N.Y. Business Corporation Law § 513: Purchase, redemption and certain other transactions by a corporation with respect to its own shares

§ 513. Purchase, redemption and certain other transactions by a

corporation with respect to its own shares.

(a) Notwithstanding any authority contained in the certificate of

incorporation, the shares of a corporation may not be purchased by the

corporation, or, if redeemable, convertible or exchangeable shares, may

not be redeemed, converted or exchanged, in each case for or into cash,

other property, indebtedness or other securities of the corporation

(other than shares of the corporation and rights to acquire such shares)

if the corporation is then insolvent or would thereby be made insolvent.

Shares may be purchased or redeemed only out of surplus.

(b) When its redeemable, convertible or exchangeable shares are

purchased by the corporation within the period during which such shares

may be redeemed, converted or exchanged at the option of the

corporation, the purchase price thereof shall not exceed the applicable

redemption, conversion or exchange price stated in the certificate of

incorporation. Upon a redemption, conversion or exchange, the amount

payable by the corporation for shares having a cumulative preference on

dividends may include the stated redemption, conversion or exchange

price plus accrued dividends to the next dividend date following the

date of redemption, conversion or exchange of such shares.

(c) No domestic corporation which is subject to the provisions of

section nine hundred twelve of this chapter shall purchase or agree to

purchase more than ten percent of the stock of the corporation from a

shareholder for more than the market value thereof unless such purchase

or agreement to purchase is approved by the affirmative vote of the

board of directors and a majority of the votes of all outstanding shares

entitled to vote thereon at a meeting of shareholders unless the

certificate of incorporation requires a greater percentage of the votes

of the outstanding shares to approve.

The provisions of this paragraph shall not apply when the corporation

offers to purchase shares from all holders of stock or for stock which

the holder has been the beneficial owner of for more than two years.

The terms "stock", "beneficial owner", and "market value" shall be as

defined in section nine hundred twelve of this chapter.