14A:7-15.1. Share dividends, share divisions and combinations
14A:7-15.1. Share dividends, share divisions and combinations.
(1) A corporation may effect a share dividend or a division or combination of its shares in the manner hereinafter set forth. As used in this section, the terms "division" and "combination" mean dividing or combining shares of any class or series, whether issued or unissued, into a greater or lesser number of shares of the same class or series.
(2) Except as otherwise provided in the certificate of incorporation, a share dividend, a division or combination may be effected by action of the board alone; except that any division which adversely affects the shares of another class shall be made by amendment. The board in effecting a share dividend, combination or division shall have authority to amend the certificate of incorporation to increase or decrease the par value of shares, increase or decrease the number of authorized shares and to make any other change necessary or appropriate to assure that the rights or preferences of the holders of outstanding shares of any class or series will not be adversely affected by such combination or division. Notwithstanding the foregoing sentence, the board shall not have the authority to amend the certificate of incorporation, and shareholder approval for the amendment shall be required in accordance with subsection 14A:9-2(4) and section 14A:9-3, if as a result of the amendment:
(a) The rights or preferences of the holders of outstanding shares of any class or series will be adversely affected; or
(b) The percentage of authorized shares that remains unissued after the share dividend, division or combination will exceed the percentage of authorized shares that was unissued before the share dividend, division or combination.
(3) If a share dividend, division or combination is effected by board action without shareholder approval and includes an amendment of the certificate of incorporation, there shall be executed on behalf of the corporation and filed in the office of the Secretary of State a certificate of amendment setting forth
(a) The name of the corporation;
(b) The date of adoption by the board of the resolution approving the dividend, division or combination;
(c) That the amendment to the certificate of incorporation will not adversely affect the rights or preferences of the holders of outstanding shares of any class or series and will not result in the percentage of authorized shares that remains unissued after the share dividend, division or combination exceeding the percentage of authorized shares that was unissued before the share dividend, division or combination;
(d) The class or series and number of shares thereof subject to the dividend, division or combination and the number of shares to be issued on the dividend or into which they are to be divided or combined;
(e) The amendment of the certificate of incorporation made in connection with the dividend, division or combination; and
(f) If the dividend, division or combination is to become effective at a time subsequent to the time of filing, the date, which may not exceed 90 days from the date of filing, when the same is to become effective.
(4) If a share dividend, division or combination is effected by action of the board and the shareholders, there shall be executed on behalf of the corporation and filed in the office of the Secretary of State a certificate of amendment as provided in subsection 14A:9-4(3), which certificate shall set forth, in addition to all information required by said subsection, the information required by paragraph 14A:7-15.1(3)(d).
(5) Upon a combination becoming effective, the authorized shares of the class or series subject thereto shall be reduced by the same percentage by which the issued shares of such class or series were reduced as a result of the combination unless the certificate of incorporation otherwise provides or the combination was approved by the shareholders in accordance with subsection 14A:9-2(4) and section 14A:9-3.
(6) (Deleted by amendment, P.L.1988, c.94.)
L.1973, c.366, s.38; amended 1988,c.94,s.46; 1995,c.279,s.8.