- 83 -
1979)) and in certain documents that are part of the instant
record under which certain Delaware corporations gave their
preferred stockholders preferential dividend rights. None of the
preferential dividend provisions described in the cases and
rulings and in the documents that are part of the instant record
to which petitioners refer restricted the power of a company's
board of directors to determine whether to declare and pay
dividends by requiring it to do so. Instead, those provisions
merely indicated that, once a board exercised its power to
declare and pay dividends, it was required to pay a certain
amount of dividends with respect to one class of stock before it
could pay any dividends with respect to another class of stock.
See 12 Fletcher Cyclopedia of Corporations, secs. 5443-5446
(perm. ed. 1996 rev.). In contrast, the mandatory dividend
provision restricted the power of the Alumax board to determine
whether or not to declare and pay dividends to the extent of 35
percent of Alumax' net income by requiring it to declare and pay
dividends to that extent to both classes of the Alumax stock.25
We find that the preferential dividend provisions in the pre-
ferred stock certificates to which petitioners refer are materi-
ally different from the mandatory dividend provision.
25 The parties agree that the mandatory dividend provision also
gave the Alumax class B common stock a preferential right to
receive 80 percent of the dividends that the Alumax board was
required to declare and pay to all Alumax stockholders.
Page: Previous 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 NextLast modified: May 25, 2011