- 81 -
that power. Consequently, according to petitioners, that provi-
sion did not reduce the voting power of the Alumax class C common
stock for purposes of section 1504(a)(1) below the 80 percent
which petitioners claim that stock possessed. In support of
their position regarding the mandatory dividend provision, peti-
tioners advance arguments which are based on the premises that
the restrictions placed on the power of the Alumax board as a re-
sult of that provision are similar to the restrictions placed on
the power of other boards of directors as a result of (1) "fixed
payment" provisions contained in "debt instruments" requiring the
payment of principal and/or interest and (2) "preferential
dividend" provisions contained in "preferred stock * * * instru-
ments". We disagree with the premises on which petitioners'
position regarding the mandatory dividend provision is based. We
therefore reject their position.
The power to incur debt and to enter into debt instruments
that fix the terms for the repayment of principal and any payment
of interest are powers relating to the management of the business
and affairs of a company that are entrusted to its board of
directors and that the board may delegate to others like corpo-
rate officers.24 See 2 Fletcher Cyclopedia of Corporations, sec.
24 In the case of certain debt (e.g., "bonded indebtedness"), a
stockholder vote or approval is required under certain State
laws. See 5 Fletcher Cyclopedia of Corporations, sec. 2105
(perm. ed. 1996 rev.).
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