N.J. Model Criminal Jury Charge, N.J.S.A. 2C:21-9b

Approved 2/13/17

MISCONDUCT BY CORPORATE OFFICIAL

(N.J.S.A. 2C:21-9b)

Count _______ of the Indictment charges the defendant with the crime of Misconduct by

a Corporate Official.

(READ COUNT OF INDICTMENT)

The statute reads in pertinent part as follows:

A Corporate Official is guilty of misconduct when, being a Director or Officer of

a Corporation, he, with purpose to defraud:

(a) Issues, participates in issuing, or concurs in a vote to issue any increase

of its capital stock beyond the amount of the capital stock thereof,

duly authorized by or in pursuance of law.

(or)

(b) Sells, or agrees to sell or is directly interested in the sale of any share of

stock of such corporation, or in any agreement to sell the same.

In order for you to find the defendant guilty of the crime of M isconduct by a Corporate

Official, the State must find beyond a reasonable doubt the following elements:

1. That the defendant was a Director or Officer of a Corporation,

2. That he/she with the purpose to defraud:

[CHOOSE AS APPROPRIATE]

(a) [Issued], [participated in issuing] or [concurred in a vote to

issue] (Choose Appropriate) any increase in its capital stock

beyond the amount of the capital stock thereof, duly authorized

by or in pursuance of law.

(or)

(b) [Sold], or [agreed to sell], or [was directly interested in the sale of]

(Choose Appropriate) any stock of such corporation, or in any

agreement to sell the same.

1

1 N.J.S.A. 2C:21-9(b)(2) incorporates a defense to this section; wherein, “unless at the time of

such sale or agreement he is the actual owner of such share, provided that the foregoing shall not apply to

a sale by or on behalf of an underwriter or dealer in connection with a bona fide public offering of shares

of stock of such Corporation.”

Misconduct by Corporate Official

N.J.S.A. 2C:21-9b

First, the State must prove beyond a reasonable doubt that the “Defendant” was a

Director or Officer of (Name the Corporation).

“Corporation” is an entity having authority under law to act as a single person distinct

from the shareholders who own it and having rights to issue stock and exist indefinitely; a group

or successor of persons established in accordance with legal rules into a legal or juristic person

that has a legal personality distinct from the natural persons who make it up, exists indefinitely

apart from them, and has the legal powers that its constitution gives it.2

A Corporate Official or Corporate Officer is a person elected or appointed by the Board

of Directors to manage the daily operations of a corporation, such as a CEO, president, secretary

or treasurer.3 The officers of a corporation shall consist of a president, a secretary, a treasurer,

and if desired, a chairman of the Board, one or more vice -presidents, and such other officers that

may be prescribed by the by -laws. Unless otherwise provided i n the by -laws, the officers shall

be elected by the board.4

A Director of a Corporation is one who manages, guides, or orders; a chief

administrator;5 a person appointed or elected to sit on a board that manages the affairs of a

corporation or other organization by electing and exercising control over its officers.6

Second, the State must prove beyond a reasonable doubt that “Defendant” with purpose

to defraud, [did issue], [participated in issuing], or [concurred in a vote to issue any] ( Choose

Appropriate) increase in its capital stock beyond the amount of the capital stock thereof, duly

authorized by or in pursuance of the law

(or)

[sold], or [agreed to sell], or [is directly interested in the sale of any share of] ( Choose

Appropriate) any stock of such corporation, or in any agreement to sell the same.

A person acts purposefully with respect to the nature of his/her conduct or a result thereof

if it is his/her conscious object to engage in the conduct of that nature or to cause such a result a

person acts purposefully with respect to attended circumstances if he/she is aware of such

circumstances or he/she believes or hopes that they exist.

2 Black’s Law Dictionary (9th ed. 2009); for additional reference, see also N.J.S.A. 14A:1-2.1(g).

3 Black’s Law Dictionary (9th ed. 2009); for additional reference, see also “Director,” N.J.S.A.

14A:1-2.1(h).

4 N.J.S.A. 14A:1-2.1(h).

5 Black’s Law Dictionary (9th ed. 2009).

6 N.J.S.A. 14A:1-2.1(g).

Misconduct by Corporate Official

N.J.S.A. 2C:21-9b

Purpose is a condition of the mind. It cannot be see n. It can only be determined by

inference from the defendant’s conduct, words or acts. A state of mind is rarely susceptible of

direct proof but must ordinarily be inferred from the facts. Therefore, it is not necessary that the

State produce witnesses to testify that an accused said that he/she had a certain state of mind

when he/she did a particular thing. It is within your power to find that such proof has been

furnished beyond a reasonable doubt by inference which may ari se from the nature of his/her

acts and conduct and from all he/she said and did at a particular time and place and from all

surrounding circumstances established by the evidence.

To “defraud” means to deprive a person of property or any inte rest, estate, or right by

deceit or artifice, to cheat.7

A “vote” means the expression of one’s preference or opinion in a meeting or election

by ballot, show of hands, or other type of communication.8

“Capital Stock of Corporation” means the total sha res of stock that a corporation may

issue under its charter or articles of incorporation, including both common stock and preferred

stock. Also termed “authorized stock,” “authorized capital stock,” authorized stock issue,”

“authorized shares;” the total par value or stated value of this stock.9

“Stock” is the capital or principal fund raised by a corporation through subscribers’

contributions or sale of shares; a proportional part of a corporation’s capital represented by the

number of equal units (shar es) owned, granting the holder the right to participate in the

company’s general management and to share in its net profit or earnings.10

“Shares of Stock” means an allotted portion owned by, contributed by, or due to

someone.11 “Shares” means the units int o which proprietary interest in a corporation are

divided.12

If you find the State has proven all of the above elements beyond a reasonable doubt,

then you must find the defendant guilty of the crime charged.

If, however, you find the State has failed to prove any of the elements of the crime

beyond a reasonable doubt, you must then find the defendant not guilty.

7 Black’s Law Dictionary (4th ed. 1968).

8 Black’s Law Dictionary (9th ed. 2009); for additional reference, see also N.J.S.A. 14A:1-2.1(r).

9 Black’s Law Dictionary (9th ed. 2009).

10 Black’s Law Dictionary (9th ed. 2009).

11 Black’s Law Dictionary (9th ed. 2009); for additional reference, see also N.J.S.A. 14A:1-2.1(m).

12 N.J.S.A. 14A:1-2.1(m).

Misconduct by Corporate Official

N.J.S.A. 2C:21-9b

If you have found that the State has proven all of the above elements beyond a reasonable

doubt then you must now determine whether the benefit derived from this act is valued at

$75,000 or more, exceeds $1,000 but is less than $75,000 or the benefit derived is $1,000 or less.