N.J. Stat. tit. 15A, ch. 3

in effect

N.J. Stat. § 15A:3-1 General powers

a. Each corporation, subject to any limitations provided in this act or other statute of this State, or in its certificate of incorporation or bylaws, may: (1) have perpetual duration unless a limited period is stated in its certificate of incorporation; (2) sue and be sued, complain and defend and participate as a party or otherwise in any judicial, administrative, arbitrative or other proceeding, in its corporate name; (3) have a corporate seal which may be altered at pleasure, and to use the seal by causing it, or a facsimile to be impressed or affixed or in any other manner reproduced; (4) take and hold by lease, gift, purchase, grant, devise or bequest any property, real or personal, necessary or desirable for attaining the objects and carrying into effect the purposes of the corporation and to purchase, lease or otherwise acquire, own, hold, improve, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated, subject, however, to any alteration or modification made by general law as to the amount of real and personal property to be held by the corporation; (5) sell, convey, mortgage, create a security interest in, lease, exchange, transfer and otherwise dispose of its property and assets; (6) purchase, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, exchange, mortgage, lend, create a security interest in, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in, or obligations of, other domestic or foreign corporate entities, associations, partnerships or individuals, or direct or indirect obligations of any domestic or foreign government or instrumentality thereof; (7) make contracts and guarantees and incur liabilities, borrow money, issue its bonds, and secure any of its obligations by mortgage of or creation of a security interest in its property, franchises and income; (8) lend money, invest and reinvest its funds, and take and hold real and personal property as security for the payment of funds so loaned or invested; (9) conduct its activities, carry on its operations, and have offices and exercise the powers granted by this act anywhere in the universe; (10) elect or appoint officers, employees and agents of the corporation, and define their duties and fix their compensation; (11) make and alter bylaws for the administration and regulation of the affairs of the corporation; (12) levy dues and assessments on its members in accordance with its certificate of incorporation or bylaws which may provide for reasonable regulations for enforcement and collection thereof and for different dues and assessments for different classes of members; (13) pay pensions and establish pension and deferred compensation plans, and plans of similar nature for, and to furnish medical services, life, sickness, accident, disability or unemployment insurance and benefits, education, housing, social and recreational services and other similar aids and services to its officers, employees, and agents including any of the foregoing who may be trustees, their families, dependents or beneficiaries; (14) participate with others in any corporate entity, partnership, limited partnership, joint venture, or other association of any kind, or in any transaction, undertaking or arrangement which the participating corporation would have power to conduct by itself, whether or not that participation involves sharing or delegation of control with or to others; (15) at the request of the United States Government or of any of its agencies, transact any lawful activity in time of war or other national emergency, notwithstanding the purposes set forth in its certificate of incorporation; (16) have and exercise all other powers necessary or convenient to effect any of the purposes for which the corporation is organized. b. It shall not be necessary to set forth in the certificate of incorporation any corporate powers enumerated in this act. L.1983, c. 127, s. 15A:3-1, eff. Oct. 1, 1983.

N.J. Stat. § 15A:3-2 Ultra vires transactions

No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid because the corporation was without capacity or power to do that act or to make or receive the conveyance or transfer, but the lack of capacity or power may be asserted: a. In a proceeding by a member or trustee against the corporation to enjoin the doing of any act or the transfer of real or personal property by or to the corporation. If the unauthorized act or transfer sought to be enjoined is or is to be performed or made pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the proceeding and if it deems the same to be equitable, set aside and enjoin the performance of the contract, and in so doing may allow to the corporation or to the other parties to the contract, as the case may be, compensation for the loss or damage sustained by either of them which may result from the action of the court in setting aside and enjoining the performance of the contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained; b. In a proceeding by the corporation, whether acting directly or through a receiver, trustee, or other legal representative, or through members in a representative suit, against the incumbent or former officers or trustees of the corporation; c. In a proceeding by the Attorney General, as provided in this act, to dissolve the corporation, or in a proceeding by the Attorney General to enjoin the corporation from the transaction of unauthorized activities. L.1983, c. 127, s. 15A:3-2, eff. Oct. 1, 1983.

N.J. Stat. § 15A:3-3 Contributions by corporations

a. Any corporation, unless otherwise provided in its certificate of incorporation or bylaws, and subject to the purposes specified in its certificate of incorporation, may, irrespective of corporate benefit, aid, singly or in cooperation with other corporate entities and with natural persons, in the creation or maintenance of institutions or organizations engaged in activities for the purpose of which a corporation may be organized under this act; including institutions or organizations engaged in community fund, hospital, charitable, philanthropic, educational, scientific or benevolent activities or patriotic or civic activities conducive to the betterment of social and economic conditions. The trustees may appropriate, spend or contribute for the purposes reasonable sums as they may determine. b. The provisions of this section shall not be construed as directly or indirectly minimizing or interpreting the rights and powers of corporations, provided for prior to the effective date of this act, with reference to appropriations, expenditures or contributions of the nature set forth in subsection a. of this section. L.1983, c. 127, s. 15A:3-3, eff. Oct. 1, 1983.

N.J. Stat. § 15A:3-4 Indemnification of trustees, officers and employees

15A:3-4. Indemnification of trustees, officers and employees. a. As used in this section: (1) "Corporate agent" means any person who is or was a trustee, officer, employee or agent of the indemnifying corporation or of any constituent corporation absorbed by the indemnifying corporation in a consolidation or merger and any person who is or was a trustee, officer, employee or agent of any other enterprise, serving as such at the request of the indemnifying corporation, or of the constituent corporation, or the legal representative of the trustee, officer, employee or agent; (2) "Other enterprise" means any domestic corporation, foreign corporation, or corporate business entity, other than the indemnifying corporation or any employee benefit plan or trust; (3) "Expenses" means reasonable costs, disbursements and counsel fees; (4) "Liabilities" means amounts paid or incurred in satisfaction of settlements, judgments, fines and penalties; and (5) "Proceeding" means any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal therein and any inquiry or investigation which could lead to the action, suit or proceeding. b. Any corporation may indemnify a corporate agent against the agent's expenses and liabilities in connection with any proceeding involving the corporate agent because the agent is or was a corporate agent, other than a proceeding by or in the right of the corporation, if: (1) the corporate agent acted in good faith and in a manner which the agent reasonably believed to be in or not opposed to the best interests of the corporation; and (2) with respect to any criminal proceeding, the corporate agent had no reasonable cause to believe the conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the corporate agent did not meet the applicable standards of conduct set forth in paragraphs (1) and (2) of subsection b. of this section. c. Any corporation may indemnify a corporate agent against the agent's expenses in connection with any proceeding by or in the right of the corporation to procure a judgment in its favor which involves the corporate agent by reason of being or having been the corporate agent, if the agent acted in good faith and in a manner which the agent reasonably believed to be in or not opposed to the best interests of the corporation. However, in the proceeding no indemnification shall be provided in respect of any claim, issue or matter as to which the corporate agent was liable to the corporation, unless and only to the extent that the Superior Court or the court in which the proceeding was brought shall determine upon application that despite the adjudication of liability, but in view of all circumstances of the case, the corporate agent is fairly and reasonably entitled to indemnity for those expenses as the Superior Court or the other court shall deem proper. d. Any corporation shall indemnify a corporate agent against expenses to the extent that the corporate agent has been successful on the merits or otherwise in any proceeding referred to in subsections b. and c. of this section or in defense of any claim, issue or matter therein. e. Any indemnification under subsection b. of this section and, unless ordered by a court, under subsection c. of this section, may be made by the corporation only as authorized in a specific case upon a determination that indemnification is proper in the circumstances because the corporate agent met the applicable standard of conduct set forth in subsection b. or c. Unless otherwise provided in the certificate of incorporation or bylaws, the determination shall be made: (1) By the board of trustees or a committee thereof at a meeting at which is present a quorum determined without including trustees who were parties to or otherwise involved in the proceeding, acting by a majority vote of trustees who were not parties to or otherwise involved in the proceeding; (2) If the quorum is not obtainable, or, even if obtainable and the quorum of the boards of trustees or committee by a majority vote of the disinterested trustees directs, by independent legal counsel, in a written opinion, the counsel to be designated by the board of trustees; or (3) By the members, if the corporation has members and if the certificate of incorporation or bylaws or a resolution of the board of trustees directs. f. Expenses incurred by a corporate agent in connection with the proceeding may be paid by the corporation in advance of the final disposition of the proceeding as authorized by the board of trustees upon receipt of an undertaking by or on behalf of the corporate agent to repay the amount unless it shall ultimately be determined that the agent is entitled to be indemnified as provided in this section. g. (1) If a corporation upon application of a corporate agent has failed or refused to provide indemnification as required under subsection d. of this section or permitted under subsections b., c. and f. of this section, a corporate agent may apply to a court for an award of indemnification by the corporation, and the court: (a) may award indemnification to the extent authorized under subsections b. and c. of this section and shall award indemnification to the extent required under subsection d. of this section, notwithstanding any contrary determination which may have been made under subsection e. of this section; and (b) may allow reasonable expenses to the extent authorized by, and subject to the provisions of, subsection f. of this section, if the court shall find that the corporate agent has by the agent's pleadings or during the course of the proceeding raised genuine issues of fact or law. (2) Application for indemnification may be made: (a) in the civil action in which the expenses were or are to be incurred or other amounts were or are to be paid; or (b) to the Superior Court in a separate proceeding. (3) If the application is for indemnification arising out of a civil action, it shall set forth reasonable cause for the failure to make application for the relief in the action or proceeding in which the expenses were or are to be incurred or other amounts were or are to be paid. The application shall set forth the disposition of any previous application for indemnification and shall be made in the manner and form as may be required by the applicable rules of the court or, in the absence thereof, by direction of the court to which it is made. The application shall be upon notice to the corporation. The court may also direct that notice shall be given at the expense of the corporation to the members, if any, and all other persons as it may designate in the manner as it may require. h. The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this section shall not exclude any other rights to which a corporate agent may be entitled under a certificate of incorporation, bylaw, agreement, or otherwise; provided that no indemnification shall be made to or on behalf of a corporate agent if a judgment or other final adjudication adverse to the corporate agent establishes that his acts or omissions (1) were in breach of his duty of loyalty to the corporation or its members, (2) were not in good faith or involved a knowing violation of law, or (3) resulted in receipt by the corporate agent of an improper personal benefit. i. Any corporation shall have the power to purchase and maintain insurance on behalf of any corporate agent against any expense incurred in any proceeding and any liabilities asserted by reason of the agent's being or having been a corporate agent, whether or not the corporation would have the power to indemnify the agent against those expenses and liabilities under the provisions of this section. j. The powers granted by this section may be exercised by the corporation notwithstanding the absence of any provision in its certificate of incorporation or bylaws authorizing the exercise of these powers. k. Except as required by subsection d. of this section, no indemnification shall be made or expenses advanced by a corporation under this section, and none shall be ordered by a court, if that action would be inconsistent with a provision of the certificate of incorporation, a bylaw, a resolution of the board or of the members, an agreement or other proper corporate action in effect at the time of the accrual of the alleged cause of action asserted in the proceeding, which prohibits, limits or otherwise conditions the exercise of indemnification powers by the corporation or the rights of indemnification to which a corporate agent may be entitled. l. This section does not limit a corporation's power to pay or reimburse expenses incurred by a corporate agent in connection with the corporate agent's appearance as a witness in a proceeding at a time when the corporate agent has not been made a party to the proceeding. L.1983, c.127, s.15A:3-4, eff. Oct. 1, 1983; amended 1989,c.260,s.2.

N.J. Stat. § 15A:3-5 Provisions relating to actions in the right of a corporation

a. No action shall be brought in this State by a member in the right of a domestic or foreign corporation unless the plaintiff was a member at the time of the transaction of which the plaintiff complains. b. In any action hereafter instituted in the right of the corporation by a member, the court having jurisdiction, upon final judgment and a finding that the action was brought without reasonable cause, may require the plaintiff to pay to the parties named as defendant the reasonable expenses, including fees of attorneys, incurred by them in the defense of the action. c. In any action now pending or hereafter instituted or maintained in the right of the corporation by less than 5% of the members or any class of members, the corporation in whose right the action is brought shall be entitled at any time before final judgment to require the plaintiff to give security for the reasonable expenses, including fees of attorneys, that may be incurred by it in connection with the action or may be incurred by other parties named as defendant for which it may become legally liable. The amount of the security may from time to time be increased or decreased, in the discretion of the court, upon showing that the security provided has or may become inadequate or excessive. The corporation shall have recourse to the security in an amount as the court having jurisdiction shall determine upon the termination of the action. d. This section shall not impair, restrict, or impose a condition on any right of a trustee of a corporation with or without members, to bring an action in this State in the right of a domestic or foreign corporation. L.1983, c. 127, s. 15A:3-5, eff. Oct. 1, 1983.

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