This text of New York § 5016 (Convertible shares, capital notes and debentures) is published on Counsel Stack Legal Research, covering New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
§ 5016. Convertible shares, capital notes and debentures.
1.When so\nprovided in the organization certificate, and subject to the\nrestrictions in subdivision four of this section, a bank, trust company,\nstock-form savings bank, or stock-form savings and loan association may\nissue preferred shares convertible, at the option of the holder only,\ninto common shares of any class. Authorized shares, whether issued or\nunissued, may be made so convertible within such period and upon such\nterms and conditions as are stated in the organization certificate.\n 2. Unless otherwise provided in the organization certificate, and\nsubject to subdivision four of section ninety-six and subdivision five-b\nof section two hundred thirty-four of this chapter, and to the\nrestrictions in subdivision f
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§ 5016. Convertible shares, capital notes and debentures. 1. When so\nprovided in the organization certificate, and subject to the\nrestrictions in subdivision four of this section, a bank, trust company,\nstock-form savings bank, or stock-form savings and loan association may\nissue preferred shares convertible, at the option of the holder only,\ninto common shares of any class. Authorized shares, whether issued or\nunissued, may be made so convertible within such period and upon such\nterms and conditions as are stated in the organization certificate.\n 2. Unless otherwise provided in the organization certificate, and\nsubject to subdivision four of section ninety-six and subdivision five-b\nof section two hundred thirty-four of this chapter, and to the\nrestrictions in subdivision four of this section, a bank, trust company,\nstock-form savings bank, or stock-form savings and loan association may\nissue its capital notes or debentures convertible into shares of the\ncorporation within such period and upon such terms and conditions as are\nfixed by the board.\n 3. If there is stockholder approval for the issue of capital notes,\ndebentures or shares convertible into shares of the corporation, such\napproval may provide that the board is authorized by certificate of\namendment under section eight thousand five to increase the authorized\nshares of any class or series to such number as will be sufficient, when\nadded to the previously authorized but unissued shares of such class or\nseries, to satisfy the conversion privileges of any such capital notes,\ndebentures or shares convertible into shares of such class or series.\n 4. No issue of capital notes, debentures or shares convertible into\nshares of the corporation shall be made unless:\n (a) A sufficient number of authorized but unissued shares of the\nappropriate class or series are reserved by the board to be issued only\nin satisfaction of the conversion privileges of such convertible capital\nnotes, debentures or shares when issued; or\n (b) The aggregate conversion privileges of such convertible capital\nnotes, debentures or shares when issued do not exceed the aggregate of\nany shares reserved under paragraph (a) and any additional shares which\nmay be authorized by the board under subdivision three of this section.\n 5. No privilege of conversion may be conferred upon, or altered in\nrespect to, any shares or capital notes or debentures that would result\nin the receipt by the corporation of less than the minimum consideration\nrequired to be received upon the issue of new shares. The consideration\nfor shares issued upon the exercise of a conversion privilege shall be\nthat provided in subdivision six of section five thousand four.\n 6. Within ninety days after any capital notes or debentures are\nconverted into shares of the corporation, a certificate of the\ncorporation shall be signed, verified and filed as provided in section\none thousand three stating the amount of capital notes or debentures so\nconverted, the number of shares of each class or series into which the\nsame were converted, and such other information with respect thereto as\nthe superintendent may require.\n