2010 New York Code
BSC - Business Corporation
Article 5 - (501 - 520) CORPORATE FINANCE
511 - Share distributions and changes.

§ 511. Share distributions and changes.
    (a)  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:
    (1) If a distribution of shares having  a  par  value  is  made,  such
  shares  shall be issued at not less than the par value thereof and there
  shall be transferred to stated capital at the time of such  distribution
  an amount of surplus equal to the aggregate par value of such shares.
    (2)  If a distribution of shares without par value is made, the amount
  of stated capital to be represented by each such share shall be fixed by
  the board, unless the  certificate  of  incorporation  reserves  to  the
  shareholders  the  right  to fix the consideration for the issue of such
  shares, and there shall be transferred to stated capital at the time  of
  such  distribution  an  amount  of surplus equal to the aggregate stated
  capital represented by such shares.
    (3) A distribution of shares of any class or series  may  be  made  to
  holders  of  the  same or any other class or series of shares unless the
  certificate of incorporation provides otherwise, provided, however, that
  in the case of a corporation incorporated prior to the effective date of
  subparagraph (4) of this paragraph, then so long as any shares  of  such
  class remain outstanding a distribution of shares of any class or series
  of  shares  of  such corporation may be made only to holders of the same
  class or series  of  shares  unless  the  certificate  of  incorporation
  permits  distribution  to  holders of another class or series, or unless
  such distribution is approved 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.
    (4) A distribution of any class or series of shares shall  be  subject
  to  the preemptive rights, if any, applicable to such shares pursuant to
  this chapter.
    (b) 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.
    (c) A change of issued shares of any class which increases the  stated
  capital  represented  by  those shares may be made if the surplus of the
  corporation is sufficient to permit the  transfer,  and  a  transfer  is
  concurrently made, from surplus to stated capital, of an amount equal to
  such increase.
    (d)  No  transfer  from  surplus  to  stated capital need be made by a
  corporation making a distribution of its treasury shares to  holders  of
  any  class  of  outstanding  shares;  nor upon a split up or division of
  issued shares of any class into a greater number of shares of  the  same
  class,  or  a  combination  of  issued shares of any class into a lesser
  number of shares of the same class, if  there  is  no  increase  in  the
  aggregate stated capital represented by them.
    (e)  Nothing  in  this section shall prevent a corporation from making
  other transfers from surplus to stated capital in connection with  share
  distributions or otherwise.
    (f)  Every distribution to shareholders of certificates representing a
  share distribution or a change of shares which affects stated capital or
  surplus shall be accompanied by a  written  notice  (1)  disclosing  the
  amounts  by which such distribution or change affects stated capital and
  surplus, or (2) if such amounts are not determinable at the time of such
  notice, disclosing the approximate effect of such distribution or change
  upon stated capital and surplus and stating that such  amounts  are  not
  yet determinable.

(g)  When issued shares are changed in any manner which affects stated
  capital or surplus, and no distribution to shareholders of  certificates
  representing  any  shares resulting from such change is made, disclosure
  of the effect of such change upon the stated capital and  surplus  shall
  be  made  in  the  next financial statement covering the period in which
  such change is made that is furnished by the corporation to  holders  of
  shares  of  the  class  or  series so changed or, if practicable, in the
  first notice of  dividend  or  share  distribution  or  change  that  is
  furnished  to such shareholders between the date of the change of shares
  and the next such financial statement,  and  in  any  event  within  six
  months of the date of such change.