14A:7-16. Acquisitions of a corporation's own shares

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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.