N.J. Stat. tit. 15A, ch. 6

in effect

N.J. Stat. § 15A:6-1 Board of trustees

The activities of a corporation shall be managed by its board, except as in this act or in its certificate of incorporation otherwise provided. Trustees shall be at least 18 years of age and need not be United States citizens or residents of this State or members of the corporation unless the certificate of incorporation or bylaws so require. The certificate of incorporation or bylaws may prescribe other qualifications for trustees. L.1983, c. 127, s. 15A:6-1, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-2 Number of trustees

The number of trustees of a corporation shall be not less than three. Subject to any provisions contained in the certificate of incorporation, the bylaws shall specify the number of trustees or that the number of trustees shall not be less than a stated minimum or more than a stated maximum, with the actual number to be determined in the manner prescribed in the bylaws, except as to the number constituting the first board. L.1983, c. 127, s. 15A:6-2, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-3 Term of trustees

a. If the certificate of incorporation or the bylaws or any other applicable law provides that the trustees shall be elected by the members, the trustees named in the certificate of incorporation shall hold office until the first annual or biennial meeting of the members and until their successors are elected and qualified. If the certificate of incorporation or the bylaws or any other applicable law provides that the trustees shall be elected by the board, the trustees named in the certificate of incorporation shall hold office until the first annual or biennial meeting of the board of trustees and until their successors shall have been elected and qualified. The certificate of incorporation or the bylaws may provide that a meeting of the board to elect trustees shall be held at least once every 2 years. If a provision for a required meeting of the board is not set forth in the certificate of incorporation or bylaws, then the meeting shall be held annually. b. If the certificate of incorporation or the bylaws provide that some of or all the trustees shall be elected or selected other than by the members or the board, the trustees named in the certificate of incorporation shall hold office for the term specified in the certificate of incorporation or bylaws and until their successors are elected and qualified. c. At the first annual or biennial meeting of the members or of the board of trustees and at each annual or biennial meeting thereafter, the members or the board of trustees, as the certificate of incorporation or the bylaws or any other applicable law may provide, shall elect trustees to be elected by them to hold office until the next annual or biennial meeting, except as to the classification of trustees as permitted by subsection b. of section 15A:6-4. Each trustee shall hold office for the term for which the trustee is elected and qualified and until a successor is elected and qualified. d. A trustee may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at a subsequent time as shall be specified in the notice of resignation. L.1983, c. 127, s. 15A:6-3, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-4 Classification of trustees; restriction of right to choose trustees

a. As to trustees to be elected by the members or by the board of trustees, a corporation may provide in its certificate of incorporation or its bylaws for the classification of its trustees in respect to the time for which they shall severally hold office, but a class of trustees shall not hold office for a term shorter than 1 year or longer than 6 years. The term of office of at least one class shall expire every 2 years. A classification of trustees shall not be effective prior to the first annual or biennial meeting of members or the board of trustees. b. Any corporation having more than one class of members may provide in its certificate of incorporation or its bylaws for the election of one or more trustees by the members of any class to the exclusion of members of other classes of members. L.1983, c. 127, s. 15A:6-4, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-5 Vacancies and newly created trusteeships

a. Unless otherwise provided in the certificate of incorporation or the bylaws, any trusteeship not filled at the annual or biennial meeting and any vacancy, however caused, occurring in the board may be filled by the affirmative vote of a majority of the remaining trustees even though less than a quorum of the board, or by a sole remaining trustee. A trustee so elected by the board shall hold office until the next succeeding annual or biennial meeting and until a successor is elected and qualified. b. Unless otherwise provided in the certificate of incorporation or bylaws, when one or more trustees shall resign from the board effective at a future date, a majority of the trustees then in office, including those who have so resigned, may fill the vacancy or vacancies, the vote thereon to take effect when the resignation or resignations become effective. Each trustee so chosen shall hold office as herein provided in the filling of other vacancies. c. Any trusteeship to be filled by reason of an increase in the number of trustees shall be filled by election at an annual or biennial meeting or at a special meeting called for that purpose of the members, or of the board if the certificate of incorporation, the bylaws or any other applicable law provides for the election of trustees by the board. A trustee elected by the board to fill the trusteeship shall hold office until the next succeeding annual or biennial meeting and until a successor is elected and qualified. d. If by reason of death, resignation or other cause, a corporation has no trustees in office, any member or the executor or administrator of a deceased member may call a special meeting of members for the election of trustees and, over the signature of that person, shall give notice of the meeting in accordance with section 15A:5-4, except to the extent that the notice is waived pursuant to section 15A:5-5. L.1983, c. 127, s. 15A:6-5, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-6 Removal of trustees

a. If the certificate of incorporation or the bylaws or any other applicable law provides for the election of trustees by the members, one or more or all the trustees may be removed for cause by the affirmative vote of the majority of the votes cast by the members entitled to vote for the election of trustees. The certificate of incorporation or bylaws may provide that the board may remove trustees for cause and to suspend trustees pending a final determination that cause exists for removal. If the certificate of incorporation or the bylaws so provide, one or more or all the trustees may be removed without cause by the affirmative vote of the majority of the votes cast by the members entitled to vote for the election of trustees. b. If the certificate of incorporation or bylaws or any other applicable law provides that trustees may be elected by the board of trustees, one or more, but not all, of the trustees of the corporation may be removed for cause by the board by the affirmative vote of a majority of all the trustees. c. The removal of trustees, with or without cause, by vote of the members as provided in subsection a. of this section is subject to the following qualifications: (1) In any case where cumulative voting is authorized, if less than the total number of trustees then serving on the board is to be removed by the members, no one of the trustees may be so removed if the votes cast against that trustee's removal would be sufficient to elect the trustee if then voted cumulatively at an election of the entire board; or, if there are classes of trustees, at an election of the class of trustees of which such trustee is a part; and (2) A trustee elected by a class vote, as authorized by subsection b. of section 15A:6-4, may be removed only by a class vote of the members entitled to vote for the election of that trustee. d. The Superior Court, in an action in which the court may proceed in a summary manner or otherwise, may review the removal or suspension of a trustee for cause. e. No act of the board done during the period when a trustee has been suspended or removed for cause shall be impugned or invalidated if the suspension or removal is thereafter rescinded or invalidated. L.1983, c. 127, s. 15A:6-6, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-7 Quorum of board of trustees and committees; vote required; action of trustees without a meeting

a. A majority of the entire board, or of any committee thereof, shall constitute a quorum for the transaction of business, unless the certificate of incorporation or the bylaws shall provide that a greater or lesser number constitutes a quorum, which in no case shall be less than the greater of two persons or one-third of the entire board or committee, except that when a committee of the board consists of one trustee, then one trustee shall constitute a quorum. b. The act of the majority present at a meeting at which a quorum is present shall be the act of the board or the committee, unless the act of a greater number is required by this act, the certificate of incorporation or the bylaws. Any action required to be authorized by a vote of the trustees greater than a majority shall be rescinded or modified only by a like vote. c. Unless otherwise provided by the certificate of incorporation or bylaws, any action required or permitted to be taken pursuant to authorization voted at a meeting of the board or any committee thereof may be taken without a meeting if, prior or subsequent to the action, all members of the board or of the committee, as the case may be, consent thereto in writing and the written consents are filed with the minutes of the proceedings of the board or committee. The consents shall have the same effect as a unanimous vote of the board or committee for all purposes, and may be stated as such in any certificate or other document filed with the Secretary of State. L.1983, c. 127, s. 15A:6-7, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-8 Effect of common trusteeships and trustees' personal interest

a. No contract or other transaction between a corporation and one or more of its trustees, or between a corporation and any domestic or foreign corporation, firm, corporate business entity or association of any type or kind in which one or more of its trustees are trustees or directors or are otherwise interested, shall be void or voidable solely by reason of the common trusteeship or interest, or solely because the trustee or trustees are present at the meeting of the board or a committee thereof which authorizes or approves the contract or transaction, or solely because the trustee's or trustees' votes are counted for that purpose, if the contract or other transaction is fair and reasonable as to the corporation at the time it is authorized, approved or ratified and either: (1) the fact of the common trusteeship or interest is disclosed or known to the board or committee and the board or committee authorizes, approves, or ratifies the contract or transaction by unanimous written consent, provided at least one trustee so consenting is disinterested, or by affirmative vote of a majority of the disinterested trustees, even though the disinterested trustees be less than a quorum; or (2) the fact of the common trusteeship or interest is disclosed or known to the members, if any, and they authorize, approve or ratify the contract or transaction. b. Common or interested trustees may be counted in determining the presence of a quorum at a board or committee meeting at which a contract or transaction described in subsection a. of this section is authorized, approved or ratified. c. The board, by the affirmative vote of a majority of trustees in office and irrespective of any personal interest of any of them, shall have authority to establish reasonable compensation of trustees for services rendered to the corporation as trustees, officers, or otherwise. The approval of the members shall be required if the bylaws so provide. L.1983, c. 127, s. 15A:6-8, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-9 Executive committee; other committees

a. If the certificate of incorporation or the bylaws so provide, the board, by resolution adopted by a majority of the entire board, may appoint from among the trustees an executive committee and one or more other committees, each of which shall have at least one or more members. To the extent provided in the resolution, or in the certificate of incorporation or in the bylaws, each committee shall have and may exercise all the authority of the board, except that no committee shall: (1) Make, alter or repeal any bylaw of the corporation; (2) Elect or appoint any trustee, or remove any officer or trustee; (3) Submit to members any action that requires members' approval; or (4) Amend or repeal any resolution previously adopted by the board. b. The board, by resolution adopted by a majority of the entire board, may: (1) Fill any vacancy in any committee; (2) Appoint one or more trustees to serve as alternate members of any committee, to act in the absence or disability of members of any committee with all the powers of the absent or disabled members; (3) Abolish any committee at its pleasure; and (4) Remove any trustee from membership on a committee at any time, with or without cause. c. Actions taken at a meeting of any committee shall be reported to the board at its next meeting following the committee meeting; except that, when the meeting of the board is held within 2 days after the committee meeting, the report shall, if not made at the first meeting, be made to the board at its second meeting following the committee meeting. d. The designation of any committee and the delegation thereto of authority shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law. L.1983, c. 127, s. 15A:6-9, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-10 Place and notice of trustees' meetings

a. Meetings of the board may be held either within or without this State, unless otherwise provided by the certificate of incorporation or the bylaws. b. Regular meetings of the board may be held with or without notice as prescribed in the bylaws. Special meetings of the board shall be held upon notice as prescribed in the bylaws. Notice of any meeting need not be given to any trustee who signs a waiver of notice, whether before or after the meeting. The attendance of any trustee at a meeting without protesting prior to the conclusion of the meeting the lack of notice of the meeting shall constitute a waiver of notice by that trustee. Neither the business to be transacted at, nor the purpose of, any meeting of the board need be specified in the notice or waiver of notice of the meeting unless required by the bylaws. Notice of an adjourned meeting need not be given if the time and place are fixed at the meeting adjourning and if the period of adjournment does not exceed 10 days in any one adjournment. c. Any or all trustees may participate in a meeting of the board or a committee of the board by means of conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other, unless otherwise provided in the certificate of incorporation or the bylaws. L.1983, c. 127, s. 15A:6-10, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-11 Loans to officers or employees

A corporation may lend money to, or guarantee any obligation of, or otherwise assist, any officer or other employee of the corporation or of any subsidiary, whenever, in the judgment of the board, the loan, guarantee or assistance may reasonably be expected to benefit the corporation, except that a corporation shall not lend money to, guarantee any obligation of, or otherwise assist, any officer or other employee who is also a trustee of the corporation unless the loan, guarantee or assistance is authorized by the certificate of incorporation or bylaws and then only when authorized by at least two-thirds of the entire board, with the vote of the interested trustee not counted. The loan, guarantee or other assistance may be made with or without interest, and may be unsecured or secured in a manner as the board shall approve, and may be made upon other terms and conditions as the board may determine. L.1983, c. 127, s. 15A:6-11, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-12 Liability of trustees in certain cases

a. In addition to any other liabilities imposed by law upon trustees of a corporation, trustees who vote for, or concur in, any of the following corporate actions: (1) The distribution or disposition of any asset in violation of this act, the certificate of incorporation, the bylaws, or the terms, conditions, or restrictions, express or implied, imposed upon the corporation upon acceptance of the asset by the corporation; (2) The distribution of assets to members during or after dissolution of the corporation without paying, or adequately providing for, all known debts, obligations, and liabilities of the corporation, except that the trustees shall be liable only to the extent of the value of assets so distributed and to the extent that the debts, obligations and liabilities of the corporation are not thereafter paid, discharged, or barred by statute or otherwise; (3) The complete liquidation of the corporation and distribution of all of its assets and cessation of the activities for which it was formed without dissolving or providing for the dissolution of the corporation and the payment of all fees, taxes and other expenses incidental thereto, except that the trustees shall be liable only to the extent of the value of assets so distributed and to the extent that the fees, taxes, and other expenses incidental thereto are not thereafter paid, discharged, or barred by statute or otherwise; (4) The making of any loan to an officer, trustee or employee of the corporation contrary to the provisions of this act; shall be jointly and severally liable to the corporation for the benefit of the corporation and its creditors, members or other interested persons to the extent of any injury suffered by those persons, respectively, as a result of the action. b. Any trustee against whom a claim is successfully asserted under this section shall be entitled to contribution from the other trustees who voted for or concurred in the action upon which the claim is asserted. c. Trustees against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amounts paid by them to the corporation as a result of the claim upon payment to the corporation of the value of any assets wrongfully distributed or disposed of, or upon payment to the corporation of the amount of any loan made improperly, to be subrogated to the rights of the corporation against the person who received the asset or the improper loan. d. A trustee shall not be liable under this section if, in the circumstances the trustee discharged the duty owned by the trustee to the corporation under section 15A:6-14. e. Every action against a trustee for recovery upon a liability imposed by subsection a. of this section shall be commenced within 6 years next after the cause of action shall have accrued. L.1983, c. 127, s. 15A:6-12, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-13 Liability of trustees; presumption of assent to action taken at a meeting

A trustee who is present at a meeting of the board, or any committee thereof of which the trustee is a member, at which action on any corporate matter referred to in section 15A:6-12 is taken shall be presumed to have concurred in the action taken unless the dissent of the trustee shall be entered in the minutes of the meeting or unless the trustee shall file a written dissent to the action with the person acting as the secretary of the meeting before or promptly after the adjournment of the meeting. The right to dissent shall not apply to a trustee who voted in favor of the action. A trustee who is absent from a meeting of the board, or any committee thereof of which the trustee is a member, at which any action is taken shall be presumed to have concurred in the action unless the trustee shall file a dissent with the secretary of the corporation within a reasonable time after learning of the action. L.1983, c. 127, s. 15A:6-13, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-14 Standard of care; liability of trustees; reliance on corporate records

15A:6-14. Standard of care; liability of trustees; reliance on corporate records. Trustees and members of any committee designated by the board shall discharge their duties in good faith and with that degree of diligence, care and skill which ordinary, prudent persons would exercise under similar circumstances in like positions. In discharging their duties, trustees and members of any committee designated by the board shall not be liable if, acting in good faith, they rely on the opinion of counsel for the corporation or upon written reports setting forth financial data concerning the corporation and prepared by an independent public accountant or certified public accountant or firm of accountants or upon financial statements, books of account or reports of the corporation represented to them to be correct by the president, the officer of the corporation having charge of its books of account, or the person presiding at a meeting of the board. A trustee shall not be personally liable to the corporation or its members for damages for breach of duty as a trustee if and to the extent that such liability has been eliminated or limited by a provision in the certificate of incorporation authorized by subsection c. of N.J.S.15A:2-8, except that, in the case of a trustee of a corporation which is established for the purposes provided for in P.L.1959, c.90 (C.2A:53A-7 et seq.) who serves without compensation, other than reimbursement for actual expenses, the trustee shall not be personally liable to the corporation or its members for damages for breach of duty as a trustee, whether or not such liability has been eliminated or limited by a provision in the certificate of incorporation authorized by subsection c. of N.J.S.15A:2-8. L.1983, c.127, s.15A:6-14, eff. Oct. 1, 1983; amended 1989,c.260,s.3.

N.J. Stat. § 15A:6-15 Officers

a. The officers of a corporation shall consist of a president, a secretary, a treasurer, and, if desired, a chairman of the board, an executive director, one or more vice presidents, and all other officers as may be prescribed by the bylaws. Unless otherwise provided in the bylaws, the officers shall be elected or appointed by the board. A corporation may provide alternative titles for those officers; provided that the certificate of incorporation or the bylaws specify which other officer titles correspond to the president, secretary and treasurer and that the alternative titles not be used in completing the annual report filed pursuant to section 15A:4-5. b. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if the instrument is required by law or by the bylaws to be executed, acknowledged, or verified by two or more officers. c. Any officer elected or appointed as herein provided shall hold office for the term for which that officer is so elected or appointed and until a successor is elected or appointed and has qualified, subject to earlier termination by removal or resignation. d. All officers of the corporation, as between themselves and the corporation, shall have the authority and perform the duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board not inconsistent with the bylaws. L.1983, c. 127, s. 15A:6-15, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-16 Removal and resignation of officers; filling of vacancies

a. Any officer elected or appointed by the board may be removed by the board with or without cause. An officer elected by the members may be removed, with or without cause, only by vote of the members, but the authority to act as an officer may be suspended by the board for cause. The removal of an officer without cause shall be without prejudice to that officer's contract rights, if any. Election or appointment of an officer shall not of itself create contract rights. b. An officer may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at a subsequent time as shall be specified in the notice of resignation. c. Any vacancy occurring among the officers, however caused, shall be filled in the manner provided in the bylaws. In the absence of such a provision, any vacancy shall be filled by the board. L.1983, c. 127, s. 15A:6-16, eff. Oct. 1, 1983.

N.J. Stat. § 15A:6-17 Bonds; facsimile signatures and seals

The seal of the corporation, if any, and any or all signatures of the officers or other agents of the corporation upon a bond and any coupon attached thereto may be facsimiles if the bond is countersigned by an officer or other agent or a trustee or other certifying or authenticating authority. In case any officer or other agent who has signed or whose facsimile signature has been placed upon the bond or coupon shall have ceased to be an officer or agent before the bond is issued, it may be issued by the corporation with the same effect as if that officer or agent were an officer or agent at the date of its issue. L.1983, c. 127, s. 15A:6-17, eff. Oct. 1, 1983.

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