New Jersey Business Corporation Act

(1) This act shall be known and may be cited as the "New Jersey Business Corporation Act."

(2) This act shall be liberally construed and applied to promote its underlying purposes and policies.

(3) Underlying purposes and policies of this act are, among others,

(a) to simplify, clarify and modernize the law governing corporations;

(b) to provide a general corporate form for the conduct of lawful business with such variations and modifications from the form so provided as the interested parties in any corporation may agree upon, subject only to over-riding interests of this State and of third parties; and

(c) to give special recognition to the legitimate needs of the close corporation.

(4) The presence in certain provisions of this act of the words "unless otherwise provided in the certificate of incorporation" or "unless otherwise provided in the certificate of incorporation or by-laws," or words of similar import, does not imply that the effect of other provisions may not be varied by provisions in the certificate of incorporation or by-laws.

L.1968, c.350.

14A:1-2.1. Definitions.

As used in this act, unless the context otherwise requires, the term:

(a) "Act" or "this act" means the "New Jersey Business Corporation Act" and includes all amendments and supplements thereto.

(b) "Attorney General" means the Attorney General of New Jersey.

(c) "Authorized shares" means the shares of all classes and series which the corporation is authorized to issue.

(d) "Board" means board of directors. "Entire board" means the total number of directors which the corporation would have if there were no vacancies.

(e) "Bonds" includes secured and unsecured bonds, debentures, notes and other written obligations for the payment of money.

(f) "Certificate of incorporation" includes:

(i) the original certificate of incorporation or any other instrument filed or issued under any statute to form a domestic or foreign corporation, as amended, supplemented or restated by certificates of amendment, merger or consolidation or by other certificates or instruments filed or issued under any statute; and

(ii) a special act or charter creating a domestic or foreign corporation, as amended, supplemented or restated.

(g) "Corporation" or "domestic corporation" means a corporation for profit organized under this act, or existing on its effective date and theretofore organized under any other law of this State for a purpose or purposes for which a corporation may be organized under this act.

(h) "Director" means any member of the governing board of a corporation, whether designated as director, trustee, manager, governor, or by any other title.

(i) "Foreign corporation" means a corporation for profit organized under the laws of a jurisdiction other than this State, including any state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction.

(j) "Resolution" means any action taken or authority granted by the shareholders, the board, or a committee of the board, regardless of whether evidenced by a formal resolution.

(k) "Secretary of State" means the Secretary of State of New Jersey.

(l) "Shareholder" means one who is a holder of record of shares in a corporation.

(m) "Shares" means the units into which the proprietary interests in a corporation are divided.

(n) "Subscriber" means one who subscribes for shares in a corporation, whether before or after incorporation.

(o) "Subsidiary" means a domestic or foreign corporation whose outstanding shares are owned directly or indirectly by another domestic or foreign corporation in such number as to entitle the holder at the time to elect a majority of its directors without regard to voting power which may thereafter exist upon a default, failure or other contingency.

(p) "Treasury shares" means shares of a corporation which have been issued, and have been subsequently acquired by the corporation under circumstances which do not result in cancellation. Treasury shares are issued shares, but not outstanding shares.

(q) "Other business entity" means a partnership, limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust, national association, or any other unincorporated business, whether organized under the laws of this State or under the laws of any other state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction.

(r) "Votes cast" means all votes cast in favor of and against a particular proposition, but shall not include abstentions.

Amended 1995, c.279, s.1; 2009, c.158, s.1.

This act shall apply to

(1) every corporation which is organized under this act;

(2) every corporation which reincorporates under this act pursuant to section 14A:1-4;

(3) every corporation which was organized under or became subject to, any heretofore enacted law of this State with respect to which power to amend or repeal was reserved to the Legislature, and which provided for the organization of a corporation or corporations for a purpose or purposes for which a corporation may be organized under this act;

(4) every corporation organized under or subject to any other law of this State providing for the organization of corporations for any purpose for which a corporation may not be organized under this act

(a) to the extent that this act provides that this act shall be applicable, in whole or in part, to any such corporation; or

(b) to the extent that the law applicable to any such corporation provides that this act shall be applicable to any such corporation;

(5) foreign corporations to the extent provided in this act; and

(6) commerce with foreign nations and among the several states, and to foreign corporations, including those formed by or under any act of Congress, only to the extent permitted under the Constitution and laws of the United States.

L.1968, c.350.

Any corporation which has been organized by special act of the Legislature for any of the purposes permitted by this act, and to which this act does not apply pursuant to section 14A:1-3, may come under and be subject to the provisions of this act, and continue in existence and operation as if organized hereunder, by amending its certificate of incorporation pursuant to the provisions of this act and filing a certificate of such amendment in the office of the Secretary of State, together with a certificate waiving any right of exemption from taxation and from privileges and advantages arising under such special act of incorporation. Thereupon, such corporation shall be deemed to be incorporated under this act and to be free from the liabilities and provisions of the act or acts under which it was formerly incorporated. Nothing in this section shall be held to affect such transactions, liabilities or debts of any such corporations, occurring before the filing of such certificate.

L.1968, c.350.

This act may be supplemented, altered, amended or repealed by the Legislature, and every corporation, domestic or foreign, to which this act applies shall be bound thereby.

L.1968, c.350.

14A:1-6. Execution, filing and recording of documents.

(1) If a document relating to a domestic or foreign corporation is required or permitted to be filed in the office of the Secretary of State under this act:

(a) The document shall be in the English language, shall be typed or machine printed, except that the corporate name need not be in the English language if written in English letters or Arabic or Roman numerals, and except that this requirement shall not apply to a certificate of good standing under paragraph 14A:2-4(2)(b), section 14A:2-5, or subsection 14A:13-4 (2).

(b) The filing shall be accomplished by delivering the document to the office of the Secretary of State, together with the fees and any accompanying documents required by law. Thereupon, the Secretary of State shall endorse the document with the word "Filed" with his official title and shall file it in his office. Each document accepted for filing shall be deemed filed as of the latest date and time of receipt stamped upon it pursuant to subsection (7) of this section. If a document was erroneously rejected for filing by the Secretary of State or for any other reason the latest "received" date would not properly reflect the filing date, the Secretary of State shall, upon request, mark the document "Filed" as of the correct date.

(c) The transaction in connection with which the document has been filed shall be effective at the time of filing, unless a subsequent effective time is set forth in such document pursuant to any other provision of this act, in which case such transaction shall be effective at the time so specified, which shall in no event be later than 90 days after the date of filing.

(2) If a document relating to a domestic corporation or a foreign corporation is required or permitted to be filed under this act and is also required by this act to be executed on behalf of such corporation, the document shall be signed by the chairman of the board, or the president or a vice-president. The name of any person so signing such a document, and the capacity in which he signs, shall be stated beneath or opposite his signature. The document may, but need not, contain

(a) The corporate seal; or

(b) An attestation by the secretary or an assistant secretary of the corporation; or

(c) An acknowledgment or proof.

If the corporation is in the hands of a receiver, trustee, or other court appointed officer, the document shall be signed by such fiduciary or the majority of them, if there are more than one.

(3) (Deleted by amendment, P.L.1988, c.94.)

(4) The Secretary of State shall record all documents, excepting annual reports, which relate to or in any way affect corporations, and which are required or permitted by law to be filed in his office. The recording may be effected by typewritten copy, or by photographic, microphotographic or microfilming process, or in such other manner as may be provided by law. Such records shall be kept in a place separate and away from the place where the originals are filed.

(5) If any instrument filed with the Secretary of State under any provision of this act is an inaccurate record of the corporate action therein referred to, or was defectively or erroneously executed, such instrument may be corrected by filing with the Secretary of State a certificate of correction executed on behalf of the corporation. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth the correction. The instrument so corrected shall be deemed to have been effective in its corrected form as of its original filing date except as to persons who relied upon the inaccurate portion of the certificate and who are adversely affected by the correction; the correction shall be effective as to such persons as of the effective date of filing of the certificate of correction.

(6) Whenever this act requires that any certificate, report or statement made, published or recorded by any corporation, domestic or foreign, state the residence or post office address of any incorporator, shareholder, director or officer, there may be furnished in the document either the home address or the business address of the person.

(7) All documents submitted or resubmitted to the Secretary of State shall be stamped immediately with the word "Received" together with the date and time of receipt.

L.1968, c.350; amended 1973,c.366,s.1; 1988,c.94,s.2; 1995,c.279,s.2.

The repeal by this act of the whole or any part of any act under which there was organized any corporation in existence on the effective date of this act, shall not work a dissolution of such corporation, but such corporation, its officers, directors and shareholders shall have the same rights, and shall be subject to the same limitations, restrictions, liabilities and penalties as those prescribed by this act for corporations organized under this act, their officers, directors and shareholders.

L.1968, c.350.

14A:1-8. In computing the period of time for the giving of any notice required or permitted by this act, or by a certificate of incorporation or by-laws or any resolution of directors or shareholders, the day on which the notice is given shall be excluded, and the day on which the matter noticed is to occur shall be included. If notice is given by mail, the notice shall be deemed to be given when deposited in the mail addressed to the person to whom it is directed at his last address as it appears on the records of the corporation, with postage prepaid thereon. Any notice required or permitted to be given under this act by electronic transmission as defined in section 2 of P.L.2009, c.176 (C.14A:1-8.1), mail or by certified mail, return receipt requested, may be given by personal delivery to the person to whom it is directed.

Amended 1988, c.94, s.3; 2009, c.176, s.1.

2. (1) Any notice required or permitted pursuant to the provisions of N.J.S.14A:1-1 et seq., or by a certificate of incorporation or by-laws or any resolution of directors or shareholders, may be provided by electronic transmission as follows:

(a) Any notice to shareholders given by the corporation pursuant to any provision of N.J.S.14A:1-1 et seq., or by a certificate of incorporation or by-laws or any resolution of directors or shareholders, shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given.

(i) Any consent given pursuant to paragraph (a) of this subsection shall be revocable by the shareholder by written notice, and not electronic transmission, to the corporation.

(ii) Any consent given pursuant to paragraph (a) of this subsection shall be deemed revoked if: (A) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with the shareholder's consent; and (B) that inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice following the second missed delivery; provided, however, the inadvertent failure to treat that inability as a revocation shall not invalidate any meeting or other action.

(b) Any notice to shareholders given by the corporation pursuant to any provision of N.J.S.14A:1-1 et seq., or by a certificate of incorporation or by-laws or any resolution of directors or shareholders, shall be deemed given:

(i) if by facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice;

(ii) if by electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice;

(iii) if by a posting on an electronic network together with separate notice to the shareholder of that specific posting, upon the later of (A) that posting; or (B) the giving of the separate notice; or

(iv) if by any other form of electronic transmission, when directed to the shareholder.

(c) An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence that the notice has been given.

(d) For purposes of this section, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, an electronic network pursuant to N.J.S.14A:5-28, that creates a record that may be retained, retrieved and reviewed by a recipient, and that may be directly reproduced in paper form by that recipient through an automated process.

(2) This section shall not apply to notices required or permitted pursuant to N.J.S.14A:6-5, N.J.S.14A:7-3, N.J.S.14A:12-10, N.J.S.14A:12-12 or N.J.S.14A:14-15.

L.2009, c.176, s.2; amended 2021, c.238, s.2.

(1) Upon request of any person, the Secretary of State shall furnish certified copies of documents filed in his office in accordance with the provisions of this act.

(2) Upon request of any person, the Secretary of State shall certify to the existence or non-existence of any facts on record in his office relating to domestic or foreign corporations.

(3) In addition, the Secretary of State shall provide information and documents upon telephone request and over the counter in accordance with sections 3 and 4 of P.L. 1982, c. 150 (C. 52:16A-37 and C. 52:16A-38).

L.1968, c.350; amended 1988, c. 94, s. 4.

14A:1-10. Filing documents by telecopy.

(1) The Secretary of State may accept for filing by means of telecopy any document required or permitted to be filed in the office of the Secretary of State.

(2) The Secretary of State shall charge a fee for the filing of a document by telecopy, which fee shall be in addition to the usual fee charged for filing the document.

(3) "Telecopy" means any method or means adopted by the Secretary of State for the transmission or receipt of facsimile documents.

L.1988, c.94, s.5; amended 1995,c.279,s.3.

Any document required to be filed under this act may be submitted to the Secretary of State for review prior to the time the document is formally filed. The Secretary of State shall determine whether the document is acceptable for filing and, if it is not acceptable, shall state why it is not acceptable. The Secretary of State shall charge a fee for the preclearance of documents.

L. 1988, c. 94, s. 6.

A corporation may be organized under this act for any lawful business purpose or purposes except to do in this State any business for which organization is permitted under any other statute of this State unless such statute permits organization under this act.

L.1968, c.350.

(1) The corporate name of a domestic corporation or of a foreign corporation authorized to transact business in this State

(a) Shall not contain any word or phrase, or abbreviation or derivative thereof, which indicates or implies that it is organized for any purpose other than one or more of the purposes permitted by its certificate of incorporation;

(b) Shall be such as to distinguish it upon the records in the office of the Secretary of State from the names of other for profit and nonprofit domestic corporations and for profit and nonprofit foreign corporations qualified to do business in this State and from the names of domestic limited partnerships and foreign limited partnerships and from names subject to a current name reservation or a current name registration, unless there is filed a certified copy of a final judgment of a court of competent jurisdiction establishing the prior right of the corporation to the use of such name in this State;

(c) Shall not contain any word or phrase, or any abbreviation or derivative thereof, the use of which is prohibited or restricted by any other statute of this State, unless any such restrictions have been complied with; and

(d) Shall contain the word "corporation," "company," "incorporated," or shall contain an abbreviation of one of those words, or shall include the abbreviation Ltd. or shall contain words or abbreviations of like import in other languages, except that a foreign corporation which does not have those words or an abbreviation thereof in its name shall add at the end of its name one of those words or an abbreviation thereof for use in this State.

(2) This section

(a) Shall not require any domestic corporation or any foreign corporation authorized to transact business in this State to change its corporate name; and

(b) Shall not prevent a domestic corporation with which another corporation, domestic or foreign, is merged, or which is formed by the reorganization or consolidation of one or more other domestic or foreign corporations or upon a sale, lease or other disposition to, or exchange with, a domestic corporation of all or substantially all the assets of another corporation, domestic or foreign, including its name, from having the same corporate name as any of such corporations if at the time such other corporation was organized under the laws of, or is authorized to transact business in, this State.

(3) If the name of a foreign corporation is not available for use in this State because of the prohibitions of subsection 14A:2-2 (1), such corporation may be authorized to transact business in this State under an assumed name which is available for corporate use under this section. Such corporation shall file in the office of the Secretary of State with its application for an original or amended certificate of authority a resolution of its board adopting such assumed name for use in transacting business in this State.

(4) The corporate name of a domestic corporation or nonprofit corporation which has been dissolved shall not be available for corporate use for one year after the effective time of dissolution, unless, within such one-year period, the written consent of such dissolved corporation to the adoption of its name is filed in the office of the Secretary of State with the certificate of incorporation of another domestic corporation or with the application of a foreign corporation for an original or amended certificate of authority to transact business in this State.

(5) The filing in the office of the Secretary of State of the certificate of incorporation of a domestic corporation or the issuance by the Secretary of State of a certificate to a foreign corporation authorizing it to transact business in this State shall not preclude an action by this State to enjoin a violation of this section or an action by any person adversely affected to enjoin such violation or the use of a corporate name in violation of the rights of such person, whether on principles of unfair competition or otherwise. The court in any such action may grant any other appropriate relief.

L.1968, c.350.; amended 1973,c.366,s.2; 1983,c.490,s.1; 1988,c.94,s.7.

This amendatory and supplementary act shall not require any domestic corporation organized prior to the effective date of this act or any foreign corporation authorized to transact business in this State prior to the effective date of this act or any nonprofit corporation organized pursuant to Title 15 of the Revised Statutes prior to the effective date of this act to change its corporate name in order to comply with this act, if such name is otherwise lawful on the effective date of this act. No corporation shall change its corporate name on or after the effective date to a name which is not available for use under this act.

L.1983, c. 490, s. 2, eff. Jan. 17, 1984.

(1) No domestic corporation, or foreign corporation which transacts business in this State within the meaning of section 14A:13-3, shall transact any business in this State using a name other than its actual name unless

(a) It also uses its actual name in the transaction of any such business in such a manner as not to be deceptive as to its actual identity; or

(b) It has been authorized to transact business in this State, using an assumed name as provided in subsection 14A:2-2(3); or

(c) It has first registered the alternate name as provided in this section.

(2) Any corporation may adopt and use any alternate name, including any which would be unavailable as the name of a domestic or foreign corporation because of the prohibitions of paragraph 14A:2-2(1)(b), but not including a name prohibited as a corporate name by paragraph 14A:2-2(1)(c), by filing a certificate of registration of a corporate alternate name with the Secretary of State executed on behalf of the corporation. The certificate shall set forth

(a) The name, jurisdiction and date of incorporation of the corporation;

(b) The alternate name;

(c) A brief statement of the character or nature of the particular business or businesses to be conducted using the alternate name;

(d) That the corporation intends to use such name in this State;

(e) That the corporation has not previously used the alternate name in this State in violation of this section or, if it has, the month and year in which it commenced such use.

(3) Such a registration shall be effective for five years from the date of filing, unless sooner terminated as provided below, and may be renewed successively for additional five-year periods by filing a certificate of renewal executed on behalf of the corporation at any time within three months prior to, but not later than, the date of expiration of the registration. Not more than four months and not less than one month prior to the date of expiration of the registration, the Secretary of State shall notify the corporation of the date of expiration and the requirements for renewal of the registration. The certificate of renewal shall be effective as of the date of expiration of the earlier registration. The certificate of renewal shall set forth the information required in paragraph 14A:2-2.1(2)(a) through paragraph 14A:2-2.1(2)(d), the date of filing of the certificate of registration then in effect, and that the corporation is continuing to use the alternate name. If a corporation ceases to use an alternate name in this State prior to the expiration date of the five-year registration period, it may file a termination certificate. A termination certificate shall state the name of the corporation, the alternate name for which the corporation has filed a certificate of registration and that the corporation has ceased to use the registered alternate name. The termination certificate may recite the date upon which the corporation ceased to use the alternate name, but no recital shall be required.

(4) Nothing in this section shall be construed

(a) To grant to the registrant of an alternate name any right in the name as against any prior or subsequent user of the name, regardless of whether used as a trademark, trade name, business name, or corporate name; or

(b) To interfere with the power of any court to enjoin the use of any such name on the basis of the law of unfair competition or on any other basis except the mere fact of identity or similarity of the alternate name to any other corporate name.

(5) A corporation which has used an alternate name in this State contrary to the provisions of this section shall, upon filing a certificate of registration of alternate name or an untimely certificate of renewal, pay to the Secretary of State the filing fee prescribed for such a certificate plus an additional filing fee equal to the full amount of the regular filing fee multiplied by the number of years it has been using such alternate name in violation of this section after August 1, 1974. For purposes of this subsection, any part of a year shall be considered a full year.

(6) The failure of a corporation to file a certificate of registration or renewal of alternate name shall not impair the validity of any contract or act of such corporation and shall not prevent such corporation from defending any action or proceeding in any court of this State, but no such corporation shall maintain any action or proceeding in any court of this State arising out of a contract or act in which it used such alternate name until it has filed such a certificate.

(7) (a) A corporation which files a certificate of registration of alternate name which contains a false statement or omission regarding the date it first used a fictitious name in this State shall, if such false statement or omission reduces the amount of the additional fee it paid or should have paid as provided in subsection 14A:2-2.1(5), forfeit to the State a penalty of not less than $200.00 nor more than $500.00.

(b) A corporation which ought to have filed a certificate of registration or renewal of alternate name and fails to do so within 60 days after being notified of its obligation to do so by certified or registered mail by the Secretary of State, by any other governmental officer, or by any person aggrieved by its failure to do so, shall forfeit to the State a penalty of not less than $200.00 nor more than $500.00.

(c) Such penalty shall be recovered with costs in an action prosecuted by the Attorney General. The court may proceed in such an action in a summary manner or otherwise.

(8) (Deleted by amendment, P.L. 1988, c. 94.)

(added) 1973,c.366,s.3; amended 1988,c.94,s.8.

No corporation organized under the laws of the State of New Jersey nor any foreign corporation authorized to do business in New Jersey shall use the words "blind," or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairments, as part of its name unless the approval of the Attorney General, or his designee, is attached to the certificate of incorporation or application for amendment thereof. Such approval shall indicate that the words "blind" or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairments, as used in the corporate name will not tend to mislead or confuse the public into believing that the corporation is organized for charitable or nonprofit purposes for the blind or handicapped. Any corporation presently organized under the laws of this State or any foreign corporation presently authorized to do business in this State that employs the words "blind," or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairment, in its corporate name shall seek the approval of the Attorney General, or his designee, within 90 days after the effective date of this act if it wishes to continue the use of such words, terms, imprint, stamp, label or symbol in its corporate name.

L.1977, c. 8, s. 1, eff. Feb. 3, 1977.

(1) The exclusive right to the use of a corporate name may be reserved upon compliance with the provisions of this section.

(2) The reservation shall be made by filing in the office of the Secretary of State an application to reserve a specified corporate name, or the first name available for corporate use among not more than three specified names, executed by or on behalf of the applicant and setting forth the name and address of the applicant. If the Secretary of State finds that the name complies with the provisions of section 14A:2-2, he shall reserve it for the exclusive use of the applicant for a period of 120 days from the date of filing of the application and shall issue a certificate of reservation.

(3) The right to the exclusive use of a specified corporate name so reserved may be transferred by filing in the office of the Secretary of State a notice of such transfer, executed by or on behalf of the applicant for whom the name was reserved, and specifying the name and address of the transferee.

(4) The holder of a reserved name may renew the reservation for additional periods of 120 days by filing an application for renewal within the last 30 days of the current reservation period. There shall be no limit upon the number of renewals.

L.1968, c.350; amended 1973,c.366,s.4; 1988,c.94,s.9.

(1) Any foreign corporation may register its corporate name under this act, provided its corporate name is available for use under section 14A:2-2.

(2) Such registration shall be made by filing in the office of the Secretary of State:

(a) An application for registration executed on behalf of the corporation, setting forth the name and the address of the main business or headquarters office of the corporation, the jurisdiction of its incorporation, the date of its incorporation, a statement that it is carrying on or doing business, and a brief statement of the business in which it is engaged; and

(b) A certificate setting forth that such corporation is in good standing under the laws of the jurisdiction of its incorporation, executed by the official of such jurisdiction who has custody of the records pertaining to corporations and dated not earlier than 30 days prior to the filing of the application.

(3) Such registration shall be effective until the close of the calendar year in which the application for registration is filed.

L.1968, c.350.

A corporation which has a registration of its corporate name in effect may renew such registration from year to year by annually filing in the office of the Secretary of State an application for renewal setting forth the facts required to be set forth in an original application for registration, together with a certificate of good standing as required for the original registration. A renewal application may be filed between the first day of October and the thirty-first day of December in each year, and shall extend the registration for the following calendar year.

L.1968, c.350.

(1) One or more individuals or domestic or foreign corporations may act as incorporator or incorporators of a corporation by signing and filing in the office of the Secretary of State a certificate of incorporation for such corporation. Individuals acting as incorporators shall be at least 18 years of age. Incorporators need not be United States citizens or residents of this State or subscribers to shares in the corporation.

(2) Except as otherwise provided in the certificate of incorporation, any action required or permitted by this act to be taken by incorporators may be taken without a meeting.

(3) When there are two or more incorporators, if any dies or is for any reason unable to act, the other or others may act. If there is no incorporator able to act, any person for whom an incorporator was acting as agent may act in his stead, or if such other person also dies or is for any reason unable to act, his legal representative may act.

L.1968, c.350.; amended by L.1973, c. 366, s. 5, eff. May 1, 1974.

14A:2-7. Certificate of incorporation.

(1) The certificate of incorporation shall set forth:

(a) The name of the corporation;

(b) The purpose or purposes for which the corporation is organized. It shall be a sufficient compliance with this paragraph to state, alone or with specifically enumerated purposes, that the corporation may engage in any activity within the purposes for which corporations may be organized under this act, and all such activities shall by such statement be deemed within the purposes of the corporation, subject to express limitations, if any;

(c) The aggregate number of shares which the corporation shall have authority to issue;

(d) If the shares are, or are to be, divided into classes, or into classes and series, the designation of each class and series, the number of shares in each class and series, and a statement of the relative rights, preferences and limitations of the shares of each class and series, to the extent that such designations, numbers, relative rights, preferences and limitations have been determined;

(e) If the shares are, or are to be, divided into classes, or into classes and series, a statement of any authority vested in the board to divide the shares into classes or series or both, and to determine or change for any class or series its designation, number of shares, relative rights, preferences and limitations;

(f) Any provision not inconsistent with this act or any other statute of this State, which the incorporators elect to set forth for the management of the business and the conduct of the affairs of the corporation, or creating, defining, limiting or regulating the powers of the corporation, its directors and shareholders or any class of shareholders, including any provision which under this act is required or permitted to be set forth in the bylaws;

(g) The address of the corporation's initial registered office, and the name of the corporation's initial registered agent at such address. On or after the effective date of this 1989 amendatory and supplementary act, the address of the registered office as shown on the certificate of incorporation shall be a complete address, including the number and street location of the registered office and, if applicable, the post office box number;

(h) The number of directors constituting the first board and the names and addresses of the persons who are to serve as such directors;

(i) The names and addresses of the incorporators;

(j) The duration of the corporation if other than perpetual; and

(k) If, pursuant to subsection 14A:2-7(2), the certificate of incorporation is to be effective on a date subsequent to the date of filing, the effective date of the certificate.

(2) The certificate of incorporation shall be filed in the office of the Secretary of State. The corporate existence shall begin upon the effective date of the certificate, which shall be the date of the filing or such later time, not to exceed 90 days from the date of filing, as may be set forth in the certificate. Such filing shall be conclusive evidence that all conditions precedent required to be performed by the incorporators have been complied with and, after the corporate existence has begun, that the corporation has been incorporated under this act, except as against this State in a proceeding to cancel or revoke the certificate of incorporation or for involuntary dissolution of the corporation.

(3) The certificate of incorporation may provide that a director or officer shall not be personally liable, or shall be liable only to the extent therein provided, to the corporation or its shareholders for damages for breach of any duty owed to the corporation or its shareholders, except that such provision shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (a) in breach of such person's duty of loyalty to the corporation or its shareholders, (b) not in good faith or involving a knowing violation of law or (c) resulting in receipt by such person of an improper personal benefit. As used in this subsection, an act or omission in breach of a person's duty of loyalty means an act or omission which that person knows or believes to be contrary to the best interests of the corporation or its shareholders in connection with a matter in which he has a material conflict of interest.

L.1968, c.350; amended 1987,c.35,s.1; 1988,c.94,s.10; 1989,c.17,s.1; 1989,c.175, s.1.

On or after the effective date of the certificate of incorporation, an organization meeting of the board named in the certificate of incorporation shall be held, at the call of a majority of the board so named, to adopt by-laws, elect officers, authorize the issuance of shares, and transact such other business as may come before the meeting. The board members calling the meeting shall give at least 5 days' notice thereof by mail to each director named in the certificate of incorporation, which notice shall state the time and place of the meeting.

L.1968, c.350.; amended by L.1973, c. 366, s. 6, eff. May 1, 1974.

14A:2-9 (1) The initial by-laws of a corporation shall be adopted by the board at its organization meeting. Thereafter, the board shall have the power to make, alter and repeal by-laws unless such power is reserved to the shareholders in the certificate of incorporation, but by-laws made by the board may be altered or repealed, and new by-laws made, by the shareholders. The shareholders may prescribe in the by-laws that any by-law made by them shall not be altered or repealed by the board.

(2) The initial by-laws of a corporation adopted by the board at its organization meeting shall be deemed to have been adopted by the shareholders for purposes of this act.

(3) Any provision which this act requires or permits to be set forth in the by-laws may be set forth in the certificate of incorporation with equal force and effect.

(4) The by-laws may contain any provision, not inconsistent with law or the certificate of incorporation, relating to the business of the corporation, the conduct of its affairs, and its rights or power or the rights or power of its shareholders, directors, officers or employees.

(5) (a) Without limiting subsection (4) of this section, the by-laws may provide that the federal and State courts in New Jersey shall be the sole and exclusive forum for:

(i) any derivative action or proceeding brought on behalf of the corporation;

(ii) any action by one or more shareholders asserting a claim of a breach of fiduciary duty owed by a director or officer, or former director or officer, to the corporation or its shareholders, or a breach of the certificate of incorporation or by-laws;

(iii) any action brought by one or more shareholders asserting a claim against the corporation or its directors or officers, or former directors or officers, arising under the certificate of incorporation or the "New Jersey Business Corporation Act," N.J.S.14A:1-1 et seq.;

(iv) any other State law claim, including a class action asserting a breach of a duty to disclose, or a similar claim, brought by one or more shareholders against the corporation, its directors or officers, or its former directors or officers; or

(v) any other claim brought by one or more shareholders which is governed by the internal affairs or an analogous doctrine.

(b) The by-laws may provide that one or more shareholders who file an action in breach of a forum selection requirement of the by-laws shall be liable for all reasonable costs incurred in enforcing the requirement, including, without limitation, reasonable attorney's fees of the defendants. If the by-laws contain an exclusive forum provision, the directors and officers, and former directors and officers, shall be deemed to have consented to the personal jurisdiction of that forum. If the provision is not contained in the original by-laws but is adopted by an amendment, the provisions and the personal jurisdiction over directors and officers, and former directors and officers, shall apply only to actions brought by one or more shareholders after the date of the amendment of the by-laws and which assert claims arising after the date of the amendment.

amended 2017, c.356.

(1) The board of a corporation may adopt emergency by-laws, subject to repeal or change by action of the shareholders, which shall, notwithstanding any different provision elsewhere in this act or in the certificate of incorporation or by-laws, be operative during any emergency in the conduct of the business of the corporation resulting from an attack on the United States or any nuclear or atomic disaster. The emergency by-laws may make any provision that may be practical and necessary for the circumstances of the emergency, including provisions that

(a) a meeting of the board may be called by any officer or director in such manner and under such conditions as shall be prescribed in the emergency by-laws;

(b) the director or directors in attendance at the meeting, or any greater number fixed by the emergency by-laws, shall constitute a quorum; and

(c) the officers or other persons designated in a list approved by the board before the emergency, all in such order of priority and subject to such conditions and for such period of time, not longer than reasonably necessary after the termination of the emergency, as may be provided in the emergency by-laws or in the resolution approving the list, shall, to the extent required to provide a quorum at any meeting of the board, be deemed directors for such meeting.

(2) Before or during any such emergency, the board may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties.

(3) Before or during any such emergency, the board may change the head office or designate several alternative head offices or regional offices, or authorize the officers so to do, said change to be effective during the emergency.

(4) To the extent not inconsistent with any emergency by-laws so adopted, the by-laws of the corporation shall remain in effect during any such emergency and upon its termination the emergency by-laws shall cease to be operative.

(5) Unless otherwise provided in emergency by-laws, notice of any meeting of the board during any such emergency need be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication, or other means of mass communication.

(6) To the extent required to constitute a quorum at any meeting of the board during any such emergency, the officers of the corporation who are present shall, unless otherwise provided in emergency by-laws, be deemed, in order of rank and within the same rank in order of seniority, directors for such meeting.

(7) No officer, director or employee acting in accordance with any emergency by-laws shall be liable except for willful misconduct. No officer, director or employee shall be liable for any action taken by him in good faith in such an emergency in furtherance of the ordinary business affairs of the corporation even though not authorized by the by-laws then in effect.

L.1968, c.350.

14A:3-1. General powers.

(1) Each corporation, subject to any limitations provided in this act or any other statute of this State, or in its certificate of incorporation, shall have power

(a) to have perpetual duration unless a limited period is stated in its certificate of incorporation;

(b) to sue and be sued, complain and defend and participate as a party or otherwise in any judicial, administrative, arbitrative or other proceeding, in its corporate name;

(c) to have a corporate seal which may be altered at pleasure, and to use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced;

(d) to purchase, lease or otherwise acquire, own, hold, improve, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated;

(e) to sell, convey, mortgage, create a security interest in, lease, exchange, transfer and otherwise dispose of all or any part of its property and assets;

(f) to purchase, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, exchange, mortgage, lend, create a security interest in, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in, or obligations of, other domestic or foreign corporations, associations, partnerships or individuals, or direct or indirect obligations of any domestic or foreign government or instrumentality thereof;

(g) to make contracts and guarantees and incur liabilities, borrow money, issue its bonds, and secure any of its obligations by mortgage of or creation of a security interest in all or any of its property, franchises and income;

(h) to lend money, invest and reinvest its funds, and take and hold real and personal property as security for the payment of funds so loaned or invested;

(i) to conduct its business, carry on its operations, and have offices and exercise the powers granted by this act anywhere in the universe;

(j) to elect or appoint officers, employees and agents of the corporation, and define their duties and fix their compensation;

(k) to make and alter by-laws for the administration and regulation of the affairs of the corporation;

(l) to pay pensions and establish pension, profit-sharing, stock option, stock purchase, incentive and deferred compensation plans, and plans of similar nature for, and to furnish medical services, life, sickness, accident, disability or unemployment insurance and benefits, education, housing, social and recreational services and other similar aids and services to, any or all of its directors, officers, employees, and agents, their families, dependents or beneficiaries;

(m) to participate with others in any corporation, partnership, limited partnership, joint venture, or other association of any kind, or in any transaction, undertaking or arrangement which the participating corporation would have power to conduct by itself, whether or not such participation involves sharing or delegation of control with or to others;

(n) at the request of the United States government or of any of its agencies, to transact any lawful business in time of war or other national emergency, notwithstanding the purpose or purposes set forth in its certificate of incorporation;

(o) to provide for its benefit life insurance and other insurance with respect to the services of any or all of its directors, officers, employees, and agents, or on the life of any shareholder for the purpose of acquiring at his death shares of its stock owned by such shareholder;

(p) to have and exercise all other powers necessary or convenient to effect any or all of the purposes for which the corporation is organized ;

(q) to renounce, in its certificate of incorporation or by action of its board of directors, any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, specified business opportunities or specified classes or categories of business opportunities that are presented to the corporation or one or more of its officers, directors or shareholders .

(2) It shall not be necessary to set forth in the certificate of incorporation any corporate powers enumerated in this act.

amended 1969, c.102, ss.1,17; 2011, c.36, s.1.

No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid by reason of the fact that the corporation was without capacity or power to do such act or to make or receive such conveyance or transfer, but such lack of capacity or power may be asserted:

(a) In a proceeding by a shareholder against the corporation to enjoin the doing of any act or acts or the transfer of real or personal property by or to the corporation. If the unauthorized acts or transfer sought to be enjoined are being, or are to be, performed or made pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the proceeding and if it deems the same to be equitable, set aside and enjoin the performance of such contract, and in so doing may allow to the corporation or to the other parties to the contract, as the case may be, compensation for the loss or damage sustained by either of them which may result from the action of the court in setting aside and enjoining the performance of such contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained.

(b) In a proceeding by the corporation, whether acting directly or through a receiver, trustee, or other legal representative, or through shareholders in a representative suit, against the incumbent or former officers or directors of the corporation.

(c) In a proceeding by the Attorney General, as provided in this act, to dissolve the corporation, or in a proceeding by the Attorney General to enjoin the corporation from the transaction of unauthorized business.

L.1968, c.350.

(1) A corporation may give a guaranty not in furtherance of its direct or indirect business interests only when authorized at a meeting of shareholders by the affirmative vote of all of the votes cast by the holders of each class and series of shares entitled to vote thereon. If authorized by such a vote, the guaranty may be secured by a mortgage of or a security interest in all or any part of the corporate property, or any interest therein, wherever situated.

(2) Nothing in subsection 14A:3-3(1) shall be deemed to diminish the rights, if any, of the corporation's creditors.

L.1968, c.350; amended 1973,c.366,s.7; 1988,c.94,s.11.

(1) Any corporation organized for any purpose under any general or special law of this State, unless otherwise provided in its certificate of incorporation or by-laws, shall have power, irrespective of corporate benefit, to aid, singly or in cooperation with other corporations and with natural persons, in the creation or maintenance of institutions or organizations engaged in community fund, hospital, charitable, philanthropic, educational, scientific or benevolent activities or patriotic or civic activities conducive to the betterment of social and economic conditions, and the board may authorize the making of contributions for those purposes in money, securities, including shares of the corporation, or other property, in such reasonable amounts as the board may determine; provided, that a contribution shall not be authorized hereunder if at the time of the contribution or immediately thereafter the donee institution shall own more than 10% of the voting stock of the donor corporation or one of its subsidiaries.

(2) The provisions of this section shall not be construed as directly or indirectly minimizing or interpreting the rights and powers of corporations, as heretofore existing, with reference to appropriations, expenditures or contributions of the nature above specified.

L.1968, c.350.; amended 1988, c. 94, s. 12.

14A:3-5. Indemnification of directors, officers and employees.

(1) As used in this section,

(a) "Corporate agent" means any person who is or was a director, officer, employee or agent of the indemnifying corporation or of any constituent corporation absorbed by the indemnifying corporation in a consolidation or merger and any person who is or was a director, officer, trustee, employee or agent of any other enterprise, serving as such at the request of the indemnifying corporation, or of any such constituent corporation, or the legal representative of any such director, officer, trustee, employee or agent;

(b) "Other enterprise" means any domestic or foreign corporation, other than the indemnifying corporation, and any partnership, joint venture, sole proprietorship, trust or other enterprise, whether or not for profit, served by a corporate agent;

(c) "Expenses" means reasonable costs, disbursements and counsel fees;

(d) "Liabilities" means amounts paid or incurred in satisfaction of settlements, judgments, fines and penalties;

(e) "Proceeding" means any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal therein and any inquiry or investigation which could lead to such action, suit or proceeding; and

(f) References to "other enterprises" include employee benefit plans; references to "fines" include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the indemnifying corporation" include any service as a corporate agent which imposes duties on, or involves services by, the corporate agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section.

(2) Any corporation organized for any purpose under any general or special law of this State shall have the power to indemnify a corporate agent against his expenses and liabilities in connection with any proceeding involving the corporate agent by reason of his being or having been such a corporate agent, other than a proceeding by or in the right of the corporation, if

(a) such corporate agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; and

(b) with respect to any criminal proceeding, such corporate agent had no reasonable cause to believe his conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that such corporate agent did not meet the applicable standards of conduct set forth in paragraphs 14A:3-5(2)(a) and 14A:3-5(2)(b).

(3) Any corporation organized for any purpose under any general or special law of this State shall have the power to indemnify a corporate agent against his expenses in connection with any proceeding by or in the right of the corporation to procure a judgment in its favor which involves the corporate agent by reason of his being or having been such corporate agent, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. However, in such proceeding no indemnification shall be provided in respect of any claim, issue or matter as to which such corporate agent shall have been adjudged to be liable to the corporation, unless and only to the extent that the Superior Court or the court in which such proceeding was brought shall determine upon application that despite the adjudication of liability, but in view of all circumstances of the case, such corporate agent is fairly and reasonably entitled to indemnity for such expenses as the Superior Court or such other court shall deem proper.

(4) Any corporation organized for any purpose under any general or special law of this State shall indemnify a corporate agent against expenses to the extent that such corporate agent has been successful on the merits or otherwise in any proceeding referred to in subsections 14A:3-5(2) and 14A:3-5(3) or in defense of any claim, issue or matter therein.

(5) Any indemnification under subsection 14A:3-5(2) and, unless ordered by a court, under subsection 14A:3-5(3) may be made by the corporation only as authorized in a specific case upon a determination that indemnification is proper in the circumstances because the corporate agent met the applicable standard of conduct set forth in subsection 14A:3-5(2) or subsection 14A:3-5(3). Unless otherwise provided in the certificate of incorporation or bylaws, such determination shall be made

(a) by the board of directors or a committee thereof, acting by a majority vote of a quorum consisting of directors who were not parties to or otherwise involved in the proceeding; or

(b) if such a quorum is not obtainable, or, even if obtainable and such quorum of the board of directors or committee by a majority vote of the disinterested directors so directs, by independent legal counsel, in a written opinion, such counsel to be designated by the board of directors; or

(c) by the shareholders if the certificate of incorporation or bylaws or a resolution of the board of directors or of the shareholders so directs.

(6) Expenses incurred by a corporate agent in connection with a proceeding may be paid by the corporation in advance of the final disposition of the proceeding upon receipt of an undertaking by or on behalf of the corporate agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified as provided in this section.

(7) (a) If a corporation upon application of a corporate agent has failed or refused to provide indemnification as required under subsection 14A:3-5(4) or permitted under subsections 14A:3-5(2), 14A:3-5(3) and 14A:3-5(6), a corporate agent may apply to a court for an award of indemnification by the corporation, and such court

(i) may award indemnification to the extent authorized under subsections 14A:3-5(2) and 14A:3-5(3) and shall award indemnification to the extent required under subsection 14A:3-5(4), notwithstanding any contrary determination which may have been made under subsection 14A:3-5(5); and

(ii) may allow reasonable expenses to the extent authorized by, and subject to the provisions of, subsection 14A:3-5(6), if the court shall find that the corporate agent has by his pleadings or during the course of the proceeding raised genuine issues of fact or law.

(b) Application for such indemnification may be made

(i) in the civil action in which the expenses were or are to be incurred or other amounts were or are to be paid; or

(ii) to the Superior Court in a separate proceeding. If the application is for indemnification arising out of a civil action, it shall set forth reasonable cause for the failure to make application for such relief in the action or proceeding in which the expenses were or are to be incurred or other amounts were or are to be paid.

The application shall set forth the disposition of any previous application for indemnification and shall be made in such manner and form as may be required by the applicable rules of court or, in the absence thereof, by direction of the court to which it is made. Such application shall be upon notice to the corporation. The court may also direct that notice shall be given at the expense of the corporation to the shareholders and such other persons as it may designate in such manner as it may require.

(8) The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this section shall not exclude any other rights, including the right to be indemnified against liabilities and expenses incurred in proceedings by or in the right of the corporation, to which a corporate agent may be entitled under a certificate of incorporation, bylaw, agreement, vote of shareholders, or otherwise; provided that no indemnification shall be made to or on behalf of a corporate agent if a judgment or other final adjudication adverse to the corporate agent establishes that his acts or omissions (a) were in breach of his duty of loyalty to the corporation or its shareholders, as defined in subsection (3) of N.J.S.14A:2-7, (b) were not in good faith or involved a knowing violation of law or (c) resulted in receipt by the corporate agent of an improper personal benefit.

(9) Any corporation organized for any purpose under any general or special law of this State shall have the power to purchase and maintain insurance on behalf of any corporate agent against any expenses incurred in any proceeding and any liabilities asserted against him by reason of his being or having been a corporate agent, whether or not the corporation would have the power to indemnify him against such expenses and liabilities under the provisions of this section. The corporation may purchase such insurance from, or such insurance may be reinsured in whole or in part by, an insurer owned by or otherwise affiliated with the corporation, whether or not such insurer does business with other insureds.

(10) The powers granted by this section may be exercised by the corporation, notwithstanding the absence of any provision in its certificate of incorporation or bylaws authorizing the exercise of such powers.

(11) Except as required by subsection 14A:3-5(4), no indemnification shall be made or expenses advanced by a corporation under this section, and none shall be ordered by a court, if such action would be inconsistent with a provision of the certificate of incorporation, a bylaw, a resolution of the board of directors or of the shareholders, an agreement or other proper corporate action, in effect at the time of the accrual of the alleged cause of action asserted in the proceeding, which prohibits, limits or otherwise conditions the exercise of indemnification powers by the corporation or the rights of indemnification to which a corporate agent may be entitled.

(12) This section does not limit a corporation's power to pay or reimburse expenses incurred by a corporate agent in connection with the corporate agent's appearance as a witness in a proceeding at a time when the corporate agent has not been made a party to the proceeding.

(13) A right to indemnification or to advancement of expenses in favor of an officer or director pursuant to a corporation's certificate of incorporation or bylaws shall not be eliminated or impaired by an amendment to the certificate of incorporation or bylaws after the occurrence of an act or omission that is the subject of a civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the certificate of incorporation or bylaws in effect at the time of the act or omission explicitly authorizes that elimination or impairment after the action or omission has occurred.

amended 1973, c.366, s.8; 1987, c.35, s.2; 1988, c.94, s.13; 1989, c.17, s.2; 2011, c.31, s.1; 2014, c.77.

1. As used in this section:

"Derivative proceeding" means a civil suit in the right of a domestic corporation.

"Shareholder" includes a beneficial owner whose shares are held in a voting trust or held by a nominee on the beneficial owner's behalf.

"Shareholder class action" means a civil suit by a shareholder against a domestic corporation or its directors or officers which alleges a breach of any duty by the directors or officers or the corporation which is imposed in whole or in part by statutory or common law of the State of New Jersey and seeks a right, remedy, or damages on behalf of a class of the domestic corporation's shareholders.

L.2013, c.42, s.1.

2. A shareholder may not commence or maintain a derivative proceeding unless the shareholder:

(1) was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time and remains a shareholder throughout the derivative proceeding; and

(2) fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

L.2013, c.42, s.2.

3. No shareholder may commence a derivative proceeding until:

(1) a written demand has been made upon the corporation to take suitable action; and

(2) 90 days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.

L.2013, c.42, s.3.

4. If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding as the court deems appropriate.

L.2013, c.42, s.4.

5. (1) Subject to subsection (5) of this section, a derivative proceeding shall be dismissed by the court on motion by the corporation if the court finds that:

(a) the person or group specified in paragraph (a) or (b) of subsection (2) of this section or subsection (6) of this section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation; or

(b) the shareholders specified in paragraph (c) of subsection (2) of this section have voted to terminate the derivative proceeding.

(2) Unless a panel is appointed pursuant to subsection (6) of this section, the determination in subsection (1) of this section shall be made by:

(a) a majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum;

(b) a majority vote of a committee consisting of one or more independent directors appointed by majority vote of independent directors, or one independent director if the board consists of only one independent director, present at a meeting of the board of directors, regardless of whether those independent directors constitute a quorum of the board; or

(c) the vote of the holders of a majority of the outstanding shares entitled to vote, not including shares owned by or voted under the control of a shareholder or related person who has or had a material beneficial financial interest in the act or omission complained of or other interest therein that would reasonably be expected to exert an influence on that shareholder's or related person's judgment if called upon to vote in the determination.

(3) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the complaint shall allege with particularity facts establishing that a majority of the board of directors, or all members of a committee, which in either case determined the matter, did not consist of independent directors at the time the determination was made.

(4) If a majority of the board of directors consisted of independent directors at the time the determination in subsection (1) of this section was made or if the determination is made by shareholders, the plaintiff shall have the burden of proving that the requirements of subsection (1) of this section have not been met. If a majority of the board of directors does not consist of independent directors at the time the determination by independent directors is made, the corporation shall have the burden of proving that the requirements of subsection (1) of this section have been met.

(5) (a) If the corporation moves to dismiss the derivative proceeding, it shall make a written filing with the court setting forth, among other things, facts to show:

(i) whether or not a majority of the board of directors was independent at the time of the determination by the independent director or directors; and

(ii) that the independent director or directors made the determination in good faith after conducting a reasonable inquiry upon which the conclusions are based.

(b) Following a motion filed pursuant to paragraph (a) of this subsection, the court shall dismiss the derivative suit unless:

(i) the court finds that the requirements of subsection (1) of this section have not been met, taking into account the burden of proof under subsection (4) or (6) of this section; or

(ii) the plaintiff, in its complaint, an amended complaint, or in a written filing with the court, has alleged with particularity facts rebutting the facts contained in the corporation's filing.

(c) All discovery proceedings shall be stayed upon the filing by the corporation of its motion to dismiss and the filing required by this subsection until the notice of entry of the order ruling on the motion. Notwithstanding the foregoing stay of discovery, the court, on motion and after a hearing, may order that specified and limited discovery be conducted if plaintiffs make a good cause showing of alleged facts which evidence a lack of independence by the person or group making the determination for the corporation or a lack of a good faith determination. Limited discovery shall not include the work product, privileged communications, or testimony of attorneys who advised or assisted the person or group making the determination.

(6) Upon motion by the corporation, the court may appoint a panel of one or more individuals to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. The plaintiff shall have the burden of proving to the panel that the requirements of subsection (1) of this section have not been met.

(7) (a) A director shall be considered independent for the purposes of this section if the director has:

(i) no economic interest in the challenged act or transaction material to him or her, other than an economic interest that is shared by all shareholders generally; and

(ii) no material, personal, or business relationships with the defendant directors or officers who have a material interest in the act or transaction challenged.

(b) None of the following shall by itself cause a director to be considered not independent for the purposes of this section:

(i) the nomination or election of the director by a person who is a defendant in the derivative proceeding or against whom action is demanded;

(ii) the naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded; or

(iii) the approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.

L.2013, c.42, s.5.

6. A derivative proceeding or a shareholder class action may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.

L.2013, c.42, s.6.

7. On termination of a derivative proceeding or a shareholder class action the court may:

(1) order the corporation to pay the plaintiff's expenses incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation;

(2) order the plaintiff to pay any defendant's expenses incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without the exercise of reasonable diligence by the plaintiff or without reasonable cause or for an improper purpose; or

(3) order a party to pay an opposing party's expenses incurred because of the filing of a pleading, motion or other paper, if it finds that the pleading, motion or other paper was not well grounded in fact, after reasonable inquiry, or warranted by existing law or a good faith argument for the extension, modification or reversal of existing law and was interposed for an improper purpose, such as to harass or cause unnecessary delay or needlessly increase the cost of litigation.

L.2013, c.42, s.7.

8. In any derivative proceeding or shareholder class action instituted by a shareholder or shareholders holding less than 5% of the outstanding shares of any class or series of the corporation, unless the shares have a market value in excess of $250,000, the corporation in whose right the action is brought shall be entitled at any time before final judgment to require the plaintiff or plaintiffs to give security for the reasonable expenses, including fees of attorneys, that may be incurred by it in connection with the action or may be incurred by other parties named as defendant for which it may become legally liable. Market value shall be determined as of the date that the plaintiff institutes the action or, in the case of an intervener, as of the date that the intervener becomes a party to the action. The corporation shall have recourse to that security in that amount which the court having jurisdiction shall determine upon the termination of the action in accordance with section 7 of P.L.2013, c.42 (C.14A:3-6.7).

L.2013, c.42, s.8.

9. In any derivative proceeding or shareholder class action against a corporation organized under the provisions of the "New Jersey Business Corporation Act," N.J.S.14A:1-1 et seq.:

a. Except for sections 7 and 8 of P.L.2013, c.42 (C.14A:3-6.7 and 6.8), which must be expressly made applicable by the corporation's certificate of incorporation, the provisions of P.L.2013, c.42 (C.14A:3-6.1 et seq.) shall apply to actions brought in state or federal court both within and outside of the State of New Jersey; and

b. The provisions of the corporation's certificate of incorporation may vary the applicability or effect of the provisions of P.L.2013, c.42 (C.14A:3-6.1 et seq.) on that corporation.

L.2013, c.42, s.9; amended 2017, c.362, s.1.

(1) Every corporation organized for any purpose under any general or special law of this State and every foreign corporation authorized to transact business in this State shall continuously maintain a registered office in this State, and a registered agent having a business office identical with such registered office.

(2) The registered office may be, but need not be, the same as a place of business of the corporation which it serves.

(3) The registered agent may be a natural person of the age of 18 years or more, or a domestic corporation or a foreign corporation authorized to transact business in this State, whether or not any such agent corporation is organized for a purpose or purposes for which a corporation may be organized under this act.

(4) The designation of a principal or registered office in this State and of a registered agent in charge thereof by any corporation of this State or by any foreign corporation authorized to transact business in this State, as in force on the effective date of this act, shall continue with like effect as if made hereunder until changed pursuant to this act.

L.1968, c.350; amended by L.1973, c. 366, s. 10, eff. May 1, 1974.

(1) Every registered agent shall be an agent of the corporation which has appointed him, upon whom process against the corporation may be served.

(2) Whenever any law of this State requires or permits any notice or demand to be given to or made upon a domestic corporation or a foreign corporation authorized to transact business in this State, its officers or directors, such notice or demand may be sent by mail or otherwise, as the law may require or permit, to the registered office of the corporation in this State, and such notice so given or demand so made shall be sufficient notice or demand.

(3) The provisions of this section shall not exclude any other method provided by law for service of process upon a corporation, domestic or foreign, or for service of a notice or demand upon such corporation, its officers or directors.

(4) (Deleted by amendment, P.L. 1988, c. 94.)

L.1968, c.350; amended 1969,c.102,ss.2,17; 1988,c.94,s.14.

14A:4-3. Change of registered office or registered agent.

(1) A domestic corporation or a foreign corporation authorized to transact business in this State may change its registered office or its registered agent, or both. When the registered office is changed, or when the registered agent is changed, or dies, resigns or becomes disqualified, the corporation shall, by resolution of the board, forthwith fix the address of the new registered office or designate the successor registered agent or both, as the case may be.

(2) Such corporation shall forthwith file in the office of the Secretary of State a certificate executed on behalf of the corporation setting forth

(a) the name of the corporation;

(b) if the registered agent is not being changed, the name of the registered agent;

(c) if the registered agent is being changed, the names of the registered agent being succeeded and of the successor registered agent;

(d) if the registered office is not being changed, the address of the then registered office;

(e) if the registered office is being changed, the address of the registered office immediately prior to the change, and the address of the new registered office;

(f) that the address of its registered office and the address of its registered agent will be identical after the change; and

(g) that the change in registered office, or registered agent, or both, is made pursuant to resolution of the board.

(3) The registered agent of one or more domestic or foreign corporations may change the registered office of such corporation or corporations to another address in this State by filing in the office of the Secretary of State a certificate executed by such agent and setting forth

(a) the names of all the corporations whose registered offices are being changed and for which he or it is the registered agent, listed in alphabetical order;

(b) the address of the registered office of each such corporation immediately prior to the change, and the address of the new registered office;

(c) that the address of the registered office of each such corporation and the address of its registered agent will be identical after the change; and

(d) a statement that at least 20 days' prior notice of the change has been given to each such corporation in writing.

The change of the registered office of each of the corporations named in the certificate shall become effective upon the date of such filing or at such later time, not to exceed 30 days after the date of filing, as may be set forth in the certificate.

(4) (Deleted by amendment, P.L.1997, c.139.)

L.1968, c.350; amended 1969, c.102, ss.3,17; 1971, c.253, s.1; 1977, c.34, s.1; 1997, c.139, s.1.

14A:4-4. Resignation of registered agent.

(1) The registered agent of a domestic corporation or a foreign corporation authorized to transact business in this State may resign by complying with the provisions of this section.

(2) The registered agent shall serve a notice of resignation by certified mail, return receipt requested, upon the president, or any vice president, or the secretary or treasurer of the corporation at the address last known to the agent, and shall make an affidavit of such service. The notice shall also advise the recipient of the requirements of subsection 14A:4-3(1). If such service cannot be made, the affidavit shall so state, and shall state briefly why such service cannot be made. The affidavit, together with a copy of the notice of resignation, shall be filed in the office of the Secretary of State.

(3) Such resignation shall become effective upon the expiration of 30 days after the filing in the office of the Secretary of State of the affidavit under this section or upon the designation by the corporation of a new registered agent pursuant to this act, whichever is earlier. If the corporation fails to designate a new registered agent within said 30-day period, the corporation shall thereafter be deemed to have no registered agent or registered office in this State.

(4) (Deleted by amendment, P.L.1997, c.139.)

L.1968, c.350; amended 1988, c.94, s.15; 1997, c.139, s.2.

14A:4-5. (1) Every domestic corporation and every foreign corporation authorized to transact business in this State shall file in the Department of the Treasury, within the time prescribed by this section, an annual report, executed on behalf of the corporation, or executed by the registered agent, setting forth:

(a) The name of the corporation and, in the case of a foreign corporation, the jurisdiction of its incorporation;

(b) The address of the registered office of the corporation in this State, and the name of its registered agent in this State at such address;

(c) The names and addresses of the directors and officers of the corporation;

(d) (Deleted by amendment, P.L.1988, c.94.)

(e) The address of its main business or headquarters office; and

(f) The address of its principal business office in New Jersey, if any.

(2) The State Treasurer shall designate a date for filing annual reports for each corporation required to submit a report pursuant to this section and shall annually notify the corporation of the date so designated not less than 60 days prior to such date. The corporation shall file the report within 30 days before or 30 days after the date so designated. If the date so designated is not more than six months after the date on which an annual report pursuant to the provisions of prior law was filed or on which the certificate of incorporation became effective, the corporation shall not be required to file an annual report until one year after the first occurrence of the date so designated.

(3) (Deleted by amendment, P.L.1997, c.139.)

(4) The State Treasurer shall furnish annual report forms, shall keep in his office all such reports and shall prepare an alphabetical index thereof, which reports and index shall be open to public inspection at proper hours.

(5) In the event a domestic corporation fails to file an annual report for two consecutive years with the State Treasurer, then, after written notice by certified mail to the corporation at its last known main business or headquarters office or at the address of its registered agent, the State Treasurer may issue a proclamation declaring that the certificate of incorporation of the corporation has been revoked and that all powers conferred by law upon it shall thereafter be inoperative and void. The proclamation of the State Treasurer shall be filed in the office of the State Treasurer. No corporation's certificate of incorporation shall be revoked pursuant to this subsection if, within 30 days after the giving of notice, it files the reports required by law and pays to the State Treasurer all of the fees due for the filing of the reports.

(6) In the event a foreign corporation fails to file an annual report for two consecutive years with the State Treasurer, then, after written notice by certified mail to the corporation at its last known main business or headquarters office or at the address of its registered agent, the State Treasurer may issue a proclamation declaring that the certificate of authority to do business of the corporation and the powers conferred by law upon it shall be revoked. The proclamation of the State Treasurer shall be filed in the office of the State Treasurer. No corporation's certificate of authority shall be revoked pursuant to this paragraph if, within 30 days after the giving of notice, it files the reports required by law and pays to the State Treasurer all of the fees due for the filing of the reports.

(7) If the certificate of incorporation of a domestic corporation or a certificate of authority of a foreign corporation has been revoked by proclamation, the certificate shall be reinstated by proclamation of the State Treasurer upon: (a) payment by the corporation of all fees due to the State Treasurer, consisting of a reinstatement filing fee of $75.00, tax clearance filing fee of $20, current annual report fee, and all delinquent annual report fees; and (b) certification of the Director of the Division of Taxation that no cause exists for revocation of the corporation's certificate of incorporation or certificate of authority pursuant to R.S.54:11-2 if the reinstatement request is filed two or more years after the revocation action. The reinstatement relates back to the date of issuance of the proclamation revoking the certificate of incorporation or the certificate of authority and shall validate all actions taken in the interim. In the event that in the interim the corporate name has become unavailable, the State Treasurer shall issue the certificate upon, in the case of a domestic corporation, the filing of an amendment to its certificate of incorporation to change the corporate name to an available name, and, in the case of a foreign corporation, the filing of an amended certificate of authority adopting an assumed name. The State Treasurer shall provide the forms necessary to effect annual report reinstatements.

amended 1971, c.253, s.2; 1973, c.366, s.11; 1988, c.94, s.16; 1997, c.139, s.3; 2002, c.34, s.22; 2019, c.149, s.2.

On or after the effective date of this 1989 amendatory and supplementary act, whenever the address of a registered office is required to be provided on any document under the provisions of chapter 4 of Title 14A of the New Jersey Statutes, the complete address shall be provided, including the number and street location and, if applicable, the post office box number. If the complete address has not been previously filed with the Secretary of State, it shall be provided by completion of a change of address form to be approved and made available by the Annual Reports Section of the Division of Commercial Recording in the Department of State.

L.1989,c.175,s.2.

14A:5-1. Place of shareholders' meetings.

(1) Meetings of shareholders of every corporation organized for any purpose under any general or special law of this State may, unless otherwise provided by law, be held at such place, within or without this State, as may be provided in the by-laws or as may be fixed by the board pursuant to authority granted by the by-laws. In the absence of any such provision, all meetings shall be held at the registered office of the corporation. A meeting of shareholders may be held solely or in part by means of remote communication to the extent the board authorizes and adopts guidelines and procedures governing such a meeting.

(2) One or more shareholders may participate in a meeting of shareholders by means of remote communication to the extent the board authorizes that participation, including the authorization of a meeting of shareholders held solely by means of remote participation. Shareholder meetings conducted in part or solely by means of remote communication and any shareholder's remote participation in those meetings shall be subject to those guidelines and procedures as the board adopts, and shall be in conformity with subsection 14A:5-1(3).

(3) A shareholder participating in a meeting of shareholders by means of remote communication in reliance upon subsection 14A:5-1(1) shall be deemed present in person and shall be entitled to vote at the meeting regardless of whether that meeting is held at a designated place or solely by means of remote communication. In any shareholder meeting conducted in part or solely by means of remote communication in reliance upon subsection 14A:5-1(1), the corporation shall implement reasonable measures to:

(a) verify that each person participating remotely is a shareholder or a proxy of a shareholder;

(b) provide each shareholder participating remotely with a reasonable opportunity to participate in the meeting, including an opportunity to vote on matters submitted to the shareholders, and to read or hear the proceedings of the meeting substantially concurrently with those proceedings; and

(c) record and maintain a record of any shareholder votes or other actions taken by remote communication at the meeting.

amended 2013, c.41, s.1; 2020, c.15; 2021, c.202, s.1.

An annual meeting of the shareholders shall be held at such time as may be provided in the by-laws, or as may be fixed by the board pursuant to authority granted in the by-laws, and, in the absence of such a provision, at noon on the first Tuesday of April. Failure to hold the annual meeting at the designated time, or to elect a sufficient number of directors at such meeting or any adjournment thereof, shall not affect otherwise valid corporate acts or work a forfeiture or dissolution of the corporation. If the annual meeting for election of directors is not held on the date designated therefor, the directors shall cause the meeting to be held as soon thereafter as convenient. If there is a failure to hold an annual meeting for a period of 30 days after the date designated therefor, or if no date has been designated for a period of 13 months after the organization of the corporation or after its last annual meeting, the Superior Court may, upon the application of any shareholder, summarily order the meeting or the election, or both, to be held at such time and place, upon such notice and for the transaction of such business as may be designated in such order. At any meeting ordered to be called pursuant to this section, the shareholders present in person or by proxy and having voting powers shall constitute a quorum for the transaction of the business designated in such order.

L.1968, c.350; amended by L.1969, c. 102, s. 4.

Special meetings of the shareholders may be called by the president or the board, or by such other officers, directors or shareholders as may be provided in the by-laws. Notwithstanding any such provision, upon the application of the holder or holders of not less than 10% of all the shares entitled to vote at a meeting, the Superior Court, in an action in which the court may proceed in a summary manner, for good cause shown, may order a special meeting of the shareholders to be called and held at such time and place, upon such notice and for the transaction of such business as may be designated in such order. At any meeting ordered to be called pursuant to this section, the shareholders present in person or by proxy and having voting powers shall constitute a quorum for the transaction of the business designated in such order.

L.1968,c.350.

14A:5-4. Notice of shareholders' meetings.

(1) Except as otherwise provided in this act, written notice of the time, place and purpose or purposes of every meeting of shareholders shall be given not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting. If the board has authorized participation by shareholders by means of remote communication pursuant to section 14A:5-1, the notice to that class or series of shareholders shall describe the means of remote communication to be used.

(2) When a meeting is adjourned to another time or place, it shall not be necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after the adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice under subsection 14A:5-4(1).

amended 2013, c.41, s.2.

(1) Notice of a meeting need not be given to any shareholder who signs a waiver of such notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.

(2) Whenever shareholders are authorized to take any action after the lapse of a prescribed period of time, the action may be taken without such lapse if such requirement is waived in writing, in person or by proxy, before or after the taking of such action, by every shareholder entitled to vote thereon as at the date of the taking of such action.

L.1968, c.350.

14A:5-6. Action by shareholders without a meeting.

(1) Any action required or permitted to be taken at a meeting of shareholders by this act or the certificate of incorporation or bylaws of a corporation, may be taken without a meeting if all the shareholders entitled to vote thereon consent thereto in writing, except that in the case of any action to be taken pursuant to N.J.S.14A:10-1 et seq., such action may be taken without a meeting only if all shareholders consent thereto in writing or if all shareholders entitled to vote thereon consent thereto in writing and the corporation provides to all other shareholders the advance notification required by paragraph (b) of subsection (2) of this section.

(2) Except as otherwise provided in the certificate of incorporation and subject to the provisions of this subsection, any action required or permitted to be taken at a meeting of shareholders by this act, the certificate of incorporation, or bylaws, other than the annual election of directors, may be taken without a meeting, without prior notice and without a vote, upon the written consent of shareholders who would have been entitled to cast the minimum number of votes which would be necessary to authorize such action at a meeting at which all shareholders entitled to vote thereon were present and voting.

(a) If any shareholder shall have the right to dissent from the proposed action, pursuant to N.J.S.14A:11-1 et seq., the board shall fix a date on which written consents are to be tabulated; in any other case, it may fix a date for tabulation. If no date is fixed, consents may be tabulated as they are received. No consent shall be counted which is received more than 60 days after the date of the board action authorizing the solicitation of consents or, in a case in which consents, or proxies for consents, are solicited from all shareholders who would have been entitled to vote at a meeting called to take such action, more than 60 days after the date of mailing of solicitation of consents, or proxies for consents.

(b) Except as provided in paragraph (c) of this subsection, the corporation, upon receipt and tabulation of the requisite number of written consents, shall promptly notify all non-consenting shareholders, who would have been entitled to notice of a meeting to vote upon such action, of the action consented to, the proposed effective date of such action, and any conditions precedent to such action. In the case of any action taken pursuant to N.J.S.14A:10-1 et seq., such notification shall be given at least 20 days in advance of the proposed effective date of such action. Any shareholder who did not consent, personally, or by proxy, to any action which he has a right to dissent from as provided in N.J.S.14A:11-1 et seq. shall in such notice also be informed that he has the right to dissent and to be paid the fair value of his shares, provided he files with the corporation a written notice of dissent as required by subsection (1) of N.J.S.14A:11-2 within 20 days from the date of giving of the notice, or such greater period of time as may be granted by the corporation, and outlining briefly, with particular reference to the time periods within which actions must be taken, the procedures set forth in N.J.S.14A:11-1 et seq. with which he must comply in order to assert and enforce such right.

(c) The corporation need not provide the notification required by paragraph (b) of this subsection if it

(i) solicits written consents or proxies for consents from all shareholders who would have been entitled to vote at a meeting called to take such action, and at the same time gives notice of the proposed action to all other shareholders who would have been entitled to notice of a meeting called to vote upon such action;

(ii) advises all shareholders, if any, who are entitled to dissent from the proposed action, as provided in N.J.S.14A:11-1 et seq., of their right to do so and to be paid the fair value of their shares, provided they file with the corporation before the date fixed for tabulation of the written consents a written notice of dissent as required by subsection (1) of N.J.S.14A:11-2, and outlining briefly, with particular reference to the time periods within which actions must be taken, the procedures set forth in N.J.S.14A:11-1 et seq. with which they must comply in order to assert and enforce such right; and

(iii) in the case of any proposed action to be taken pursuant to N.J.S.14A:10-1 et seq., fixes a date for tabulation of consents not less than 20 days, and not more than 60 days, after the date of mailing of solicitations of consents or proxies for consents.

(d) Any consent obtained pursuant to paragraph (c) of this subsection may be revoked at any time prior to the day fixed for tabulation of consents. Any other consent may be revoked at any time prior to the day on which the proposed action could be taken upon compliance with paragraph (b) of this subsection. No revocation shall be effective unless in writing and until received by the corporation at the place fixed for receipt of consents or, if none, at the main business office or headquarters of the corporation.

(3) Whenever action is taken pursuant to subsection (1) or (2) of this section, the written consents of the shareholders consenting thereto or the written report of inspectors appointed to tabulate such consents shall be filed with the minutes of proceedings of shareholders.

(4) Any action taken pursuant to subsection (1) or (2) of this section shall have the same effect for all purposes as if such action had been taken at a meeting of the shareholders.

(5) If any other provision of this act requires the filing of a certificate upon the taking of an action by shareholders, and such action is taken in the manner authorized by subsection (1) or (2) of this section, such certificate shall state that such action was taken without a meeting pursuant to the written consents of the shareholders and shall set forth the number of shares represented by such consents.

amended 1969, c.102, ss.5,17; 1973, c.366, s.12; 1995, c.279, s.4; 2010, c.15, s.1.

14A:5-7. Fixing record date.

(1) The bylaws may provide for fixing, or in the absence of such a provision the board may fix, in advance, a date as the record date for determining the corporation's shareholders with regard to any corporate action or event and, in particular, for determining the shareholders entitled to

(a) notice of or to vote at any meeting of shareholders or any adjournment thereof;

(b) give a written consent to any action without a meeting; or

(c) receive payment of any dividend or allotment of any right. The record date may in no case be more than 60 days prior to the shareholders' meeting or other corporate action or event to which it relates. The record date for a shareholders' meeting may not be less than 10 days before the date of the meeting. The record date to determine shareholders entitled to give a written consent may not be more than 60 days before the date fixed for tabulation of the consents or, if no date has been fixed for tabulation, more than 60 days before the last day on which consents received may be counted.

(2) If no record date is fixed

(a) the record date for a shareholders' meeting shall be the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day next preceding the day on which the meeting is held; and

(b) the record date for determining shareholders for any purpose other than that specified in paragraph 14A:5-7(2)(a) shall be at the close of business on the day on which the resolution of the board relating thereto is adopted; and

(c) the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by this act, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in this State, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded.

(3) When a determination of shareholders of record for a shareholders' meeting has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the board fixes a new record date under this section for the adjourned meeting.

L.1968, c.350; amended 1973,c.366,s.13; 1995,c.279,s.5.

(1) The officer or agent having charge of the stock transfer books for shares of a corporation shall make a complete list of the shareholders entitled to vote at a shareholders' meeting or any adjournment thereof. A list required by this subsection may consist of cards arranged alphabetically or any equipment which permits the visual display of the information required by this section. Such list shall

(a) Be arranged alphabetically within each class, series, or group of shareholders maintained by the corporation for convenience of reference, with the address of, and the number of shares held by, each shareholder;

(b) Be produced (or available by means of a visual display) at the time and place of the meeting;

(c) Be subject to the inspection of any shareholder for reasonable periods during the meeting; and

(d) Be prima facie evidence as to who are the shareholders entitled to examine such list or to vote at any meeting.

(2) If the requirements of this section have not been complied with, the meeting shall, on the demand of any shareholder in person or by proxy, be adjourned until the requirements are complied with. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting prior to the making of any such demand.

L.1968, c.350; amended 1973,c.366,s.14; 1988,c.94,s.17.

(1) Unless otherwise provided in the certificate of incorporation or this act, the holders of shares entitled to cast a majority of the votes at a meeting shall constitute a quorum at such meeting. The shareholders present in person or by proxy at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Less than a quorum may adjourn.

(2) Whenever the holders of any class or series of shares are entitled to vote separately on a specified item of business, the provisions of this section shall apply in determining the presence of a quorum of such class or series for the transaction of such specified item of business.

L.1968, c.350.

Each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, unless otherwise provided in the certificate of incorporation.

L.1968, c.350.

(1) Whenever any action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon, unless a greater plurality is required by the certificate of incorporation or another section of this act.

(2) The certificate of incorporation may provide that any class or classes of shares, or any series thereof, shall vote as a class to authorize any action, including amendments to the certificate of incorporation. Such voting as a class shall be in addition to any other vote required by this act. Where voting as a class or series is provided in the certificate of incorporation, it shall be by the proportionate vote provided in the certificate or, if no proportionate vote is so provided, then for any action other than the election of directors, by a majority of the votes cast at such meeting by the holders of shares of such class or series entitled to vote thereon.

(3) Where voting as a class or series is required by this act to authorize any action, such action shall be authorized by a majority of the votes cast at such meeting by the holders of shares of each such class or series entitled to vote thereon, unless a greater vote is required by the certificate of incorporation or another section of this act. Such voting as a class shall be in addition to any other vote required by this act.

L.1968, c.350.

(1) The provisions of the certificate of incorporation shall control whenever, with respect to any action to be authorized by the shareholders of a corporation, including the election of directors, the certificate of incorporation requires the affirmative vote of a greater proportion of the votes cast, including a unanimous vote, by the holders of shares entitled to vote thereon, or by the holders of shares of any class or series thereof, than is required by this act with respect to such action.

(2) An amendment of the certificate of incorporation which changes or deletes such a provision shall be authorized by the same vote as would be required to take action under the provision.

L.1968, c.350; amended 1988,c.94,s.18.

A corporation holding its own shares shall not vote those shares at any meeting and those shares shall not be counted in determining the total number of outstanding shares at any given time. If the corporation holds a majority of the shares entitled to vote for the election of directors of another domestic corporation or a foreign corporation, shares of the corporation held by such other domestic corporation or foreign corporation shall not be voted at any meeting or counted in determining the total number of outstanding shares at any given time.

L.1968, c.350; amended 1988,c.94,s.19.

Shares standing in the name of another domestic or foreign corporation may be voted by any officer or agent, or by proxy appointed by any of them, unless some other person, by resolution of its board or pursuant to its by-laws, shall be appointed to vote such shares.

L.1968, c.350.

Shares held by any person in any representative or fiduciary capacity may be voted by him without a transfer of such shares into his name. Where shares are held jointly by any number of fiduciaries, and the instrument or order appointing such fiduciaries does not otherwise direct, such shares shall be voted as the majority of such fiduciaries shall determine. If the fiduciaries are equally divided as to how the shares shall be voted, any court having jurisdiction may, in an action brought by any of such fiduciaries or by any beneficiary, appoint an additional person to act with such fiduciaries in such matter, and the stock shall be voted by the majority of such fiduciaries and such additional person. The court may proceed in the action in a summary manner or otherwise.

L.1968, c.350.

Shares held by two or more persons as joint tenants or as tenants in common may be voted at any meeting of the shareholders by any one of such persons, unless another joint tenant or tenant in common seeks to vote any of such shares in person or by proxy. In the latter event, the written agreement, if any, which governs the manner in which such shares shall be voted, shall control if presented at the meeting. If there be no such agreement presented at the meeting, the majority in number of such joint tenants or tenants in common present shall control the manner of voting. If there be no such majority, or if there be two such joint tenants or tenants in common, both of whom seek to vote such shares, the shares shall, for the purpose of voting, be divided equally among such joint tenants or tenants in common present.

L.1968, c.350.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, or a nominee of the pledgee. L.1968, c.350.

On and after the date on which written notice of redemption of redeemable shares has been mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with a bank or trust company with irrevocable instruction and authority to pay the redemption price to the holders thereof upon surrender of certificates therefor, such shares shall not be entitled to vote on any matter and shall not be deemed to be outstanding shares.

L.1968, c.350.

14A:5-19. Proxy voting.

(1) Every shareholder entitled to vote at a meeting of shareholders or to express consent without a meeting may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his agent, except that a proxy may be given by a shareholder or his agent by telegram, cable, telephonic transmission or by any other means of electronic communication so long as that telegram, cable, telephonic transmission or other means of electronic communication either sets forth or is submitted with information from which it can be determined that the proxy was authorized by the shareholder or his agent. No proxy shall be valid for more than 11 months, unless a longer time is expressly provided therein. Unless it is irrevocable as provided in subsection 14A:5-19(3), a proxy shall be revocable at will. The grant of a later proxy revokes any earlier proxy unless the earlier proxy is irrevocable. A proxy shall not be revoked by the death or incapacity of the shareholder, but the proxy shall continue to be in force until revoked by the personal representative or guardian of the shareholder. The presence at any meeting of any shareholder who has given a proxy does not revoke the proxy unless the shareholder files written notice of the revocation with the secretary of the meeting prior to the voting of the proxy or votes the shares subject to the proxy by written ballot.

(2) A person named in a proxy as the attorney or agent of a shareholder may, if the proxy so provides, substitute another person to act in his place, including any other person named as an attorney or agent in the same proxy. The substitution shall not be effective until an instrument effecting it is filed with the secretary of the corporation.

(3) A proxy which states that it is irrevocable is irrevocable if coupled with an interest either in the stock itself or in the corporation and, in particular and without limitation, if it is held by any of the following or a nominee of any of the following:

(a) A pledgee;

(b) A person who has purchased or agreed to purchase the shares;

(c) A creditor of the corporation who has extended credit or has agreed to continue to extend credit to the corporation if the proxy is given in consideration of the extension or continuation;

(d) A person who has agreed to perform services as an employee of the corporation if the proxy is given in consideration of the agreement; or

(e) A person designated pursuant to the terms of an agreement as to voting between two or more shareholders.

An irrevocable proxy becomes revocable when the interest which supports the proxy has terminated.

(4) Unless noted conspicuously on the share certificate, an otherwise irrevocable proxy may be revoked by a person who becomes the holder of the shares without actual knowledge of the restriction.

L.1968, c.350; amended 1973, c.366, s.15; 1988, c.94, s.20; 1998, c.144.

14A:5-20. (1) One or more shareholders of a corporation may confer upon a trustee or trustees the right to vote or otherwise represent his or their shares, for a period not to exceed 21 years, by entering into a written voting trust agreement specifying the terms and conditions of the voting trust, by filing an executed counterpart of the agreement at the registered office of the corporation and by depositing his or their shares of an original issue with, or by transferring his or their shares to, such trustee or trustees for the purposes of the agreement. After the filing of the agreement, certificates for shares shall be issued to the trustee or trustees to represent any shares of an original issue so deposited with him or them, and any certificates for shares so transferred shall be surrendered and cancelled and new certificates therefor issued to such trustee or trustees stating that they are issued under such agreement, and in the entry of such ownership in the records of the corporation that fact shall also be noted, and such trustee or trustees may vote the shares so transferred during the term of such agreement. The copy of the voting trust agreement so filed shall be subject to inspection at any reasonable time by any shareholder of the corporation or by any holder of a beneficial interest in the voting trust, in person or by agent or attorney. Voting trust certificates shall be issued to evidence beneficial interests in the voting trust.

(2) A trustee who votes shares subject to a voting trust shall incur no responsibility as shareholder, trustee, or otherwise, except for his own dereliction of duty.

(3) Where two or more persons are designated as voting trustees, and the right and method of voting any shares standing in their names at any meeting of the corporation are not fixed by the agreement appointing the trustees, the right to vote said shares and the manner of voting the same at any such meeting shall be determined by a majority of the trustees. If the trustees are equally divided as to how the shares shall be voted, the Superior Court may, in an action brought by any of such trustees, appoint an additional person to act with such trustees in such matter, and the right to vote said shares and the manner of voting the same at any such meeting shall be determined by a majority of the trustees and such additional person. The court may proceed in the action in a summary manner or otherwise.

(4) At any time within two years prior to the time of expiration of any such voting trust agreement as originally fixed or as extended as herein provided, one or more beneficiaries of the voting trust may, by agreement in writing and with the written consent of such voting trustees, extend the duration of such voting trust agreement with regard to the shares subject to their beneficial interest for an additional period not exceeding 21 years. The voting trustees shall, prior to the time of expiration of any such voting trust agreement, as originally fixed or as previously extended, as the case may be, file in the registered office of the corporation an executed counterpart of such extension agreement and of their consent thereto, and thereupon the duration of such voting trust agreement shall be extended for the period fixed in such extension agreement; but no such extension agreement shall affect the rights or obligations of persons not parties thereto.

(5) The validity of a voting trust or of an extension thereof, otherwise lawful, shall not be affected during a period of 21 years from the date of its commencement by the fact that by its terms it will or may last beyond such 21-year period; but it shall become inoperative at the end of such 21-year period.

L.1968, c.350; amended 1991,c.91,s.228.

(1) An agreement between two or more shareholders, if in writing and signed by the parties thereto, may provide that in exercising any voting rights, the shares held by them shall be voted as therein provided, or as they may agree, or as determined in accordance with a procedure agreed upon by them. Those agreements shall be specifically enforceable.

(2) A provision in the certificate of incorporation otherwise prohibited by law because it improperly restricts the board in its management of the business of the corporation, or improperly transfers or provides for the transfer to one or more persons named in the certificate of incorporation or to be selected from time to time by shareholders, all or any part of such management otherwise within the authority of the board, shall nevertheless be valid if all the incorporators have authorized such provision in the certificate of incorporation or the holders of record of all outstanding shares, whether or not having voting power, have authorized such provision in an amendment to the certificate of incorporation. If all management powers otherwise within the authority of the board are so transferred, the certificate of incorporation may provide that the corporation shall not have a board in which case the certificate of incorporation and any other certificate or document requiring a statement of the number, names, and addresses of directors shall set out in lieu thereof the name, address, and title, if any, of the person or persons in whom such management authority is then vested.

(3) A provision authorized by subsection 14A:5-21(2) shall become invalid if, to the knowledge of the board, or of the person or persons having the management authority otherwise in the board,

(a) Subsequent to the adoption of such provision, shares are transferred or issued to any person who takes delivery of the share certificate without notice thereof, unless such person consents in writing to such provisions; or

(b) Any shares of the corporation are listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or affiliated securities association.

(4) If a provision authorized by subsection 14A:5-21(2) shall have become invalid as provided in subsection 14A:5-21(3), the board, or the person or persons having the management authority otherwise in the board, shall amend the certificate of incorporation to delete such provision by filing a certificate of amendment in the office of the Secretary of State. The certificate shall be executed on behalf of the corporation and shall set forth (a) The name of the corporation;

(b) The date of the adoption of the amendment;

(c) The deleted provision; and

(d) The event set forth in subsection 14A:5-21(3)

by reason of which the provision has become invalid.

(5) The effect of any provision authorized by subsection 14A:5-21(2) shall be to relieve the directors, if any, and grant to and impose upon, the person or persons vested with management authority otherwise in the board the rights, powers, privileges, and liabilities, including liability for managerial acts or omissions, that are granted to and imposed upon directors by law to the extent that, and so long as, the discretion and powers which otherwise would be in the directors in their management of corporate affairs are vested in such person or persons by any such provision. Such person or persons shall be deemed to be directors for purposes of applying the provisions of this act and shall be deemed to be corporate agents for the purposes of section 14A:3-5.

(6) If the certificate of incorporation contains a provision authorized by subsection 14A:5-21(2), the existence of such provision shall be noted conspicuously on the face of every certificate for shares issued by such corporation, and each holder of such certificate shall conclusively be deemed to have taken delivery with notice of such provision.

(7) As used in this section, "person" shall include a natural person, a domestic or foreign corporation, a partnership, limited partnership, trust, firm, society, association, joint stock company, or any other entity legally competent to contract in its own name.

L.1968, c.350; amended 1973,c.366,s.16; 1988,c.94,s.21.

(1) A corporation may treat an infant who holds shares or bonds of such corporation as having capacity to receive and to empower others to receive dividends, interest, principal and other payments and distributions, to vote or express consent or dissent, and to make elections and exercise rights relating to such shares or bonds, unless, in the case of shares, the corporate officer responsible for maintaining the list of shareholders or the transfer agent of the corporation or, in the case of bonds, the treasurer or paying officer or agent, has received written notice that such holder is an infant.

(2) An infant holder of shares or bonds of a corporation who has received or empowered others to receive payments or distributions, voted or expressed consent or dissent, or made an election or exercised a right relating to such shares or bonds, shall have no right thereafter to disaffirm or avoid, as against the corporation, any such act on his part, unless prior to such receipt, vote, consent, dissent, election or exercise, as to shares, the corporate officer responsible for maintaining the list of shareholders or its transfer agent or, in the case of bonds, the treasurer, other paying officer or transfer agent, had received written notice that such holder was an infant.

(3) This section does not limit any other statute which authorizes any corporation to deal with an infant or limits the right of an infant to disaffirm his acts.

L.1968, c.350.

The certificate of incorporation may confer upon the holders of bonds issued by the corporation the power to vote for the election of directors and in respect to other corporate affairs and management, upon such terms and conditions as the certificate of incorporation shall provide. The certificate of incorporation or by-laws may provide for the manner of exercising such voting powers. The holders of bonds with voting powers shall, when entitled by the terms of such bonds to exercise such voting powers, have the same rights as those accorded to shareholders under section 14A:5-28.

L.1968, c.350.

14A:5-24. Elections of directors; cumulative voting.

(1) Elections of directors need not be by ballot unless a shareholder demands election by ballot at the election and before the voting begins. If the by-laws require election by ballot at any shareholders' meeting, such requirement is waived unless compliance therewith is requested by a shareholder entitled to vote at such meeting.

(2) At each election of directors every shareholder entitled to vote at such election shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, or, if the certificate of incorporation so provides, to cumulate his votes by giving one candidate as many votes as the number of such directors multiplied by the aggregate number of his votes shall equal, or by distributing such votes on the same principle among any number of such candidates.

(3) Except as otherwise provided by the certificate of incorporation or by-laws, directors shall be elected by a plurality of the votes cast at an election.

Amended 1973, c.366, s.17; 2009, c.10.

(1) Unless the by-laws otherwise provide, the board may, in advance of any shareholders' meeting, or of the tabulation of written consents of shareholders without a meeting, appoint one or more inspectors to act at the meeting or any adjournment thereof or to tabulate such consents and make a written report thereof.

(2) If inspectors to act at any meeting of shareholders are not so appointed by the board or as otherwise provided in the by-laws or shall fail to qualify, the person presiding at a shareholders' meeting may, and on the request of any shareholder entitled to vote thereat, shall, make such appointment.

(3) In case any person appointed as inspector fails to appear or act, the vacancy may be filled by appointment made by the board in advance of the meeting or at the meeting by the person presiding at the meeting.

(4) If the by-laws require inspectors at any shareholders' meeting, such requirement is waived unless compliance therewith is requested by a shareholder entitled to vote at such meeting.

(5) Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.

(6) No person shall be elected a director in an election for which he has served as an inspector.

L.1968, c.350; amended by L.1973, c. 366, s. 18, eff. May 1, 1974.

The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. If there are three or more inspectors, the act of a majority shall govern. On request of the person presiding at the meeting or any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them. Any report made by them shall be prima facie evidence of the facts therein stated, and such report shall be filed with the minutes of the meeting.

L.1968, c.350.

Any election by shareholders may be reviewed by the Superior Court in a summary manner, or otherwise, in an action brought by a shareholder entitled to vote at such election upon notice to the persons elected, the corporation and such other persons as the court may direct. The court may confirm the election, order a new election or provide such other relief as justice may require.

L.1968, c.350.

14A:5-28. Books and records; right of inspection.

(1) Each corporation shall keep books and records of account and minutes of the proceedings of its shareholders, board and executive committee, if any. Unless otherwise provided in the bylaws, such books, records and minutes may be kept outside this State. The corporation shall keep at its principal office, its registered office, at the office of its transfer agent, or on an electronic network, a record or records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of record thereof. Any of the foregoing books, minutes or records may be in written form or in any other form capable of being converted into readable form within a reasonable time, including on an electronic network. A corporation shall convert into readable form without charge any such records not in such form, upon the written request of any person entitled to inspect them.

(2) Upon the written request of any shareholder, the corporation shall mail to such shareholder its balance sheet as at the end of the preceding fiscal year, and its profit and loss and surplus statement for such fiscal year.

(3) Any person who shall have been a shareholder of record of a corporation for at least six months immediately preceding his demand, or any person holding, or so authorized in writing by the holders of, at least 5% of the outstanding shares of any class or series, upon at least five days' written demand shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its shareholders and record of shareholders and to make extracts therefrom, at the places where the same are kept pursuant to subsection 14A:5-28(1). If the records are kept on an electronic network, the corporation shall convert any records so kept into a clearly legible form upon the request of any person entitled to the records in the timeframe required pursuant to this subsection.

(4) Nothing herein contained shall impair the power of any court, upon proof by a shareholder of proper purpose, irrespective of the period of time during which the shareholder shall have been a shareholder of record, and irrespective of the number of shares held by him, to compel the production for examination by such shareholder of the books and records of account, minutes, and record of shareholders of a corporation. The court may, in its discretion prescribe any limitations or conditions with reference to the inspection, or award any other or further relief as the court may deem just and proper. The court may order books, documents and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought within this State and kept in this State upon whatever terms and conditions as the order may prescribe. In any action for inspection the court may proceed summarily.

(5) Holders of voting trust certificates representing shares of the corporation shall be regarded as shareholders for the purpose of this section.

(6) A corporation may impose reasonable limitations or conditions on the use or distribution of requested materials provided to a demanding shareholder: (a) pursuant to either subsection 14A:5-28(2) or 14A:5-28(3); or (b) prior to the order of a court pursuant to subsection 14A:5-28(4).

As used in this section, "electronic network" means one or more electronic networks or databases, including one or more distributed electronic networks or databases that utilize blockchain technology, administered by or on the behalf of the corporation.

amended 1973, c.366, s.19; 1988, c.94, s.22; 2017, c.364; 2021, c.238, s.1.

14A:5-29. Preemptive rights.

(1) The shareholders of corporations organized after January 1, 1969 shall not have preemptive rights unless the certificate of incorporation provides otherwise. The shareholders of corporations organized prior to January 1, 1969 shall have preemptive rights unless a bylaw duly adopted by the shareholders prior to that date or the certificate of incorporation provides otherwise. Any corporation may alter or abolish preemptive rights by amendment to its certificate of incorporation.

(2) Any corporation may elect to grant its shareholders preemptive rights. An election may be made by including in the certificate of incorporation a statement to the effect that the shareholders shall have preemptive rights.

(3) Unless otherwise provided in the certificate of incorporation, the effect of shareholders having preemptive rights shall be as follows:

(a) Upon the issuance for cash of shares, or options to purchase shares, of the same class as those held by a shareholder, the shareholder shall have a right to acquire a pro rata portion of such shares or options so issued according to the number of shares of such class held by him. Such preemptive right shall extend to shares, obligations or other securities, however described, which are convertible into shares of the same class as those held by the shareholder.

(b) Shares, obligations or other securities of the corporation which are subject to preemptive rights as herein provided shall not be deemed to be issued for cash within the meaning of this section if cash constitutes only a part of the consideration received by the corporation.

(c) A shareholder may waive his preemptive right; a waiver of a preemptive right, when evidenced by a writing, shall be binding upon the shareholder notwithstanding it is given without consideration.

(d) No shareholder shall have a preemptive right to acquire shares, obligations or other securities as herein provided, which

(i) are issued pursuant to a plan of merger or consolidation;

(ii) are issued pursuant to Chapter 8 of this act;

(iii) are issued to satisfy conversion or option rights, however evidenced, granted by the corporation;

(iv) are issued pursuant to a plan of reorganization approved by a court pursuant to a statute of this State or of the United States; or

(v) are part of the shares, obligations or other securities authorized in the original certificate of incorporation and are issued within six months from the effective date of such certificate.

(e) Upon the proposed issuance of shares, obligations or other securities subject to preemptive rights, the board shall cause notice to be given to each shareholder of record entitled to preemptive rights. The notice shall set forth (i) the amount of shares, obligations or other securities with respect to which the shareholder has a preemptive right and the method used to determine that amount;

(ii) the price and other terms and conditions upon which the shareholder may purchase such shares, obligations or other securities; and

(iii) the time within which and the method by which the shareholder must exercise the right.

The notice shall be given at least 30 days prior to the time within which the shareholder must exercise the right.

(f) Shares, obligations or other securities subject to preemptive rights, which are not acquired by shareholders in the exercise of their preemptive rights may, for a period not exceeding one year after the date limited by the directors for the exercise of such preemptive rights, be issued, sold, or optioned to such person or persons as the board may determine, at a price not less than that at which they were offered to such shareholders. Any such shares, obligations or other securities not so issued, sold or optioned during such one-year period, shall at the expiration of such period again be subject to preemptive rights of shareholders.

L.1968, c.350; amended 1973,c.366,s.20; 1988,c.94,s.23; 1995,c.279,s.6.

14A:5-30. Liability of subscribers and shareholders.

(1) A holder of or subscriber for shares of a corporation shall be under no obligation to the corporation or its creditors to pay for such shares other than the obligation to pay to the corporation the unpaid portion of the consideration for which such shares were issued or to be issued, which in no event shall be less than the amount of the consideration for which such shares could be lawfully issued.

(2) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts of the corporation, except that a shareholder may become personally liable by the reason of his own acts or conduct.

(3) A person holding stock in a fiduciary or representative capacity shall not be personally liable to the corporation as the holder of or subscriber for shares of a corporation but the estate and funds in his hands shall be so liable.

(4) Any person becoming an assignee or transferee of shares or of a subscription for shares in good faith and without knowledge or notice that the full consideration therefor has not been paid shall not be liable to the corporation or its creditors for any unpaid portion of such consideration, but the original holder or subscriber and any assignee or transferee prior to an assignment or transfer to a person taking in good faith and without such knowledge or notice shall remain liable therefor.

(5) No pledgee or other holder of shares as collateral security shall be liable as a shareholder.

L.1968, c.350; amended 1995,c.279,s.7.

1. A corporation may establish, in its bylaws, procedures or conditions under which materials with respect to shareholder-nominated individuals will be included in a corporation's proxy solicitation materials, including the form of proxy, for an upcoming election of directors. Those procedures or conditions may include, but shall not be limited to, the following:

(1) A condition requiring a minimum level of beneficial ownership of shares of the corporation's voting stock by the nominating shareholder or a minimum duration of ownership of those shares;

(2) Conditions limiting nominations of directors who have been previously nominated to the board;

(3) A provision limiting the number of shareholder-nominated directors for each shareholder meeting at which directors are to be elected;

(4) Procedures requiring the nominating shareholder to submit specified information concerning the shareholder and the shareholder's nominees, including information concerning ownership by those persons of shares of the corporation's capital stock;

(5) A provision limiting nominations to shareholders, or any affiliate of those shareholders, who have not, and whose nominee has not, within a specified time period, publicly proposed to acquire shares constituting a specified percentage of the voting power of the corporation's outstanding voting stock; and

(6) A provision requiring that the nominating shareholder undertake to indemnify the corporation in respect of any loss arising as a result of any false or misleading information or statement submitted by the nominating shareholder in connection with a nomination.

L.2017, c.299, s.1.

14A:6-1. Board of directors.

(1) The business and affairs of a corporation shall be managed by or under the direction of its board, except as in this act or in its certificate of incorporation otherwise provided. Directors shall be at least 18 years of age and need not be United States citizens or residents of this State or shareholders of the corporation unless the certificate of incorporation or by-laws so require. The certificate of incorporation or by-laws may prescribe other qualifications for directors.

(2) In discharging his duties to the corporation and in determining what he reasonably believes to be in the best interest of the corporation, a director may, in addition to considering the effects of any action on shareholders, consider any of the following: (a) the effects of the action on the corporation's employees, suppliers, creditors and customers; (b) the effects of the action on the community in which the corporation operates; and (c) the long term as well as the short-term interests of the corporation and its shareholders, including the possibility that these interests may best be served by the continued independence of the corporation.

(3) If on the basis of the factors described in subsection (2) of this section, the board of directors determines that any proposal or offer to acquire the corporation is not in the best interest of the corporation, it may reject such proposal or offer. If the board of directors determines to reject any such proposal or offer, the board of directors shall have no obligation to facilitate, remove any barriers to, or refrain from impeding the proposal or offer.

L.1968, c.350; amended 1973,c.366,s.21; 1988,c.94,s.24; 1989,c.106,s.1.

The board of directors of a corporation shall consist of one or more members. Subject to any provisions contained in the certificate of incorporation, the by-laws shall specify the number of directors, or that the number of directors shall not be less than a stated minimum nor more than a stated maximum, with the actual number to be determined in the manner prescribed in the by-laws, except as to the number constituting the first board.

L.1968, c.350.; amended by L.1969, c. 102, s. 6; L.1973, c. 366, s. 22, eff. May 1, 1974.

14A:6-3. Term of directors; resignation.

(1) The directors named in the certificate of incorporation shall hold office until the first annual meeting of shareholders, and until their successors shall have been elected and qualified. At the first annual meeting of shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting, except in case of the classification of directors pursuant to subsection (1) of N.J.S.14A:6-4 and in the case of directors whose terms expire as provided for in subsection (2) of N.J.S.14A:6-4. Each director shall hold office for the term for which he is elected and until his successor shall have been elected and qualified.

(2) A director may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation of that notice, or at such subsequent time as shall be specified in the notice of resignation, or upon the occurrence of a certain event or events specified in the notice of resignation. Any resignation which is contingent upon a director failing to receive a specified vote for re-election shall provide that the resignation is irrevocable.

Amended 1988, c.94, s.25; 2009, c.9.

(1) A corporation may provide in its certificate of incorporation for the classification of its directors in respect to the time for which they shall severally hold office, but no class of directors shall hold office for a term shorter than one year or longer than five years, and the term of office of at least one class shall expire in each year. No classification of directors shall be effective prior to the first annual meeting of shareholders.

(2) Any corporation having more than one class or series of shares may provide in its certificate of incorporation for the election of one or more directors by the shareholders of any class or series, to the exclusion of other shareholders. The certificate of incorporation may grant shareholders of a class or series of shares the right to elect one or more directors upon the occurrence of stated events for a specific term or a term ending upon the occurrence of stated events.

L.1968, c.350; amended 1988,c.94,s.26.

(1) Unless otherwise provided in the certificate of incorporation or the by-laws, any directorship not filled at the annual meeting, any vacancy, however caused, occurring in the board, and newly created directorships resulting from an increase in the authorized number of directors may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the board, or by a sole remaining director. A director so elected by the board shall hold office until the next succeeding annual meeting of shareholders and until his successor shall have been elected and qualified.

(2) Unless otherwise provided in the certificate of incorporation or by-laws, when one or more directors shall resign from the board effective at a future date, a majority of the directors, then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies.

(3) Any directorship not filled by the board may be filled by the shareholders at an annual meeting or at a special meeting of shareholders called for that purpose.

(4) If by reason of death, resignation or other cause a corporation has no directors in office, any shareholder or the executor or administrator of a deceased shareholder may call a special meeting of shareholders for the election of directors and, over his own signature, shall give notice of said meeting in accordance with section 14A:5-4 except to the extent that such notice is waived pursuant to section 14A:5-5.

L.1968, c.350; amended 1988,c.94,s.27.

(1) One or more or all the directors of a corporation may be removed for cause or, unless otherwise provided in the certificate of incorporation, without cause by the shareholders by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of directors.

(2) Unless otherwise provided in the certificate of incorporation, the removal of directors, with or without cause, by vote of the shareholders as provided in subsection 14A:6-6(1), is subject to the following qualifications

(a) In any case where cumulative voting is authorized, if less than the total number of directors then serving on the board is to be removed by the shareholders, no one of the directors may be so removed if the votes cast against his removal would be sufficient to elect him if then voted cumulatively at an election of the entire board; or, if there are classes of directors, at an election of the class of directors of which he is a part;

(b) A director elected by a class vote, as authorized by subsection 14A:6-4(2), may be removed only by a class vote of the holders of shares entitled to vote for his election;

(c) If the certificate of incorporation requires a greater vote than a plurality of the votes cast for the election of directors, no director may be removed except by the greater vote required to elect him; and

(d) Shareholders of a corporation whose board of directors is classified as provided in subsection 14A:6-4(1) shall not be entitled to remove directors without cause.

(3) The certificate of incorporation or a by-law adopted by the shareholders may provide that the board shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal.

(4) The Superior Court, in an action in which the court may proceed in a summary manner or otherwise, may review the removal or suspension of a director for cause.

(5) No act of the board done during the period when a director has been suspended or removed for cause shall be impugned or invalidated solely on account of the suspension or removal if the suspension or removal is thereafter rescinded by the shareholders or by the board or by the final judgment of the court.

L.1968, c.350; amended 1988,c.94,s.28.

14A:6-7.1. Directors' voting; quorum of board of directors and committees; action of board and committees; action of directors without a meeting.

(1) Each director shall have one vote at meetings of the board or at meetings of board committees unless the certificate of incorporation provides the director is entitled to more than one vote pursuant to a provision in the certificate of incorporation consistent with subsection 14A:6-7.1(2).

(2) The certificate of incorporation may provide either that one or more directors elected by the holders of shares of a class or series shall have more than one vote or that the shareholders at an annual or special meeting shall have the right to designate one or more directors who shall have more than one vote. The certificate of incorporation shall also specify either the number of votes which those directors shall have or that the shareholders electing those directors shall have the right to specify the number of votes which the directors shall have. Any person appointed by the board to fill a vacancy of a directorship with more than one vote shall have only one vote unless otherwise provided by the certificate of incorporation. If a director has more than one vote as provided in this subsection, any reference in this act to the vote or act of a majority of the board, of the directors, or of the entire board, or similar language, means the vote or act of directors who are entitled to cast a majority of the votes.

(3) The participation of directors with a majority of the votes of the entire board, or of any committee thereof, shall constitute a quorum for the transaction of business, unless the certificate of incorporation or the by-laws provide that a greater or lesser proportion shall constitute a quorum, which in no case shall be less than one-third of the votes of the entire board or committee.

(4) Any action approved by a majority of the votes of directors present at a meeting at which a quorum is present shall be the act of the board or of the committee, unless this act, or the certificate of incorporation, or the by-laws require a greater proportion, including a unanimous vote.

(5) Unless otherwise provided by the certificate of incorporation or by-laws, any action required or permitted to be taken pursuant to authorization voted at a meeting of the board or any committee thereof, may be taken without a meeting if, prior or subsequent to the action, all members of the board or of such committee, as the case may be, consent thereto in writing or by electronic transmission and the written consents or electronic transmissions are filed with the minutes of the proceedings of the board or committee. Such consent or electronic transmission shall have the same effect as a unanimous vote of the board or committee for all purposes, and may be stated as a unanimous vote in any certificate or other document filed with the Secretary of State. The filing of written consents or electronic transmissions shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. "Electronic transmission" shall have the meaning contained in section 14A:1-8.1.

(added) 1988, c.94, s.29; amended 2017, c.363.

(1) No contract or other transaction between a corporation and one or more of its directors, or between a corporation and any domestic or foreign corporation, firm or association of any type or kind in which one or more of its directors are directors or are otherwise interested, shall be void or voidable solely by reason of such common directorship or interest, or solely because such director or directors are present at the meeting of the board or a committee thereof which authorizes or approves the contract or transaction, or solely because his or their votes are counted for such purpose, if any one of the following is true:

(a) The contract or other transaction is fair and reasonable as to the corporation at the time it is authorized, approved or ratified; or

(b) The fact of the common directorship or interest is disclosed or known to the board or committee and the board or committee authorizes, approves, or ratifies the contract or transaction by unanimous written consent, provided at least one director so consenting is disinterested, or by affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

(c) The fact of the common directorship or interest is disclosed or known to the shareholders, and they authorize, approve or ratify the contract or transaction.

(2) Common or interested directors may be counted in determining the presence of a quorum at a board or committee meeting at which a contract or transaction described in subsection 14A:6-8(1) is authorized, approved or ratified.

(3) The board, by the affirmative vote of a majority of directors in office and irrespective of any personal interest of any of them, shall have authority to establish reasonable compensation of directors for services to the corporation as directors, officers, or otherwise.

L.1968, c.350; amended 1973,c.366,s.24; 1988,c.94,s.30.

(1) If the certificate of incorporation or the by-laws so provide, the board, by resolution adopted by a majority of the entire board, may appoint from among its members an executive committee and one or more other committees, each of which shall have one or more members. To the extent provided in such resolution, or in the certificate of incorporation or in the by-laws, each such committee shall have and may exercise all the authority of the board, except that no such committee shall

(a) make, alter or repeal any by-law of the corporation;

(b) elect or appoint any director, or remove any officer or director;

(c) submit to shareholders any action that requires shareholders' approval; or

(d) amend or repeal any resolution theretofore adopted by the board which by its terms is amendable or repealable only by the board.

(2) The board, by resolution adopted by a majority of the entire board may,

(a) fill any vacancy in any such committee;

(b) appoint one or more directors to serve as alternate members of any such committee, to act in the absence or disability of members of any such committee with all the powers of such absent or disabled members;

(c) abolish any such committee at its pleasure; and

(d) remove any director from membership on such committee at any time, with or without cause.

(3) Actions taken at a meeting of any such committee shall be reported to the board at its next meeting following such committee meeting; except that, when the meeting of the board is held within 2 days after the committee meeting, such report shall, if not made at the first meeting, be made to the board at its second meeting following such committee meeting.

(4) The designation of any such committee and the delegation thereto of authority shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law.

L.1968, c.350; amended by L.1971, c. 394, s. 1, eff. Jan. 7, 1972; L.1973, c. 366, s. 25, eff. May 1, 1974.

(1) Meetings of the board may be held either within or without this State, unless otherwise provided by the certificate of incorporation or the by-laws.

(2) Regular meetings of the board may be held with or without notice as prescribed in the by-laws. Special meetings of the board shall be held upon such notice as is prescribed in the by-laws. Notice of any meeting need not be given to any director who signs a waiver of notice, whether before or after the meeting. The attendance of any director at a meeting without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him. Neither the business to be transacted at, nor the purpose of, any meeting of the board need be specified in the notice or waiver of notice of such meeting unless required by the by-laws. Notice of an adjourned meeting need not be given if the time and place are fixed at the meeting adjourning and if the period of adjournment does not exceed ten days in any one adjournment.

(3) Where appropriate communication facilities are reasonably available, any or all directors shall have the right to participate in all or any part of a meeting of the board or a committee of the board by means of conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other, unless otherwise provided in the certificate of incorporation or the by-laws.

L.1968, c.350; amended 1969,c.102,ss.7,17; 1988,c.94,s.31.

A corporation may lend money to, or guarantee any obligation of, or otherwise assist, any director, officer or employee of the corporation or of any subsidiary, whenever, in the judgment of the directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be made with or without interest, and may be unsecured, or secured in such manner as the board shall approve, including, without limitation, a pledge of shares of the corporation, and may be made upon such other terms and conditions as the board may determine.

L.1968, c.350; amended 1973,c.366,s.26; 1988,c.94,s.32.

(1) In addition to any other liabilities imposed by law upon directors of a corporation, directors who vote for, or concur in, any of the following corporate actions

(a) the declaration of any dividend or other distribution of assets to the shareholders contrary to the provisions of this act or contrary to any restrictions contained in the certificate of incorporation;

(b) the purchase of the shares of the corporation contrary to the provisions of this act or contrary to any restrictions contained in the certificate of incorporation;

(c) the distribution of assets to shareholders during or after dissolution of the corporation without paying, or adequately providing for, all known debts, obligations and liabilities of the corporation, except that the directors shall be liable only to the extent of the value of assets so distributed and to the extent that such debts, obligations and liabilities of the corporation are not thereafter paid, discharged, or barred by statute or otherwise;

(d) the complete liquidation of the corporation and distribution of all of its assets to its shareholders without dissolving or providing for the dissolution of the corporation and the payment of all fees, taxes, and other expenses incidental thereto, except that the directors shall be liable only to the extent of the value of assets so distributed and to the extent that such fees, taxes, and other expenses incidental to dissolution are not thereafter paid;

(e) the making of any loan to an officer, director or employee of the corporation or of any subsidiary thereof contrary to the provisions of this act;

shall be jointly and severally liable to the corporation for the benefit of its creditors or shareholders, to the extent of any injury suffered by such persons, respectively, as a result of any such action.

(2) Any director against whom a claim is successfully asserted under this section shall be entitled to contribution from the other directors who voted for, or concurred in, the action upon which the claim is asserted.

(3) Directors against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amounts paid by them to the corporation as a result of such claims,

(a) upon payment to the corporation of any amount of an improper dividend or distribution, to be subrogated to the rights of the corporation against shareholders who received such dividend or distribution with knowledge of facts indicating that it was not authorized by this act, in proportion to the amounts received by them respectively;

(b) upon payment to the corporation of any amount of the purchase price of an improper purchase of shares, to have the corporation rescind such purchase of shares and recover for their benefit, but at their expense, the amount of such purchase price from any seller who sold such shares with knowledge of facts indicating that such purchase of shares by the corporation was not authorized by this act;

(c) upon payment to the corporation of the claim of any creditor by reason of a violation of paragraph 14A:6-12(1)(c), to be subrogated to the rights of the corporation against shareholders who received an improper distribution of assets;

(d) upon payment to the corporation of the amount of any loan made improperly, to be subrogated to the rights of the corporation against the person who received the improper loan.

(4) A director shall not be liable under this section if, in the circumstances, he discharged his duty to the corporation under section 14A:6-14.

(5) Every action against a director for recovery upon a liability imposed by subsection 14A:6-12(1) shall be commenced within six years next after the cause of any such action shall have accrued.

L.1968, c.350; amended by L.1973, c. 366, s. 27, eff. May 1, 1974.

A director of a corporation who is present at a meeting of its board, or any committee thereof of which he is a member, at which action on any corporate matter referred to in section 14A:6-12 is taken shall be presumed to have concurred in the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before or promptly after the adjournment thereof. Such right to dissent shall not apply to a director who voted in favor of such action. A director who is absent from a meeting of the board, or any committee thereof of which he is a member, at which any such action is taken shall be presumed to have concurred in the action unless he shall file his dissent with the secretary of the corporation within a reasonable time after learning of such action.

L.1968, c.350; amended by L.1973, c. 366, s. 28, eff. May 1, 1974.

Liability of directors; reliance on records and reports.

(1) Directors and members of any committee designated by the board shall discharge their duties in good faith and with that degree of diligence, care and skill which ordinarily prudent people would exercise under similar circumstances in like positions.

(2) In discharging their duties, directors and members of any committee designated by the board shall not be liable if, acting in good faith, they rely

(a) Upon the opinion of counsel for the corporation;

(b) Upon written reports setting forth financial data concerning the corporation and prepared by an independent public accountant or certified public accountant or firm of such accountants;

(c) Upon financial statements, books of account or reports of the corporation represented to them to be correct by the president, the officer of the corporation having charge of its books of account, or the person presiding at a meeting of the board; or

(d) Upon written reports of committees of the board.

(3) A director shall not be personally liable to the corporation or its shareholders for damages for breach of duty as a director if and to the extent that such liability has been eliminated or limited by a provision in the certificate of incorporation authorized by subsection (3) of N.J.S. 14A:2-7.

(4) In taking action, including, without limitation, action which may involve or relate to a change or potential change in the control of the corporation, a director shall be entitled to consider, without limitation, both the long-term and the short-term interests of the corporation and its shareholders. For the purpose of this subsection, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the corporation, whether through the ownership of voting shares, by contract or otherwise.

L.1968, c.350; amended 1987,c.35,s.3; 1988,c.94,s.33; 1989,c.17,s.3.

(1) The officers of a corporation shall consist of a president, a secretary, a treasurer, and, if desired, a chairman of the board, one or more vice presidents, and such other officers as may be prescribed by the by-laws. Unless otherwise provided in the by-laws, the officers shall be elected by the board.

(2) Any two or more offices may be held by the same person but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law or by the by-laws to be executed, acknowledged, or verified by two or more officers.

(3) Any officer elected as herein provided shall hold office for the term for which he is so elected and until a successor is elected and has qualified, subject to earlier termination by removal or resignation.

(4) All officers of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the by-laws, or as may be determined by resolution of the board not inconsistent with the by-laws.

L.1968, c.350; amended by L.1973, c. 366, s. 29, eff. May 1, 1974.

(1) Any officer elected by the board may be removed by the board with or without cause. An officer elected by the shareholders may be removed, with or without cause, only by vote of the shareholders but his authority to act as an officer may be suspended by the board for cause. The removal of an officer shall be without prejudice to his contract rights, if any. Election of an officer shall not of itself create contract rights.

(2) An officer may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall be specified in the notice of resignation.

(3) Any vacancy occurring among the officers, however caused, shall be filled in the manner provided in the by-laws. In the absence of such provision, any vacancy shall be filled by the board.

L.1968, c.350; amended 1988,c.94,s.34.

The seal of the corporation and any or all signatures of the officers or other agents of the corporation upon a bond and any coupon attached thereto may be facsimiles if the bond is countersigned by an officer or other agent of a trustee or other certifying or authenticating authority. In case any officer or other agent who has signed or whose facsimile signature has been placed upon such bond or coupon shall have ceased to be such officer or agent before such bond is issued, it may be issued by the corporation with the same effect as if he were such officer or agent at the date of its issue.

L.1968, c.350.

(1) Each corporation shall have power to create and issue the number of shares stated in its certificate of incorporation. Such shares may consist of one class or may be divided into two or more classes and any class may be divided into one or more series. Each class and series may have such designation and such relative voting, dividend, liquidation and other rights, preferences, and limitations as shall be stated in the certificate of incorporation, except that all shares of the same class shall be either without par value or shall have the same par value. Each class and series shall be designated so as to distinguish its shares from those of every other class and series.

(2) In particular, and without limitation upon the general power granted by subsection 14A:7-1(1), a corporation, when so authorized in its certificate of incorporation, may issue classes of shares and series of shares of any class

(a) entitling the holders thereof to cumulative, non-cumulative or partially cumulative dividends;

(b) entitling the holders thereof to receive dividends payable on a parity with or in preference to the dividends payable on any other class or series;

(c) entitling the holders thereof to preferential rights upon the liquidation of, or upon any distribution of the assets of, the corporation;

(d) convertible as provided in section 14A:7-9;

(e) redeemable as provided in section 14A:7-6;

(f) lacking voting rights or having limited voting rights or enjoying special or multiple voting rights.

L.1968, c.350.

(1) The division of shares into classes and into series within any class or classes, the determination of the designation and the number of shares of any class or series, the determination of the relative rights, preferences and limitations of the shares of any class or series, and any or all of such divisions and determinations, may be accomplished by the original certificate of incorporation or may be accomplished by an amendment or amendments thereto. Such an amendment may be made by any procedure to amend the certificate of incorporation provided for in Chapter 9 of this act or as provided in subsection 14A:7-2(2).

(2) Such an amendment may be made by action of the board if the certificate of incorporation authorizes the board to make such divisions and determinations. Unless otherwise provided in the certificate of incorporation, authority granted to the board to determine the number of shares of any class or series shall be deemed to include the power to increase the number of shares of such class or series previously determined by it, and to decrease such previously determined number of shares to a number not less than that of the shares then outstanding. Upon any such decrease, the affected shares shall continue as part of the authorized shares and shall have such designation and such relative rights, preferences and limitations as they had before the board first acted to include them in such class or series. Unless otherwise provided in the certificate of incorporation, authority granted to the board to determine the relative rights and preferences of any class or series shall be deemed to include the power to determine relative rights and preferences which are prior or subordinate to, or equal with, the shares of any other class or series, whether or not such other shares are issued and outstanding at the time when the board acts to determine such relative rights and preferences. The certificate of incorporation may authorize the board to change the designation or number of shares, or the relative rights, preferences and limitations of the shares, of any theretofore established class or series no shares of which have been issued.

(3) Whenever the board acts under subsection 14A:7-2(2) it shall adopt a resolution setting forth its actions and stating the designation and number of shares, and the relative rights, preferences and limitations of the shares, of each class and series thereby created or with respect to which it has made a determination or change.

(4) Before the issue of any shares of a class or series with respect to which the board has acted under subsection 14A:7-2(2), the corporation shall execute and file in the office of the Secretary of State a certificate of amendment to the certificate of incorporation setting forth

(a) the name of the corporation;

(b) a copy of the resolution of the board required by subsection 14A:7-2(3);

(c) that such resolution was duly adopted by the board and the date of such adoption; and

(d) that the certificate of incorporation is amended so that the designation and number of shares of each class and series acted upon in the resolution, and the relative rights, preferences and limitations of each such class and series, are as stated in the resolution.

L.1968, c.350; amended by L.1973, c. 366, s. 30, eff. May 1, 1974.

14A:7-3. Subscription for shares.

(1) Unless otherwise provided by the subscription agreement or unless all of the subscribers consent to the revocation of such subscription, a subscription for shares of a corporation to be formed shall be irrevocable for a period of six months if no certificate of incorporation shall be filed within such period. If the certificate of incorporation is filed within such period, or if it is filed at any later time before revocation, such subscription shall also be irrevocable until 60 days after the filing of the certificate of incorporation. Subscriptions for shares, whether made before or after the organization of a corporation, shall be accepted or rejected by the board, unless the certificate of incorporation or the bylaws require action by the shareholders.

(2) (Deleted by amendment, P.L.1997, c.252.)

(3) A subscriber shall not become a holder of any shares for which the full consideration has not been paid. Unless otherwise provided by the subscription agreement

(a) Any payment made by the subscriber, in accordance with the subscription agreement or as called for by the board, shall be applied to pay the full consideration for as many whole shares as possible and any remaining balance of such payment shall be applied as part payment of a share;

(b) A share certificate shall be registered in the name of the subscriber for the number of shares so paid for in full; and

(c) The corporation shall be entitled to retain such share certificate as security for the performance by the subscriber of his obligations under the subscription agreement and subject to the power of sale or rescission upon default provided in paragraphs 14A:7-3(5)(b) and 14A:7-3(5)(c).

(4) Unless otherwise provided by the subscription agreement

(a) Subscriptions for shares, whether made before or after the organization of a corporation, shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board;

(b) Any call made by the board for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series, as the case may be;

(c) All such calls for payments on subscriptions shall be upon 30 days' notice thereof and of the time and place of payment, which notice shall be given personally or by registered or certified mail.

(5) In the event of default in the payment of any installment or call or other amount due under the terms of the subscription agreement, including any amount which may become due as a result of a default in the performance of any provision thereof, the corporation shall have the following rights and duties:

(a) It may proceed to collect the amount due in the same manner as any other debt owing to it. At any time before full satisfaction of the claim or any judgment therefor, it may proceed as provided in paragraph 14A:7-3(5)(b).

(b) It may sell the shares in any reasonable manner. Notice of the time and place of any public sale or of the time after which any private sale may be had, together with a statement of the amount due upon each share, shall be given in writing to the subscriber personally or by registered or certified mail at least 20 days before any such time stated in the notice. Unless otherwise provided in the subscription agreement, the corporation may not be the purchaser at any sale. Any excess of net proceeds realized over the amount due plus interest shall be paid over to the subscriber. If the sale is made in good faith, in a reasonable manner and upon the notice required by this paragraph, the corporation may recover the difference between the amount due plus interest and the net proceeds of the sale. A good faith purchaser for value shall acquire title to the sold shares free of any rights of the subscriber even though the corporation fails to comply with one or more of the requirements of this subsection.

(c) It may rescind the subscription, with the effect provided in subsection 14A:7-3(6), and may recover damages for breach of contract. Unless special circumstances show proximate damages of a different amount, the measure of damages shall be the difference between the market price at the time and place for tender of the shares and the unpaid contract price. Liquidated damages may be provided for in the subscription agreement in an amount which is reasonable under the circumstances, including the difficulties of proof of loss. The subscriber shall be entitled to restitution of any amount by which the sum of his payments exceeds the corporation's damages for breach of contract, whether fixed by agreement or judgment.

The rights and duties set forth in subsection 14A:7-3(5) shall be interpreted as cumulative so far as is consistent with the purpose of entitling the corporation to a full and single recovery of the amount due or its damages. The subscription agreement may limit the rights and remedies of the corporation set forth in subsection 14A:7-3(5), and may add to them so far as is consistent with the preceding sentence.

(6) The rescission by the corporation of a subscription under which a portion of the shares subscribed for have been issued and in which the corporation retains a security interest, as provided in subsection 14A:7-3(3), shall effect the cancellation of such shares.

(7) A contract made with a corporation to purchase its shares is a subscription agreement and not an executory contract to purchase shares, unless otherwise provided in the agreement.

L.1968, c.350; amended 1973,c.366,s.31; 1988,c.94,s.35, 1997,c.252,s.20.

(1) Subject to any restriction contained in the certificate of incorporation, shares may be issued for such consideration as shall be fixed from time to time by the board or as shall be determined in accordance with a general formula or at not less than such minimum consideration as the board shall authorize.

(2) The shareholders may reserve in the certificate of incorporation the right to fix the consideration to be received for shares. If such right is reserved as to any shares, the shareholders shall either fix the consideration to be received for such shares or authorize the board to fix such consideration.

(3) (Deleted by amendment, P.L. 1988, c. 94.)

(4) (Deleted by amendment, P.L. 1988, c. 94.)

(5) (Deleted by amendment, P.L. 1988, c. 94.)

(6) A good faith judgment of the board of directors or the shareholders, as the case may be, as to the value of the consideration is conclusive.

L.1968, c.350; amended 1988,c.94,s.36.

(1) Subject to any restrictions contained in the certificate of incorporation, the consideration for the issuance of shares may be paid, in whole or in part, in: (a) money, (b) real property,(c) tangible or intangible personal property, including stock of another corporation, and obligations of the subscriber or of another person, whether secured or unsecured, (d) labor or services actually performed for the corporation or in its formation, or (e) labor or services to be performed in the future for the corporation. A new employee's termination of employment with a prior employer or the employee's acceptance of employment with the corporation is adequate consideration for the issuance of shares.

(2) When payment of the full consideration for which shares are to be issued is made, the subscriber shall thereupon become entitled to all the rights and privileges of a holder of such shares, including the registration in his name of a certificate representing them, and such shares shall be fully paid and nonassessable.

L.1968, c.350; amended 1973,c.366,s.32; 1988,c.94,s.37.

(1) A corporation may provide in its certificate of incorporation for one or more classes or series of shares which are redeemable, in whole or in part, at the option of the corporation in cash, its bonds or other property, at such price or prices, within such period or periods, and under such conditions as are stated in the certificate of incorporation. A sinking fund may be created for the redemption of any class or series of redeemable shares.

(2) A corporation which is an open-end investment company, as defined in an Act of Congress entitled "Investment Company Act of 1940," as amended or supplemented, or any act adopted in substitution therefor, may, if its certificate of incorporation so provides and upon compliance with that act, issue shares which are redeemable at the option of the holder at a price approximately equal to the shares' proportionate interest in the net assets of the corporation, and a shareholder may compel redemption of such shares in accordance with their terms.

(3) A corporation may provide, in its certificate of incorporation for one or more classes or series of shares which are redeemable, in whole or in part, at the option of the shareholder. Subject to the restrictions imposed by section 14A:7-16, such shares may be redeemable in cash, bonds of the corporation or other property, at such price or prices, as are fixed, or established by formula, within such period or periods and under such conditions as are stated in the certificate of incorporation, and such shares may also be redeemable at the option of the corporation, as provided in subsection 14A:7-6(1). If any shares redeemable at the option of the shareholder are outstanding, the certificate of incorporation may be amended to delete or limit the provisions concerning redeemability with respect to those outstanding shares only with the unanimous approval of the holders of those shares. The provisions of this subsection shall not be applicable to an open-end investment company.

(4) (Deleted by amendment, P.L. 1988, c. 94.)

L.1968, c.350; amended 1969,c.102,ss.8,17; 1973,c.366,s.33; 1988,c.94,s.38.

14A:7-7. Share rights and options.

(1) Subject to any provisions in respect thereof set forth in its certificate of incorporation in effect before the authorization and issuance of the rights or options, a corporation may create and issue, whether or not in connection with the issuance and sale of any of its shares or bonds, rights or options entitling the holders thereof to purchase from the corporation shares of any class or series for such consideration and upon such terms and conditions as may be fixed by the board. Such rights or options shall be evidenced in such manner as the board shall approve and, without limiting the generality of the foregoing, may be evidenced by warrants attached to or forming part of bond instruments or share certificates or existing independently thereof. The instruments evidencing such rights or options shall set forth or incorporate by reference the terms and conditions of their exercise, including the time or times, which may be limited or unlimited in duration, within which, and the price or prices at which such shares may be purchased from the corporation, and any limitations on the transferability of any such right or option. The rights or options may contain provisions which adjust the rights or options in the event of an acquisition of shares or a reorganization, merger, consolidation, sale of assets or other occurrence. The consideration for shares to be purchased upon the exercise of any such right or option shall comply with the requirements of sections 14A:7-4 and 14A:7-5. A good faith judgment of the board as to the adequacy of the consideration received for such rights or options is conclusive.

(2) (Deleted by amendment, P.L.1988, c.94.)

(3) Notwithstanding N.J.S.14A:7-1 and N.J.S.14A:7-2 and any other provision of chapter 7 of Title 14A of the New Jersey Statutes, and unless otherwise provided in the certificate of incorporation in effect before the authorization and issuance of the rights or options, a corporation may before, on or after the effective date of this 1989 amendatory act, authorize and issue rights or options which include conditions that prevent the holder of a specified percentage of the outstanding shares of the corporation, including subsequent transferees of the holder, from exercising those rights or options or which invalidate any rights or options beneficially owned by the holder of a specified percentage of the outstanding shares of the corporation, including subsequent transferees of the holder.

L.1968, c.350; amended 1969,c.102,ss.9,17; 1973,c.366,s.34; 1988,c.94,s.39; 1989,c.107,s.1.

(1) Unless otherwise provided in the certificate of incorporation, all shares shall have no par value and no stated capital shall be required to be maintained.

(2) A corporation in its certificate of incorporation may specify a par value for any class or series of its shares, may require that a specified stated capital be maintained, or may impose any other capitalization requirements. A corporation which specifies in its certificate of incorporation the par value for its shares or a specified stated capital shall not be subject to any limitations on distributions other than those set forth in section 14A:7-14.1, unless other restrictions are set forth in the certificate of incorporation.

(3) If for any reason the laws of this State or those of any other jurisdiction require that the par value of shares or stated capital of a corporation be ascertained, then solely for that purpose a domestic corporation which has not otherwise made express provision therefor in its certificate of incorporation shall be deemed to have declared and be entitled to declare that its capital stock has a par value of one mill per share and a stated capital of one mill times the number of shares then outstanding.

(added) 1988,c.94,s.40.

(1) When so provided in its certificate of incorporation, a corporation may issue shares of any class or series convertible, at the option of the holder or of the corporation or both, into shares of any other class or classes or of any series of the same or any other class or classes.

(2) Unless otherwise provided in its certificate of incorporation, a corporation may issue bonds convertible, at the option of the holder or of the corporation or both, into shares of any class or classes or of any series of any class or classes, upon such terms and conditions as may be fixed by the board. The bond instrument shall set forth or incorporate by reference the terms and conditions of the conversion privilege.

(3) No issue of shares or bonds convertible into shares of the corporation shall be made unless a sufficient number of shares of the appropriate class or classes or series, either authorized but unissued or treasury shares, are reserved by the board to be issued or disposed of only in satisfaction of the conversion privileges of the convertible shares or bonds being issued.

(4) If there is shareholder approval of the issue of shares or bonds convertible into shares of the corporation, such approval may provide that the board is authorized upon such issue to increase the authorized shares of any class or series to such number as will be not more than sufficient, when added to the previously authorized but unissued shares of such class or series, to satisfy the conversion privileges of the convertible shares or bonds being issued. The board, when so authorized, may increase the authorized shares of the corporation by filing a certificate of amendment to the certificate of incorporation. The certificate shall be executed on behalf of the corporation and shall set forth

(a) The name of the corporation;

(b) The date of adoption of the amendment;

(c) The amendment so adopted;

(d) That the amendment is made pursuant to authority granted by the shareholders in connection with shareholder approval of the issue of shares or bonds of the corporation convertible into the shares being authorized by the amendment; and

(e) The designation of the convertible shares or bonds and the date of such shareholder approval.

(5) (Deleted by amendment, P.L. 1988, c. 94.)

(6) (Deleted by amendment, P.L. 1988, c. 94.)

(7) When bonds have been converted, they shall be cancelled and not reissued. The disposition of converted shares is provided for in section 14A:7-18.

L.1968, c.350; amended 1988,c.94,s.41.

The reasonable charges and expenses of organization or reorganization of a corporation, and the reasonable expenses of and compensation for the sale or underwriting of its shares, may be paid or allowed by such corporation out of the consideration received by it in payment for its shares without thereby rendering such shares assessable or not fully paid.

L.1968, c.350.

(1) The shares of a corporation shall be represented by certificates or, in accordance with subsection 14A:7-11(6), shall be uncertificated shares. Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board, or the president or a vice-president, and may be countersigned by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation and may be sealed with the seal of the corporation or a facsimile thereof. Any or all signatures upon a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate, shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of its issue.

(2) Every share certificate delivered after the effective date of this act by a corporation which is authorized to issue shares of more than one class shall set forth upon the face or back of the certificate, a full statement

(a) Of the designations, relative rights, preferences and limitations of the shares of each class and series authorized to be issued, so far as the same have been determined, and

(b) Of the authority of the board to divide the shares into classes or series and to determine and change the relative rights, preferences and limitations of any class or series, or shall set forth that the corporation will furnish to any shareholder, upon request and without charge, such a full statement.

(3) Each certificate representing shares shall state upon the face thereof

(a) That the corporation is organized under the laws of this State;

(b) The name of the person to whom issued; and

(c) The number and class of shares, and the designation of the series, if any, which such certificate represents.

(4) No certificate shall be issued for any share until such share is fully paid.

(5) A card which is punched, magnetically coded or otherwise treated so as to facilitate machine or automatic processing, may be used as a share certificate if it otherwise complies with the provisions of this section.

(6) The board may provide that some or all of the shares of any class or series shall be represented by uncertificated shares. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates by subsections 14A:7-11(2) and 14A:7-11(3), and if required, 14A:7-12(2). Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical.

L.1968, c.350; amended 1973,c.366,s.36; 1988,c.94,s.42.

(1) The shares of a corporation shall be personal property and shall be transferable in accordance with the provisions of Chapter 8 of the Uniform Commercial Code (N.J.S. 12A:8-101 et seq.), as amended from time to time, except as otherwise provided in this act.

(2) Any reasonable restriction on the transfer or registration of transfer of shares, or other securities having conversion or option rights, may be enforced against the holder of the restricted securities and any successor or transferee of the holder, including any fiduciary entrusted with responsibility for the person or property of the holder. Such restriction shall be valid only if imposed by the certificate of incorporation or by-laws or by the provisions of an employee benefit plan permitted by Chapter 8 of this act, or by a written agreement among any number of shareholders or among such holders and the corporation. No restriction shall be valid with respect to any securities issued prior to the imposition of the restriction unless their holders shall have voted in favor of the imposition of the restriction or are parties to the agreement imposing it. Unless noted conspicuously on the security or contained in the information statement required by subsection 14A:7-11(6), a restriction shall not be valid against a person who becomes the holder of the security without actual knowledge of the restriction.

(3) In particular and without limitation of the generality of the power granted by subsection 14A:7-12(2) to impose restrictions, a restriction on the transfer or registration of transfer of shares, or other securities having conversion or option rights, may be enforced as provided in subsection 14A:7-12(2), if it:

(a) Obligates the holder of the restricted securities to offer to the corporation or to any other holders of securities of the corporation or to any other person or to any combination of the foregoing, a prior opportunity, to be exercised within a reasonable time, to acquire the restricted securities;

(b) Obligates the corporation or any holder of securities of the corporation or any other person or any combination of the foregoing, to purchase the securities which are the subject of an agreement respecting the purchase and sale of the restricted securities;

(c) Requires the corporation or the holders of any class or series of securities of the corporation to consent to any proposed transfer of the restricted securities or to approve the proposed transferee of the restricted securities;

(d) Prohibits the transfer of the restricted securities to designated persons or classes of persons, and such designation is not manifestly unreasonable; or

(e) Exists for the purpose of maintaining the status of the corporation as an electing small business corporation under subchapter S of the United States Internal Revenue Code.

(4) If a restriction on transfer of shares or other securities having conversion or option rights is held not to be authorized by the law of this State, the corporation shall nevertheless have an option for a period of 30 days after the judgment setting aside the restriction becomes final, to acquire the restricted securities at a price to be agreed upon by the parties, or if no agreement is reached as to price, then at their fair value as determined by any court having jurisdiction. In order to determine fair value, the court may appoint an appraiser to receive evidence and report to the court his findings and recommendations as to fair value. The appraiser shall have such powers and shall proceed so far as applicable, in the same manner as an appraiser appointed under section 14A:11-8.

L.1968, c.350; amended 1988,c.94,s.43.

Unless otherwise provided in its certificate of incorporation, a corporation may, but shall not be obliged to, issue fractions of a share and certificates therefor. By action of its board, a corporation may, in lieu of issuing fractional shares, pay cash equal to the value of such fractional share, or issue scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share. A certificate for a fractional share shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any distribution of assets of the corporation in the event of liquidation, but scrip shall not entitle the holder to exercise such voting rights, receive dividends or participate in any such distribution of assets unless such scrip shall so provide. All scrip shall be issued subject to the condition that it shall become void if not exchanged for certificates representing full shares before a specified date. If such scrip is not so exchanged, the corporation shall either sell the shares for which such scrip was exchangeable and distribute the proceeds thereof pro rata to the holders of such scrip, or pay, pro rata, to the holders of such scrip the market value of the shares for which such scrip was exchangeable as of the day when such scrip became void.

L.1968, c.350; amended by L.1973, c. 366, s. 37, eff. May 1, 1974.

(1) "Distribution" means a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a dividend, a purchase, redemption or other acquisition of its shares, or otherwise.

(2) A corporation may not make a distribution if, after giving effect thereto, either:

(a) The corporation would be unable to pay its debts as they become due in the usual course of its business; or

(b) The corporation's total assets would be less than its total liabilities.

(3) Determinations under paragraph 14A:7-14.1(2)(b) may be based upon (i) financial statements prepared on the basis of generally accepted accounting principles, (ii) financial statements prepared on the basis of other accounting practices and principles that are reasonable in the circumstances, or (iii) a fair valuation or other method that is reasonable in the circumstances.

(4) In the case of a purchase, redemption or other acquisition by a corporation of its own shares, the effect of a distribution shall be measured as of the earlier of (i) the date money or other property is transferred or debt is incurred by the corporation, or (ii) the date the shareholder ceases to be a shareholder with respect to the acquired shares. In all other cases, the effect of a distribution shall be measured (i) as of the date of its authorization if payment occurs 120 days or less following the date of authorization, or (ii) as of the date of payment if payment occurs more than 120 days following the date of authorization.

(5) A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section shall not be subordinated to the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

(added) 1988,c.94,s.44.

(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.

(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.

(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 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) A statement that the certificate of incorporation or plan of merger provides that the shares cancelled shall not be reissued; and

(e) That the certificate of incorporation is amended by decreasing the aggregate number of shares which the corporation is authorized to issue by the number of shares cancelled.

(f) (Deleted by amendment, P.L.1988, c.94.)

(3) (Deleted by amendment, P.L.1988, c.94.)

(4) A certificate of amendment reducing the authorized shares because of the conversion of convertible shares shall be filed only if the certificate of incorporation provides that such shares shall not be reissued. The certificate of amendment shall set forth the information required by subsection 14A:7-18(2) and in the case of cancellation of converted shares, the certificate of amendment shall be filed not later than 90 days after the close of the fiscal year in which the shares were reacquired.

(5) Nothing contained in this section shall be construed to forbid a cancellation of shares or a reduction of authorized shares in any other manner permitted by this act.

L.1968, c.350; amended 1973,c.366,s.40; 1988,c.94,s.48; 1995,c.279,s.10.

14A:8-1. Employee benefit plans.

(1) A corporation may establish and carry out wholly or partly at its expense, any one or more of the following plans for the benefit of some or all employees, as hereinafter defined, and their families, dependents or beneficiaries:

(a) Plans providing for the sale or distribution of its shares of any class or series, held by it or issued or purchased by it for the purpose, including stock option, stock purchase, stock bonus, profit-sharing, savings, pension, retirement, deferred compensation and other plans of similar nature, whether or not such plans also provide for the distribution of cash or property other than its shares;

(b) Plans providing for payments solely in cash or property other than shares of the corporation, including profit-sharing, bonus, savings, pension, retirement, deferred compensation and other plans of similar nature; and

(c) Plans for the furnishing of medical services; life, sickness, accident, disability or unemployment insurance or benefits; education; housing; social and recreational services; and other similar aids and services.

(2) The term "employees" as used in this chapter means employees, officers, directors, and agents of the corporation or any subsidiary thereof, or other persons who are or have been actively engaged in the conduct of the business of the corporation or any subsidiary thereof, including any who have retired, become disabled or died prior to the establishment of any plan heretofore or hereafter adopted.

(3) Employee benefits plans may be adopted, amended or terminated by a corporation by the act of its board, a committee of the board, or officers to whom the responsibility has been delegated. Notwithstanding the foregoing, any plan providing for the issuance of shares shall be initially adopted by the board or any committee thereof.

(4) The board of directors may, by a resolution adopted by the board or a committee of the board, authorize one or more officers of the corporation to do one or both of the following: (a) designate officers and employees of the corporation or of any of its subsidiaries to be recipients of shares of stock, rights or options created by the corporation; or (b) determine the number of shares, rights or options to be received by those officers and employees; provided, however that the resolution authorizing those officers shall specify the total number of shares, rights or options the officers may award. A resolution adopted pursuant to this subsection shall prohibit any officer from designating himself as a recipient of any shares, rights or options.

Amended 1969, c.102, ss.11,17; 1973, c.366, s.42; 1988, c.94, s.49; 2009, c.159.

Any domestic or foreign corporation which has adopted, or hereafter adopts, a plan described in section 14A:8-1 may establish one or more trust funds of the property contributed or held by any corporation or any subsidiary thereof for the purposes of a plan. Any trust fund may be held and administered by the corporation adopting a plan or by any trustee or trustees, within or without this State, appointed by the corporation for that purpose.

(added) 1988,c.94,s.50.

The period for which any trust may be created and maintained may be as long�as may be desirable for the complete administration of any plan as originally adopted or thereafter amended, and no trust or trust fund shall be subject to or�held to be in violation of any principle of law, against perpetuities or restraints on alienation or perpetual accumulations of trusts.

(added) 1988,c.94,s.51.

(1) A corporation may amend its certificate of incorporation, from time to time, in any and as many respects as may be desired so long as the amendment contains only such provisions as might lawfully be contained in an original certificate of incorporation filed at the time of making such amendment.

(2) In particular, and without limitation upon the general power of amendment granted by subsection 14A:9-1(1), a corporation may amend its certificate of incorporation

(a) To change its corporate name;

(b) To enlarge, limit, or otherwise change its corporate purposes or powers;

(c) To change the duration of the corporation, even if such duration has expired, to a limited or perpetual duration;

(d) To increase or decrease the aggregate number of shares or shares of any class or series of any class, which the corporation has authority to issue;

(e) To increase or decrease the par value of the authorized shares of any class having a par value, whether issued or unissued;

(f) To exchange, classify, reclassify or cancel all or any part of its shares, whether issued or unissued;

(g) To change the designation of all or any part of its shares, whether issued or unissued, and to change the preferences, limitations and the relative rights in respect of all or any part of its shares, whether issued or unissued;

(h) To change shares having a par value, whether issued or unissued, into the same or a different number of shares without par value, and to change shares without par value, whether issued or unissued, into the same or a different number of shares having a par value;

(i) To change the shares of any class or series, whether issued or unissued, and whether with or without par value, into a different number of shares of the same class or series or into the same or a different number of shares, either with or without par value, of other classes or series;

(j) To create new classes or series of shares having rights and preferences superior or inferior to, or equal with, the shares of any class or series then authorized, whether issued or unissued;

(k) To cancel or otherwise affect the right of the holders of the shares of any class or series to receive dividends which have accrued but have not been declared;

(l) To divide any class of shares, whether issued or unissued, into series and fix the designations of such series and the preferences, limitations and relative rights of the shares of such series;

(m) To authorize the board to divide authorized but unissued shares of any class into series and fix the designations and number of shares of such series and the preferences, limitations and relative rights of the shares of such series;

(n) To authorize the board to fix or change the designation or number of shares of, or preferences, limitations or relative rights of the shares of any theretofore established series the shares of which have not been issued;

(o) To revoke, diminish or enlarge the authority of the board to take any of the actions set forth in paragraphs 14A:9-1(2)(m) and 14A:9-1(2)(n);

(p) To limit, deny or grant to shareholders of any class the preemptive right to acquire additional or treasury shares of the corporation, whether then or thereafter authorized;

(q) To strike out, change or add any provision, not inconsistent with law, for the management of the business and the conduct of the affairs of the corporation, or creating, defining, limiting and regulating the powers of the corporation, its directors and shareholders or any class of shareholders, including any provision which under this act is required or permitted to be set forth in the by-laws.

(3) (Deleted by amendment, P.L. 1988, c. 94.)

L.1968, c.350; amended 1988,c.94,s.52.

14A:9-2. Procedure to amend certificate of incorporation.

(1) Before the organization meeting of the board, the incorporators may amend the certificate of incorporation by complying with subsection 14A:9-4(1).

(2) Amendment of the certificate of incorporation by action of the board is provided for in subsection 14A:4-3(1), subsection 14A:5-21(4), subsection 14A:7-2(4), subsection 14A:7-9(4), subsection 14A:7-15.1(3), and subsections 14A:7-18(1) and 14A:7-18(4). Amendment of the certificate of incorporation by action of the registered agent to change the registered office is provided for in subsection 14A:4-3(3).

(3) An amendment of the certificate of incorporation pursuant to a plan of merger may be made in the manner provided in Chapter 10 of this act.

(4) All other amendments of the certificate of incorporation shall be made in the following manner:

(a) The board shall approve the proposed amendment and direct that it be submitted to a vote at a meeting of the shareholders.

(b) Written notice setting forth the proposed amendment or a summary of the changes to be effected thereby shall be given to each shareholder of record entitled to vote thereon within the time and in the manner provided in this act for the giving of notice of meetings of shareholders.

(c) At such meeting a vote of shareholders entitled to vote thereon shall be taken on the proposed amendment. The proposed amendment shall be adopted upon receiving the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote thereon and, in addition, if any class or series of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote; except that, in the case of a corporation organized prior to January 1, 1969, the proposed amendment shall be adopted upon receiving the affirmative vote of two-thirds of the votes so cast. The voting requirements of this section shall be subject to such greater requirements as are provided in this act for specific amendments, or as may be provided in the certificate of incorporation.

(d) Subject to the provisions of section 14A:5-12, a corporation organized prior to January 1, 1969 may adopt the majority voting requirements prescribed in paragraph 14A:9-2(4)(c) by amendment of its certificate of incorporation adopted by the affirmative vote of two-thirds of the votes cast by the holders of shares entitled to vote thereon.

(e) Any number of amendments may be acted upon at one meeting.

(f) Upon adoption, a certificate of amendment shall be filed in the office of the Secretary of State as provided in section 14A:9-4.

L.1968, c.350; amended 1973,c.366,s.47; 1988,c.94,s.53; 1995,c.279,s.11.

(1) Except as otherwise provided in subsection 14A:9-3(4), and notwithstanding any provision in the certificate of incorporation, the holders of the outstanding shares of a class or series shall be entitled to vote as a class upon a proposed amendment, if the amendment would

(a) exclude or limit their right to vote on any matter, except as such right may be limited by voting rights given to new shares then being authorized of any existing or new class or series;

(b) limit or deny their existing preemptive rights;

(c) cancel or otherwise adversely affect dividends which have accrued but have not been declared on the shares held by them; or

(d) create, or authorize the board to create, a new class or series having, or convertible into shares having, rights or preferences prior or superior to those of the shares held by them, or increase such rights or preferences of any class or series.

(2) Except as otherwise provided in subsection 14A:9-3(4), and notwithstanding any provision in the certificate of incorporation, the holders of the outstanding shares of a class or series whose rights or preferences would be subordinated or otherwise adversely affected by a proposed amendment shall be entitled to vote as a class thereon, if the amendment would

(a) decrease the par value of their shares;

(b) effect a conversion, exchange or reclassification of their shares;

(c) effect a conversion or exchange, or create a right of conversion or exchange, of any shares of another class or series into shares of their class or series;

(d) change the designation, preferences, limitations or relative rights of their shares;

(e) change their shares into a different number of shares, or into the same number of shares of another class or series; or

(f) divide the shares of their class into series or determine the designation of any series in their class or determine any preferences, limitations or relative rights of any series in their class, or authorize the board to make any such division or to make or change any such determination.

(3) If any proposed amendment referred to in subsections 14A:9-3(1) and 14A:9-3(2) would subordinate or otherwise adversely affect the rights or preferences of the holders of shares of one or more series of any class, but not of the entire class, then only the holders of such series shall be entitled by this section to vote as a class upon such proposed amendment.

(4) This section shall not apply to amendments which may be made by board action without shareholder approval, as set forth in subsection 14A:9-2(2).

L.1968, c.350.

(1) If the amendment is made as provided by subsection 14A:9-2(1), a certificate of amendment shall, subject to subsection 14A:2-6(3), be signed by all the incorporators, shall set forth the name of the corporation and the amendment so adopted, and shall recite that the amendment is made by unanimous consent of the incorporators before the organization meeting of the directors.

(2) If the amendment is made by the board as referred to in subsection 14A:9-2(2), a certificate of amendment shall be executed on behalf of the corporation. The certificate shall set forth the information required by the section of this act which empowers the board to make the amendment.

(3) If the amendment is made as provided by subsection 14A:9-2(4), a certificate of amendment shall be executed on behalf of the corporation and shall set forth

(a) The name of the corporation;

(b) The amendment so adopted;

(c) The date of the adoption of the amendment by the shareholders;

(d) The number of shares entitled to vote thereon, and if the shares of any class or series are entitled to vote thereon as a class, the designation and number of shares entitled to vote thereon of each such class or series;

(e) The number of shares voted for and against such amendment, respectively, and if the shares of any class or series are entitled to vote thereon as a class, the number of shares of each such class and series voted for and against such amendment, respectively;

(f) If such amendment is intended to provide for an exchange, reclassification or cancellation of issued shares, a statement of the manner in which the same shall be effected; and

(g) If, pursuant to subsection 14A:9-4(5), the amendment is to become effective at a time subsequent to the time of filing, the date when the amendment is to become effective.

(4) (Deleted by amendment, P.L. 1988, c. 94.)

(5) Each certificate of amendment of the certificate of incorporation shall be filed in the office of the Secretary of State and the amendment shall become effective upon the date of filing or at such later time, not to exceed 90 days from the date of filing, as may be set forth in the certificate.

L.1968, c.350; amended 1973,c.366,s.48; 1988,c.94,s.54.

(1) A corporation may restate and integrate in a single certificate the provisions of its certificate of incorporation as theretofore amended, including any provision effected by a merger or consolidation and any further amendments as may be adopted concurrently with the restated certificate.

(2) If the proposed restated certificate merely restates and integrates, but does not substantively amend the certificate of incorporation as theretofore amended, it may be adopted by the board.

(3) If the proposed restated certificate restates and integrates and also substantively amends the certificate of incorporation as theretofore amended, such restated certificate shall be adopted in the following manner:

(a) The board shall approve the proposed restated certificate and direct that it be submitted to a vote at a meeting of the shareholders;

(b) Written notice setting forth the proposed restated certificate shall be given to each shareholder of record entitled to vote thereon within the time and in the manner provided in this act for the giving of notice of such meeting;

(c) At such meeting a vote of shareholders entitled to vote thereon shall be taken on the proposed restated certificate. The proposed restated certificate shall be adopted upon receiving a number of votes sufficient to adopt an amendment to the corporation's certificate of incorporation. The voting requirements of this section shall be subject to such greater requirements as are provided in this act for specific amendments or as may be provided in the certificate of incorporation.

(4) The restated certificate shall recite that it is a restated certificate and shall contain all such provisions as are required in an original certificate of incorporation filed at the time the restated certificate is filed, except that

(a) It shall state the address of the corporation's then current registered office, and the name of its then current registered agent, and it shall also state the number, names and addresses of the directors constituting its then current board;

(b) It need not include statements as to the incorporator or incorporators or as to the first directors or the first registered office and registered agent;

(c) If, pursuant to subsection 14A:9-5(6), the restated certificate is to become effective subsequent to the time of filing, it shall state the date when it is to become effective.

(5) The restated certificate shall be executed on behalf of the corporation, and shall be filed in the office of the Secretary of State. There shall be attached to it and filed therewith a certificate executed on behalf of the corporation and setting forth

(a) The name of the corporation;

(b) The date such restated certificate was adopted; and

(c) If the restated certificate was adopted by the shareholders, it shall also set forth

(i) the number of shares entitled to vote

thereon, and, if the shares of any class or

series are entitled to vote thereon as a class,

the designation and number of shares entitled

to vote thereon of each such class and series;

(ii) the number of shares voted for and

against such adoption, and, if the shares of

any class or series are entitled to vote thereon

as a class, the number of shares of each such

class and series voted for and against such

adoption; and

(iii) if any amendment of the certificate of

incorporation made by such restated certificate

is intended to provide for an exchange,

reclassification, or cancellation of issued

shares, a statement of the manner in which the

same shall be effected.

(6) The restated certificate shall become effective upon the date of filing with the Secretary of State or at such later time, not to exceed 90 days from the date of filing, as may be set forth therein. A restated certificate adopted in the manner prescribed herein, whether by action of the board alone pursuant to subsection 14A:9-5 (2) or by action of the board and the shareholders pursuant to subsection 14A:9-5(3), shall supersede for all purposes the original certificate of incorporation and all amendments thereto made prior to the adoption of such restated certificate, and such restated certificate may be separately certified as the certificate of incorporation.

L.1968, c.350; amended 1969,c.102,ss.13,17; 1973,c.366,s.49; 1988,c.94,s.55.

Prior to the effective date of an amendment of the certificate of incorporation or of a restated certificate for which shareholder approval is required under the provisions of this act, such amendment or such restated certificate may be abandoned pursuant to provisions therefor, if any, set forth in the resolution of the shareholders approving such amendment or such restated certificate or in any resolution subsequently adopted by the shareholders. If a certificate of amendment or a restated certificate has been filed in the office of the Secretary of State prior to such abandonment, a certificate of abandonment shall be filed in the office of the Secretary of State. The certificate shall state that the amendment or the restated certificate has been abandoned in accordance with the provisions therefor set forth in the resolution of the shareholders.

L.1968, c.350; amended by L.1973, c. 366, s. 50, eff. May 1, 1974.

14A:10-1. Procedure for merger.

(1) Any two or more domestic corporations, or any one or more domestic corporations and any one or more other business entities, may merge into one of such corporations or other business entities pursuant to a plan of merger approved in the manner provided in this act.

(2) The board of each corporation shall approve a plan of merger setting forth

(a) The names of the corporations or other business entities proposing to merge, and the name of the corporation or other business entity into which they propose to merge, which is hereinafter designated as the surviving corporation or surviving other business entity;

(b) The terms and conditions of the proposed merger, including a statement of any amendments in the certificate of incorporation of the surviving corporation to be effected by such merger which amendments may be set forth in and effected by a restated certificate of incorporation which may be filed as an additional document together with the certificate of merger;

(c) The manner and basis of converting the shares of each corporation into shares, obligations, or other securities of the surviving corporation or of the surviving other business entity, or of any other corporation or other business entity, or, in whole or in part, into cash or other property; and

(d) Such other provisions with respect to the proposed merger as are deemed necessary or desirable.

L.1968, c.350; amended 1973,c.366,s.51; 1988,c.94,s.56; 1995,c.279,s.12.

14A:10-2. Procedure for consolidation.

(1) Any two or more domestic corporations, or any one or more corporations and any one or more other business entities, may consolidate into a new corporation or other business entity pursuant to a plan of consolidation approved in the manner provided in this act.

(2) The board of each corporation shall approve a plan of consolidation setting forth

(a) the names of the corporations proposing to consolidate, and the name of the new corporation or other business entity into which they propose to consolidate, which is hereinafter designated as the new corporation or new business entity;

(b) the terms and conditions of the proposed consolidation;

(c) the manner and basis of converting the shares of each corporation into shares, obligations or other securities of the new corporation or new business entity, or of any other corporation or business entity, in whole or in part, into cash or other property;

(d) with respect to the new corporation, all of the statements required to be set forth in the certificate of incorporation for corporations organized under this act, except that it shall not be necessary to set forth the name and address of each incorporator; and

(e) such other provisions with respect to the proposed consolidation as are deemed necessary or desirable.

L.1968, c.350; amended 1973,c.366,s.52; 1995,c.279,s.13.

14A:10-3. Approval by shareholders.

(1) The board of each corporation, upon approving such plan of merger or plan of consolidation, shall direct that the plan be submitted to a vote at a meeting of shareholders. Written notice shall be given not less than 20 nor more than 60 days before such meeting to each shareholder of record, whether or not entitled to vote at such meeting, in the manner provided in this act for the giving of notice of meetings of shareholders. Such notice shall include, or shall be accompanied by

(a) A copy or a summary of the plan of merger or consolidation; and

(b) A statement informing shareholders who, under Chapter 11 of this act, are entitled to dissent, that they have the right to dissent and to be paid the fair value of their shares and outlining briefly, with particular reference to the time periods within which actions must be taken, the procedures set forth in Chapter 11 of this act with which they must comply in order to assert and enforce such right.

(2) At each such meeting, a vote of the shareholders shall be taken on the proposed plan of merger or consolidation. Such plan shall be approved upon receiving the affirmative vote of a majority of the votes cast by the holders of shares of each such corporation entitled to vote thereon, and, in addition, if any class or series is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote; except that, in the case of a corporation organized prior to January 1, 1969, the plan of merger or consolidation shall be approved upon receiving the affirmative vote of two-thirds of the votes so cast. Any class or series of shares of any such corporation shall be entitled to vote as a class if the plan of merger or consolidation, as the case may be, contains any provision which, if contained in a proposed amendment to the certificate of incorporation, would entitle such class or series of shares to vote as a class unless such provision is one which could be adopted by the board without shareholder approval as referred to in subsection 14A:9-2(2). The voting requirements of this section shall be subject to such greater requirements as are provided in this act for specific amendments or as may be provided in the certificate of incorporation.

(3) Subject to the provisions of section 14A:5-12, a corporation organized prior to January 1, 1969, may adopt the majority voting requirements prescribed in subsection 14A:10-3(2) by an amendment of its certificate of incorporation adopted by the affirmative vote of two-thirds of the votes cast by the holders of shares entitled to vote thereon.

(4) Notwithstanding the provisions set forth in subsections 14A:10-3(1) and 14A:10-3(2), the approval of the shareholders of a surviving corporation shall not be required to authorize a merger (unless its certificate of incorporation otherwise provides) if

(a) The plan of merger does not make an amendment of the certificate of incorporation of the surviving corporation which is required by the provisions of this act to be approved by the shareholders;

(b) Each shareholder of the surviving corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical designations, preferences, limitations, and rights, immediately after;

(c) The number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 40% the total number of voting shares of the surviving corporation outstanding immediately before the merger; and

(d) The number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 40% the total number of participating shares of the surviving corporation outstanding immediately before the merger.

(5) As used in subsection 14A:10-3(4):

(a) "Participating shares" means shares that entitle their holders to participate without limitation in distributions.

(b) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.

(6) Notwithstanding the provisions set forth in subsections 14A:10-3(1) and 14A:10-3(2), the approval of the shareholders of a corporation shall not be required to authorize a merger with or into a single indirect wholly-owned subsidiary of that corporation (unless its certificate of incorporation otherwise provides) if:

(a) the corporation, the holding company and the indirect wholly-owned subsidiary of the corporation are the only parties to the merger; and

(b) each shareholder of the corporation will hold the same number of shares of the holding company, with identical designations, preferences, limitations and rights, immediately after the effective date of the merger; and

(c) the corporation, the indirect wholly-owned subsidiary and the holding company are domestic corporations; and

(d) the certificate of incorporation and bylaws of the holding company immediately after the effective date of the merger contain provisions identical to the certificate of incorporation and bylaws of the corporation immediately before the effective date of the merger, other than provisions, if any, regarding the incorporators, the corporate name, the registered office and agent, the initial board of directors, the initial subscribers for shares and the provisions necessary to effect a change, exchange, reclassification or cancellation of shares, if such change, exchange, reclassification or cancellation has become effective prior to the effective date of the merger; and

(e) the surviving corporation, as a result of the merger, remains or becomes a direct or indirect wholly-owned subsidiary of the holding company; and

(f) the directors of the corporation remain or become the directors of the holding company upon the effective date of the merger; and

(g) the certificate of incorporation of the surviving corporation immediately after the effective date of the merger is identical to the certificate of incorporation of the corporation immediately before the effective date of the merger, other than provisions, if any, regarding the incorporators, the corporate name, the registered office and agent, the initial board of directors, the initial subscribers for shares and the provisions necessary to effect a change, exchange, reclassification or cancellation of shares, if such change, exchange, reclassification or cancellation has become effective prior to the effective date of the merger; provided that: (i) the certificate of incorporation of the surviving corporation shall contain a provision requiring that any act or transaction by or involving the surviving corporation that requires for its adoption under N.J.S.14A:1-1 et seq., or its certificate of incorporation, approval by the shareholders of the surviving corporation, other than the election or removal of directors of the surviving corporation, shall require approval by the shareholders of the holding company (or any successor by merger), by the same vote as is required by N.J.S.14A:1-1 et seq. or by the certificate of incorporation of the surviving corporation, until thereafter otherwise amended by approval of the shareholders of the surviving corporation and the holding company; and (ii) the certificate of incorporation of the surviving corporation may be amended to reduce the number of classes and shares of capital stock that the surviving corporation is authorized to issue; and

(h) the shareholders of the corporation do not recognize a gain or loss for United States federal income tax purposes as determined by the board of directors of the corporation.

(7) On and after the effective date of a merger authorized by action of the board of directors of a corporation and without any vote of the shareholders pursuant to subsection (6) of N.J.S.14A:10-3:

(a) to the extent that the restrictions of the "New Jersey Shareholders' Protection Act," P.L.1986, c.74 (C.14A:10A-1 et seq.), applied to the corporation and its shareholders at the effective date of the merger, the restrictions shall apply to the holding company and its shareholders immediately after the effective date of the merger in the same manner as if it were the corporation and all shares of the holding company acquired in the merger shall for purposes of the "New Jersey Shareholders' Protection Act," P.L.1986, c.74 (C.14A:10A-1 et seq.) be deemed to have been acquired at the time that the shares of the corporation converted in the merger were acquired, and provided further that any shareholder who, immediately prior to the effective date of the merger, was not an interested stockholder within the meaning of section 3 of the "New Jersey Shareholders' Protection Act," P.L.1986, c.74 (C.14A:10A-3) shall not solely by reason of the merger become an interested stockholder of the holding company; and

(b) if the corporate name of the holding company immediately after the effective date of the merger is the same as the corporate name of the corporation immediately prior to the effective date of the merger, the shares of the holding company into which the shares of the corporation are converted in the merger shall be represented by the stock certificates that previously represented shares of the corporation.

(8) As used in subsections (6) and (7) of N.J.S.14A:10-3, "holding company" means a corporation which, from its incorporation until consummation of a merger governed by subsections (6) and (7) of N.J.S.14A:10-3, was at all times a direct wholly-owned subsidiary of the corporation and shares of which are issued in the merger; and "indirect wholly-owned subsidiary of the corporation" means a corporation all the shares of which are owned, directly or indirectly, by the holding company.

(9) A corporation may agree to submit the plan of merger or consolidation to a vote of its shareholders regardless of whether the board of directors determines at any time subsequent to approving the plan that the plan is no longer advisable and recommends that the shareholders reject or vote against the plan.

(10) Any plan of merger or consolidation may contain a provision that the boards of directors of the corporations may amend the plan of merger or consolidation at any time prior to the time that the merger or consolidation contemplated by the plan of merger or consolidation becomes effective, provided that an amendment made subsequent to the adoption of the agreement by the shareholders of any corporation shall not, without further shareholder approval:

(a) alter or change the amount or kind of shares, securities, cash, property, or rights to be received in exchange for, or on conversion of, all or any of the shares of any class or series thereof of such corporation;

(b) alter or change any term of the certificate of incorporation of the surviving corporation to be effected by the merger or consolidation; or

(c) unless the plan of merger or consolidation expressly provides otherwise, alter or change any of the terms and conditions of the plan, if that alteration or change would materially and adversely affect the shareholders of either corporation who are or were entitled to vote on the plan. In the event the plan of merger or consolidation is amended after the filing of a certificate of merger or consolidation with the Secretary of State but prior to the time the merger or consolidation has become effective, a certificate of amendment of merger or consolidation shall be filed in accordance with subsection (3) of N.J.S.14A:10-4.1.

amended 1973, c.366, s.53; 1988, c.94, s.57; 2001, c.193, s.1; 2017, c.355, s.1.

14A:10-4.1. Certificate of merger or consolidation.

(1) After approval of the plan of merger or consolidation, a certificate of merger or a certificate of consolidation shall be executed on behalf of each corporation. The certificate shall set forth

(a) The name of the surviving or new corporation or new other business entity and the names of the merging or consolidating corporations or other business entities;

(b) The plan of merger or the plan of consolidation;

(c) The date or dates of approval by the shareholders of each corporation of the plan of merger or the plan of consolidation;

(d) As to each corporation whose shareholders are entitled to vote, the number of shares entitled to vote thereon, and, if the shares of any class or series are entitled to vote thereon as a class, the designation and number of shares entitled to vote thereon of each class or series;

(e) As to each corporation whose shareholders are entitled to vote, the number of shares voted for and against the plan, respectively, and, if the shares of any class are entitled to vote as a class, the number of shares of each class or series voted for and against the plan, respectively;

(f) In the case of a merger governed by subsection 14A:10-3 (4), that the plan of merger was approved by the board of directors of the surviving corporation and that no vote of the shareholders of the surviving corporation was required because of the applicability of that subsection;

(g) If, pursuant to subsection 14A:10-4.1(2), the merger is to become effective at a time subsequent to the date of filing with the Secretary of State, the date when the merger is to become effective; and

(h) In the case of a merger governed by subsection (6) of N.J.S.14A:10-3, that the plan of merger was approved by the board of directors of the surviving corporation, that no vote of the shareholders of the surviving corporation was required because of the applicability of that subsection, and that the conditions of paragraphs (a) through (h) of that subsection have been satisfied.

(2) The executed original and a copy of the certificate shall be filed in the office of the Secretary of State and the merger or consolidation shall become effective upon the date of the filing or at a later time, not to exceed 90 days after the date of filing, as may be set forth in the certificate. The Secretary of State shall, upon filing, forward the copy of the certificate to the Director of the Division of Taxation.

(3) Following the filing of a certificate of merger or consolidation with the Secretary of State but prior to the time when the merger or consolidation becomes effective, and upon the amendment of the plan of merger or consolidation in accordance with subsection (10) of N.J.S.14A:10-3, a certificate of amendment of merger or consolidation shall be filed in the office of the Secretary of State amending the plan of merger or consolidation. The certificate of amendment shall state that the plan of merger or consolidation has been amended and shall contain the amended plan of merger or consolidation.

(added) 1988, c.94, s.58; amended 1995, c.279, s.14; 2001, c.193, s.2; 2017, c.355, s.2.

14A:10-5.1. Merger of subsidiary corporation.

(1) A domestic corporation owning at least 90% of the outstanding shares of each class and series of another domestic corporation or corporations, may merge the other corporation or corporations into itself, or may merge itself, or itself and any subsidiary corporation or corporations, into any subsidiary corporation, without approval of the shareholders of any of the corporations, except as provided in subsections 14A:10-5.1(5) and 14A:10-5.1(6). The board of the parent corporation shall approve a plan of merger setting forth those matters required to be set forth in plans of merger under section 14A:10-1. Approval by the board of any subsidiary corporation shall not be required.

(2) If the parent corporation owns less than 100% of the outstanding shares of each subsidiary corporation, it shall mail to each minority shareholder of record of each subsidiary corporation, unless waived in writing, a copy or a summary of the plan of merger. The parent corporation shall also mail to each shareholder who, under Chapter 11 of this act, is entitled to dissent, a statement informing the shareholder that he has the right to dissent and to be paid the fair value of his shares, and outlining briefly, with particular reference to the time periods within which actions shall be taken, the procedures set forth in Chapter 11 of this act with which he shall comply in order to assert and enforce that right.

(3) A certificate of merger shall be executed on behalf of the parent corporation. The certificate shall set forth:

(a) The name of the surviving corporation and the names of the merged corporations;

(b) The plan of merger;

(c) The date of approval by the board of the parent corporation of the plan of merger;

(d) The number of outstanding shares of each class and series of each subsidiary corporation which is a party to the merger and the number of shares of each class and series owned by the parent corporation;

(e) If the parent corporation owns less than 100% of the outstanding shares of each subsidiary corporation, the date of the mailing of a copy or a summary of the plan of merger to minority shareholders of each subsidiary corporation; or if all the shareholders have waived the mailing in writing, a statement that the waiver has been obtained;

(f) If approval of the shareholders of the parent corporation is required by subsection 14A:10-5.1(6), the information as to the corporation required by paragraphs 14A:10-4.1(1)(d) and (e); and

(g) If, pursuant to subsection 14A:10-5.1(4), the merger is to become effective at a time subsequent to the date of filing with the Secretary of State, the date when the merger is to become effective.

(4) The executed original and a copy of the certificate shall be filed in the office of the Secretary of State and the merger shall become effective upon the date of the filing or at a later time, not to exceed 90 days from the date of filing, as may be set forth in the certificate. The Secretary of State shall, upon filing, forward the copy of the certificate to the Director of the Division of Taxation.

(5) Approval of the shareholders of any subsidiary corporation shall be obtained pursuant to its certificate of incorporation, if the certificate requires approval of a merger by the affirmative vote of the holders of more than the percentage of the shares of any class or series of the corporation then owned by the parent corporation.

(6) Approval of the shareholders of the parent corporation shall be obtained:

(a) Whenever its certificate of incorporation requires shareholder approval of a merger; or

(b) Pursuant to section 14A:10-3 where

(i) the plan of merger contains a provision which would change any part of the certificate of incorporation of the parent corporation into which a subsidiary corporation is being merged, unless the change is one that can be made by the board without shareholder approval as referred to in subsection 14A:9-2(2); or

(ii) a subsidiary corporation is to be the surviving corporation.

(7) The grant of the power to merge under this section shall not preclude the effectuation of any merger as elsewhere provided in this Chapter.

L.1988, c.94, s.59; amended 1995,c.279,s.15.

When a merger or consolidation has become effective:

(a) The parties to the plan of merger or consolidation shall be a single corporation, which, in the case of a merger, shall be that corporation designated in the plan of merger as the surviving corporation, and, in the case of a consolidation, shall be the new corporation provided for in the plan of consolidation.

(b) The separate existence of all parties to the plan of merger or consolidation, except the surviving or new corporation, shall cease.

(c) Such surviving or new corporation shall, to the extent consistent with its certificate of incorporation as amended or established by the merger or consolidation, possess all the rights, privileges, powers, immunities, purposes and franchises, both public and private, of each of the merging or consolidating corporations.

(d) All real property and personal property, tangible and intangible, of every kind and description, belonging to each of the corporations so merged or consolidated shall be vested in the surviving or new corporation without further act or deed; and the title to any real estate, or any interest therein, vested in any of such corporations shall not revert or be in any way impaired by reason of such merger or consolidation.

(e) The surviving or new corporation shall be liable for all the obligations and liabilities of each of the corporations so merged or consolidated; and any claim existing or action or proceeding pending by or against any of such corporations may be enforced as if such merger or consolidation had not taken place. Neither the rights of creditors nor any liens upon, or security interests in, the property of any of such corporations shall be impaired by such merger or consolidation.

(f) In the case of a merger, the certificate of incorporation of the surviving corporation shall, without further act or deed, be amended to the extent, if any, stated in the plan of merger; and, in the case of a consolidation, the statements set forth in the certificate of consolidation and which are required or permitted to be set forth in the certificate of incorporation of corporations organized under this act shall be the certificate of incorporation of the new corporation.

L.1968, c.350.

(1) One or more foreign corporations and one or more domestic corporations may be merged or consolidated in the following manner:

(a) Each domestic corporation shall comply with the provisions of this act with respect to the merger or consolidation of domestic corporations and each foreign corporation shall comply with the applicable provisions of the laws of the jurisdiction under which it is organized.

(b) The certificate of merger or consolidation required by section 14A:10-4.1 shall be executed on behalf of each domestic corporation and each foreign corporation and, in addition to the information required by subsection 14A:10-4.1(1), shall set forth that the applicable provisions of the laws of the jurisdiction under which each foreign corporation was organized have been, or upon compliance with filing and recording requirements will have been, complied with.

(c) If the surviving or new corporation is to be a foreign corporation and is to transact business in this State, it shall comply with the provisions of this act with respect to foreign corporations, and, whether or not it is to transact business in this State, the certificate of merger or consolidation required by section 14A:10-4.1 shall, in addition to other required information, set forth

(i) an agreement by such foreign corporation

that it may be served with process in this State

in any proceeding for the enforcement of any

obligation of any domestic corporation or any

foreign corporation, previously amenable to suit

in this State, which is a party to such merger

or consolidation, and in any proceeding for

the enforcement of the rights of a dissenting

shareholder of any such domestic corporation

against the surviving or new corporation; and

(ii) an irrevocable appointment by such

foreign corporation of the Secretary of State of

this State as its agent to accept service of

process in any such proceeding, and the post

office address, within or without this State,

to which the Secretary of State shall mail a

copy of the process in such proceeding;

(iii) an agreement by such foreign corporation

that it will promptly pay to the dissenting

shareholders of any such domestic corporation

the amount, if any, to which they shall be

entitled under the provisions of this act with

respect to the rights of dissenting shareholders.

(2) The provisions of subsection 14A:10-3(4) shall apply to a merger in which the surviving corporation is a domestic corporation.

(3) If the surviving or new corporation is a domestic corporation, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations. If the surviving or new corporation is a foreign corporation, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations except insofar as the laws of the jurisdiction of incorporation of such foreign corporation shall provide otherwise.

(4) One or more foreign corporations and one or more domestic corporations may be merged in the manner provided in section 14A:10-5.1, provided that, if the parent corporation is a foreign corporation, it shall, notwithstanding the provisions of the laws of its jurisdiction of incorporation, comply with the provisions of subsection 14A:10-5.1(2) with respect to notice to shareholders of any domestic subsidiary corporation which is a party to the merger.

L.1968, c.350; amended 1973,c.366,s.56; 1988,c.94,s.60.

Prior to the time when a merger or consolidation authorized by this Chapter shall become effective, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the plan of merger or consolidation. If a certificate of merger or consolidation has been filed in the office of the Secretary of State prior to such abandonment, a certificate of abandonment shall be filed in the office of the Secretary of State. The certificate shall be executed on behalf of each corporation which is a party to the plan of merger or consolidation, unless the plan permits abandonment by less than all of such corporations, in which event the certificate may be executed on behalf of the corporation or corporations exercising the right to abandon. The certificate shall state that the merger or consolidation has been abandoned in accordance with the provisions therefor set forth in the plan of merger or consolidation.

L.1968, c.350.

(1) Subject to the limitations imposed by any other statute of this State, any domestic corporation may, in the manner provided by this section, acquire, in exchange for its shares, all the shares, or all the shares of any class or series, of any other corporation organized under any statute of this State.

(2) Such acquiring corporation shall submit by first-class mail to all holders of the shares to be acquired a written offer which shall

(a) specify the shares to which such offer relates;

(b) prescribe the terms and conditions of such offer, including the method of acceptance thereof and the manner of exchanging such shares;

(c) contain a statement summarizing the rights of such shareholders as provided in paragraph 14A:10-9(3)(b).

Any such offer may provide for the payment of cash in lieu of the issuance of fractional shares of the acquiring corporation.

(3) If, within 120 days after the date of such mailing, the offer is accepted by the holders of not less than 90% of the shares of each class and series to which the offer relates, other than shares already held at the date of mailing by, or by a nominee for, the acquiring corporation or any subsidiary thereof, the acquiring corporation shall, within 60 days after such acceptance:

(a) execute and file a certificate in the office of the Secretary of State setting forth such acceptance; and

(b) give written notice of such acceptance, by registered or certified mail, return receipt requested, to each holder of such shares to which the offer relates, who has not accepted the offer. Such notice shall include, or be accompanied by, a statement

(i) that such shareholders may elect either to accept the offer or to dissent therefrom and be paid the fair value of their shares provided that they file with the acquiring corporation, not later than 20 days after the mailing of such written notice, a written demand for the fair value of their shares as required by subsection 14A:11-2(5), and otherwise comply with the procedures set forth in Chapter 11 of this act;

(ii) outlining briefly, with particular reference to the time periods within which actions must be taken, the procedures set forth in Chapter 11 of this act with which they must comply; and

(iii) that if such shareholders do not make written demand for the payment of the fair value of their shares within said 20-day period, they shall be deemed to have accepted the offer.

(4) Upon the filing of such certificate in the office of the Secretary of State as required by paragraph 14A:10-9(3)(a)

(a) the acquiring corporation shall cause to be issued to the holders of shares who have accepted or who are deemed to have accepted such offer pursuant to the provisions of paragraph 14A:10-9(3)(b) certificates for shares of the acquiring corporation to which they respectively are entitled;

(b) all shares in exchange for which shares of the acquiring corporation are so issued shall become the property of the acquiring corporation, irrespective of whether the certificates for such shares have been surrendered for exchange, and the acquiring corporation shall be entitled to have new certificates registered in its name as the holder thereof; and

(c) the acquiring corporation, or a corporate fiduciary designated by it, shall hold in trust, for delivery to the persons entitled thereto, certificates for its shares registered in the names of any holders, other than shares of dissenting shareholders, who have not surrendered their shares for exchange in accordance with the offer, and shall hold in trust, for payment to the persons entitled thereto, any cash payable in lieu of fractional shares.

(5) This section shall not be construed to prevent a corporation from making an offer to purchase the shares of another corporation conditioned upon the acceptance of holders of less than 90% of the shares to which such offer relates. Such an offer may be joined as an alternate offer with an offer made pursuant to this section; but in no case shall the acquiring corporation have the right to avail itself of the provisions of this section unless the holders of the percentage of shares to which the offer relates required by subsection 14A:10-9(3) shall accept the offer within the time period required by subsection 14A:10-9(3).

(6) Whenever a corporation whose capital stock is acquired pursuant to this section is a stock insurance company organized under any law of this State (hereinafter called the insurance subsidiary),

(a) the acquiring corporation shall furnish to the Commissioner of Banking and Insurance such information as he may, from time to time, reasonably request in respect to the honesty and trustworthiness of its directors and officers, and

(b) upon a finding by the Commissioner of Banking and Insurance that the acquiring corporation has failed or refused to take such steps as may be necessary to remove from office any of the directors or officers referred to in paragraph 14A:10-9(6)(a) hereof whom the commissioner, after hearing upon notice to such acquiring corporation and such officer or director, has found to be a dishonest or untrustworthy person, the commissioner may forthwith take possession of the property and business of the insurance subsidiary as provided in chapter 30 of Title 17 of the Revised Statutes, and

(c) upon a finding by the Commissioner of Banking and Insurance that access to specified books and records of the acquiring corporation which relate to the condition and affairs of the insurance subsidiary is necessary to the discharge of his regulatory duties with respect to such subsidiary under Title 17 of the Revised Statutes, the commissioner may have access to the books and records which he has so specified and the acquiring corporation shall answer any inquiry by him which is pertinent thereto.

L.1968, c.350; amended by L.1973, c. 366, s. 57, eff. May 1, 1974.

The sale, lease, exchange, or other disposition of all, or substantially all, the assets of a corporation in the usual and regular course of its business as conducted by such corporation, and the mortgage or pledge of any or all the assets of a corporation whether or not in the usual and regular course of business as conducted by such corporation, may be made upon such terms and conditions and for such consideration, which may consist in whole or in part of money or property, real or personal, including shares, bonds or other securities of any other corporation, domestic or foreign, as shall be authorized by its board. In any such case, unless otherwise provided in the certificate of incorporation, no approval of the shareholders shall be required.

L.1968, c.350.

14A:10-11. Sale or other disposition of assets other than in regular course of business.

(1) A sale, lease, exchange, or other disposition of all, or substantially all, the assets of a corporation, if not in the usual and regular course of its business as conducted by such corporation, may be made upon such terms and conditions and for such consideration, which may consist in whole or in part of money or property, real or personal, including shares, bonds, or other securities of any other corporation, domestic or foreign, as may be authorized in the following manner:

(a) The board shall recommend such sale, lease, exchange, or other disposition and direct that it be submitted to a vote at a meeting of shareholders.

(b) Written notice shall be given not less than 20 nor more than 60 days before such meeting to each shareholder of record, whether or not entitled to vote at such meeting, in the manner provided in this act for the giving of notice of meetings of shareholders. Such notice shall include, or shall be accompanied by

(i) a statement summarizing the principal terms of the proposed transaction; and (ii) a statement informing shareholders who, under Chapter 11 of this act, are entitled to dissent, that they have the right to dissent and to be paid the fair value of their shares and outlining briefly, with particular reference to the time periods within which actions must be taken, the procedures set forth in Chapter 11 of this act with which they must comply in order to assert and enforce such right.

(c) At such meeting the shareholders may approve such sale, lease, exchange, or other disposition and may fix, or may authorize the board to fix, any or all of the terms and conditions thereof and the consideration to be received by the corporation therefor. Such sale, lease, exchange or other disposition shall be approved upon receiving the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote thereon, and, in addition, if any class or series of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote; except that, in the case of a corporation organized prior to January 1, 1969, the sale, lease, exchange, or other disposition shall be approved upon receiving the affirmative vote of two-thirds of the votes so cast.

(d) Subject to the provisions of section 14A:5-12, a corporation organized prior to January 1, 1969, may adopt the majority voting requirements prescribed in paragraph 14A:10-11(1)(c) by an amendment of its certificate of incorporation adopted by the affirmative vote of two-thirds of the votes cast by the holders of shares entitled to vote thereon.

(2) Notwithstanding such approval or authorization by the shareholders, the board may abandon such sale, lease, exchange, or other disposition of assets, subject to the rights of third parties under any contracts relating thereto, without further action by the shareholders.

(3) The sale, lease, exchange, or other disposition of all, or substantially all, the assets of one or more subsidiaries of a corporation, if not in the usual and regular course of business as conducted by such subsidiary or subsidiaries, shall be treated as a disposition within the meaning of subsection 14A:10-11(1) if the subsidiary or subsidiaries constitute all, or substantially all, the assets of the corporation.

(4) Notwithstanding the provisions of subsection (1) of this section, a parent corporation may, upon such terms and conditions and for such consideration as may be determined by its board, transfer any or all of its assets to any corporation, all of the outstanding shares of which are owned, directly or indirectly, by the parent corporation, and, unless the certificate of incorporation of the parent corporation otherwise requires, no approval or authorization by the shareholders of the parent corporation shall be required.

L.1968, c.350; amended 1973,c.366,s.58; 1988,c.94,s.61; 1995,c.279,s.16.

(1) Shareholders of a corporation which proposes to acquire, directly or through a subsidiary, in exchange for its shares, obligations or other securities, some or all of the outstanding shares of another corporation, or some or all of the assets of a corporation, a business trust, a business proprietorship or a business partnership, shall have the same rights, if any, as they would if they were shareholders of a surviving corporation in a merger

(a) To notice of the proposed acquisition;

(b) To vote on the proposed acquisition; and

(c) To dissent from the proposed acquisition and be paid the fair value of their shares, if:

(i) the number of voting shares outstanding immediately after the transaction, plus the number of voting shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the transaction, will exceed by more than 40% the total number of voting shares of the corporation outstanding immediately before the transaction; or

(ii) the number of participating shares outstanding immediately after the transaction, plus the number of participating shares issuable on conversion of other securities or on exercise of rights and warrants issued pursuant to the transaction will exceed by more than 40% the total number of participating shares of the corporation outstanding immediately before the transaction.

(2) As used in subsection 14A:10-12(1):

(a) "Participating shares" means shares that entitle their holders to participate without limitation in distributions.

(b) "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.

(added) 1973,c.366,s.59; amended 1988,c.94,s.62.

(1) A domestic or foreign corporation may acquire all of the outstanding shares, or all of the outstanding shares of one or more classes or series, of a domestic corporation if the board of each corporation adopts and the shareholders of the acquired corporation approve a plan of exchange.

(2) The plan of exchange shall set forth:

(a) The name of the acquired corporation, and the name of the acquiring corporation;

(b) All classes and series of shares of the acquired corporation which are proposed to be acquired by exchange;

(c) The terms and conditions of the proposed exchange;

(d) The manner and basis of exchanging the shares of the acquired corporation for shares, obligations or other securities of the acquiring corporation or any other corporation or for cash or other property or for any combination of securities, cash or property; and

(e) Other provisions considered necessary or desirable with respect to the exchange.

(3) The board of the acquired corporation upon approving the plan of exchange shall submit it to a vote at a meeting of its shareholders. If the plan of exchange provides for the acquisition of all of the outstanding shares of the acquired corporation, the shareholders of the acquired corporation shall be entitled to all the voting rights they would have if the exchange were a merger. If less than all of the classes or series of shares of the acquired corporation are to be acquired, only the holders of shares of those classes or series of shares of the acquired corporation which are proposed to be acquired shall be entitled to vote at the meeting. Written notice shall be given not less than 20 and not more than 60 days before the meeting to each shareholder of record, whether or not entitled to vote at the meeting, in the manner provided in this act for the giving of notices of meetings of shareholders. The notice shall include or be accompanied by:

(a) A copy or summary of the plan of exchange; and

(b) A statement informing shareholders who, under Chapter 11 of this act, are entitled to dissent, that they have the right to dissent and to be paid the fair value of their shares and outlining briefly, with particular reference to the time periods within which actions shall be taken, the procedures set forth in Chapter 11 of this act with which they shall comply in order to assert and enforce that right.

(4) The plan of exchange shall be approved upon receiving the affirmative vote of a majority of the votes cast by the holders of shares which are entitled to vote on the plan of exchange. In the case of a corporation organized prior to January 1, 1969, the plan of exchange shall be approved upon receiving the affirmative vote of two-thirds of the votes so cast unless the corporation has adopted the majority voting requirements prescribed in this subsection or in subsection 14A:10-3(3) by an amendment of its certificate of incorporation adopted by the affirmative vote of two-thirds of the votes cast by the holders of shares entitled to vote thereon.

(5) After approval of the plan of exchange, a certificate of exchange shall be executed on behalf of each corporation which shall set forth:

(a) The name of the acquired corporation and the name of the acquiring corporation;

(b) The plan of exchange;

(c) The dates of the approval of the plan of exchange by the boards of directors of each corporation;

(d) The date of the approval of shareholders of the acquired corporation and, if necessary, the acquiring corporation;

(e) As to the acquired corporation whose shareholders are entitled to vote: the number of shares entitled to vote thereon, and if the shares of any class or series are entitled to vote thereon as a class, the designation and number of shares entitled to vote thereon of each said class or series; the number of shares voted for and against the plan respectively, and, if the shares of any class are entitled to vote as a class, the number of shares of each class or series voted for and against the plan, respectively;

(f) That the plan of exchange was approved by the boards of directors of each corporation; and

(g) If the exchange is to be effective at a time subsequent to the date of filing with the Secretary of State, the date when the exchange is to be effective, which date may be no more than 90 days after the filing of the certificate.

(6) The certificate of exchange shall be filed in the office of the Secretary of State and the exchange shall become effective upon the date of the filing or at a later time, not to exceed 90 days after the date of filing, as may be set forth in the certificate.

(7) Upon the effective date of the exchange, the terms of the plan of exchange shall automatically become effective. Without limiting the foregoing, upon the effective date all of the outstanding shares of the acquired corporation, which the plan of exchange provides shall be acquired, automatically shall become the property of the acquiring corporation; share certificates which formerly evidenced the acquired shares shall only evidence the right of the holder thereof to receive the consideration provided for in the plan. The acquiring corporation may condition the payment of the consideration provided for in the plan upon the surrender of the share certificate evidencing the acquired shares.

(8) Any shareholder of an acquired corporation whose shares are acquired pursuant to the plan of exchange shall have all of the rights of a dissenting shareholder under Chapter 11 of this act to the extent the shareholder would have those rights if the plan of exchange were treated as a merger under paragraph 14A:11-1(1)(a).

(added) 1988,c.94,s.63.

30. (1) A domestic corporation may merge or consolidate with one or more other business entities in the following manner:

(a) Each domestic corporation shall comply with the provisions of chapter 10 of Title 14A of the New Jersey Statutes with respect to the merger or consolidation of domestic corporations and each other business entity shall comply with the applicable provisions of the laws of the jurisdiction under which it is organized.

(b) The certificate of merger or consolidation required by N.J.S.14A:10-4.1 shall be executed on behalf of each domestic corporation and each other business entity and, in addition to the information required by subsection (1) of N.J.S.14A:10-4.1, shall set forth that the applicable provisions of the laws of the jurisdiction under which each other business entity was organized have been, or upon compliance with filing and recording requirements will have been, complied with.

(c) If the surviving business entity or new business entity meets the definition of "other business entity" pursuant to subsection (q) of N.J.S.14A:1-2.1, and is organized under the laws of another jurisdiction and is to transact business in this State, it shall comply with the laws of this State applicable to that other business entity, and, whether or not it is to transact business in this State, the certificate of merger or consolidation required by N.J.S.14A:10-4.1 shall, in addition to other required information, set forth:

(i) an agreement by that other business entity that it may be served with process in this State in any proceeding for the enforcement of any obligation of any domestic corporation or any other business entity, previously amenable to suit in this State, which is a party to such merger or consolidation, and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such domestic corporation against the surviving or new corporation;

(ii) an irrevocable appointment by that other business entity of the Secretary of State of this State as its agent to accept service of process in any such proceeding, and the post office address, within or without this State, to which the Secretary of State shall mail a copy of the process in such proceeding; and

(iii) an agreement by that other business entity that it will promptly pay to the dissenting shareholders of any such domestic corporation the amount, if any, to which they shall be entitled under the provisions of chapter 11 of Title 14A of the New Jersey Statutes with respect to the rights of dissenting shareholders.

(2) The provisions of subsection (4) of N.J.S.14A:10-3 shall apply to a merger in which the surviving corporation is a domestic corporation.

(3) If the surviving or new corporation is a domestic corporation, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations. If the surviving or new corporation is any other business entity, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations except insofar as provided otherwise in the laws under which such other business entity is organized.

L.1995, c.279, s.30; amended 2009, c.158, s.2.

This act shall be known and may be cited as the "New Jersey Shareholders' Protection Act." The requirements of this act shall be in addition to the requirements of applicable law, including Title 14A of the New Jersey Statutes and any additional requirements contained in the certificate of incorporation or bylaws of a resident domestic corporation with respect to business combinations as defined herein.

L. 1986, c. 74, s. 1.

The Legislature hereby finds and declares it to be the public policy of this State, the following:

a. Resident domestic corporations, as defined in this act, encompass, represent and affect, through their ongoing business operations, a variety of constituencies, including New Jersey shareholders, employees, customers, suppliers and local communities and their economies whose welfare is vital to the State's interests.

b. In order to promote such welfare, the regulation of the internal affairs of resident domestic corporations as reflected in the laws of this State governing business corporations should allow for the stable, long-term growth of resident domestic corporations.

c. Takeovers of public corporations financed largely through debt to be repaid in the short term by the sale of substantial assets of the target corporation, in other states, have impaired local employment conditions and disrupted local commercial activity. These takeovers prevent shareholders from realizing the full value of their holdings through forced mergers and other coercive devices. The threat of these takeovers also deprives shareholders of value by forcing the adoption of short-term business strategies as well as defensive tactics which may not be in the public interest.

L. 1986, c. 74, s. 2.

3. As used in this act:

a. "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person.

b. "Announcement date," when used in reference to any business combination, means the date of the first public announcement of the final, definitive proposal for that business combination.

c. "Associate," when used to indicate a relationship with any person, means (1) any corporation or organization of which that person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of voting stock, (2) any trust or other estate in which that person has a substantial beneficial interest or as to which that person serves as trustee or in a similar fiduciary capacity, or (3) any relative or spouse of that person, or any relative of that spouse, who has the same home as that person.

d. "Beneficial owner," when used with respect to any stock, means a person:

(1) that, individually or with or through any of its affiliates or associates, beneficially owns that stock, directly or indirectly;

(2) that, individually or with or through any of its affiliates or associates, has (a) the right to acquire that stock (whether that right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the beneficial owner of stock tendered pursuant to a tender or exchange offer made by that person or any of that person's affiliates or associates until that tendered stock is accepted for purchase or exchange; or (b) the right to vote that stock pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a person shall not be deemed the beneficial owner of any stock under this subparagraph if the agreement, arrangement or understanding to vote that stock (i) arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made in accordance with the applicable rules and regulations under the Exchange Act, and (ii) is not then reportable on a Schedule 13D under the Exchange Act (or any comparable or successor report); or

(3) that has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in subparagraph (b) of paragraph (2) of this subsection), or disposing of that stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, that stock.

e. "Business combination," when used in reference to any resident domestic corporation and any interested stockholder of that resident domestic corporation, means:

(1) any merger or consolidation of that resident domestic corporation or any subsidiary of that resident domestic corporation with (a) that interested stockholder or (b) any other corporation (whether or not it is an interested stockholder of that resident domestic corporation) which is, or after a merger or consolidation would be, an affiliate or associate of that interested stockholder;

(2) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with that interested stockholder or any affiliate or associate of that interested stockholder of assets of that resident domestic corporation or any subsidiary of that resident domestic corporation (a) having an aggregate market value equal to 10% or more of the aggregate market value of all the assets, determined on a consolidated basis, of that resident domestic corporation, (b) having an aggregate market value equal to 10% or more of the aggregate market value of all the outstanding stock of that resident domestic corporation, or (c) representing 10% or more of the earning power or income, determined on a consolidated basis, of that resident domestic corporation;

(3) the issuance or transfer by that resident domestic corporation or any subsidiary of that resident domestic corporation (in one transaction or a series of transactions) of any stock of that resident domestic corporation or any subsidiary of that resident domestic corporation which has an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding stock of that resident domestic corporation to that interested stockholder or any affiliate or associate of that interested stockholder, except pursuant to the exercise of warrants or rights to purchase stock offered, or a dividend or distribution paid or made, pro rata to all stockholders of that resident domestic corporation;

(4) the adoption of any plan or proposal for the liquidation or dissolution of that resident domestic corporation proposed by, on behalf of or pursuant to any agreement, arrangement or understanding (whether or not in writing) with that interested stockholder or any affiliate or associate of that interested stockholder;

(5) any reclassification of securities (including, without limitation, any stock split, stock dividend, or other distribution of stock in respect of stock, or any reverse stock split), or recapitalization of that resident domestic corporation, or any merger or consolidation of that resident domestic corporation with any subsidiary of that resident domestic corporation, or any other transaction (whether or not with, or into, or otherwise involving that interested stockholder), proposed by, on behalf of or pursuant to any agreement, arrangement or understanding (whether or not in writing) with that interested stockholder or any affiliate or associate of that interested stockholder, which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series of stock or securities convertible into voting stock of that resident domestic corporation or any subsidiary of that resident domestic corporation which is directly or indirectly owned by that interested stockholder or any affiliate or associate of that interested stockholder, except as a result of immaterial changes due to fractional share adjustments; or

(6) any receipt by that interested stockholder or any affiliate or associate of that interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of that resident domestic corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by or through that corporation; provided, however, that the term "business combination" shall not be deemed to include the receipt of any of the foregoing benefits by that resident domestic corporation or any of that corporation's affiliates arising from transactions (such as intercompany loans or tax sharing arrangements) between that resident domestic corporation and its affiliates in the ordinary course of business.

f. "Common stock" means any stock other than preferred stock.

g. "Consummation date," with respect to any business combination, means the date of consummation of that business combination.

h. "Control," including the terms "controlling," "controlled by" and "under common control with," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract, or otherwise. A person's beneficial ownership of 10% or more of the voting power of a corporation's outstanding voting stock shall create a presumption that that person has control of that corporation. Notwithstanding the foregoing in this subsection, a person shall not be deemed to have control of a corporation if that person holds voting power, in good faith and not for the purpose of circumventing this section, as an agent, bank, broker, nominee, custodian or trustee for one or more beneficial owners who do not individually or as a group have control of that corporation.

i. "Exchange Act" means the "Securities Exchange Act of 1934," 48 Stat. 881 (15 U.S.C. s. 78a et seq.) as the same has been or hereafter may be amended from time to time.

j. "Interested stockholder," when used in reference to any resident domestic corporation, means any person (other than that resident domestic corporation or any subsidiary of that resident domestic corporation) that:

(1) is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting stock of that resident domestic corporation; or

(2) is an affiliate or associate of that resident domestic corporation and at any time within the five-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding stock of that resident domestic corporation. For the purpose of determining whether a person is an interested stockholder pursuant to this subsection, the number of shares of voting stock of that resident domestic corporation deemed to be outstanding shall include shares deemed to be beneficially owned by the person through application of subsection d. of this section but shall not include any other unissued shares of voting stock of that resident domestic corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

k. "Market value," when used in reference to property of any resident domestic corporation, means:

(1) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of that stock on the composite tape for New York Stock Exchange-listed stocks, or, if that stock is not quoted on that composite tape or if that stock is not listed on that exchange, on the principal United States securities exchange registered under the Exchange Act on which that stock is listed, or, if that stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of that stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System, or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of that resident domestic stock as determined by the board of directors of that corporation in good faith; and

(2) in the case of property other than cash or stock, the fair market value of that property on the date in question as determined by the board of directors of that resident domestic corporation in good faith.

l. "Preferred stock" means any class or series of stock of a resident domestic corporation which under the bylaws or certificate of incorporation of that resident domestic corporation is entitled to receive payment of dividends prior to any payment of dividends on some other class or series of stock, or is entitled in the event of any voluntary liquidation, dissolution or winding up of the resident domestic corporation to receive payment or distribution of a preferential amount before any payments or distributions are received by some other class or series of stock.

m. "Resident domestic corporation" means an issuer of voting stock which is organized under the laws of this State, provided, however, that an issuer which did not have its principal executive offices located in this State and did not have significant business operations in this State on the date of enactment of P.L.2013, c.40, may elect not to be a resident domestic corporation and not be governed by P.L.1986, c.74 (C.14A:10A-1 et seq.), by its board of directors adopting an amendment to its bylaws to that effect within 90 days of the date of enactment of P.L.2013, c.40, and which amendment shall not be further amended by the board of directors.

n. "Stock" means:

(1) any stock or similar security, any certificate of interest, any participation in any profit sharing agreement, any voting trust certificate, or any certificate of deposit for stock; and

(2) any security convertible, with or without consideration, into stock, or any warrant, call or other option or privilege of buying stock without being bound to do so, or any other security carrying any right to acquire, subscribe to or purchase stock.

o. "Stock acquisition date," with respect to any person and any resident domestic corporation, means the date that person first becomes an interested stockholder of that resident domestic corporation.

p. "Subsidiary" of any resident domestic corporation means any other corporation of which voting stock having a majority of the votes entitled to be cast is owned, directly or indirectly, by that resident domestic corporation.

q. "Voting stock" means shares of capital stock of a corporation entitled to vote generally in the election of directors.

L.1986, c.74, s.3; amended 1987, c.380, s.1; 1989, c.106, s.2; 2013, c.40, s.1.

4. Notwithstanding anything to the contrary contained in this act (except section 6 of this act), no resident domestic corporation shall engage in any business combination with any interested stockholder of that resident domestic corporation for a period of five years following that interested stockholder's stock acquisition date unless:

a. that business combination is approved by the board of directors of that resident domestic corporation prior to that interested stockholder's stock acquisition date; or

b. the transaction or series of related transactions which caused the person to become an interested stockholder was approved by the board of directors of that resident domestic corporation prior to that interested stockholder's stock acquisition date and any subsequent business combinations with that interested stockholder are approved by the board of directors of that resident domestic corporation, provided that any such subsequent business combination is approved by (1) the board of directors, or a committee of that board, consisting solely of persons who are not employees, officers, directors, stockholders, affiliates or associates of that interested stockholder, and (2) the affirmative vote of the holders of a majority of the voting stock not beneficially owned by such interested stockholder at a meeting called for such purpose.

L.1986, c.74, s.4; amended 2013, c.40, s.2.

5. In addition to the restriction contained in section 4 of this act, and except as provided in section 6 of this act, no resident domestic corporation shall engage at any time in any business combination with any interested stockholder of that resident domestic corporation other than a business combination specified in any one of subsection a., b., c. or d. of this section (the satisfaction of any one subsection being sufficient):

a. a business combination approved by the board of directors of that resident domestic corporation prior to that interested stockholder's stock acquisition date.

b. a business combination approved by the affirmative vote of the holders of two-thirds of the voting stock not beneficially owned by that interested stockholder at a meeting called for such purpose.

c. a business combination that meets all of the following conditions:

(1) the aggregate amount of the cash and the market value, as of the consummation date, of consideration other than cash to be received per share by holders of outstanding shares of common stock of that resident domestic corporation in that business combination is at least equal to the higher of the following:

(a) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by that interested stockholder for any shares of common stock of the same class or series acquired by it (i) within the five-year period immediately prior to the announcement date with respect to that business combination, or (ii) within the five-year period immediately prior to, or in, the transaction in which that interested stockholder became an interested stockholder, whichever is higher; plus, in either case, interest compounded annually from the earliest date on which that highest per share acquisition price was paid through the consummation date at the rate for one-year United States Treasury obligations from time to time in effect; less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of common stock since that earliest date, up to the amount of that interest; and

(b) the market value per share of common stock on the announcement date with respect to that business combination or on that interested stockholder's stock acquisition date, whichever is higher; plus interest compounded annually from that date through the consummation date at the rate for one-year United States Treasury obligations from time to time in effect; less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of common stock since that date, up to the amount of that interest;

(2) the aggregate amount of the cash and the market value as of the consummation date of consideration other than cash to be received per share by holders of outstanding shares of any class or series of stock, other than common stock, of that resident domestic corporation is at least equal to the highest of the following (whether or not that interested stockholder has previously acquired any shares of that class or series of stock):

(a) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by that interested stockholder for any shares of that class or series of stock acquired by it (i) within the five-year period immediately prior to the announcement date with respect to that business combination, or (ii) within the five-year period immediately prior to, or in, the transaction in which that interested stockholder became an interested stockholder, whichever is higher; plus, in either case, interest compounded annually from the earliest date on which that highest per share acquisition price was paid through the consummation date at the rate for one-year United States Treasury obligations from time to time in effect; less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of that class or series of stock since that earliest date, up to the amount of that interest;

(b) the highest preferential amount per share to which the holders of shares of that class or series of stock are entitled in the event of any liquidation, dissolution or winding up of that resident domestic corporation, plus the aggregate amount of any dividends declared or due as to which those holders are entitled prior to payment of dividends on some other class or series of stock (unless the aggregate amount of those dividends is included in that preferential amount); and

(c) the market value per share of that class or series of stock on the announcement date with respect to that business combination or on that interested stockholder's stock acquisition date, whichever is higher; plus interest compounded annually from that date through the consummation date at the rate for one-year United States Treasury obligations from time to time in effect; less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of that class or series of stock since that date, up to the amount of that interest;

(3) the consideration to be received by holders of a particular class or series of outstanding stock (including common stock) of that resident domestic corporation in that business combination is in cash or in the same form as the interested stockholder has used to acquire the largest number of shares of that class or series of stock previously acquired by it;

(4) the holders of all outstanding shares of stock of that resident domestic corporation not beneficially owned by that interested stockholder immediately prior to the consummation of that business combination are entitled to receive in that business combination cash or other consideration for those shares in compliance with paragraphs (1), (2) and (3) of this subsection; and

(5) after that interested stockholder's stock acquisition date and prior to the consummation date with respect to that business combination, that interested stockholder has not become the beneficial owner of any additional shares of stock of that resident domestic corporation, except:

(a) as part of the transaction which resulted in that interested stockholder becoming an interested stockholder;

(b) by virtue of proportionate stock splits, stock dividends or other distributions of stock in respect of stock not constituting a business combination under paragraph (5) of subsection e. of section 2 of this act;

(c) through a business combination meeting all of the conditions of paragraph (3) and this paragraph; or

(d) through purchase by that interested stockholder at any price which, if that price had been paid in an otherwise permissible business combination, the announcement date and consummation date of which were the date of that purchase, would have satisfied the requirements of paragraphs (1), (2) and (3) of this subsection.

d. a business combination approved by (1) the board of directors, or a committee of the board of directors, of that resident domestic corporation consisting solely of persons who are not employees, officers, directors, stockholders, affiliates or associates of that interested stockholder prior to the consummation of the business combination; and (2) the affirmative vote of the holders of a majority of the voting stock not beneficially owned by such interested stockholder at a meeting called for such purpose if the transaction or series of related transactions with the interested stockholder which caused the person to become an interested stockholder was approved by the board of directors of the resident domestic corporation prior to the consummation of such transaction or series of related transactions.

L.1986, c.74, s.5; amended 1987, c.380, s.2; 2013, c.40, s.3.

6. a. Unless the certificate of incorporation provides otherwise, the provisions of this act shall not apply to any business combination of a resident domestic corporation with an interested stockholder if the resident domestic corporation did not have a class of voting stock registered or traded on a national securities exchange or registered with the Securities and Exchange Commission pursuant to section 12(g) of the Exchange Act, 48 Stat. 892 (15 U.S.C. s.78l ) on that interested stockholder's stock acquisition date.

b. Unless the certificate of incorporation provides otherwise, the provisions of this act shall not apply to any business combination with an interested stockholder who was an interested stockholder prior to the effective date of this act unless subsequent thereto that interested stockholder increased his or its interested stockholder's proportion of the voting power of the resident domestic corporation's outstanding voting stock to a proportion in excess of the proportion of voting power that interested stockholder held prior to the effective date of this act.

c. (Deleted by amendment, P.L.1987, c.380.)

d. The provisions of this act shall not apply to any business combination of a resident domestic corporation with an interested stockholder of that corporation which became an interested stockholder inadvertently, if such interested stockholder (1) as soon as practicable divests itself or himself of a sufficient amount of the voting stock of that resident domestic corporation so that he or it no longer is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting stock of that corporation, or a subsidiary of that resident domestic corporation, and (2) would not at any time within the five-year period preceding the announcement date with respect to that business combination have been an interested stockholder but for that inadvertent acquisition.

e. (Deleted by amendment, P.L.1989, c.106.)

f. The provisions of this act shall not apply to any business combination of a resident domestic corporation with an interested stockholder of that corporation which, prior to August 5, 1986, became the beneficial owner of more than 50% of the voting power of the outstanding voting stock of that resident domestic corporation by reason of a purchase of voting stock directly from that resident domestic corporation in a transaction approved by the board of directors of that resident domestic corporation, provided that, at the time of the approval, none of the directors of the resident domestic corporation was an employee, officer, director, shareholder, affiliate or associate of the interested stockholder.

g. The provisions of this act shall not apply to any business combination of a resident domestic corporation with an interested stockholder of that corporation which became an interested stockholder on or after August 5, 1986 and before January 1, 1987.

h. The provisions of P.L.1986, c.74 (C.14A:10A-1 et seq.) shall not apply to any stockholder who was the beneficial owner of 5% or more of the voting power of the outstanding voting stock of that resident domestic corporation on the effective date of P.L.2013, c.40 if the resident domestic corporation did not, on the effective date of P.L.2013, c.40, have its principal executive offices located in this State or significant business operations located in this State.

L.1986, c.74, s.6; amended 1987, c.380, s.3; 1988, c.155; 1989, c.106, s.3; 2013, c.40, s.4.

14A:11-1. Right of shareholder to dissent.

(1) Any shareholder of a domestic corporation shall have the right to dissent from any of the following corporate actions

(a) Any plan of merger or consolidation to which the corporation is a party, provided that, unless the certificate of incorporation otherwise provides

(i) a shareholder shall not have the right to dissent from any plan of merger or consolidation with respect to shares

(A) of a class or series which is listed on a national securities exchange or is held of record by not less than 1,000 holders on the record date fixed to determine the shareholders entitled to vote upon the plan of merger or consolidation; or

(B) for which, pursuant to the plan of merger or consolidation, he will receive (x) cash, (y) shares, obligations or other securities which, upon consummation of the merger or consolidation, will either be listed on a national securities exchange or held of record by not less than 1,000 holders, or (z) cash and such securities;

(ii) a shareholder of a surviving corporation shall not have the right to dissent from a plan of merger, if the merger did not require for its approval the vote of such shareholders as provided in section 14A:10-5.1 or in subsection 14A:10-3(4), 14A:10-7(2) or 14A:10-7(4);

(iii) a shareholder of a corporation shall not have the right to dissent from a plan of merger, if the merger did not require, for its approval, the vote of the shareholders as provided in subsection (6) of N.J.S.14A:10-3; or

(b) Any sale, lease, exchange or other disposition of all or substantially all of the assets of a corporation not in the usual or regular course of business as conducted by such corporation, other than a transfer pursuant to subsection (4) of N.J.S.14A:10-11, provided that, unless the certificate of incorporation otherwise provides, the shareholder shall not have the right to dissent

(i) with respect to shares of a class or series which, at the record date fixed to determine the shareholders entitled to vote upon such transaction, is listed on a national securities exchange or is held of record by not less than 1,000 holders; or

(ii) from a transaction pursuant to a plan of dissolution of the corporation which provides for distribution of substantially all of its net assets to shareholders in accordance with their respective interests within one year after the date of such transaction, where such transaction is wholly for

(A) cash; or

(B) shares, obligations or other securities which, upon consummation of the plan of dissolution will either be listed on a national securities exchange or held of record by not less than 1,000 holders; or

(C) cash and such securities; or

(iii) from a sale pursuant to an order of a court having jurisdiction.

(2) Any shareholder of a domestic corporation shall have the right to dissent with respect to any shares owned by him which are to be acquired pursuant to section 14A:10-9.

(3) A shareholder may not dissent as to less than all of the shares owned beneficially by him and with respect to which a right of dissent exists. A nominee or fiduciary may not dissent on behalf of any beneficial owner as to less than all of the shares of such owner with respect to which the right of dissent exists.

(4) A corporation may provide in its certificate of incorporation that holders of all its shares, or of a particular class or series thereof, shall have the right to dissent from specified corporate actions in addition to those enumerated in subsection 14A:11-1(1), in which case the exercise of such right of dissent shall be governed by the provisions of this Chapter.

(5) A shareholder entitled to dissent from a corporate action as enumerated in subsection 14A:11-1(1) or as specified pursuant to a corporation's certificate of incorporation shall not have the right to challenge a corporate action from which a shareholder has a right to dissent, regardless of whether the shareholder actually exercised the right to dissent as to that action, except that a shareholder may challenge a corporate action that was:

(a) not effectuated in accordance with the applicable provisions of this Chapter or the corporation's certificate of incorporation; or

(b) procured as a result of fraud, material misrepresentation, or other deceptive means.

amended 1973, c.366, s.60; 1988, c.94, s.64; 1995, c.279, s.21; 2001, c.193, s.3; 2013, c.41, s.3.

(1) Whenever a vote is to be taken, either at a meeting of shareholders or upon written consents in lieu of a meeting pursuant to section 14A:5-6, upon a proposed corporate action from which a shareholder may dissent under section 14A:11-1, any shareholder electing to dissent from such action shall file with the corporation before the taking of the vote of the shareholders on such corporate action, or within the time specified in paragraph 14A:5-6(2)(b) or 14A:5-6(2)(c), as the case may be, if no meeting of shareholders is to be held, a written notice of such dissent stating that he intends to demand payment for his shares if the action is taken.

(2) Within 10 days after the date on which such corporate action takes effect, the corporation, or, in the case of a merger or consolidation, the surviving or new corporation, shall give written notice of the effective date of such corporate action, by certified mail to each shareholder who filed written notice of dissent pursuant to subsection 14A:11-2(1), except any who voted for or consented in writing to the proposed action.

(3) Within 20 days after the mailing of such notice, any shareholder to whom the corporation was required to give such notice and who has filed a written notice of dissent pursuant to this section may make written demand on the corporation, or, in the case of a merger or consolidation, on the surviving or new corporation, for the payment of the fair value of his shares.

(4) Whenever a corporation is to be merged pursuant to section 14A:10-5.1 or subsection 14A:10-7(4) and shareholder approval is not required under subsections 14A:10-5.1(5) and 14A:10-5.1(6), a shareholder who has the right to dissent pursuant to section 14A:11-1 may, not later than 20 days after a copy or summary of the plan of such merger and the statement required by subsection 14A:10-5.1(2) is mailed to such shareholder, make written demand on the corporation or on the surviving corporation, for the payment of the fair value of his shares.

(5) Whenever all the shares, or all the shares of a class or series, are to be acquired by another corporation pursuant to section 14A:10-9, a shareholder of the corporation whose shares are to be acquired may, not later than 20 days after the mailing of notice by the acquiring corporation pursuant to paragraph 14A:10-9(3)(b), make written demand on the acquiring corporation for the payment of the fair value of his shares.

(6) Not later than 20 days after demanding payment for his shares pursuant to this section, the shareholder shall submit the certificate or certificates representing his shares to the corporation upon which such demand has been made for notation thereon that such demand has been made, whereupon such certificate or certificates shall be returned to him. If shares represented by a certificate on which notation has been made shall be transferred, each new certificate issued therefor shall bear similar notation, together with the name of the original dissenting holder of such shares, and a transferee of such shares shall acquire by such transfer no rights in the corporation other than those which the original dissenting shareholder had after making a demand for payment of the fair value thereof.

(7) Every notice or other communication required to be given or made by a corporation to any shareholder pursuant to this Chapter shall inform such shareholder of all dates prior to which action must be taken by such shareholder in order to perfect his rights as a dissenting shareholder under this Chapter.

L.1968, c.350; amended 1973,c.366,s.61; 1988,c.94,s.65.

(1) A shareholder who has made demand for the payment of his shares in the manner prescribed by subsection 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) is hereafter in this Chapter referred to as a "dissenting shareholder."

(2) Upon making such demand, the dissenting shareholder shall cease to have any of the rights of a shareholder except the right to be paid the fair value of his shares and any other rights of a dissenting shareholder under this Chapter.

(3) "Fair value" as used in this Chapter shall be determined

(a) As of the day prior to the day of the meeting of shareholders at which the proposed action was approved or as of the day prior to the day specified by the corporation for the tabulation of consents to such action if no meeting of shareholders was held; or

(b) In the case of a merger pursuant to section 14A:10-5.1 or subsection 14A:10-7(4) in which shareholder approval is not required, as of the day prior to the day on which the board of directors approved the plan of merger; or

(c) In the case of an acquisition of all the shares or all the shares of a class or series by another corporation pursuant to section 14A:10-9, as of the day prior to the day on which the board of directors of the acquiring corporation authorized the acquisition, or, if a shareholder vote was taken pursuant to section 14A:10-12, as of the day provided in paragraph 14A:11-3(3)(a).

In all cases, "fair value" shall exclude any appreciation or depreciation resulting from the proposed action.

L.1968, c.350; amended 1973,c.366,s.62; 1988,c.94,s.66.

(1) The right of a dissenting shareholder to be paid the fair value of his shares under this Chapter shall cease if

(a) he has failed to present his certificates for notation as provided by subsection 14A:11-2(6), unless a court having jurisdiction, for good and sufficient cause shown, shall otherwise direct;

(b) his demand for payment is withdrawn with the written consent of the corporation;

(c) the fair value of the shares is not agreed upon as provided in this Chapter and no action for the determination of fair value by the Superior Court is commenced within the time provided in this Chapter;

(d) the Superior Court determines that the shareholder is not entitled to payment for his shares;

(e) the proposed corporate action is abandoned or rescinded; or

(f) a court having jurisdiction permanently enjoins or sets aside the corporate action.

(2) In any case provided for in subsection 14A:11-4(1), the rights of the dissenting shareholder as a shareholder shall be reinstated as of the date of the making of a demand for payment pursuant to subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) without prejudice to any corporate action which has taken place during the interim period. In such event, he shall be entitled to any intervening preemptive rights and the right to payment of any intervening dividend or other distribution, or, if any such rights have expired or any such dividend or distribution other than in cash has been completed, in lieu thereof, at the election of the board, the fair value thereof in cash as of the time of such expiration or completion.

L.1968, c.350.

(1) A dissenting shareholder may not withdraw his demand for payment of the fair value of his shares without the written consent of the corporation.

(2) The enforcement by a dissenting shareholder of his right to receive payment for his shares shall exclude the enforcement by such dissenting shareholder of any other right to which he might otherwise be entitled by virtue of share ownership, except as provided in subsection 14A:11-4(2) and except that this subsection shall not exclude the right of such dissenting shareholder to bring or maintain an appropriate action to obtain relief on the ground that such corporate action will be or is ultra vires, unlawful or fraudulent as to such dissenting shareholder.

L.1968, c.350.

(1) Not later than 10 days after the expiration of the period within which shareholders may make written demand to be paid the fair value of their shares, the corporation upon which such demand has been made pursuant to subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) shall mail to each dissenting shareholder the balance sheet and the surplus statement of the corporation whose shares he holds, as of the latest available date which shall not be earlier than 12 months prior to the making of such offer and a profit and loss statement or statements for not less than a 12-month period ended on the date of such balance sheet or, if the corporation was not in existence for such 12-month period, for the portion thereof during which it was in existence. The corporation may accompany such mailing with a written offer to pay each dissenting shareholder for his shares at a specified price deemed by such corporation to be the fair value thereof. Such offer shall be made at the same price per share to all dissenting shareholders of the same class, or, if divided into series, of the same series.

(2) If, not later than 30 days after the expiration of the 10-day period limited by subsection 14A:11-6(1), the fair value of the shares is agreed upon between any dissenting shareholder and the corporation, payment therefor shall be made upon surrender of the certificate or certificates representing such shares.

L.1968, c.350; amended by L.1973, c. 366, s. 63, eff. May 1, 1974.

(1) If the fair value of the shares is not agreed upon within the 30-day period limited by subsection 14A:11-6(2), the dissenting shareholder may serve upon the corporation upon which such demand has been made pursuant to subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) a written demand that it commence an action in the Superior Court for the determination of the fair value of the shares. Such demand shall be served not later than 30 days after the expiration of the 30-day period so limited and such action shall be commenced by the corporation not later than 30 days after receipt by the corporation of such demand, but nothing herein shall prevent the corporation from commencing such action at any earlier time.

(2) If a corporation fails to commence the action as provided in subsection 14A:11-7(1), a dissenting shareholder may do so in the name of the corporation, not later than 60 days after the expiration of the time limited by subsection 14A:11-7(1) in which the corporation may commence such an action.

L.1968, c.350.

In any action to determine the fair value of shares pursuant to this Chapter:

(a) The Superior Court shall have jurisdiction and may proceed in the action in a summary manner or otherwise;

(b) All dissenting shareholders, wherever residing, except those who have agreed with the corporation upon the price to be paid for their shares, shall be made parties thereto as an action against their shares quasi in rem;

(c) The court in its discretion may appoint an appraiser to receive evidence and report to the court on the question of fair value, who shall have such power and authority as shall be specified in the order of his appointment; and

(d) The court shall render judgment against the corporation and in favor of each shareholder who is a party to the action for the amount of the fair value of his shares.

L.1968, c.350.

(1) A judgment for the payment of the fair value of shares shall be payable upon surrender to the corporation of the certificate or certificates representing such shares.

(2) The judgment shall include an allowance for interest at such rate as the court finds to be equitable, from the date of the dissenting shareholder's demand for payment under subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) to the day of payment. If the court finds that the refusal of any dissenting shareholder to accept any offer of payment, made by the corporation under section 14A:11-6, was arbitrary, vexatious or otherwise not in good faith, no interest shall be allowed to him.

L.1968, c.350.

The costs and expenses of bringing an action pursuant to section 14A:11-8 shall be determined by the court and shall be apportioned and assessed as the court may find equitable upon the parties or any of them. Such expenses shall include reasonable compensation for and reasonable expenses of the appraiser, if any, but shall exclude the fees and expenses of counsel for and experts employed by any party; but if the court finds that the offer of payment made by the corporation under section 14A:11-6 was not made in good faith, or if no such offer was made, the court in its discretion may award to any dissenting shareholder who is a party to the action reasonable fees and expenses of his counsel and of any experts employed by the dissenting shareholder.

L.1968, c.350.

14A:11-11. Disposition of shares acquired by corporation.

(1) The shares of a dissenting shareholder in a transaction described in subsection 14A:11-1(1) shall become reacquired by the corporation which issued them or by the surviving corporation, as the case may be, upon the payment of the fair value of shares.

(2) (Deleted by amendment, P.L.1995, c.279.)

(3) In an acquisition of shares pursuant to section 14A:10-9 or section 14A:10-13, the shares of a dissenting shareholder shall become the property of the acquiring corporation upon the payment by the acquiring corporation of the fair value of such shares. Such payment may be made, with the consent of the acquiring corporation, by the corporation which issued the shares, in which case the shares so paid for shall become reacquired by the corporation which issued them and shall be cancelled.

L.1968, c.350; amended 1995,c.279,s.17.

2. (1) As used in this section:

"Filing office" means the Division of Revenue and Enterprise Services in the Department of the Treasury, or other State office as designated by law.

"Other entity" means a partnership, limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust, national association, or any other unincorporated business, not including a sole proprietorship, whether organized under the laws of this State or under the laws of any other state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction, or a foreign corporation.

(2) Any other entity may, upon the authorization of conversion in accordance with this section, convert to a domestic corporation.

(3) Prior to filing a certificate of conversion to corporation with the filing office, a plan of conversion shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other entity and the conduct of its business and in accordance with applicable law, as appropriate, and a certificate of incorporation shall be approved by the same authorization required to approve the conversion.

(4) Any other entity may convert to a domestic corporation by complying with subsection (3) of this section and filing in the filing office:

(a) A certificate of conversion to corporation that has been executed in accordance with subsection (10) of this section and filed in accordance with N.J.S.14A:1-6; and

(b) A certificate of incorporation that has been executed, acknowledged and filed in accordance with N.J.S.14A:1-6.

(5) The certificate of conversion to corporation shall state:

(a) The date on which and jurisdiction where the other entity was first created, incorporated, formed or otherwise came into being and, if it has changed, its jurisdiction immediately prior to its conversion to a domestic corporation;

(b) The name of the other entity immediately prior to the filing of the certificate of conversion to corporation;

(c) The name of the corporation as set forth in its certificate of incorporation filed in accordance with subsection (4) of this section;

(d) The future effective date or time, which shall be a date or time certain, of the conversion if it is not to be effective upon the filing of the certificate of conversion, which is not to exceed 90 days after the date of filing; and

(e) That the plan of conversion has been approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other entity and the conduct of its business and in accordance with applicable law, as appropriate.

(6) Upon the effective time of the certificate of conversion to corporation and the certificate of incorporation, the other entity shall be converted to a domestic corporation and the corporation shall thereafter be subject to all of the provisions of this title, except that notwithstanding subsection (2) of N.J.S.14A:2-7, the existence of the corporation shall be deemed to have commenced on the date the other entity commenced its existence in the jurisdiction in which the other entity was first created, formed, incorporated or otherwise came into being.

(7) The conversion of any other entity to a domestic corporation shall not be deemed to affect any obligations or liabilities of the other entity incurred prior to its conversion to a domestic corporation or the personal liability of any person incurred prior to conversion.

(8) When any other entity has been converted to a domestic corporation pursuant to this section, the domestic corporation shall, for all purposes of the laws of the State of New Jersey, be deemed to be the same entity as the converting other entity. When any conversion shall have become effective under this section, for all purposes of the laws of the State of New Jersey, all of the rights, privileges and powers of the other entity that has converted, and all property, real, personal and mixed, and all debts due to that other entity, as well as all other things and causes of action belonging to that other entity, shall remain vested in the domestic corporation to which that other entity has converted and shall be the property of that domestic corporation and the title to any real property vested by deed or otherwise in that other entity shall not revert or be in any way impaired by reason of this act; but all rights of creditors and all liens upon any property of that other entity shall be preserved unimpaired, and all debts, liabilities and duties of the other entity that has converted shall remain attached to the domestic corporation to which that other entity has converted, and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as a domestic corporation. The rights, privileges, powers and interests in property of the other entity, as well as the debts, liabilities and duties of the other entity, shall not be deemed, as a consequence of the conversion, to have been transferred to the domestic corporation to which that other entity has converted for any purpose of the laws of the State of New Jersey.

(9) Unless otherwise agreed for all purposes of the laws of the State of New Jersey or as required under applicable non-New Jersey law, the converting other entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of that other entity and shall constitute a continuation of the existence of the converting other entity in the form of a domestic corporation.

(10) The certificate of conversion to corporation shall be signed by any person who is authorized to sign the certificate of conversion to corporation on behalf of the other entity.

(11) In connection with a conversion hereunder, rights or securities of, or interests in, the other entity which is to be converted to a domestic corporation may be exchanged for or converted into cash, property, or shares of stock, rights or securities of that domestic corporation or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or shares of stock, rights or securities of or interests in another domestic corporation or other entity or may be cancelled.

L.2023, c.38, s.2.

3. (1) As used in this section:

"Filing office" means the Division of Revenue and Enterprise Services in the Department of the Treasury, or other State office as designated by law.

"Other entity" means a partnership, limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust, national association, or any other unincorporated business, not including a sole proprietorship, whether organized under the laws of this State or under the laws of any other state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction, or a foreign corporation.

(2) A domestic corporation may, upon the authorization of conversion in accordance with this section, convert to any other entity.

(3) The board of directors of the corporation which desires to convert under this section shall adopt a resolution approving a plan of conversion, specifying the type of other entity into which the corporation shall be converted and shall direct that the conversion be submitted to a vote at a meeting of shareholders. Written notice shall be given not less than 20 nor more than 60 days before that meeting to each shareholder of record, whether or not entitled to vote at that meeting, in the manner provided in the "New Jersey Business Corporation Act" for the giving of notice of meetings of shareholders. At each meeting, a vote of the shareholders shall be taken on the proposed plan of conversion. The conversion shall be approved upon receiving the affirmative vote of the holders of all shares of outstanding stock, whether voting or nonvoting. The conversion shall also be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other entity and the conduct of its business and in accordance with applicable law, as appropriate.

(4) A domestic corporation that converts to any other entity that will be domiciled in this State shall file with the filing office a certificate of conversion that states:

(a) the name of the corporation, and if it wishes to change its name, the proposed new name;

(b) the future effective date or time, which shall be a date or time certain, of the conversion if it is not to be effective upon the filing of the certificate of conversion, which is not to exceed 90 days after the date of filing; and

(c) that the conversion was adopted pursuant to the provisions of subsection (3) of this section.

(5) If a corporation shall convert in accordance with this section to any other entity organized, formed or created under the laws of a jurisdiction other than the State of New Jersey, the corporation shall file with the filing office a certificate of conversion executed in accordance with N.J.S.14A:1-6, which certifies:

(a) the name of the corporation, and if it has been changed, the name under which it was originally incorporated;

(b) the date of filing of its original certificate of incorporation with the filing office;

(c) the name and jurisdiction of the other entity to which the corporation shall be converted;

(d) that the conversion has been approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other entity and the conduct of its business and in accordance with applicable law, as appropriate; and

(e) the future effective date or time, which shall be a date or time certain, of the conversion if it is not to be effective upon the filing of the certificate of conversion, which is not to exceed 90 days after the date of filing.

(f) If the other entity is to transact business in this State, it shall comply with the provisions of this act with respect to foreign entities, and, whether or not it is to transact business in this State, the certificate of conversion required by this section shall, in addition to other required information, set forth:

(i) an agreement by that other entity that it may be served with process in this State in any proceeding for the enforcement of any obligation of the converting corporation; and

(ii) an irrevocable appointment by that other entity of the filing office of this State as its agent to accept service of process in any proceeding for the enforcement of any obligation of the converting corporation, and the post office address, within or without this State, to which the filing office shall mail a copy of the process in that proceeding.

(g) In the event of service upon the filing office in accordance with paragraph (f) of subsection (5) of this section, the filing office shall forthwith notify the corporation that has converted out of the State of New Jersey by letter, directed to the corporation that has converted out of the State of New Jersey at the address so specified, unless that corporation shall have designated in writing to the filing office a different address for that purpose, in which case it shall be mailed to the last address designated. The letter shall be sent by a mail or courier service, and the filing office shall maintain a record of the mailing or deposit with the courier. The letter shall enclose a copy of the process and any other papers served on the filing office pursuant to this subsection. It shall be the duty of the plaintiff to serve process and any other papers in duplicate, to notify the filing office that service is being effected pursuant to this subsection and to pay the filing office the sum of $75.00 for the use of the State, which sum shall be taxed as part of the costs in the proceeding, if the plaintiff shall prevail therein. The filing office shall maintain an alphabetical record of any service, setting forth the name of the plaintiff and the defendant, the title, docket number and nature of the proceeding in which process has been served, the fact that service has been effected pursuant to this subsection, the return date thereof, and the day and hour service was made. The filing office shall not be required to retain the information longer than five years from receipt of the service of process.

(6) Upon the filing in the filing office of a certificate of conversion to a non-New Jersey entity in accordance with subsection (5) of this section or upon the future effective date or time of the certification of conversion to a non-New Jersey entity and payment to the filing office of all fees prescribed under this title, the filing office shall certify that the corporation has filed all documents and paid all fees required by this title, and thereupon the corporation shall cease to exist as a domestic corporation at the time the certificate of conversion becomes effective in accordance with N.J.S.14A:1-6. The certificate of the filing office shall be prima facie evidence of the conversion by such corporation out of the State of New Jersey.

(7) The conversion of a corporation out of the State of New Jersey in accordance with this section and the resulting cessation of its existence as a domestic corporation pursuant to a certificate of conversion to a non-New Jersey entity shall not be deemed to affect any obligations or liabilities of the corporation incurred prior to conversion or the personal liability of any person incurred prior to conversion, nor shall it be deemed to affect the choice of law applicable to the corporation with respect to matters arising prior to conversion.

(8) Unless otherwise provided in the plan of conversion adopted in accordance with this section, the converting corporation shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not constitute a dissolution of the corporation.

(9) In connection with a conversion of a domestic corporation to an other entity pursuant to this section, shares of stock of the domestic corporation which is to be converted may be exchanged for or converted into cash, property rights or securities of, or interest in, the other entity to which the domestic corporation is being converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, shares of stock, rights or securities of, or interest in, another domestic corporation or other entity or may be cancelled.

(10) When a corporation has been converted to the other entity pursuant to this section, the other entity shall, for all purposes of the laws of the State of New Jersey, be deemed to be the same entity as the corporation. When any conversion shall have become effective under this section, for all purposes of the laws of the State of New Jersey, all of the rights, privileges and powers of the corporation that has converted and all property, real, personal and mixed, and all debts due to that corporation, as well as all other things and causes of action belonging to that corporation, shall remain vested in the other entity to which that corporation has converted and shall be the property of that other entity, and the title to any real property vested by deed or otherwise in that corporation shall not revert or be in any way impaired by reason of this act; but all rights of creditors and all liens upon any property of that corporation shall be preserved unimpaired, and all debts, liabilities and duties of the corporation that has converted shall remain attached to the other entity to which that corporation has converted and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as that other entity. The rights, privileges, powers and interest in property of the corporation that has converted, as well as the debts, liabilities and duties of that corporation, shall not be deemed, as a consequence of the conversion, to have been transferred to the other entity to which that corporation has converted for any purpose of the laws of the State of New Jersey.

(11) No vote of shareholders of a corporation shall be necessary to authorize a conversion if no shares of the stock of that corporation shall have been issued prior to the adoption by the board of directors of the resolution approving the conversion.

L.2023, c.38, s.3.

(1) A corporation may be dissolved in any one of the following ways

(a) By the filing of a certificate of dissolution pursuant to section 14A:12-5.1 upon expiration of any period of duration stated in the corporation's certificate of incorporation;

(b) By action of the incorporators or directors pursuant to section 14A:12-2;

(c) By action of the shareholders pursuant to section 14A:12-3;

(d) By action of the board and the shareholders pursuant to section 14A:12-4;

(e) By action of a shareholder or shareholders pursuant to section 14A:12-5;

(f) By a judgment of the Superior Court in an action brought pursuant to section 14A:12-6 or 14A:12-7, or otherwise;

(g) Automatically by a proclamation of the Secretary of State repealing or revoking a certificate of incorporation for nonpayment of taxes or for failure to file annual reports;

(h) By action of a corporation without assets pursuant to section 14A:12-4.1.

(2) A corporation which has been dissolved in a proceeding pursuant to section 14A:12-6 or 14A:12-7, or which has been dissolved, or whose charter has been forfeited or revoked, for a cause or by a method not mentioned in this section, shall be subject to all the provisions of this Chapter and of Chapter 14, to the extent that such provisions are compatible with a court directed dissolution, or with the statute or common-law proceeding pursuant to which such dissolution, forfeiture or revocation is effected.

L.1968, c.350; amended 1973,c.366,s.64; 1988,c.94,s.67.

(1) A corporation may be dissolved by action of its incorporators when there has been no organization meeting of the board, or by the board if there has been an organization meeting, provided that the corporation

(a) Has not commenced business;

(b) Has not issued any shares;

(c) Has no debts or other liabilities; and

(d) Has received no payments on subscriptions for its shares, or, if it has received such payments, has returned them to those entitled thereto, less any part thereof disbursed for expenses.

(2) The dissolution of such a corporation shall be effected in the following manner: the sole incorporator or director, if there is only one, or both incorporators or directors, if there are only two, or a majority of the incorporators or directors, if there are more than two, shall execute and file in the office of the Secretary of State a certificate of dissolution stating

(a) The name of the corporation;

(b) The name of the registered agent of the corporation;

(c) The location of the registered office of the corporation;

(d) The names of the incorporations and directors constituting the first board;

(e) That the corporation has not commenced business and has issued no shares, and has no debts or other liabilities;

(f) That the corporation has received no payments or subscriptions to its shares, or, if it has received such payments, that it has returned them to those entitled thereto, less any part thereof disbursed for expenses; and

(g) That the sole incorporator or director, if there is only one, or both incorporators or directors, if there are only two, or a majority of the incorporators or directors, if there are more than two, has or have elected that the corporation be dissolved.

(3) Notwithstanding the provisions of sections 14A:2-2 and 14A:15-2 and section 3 of P.L.1973, c. 367 (C. 54:50-14),

(a) The Secretary of State shall accept for filing a certificate of dissolution pursuant to the provisions of this section

(i) Without payment of any filing fee; and

(ii) Without the filing with him of the certificate of the Director of the Division of Taxation evidencing the payment, or provision for the payment, by the corporation of taxes, fees, penalties, and interest; and

(b) The name of the corporation shall be available immediately for corporate use upon the filing of a certificate of dissolution pursuant to the provisions of this section.

L.1968, c.350; amended by L.1973, c. 366, s. 65, eff. May 1, 1974; L.1979, c. 86, s. 4, eff. May 15, 1979.

14A:12-3. Dissolution without a meeting of shareholders.

A corporation may be dissolved by the consent of all its shareholders entitled to vote thereon. Notice of dissolution pursuant to this section shall be provided to all shareholders not entitled to vote thereon, not less than 10 nor more than 60 days before the filing of the certificate of dissolution, in the manner provided in this act for the giving of notice of meetings of shareholders. To effect such dissolution, all shareholders entitled to vote thereon shall sign and file in the office of the Secretary of State a certificate of dissolution which shall state

(a) the name of the corporation;

(b) the name of the registered agent of the corporation;

(c) the location of the registered office of the corporation;

(d) the names of its directors and officers;

(e) that the corporation is dissolved; and

(f) that the certificate has been signed in person or by proxy by all the shareholders of the corporation entitled to vote thereon.

L.1968, c.350; amended 1995,c.279,s.18.

14A:12-4. Dissolution pursuant to action of board and shareholders.

(1) A corporation may be dissolved by action of its board and its shareholders as provided in this section.

(2) The board shall recommend that the corporation be dissolved, and direct that the question of dissolution be submitted to a vote at a meeting of shareholders.

(3) Written notice of the meeting shall be given not less than 10 nor more than 60 days before the meeting to each shareholder of record whether or not entitled to vote at such meeting in the manner provided in this act for the giving of notice of meetings of shareholders.

(4) At such meeting, a vote of the shareholders shall be taken on the proposed dissolution. Such dissolution shall be approved upon receiving the affirmative vote of a majority of the votes cast by the holders of shares of the corporation entitled to vote thereon, and, in addition, if any class or series is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote; except that, in the case of a corporation organized prior to the effective date of this act, the proposed dissolution shall be approved upon receiving the affirmative vote of two-thirds of the votes so cast. The voting requirements of this section shall be subject to such greater requirements as may be provided in the certificate of incorporation.

(5) Subject to the provisions of section 14A:5-12, a corporation organized prior to January 1, 1969 may adopt the majority voting requirements prescribed in subsection 14A:12-4(4) by an amendment of its certificate of incorporation adopted by the affirmative vote of two-thirds of the votes cast by the holders of shares entitled to vote thereon.

(6) If dissolution is approved as provided in this section, a certificate of dissolution shall be executed on behalf of the corporation and shall be filed in the office of the Secretary of State. The certificate shall set forth

(a) the name of the corporation;

(b) the name of the registered agent of the corporation;

(c) the location of the registered office of the corporation;

(d) the names of the corporation's directors and officers;

(e) the text of the board resolution authorizing the dissolution;

(f) the date and place of the meeting of shareholders called to vote upon the dissolution;

(g) the number of outstanding shares of the corporation entitled to vote on the dissolution, and, if the shares of any class or series are entitled to vote as a class, the designation and number of outstanding shares of each such class and series; and

(h) the number of shares represented at the meeting, the number of shares voted for and voted against the dissolution, and, if the shares of any class or series are entitled to vote as a class, the number of shares of each such class and series voted for and voted against the dissolution.

L.1968, c.350; amended 1995,c.279,s.19.

(1) A corporation which has ceased doing business and does not intend to recommence doing business may be dissolved by action of its board and shareholders or, as set forth in this section, by a corporate officer, if the corporation

(a) Has no assets;

(b) Has ceased doing business and does not intend to recommence doing business; and

(c) Has not made any distributions of cash or property to its shareholders�within the last 24 months and does not intend to make any distribution following�its dissolution.

(2) The dissolution of a corporation may be authorized by the shareholders�without a meeting as provided in section 14A:12-3, by action of the board and the shareholders as provided in section 14A:12-4 or by action of a corporate officer as provided below. The dissolution may be authorized by a corporate officer if the officer has given 30 days' prior written notice of his intention to dissolve the corporation by mail or personal service to all known directors and shareholders at their last known address and no director or shareholder has objected to the proposed dissolution. The dissolution shall be effected by filing with the Secretary of State a certificate of dissolution executed on behalf of the corporation by all of the shareholders or any officer of the corporation setting forth the following:

(a) The name of the corporation;

(b) The name and address of the shareholders executing the certificate, or�the name, address and title of the officer executing the certificate;

(c) That the corporation has no assets, has ceased doing business and does�not intend to recommence doing business, and has not made any distributions of cash or property to its shareholders within the last 24 months and does not intend to make any distribution following its dissolution;

(d) That (i) the shareholders have authorized the dissolution by signing the certificate of dissolution in person or by proxy, or (ii) the board and the shareholders have authorized the dissolution as provided in section 14A:12-4, or�(iii) 30 days' prior written notice of the dissolution has been mailed to or personally served upon all known directors and shareholders at their last known addresses and no one of them has objected to the dissolution; and

(e) That the shareholders executing the certificate believe, or the officer executing the certificate believes, that all of the statements in the certificate are true under penalty of perjury.

(3) Notwithstanding the provisions of sections 14A:2-2 and 14A:15-2, and section 3 of P.L. 1973, c. 367 (C. 54:50-14) or any other provisions of law,

(a) The Secretary of State shall accept for filing a certificate of dissolution pursuant to the provisions of this section

(i) without payment of any filing fee; and

(ii) without the filing with the Secretary of

State of the certificate of the Director of the

Division of Taxation evidencing the payment, or

provision for the payment, by the corporation of

taxes, fees, penalties, and interest; and

(b) The name of the corporation shall be available immediately for corporate use upon the filing of a certificate of dissolution pursuant to the provisions of this section.

(added) 1988,c.94,s.68.

(1) The certificate of incorporation may provide that any shareholder, or any specified number of shareholders, or the holders of any specified number or proportion of shares, or of any specified number or proportion of shares of any class or series, may effect the dissolution of the corporation at will or upon the occurrence of a specified event. In such a case, dissolution of the corporation may be effected by the filing of a certificate of dissolution in the office of the Secretary of State, signed, as the certificate of incorporation may provide, by a single shareholder, or the specified number of shareholders, or the holders of any specified number or proportion of shares, or of any specified number or proportion of shares of any class or series. The certificate of dissolution shall state the name of the corporation, the location of its registered office and the name of its registered agent. It shall also state that the corporation is dissolved; that the dissolution is effected pursuant to a provision of the certificate of incorporation; and that the certificate is executed and filed by the person or persons authorized by the certificate of incorporation.

(2) An amendment of the certificate of incorporation which adds a provision authorized by this section, or which amends or deletes such a provision, shall be authorized at a meeting of shareholders by a vote of all outstanding shares, or by such lesser vote, but not less than the vote set forth in paragraph 14A:9-2(4)(c), as may be specifically provided for in the certificate of incorporation for such amendment.

(3) If the certificate of incorporation of any corporation contains a provision authorized by this section, the fact that such provision exists shall be noted conspicuously on the face or back of every certificate for shares issued by such corporation, and each holder of such certificates shall conclusively be deemed to have taken delivery with notice of such provision. A provision authorized by this subsection shall become invalid if, subsequent to the adoption of such provision, shares are transferred or issued to any person who takes delivery of the share certificate without notice thereof, unless such person consents in writing to such provision.

L.1968, c.350.

(1) A corporation shall not be dissolved when the period of duration stated in its certificate of incorporation expires until a certificate of dissolution executed on its behalf has been filed in the office of the Secretary of State. Upon written demand to the corporation by any shareholder, a corporation whose duration has expired shall, within 60 days of such demand, file a certificate of dissolution in the office of the Secretary of State unless within such time it amends its certificate of incorporation to extend its duration, as provided in section 14A:9-1(2)(c).

(2) A certificate of dissolution filed pursuant to this section shall set forth

(a) the name of the corporation;

(b) the name of the registered agent of the corporation;

(c) the location of the registered office of the corporation;

(d) the names of the corporation's directors and officers; and

(e) the fact that the corporation is dissolved because of expiration of the period of duration stated in its certificate of incorporation.

L.1973, c. 366, s. 66, eff. May 1, 1974.

(1) The Attorney General may bring an action in the Superior Court for the dissolution of a corporation upon the ground that the corporation

(a) has procured its organization through fraud;

(b) has repeatedly exceeded the authority conferred upon it by law; or

(c) has repeatedly conducted its business in an unlawful manner.

(2) The Superior Court may proceed in such action in a summary manner or otherwise.

(3) The enumeration in subsection 14A:12-6(1) of grounds for dissolution shall not exclude any other statutory or common law action by the Attorney General for the dissolution of a corporation or the revocation or forfeiture of its corporate franchises.

L.1968, c.350.

(1) The Superior Court, in an action brought under this section, may appoint a custodian, appoint a provisional director, order a sale of the corporation's stock as provided below, or enter a judgment dissolving the corporation, upon proof that

(a) The shareholders of the corporation are so divided in voting power that, for a period which includes the time when two consecutive annual meetings were or should have been held, they have failed to elect successors to directors whose terms have expired or would have expired upon the election and qualification of their successors; or

(b) The directors of the corporation, or the person or persons having the management authority otherwise in the board, if a provision in the corporation's certificate of incorporation contemplated by subsection 14A:5-21(2) is in effect, are unable to effect action on one or more substantial matters respecting the management of the corporation's affairs; or

(c) In the case of a corporation having 25 or less shareholders, the directors or those in control have acted fraudulently or illegally, mismanaged the corporation, or abused their authority as officers or directors or have acted oppressively or unfairly toward one or more minority shareholders in their capacities as shareholders, directors, officers, or employees.

(2) An action may be brought under this section by one or more directors or by one or more shareholders. In such action, in the case of appointment of a custodian or a provisional director, the court may proceed in a summary manner or otherwise.

(3) One or more provisional directors may be appointed if it appears to the court that such an appointment may be in the best interests of the corporation and its shareholders, notwithstanding any provisions in the corporation's by-laws, certificate of incorporation, or any resolutions adopted by the board or shareholders. A provisional director shall have all the rights and powers of a duly elected director of the corporation, including the right to notice of and to vote at meetings of directors, until such time as he shall be removed by order of the court or, unless otherwise ordered by the court, by a vote or written consent of a majority of the votes entitled to be cast by the holders of shares entitled to vote to elect directors.

(4) A custodian may be appointed if it appears to the court that such an appointment may be in the best interests of the corporation and its shareholders, notwithstanding any provisions in the corporation's by-laws, certificate of incorporation, or any resolutions adopted by the shareholders or the board. Subject to any limitations which the court imposes, a custodian shall be entitled to exercise all of the powers of the corporation's board and officers to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors, until such time as he shall be removed by order of the court or, unless otherwise ordered by the court, by the vote or written consent of a majority of the votes entitled to be cast by the holders of shares entitled to vote to elect directors. Such powers may be exercised directly or through, or in conjunction with, the corporation's board or officers, in the discretion of the custodian or as the court may order. If so provided in the order appointing him, a custodian shall have the fact-determining powers of a receiver as provided in subsections 14A:14-5 (e) and (f).

(5) Any custodian or provisional director shall be an impartial person who is neither a shareholder nor a creditor of the corporation or of any subsidiary or affiliate of the corporation.

(6) Any custodian or provisional director shall report from time to time to the court concerning the matter complained of, or the status of the deadlock, if any, and of the status of the corporation's business, as the court shall direct. In addition, he shall submit to the court, if so directed, his recommendations as to the appropriate disposition of the action. If, after the appointment of a custodian or provisional director, the court determines that a judgment of dissolution is in the best interests of the shareholders of the corporation, such a judgment shall be entered. The court may continue any custodian or provisional director in such office subsequent to the entry of a judgment of dissolution and until such time as the affairs of the corporation are wound up, or it may appoint such person or another as receiver, as provided in section 14A:12-15.

(7) In any proceeding under this section, the court shall allow reasonable compensation to the custodian or provisional director for his services and reimbursement or direct payment of his reasonable costs and expenses which amounts shall be paid by the corporation.

(8) Upon motion of the corporation or any shareholder who is a party to the proceeding, the court may order the sale of all shares of the corporation's stock held by any other shareholder who is a party to the proceeding to either the corporation or the moving shareholder or shareholders, whichever is specified in the motion, if the court determines in its discretion that such an order would be fair and equitable to all parties under all of the circumstances of the case.

(a) The purchase price of any shares so sold shall be their fair value as of the date of the commencement of the action or such earlier or later date deemed equitable by the court, plus or minus any adjustments deemed equitable by the court if the action was brought in whole or in part under paragraph 14A:12-7(1)(c).

(b) Within five days after the entry of any such order, the corporation shall provide each selling shareholder with the information it is required to provide a dissenting shareholder under section 14A:11-6, and within 10 days after entry of the order the purchasing party shall make a written offer to purchase at a price deemed by the purchasing party to be the fair value of the shares.

(c) If the parties are unable to agree on fair value within 40 days of entry of the order, the court shall make the determination of the fair value, and the provisions of sections 14A:11-8 through 14A:11-11 shall be followed insofar as they are applicable.

(d) Interest may be allowed at the rate and from the date determined by the court to be equitable, and if the court finds that the refusal of the shareholder to accept any offer of payment was arbitrary, vexatious, or otherwise not in good faith, no interest shall be allowed. If the court finds that the action was maintainable under paragraph 14A:12-7(1)(c), the court in its discretion may award to the selling shareholder or shareholders reasonable fees and expenses of counsel and of any experts, including accountants, employed by them.

(e) The purchase price shall be paid by the delivery of cash, notes, or other property, or any combination thereof within 30 days after the court has determined the fair value of the shares. The court shall, in its discretion, determine the method of payment of the purchase price. Whenever practicable, the purchase price shall be paid entirely in cash. If the court determines that an all cash payment is not practicable, it shall determine the amount of the cash payment, the kind and amount of any property, whether any note shall be secured, and other appropriate terms, including the interest rate of any note.

(f) Upon entry of an order for the sale of shares under this subsection, and provided the corporation or the moving shareholders post a bond in adequate amount with sufficient sureties or otherwise satisfy the court that the full purchase price of the shares, plus whatever additional costs, expenses, and fees as may be awarded, will be paid when due and payable, the selling shareholders shall no longer have any rights or status as shareholders, officers, or directors, except the right to receive the fair value of their shares plus whatever other amounts as may be awarded. In such event, the court may remove any custodian or provisional director who may have been appointed.

(9) In determining whether to enter a judgment of dissolution in an action brought under this section, the court shall take into consideration whether the corporation is operating profitably and in the best interests of its shareholders, but shall not deny entry of such a judgment solely on that ground.

(10) If the court determines that any party to an action brought under this section has acted arbitrarily, vexatiously, or otherwise not in good faith, it may in its discretion award reasonable expenses, including counsel fees incurred in connection with the action, to the injured party or parties.

L.1968, c.350; amended 1973,c.366,s.67; 1988,c.94,s.69.

14A:12-8. Effective time of dissolution.

A corporation is dissolved

(a) when the period of duration stated in the corporation's certificate of incorporation expires and the corporation files a certificate of dissolution in the office of the Secretary of State pursuant to section 14A:12-5.1; or

(b) upon the proclamation of the Secretary of State issued pursuant to section 54:11-2 of the Revised Statutes; or

(c) when a certificate of dissolution is filed in the office of the Secretary of State pursuant to section 14A:12-2, 14A:12-3, 14A:12-4 or 14A:12-5, except when a later time not to exceed 90 days after the date of filing is specified in the certificate of dissolution; or

(d) when a judgment of forfeiture of corporate franchises or of dissolution is entered by a court of competent jurisdiction.

L.1968, c.350; amended 1973,c.366,s.68; 1995,c.279,s.20.

(1) Except as a court may otherwise direct, a dissolved corporation shall continue its corporate existence but shall carry on no business except for the purpose of winding up its affairs by

(a) collecting its assets;

(b) conveying for cash or upon deferred payments, with or without security, such of its assets as are not to be distributed in kind to its shareholders;

(c) paying, satisfying and discharging its debts and other liabilities; and

(d) doing all other acts required to liquidate its business and affairs.

(2) Subject to the provisions of subsection 14A:12-9(1), and except as otherwise provided by court order, the corporation, its officers, directors and shareholders shall continue to function in the same manner as if dissolution had not occurred. In particular, and without limiting the generality of the foregoing,

(a) the directors of the corporation shall not be deemed to be trustees of its assets and shall be held to no greater standard of conduct than that prescribed by section 14A:6-14;

(b) title to the corporation's assets shall remain in the corporation until transferred by it in the corporate name;

(c) the dissolution shall not change quorum or voting requirements for the board or shareholders, nor shall it alter provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of by-laws or adoption of new by-laws;

(d) shares may be transferred until the record date of the final liquidating distribution or dividend to shareholders;

(e) the corporation may sue and be sued in its corporate name and process may issue by and against the corporation in the same manner as if dissolution had not occurred;

(f) no action brought against any corporation prior to its dissolution shall abate by reason of such dissolution.

(3) The right of the corporation to sell its assets and the right of a shareholder to dissent from such sale shall be governed by Chapters 10 and 11 in the same manner as if dissolution had not occurred.

(4) A dissolved corporation may condition the payment to its shareholders

(a) of any partial liquidating distribution or dividend on the surrender to it of the share certificates on which the distribution or dividend is to be paid for endorsement to reflect such payment; or

(b) of the final liquidating distribution or dividend on the surrender to it for cancellation of the share certificates on which the distribution or dividend is to be paid.

L.1968, c.350; amended by L.1973, c. 366, s. 69, eff. May 1, 1974.

(1) Dissolution proceedings commenced pursuant to sections 14A:12-3, 14A:12-4 or 14A:12-5 may be revoked at any time within 60 days after the effective time of dissolution, as determined pursuant to section 14A:12-8, provided that no distribution of corporate assets has been made to the shareholders and no proceeding pursuant to section 14A:12-15 is pending, by filing in the office of the Secretary of State a certificate of revocation signed, in person or by proxy, by all of the shareholders, stating that revocation is effective pursuant to subsection 14A:12-10(1) and that all the shareholders of the corporation have signed the certificate, in person or by proxy.

(2) Dissolution proceedings commenced pursuant to sections 14A:12-3 or 14A:12-4 may also be revoked at any time within 60 days after the effective time of dissolution, as determined pursuant to section 14A:12-8, provided that no distribution of corporate assets has been made to the shareholders and no proceeding pursuant to section 14A:12-15 is pending, in the following manner:

(a) The board of directors shall call a meeting of shareholders to vote upon the question of revocation of the dissolution proceedings. In connection with such meeting, the shareholders shall be given the same notice, and the revocation shall be approved by the same vote, as that required by section 14A:12-4 for the approval of dissolution.

(b) A certificate of revocation, stating

(i) that dissolution is revoked pursuant to subsection 14A:12-10(2), and

(ii) the matters required by subsection 14A:12-4(6)

shall be executed on behalf of the corporation and shall be filed in the office of the Secretary of State.

L.1968, c.350; amended by L.1969, c. 102, s. 14.

(1) Upon the filing of a certificate of revocation of dissolution proceedings as authorized by this act, the revocation of dissolution proceedings shall become effective, and the corporation may, subject to the provisions of subsection 14A:12-11(2), again carry on its business in the same manner as if dissolution proceedings had never been commenced. The corporation shall be liable for all taxes payable under the "Corporation Business Tax Act (1945)" (P.L.1945, c. 162), as amended and supplemented, or under the "Financial Business Tax Law (1946)" (P.L.1946, c. 174), as amended and supplemented, as though dissolution of the corporation had not occurred.

(2) If, pursuant to subsection 14A:2-2(3), a dissolved corporation has filed a written consent to the adoption of its name or a confusingly similar name by another, the subsequent revocation of dissolution proceedings pursuant to this section shall not restore the dissolved corporation's right to the use of its name.

L.1968, c.350.

(1) At any time after a corporation has been dissolved, the corporation, or a receiver appointed for the corporation pursuant to this chapter, may give notice requiring all creditors to present their claims in writing. Such notice shall be published 3 times, once in each of 3 consecutive weeks, in a newspaper of general circulation in the county in which the registered office of the corporation is located and shall state that all persons who are creditors of the corporation shall present written proof of their claims to the corporation or the receiver, as the case may be, at a place and on or before a date named in the notice, which date shall not be less than 6 months after the date of the first publication.

(2) On or before the date of the first publication of the notice as provided in subsection 14A:12-12(1), the corporation, or the receiver, as the case may be, shall mail a copy of the notice to each known creditor of the corporation. The giving of such notice shall not constitute recognition that any person to whom such notice is directed is a creditor of the corporation other than for the purpose of receipt of notice hereunder.

(3) As used in this section, "creditor" means all persons to whom the corporation is indebted, and all other persons who have claims or rights against the corporation, whether liquidated or unliquidated, matured or unmatured, direct or indirect, absolute or contingent, secured or unsecured.

(4) Proof of the publication and mailing authorized by this section shall be made by an affidavit filed in the office of the Secretary of State.

L.1968, c.350; amended by L.1973, c. 366, s. 70, eff. May 1, 1974.

(1) Any creditor as defined in subsection 14A:12-12(3) who does not file his claim as provided in the notice given pursuant to section 14A:12-12, and all those claiming through or under him, shall be forever barred from suing on such claim or otherwise realizing upon or enforcing it except, in the case of a creditor who shows good cause for not having previously filed his claim, to such extent as the Superior Court may allow

(a) against the corporation to the extent of any undistributed assets; or

(b) if the undistributed assets are not sufficient to satisfy such a claim, against a shareholder to the extent of his ratable part of such claim, out of the assets of the corporation distributed to him in liquidation or dissolution.

(2) This section shall not apply to claims which are in litigation on the date of the first publication of the notice pursuant to section 14A:12-12.

L.1968, c.350; amended by L.1973, c. 366, s. 71, eff. May 1, 1974.

1. (1) A creditor as defined in subsection (3) of N.J.S.14A:12-12 or subsection (b) of N.J.S.14A:14-1, and all those claiming through or under the creditor, shall be forever barred from suing a shareholder on any claim, or otherwise realizing upon or enforcing any claim against a shareholder, unless that claim was filed against the shareholder, pursuant to N.J.S.14A:12-13 or N.J.S.14A:14-15, or otherwise, within five years after the corporation was dissolved.

(2) This section shall not: (a) apply to claims against shareholders which are in litigation on the effective date of this section; (b) operate to extend any otherwise applicable statute of limitations; or (c) affect any rights of creditors under the "Uniform Voidable Transactions Act," R.S.25:2-20 et seq.

L.2001, c.231, s.1; amended 2021, c.92, s.20.

If the corporation, or the receiver of a corporation appointed pursuant to this chapter, rejects in whole or in part any claim filed by a creditor, as defined in subsection 14A:12-12(3), the corporation or the receiver, as the case may be, shall mail notice of such rejection to the creditor. If the creditor does not bring suit upon such claim within 60 days from the time such notice was mailed to him, the creditor and all those claiming through or under him shall, except as otherwise provided in this chapter, be forever barred from suing on such claim or otherwise realizing upon or enforcing it. Proof of the mailing required by this section shall be made by an affidavit filed in the office of the Secretary of State.

L.1968, c.350.

At any time after a corporation has been dissolved in any manner, a creditor, as defined in subsection 14A:12-12(3), or a shareholder of the corporation, or the corporation itself, may apply to the Superior Court for a judgment that the affairs of the corporation and the liquidation of its assets continue under the supervision of the court. The court shall have power to proceed in a summary manner or otherwise upon such application, and shall make such orders and judgments as may be required, including, but not limited to, the continuance of the liquidation of the corporation's assets by its officers and directors under the supervision of the court, or the appointment of a receiver of the corporation, who shall be vested with all the powers provided in Chapter 14 to be exercised by receivers appointed to liquidate the affairs of a corporation.

L.1968, c.350; amended by L.1973, c. 366, s. 72, eff. May 1, 1974.

Any assets remaining after payment of or provision for claims against the corporation shall be distributed among the shareholders according to their respective rights and interests. Distribution may be made in either or both cash and kind.

L.1968, c.350; amended by L.1969, c. 102, s. 15.

The distributive shares payable to any person who is unknown or cannot be found, or who is under a disability and for whom there is no legal representative, shall be paid into the Superior Court to be held for the benefit of the owners, subject to the order of the court.

L.1968, c.350.

A copy of every judgment dissolving a corporation or forfeiting its charter shall be forthwith filed by the clerk of the court in the office of the Secretary of State, and a notation thereof shall be made by the Secretary of State on the charter or certificate of incorporation of the corporation affected.

L.1968, c.350.

No corporation shall be completely liquidated and all of its assets distributed to its shareholders unless provision is made for the dissolution of the corporation and the payment of all fees, taxes, and other expenses incidental thereto.

L.1973, c. 366, s. 73, eff. May 1, 1974.

A corporation organized under laws other than the laws of this State, whether or not constituting a foreign corporation as defined in this act, shall have the same powers with respect to real property located in this State, or any interest therein, as a domestic corporation.

L.1968, c.350.

(1) Foreign corporations which are duly authorized to transact business in this State on the effective date of this act, for a purpose or purposes for which a corporation might secure such authority under this act, shall be entitled to all the rights and privileges applicable to foreign corporations procuring certificates of authority to transact business in this State under this act, and from the time this act takes effect such corporations shall be subject to all the duties, restrictions, penalties and liabilities prescribed herein for foreign corporations procuring certificates of authority to transact business in this State under this act.

(2) A foreign corporation which receives a certificate of authority under this act shall, until a certificate of revocation or of withdrawal is issued as provided in this act, enjoy the same, but no greater, rights and privileges as a domestic corporation organized for the purposes set forth in the application pursuant to which such certificate of authority is issued; and, except as in this act otherwise provided, shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a domestic corporation of like character.

(3) A foreign corporation which transacts business in this State without a certificate of authority under this act shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a foreign corporation procuring such certificate of authority.

L.1968, c.350.

(1) No foreign corporation shall have the right to transact business in this State until it shall have procured a certificate of authority so to do from the Secretary of State. A foreign corporation may be authorized to do in this State any business which may be done lawfully in this State by a domestic corporation, to the extent that it is authorized to do such business in the jurisdiction of its incorporation, but no other business.

(2) Without excluding other activities which may not constitute transacting business in this State, a foreign corporation shall not be considered to be transacting business in this State, for the purposes of this act, by reason of carrying on in this State any one or more of the following activities

(a) maintaining, defending or otherwise participating in any action or proceeding, whether judicial, administrative, arbitrative or otherwise, or effecting the settlement thereof or the settlement of claims or disputes;

(b) holding meetings of its directors or shareholders;

(c) maintaining bank accounts or borrowing money, with or without security, even if such borrowings are repeated and continuous transactions and even if such security has a situs in this State;

(d) maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities.

(3) The specification in subsection 14A:13-3(2) does not establish a standard for activities which may subject a foreign corporation to service of process or taxation in this State.

L.1968, c.350.

(1) To procure a certificate of authority to transact business in this State, a foreign corporation shall file in the office of the Secretary of State an application executed on behalf of the corporation setting forth

(a) the name of the corporation and the jurisdiction of its incorporation;

(b) the date of incorporation and the period of duration of the corporation;

(c) the address of the main business or headquarters office of the corporation;

(d) the address of the registered office of the corporation in this State, and the name of its registered agent in this State at such address, together with a statement that the registered agent is an agent of the corporation upon whom process against the corporation may be served; and

(e) the character of the business it is to transact in this State, together with a statement that it is authorized to transact such business in the jurisdiction of its incorporation.

(2) Attached to the application shall be a certificate setting forth that such corporation is in good standing under the laws of the jurisdiction of its incorporation, executed by the official of such jurisdiction who has custody of the records pertaining to corporations and dated not earlier than 30 days prior to the filing of the application. If such certificate is in a foreign language, a translation thereof under oath of the translator shall be attached thereto.

(3) Upon the filing of the application, the Secretary of State shall issue to the foreign corporation a certificate of authority to transact business in this State.

L.1968, c.350.

Upon the issuance of a certificate of authority by the Secretary of State, the foreign corporation shall be authorized to transact in this State any business of the character set forth in its application. Such authority shall continue so long as it retains its authority to transact such business in the jurisdiction of its incorporation and its authority to transact business in this State has not been surrendered, suspended or revoked.

L.1968, c.350.

(1) A foreign corporation authorized to transact business in this State shall procure an amended certificate of authority in the event it desires to change its corporate name, or to enlarge, limit or otherwise change the character of the business which it proposes to transact in this State, by making application therefor to the Secretary of State.

(2) The requirements in respect to the form and contents of such application, the manner of its execution, the filing thereof in the office of the Secretary of State, the issuance of an amended certificate of authority and the effect thereof, shall be the same as in the case of an original application for a certificate of authority.

L.1968, c.350.

1. (1) Following a conversion under applicable law of an other business entity, which was authorized to transact business in this State, to a foreign corporation, the foreign corporation shall file in the filing office an application executed on behalf of the corporation setting forth:

(a) the name of the corporation and the jurisdiction of its incorporation;

(b) the name of the other business entity, which was authorized to transact business in this State;

(c) the ten digit identification number;

(d) the date of the conversion of the other business entity to the foreign corporation;

(e) the date of the authorization of the other business entity to transact business in this State;

(f) the address of the main business or headquarters office of the corporation;

(g) the address of the registered office of the corporation in this State and the name of its registered agent in this State at that address, together with a statement that the registered agent is an agent of the corporation upon whom process against the corporation may be served; and

(h) the character of the business it is to transact in this State, together with a statement that it is authorized to transact business in the jurisdiction of its incorporation.

(2) Attached to the application shall be a certificate setting forth that the corporation is in good standing under the laws of the jurisdiction of its incorporation, executed by the official of that jurisdiction who has custody of the records pertaining to corporations and dated not earlier than 30 days prior to the filing of the application, but of a date subsequent to the conversion. If that certificate is in a foreign language, a translation thereof under oath of the translator shall be attached thereto.

(3) Upon the filing of the application, the filing office shall issue to the foreign corporation a certificate of authority to transact business in this State.

(4) As used in this section, "filing office" means the Division of Revenue and Enterprise Services in the Department of the Treasury, or other State office as designated by law.

L.2023, c.38, s.1.

Whenever a foreign corporation which is authorized to transact business in this State shall change its name to one under which a certificate of authority would not be granted to it on application therefor, the certificate of authority of such corporation shall be suspended and the corporation shall not thereafter transact any business in this State until it has changed its name to a name which is available to it under the laws of this State or has otherwise complied with the provisions of this act.

L.1968, c.350.

(1) A foreign corporation authorized to transact business in this State may withdraw from this State upon procuring from the Secretary of State a certificate of withdrawal. In order to procure such a certificate of withdrawal, such foreign corporation shall file in the office of the Secretary of State an application for withdrawal executed on behalf of the corporation setting forth

(a) the name of the corporation and the jurisdiction of its incorporation;

(b) that the corporation is not transacting business in this State;

(c) that the corporation surrenders its authority to transact business in this State; and

(d) a post-office address within or without this State to which the Secretary of State may mail a copy of any process against the corporation that may be served on him.

(2) Upon the filing of the application for withdrawal, the Secretary of State shall issue to the corporation a certificate of withdrawal, whereupon

(a) the authority of the corporation to transact business in this State shall cease;

(b) the authority of its registered agent in this State to accept service of any process against the corporation shall be deemed revoked;

(c) the corporation shall be deemed to have irrevocably consented that service of process in any action or proceeding based upon any liability or obligation incurred by it within this State before the issuance of the certificate of withdrawal may thereafter be made on such corporation by service thereof on the Secretary of State or the chief clerk in his office; and

(d) the Secretary of State shall be charged with such duties and shall be entitled to receive such fees with respect to any process which may be served hereunder on him or the chief clerk of his office, as are provided in N.J.S. sections 2A:15-26 to 2A:15-30.

(3) The post-office address specified in paragraph 14A:13-8(1)(d) may be changed from time to time by filing in the office of the Secretary of State a certificate executed on behalf of the corporation setting forth

(a) the name of the foreign corporation;

(b) the jurisdiction of its incorporation;

(c) the date of the issuance of its certificate of withdrawal by the Secretary of State; and

(d) the changed post-office address.

L.1968, c.350.

(1) When a foreign corporation authorized to transact business in this State is dissolved, or its authority or existence is otherwise terminated or cancelled in the jurisdiction of its incorporation, or it is merged into or consolidated with another corporation, there shall be filed in the office of the Secretary of State

(a) a certificate of the official of the jurisdiction of incorporation of such foreign corporation who has custody of the records pertaining to corporations, attesting to the occurrence of any such event; or

(b) a certified copy of an order or decree of a court of competent jurisdiction directing the dissolution of such foreign corporation, the termination of its existence, or the cancellation of its authority;

together with a statement executed on behalf of the corporation of the post-office address within or without this State to which the Secretary of State may mail a copy of any process against the corporation that may be served on him.

(2) Upon the filing of the certificate, order or decree and the statement of the post-office address, the Secretary of State shall issue a certificate of withdrawal with like effect as provided in subsection 14A:13-8(2).

(3) The post-office address specified in subsection 14A:13-9(1) may be changed from time to time in the same manner as is provided in subsection 14A:13-8(3).

L.1968, c.350.

(1) In addition to any other ground for revocation provided by law, the certificate of authority of a foreign corporation to transact business in this State may be revoked by the Secretary of State upon the conditions prescribed in this section when

(a) the certificate of authority of the corporation has been suspended for 90 days under this act; or

(b) the corporation has failed to apply for an amended certificate of authority within 90 days after it was required to do so under this act; or

(c) the corporation has failed to maintain a registered agent in this State as required by this act; or

(d) the corporation has failed, after change of its registered office or registered agent, to file in the office of the Secretary of State a statement of such change as required by this act; or

(e) the corporation has failed to file its annual report within the time required by this act.

(2) No certificate of authority of a foreign corporation shall be revoked by the Secretary of State unless

(a) he shall have given the corporation not less than 90 days' notice that such default exists and that its certificate of authority will be revoked unless such default is cured within 90 days after the mailing of such notice; and

(b) the corporation shall fail prior to revocation to cure such default.

Such notice shall be sent by certified mail to the corporation at its registered office in this State and at its main business or headquarters office as such offices are on record in the office of the Secretary of State.

(3) Upon revoking any such certificate of authority, the Secretary of State shall issue a certificate of revocation and shall mail a copy to such corporation at each of the addresses designated in subsection 14A:13-10(2).

(4) The issuance of the certificate of revocation shall have the same force and effect as the issuance of a certificate of withdrawal under subsection 14A:13-8(2).

L.1968, c.350.

(1) No foreign corporation transacting business in this State without a certificate of authority shall maintain any action or proceeding in any court of this State, until such corporation shall have obtained a certificate of authority. This prohibition shall apply to

(a) any successor in interest of such foreign corporation, except any receiver, trustee in bankruptcy or other representative of creditors of such corporation; and

(b) any assignee of the foreign corporation, except an assignee for value who accepts an assignment without knowledge that the foreign corporation should have but has not obtained a certificate of authority in this State.

(2) The failure of a foreign corporation to obtain a certificate of authority to transact business in this State shall not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action or proceeding in any court of this State.

(3) In addition to any other liabilities imposed by law, a foreign corporation which transacts business in this State without a certificate of authority shall forfeit to the State a penalty of not less than $200.00, nor more than $1,000.00 for each calendar year, not more than 5 years prior thereto, in which it shall have transacted business in this State without a certificate of authority. Such penalty shall be recovered with costs in an action prosecuted by the Attorney General. The court may proceed in such action in a summary manner or otherwise.

L.1968, c.350.

(1) The Attorney General may bring an action in the Superior Court in the name of the State to enjoin a foreign corporation from transacting business in this State

(a) without having first obtained a certificate of authority pursuant to this Chapter; or

(b) of a character not set forth in its application for a certificate of authority or for an amended certificate of authority; or

(c) after its authority to transact business in this State has been surrendered or revoked; or

(d) after it is dissolved or its authority or existence is otherwise terminated or cancelled in the jurisdiction of its incorporation.

(2) The Superior Court may proceed in such action in a summary manner or otherwise.

(3) The provisions of this section shall not exclude any other ground provided by law for injunctive relief against a foreign corporation to restrain it from the exercise of any franchise or the transaction of any business within this State.

L.1968, c.350.

(1) As used in this section, unless the context clearly requires otherwise:

(a) "Surviving foreign corporation" means a foreign corporation into which one or more other foreign corporations have merged.

(b) "New foreign corporation" means a foreign corporation formed by the consolidation of two or more other foreign corporations.

(c) "Certificate of merger" means the instrument, by whatever name it is called, filed or issued under any statute to merge one or more foreign corporations into another foreign corporation.

(d) "Certificate of consolidation" means the instrument, by whatever name it is called, filed or issued under any statute to consolidate two or more foreign corporations into a new foreign corporation.

(e) "Certified copy" , when used with reference to a certificate of merger or a certificate of consolidation, means a copy of the certificate of merger or of the certificate of consolidation, as the case may be, which was filed in or issued by the jurisdiction of the surviving corporation, as the case may be, to make the merger or consolidation effective, certified by the official of such jurisdiction having custody of its records pertaining to corporations.

(2) Whenever a foreign corporation shall merge into or consolidate with another foreign corporation, and a certified copy of the certificate of merger or certificate of consolidation, as the case may be, is filed in the office of the secretary of state of New Jersey, any and all real property in New Jersey and any and all interests therein, owned by each of the merging or consolidating foreign corporations, shall be deemed to have been vested in the surviving foreign corporation or the new foreign corporation, as the case may be, upon the effective date of the merger or consolidation, without further act or deed. Such merger or consolidation shall be valid and effectual to vest title to such real property and interests therein in the surviving foreign corporation or the new foreign corporation, as the case may be, as fully and completely as if regularly conveyed to it by deed.

(3) The provisions of this section shall apply to every merger and to every consolidation of foreign corporations which became effective before the effective date of this act, as well as to every merger and every consolidation of foreign corporations which shall become effective after the effective date of this act, whether the certified copy of the certificate of merger or of the certificate of consolidation, as the case may be, was filed in the office of the secretary of state of New Jersey before the effective date of this act or shall be so filed thereafter. In the case of mergers or consolidations of foreign corporations which became effective before the effective date of this act, the title of each surviving foreign corporation and of each new foreign corporation to all real property in New Jersey and to all interests in real property in New Jersey which at the time of the merger or consolidation was owned by each foreign corporation which was a party to the merger or consolidation is hereby confirmed and made valid and effectual, provided a certified copy of the certificate of consolidation, as the case may be, is filed in the office of the secretary of state of New Jersey.

L.1968, c.350.

This act shall be known as the "Corporation Business Activities Reporting Act."

L.1973, c. 171, s. 1, eff. June 7, 1973.

Every foreign corporation which during any calendar or fiscal accounting year ending after December 31, 1973, carried on any activity or owned or maintained any property in this State, unless specifically exempted under section 3 of this act, shall be required to file a notice of business activities report, as hereinafter provided.

Activities or property maintenance in this State which require corporations to file this report are:

a. the maintenance in this State of an office or other place of business; or

b. the maintenance of personnel in this State, including the presence of employees, agents, representatives or independent contractors in connection with the corporation's business, even though not regularly stationed in this State; or

c. the ownership or maintenance of real and/or tangible personal property directly used by the corporation in this State; or

d. the ownership or maintenance of tangible and/or intangible property in this State which is used by others; or

e. receiving payments from persons residing in this State, or businesses located in this State, aggregating in excess of $25,000.00 regardless of any other connections with this State; or

f. the derivation of income from any source or sources within this State; or

g. any other activity or property in, or interrelationships with, this State as designated by the director.

L.1973, c. 171, s. 2, eff. June 7, 1973.

A foreign corporation shall not be required to file a notice of business activities report if

a. by the end of an accounting period for which it was otherwise required to file a notice of business activities report under this act, it had received a certificate of authority to do business in this State; or

b. a timely return has been filed under the Corporation Business Tax Act or the Corporation Income Tax Act for such accounting period.

L.1973, c. 171, s. 3, eff. June 7, 1973.

For the purposes of this act, unless the context requires a different meaning:

a. "Director" shall mean the Director of the Division of Taxation of the State Department of the Treasury.

b. "Corporation" shall mean any corporation, joint-stock company or association and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument.

c. "Calendar year" shall mean an accounting period ending on the last day of December on the basis of which the corporation is required to report for Federal income tax purposes.

d. "Fiscal year" shall mean an accounting period ending on any day other than the last day of December on the basis of which the corporation is required to report for Federal income tax purposes.

e. "Accounting period" shall mean the calendar or fiscal year, or part thereof, for which a report is due under this act.

L.1973, c. 171, s. 4, eff. June 7, 1973.

a. Every foreign corporation shall annually file a notice of business activities report with respect to all or any part of each of its calendar or fiscal accounting years ending after December 31, 1973, on a report which shall be filed on or before the fifteenth day of the fourth month after the close of such calendar or fiscal accounting year.

b. For purposes of this act, every foreign corporation shall use the same calendar or fiscal accounting year upon which it reports to the United States Treasury Department for Federal income tax purposes.

L.1973, c. 171, s. 5, eff. June 7, 1973.

The director shall design a form of report and forms for such additional statements or schedules as he may require to be filed therewith. Such form shall contain a provision in which the foreign corporation may disclaim liability for the corporation business tax and the corporation income tax, and any obligation to obtain a certificate of authority to do business in this State and shall provide for the setting forth of such additional facts as the director may deem necessary for the proper enforcement of this act. He shall cause a supply thereof to be printed and shall furnish appropriate blank forms to each corporation upon application or otherwise as he may deem necessary. Failure to receive a form shall not relieve any corporation from the obligation to file a report under the provisions of this act. Each such report shall have annexed thereto a certification by the president, vice president, comptroller, secretary, treasurer, assistant treasurer, accounting officer of the corporation or any other officer of the corporation duly authorized so to act to the effect that the statements contained therein are true. The fact that an individual's name is signed on a certification of the report shall be prima facie evidence that such individual is authorized to sign and certify the report on behalf of the corporation. In the case of a corporation in liquidation or in the hands of a receiver or trustee, certification shall be made by the person responsible for the conduct of the affairs of such corporation.

L.1973, c. 171, s. 6, eff. June 7, 1973.

a. No foreign corporation carrying on any activity or owning or maintaining any property in this State which has not obtained a certificate of authority to do business in this State and disclaims liability for the corporation business tax and the corporation income tax shall maintain any action or proceeding in any State or Federal court in New Jersey, until such corporation shall have filed a timely notice of business activities report.

b. The failure of a foreign corporation to file a timely report shall prevent the use of the courts in this State for all contracts executed and all causes of action that arose at any time prior to the end of the last accounting period for which the corporation failed to file a required timely report.

c. The court in which the issues arise shall be granted the power to excuse the corporation for failure to file a report when due, and restore the right of access to the courts in this State. Such failure to file a report shall be excusable where the court finds the corporation has sustained the burden of establishing that

(1) the failure to file a timely report was done in ignorance of the requirement to file, such ignorance was reasonable in all circumstances; and

(2) all taxes, interest and civil penalties due the State for all periods have been paid, or provided for by adequate security or bond approved by the director, before the suit may proceed.

L.1973, c. 171, s. 7, eff. June 7, 1973.

This act shall be governed in all respects by the provisions of the State tax uniform procedure law (subtitle 9 of Title 54 of the Revised Statutes) except only to the extent that a specific provision of this act may be in conflict therewith.

L.1973, c. 171, s. 8, eff. June 7, 1973.

The Director, Division of Taxation in the Department of Treasury shall administer the provisions of this act, adopt regulations necessary or desirable to effectuate its purposes, prepare instructions for guidance and information and provide for all other matters reasonably required for the fair, impartial and practical administration of this act.

L.1973, c. 171, s. 9, eff. June 7, 1973.

If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered.

L.1973, c. 171, s. 10, eff. June 7, 1973.

As used in this chapter, and unless the context requires otherwise

(a) "corporation" means a domestic corporation and a foreign corporation;

(b) "creditor" means the holder of any claim, of whatever character, against a corporation, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, absolute or contingent;

(c) "debt" includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent;

(d) "encumbrance" means a mortgage, security interest, lien or charge of any nature in or upon property;

(e) "fair consideration" is given for property or an obligation when, in exchange for such property or obligation, as a fair equivalent therefor, and in good faith, property is transferred or an antecedent debt is satisfied; or when such property or obligation is received in good faith to secure a present advance or antecedent debt in amount not disproportionately small as compared with the value of the property or obligation obtained;

(f) "insolvent" : a corporation shall be deemed to be insolvent for the purposes of this chapter (1) when the aggregate of its property, exclusive of any property which it may have conveyed, transferred, concealed, removed or permitted to be concealed or removed, with intent to defraud, hinder or delay its creditors, shall not at a fair valuation be sufficient in amount to pay its debts; or (2) when the corporation is unable, by its available assets or the honest use of credit, to pay its debts as they become due;

(g) "property" means real property, tangible and intangible personal property, and rights, claims and franchises of every nature;

(h) "receiver" means a receiver of a corporation appointed pursuant to this chapter, and includes corporations authorized by law to act as receivers in this State, as well as individuals;

(i) "receivership action" means an action brought pursuant to this chapter for the appointment of a receiver of a corporation;

(j) "transfer" means the sale and every other method, direct or indirect, of disposing of or parting with property or with an interest therein, or with the possession thereof, or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, payment, pledge, mortgage, lien, encumbrance, gift, security, or otherwise; the retention of security title to property delivered to a corporation shall be deemed a transfer suffered by such corporation.

(1) A receivership action may be brought in the Superior Court by

(a) a creditor whose claim is for a sum certain or for a sum which can by computation be made certain; or

(b) a shareholder or shareholders who individually or in combination own at least ten per cent of the outstanding shares of any class of the corporation; or

(c) the corporation, pursuant to resolution of its board.

(2) The action shall be based upon at least one of the following grounds:

(a) the corporation is insolvent;

(b) the corporation has suspended its ordinary business for lack of funds;

(c) the business of the corporation is being conducted at a great loss and greatly prejudicial to the interests of its creditors or shareholders.

(3) The court may proceed in the action in a summary manner or otherwise. It shall have power to appoint and remove one or more receivers of the corporation from time to time, and to enjoin the corporation, its officers and agents, from exercising any of its privileges and franchises, and from collecting or receiving any debts, or paying out, selling, assigning or transferring any of its property, except to a receiver, and except as the court may otherwise order. The court shall have such further powers as shall be appropriate for the fulfillment of the purposes of this chapter.

(4) Every receiver shall, before assuming his duties, execute and file a bond in the office of the Clerk of the Superior Court, with such sureties and in such form as the court shall approve.

L.1968, c.350.

When more than one receiver of a corporation is appointed,

(a) the provisions of this chapter applicable to one receiver shall be applicable to all;

(b) the debts and property of the corporation may be collected and received by any of them; and

(c) the powers and rights conferred upon them may be exercised by a majority of them.

L.1968, c.350.

(1) Upon his appointment, the receiver shall become vested with the title to all the property of the corporation, of every nature, including its franchises.

(2) For the purpose of avoiding encumbrances, transfers and preferences, the right and title of a receiver shall relate back to the date upon which the receivership action commenced.

L.1968, c.350.

Subject to the general supervision of the Superior Court and pursuant to specific order where appropriate, a receiver shall have power to

(a) take into his possession all the property of the corporation, including its books, records and papers;

(b) institute and defend actions by or on behalf of the corporation;

(c) sell, assign, convey or otherwise dispose of all or any part of the property of the corporation;

(d) settle or compromise with any debtor or creditor of the corporation, including any taxing authority;

(e) summon and examine under oath, which he may administer, or by affirmation, any persons concerning any matter pertaining to the receivership or to the corporation, its property and its transactions, and require such person to produce books, records, papers and other tangible things and to be examined thereon;

(f) take testimony within or without the State, and, if without the State, apply to courts of other jurisdictions for compulsory process to obtain the attendance of witnesses;

(g) continue the business of the corporation, and, to that end, enter into contracts, borrow money, pledge, mortgage or otherwise encumber the property of the corporation as security for the repayment of the receiver's loans;

(h) do all further acts as shall best fulfill the purposes of this chapter.

L.1968, c.350.

If any person summoned to be examined pursuant to section 14A:14-5 shall refuse to be sworn, or to affirm, or to testify, or to answer a proper question, or to produce the books, papers, documents or tangible things demanded, or shall otherwise misconduct himself, the Superior Court may, on motion, and after affording such person the opportunity to be heard, punish such person in the same manner as like failure is punishable in a case pending in the court.

L.1968, c.350.

When property of a corporation for which a receiver has been appointed is, at the time of such appointment, subject to one or more encumbrances, the Superior Court, upon the application of the receiver, may authorize the receiver to sell such property at public or at private sale, clear of encumbrances, for such price and upon such terms as the court may approve. No such sale shall be authorized or made except upon prior notice to the holders of the encumbrances affecting such property, and unless the receiver demonstrates to the satisfaction of the court that the sale of such property may be reasonably expected to benefit general creditors of the corporation without adversely affecting the interests of the holders of the encumbrances. The proceeds of such sale shall be paid into court, there to remain until the further order of the court, subject to the same encumbrances which affected the property at the time of the sale.

L.1968, c.350.

(1) In all cases of mutual debts or mutual credits between the corporation and a creditor, the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid.

(2) A right of setoff or counterclaim shall not be allowed in favor of any debtor of the corporation if it was acquired by such debtor after the commencement of the receivership action, or within four months before such commencement, with a view to such use and with knowledge or notice that the corporation was insolvent.

L.1968, c.350.

(1) After the commencement of a receivership action, but before the appointment of a receiver, a debtor of the corporation may make payment to the corporation of his debt, and a person holding property of the corporation may deliver it to the corporation, and such payment and such delivery shall have the same effect as if the receivership action were not pending.

(2) If such payment or such delivery is made after the appointment of a receiver by a person acting in good faith and without knowledge of the appointment, such payment and such delivery shall have the same effect as if a receiver had not been appointed.

L.1968, c.350.

(1) Every lien against the property of a corporation shall be void if

(a) such lien is obtained by attachment, judgment, levy or other legal process; and

(b) a receivership action against the corporation is commenced within four months after the date on which such lien was obtained, or if such lien is obtained after the commencement of the receivership action; and

(c) the assets of the corporation are distributed in the receivership action.

(2) The property affected by any such lien shall be discharged from such lien and shall pass to the receiver, but the court may order such lien to be preserved for the benefit of the corporation's creditors. The Superior Court may direct such conveyance of the property affected as may be proper or adequate to evidence title thereto of the receiver. The title of a bona fide purchaser of such property shall be valid, but, if such title is acquired otherwise than by a judicial sale held to enforce such lien, it shall be valid only to the extent of the present consideration paid for such property.

L.1968, c.350.

(1) For the purposes of this chapter, a preference arises when

(a) a corporation which, while insolvent, and within four months of the commencement of a receivership action by or against it, transfers any property to or for the benefit of a creditor for or on account of an antecedent debt; and

(b) the effect of such transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class; and

(c) the creditor receiving or to be benefited by the transfer, or his agent acting with reference thereto, has, at the time when the transfer is made, reasonable cause to believe that the corporation is insolvent.

(2) For the purpose of determining whether a preference has arisen

(a) a transfer of property other than real property shall be deemed to have been made or suffered at a time when it became so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee;

(b) a transfer of real property shall be deemed to have been made or suffered when it became so far perfected that no subsequent bona fide purchase from the corporation could create rights in such property superior to the rights of the transferee.

(3) If any transfer of real property is not so perfected against a bona fide purchase, or if any transfer of other property is not so perfected against such liens by legal or equitable proceedings prior to the commencement of a receivership action, it shall be deemed to have been made immediately before the commencement of such action.

(4) When a preference has arisen, the receiver may recover the property or, if it has been converted, its value, from any person who has received or converted such property, except a bona fide purchaser from or lienor of the corporation's transferee for a present fair consideration. Where, however, such bona fide purchaser or lienor has given less than such value, he shall nevertheless have a lien upon such property, but only to the extent of the consideration actually given by him. When a preference is by way of lien or security title, the Superior Court may on due notice order such lien or title to be preserved for the benefit of the insolvent corporation's estate, in which event the lien or title shall pass to the receiver.

(5) If a creditor has been preferred and afterward in good faith gives the corporation further credit without security of any kind for property which becomes a part of the insolvent corporation's property, the amount of such new credit remaining unpaid at the time of the commencement of the receivership action may be set off against the amount which would otherwise be recoverable from such creditor.

L.1968, c.350.

(1) The receiver shall, within 30 days following the date of his appointment, give notice requiring all creditors to present their claims in writing. Such notice shall be published twice, once in each of two consecutive weeks, in a newspaper of general circulation in the county in which the registered office of the corporation is located and shall state that all persons who are creditors of the corporation shall present written proof of their claims, under oath, to the receiver at a place and on or before a date named in the notice, which date shall not be less than 6 months after the date of the first publication. By order of the Superior Court, the time for giving such notice to creditors and the time within which creditors shall be required to file proofs of claim may be extended or limited, or the giving of such notice to creditors may be entirely excused.

(2) Any creditor who does not file his claim as provided in the notice given pursuant to subsection 14A:14-15(1), and all those claiming through or under him, shall be forever barred from suing on such claim or otherwise realizing upon or enforcing it except, in the case of a creditor who shows good cause for not having previously filed his claim, to such extent as the Superior Court may allow

(a) against the corporation to the extent of any undistributed assets; or

(b) if the undistributed assets are not sufficient to satisfy such a claim, against a shareholder to the extent of his ratable part of such claim, out of the assets of the corporation distributed to him in liquidation or dissolution.

(3) On or before the date of the first publication of the notice as provided in subsection (1) of this section, the receiver shall mail a copy of the notice to each known creditor of the corporation. The giving of such notice shall not constitute recognition that any person to whom such notice is directed is a creditor of the corporation other than for the purpose of receipt of notice hereunder.

(4) Proof of the publication and mailing required by this section shall be made by an affidavit filed in the office of the Clerk of the Superior Court.

L.1968, c.350; amended by L.1973, c. 366, s. 74, eff. May 1, 1974.

Creditors shall, if required by the receiver, submit themselves to examination by him and produce before him such records and proof relating to their claims as the receiver may direct. The receiver may also examine under oath all witnesses produced before him relating to the claims, and he shall pass upon, and allow or disallow, such claims, and shall notify the creditors of his determination.

L.1968, c.350.

A creditor who presents his claim to a receiver pursuant to this chapter and whose claim is disallowed in whole or in part by the receiver shall, on demand in writing, be entitled to trial by jury on any issue triable of right by jury.

L.1968, c.350.

Any person aggrieved by the proceedings or determination of the receiver in the discharge of his duties shall be entitled to a review of the receiver's action in a summary manner in the Superior Court.

L.1968, c.350.

A receivership action against a corporation may be discontinued at any time when it is established that cause for the action no longer exists. In such event, the court shall dismiss the proceedings and direct the receiver to redeliver to the corporation all its property remaining in his hands. Upon such redelivery, the corporation shall be revested with full rights in such property and in its franchises as if the receiver had not been appointed.

L.1968, c.350.

In any proceeding under this chapter, the court shall allow a reasonable compensation to the receiver for his services and his costs and expenses in the receivership action. It shall also allow reasonable compensation to the following for their services in the receivership action and their costs and expenses: the attorney for the receiver, the appraiser, the auctioneer, the accountant and other persons appointed by the court in connection with the receivership action.

L.1968, c.350.

(1) After payment of all allowances, expenses and costs, and, subject to the laws of the United States and to subsection 14A:14-21(3), the satisfaction of all liens upon the funds of the corporation to the extent of their lawful priority, the creditors shall be paid proportionately to the amount of their respective debts, excepting mortgage and judgment creditors when the judgment has not been by confession for the purpose of preferring creditors. The creditors shall be entitled to distribution on debts not due, making in such case a rebate of interest, when interest is not accruing on the same.

(2) The surplus funds, if any, after payment of the creditors and the costs, expenses and allowances aforesaid, and the preferred stockholders, shall be divided and paid to the general stockholders proportionately, according to their respective shares.

(3) In any distribution to creditors all persons doing labor or service of any character, in the regular employment of the corporation, shall be entitled to priority of payment for the wages, not to exceed $600. for each claimant, due them respectively for all labor, work and services performed within three months before the institution of a receivership action under this chapter. A claim under this subsection 14A:14-21(3) shall have priority over all other claims against the corporation, but shall be subordinate to (1) a security interest in personal property perfected prior to the date when the receivership action was instituted, which perfected security interest cannot be set aside by the receiver under the provisions of this Chapter, (2) mortgages upon the real property of the corporation, and (3) all claims entitled to higher priority by law.

L.1968, c.350; amended by L.1973, c. 366, s. 75, eff. May 1, 1974.

After distribution of the corporation's assets as provided in section 14A:14-21, the Superior Court may make a judgment dissolving the corporation and declaring its charter forfeited and void.

L.1968, c.350.

As used in sections 14A:14-24, 14A:14-25 and 14A:14-26, "plan of reorganization" means a plan of corporate reorganization which has been ordered or confirmed by a court or by a commission or other agency of the United States, in a proceeding brought under any act of Congress providing for the reorganization of corporations.

L.1968, c.350.

(1) A corporation shall have the power to do any act required or permitted by a plan of reorganization in order to put such plan in effect according to its terms.

(2) The power conferred by subsection (1) of this section shall be exercised by the trustee or trustees, or other person or persons acting in similar capacities, appointed in the reorganization proceeding resulting in the plan of reorganization, or, if none be then acting, by any other person or persons designated or appointed for such purpose in such organization proceeding, or, if no such other person or persons be then acting, by an officer or officers of the corporation.

(3) The exercise of the power to put in effect a plan of reorganization by those designated in subsection (2) of this section shall have the same effect as if done with the unanimous consent of the directors and the shareholders.

L.1968, c.350.

In any case where a plan of reorganization of a corporation provides for any action to be taken, which, if taken pursuant to any provisions of this act would entitle dissenting shareholders to payment of the value of their shares, such action may be taken by such corporation in reorganization without payment to shareholders of the value of their shares.

L.1968, c.350; amended by L.1973, c. 366, s. 76, eff. May 1, 1974.

When any plan of reorganization provides for any action to be taken, which, if taken pursuant to any provisions of this act, would require the filing of a certificate or other document in the office of the Secretary of State, such certificate or other document shall be executed on behalf of the corporation by the persons specified in subsection (2) of section 14A:14-24 and shall be filed in the office of the Secretary of State. Such certificate or other document shall recite that its making and filing are authorized pursuant to a plan of reorganization, and shall make reference to the proceeding in which the plan of reorganization was ordered or confirmed.

L.1968, c.350; amended by L.1973, c. 366, s. 77, eff. May 1, 1974.

Nothing contained in sections 14A:14-24, 14A:14-25 or 14A:14-26 shall be construed to abrogate, limit or restrict the powers and duties over any corporation imposed or conferred by law on any State officer, board, commission or other agency.

L.1968, c.350.

14A:15-2. On filing any certificate or other papers relative to corporations in the Department of the Treasury, there shall be paid to the State Treasurer, filing fees as follows:

(1) Certificate of incorporation and amendments thereto:

(a) for filing the original certificate of incorporation...... $125.00

(b) for filing a certificate of amendment of the certificate of incorporation, including any number of amendments...... $75.00

(c) for filing a certificate of abandonment of one or more amendments of the certificate of incorporation...... $75.00

(d) for filing a certificate of merger or a certificate of consolidation...... $75.00

(e) for filing a certificate of abandonment of a merger or consolidation...... $75.00

(2) Restated certificate of incorporation:

for filing a restated certificate of incorporation, including any amendments of the certificate of incorporation concurrently adopted...... $75.00

(3) Dissolution of corporation:

(a) for filing a certificate of dissolution...... $75.00

(b) for filing a certificate of revocation of dissolution proceedings...... $75.00

(4) Admission and withdrawal of foreign corporation:

(a) for filing an application for a certificate of authority to transact business in this State and issuing a certificate of authority...... $125.00

(b) for filing an application for an amended certificate of authority to transact business in this State and issuing an amended certificate of authority...... $75.00

(c) for filing an application for withdrawal from this State and issuing a certificate of withdrawal...... $75.00

(d) for filing a certificate of change of post-office address to which process may be mailed by the State Treasurer...... $25.00

(e) for filing a certificate, order or decree with respect to the dissolution of a foreign corporation, the termination of its existence, or the cancellation of its authority, and issuing a certificate of withdrawal...... $75.00

(5) Registered office and registered agent:

(a) for filing a certificate of change of address of registered office, or change of registered agent, or both...... $25.00

(b) (i) for filing a certificate of change of address of registered agent, where such certificate effects a change in the address of the registered office of one to 499 corporations or of 500 or more corporations in cases where the filing information is not transmitted to the State Treasurer in a machine readable format agreeable to the Division of Revenue and Enterprise Services, for each corporation named in the certificate...... $25.00

(ii) for filing a certificate of change of address of registered agent, where such certificate effects a change in the address of the registered office of 500 or more corporations in cases where the filing information is transmitted to the State Treasurer in a machine readable format agreeable to the Division of Revenue and Enterprise Services...... $5,000.00

(iii) In addition to the fee imposed pursuant to subparagraph (ii) of this paragraph, the State Treasurer may assess an additional fee not to exceed those administrative costs associated with the technical transmission of the filing information.

(c) for filing an affidavit of resignation of a registered agent...... $25.00

(6) Annual report:

for each such report required to be filed...... $75.00

(7) Tax clearance certificate from the Director of the Division of Taxation: for each such certificate required to be filed...... $20.00

(8) for filing a certificate of conversion��������75.00

amended 1971, c.253, s.4; 1977, c.34, s.2; 1982, c.52, s.5; 1987, c.435, s.9; 1991, c.247; 1994, c.60, s.2; 2002, c.34, s.20; 2019, c.149, s.3; 2023, c.38, s.4.

(1) filing an application to reserve a

specified corporate name and issuing

a certificate of reservation $50.00

if application is for the first name available for

corporate use among not more than

three specified names $50.00

(2) filing a notice of transfer of a

reserved corporate name $25.00

(3) filing an application by a foreign corporation

to register its corporate name $50.00

(4) filing an application by a foreign corporation

to renew the registration of its corporate name $50.00

(5) filing a statement of cancellation of shares $75.00

(6) filing a statement of reduction of

stated capital $75.00

(7) filing a certificate as to the acquisition of

the shares or a class of shares of

a domestic corporation $75.00

(8) issuing a certificate of standing, including

registered agent and registered office $25.00

(9) issuing a certificate of standing, same as

above, but including incorporators, officers

and directors, and authorized shares $25.00

(10) issuing a certificate of standing,

listing charter documents $25.00

(11) issuing a certificate of availability of

corporate name (one to three names) $25.00

(12) filing a certificate of registration of

alternate name $50.00

(13) filing a certificate of renewal of

registration of alternate name $25.00

(14) filing a certificate of correction, in addition

to any applicable license fee $10.00

(15) filing and issuing a rein

(15) filing and issuing a reinstatement

of charter $75.00

(16) corporate status reports -- per name $5.00

(17) accepting service of process

against corporation pursuant

to N.J.S.2A:15-26 et seq. $25.00

(18) filing a termination of alternate name $75.00

L.1968, c.350; amended 1971, c.253, s.5; 1973, c.366, s.78; 1979, c.295; 1982, c.52, s.6; 1987, c.435, s.10; 1988, c.94, s.70; 2002, c.34, s.21.

(1) The provisions of this act not inconsistent with those of prior laws shall be construed as a continuation of such laws.

(2) This act shall be deemed to be a part of the general and permanent statutes of this State. The abbreviation "N.J.S. 14A" shall constitute a reference to this act, and sections of this act may be cited by section number only, preceded by such abbreviation.

(3) No repeal contained herein shall affect any right now vested in any person pursuant to the provisions of any law so repealed, nor, except as otherwise provided herein, shall it affect any remedy in an action or proceeding heretofore instituted and pending on the effective date of this act. "Action or proceeding" as used in this section shall not be limited to judicial actions or proceedings.

(4) The repeal of Title 14 of the Revised Statutes, as amended and supplemented, shall not of itself be deemed to revive any common law right or remedy abolished by any provision of said Title.

(5) The classification and arrangement of the sections of this act have been made for purposes of convenience, reference and orderly arrangement, and no implication or presumption of a legislative construction shall be drawn therefrom.

(6) In the construction of this act, no outline or analysis of the contents hereof or of any chapter or other part hereof, no cross-reference or cross-reference note and no headnote or source note to any section shall be deemed to be a part hereof.

(7) If any chapter, section or provision of this act shall be declared to be unconstitutional, invalid or inoperative in whole or in part, by a court of competent jurisdiction, such chapter, section or provision shall, to the extent that it is not declared unconstitutional, invalid or inoperative, be enforced and effectuated, and no such determination shall be deemed to invalidate or make ineffectual the remaining provisions of this act.

(8) The provisions of chapter 1 of Title 1 of the Revised Statutes shall be applicable to this act.

(9) Any reference to a section or sections of Title 14 of the Revised Statutes, as amended and supplemented, in any other statute which became effective prior to the effective date of this act and which remains in effect, shall be given effect on and after the effective date of this act, as though the reference therein were made to the section or sections of this act which contain the statutory material formerly included in said section or sections of Title 14, as amended and supplemented. Where the statutory material formerly included in Title 14 as amended and supplemented, is not included in this act, references thereto in any other statute which so became effective and remains in effect, shall cease to be operative and shall be deemed to be superseded.

L.1968, c.350; amended by L.1969, c. 102, s. 16.

The following acts and parts of acts, and all amendments thereof, are saved from repeal:

R.S. 14:2-2

R.S. 14:3-7

R.S. 14:3-10

R.S. 14:7-5

R.S. 14:8-18

R.S. 14:8-22

R.S. 14:11-16

R.S. 14:13-13

P.L.1950, c. 102 (C. 14:17-1)

P.L.1959, c. 200 (C. 14:18-1 through C. 14:18-12)

P.L.1962, c. 233 (C. 14:19-1 through C. 14:19-17)

L.1968, c.350.

The following acts and parts of acts, and all other acts which are inconsistent with this act, except those specifically saved from repeal by this act, are hereby repealed:

Title 14 of the Revised Statutes

P.L.1938, c. 178 (C. 14:15-7 through C. 14:15-9)

P.L.1938, c. 180 (C. 14:15-10)

P.L.1938, c. 303 (C. 14:13-15)

P.L.1942, c. 124 (C. 14:3-14)

P.L.1943, c. 175 (C. 14:8-3.1)

P.L.1945, c. 131 (C. 14:3-15 through C. 14:3-17)

P.L.1950, c. 220 (C. 14:3-13.1 through C. 14:3-13.4)

P.L.1950, c. 282 (C. 14:4-4.1)

P.L.1951, c. 254 (C. 14:13-7.1 through C. 14:13-7.3)

P.L.1952, c. 33 (C. 14:12-10)

P.L.1963, c. 161 (C. 14:4-7, C. 14:4-8)

P.L.1964, c. 177 (C. 14:10-9.1)

P.L.1967, c. 116 (C. 14:12A-1 through C. 14:12A-5)

P.L.1968, c. 151 (C. 14:15-1.1)

P.L.1968, c. 168 (C. 14:1-3.1)

P.L.1968, c. 262 (C. 14:3-18)

L.1968, c.350.

This act shall take effect on January 1, 1969.

L.1968, c.350.

It is the legislative intent to provide for the incorporation of an individual or group of individuals to render the same professional service to the public for which such individuals are required by law to be licensed or to obtain other legal authorization.

L.1969, c. 232, s. 1, eff. Dec. 16, 1969.

This act may be cited as "The Professional Service Corporation Act."

L.1969, c. 232, s. 2, eff. Dec. 16, 1969.

3. Terms defined. As used in this act, the following words shall have the meanings indicated:

(1) "Professional service" shall mean any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization and which prior to the passage of this act and by reason of law could not be performed by a corporation. By way of example and without limiting the generality thereof, the personal services which come within the provisions of this act are the personal services rendered by certified public accountants, architects, optometrists, ophthalmic dispensers and technicians, professional engineers, land surveyors, land planners, chiropractors, physical therapists, registered professional nurses, psychologists, dentists, osteopaths, physicians and surgeons, doctors of medicine, doctors of dentistry, podiatrists, veterinarians and, subject to the Rules of the Supreme Court, attorneys-at-law;

(2) "Professional corporation" means a corporation which is organized under this act for the sole and specific purpose of rendering the same or closely allied professional service as its shareholders, each of whom must be licensed or otherwise legally authorized within this State to render such professional service;

(3) "Closely allied professional service" means and is limited to the practice of (a) architecture, professional engineering, land surveying and land planning and (b) any branch of medicine and surgery, optometry, opticianry, physical therapy, registered professional nursing, psychology, and dentistry;

(4) "Domestic professional legal corporation" means a professional corporation incorporated under P.L.1969, c.232 (C.14A:17-1 et seq.) for the sole purpose of rendering legal services of the type provided by attorneys-at-law;

(5) "Foreign professional legal corporation" means a corporation incorporated under the laws of another state for the purpose of rendering legal services of the type provided by attorneys-at-law.

L.1969, c.232, s.3; amended 1981, c.425, s.1; 1986, c.131; 1991, c.105, s.1; 1995, c.375, s.1; 2005, c.27; 2005, c.259, s.22 2014, c.79.

This act shall not apply to any individual or groups within this State who, prior to the passage of this act, were permitted to organize a corporation and perform personal services to the public by the means of a corporation, and this act shall not apply to any corporations organized by such individual or group of individuals prior to the passage of this act; provided, however, any such individual or group of individuals or any such corporation may bring themselves and such corporation within the provisions of this act by amending the certificate of incorporation in such a manner so as to be consistent with all the provisions of this act and by affirmatively stating in the amended certificate of incorporation that the shareholders have elected to bring the corporation within the provisions of this act.

L.1969, c. 232, s. 4, eff. Dec. 16, 1969.

5. Professional corporation and foreign professional legal corporation. (a) One or more persons, each of whom is duly licensed or otherwise legally authorized to render the same or closely allied professional service within this State, may organize and become a shareholder or shareholders of a professional corporation for pecuniary profit under the provisions of the Business Corporation Act of New Jersey (Title 14A, Corporations, General, of the New Jersey Statutes), for the sole and specific purpose of rendering such professional service.

(b) A foreign professional legal corporation may render legal services of the type provided by attorneys-at-law in this State provided by that it secures a certificate of authority from the Secretary of State in accordance with Chapter 13 of the Business Corporation Act of New Jersey (Title 14A, Corporations, General, of the New Jersey Statutes) and provided further that every shareholder or employee of the foreign professional legal corporation providing legal services in this State is an attorney-at-law licensed and eligible to practice in this State under the Rules of the Supreme Court.

L.1969,c.232,s.5; amended 1981,c.425,s.2; 1995,c.375,s.2.

A professional corporation which has only one shareholder need have only one director who shall be such shareholder. Such one shareholder shall also serve as the president of the corporation. The other officers of the corporation in such a case need not be licensed or otherwise legally authorized to render the same professional service within this State, as such one shareholder. A professional corporation which has only 2 shareholders need have only 2 directors who shall be such shareholders. The 2 shareholders shall, between them, fill all the officerships of the professional corporation.

L.1969, c. 232, s. 6, eff. Dec. 16, 1969.

7. Rendering of professional service limited to licensed personnel; charges authorized. No professional corporation or foreign professional legal corporation may render professional services in this State except through its officers, employees and agents who are duly licensed or otherwise legally authorized to render such professional services within this State; provided, however, that this provision shall not be interpreted to include in the term "employee" as used herein clerks, secretaries, administrators, bookkeepers, technicians and other assistants who are not usually and ordinarily considered by law, custom and practice to be rendering professional service to the public for which a license or other legal authorization is required in connection with the profession to be practiced, nor does the term "employee" include any other person who performs all his employment under the direct supervision and control of an officer, agent or employee who is himself rendering professional service to the public on behalf of the professional corporation; provided, that no person shall, under the guise of employment, practice a profession unless duly licensed to practice that profession under the laws of this State. Notwithstanding any other or contrary provisions of the laws of the State, a professional corporation or foreign professional legal corporation may charge for its services, may collect such charges, and may compensate its officers, employees and agents, including those persons excluded from the term "employee" as used herein.

L.1969,c.232,s.7; amended 1991,c.105,s.2; 1995,c.375,s.3.

8. Professional relationship; personal liability; corporate liability. Nothing contained in this act shall be interpreted to abolish, repeal, modify, restrict or limit the law now in effect in this State applicable to the professional relationship and the contract, tort and other legal liabilities between the person furnishing the professional services and the person receiving such professional service and to the standards for professional conduct, including the confidential relationship between the person rendering the professional services and the person receiving such professional service, if any; and all confidential relationships previously enjoyed under the laws of this State or hereafter enacted shall remain inviolate. Any officer, shareholder, agent or employee of a professional corporation or a foreign professional legal corporation shall remain personally and fully liable and accountable for any negligent or wrongful acts or misconduct committed by him, or by any person under his direct supervision and control, while rendering professional service on behalf of the corporation in this State to the person for whom such professional service was being rendered; provided, that the personal liability of shareholders of a professional corporation, in their capacity as shareholders of such corporation, shall be no greater in any aspect than that of a shareholder-employee of a corporation organized under the provisions of the Business Corporation Act of New Jersey, exclusive of this act. The professional corporation shall be liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its officers, shareholders, agents or employees while they are engaged on behalf of the corporation in the rendering of professional service. The assets of a professional corporation shall not be liable to attachment for the individual debts of its shareholders. Notwithstanding the foregoing, the relationship of an individual to a professional corporation or a foreign professional legal corporation with which such individual is or may be associated, whether as shareholder, director, officer, employee or agent, shall in no way modify, extend or diminish the jurisdiction over such individual, of and by whatever State, agency, office or authority which licensed or otherwise legally authorized him to render service in a particular field of endeavor in this State.

L.1969,c.232,s.8; amended 1995,c.375,s.4.

9. Limitations on corporate business activity. No professional corporation shall engage in any business other than the rendering of the professional services for which it was specifically incorporated; and no foreign professional legal corporation shall engage in any business in this State other than the rendering of legal services of the type provided by attorneys-at-law; provided, that nothing in this act or in any other provisions of existing law applicable to corporations shall be interpreted to prohibit such corporation from investing its funds in real estate, mortgages, stocks, bonds or any other type of investments, or from owning real or personal property necessary for, or appropriate or desirable in, the fulfillment or rendering of its professional services.

L.1969,c.232,s.9; amended 1995,c.375,s.5.

10. Who may own shares; voting trust; estate ownership. (a) No professional corporation may issue any of its shares to anyone other than an individual who is duly licensed or otherwise legally authorized to render the same professional service as that for which the corporation was incorporated. No shareholder of a professional corporation shall enter into a voting trust agreement or proxy or any other type of agreement vesting another person not a shareholder of the corporation with the authority to exercise the voting power of any or all of his shares. Subject to the provisions of the corporation's certificate of incorporation, the estate of a deceased shareholder may continue to hold the shares of such shareholder for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service.

(b) A foreign professional legal corporation rendering legal services in this State shall have at least one shareholder who is an attorney-at-law licensed and eligible to practice in this State under the Rules of the Supreme Court.

L.1969,c.232,s.10; amended 1995,c.375,s.6.

If any officer, shareholder, agent or employee of a professional corporation becomes legally disqualified to render the same professional service as that for which the corporation was organized, he shall forthwith sever all employment with such corporation and shall not, directly or indirectly, participate or share, as a shareholder, in any earnings or profits realized by such corporation on account of professional services rendered on or after the effective date of such disqualification.

L.1969, c. 232, s. 11, eff. Dec. 16, 1969.

No shareholder of a professional corporation may transfer his shares in such corporation except to the corporation or to another individual who is eligible to be a shareholder of such corporation.

L.1969, c. 232, s. 12, eff. Dec. 16, 1969.

(a) A professional corporation shall have perpetual existence until dissolved in accordance with the provisions of the Business Corporation Act of New Jersey.

(b) Whenever all shareholders of a professional corporation shall cease at any one time and for any reason to be duly licensed or otherwise legally authorized to render the same professional service for which such corporation was organized, or if such corporation shall for any reason fail to comply or require compliance with the provisions of this section or of section 11 of this act, said corporation shall thereupon be treated as converted into and shall operate thereafter solely as a business corporation under applicable provisions of the Business Corporation Act of New Jersey, exclusive of this act.

(c) Within 375 days following the date of death of a shareholder, or within 90 days following his disqualification to own shares in the corporation, all of the shares of such shareholder shall be transferred to, and acquired by, the corporation or persons qualified to own such shares. If such transfer and acquisition is not otherwise effected within said period, the corporation shall forthwith purchase and redeem all of his shares at the book value thereof, determined as of the end of the month immediately preceding death or disqualification. For this purpose, the book value shall be determined by an independent certified public accountant employed by the professional corporation from the books and records of the corporation in accordance with the regular methods of accounting used by it. Such determination shall be conclusive on the professional corporation and its shareholders. Nothing contained in this section shall prevent the parties involved from making any other arrangement or provision in the certificate of incorporation or by-laws, or by agreement, to transfer the shares of a deceased or disqualified shareholder to the corporation or to persons qualified to own the same, whether made before or after the death or disqualification of the shareholder, provided that within the period herein specified, all the stock involved shall have been so transferred.

L.1969, c. 232, s. 13, eff. Dec. 16, 1969.

14. a. Corporate name. The corporate name of a professional corporation shall contain the full or last names of one or more of the shareholders or a name descriptive of the type of professional service in which the corporation will be engaged and shall also contain the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC". The use of the word "company," "corporation" or "incorporated," or any other word, words, abbreviations, affix or prefix indicating that it is a corporation, in the corporate name of a professional corporation, other than the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC" is specifically prohibited. It shall be permissible, however, for the corporation and the shareholders to render professional services or to exercise its authorized powers under a name which is identical to its corporate name except that the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC" is omitted. Nothing in this subsection shall limit the right of a professional corporation to use or register an alternate name pursuant to N.J.S.14A:2-2.1, provided that the alternate name contains the full or last name of one or more of the shareholders or adequately describes the type of professional service in which the professional corporation will be engaged.

b. Notwithstanding the provisions of subsection a. of this section, the corporate name of a professional corporation may contain the name of a deceased person only if, at the time of the person's death:

(1) that person's name was part of the corporate name; or

(2) that person's name was part of the name of an existing partnership and at least two-thirds of that partnership's partners become shareholders of the professional corporation.

L.1969, c.232, s.14; amended 1982, c.97, s.1; 1991, c.50; 2011, c.27, s.1

15. Applicable law; consolidation, merger; report, contents. The Business Corporation Act of New Jersey shall be applicable to a professional corporation and to a foreign professional legal corporation except to the extent that any of the provisions of this act are interpreted to be in conflict with the provisions of the Business Corporation Act of New Jersey, and in such event the provisions and sections of this act shall take precedence with respect to a professional corporation and a foreign professional legal corporation. Except for a domestic professional legal corporation, a professional corporation organized under this act may consolidate or merge only with another professional corporation organized under this act and empowered to render the same professional service. A merger or consolidation with any foreign corporation is prohibited. A domestic professional legal corporation may consolidate or merge either with another domestic professional legal corporation or with a foreign professional legal corporation provided that the registration requirements of this act and the Rules of the Supreme Court are complied with. A professional corporation shall annually furnish a report to the office of the Secretary of State on a date designated by the Secretary of State showing the names and post-office addresses of all its shareholders, directors and officers, which shall certify that, with the exception permitted in section 6, all such persons are duly licensed or otherwise legally authorized to render the same professional service in this State. A foreign professional legal corporation shall annually furnish a report to the office of the Secretary of State on a date designated by the Secretary of State showing the names and post-office addresses of all its shareholders, directors and officers, and shall certify that the foreign professional legal corporation is authorized to render legal services of the type provided by attorneys-at-law in its state of incorporation and further certify that the shareholders and employees providing such services in this State are attorneys-at-law licensed and eligible to practice in this State. This report shall be made on forms prescribed and furnished by the Secretary of State, but shall contain no information except that expressly called for by this section. It shall be signed by the president or vice-president and the secretary or an assistant secretary of the corporation, and acknowledged by the persons signing the report before a notary public or other officer duly authorized to administer oaths, shall be filed in the office of the Secretary of State, and shall be in lieu of the regular annual report of corporations otherwise required by the Business Corporation Act of New Jersey.

L.1969,c.232,s.15; amended 1982,c.97,s.2.; 1995,c.375,s.7.

If any provision of this act or the application thereof to any person or circumstances be held invalid, such invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable. All laws and parts of laws in conflict with any of the provisions of this act are hereby repealed, to the extent so in conflict.

L.1969, c. 232, s. 16, eff. Dec. 16, 1969.

The provisions of this act shall not be construed as repealing, modifying or restricting the applicable provisions of law relating to incorporations, sales of securities or regulating the several professions enumerated in this act except insofar as such laws conflict with the provisions of this act.

L.1969, c. 232, s. 17, eff. Dec. 16, 1969.

Chapter 233 of the laws of 1962, as amended, is hereby repealed, but all corporations formed under the provisions thereof shall continue and shall be governed by the provisions of this act.

L.1969, c. 232, s. 18, eff. Dec. 16, 1969.

1. For purposes of this act:

"Benefit corporation" means a corporation organized under provisions of the "New Jersey Business Corporation Act," N.J.S.14A:1-1 et seq., that has elected to become subject to this act and whose status as a benefit corporation has not been terminated as provided in this act.

"Benefit director" means the director designated as the benefit director of a benefit corporation as provided in section 7 of this act.

"Benefit enforcement proceeding" means a claim or action brought directly by a benefit corporation, or derivatively on behalf of a benefit corporation, against a director or officer for:

(1) Failure to pursue the general public benefit purpose of the benefit corporation or any specific public benefit purpose set forth in its certificate of incorporation; or

(2) Violation of a duty or standard of conduct under this act.

"Benefit officer" means the officer of a benefit corporation, if any, designated as the benefit officer as provided in section 9 of this act.

"General public benefit" means a material positive impact on society and the environment by the operations of a benefit corporation through activities that promote some combination of specific public benefits.

"Independent" means that a person has no material relationship with a benefit corporation or any of its subsidiaries (other than the relationship of serving as the benefit director or benefit officer), either directly or as a shareholder, partner, member or other owner or a director, officer or other manager of an entity that has a material relationship with the benefit corporation or any of its subsidiaries. A material relationship between an individual and a benefit corporation or any of its subsidiaries will be conclusively presumed to exist if:

(1) The person is, or has been within the last three years, an employee of the benefit corporation or any of its subsidiaries, other than as a benefit officer;

(2) An immediate family member of the person is, or has been within the last three years, an executive officer, other than a benefit officer, of the benefit corporation or any of its subsidiaries; or

(3) The person, or an entity of which the person is a director, officer or other manager or in which the person owns beneficially or of record 5% or more of the outstanding equity interests, owns beneficially or of record 5% or more of the outstanding shares of the benefit corporation.

A percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.

"Minimum status vote" means that, in addition to any other approval or vote required by Title 14A of the New Jersey Statutes or the certificate of incorporation:

(1) The holders of shares of every class or series shall be entitled to vote on the corporate action regardless of any limitation stated in the certificate of incorporation on the voting rights of any class or series; and

(2) The corporate action must be approved by vote of the shareholders of each class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or series are entitled to cast thereon.

"Specific public benefit" includes:

(1) Providing low-income individuals or communities with beneficial products or services;

(2) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;

(3) Preserving the environment;

(4) Improving human health;

(5) Promoting the arts, sciences or advancement of knowledge;

(6) Increasing the flow of capital to entities with a public benefit purpose; and

(7) The accomplishment of any other particular benefit for society or the environment.

"Subsidiary" of a person means an entity in which the person owns beneficially or of record 50% or more of the outstanding equity interests. A percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.

"Third-party standard" means a recognized standard for defining, reporting and assessing corporate social and environmental performance that is:

(1) Developed by a person that is independent of the benefit corporation; and

(2) Transparent because the following information about the standard is publicly available:

(a) the factors considered when measuring the performance of a business;

(b) the relative weightings of those factors; and

(c) the identity of the persons who developed and control changes to the standard and the process by which those changes are made.

L.2011, c.30, s.1.

2. A benefit corporation shall be formed in accordance with chapter 2 of Title 14A of the New Jersey Statutes, except that its certificate of incorporation shall also state that it is a benefit corporation.

L.2011, c.30, s.2.

3. a. A corporation organized under the provisions of the "New Jersey Business Corporation Act," N.J.S.14A:1-1 et seq., may become a benefit corporation under this act by amending its certificate of incorporation so that it contains a statement that the corporation is a benefit corporation. The amendment shall not be effective unless it is adopted by at least the minimum status vote.

b. If a corporation that is not a benefit corporation is a party to a merger or consolidation or is the exchanging corporation in a share exchange, and the surviving or new corporation in the merger, consolidation, or share exchange is to be a benefit corporation, then the plan of merger, consolidation, or share exchange shall not be effective unless it is adopted by the corporation by at least the minimum status vote.

L.2011, c.30, s.3.

4. a. A benefit corporation may terminate its status as a benefit corporation and cease to be subject to this act by amending its certificate of incorporation to delete the provision required by section 2 or subsection a. of section 3 of this act. The amendment shall not be effective unless it is adopted by at least the minimum status vote.

b. If a plan of merger, consolidation or exchange would have the effect of terminating the status of a corporation as a benefit corporation, the plan shall not be effective unless it is adopted by at least the minimum status vote.

L.2011, c.30, s.4.

5. a. Every benefit corporation shall have the purpose of creating a general public benefit. This purpose is in addition to, and may be a limitation on, its purpose under its certificate of incorporation and any specific purpose set forth in its certificate of incorporation.

b. The certificate of incorporation of a benefit corporation may identify one or more specific public benefits that is the purpose of the benefit corporation to create in addition to its purposes under its certificate of incorporation and subsection a. of this section. The identification of a specific public benefit under this subsection does not limit the obligation of a benefit corporation to create general public benefit.

c. The creation of general and specific public benefits, as provided in subsections a. and b. of this section, shall be in the best interests of the benefit corporation.

d. A benefit corporation may amend its certificate of incorporation to add, amend or delete a specific public benefit that is the purpose of the benefit corporation to create. The amendment shall not be effective unless it is adopted by at least the minimum status vote.

L.2011, c.30, s.5.

6. a. The board of directors, committees of the board and individual directors of a benefit corporation, in considering the best interests of the benefit corporation shall consider the effects of any action upon:

(1) the shareholders of the benefit corporation;

(2) the employees and workforce of the benefit corporation and its subsidiaries and suppliers;

(3) the interests of customers as beneficiaries of the general or specific public benefit purposes of the benefit corporation;

(4) community and societal considerations, including those of any community in which offices or facilities of the benefit corporation or its subsidiaries or suppliers are located;

(5) the local and global environment; and

(6) the short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation;

b. The board of directors, committees of the board and individual directors of a benefit corporation, in considering the best interests of the benefit corporation may consider:

(1) matters listed in subsection (2) of N.J.S.14A:6-1; and

(2) any other pertinent factors or the interests of any other group that they deem appropriate; and

c. The board of directors, committees of the board and individual directors of a benefit corporation shall not be required to give priority to the interests of any particular person or group referred to in subsection a. or subsection b. of this section over the interests of any other person or group unless the benefit corporation has stated its intention to give priority to interests related to a specific public benefit purpose identified in its certificate of incorporation.

d. A director is not personally liable for monetary damages for failure of the benefit corporation to create general or specific public benefits.

L.2011, c.30, s.6.

7. a. The board of directors of a benefit corporation shall include one director who shall be designated the "benefit director" and shall have, in addition to all of the powers, duties, rights and immunities of the other directors of the benefit corporation, the powers, duties, rights and immunities provided in this act.

b. The benefit director shall be elected, and may be removed, in the manner provided by chapter 6 of Title 14A of the New Jersey Statutes, and shall be an individual who is independent. The benefit director may serve as the benefit officer, designated pursuant to section 9 of this act, at the same time as serving as the benefit director. The certificate of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this subsection.

c. The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by section 11 of this act, a statement whether, in the opinion of the benefit director, the benefit corporation acted in accordance with its general, and any specific, public benefit purpose in all material respects during the period covered by the report and whether the directors and officers complied with subsection a. of section 6 of this act and subsection a. of section 8 of this act. If in the opinion of the benefit director the benefit corporation or its directors or officers failed to act in accordance with its public benefit purpose, then the statement of the benefit director shall include a description of the ways in which the benefit corporation or its directors or officers failed to act.

d. If the by-laws of a benefit corporation provide that the powers and duties conferred or imposed upon the board of directors shall be exercised or performed by a person other than the directors pursuant to N.J.S.14A:6-1, then the bylaws of the benefit corporation must provide that the person or shareholders who perform the duties of a board of directors shall include a person with the powers, duties, rights and immunities of a benefit director.

e. Regardless of whether the certificate of incorporation of a benefit corporation includes a provision eliminating or limiting the personal liability of directors authorized by subsection (3) of N.J.S.14A:2-7, a benefit director shall not be personally liable for any act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct or a knowing violation of law.

L.2011, c.30, s.7.

8. a. Each officer of a benefit corporation shall consider the interests and factors described in subsection a. of section 6 of this act when:

(1) The officer has discretion to act with respect to a matter; and

(2) It reasonably appears to the officer that the matter may have a material effect on:

(a) the creation of general or specific public benefits by the benefit corporation; or

(b) any of the interests or factors referred to in subsection a. of section 6 of this act.

b. The consideration of interests and factors in the manner described in subsection c. of section 6 of this act.

c. An officer is not personally liable for monetary damages for failure of the benefit corporation to create general or specific public benefit.

L.2011, c.30, s.8.

9. A benefit corporation may have an officer designated the "benefit officer" who shall have authority and shall perform duties in the management of the benefit corporation relating to the purpose of the corporation to create general or specific public benefits as may be provided by or pursuant to the by-laws or, in the absence of controlling provisions in the by-laws, as may be determined by or pursuant to resolutions or orders of the board of directors. If a benefit corporation has a benefit officer, the duties of the benefit officer shall include preparing the benefit report required by section 11 of this act.

L.2011, c.30, s.9.

10. a. The duties of directors and officers under this act, and the general and any specific public benefit purpose of a benefit corporation, may be enforced only in a benefit enforcement proceeding. No person may bring an action or assert a claim against a benefit corporation or its directors or officers with respect to the duties of directors and officers under this act and the general and any specific public benefit purpose of the benefit corporation except in a benefit enforcement proceeding.

b. A benefit enforcement proceeding may be commenced or maintained only:

(1) Directly by the benefit corporation; or

(2) Derivatively by:

(a) a shareholder;

(b) a director;

(c) a person or group of persons that owns beneficially or of record 10% or more of the equity interests in an entity of which the benefit corporation is a subsidiary; or

(d) such other persons as may be specified in the certificate of incorporation or by-laws of the benefit corporation.

L.2011, c.30, s.10.

11. a. A benefit corporation shall deliver to each shareholder an annual benefit report including:

(1) A narrative description of:

(a) The ways in which the benefit corporation pursued a general public benefit during the year and the extent to which the general public benefit was created;

(b) The ways in which the benefit corporation pursued any specific public benefit that the certificate of incorporation states is the purpose of the benefit corporation to create and the extent to which that specific public benefit was created; and

(c) Any circumstances that have hindered the creation by the benefit corporation of general or specific public benefits;

(2) An assessment of the social and environmental performance of the benefit corporation, prepared in accordance with a third-party standard applied consistently with any application of that standard in prior benefit reports or accompanied by an explanation of the reasons for any inconsistent application;

(3) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed;

(4) The compensation paid by the benefit corporation during the year to each director in that capacity;

(5) The name of each person that owns 5% or more of the outstanding shares of the benefit corporation either beneficially, to the extent known to the benefit corporation without independent investigation, or of record; and

(6) The statement of the benefit director described in section 7 of this act.

b. The benefit report must be sent annually to each shareholder within 120 days following the end of the fiscal year of the benefit corporation or at the same time that the benefit corporation delivers any other annual report to its shareholders.

c. A benefit corporation must post its most recent benefit report on the public portion of its website, if any, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as posted.

d. (1) With the delivery of the benefit report to shareholders pursuant to subsection b. of this section, the benefit corporation must deliver a copy of the benefit report to the Department of the Treasury for filing, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as filed under this section. The State Treasurer shall charge a fee of $70 for filing a benefit report.

(2) If a benefit corporation has not delivered a benefit report to the department for a period of two years, the department may prepare and file a statement that the corporation has forfeited its status as a benefit corporation and is no longer subject to this act. If the corporation subsequently delivers a benefit report to the department for filing, the status of the corporation as a benefit corporation shall be automatically reinstated upon the filing of the benefit report by the department and the corporation shall again be subject to this act.

L.2011, c.30, s.11.