N.Y. Banking Law § 5010: Share distributions and changes

§ 5010. Share distributions and changes. 1. A corporation may make pro

rata distributions of its authorized but unissued shares to holders of

any class or series of its outstanding shares, subject to the following

conditions:

(a) Such shares shall be issued at not less than the par value thereof

and there shall be transferred to capital stock at the time of such

distribution an amount of undivided profits or surplus equal to the

aggregate par value of such shares.

(b) A distribution of shares of any class or series may be made only

to holders of the same class or series of shares unless the organization

certificate permits distribution, subject to the preemptive rights of

holders of any outstanding shares, to holders of another class or series

or unless such distribution is authorized, when there are no outstanding

preemptive rights, by the affirmative vote or the written consent of the

holders of a majority of the outstanding shares of the class or series

to be distributed.

2. A corporation making a pro rata distribution of authorized but

unissued shares to the holders of any class or series of outstanding

shares may at its option make an equivalent distribution upon treasury

shares of the same class or series, and any shares so distributed shall

be treasury shares.

3. A change of issued shares of any class which increases the

aggregate par value of those shares may be made if the sum of the

undivided profits and surplus of the corporation is sufficient to permit

the transfer, and a transfer is concurrently made, from undivided

profits or surplus to capital stock, of an amount equal to such

increase.