New Jersey § 14a:12-7

§ 14a:12-7.

(1) The Superior Court, in an action brought under this section, may appoint a custodian,

appoint a provisional director, order a sale of the corporation's stock as provided

below, or enter a judgment dissolving the corporation, upon proof that (a) The shareholders of the corporation are so divided in voting power that, for a

period which includes the time when two consecutive annual meetings were or should

have been held, they have failed to elect successors to directors whose terms have

expired or would have expired upon the election and qualification of their successors;

or (b) The directors of the corporation, or the person or persons having the management

authority otherwise in the board, if a provision in the corporation's certificate

of incorporation contemplated by subsection 14A:5-21(2) is in effect, are unable to

effect action on one or more substantial matters respecting the management of the

corporation's affairs; or (c) In the case of a corporation having 25 or less shareholders, the directors or

those in control have acted fraudulently or illegally, mismanaged the corporation,

or abused their authority as officers or directors or have acted oppressively or unfairly

toward one or more minority shareholders in their capacities as shareholders, directors,

officers, or employees. (2) An action may be brought under this section by one or more directors or by one

or more shareholders. In such action, in the case of appointment of a custodian or a provisional director,

the court may proceed in a summary manner or otherwise. (3) One or more provisional directors may be appointed if it appears to the court

that such an appointment may be in the best interests of the corporation and its shareholders,

notwithstanding any provisions in the corporation's by-laws, certificate of incorporation,

or any resolutions adopted by the board or shareholders. A provisional director shall have all the rights and powers of a duly elected director

of the corporation, including the right to notice of and to vote at meetings of directors,

until such time as he shall be removed by order of the court or, unless otherwise

ordered by the court, by a vote or written consent of a majority of the votes entitled

to be cast by the holders of shares entitled to vote to elect directors. (4) A custodian may be appointed if it appears to the court that such an appointment

may be in the best interests of the corporation and its shareholders, notwithstanding

any provisions in the corporation's by-laws, certificate of incorporation, or any

resolutions adopted by the shareholders or the board. Subject to any limitations which the court imposes, a custodian shall be entitled

to exercise all of the powers of the corporation's board and officers to the extent

necessary to manage the affairs of the corporation in the best interests of its shareholders

and creditors, until such time as he shall be removed by order of the court or, unless

otherwise ordered by the court, by the vote or written consent of a majority of the

votes entitled to be cast by the holders of shares entitled to vote to elect directors. Such powers may be exercised directly or through, or in conjunction with, the corporation's

board or officers, in the discretion of the custodian or as the court may order. If so provided in the order appointing him, a custodian shall have the fact-determining

powers of a receiver as provided in subsections 14A:14-5(e) and (f). (5) Any custodian or provisional director shall be an impartial person who is neither

a shareholder nor a creditor of the corporation or of any subsidiary or affiliate

of the corporation. (6) Any custodian or provisional director shall report from time to time to the court

concerning the matter complained of, or the status of the deadlock, if any, and of

the status of the corporation's business, as the court shall direct. In addition, he shall submit to the court, if so directed, his recommendations as

to the appropriate disposition of the action. If, after the appointment of a custodian or provisional director, the court determines

that a judgment of dissolution is in the best interests of the shareholders of the

corporation, such a judgment shall be entered. The court may continue any custodian or provisional director in such office subsequent

to the entry of a judgment of dissolution and until such time as the affairs of the

corporation are wound up, or it may appoint such person or another as receiver, as

provided in section 14A:12-15 . (7) In any proceeding under this section, the court shall allow reasonable compensation

to the custodian or provisional director for his services and reimbursement or direct

payment of his reasonable costs and expenses which amounts shall be paid by the corporation. (8) Upon motion of the corporation or any shareholder who is a party to the proceeding , the court may order the sale of all shares of the corporation's stock held by any other shareholder who is a party to the proceeding to either the corporation or the moving shareholder or shareholders, whichever is specified in the motion, if the court determines in its

discretion that such an order would be fair and equitable to all parties under all

of the circumstances of the case. (a) The purchase price of any shares so sold shall be their fair value as of the date

of the commencement of the action or such earlier or later date deemed equitable by

the court, plus or minus any adjustments deemed equitable by the court if the action

was brought in whole or in part under paragraph 14A:12-7(1)(c). (b) Within five days after the entry of any such order, the corporation shall provide

each selling shareholder with the information it is required to provide a dissenting

shareholder under section 14A:11-6 , and within 10 days after entry of the order the purchasing party shall make a written

offer to purchase at a price deemed by the purchasing party to be the fair value of

the shares. (c) If the parties are unable to agree on fair value within 40 days of entry of the

order, the court shall make the determination of the fair value, and the provisions

of sections 14A:11-8 through 14A:11-11 shall be followed insofar as they are applicable. (d) Interest may be allowed at the rate and from the date determined by the court

to be equitable, and if the court finds that the refusal of the shareholder to accept

any offer of payment was arbitrary, vexatious, or otherwise not in good faith, no

interest shall be allowed. If the court finds that the action was maintainable under paragraph 14A:12-7(1)(c),

the court in its discretion may award to the selling shareholder or shareholders reasonable

fees and expenses of counsel and of any experts, including accountants, employed by

them. (e) The purchase price shall be paid by the delivery of cash, notes, or other property, or any combination thereof within 30 days after the court has determined the fair value of the shares. The court shall, in its discretion, determine the method of payment of the purchase

price. Whenever practicable, the purchase price shall be paid entirely in cash. If the court determines that an all cash payment is not practicable, it shall determine

the amount of the cash payment, the kind and amount of any property, whether any note

shall be secured, and other appropriate terms, including the interest rate of any

note. (f) Upon entry of an order for the sale of shares under this subsection, and provided

the corporation or the moving shareholders post a bond in adequate amount with sufficient

sureties or otherwise satisfy the court that the full purchase price of the shares,

plus whatever additional costs, expenses, and fees as may be awarded, will be paid when due and

payable, the selling shareholders shall no longer have any rights or status as shareholders,

officers, or directors, except the right to receive the fair value of their shares

plus whatever other amounts as may be awarded. In such event, the court may remove any custodian or provisional director who may

have been appointed. (9) In determining whether to enter a judgment of dissolution in an action brought

under this section, the court shall take into consideration whether the corporation

is operating profitably and in the best interests of its shareholders, but shall not

deny entry of such a judgment solely on that ground. (10) If the court determines that any party to an action brought under this section

has acted arbitrarily, vexatiously, or otherwise not in good faith, it may in its

discretion award reasonable expenses, including counsel fees incurred in connection

with the action, to the injured party or parties.