CaseMark Dividend Declaration Resolution
Drafts a board-adopted resolution authorizing a dividend distribution, functioning as a binding corporate record and evidentiary foundation for fiduciary compliance.
Quick Start
Collect these inputs before drafting:
- Articles of incorporation — legal name, authorized stock classes, preferred dividend preferences, cumulation rights
- Bylaws — quorum requirements, notice provisions, officer authority
- Financial statements — balance sheet and income statement within 90 days; retained earnings balance
- Loan agreements — dividend restrictions, maintenance covenants, lender consent requirements
- Prior resolutions (if any) — format consistency, accumulated preferred dividends paid
- Dividend parameters — type (cash/stock/property), amount per share, proposed record date, proposed payment date
Output Structure
1. Header Block
- Corporation legal name, document title ("Resolution of the Board of Directors Authorizing Declaration of [Type] Dividend")
- Meeting type (regular/special), date, location/remote platform, time
2. Meeting Mechanics
| Item | Required Content |
|---|---|
| Notice | Proper notice per bylaw § ___ confirmed; waiver if applicable |
| Quorum | Quorum present per bylaw § ___ and [State] Corp. Law § ___ |
| Directors present | Full names |
| Directors absent | Names; whether excused |
| Presiding officer | Name and title |
3. WHEREAS Recitals
Draft numbered recitals in this order:
| # | Recital | Key Content |
|---|---|---|
| 1 | Financial review | Board reviewed financials as of [date]; retained earnings of $[X] |
| 2 | Statutory authority | Dividend pursuant to [Del. DGCL §170 / [State] [Cite]] [VERIFY for non-DE] |
| 3 | Equity solvency | Corporation able to pay debts as they become due |
| 4 | Balance sheet solvency | Assets exceed liabilities after giving effect to dividend |
| 5 | Business judgment | Dividend in best interests considering capital needs and prospects |
| 6 | Preferred satisfaction | Accumulated preferred dividends paid/current [omit if no preferred] |
| 7 | Third-party compliance | Loan covenants satisfied / lender consent obtained [omit if N/A] |
4. RESOLVED Clauses
| # | Resolution | Key Language |
|---|---|---|
| 1 | Dividend Declaration | Declare [cash] dividend of $[X.XX] per share on [Class] stock, par value $[X.XX], totaling ~$[aggregate] based on [X,XXX,XXX] shares outstanding |
| 2 | Critical Dates | Declaration Date: date of meeting; Record Date: 10–30 days post-declaration; Payment Date: 2–4 weeks post-record |
| 3 | Eligible Shares | Payable to holders of record of [Class] shares at Record Date; treasury shares and forfeiture shares excluded |
| 4 | Officer Authorization | CEO, CFO, Secretary authorized to: (a) instruct transfer agent; (b) make accounting entries; (c) file regulatory notifications; (d) execute implementing documents. Ministerial changes permitted if non-material |
5. Vote Record
- Count and names: in favor, against, abstaining (with conflict disclosures)
- Resolution declared ADOPTED or FAILED
- Document conflict-of-interest disclosures and recusals by name
6. Secretary Certification and Signature Block
- Secretary certifies resolution duly adopted at properly noticed meeting with quorum present throughout
- Signature lines: Corporate Secretary (name, date), Chairperson of the Board (name, date)
- Corporate seal placement
Guidelines
- Both solvency tests are mandatory — omitting either equity or balance sheet test creates fiduciary exposure
- Delaware §170 [VERIFY] — applies to DE-incorporated entities; confirm equivalent statute for other jurisdictions before citing
- Preferred stock priority — verify cumulative vs. non-cumulative in articles; accumulated arrears must clear before common dividend if cumulative
- Lender covenants — check all credit agreements for dividend blockers and basket limitations before finalizing
- Record date window — Delaware requires record date no more than 60 days before payment [VERIFY]; NYSE/Nasdaq listed companies have additional exchange notice requirements
- Treasury shares — exclude from eligibility and aggregate calculation
- Stock dividends — may require shareholder approval if altering capital structure; confirm under governing state law and articles
- Retention — file executed resolution in corporate minute book per applicable state record-keeping statute
Troubleshooting
- Missing solvency recital — if either equity or balance sheet solvency language is absent, the resolution is incomplete; add the missing recital before finalization
- Non-Delaware jurisdiction — do not default to DGCL citations; insert
[VERIFY: STATE STATUTE]and confirm the governing state's dividend authority provision - Preferred stock arrears unknown — if cumulation status or arrears balance is unavailable, flag with
[VERIFY: PREFERRED DIVIDEND STATUS]rather than omitting the recital - Covenant conflict — if loan agreement review is incomplete, insert
[VERIFY: LENDER CONSENT REQUIRED]in the third-party compliance recital - Record date exceeds statutory window — if proposed record date is more than 60 days before payment, adjust dates or confirm state law permits the gap