§ 1511. Cemetery indebtedness.

(a) Certificates of indebtedness. (1) If a cemetery corporation be
indebted for lands purchased for cemetery purposes, or for services
rendered or materials furnished in connection with the necessary and
proper preservation or improvement of its cemetery or for moneys
borrowed exclusively for payment of such services or materials, the
directors, by the concurring vote of a majority of their whole number,
with the consent of the creditor to whom such indebtedness is owing, may
issue certificates under the corporate seal, signed by the president and
secretary, for such amount, payable at the times and at the rate of
interest agreed upon but not to exceed six per centum per annum;
provided, however, that there be first obtained from the cemetery board
an order approving the issuance of such certificates. In the case of
certificates of indebtedness issued for moneys borrowed exclusively for
payment for services rendered or materials furnished in connection with
the necessary and proper preservation or improvement of its cemetery the
consent of the creditor to whom such indebtedness is owing shall not be
required. (2) Such approval shall be given by the cemetery board only
if it determines that the amount of the certificates proposed to be
issued does not exceed the fair and reasonable value of the services
rendered or materials furnished or the purchase price of real property
as fixed in accordance with subdivision (b) of this section. No
certificate issued shall be valid or enforceable unless there has first
been issued by the cemetery board an order of approval as herein
provided. No certificate shall be for less than one hundred dollars.
The certificate shall be transferable by delivery, unless therein
otherwise provided. (3) The directors shall keep an account of the
number and amount of such certificates, the persons to whom issued, the
date of maturity, the rate of interest and the purpose for which the
same were issued. Each cemetery corporation shall file with the
cemetery board a verified statement setting forth all changes in such
account during the previous calendar or fiscal year. (4) The directors
shall set aside from the proceeds of sales of lots, plots and parts
thereof such sums to pay such certificates at maturity as they deem
necessary. Until the certificates are paid the holders thereof shall be
entitled at all meetings of the corporation, to one vote for each one
hundred dollars of indebtedness remaining unpaid, except that those
certificates of indebtedness issued for moneys borrowed exclusively for
payment of services or materials shall have no voting power. The
certificates shall not be a lien upon any lot, plot or part thereof
belonging to a lot owner.

(b) Application of proceeds of sales of lots. (1) At least one-half
of the proceeds of sales of lots or the use thereof remaining after the
deductions for the portion thereof required to be deposited in the
permanent maintenance fund and current maintenance fund together with
the expenses of sale shall be applied by a cemetery corporation to the
payment of the purchase price of the real property acquired by it. The
remainder of such proceeds shall be applied by the corporation to
preserving, improving and embellishing the cemetery grounds and the
avenues and roads leading thereto, and to defraying its expenses and
discharging its liabilities. After the payment of such purchase price,
and the expense of surveying and laying out the cemetery, all the
proceeds of such sales shall be applied to the improvement, preservation
and embellishment of the cemetery and to such expenses and liabilities.
(2) Where a corporation has agreed with a person from whom any such
lands were purchased to pay therefor a specified share not exceeding
one-half of the proceeds of sales of lots therein or the use thereof,
such corporation may continue to make payments as so agreed, provided
however that there be first deducted from said proceeds of sales the
amount required to be deposited in the permanent maintenance fund and
current maintenance fund as aforesaid together with the expenses of
sale. The balance of such proceeds shall continue to be applied by the
corporation to the preservation, improvement and embellishment of the
cemetery, and the expenses and liabilities of the corporation. Where
the corporation has heretofore agreed to pay a specified share of the
proceeds as aforesaid in payment of the purchase price of land, the
prices of lots or the use thereof in force when such purchase was made,
shall not be changed, while the purchase price remains unpaid, without
the written consent of a majority in interest of the persons from whom
the lands were purchased or their legal representatives. (3) A
corporation which has hertofore issued certificates of land shares which
entitle the owner to a specified share in the proceeds of the sale of
lots, may purchase such certificates with its surplus or reserve funds
and hold such certificates for the benefit of its surplus or reserve
funds, but such certificates may not thereafter be sold or reissued.

(c) Certificates of stock formerly issued. If a cemetery
corporation, incorporated under a law repealed by the membership
corporations law, prior to September first, eighteen hundred
ninety-five, converted its outstanding indebtedness or certificates of
indebtedness into certificates of stock, in pursuance of law, no
interest shall accrue to the holders of such stock, but they shall
receive annually or semi-annually a dividend thereon for their
proportional part of the entire surplus or net receipts of the
corporation over and above current expenses; or if the proportion of the
net receipts or surplus which stockholders shall be entitled to receive
shall have been fixed by agreement at the time of issuing such stock,
such stockholders shall be entitled to receive dividends in accordance
with such agreement. Such certificates of stock shall be transferable
only on the books of the corporation on the surrender of the
certificate, unless otherwise provided on the face thereof, and on every
such surrender a new certificate of stock shall be issued to the person
to whom the same has been transferred; and the holders of such stock
shall be entitled, in person or by proxy, to one vote for every share
thereof, at each meeting of the corporation. A register of the stock
issued by the corporation shall be kept by its directors showing the
date of issue, the number of shares, the par value thereof, the name of
each person to whom issued, the number of the certificates therefor; and
all transfers of such stock shall be noted and entered in such register,
and the certificates surrendered shall be deemed canceled by the issue
of a new certificate, and the surrendered certificate shall be
destroyed. Any director may become the holder or transferee of such
stock for his own individual use or benefit. No such stock shall be a
lien on the lot of any individual lot owner within the cemetery limits;
and no other or greater liability of the corporation issuing such stock
shall be created or deemed to exist than may be necessary to enforce the
faithful application of the surplus or net receipts of the corporation
to and among the holders of the stock in the manner hereinbefore
specified. A cemetery which has heretofore issued such certificates of
stock is a membership corporation and not a stock corporation.

(d) Retirement of certificates of stock of certain cemetery
corporations. If a cemetery association, incorporated under a law
repealed by chapter five hundred fifty-nine of the laws of eighteen
hundred ninety-five has changed certificates of indebtedness into
certificates of stock, pursuant to chapter one hundred seven of the laws
of eighteen hundred seventy-nine, and such stock remains unimpaired,
such association may retire such stock and issue in exchange therefor
certificates of indebtedness representing the par value of such stock,
such certificates of indebtedness to bear interest at a rate not
exceeding six per centum per annum from the date of the last preceding
dividend payment; provided, however, the exchange of such stock for
certificates of indebtedness shall be authorized at a duly called
meeting of such association by the affirmative vote of at least
two-thirds of the stock issued and outstanding and of at least
two-thirds of all votes cast at such meeting in favor of such exchange.
Any holder of such stock not voting in favor of the exchange of such
stock for certificates of indebtedness may at any time prior to the vote
upon such exchange, or if notice of the meeting to vote upon such
exchange was not mailed to him at least twenty days prior to the taking
of such vote, then within twenty days after the mailing of such notice,
object to such exchange and demand payment for his stock and thereupon
such stockholder or the corporation shall have the right, subject to the
same conditions and provisions contained in section six hundred
twenty-three of the business corporation law, to have such stock
appraised and paid for as provided in such section. Such objection and
demand must be in writing and filed with the corporation. The
provisions of this section relating to certificates of indebtedness and
the rights of the holders thereof shall apply to certificates of
indebtedness issued as provided in this subdivision. The stocks so
retired shall not be reissued by such association and it shall have no
right thereafter to issue any certificates of stock.

(e) Purchase, retirement and exchange of stock. (1) A cemetery
corporation which has issued certificates of stock, pursuant to chapter
one hundred seven of the laws of eighteen hundred seventy-nine, or
chapter two hundred sixty-seven of the laws of eighteen hundred
ninety-four, may purchase such certificates of stock with its surplus or
reserve funds, and hold such certificates for the benefit of its surplus
or reserve funds, but such certificates of stock so purchased may not
thereafter be sold or reissued. (2) A cemetery corporation which has
issued certificates of stock may also effect the retirement of such
stock as follows: The board of directors of such corporation shall
adopt by vote of a majority of the entire number of such directors a
plan for such retirement which shall include the fixing of a price which
the corporation will pay for all shares of stock then outstanding, which
price shall, in the opinion of such directors, represent the fair value
of such stock. The said plan shall be submitted to a duly called
meeting of the members of such corporation and, if approved by the
affirmative vote of at least two-thirds of all votes cast at such
meeting, including the affirmative vote of the holders of record of at
least two-thirds of all shares of stock issued and then outstanding
exclusive of any shares of stock held by the corporation, shall become
binding upon all stockholders, and they shall proceed to transfer and
surrender to the corporation their certificates of stock and to receive
payment therefor in accordance with the terms of such plan. Any holder
of shares of such stock not voting in favor of such plan may at any time
prior to the vote approving such plan, or if notice of the meeting to
vote upon such plan was not mailed to him at least twenty days prior to
the taking of such vote, then within twenty days after the mailing of
such notice, but in any event within ten days after the taking of such
vote, by written notice filed with such corporation, object to such plan
and demand appraisal of his shares. Thereupon, such stockholder or the
corporation shall have the right, subject to the same conditions and
provisions contained in section six hundred twenty-three of the business
corporation law, to have such stock appraised and paid for as provided
in such section. (3) A cemetery corporation which has issued
certificates of stock may also effect the exchange of such stock as
follows: The board of directors of such corporation shall adopt by a
vote of a majority of the entire number of such directors a plan for the
exchange of all shares of stock then outstanding for a like number of
participating certificates. Such participating certificates shall
entitle the owners to a specified share not exceeding, collectively,
one-half of the proceeds of sales of lots therein or the use thereof
after first deducting from such proceeds of sale the amount required to
be deposited in the permanent maintenance fund and current maintenance
fund as provided in and pursuant to subdivision (a) of section fifteen
hundred seven of this article, together with the expenses of sale. Such
plan shall then be submitted to the cemetery board for its approval. In
making its determination the cemetery board shall consider and may
condition its approval on the purposes of this section. Thereafter, if
the cemetery board approves such plan, or in the event the cemetery
board conditioned its approval and the conditions imposed have been
accepted by a vote of a majority of the entire board of directors of the
corporation, such plan shall be submitted to a duly called meeting of
the members of such corporation, and, if approved by the affirmative
vote of at least two-thirds of all votes cast at such meeting, including
the affirmative vote of the holders of record of at least ninety per
centum of all shares of stock issued and then outstanding exclusive of
any shares of stock held by the corporation, shall become binding upon
all stockholders. The stockholders shall then proceed to transfer and
surrender to the corporation their shares of stock and to receive in
exchange therefor participating certificates in accordance with the
terms of such plan. Any holder of shares of such stock not voting in
favor of such plan may at any time prior to the vote approving such
plan, or if notice of the meeting to vote upon such plan was not mailed
to him at least twenty days prior to the taking of such vote, then
within twenty days after the mailing of such notice, but in any event
within ten days after the taking of such vote, by written notice filed
with such corporation, object to such plan and demand appraisal of his
shares. Thereupon, such stockholder or the corporation shall have the
right, subject to the same conditions and provisions contained in
section six hundred twenty-three of the business corporation law, to
have such stock appraised and paid for as provided in such section.
Each such participating certificate issued in exchange for a share of
stock shall entitle the holder thereof to one vote for each certificate
at all meetings of the corporation. The prices of lots or the use
thereof at the time when such exchange is made shall not be changed,
while such participating certificates remain outstanding, without the
written consent of a majority in interest of the holders thereof except
as now or hereafter authorized by law. The shares of stock so exchanged
shall not be reissued by such corporation and it shall have no right
thereafter to issue any shares of stock.

(f) Exchange of certificates for shares. The directors of a cemetery
corporation, which has issued certificates for shares, from time to time
by resolution, may fix the value of each of such shares and authorize
the acceptance by the corporation of such certificates at the value so
fixed in payment for land. All certificates so accepted shall be
immediately cancelled and shall not be again issued.