New York Consolidated Laws, Business Corporation Law - BSC § 515. Reacquired shares

(a) Shares that have been issued and have been purchased, redeemed or otherwise reacquired by a corporation shall be cancelled if they are reacquired out of stated capital, or if they are converted shares, or if the certificate of incorporation requires that such shares be cancelled upon reacquisition.

(b) Any shares reacquired by the corporation and not required to be cancelled may be either retained as treasury shares or cancelled by the board at the time of reacquisition or at any time thereafter.

(c) Neither the retention of reacquired shares as treasury shares, nor their subsequent distribution to shareholders or disposition for a consideration shall change the stated capital.  When treasury shares are disposed of for a consideration, the surplus shall be increased by the full amount of the consideration received.

(d) Shares cancelled under this section are restored to the status of authorized but unissued shares.  However, if the certificate of incorporation prohibits the reissue of any shares required or permitted to be cancelled under this section, the board by certificate of amendment under section 805 (Certificate of amendment;  contents) shall reduce the number of authorized shares accordingly.