17:9A-99. Preemptive rights of stockholders to purchase new stock

353 words·~2 min read·/nj/title-17/chapter-9a/17-9a-99

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Except as otherwise provided by law, upon an increase of the capital stock of a bank by an issue of additional shares, every stockholder shall have a right to purchase that proportion of the shares to be issued which the par value of the stock held by him bears to the aggregate par value of the capital stock of the bank before such increase, at such price, which may be in excess of par value, and within such time as shall be fixed by the resolution of the board adopted pursuant to section 117 providing for the issue of such stock, unless

(1)such right is waived by him, or

(2)the certificate of incorporation otherwise provided at the time of the issue of the shares held by him. For the purposes of this subsection, aggregate par value of the capital stock of a bank shall mean the aggregate par value of all shares the holders of which are entitled under this section to preemptive rights.

B. Unless the certificate of incorporation otherwise provided at the time when the preferred stock held by him was issued, or unless the right is waived by him, the holder of shares of preferred stock shall have the preemptive right specified in subsection A. of this section only in case of the issue of

(1)preferred stock of the same class held by him, or

(2)preferred stock which has preference or priority, in the payment of dividends or upon liquidation, over the class of preferred stock held by him.

C. Shares of the capital stock not purchased by stockholders in the exercise of the rights provided by subsections A. or B. of this section, shall be sold to such persons as shall be determined by the board of directors, at a price not less than that specified in the resolution of the board adopted pursuant to section 117 providing for the issue of such stock.

L.1948, c. 67, p. 266, s. 99. Amended by L.1950, c. 267, p. 913, s. 1; L.1964, c. 201, s. 1; L.1971, c. 452, s. 1, eff. Feb. 16, 1972.