Contract clause library

Dividends clause: Copy, customize, and use instantly

Introduction

A dividends clause outlines how and when dividends will be paid to shareholders under the terms of an agreement. It specifies the amount or formula for dividend payments, the conditions under which dividends can be declared, and any restrictions on dividend payments. This clause ensures transparency and helps manage expectations regarding the distribution of profits.

Below are templates for dividends clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Payment of dividends based on profits

This clause defines dividend payment based on profits.

The company shall declare dividends to its shareholders based on its annual profits, with the dividend amount being determined by the Board of Directors. The dividends will be paid within [time period] after the end of each fiscal year, subject to the company’s profitability and cash flow requirements.

Fixed dividend rate

This clause sets a fixed dividend rate.

The company shall pay a fixed dividend of [amount or percentage]% per share to all shareholders for each fiscal year. The dividend will be payable on [specific date] and will not be adjusted based on the company’s performance or market conditions.

Dividends as a percentage of net income

This clause defines dividends as a percentage of net income.

The company shall pay dividends to its shareholders at a rate equal to [percentage]% of the company’s annual net income, as determined by the most recent audited financial statements. The dividend will be paid annually or as otherwise decided by the Board of Directors.

Payment of dividends subject to Board approval

This clause requires Board approval for dividend payments.

Dividends shall be paid to the shareholders at the discretion of the Board of Directors. The Board shall have the sole authority to approve the declaration of dividends based on the company’s financial condition, liquidity, and other factors deemed relevant by the Board.

Preference in dividend payments for preferred shares

This clause defines dividend priority for preferred shares.

Shareholders holding preferred stock shall be entitled to receive dividends before any dividends are paid to common shareholders. The dividend for preferred shareholders will be set at [fixed amount or percentage] and will be paid prior to any distribution to common shareholders.

Dividend reinvestment option

This clause offers a dividend reinvestment option.

Shareholders may elect to reinvest their dividends by purchasing additional shares of the company at the current market price or at a discounted price, as determined by the company. Shareholders must notify the company of their intent to reinvest within [time period] following the dividend declaration.

Prohibited dividend payments during financial distress

This clause prohibits dividend payments during financial distress.

The company shall not declare or pay any dividends if its financial position is deemed to be in distress or if such payments would result in a violation of applicable laws or regulations. The Board of Directors shall review the financial condition of the company and may suspend dividend payments in times of financial difficulty.

Cumulative dividend rights for preferred stock

This clause defines cumulative dividends for preferred stockholders.

If the company fails to pay dividends in any given year on the preferred shares, the unpaid dividends shall accrue and accumulate. These dividends will be paid to the preferred shareholders in subsequent years before any dividends are declared for common shareholders.

Payment of dividends in kind

This clause allows for payment of dividends in kind.

The company may, at its discretion, declare dividends in the form of assets other than cash, including but not limited to additional shares, property, or other company assets. The form of dividend payment will be determined by the Board and communicated to shareholders in advance.

Dividends based on available cash flow

This clause defines dividends based on available cash flow.

Dividends will be paid to shareholders at a rate determined by the Board of Directors, based on the company’s available cash flow for the fiscal year. The Board will evaluate the cash position and may choose to pay dividends only if sufficient funds are available for such distributions.

Deferred dividend payments

This clause allows for deferred dividend payments.

The company may defer the payment of dividends in any fiscal year if the Board of Directors determines that deferral is necessary to support the company’s strategic goals or liquidity requirements. Deferred dividends will be paid in the following year or when the Board determines that it is financially feasible.

Dividend payment with a cap

This clause sets a cap on dividends.

The company shall pay dividends to shareholders up to a maximum cap of [amount or percentage]% of the net income in any given year. If the company’s net income exceeds this cap, the excess profits will be retained for reinvestment in the business.

Dividends in the event of a liquidation

This clause defines dividend distribution in case of liquidation.

In the event of liquidation, dividends will be distributed to shareholders in accordance with their shareholding percentage after all debts, liabilities, and preferred stock dividends have been satisfied. The remaining assets will be distributed to common shareholders only after preferred shareholders have received their full liquidation preference.

Timing of dividend payments

This clause defines the timing for dividend payments.

Dividends, once declared by the Board of Directors, will be payable within [specific period] of the declaration date. Payments will be made on a quarterly, semi-annual, or annual basis as determined by the Board of Directors.

Dividend distribution to foreign shareholders

This clause defines dividend distribution to foreign shareholders.

The company shall distribute dividends to foreign shareholders in accordance with applicable foreign tax laws. Any withholding tax imposed on foreign shareholders will be deducted from the dividend payment, and the company will provide the necessary documentation for tax reporting purposes.

Dividends based on a dividend yield formula

This clause defines dividends based on a formula tied to yield.

The company shall pay dividends to its shareholders based on a dividend yield formula. The formula will calculate the dividend based on the current market price of the shares and a set percentage yield. The yield rate will be determined annually by the Board of Directors.

Additional dividend payment terms for directors and executives

This clause defines additional dividend payments for directors and executives.

Directors and executives of the company may be entitled to receive additional dividend payments as part of their compensation package. These additional payments will be based on individual performance or company performance metrics and will be disclosed annually to shareholders.

Dividends linked to stock performance

This clause defines dividends linked to stock performance.

The dividend amount for each shareholder will be determined based on the company’s stock performance. The Board of Directors will evaluate the stock price performance and declare dividends based on the relative increase in stock price over a specified period.

Optional dividend payment in shares

This clause offers optional payment in shares.

Shareholders may opt to receive their dividends in the form of additional shares of the company. The number of shares issued will be based on the market price of the shares at the time of the dividend declaration, and shareholders must inform the company of their election within [specified time].

Dividend payment for convertible securities

This clause addresses dividend payments for convertible securities.

The holders of convertible securities, such as convertible bonds or preferred shares, will be entitled to receive dividends at the same rate as common shareholders unless the terms of the convertible securities stipulate a different dividend rate. In case of conversion, the holder will receive dividends on the newly issued common shares.

This clause defines dividend payments during a share buyback.

If the company undertakes a share buyback program, dividend payments to the shareholders will be made before the buyback is executed. The dividend will be paid based on the total number of outstanding shares before the buyback is completed.

Dividends based on adjusted financial results

This clause defines dividends based on adjusted financial results.

The Board of Directors will declare dividends based on the adjusted financial results of the company, excluding one-time items or extraordinary gains/losses. The adjusted figures will provide a more accurate basis for determining the dividend payout.

Dividend payment based on annual review

This clause defines dividends based on an annual review.

The Board of Directors will review the company’s financial performance annually and declare dividends accordingly. Dividends will be paid to shareholders based on the available profits, subject to the Board’s discretion and the company’s financial position.

Cumulative dividends for preferred shareholders

This clause defines cumulative dividends for preferred shareholders.

Preferred shareholders are entitled to cumulative dividends, which will accrue if not paid in any given year. These dividends will accumulate and must be paid in full before any dividends can be declared for common shareholders.

Dividend payment during economic downturn

This clause defines dividend payments during an economic downturn.

In the event of an economic downturn, the Board of Directors may delay or suspend dividend payments to ensure the company’s financial stability. The decision to defer dividends will be communicated to shareholders and reviewed annually until the company’s financial position improves.

Dividends tied to a performance threshold

This clause defines dividends tied to performance thresholds.

Dividends shall be paid to shareholders only if the company’s revenue exceeds a specified threshold, as determined by the Board of Directors. The dividend rate will be calculated based on the company’s performance, with higher revenue triggering higher dividend payouts.

Dividends paid in the form of company assets

This clause allows dividends to be paid in the form of assets.

The company may declare dividends in the form of assets other than cash, including real property, equipment, or securities. The asset distribution will be valued at the market price at the time of the dividend declaration, and shareholders will have the option to accept or decline the dividend.

Dividends subject to tax withholding

This clause addresses tax withholding on dividends.

All dividends paid under this Agreement are subject to applicable tax withholdings as required by law. The company will deduct any taxes due from the dividend payment and remit them to the appropriate tax authority on behalf of the shareholder.

This clause addresses dividends for shareholders with multiple share classes.

Dividends will be paid to shareholders based on the class of shares they hold. Holders of preferred shares will receive dividends as per their share class terms, while holders of common shares will receive dividends based on the remaining profits after preferred dividends have been paid.

Payment of interim dividends

This clause defines interim dividend payments.

The Board of Directors may declare interim dividends during the fiscal year, which will be paid before the year-end financial results are finalized. Interim dividends will be paid in proportion to the shareholder's holdings at the time of declaration.

Dividends based on a fixed percentage of profits

This clause defines dividends as a fixed percentage of profits.

The company will distribute dividends to shareholders at a rate equal to [fixed percentage]% of the net profits for each fiscal year. The percentage will remain consistent unless modified by the Board of Directors based on future performance.

Dividends to be paid quarterly

This clause defines quarterly dividend payments.

The company will pay dividends on a quarterly basis, with payments made to shareholders on the [specific date] of each quarter. The dividend amount will be determined based on the company’s performance and cash flow.

Dividends for employees holding stock options

This clause defines dividends for employees holding stock options.

Employees holding stock options will be entitled to receive dividends on the shares issued upon exercise of their options. The dividend payments will be made at the same rate as for other common shareholders, starting from the date the option shares are issued.

Dividend payment in the event of a merger

This clause defines dividend payment in the event of a merger.

In the event of a merger, all dividends payable to shareholders will be settled before the merger transaction is finalized. If the merger involves a cash settlement, the outstanding dividends will be paid in cash; if it involves shares, the dividends will be paid in shares of the acquiring company.

Dividends for restricted stock holders

This clause defines dividends for holders of restricted stock.

Holders of restricted stock shall be entitled to dividends in accordance with the terms of their restricted stock agreements. The dividends will be paid on restricted stock to the same extent and at the same rate as common shareholders, provided that the restrictions on the stock are met.

Dividends based on discretionary payouts

This clause allows for discretionary dividend payouts.

The company may declare dividends at the discretion of the Board of Directors, based on the availability of profits and the company’s financial condition. There is no obligation to declare or pay dividends in any fiscal year.

Dividends linked to the market price of shares

This clause defines dividends based on market price.

The dividend amount paid to each shareholder will be linked to the market price of the company’s shares. The Board of Directors will calculate the dividend as a percentage of the average market price of the shares during a specified period prior to the dividend declaration.

Dividends based on company’s retained earnings

This clause defines dividends based on retained earnings.

Dividends will be declared and paid to shareholders based on the company’s retained earnings from previous years. The Board will ensure that dividends are paid out of accumulated profits, subject to the company maintaining an adequate financial position.

Dividends for shareholder loans

This clause defines dividends for shareholders who have provided loans.

Shareholders who have extended loans to the company may receive dividends on the same terms as other shareholders, but the payment will first prioritize repayment of any outstanding loans before dividends are paid.

Dividends in case of bankruptcy

This clause addresses dividends in the event of bankruptcy.

If the company enters bankruptcy proceedings, dividends will only be paid to shareholders once all debts, liabilities, and claims from creditors have been settled. Shareholders will receive dividends as part of the final distribution of assets, if any remain after fulfilling creditor obligations.

Dividends linked to revenue growth

This clause defines dividends tied to revenue growth.

The company will pay dividends to shareholders based on revenue growth, with the dividend amount increasing as the company’s revenue exceeds predefined targets. The Board will determine the dividend percentage based on the level of revenue growth achieved in the fiscal year.

Dividends for non-cash transactions

This clause defines dividends in non-cash transactions.

The company may, at its discretion, declare dividends in non-cash forms, such as shares, securities, or other assets. The value of the non-cash dividends will be determined at the market value of the asset at the time of dividend declaration.

Dividends payable upon annual shareholder meeting

This clause defines dividends payable at the annual meeting.

Dividends will be declared and paid to shareholders following the annual shareholder meeting. The amount will be determined by the Board of Directors based on the financial performance of the company for the previous fiscal year, and payments will be made within [specified time] after the meeting.

Dividends based on retention ratio

This clause defines dividends based on the retention ratio.

The company will declare dividends based on its retention ratio. The Board of Directors will calculate the ratio of earnings retained in the business versus the earnings distributed as dividends. The percentage of retained earnings will determine the dividend payout, which will be paid to shareholders annually.

Dividends paid after debt obligations

This clause defines dividends after debt obligations are met.

Dividends will only be paid to shareholders after all outstanding debt obligations, including principal and interest payments, have been settled. The company will ensure that no dividends are declared unless the financial position allows for the repayment of its debts.

Dividends with priority for new investors

This clause defines dividend priority for new investors.

In the case of a new investment round, the company may declare a dividend payable to new investors at a preferential rate or before dividends are distributed to existing shareholders. This priority dividend payment will be defined as part of the new investment agreement.

Dividends for class B shares

This clause defines dividends for class B shareholders.

Shareholders holding Class B shares shall be entitled to receive dividends at a rate of [amount or percentage]% higher than those holding Class A shares. This adjustment reflects the special terms granted to Class B shareholders under the company’s share structure.

Dividend reinvestment with discounted shares

This clause defines dividend reinvestment with discounted shares.

Shareholders have the option to reinvest dividends by purchasing additional shares at a discounted price of [percentage]% of the current market value. The number of shares issued will be based on the dividend amount, and shareholders must elect to reinvest their dividends within [specified time period].

Dividends contingent on capital expenditure approval

This clause defines dividends contingent on capital expenditure approval.

Dividend payments will be contingent upon the approval of capital expenditures by the Board of Directors. If the Board approves significant investments, a portion of the profits will be earmarked for reinvestment, and dividends will be adjusted accordingly based on available profits after such capital expenditure decisions.

This clause defines dividend payments during a buyback program.

During any share buyback program, the company shall continue to pay dividends to shareholders based on the outstanding shares before the buyback. The dividend amount will be recalculated after the completion of the buyback to reflect the reduction in the total number of shares.

Dividends subject to shareholder approval

This clause defines dividends subject to shareholder approval.

The declaration of dividends under this Agreement is subject to shareholder approval. The Board of Directors may propose dividends, but the shareholders must vote in favor of the proposed dividends at the annual or special meeting to authorize payment.

Dividends as a function of EBITDA

This clause defines dividends as a percentage of EBITDA.

Dividends shall be calculated as a percentage of the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the fiscal year. The percentage to be paid as dividends will be determined by the Board of Directors based on the financial health of the company.

Dividends based on quarterly performance

This clause defines dividends based on quarterly performance.

The company may declare dividends on a quarterly basis, with the amount determined by the performance of the company in the preceding quarter. If the company exceeds its quarterly revenue or profit targets, a special dividend may be declared in addition to the regular quarterly payout.

Dividends based on annual net profit margin

This clause defines dividends based on net profit margin.

Dividends will be declared based on the company’s annual net profit margin. The Board of Directors will review the net profit margin at the end of the fiscal year and declare dividends as a percentage of profits, with higher margins resulting in higher dividend payouts.

Dividends linked to the company’s long-term financial goals

This clause defines dividends linked to long-term goals.

The company will distribute dividends to shareholders based on the achievement of long-term financial goals set by the Board of Directors. If the company meets or exceeds predefined revenue, profitability, and market position targets, dividends will be distributed to reflect the company’s long-term success.

Dividends for non-voting shareholders

This clause defines dividends for non-voting shareholders.

Non-voting shareholders shall be entitled to the same dividend rate as voting shareholders, provided they hold the same class of shares. The non-voting shareholders will receive their dividend payments at the same time as voting shareholders, without the right to vote on matters affecting the company.

This clause defines dividends based on profit-sharing.

The company may declare dividends based on profit-sharing arrangements. The profit-sharing scheme will be linked to the company’s overall profitability, with a fixed percentage of profits allocated for dividends to shareholders according to the profit-sharing formula.

Dividend payment terms for controlling shareholders

This clause defines dividend terms for controlling shareholders.

Controlling shareholders may receive dividends at an enhanced rate compared to minority shareholders, as determined by the Board of Directors. The enhanced dividend rate will reflect the controlling shareholder’s additional investment or operational contributions to the company.

Dividends based on retained earnings

This clause defines dividends based on retained earnings.

The Board of Directors will declare dividends to shareholders based on the retained earnings of the company. Retained earnings will be reviewed annually, and dividends will be paid based on the availability of sufficient retained profits from previous periods.

Dividends during a fiscal year-end close

This clause defines dividends during year-end close.

At the close of each fiscal year, the company may declare dividends based on the financial results for that year. The dividends will be declared after the annual financial statements are finalized, and payments will be made within [time period] of the declaration.

Dividends contingent on tax obligations

This clause defines dividends contingent on tax obligations.

The company may withhold or adjust dividend payments if necessary to fulfill any outstanding tax obligations. If the company’s tax liabilities exceed a certain threshold, the Board of Directors may reduce the dividend payout until tax obligations are satisfied.

Dividends linked to shareholder loyalty

This clause defines dividends for loyal shareholders.

Shareholders who have held their shares for more than [specified number] of years may be entitled to a loyalty bonus in the form of additional dividends. The loyalty bonus will be calculated as a percentage of the regular dividend payout, rewarding long-term shareholders.

Dividends for minority shareholders

This clause defines dividends for minority shareholders.

Minority shareholders will be entitled to receive dividends in proportion to their shareholding, under the same terms and conditions as the majority shareholders. The dividend payout will be made to all shareholders in proportion to the number of shares held.

Dividends based on shareholder tenure

This clause defines dividends based on shareholder tenure.

Shareholders who have held their shares for more than [specified number] of years will receive a higher dividend rate than newer shareholders. The increase in the dividend rate will be [percentage]% for each year beyond the minimum holding period, rewarding long-term investment.

Dividends with a variable rate based on profitability

This clause defines dividends with a variable rate based on profitability.

The company will declare dividends based on a variable rate determined by the company’s profitability. If profits exceed a specified threshold, the rate will increase, with a corresponding reduction in the rate if profits fall below the threshold.

Dividends based on the company’s capital allocation strategy

This clause defines dividends based on capital allocation.

The company will pay dividends to shareholders based on its capital allocation strategy, which includes prioritizing reinvestment in the business and strategic acquisitions. Dividends will be paid after ensuring adequate funds for business operations and growth initiatives.

Dividends as a percentage of gross revenue

This clause defines dividends as a percentage of gross revenue.

The company will declare dividends as a percentage of its gross revenue for the fiscal year. The exact percentage will be determined by the Board of Directors based on the company’s financial stability, operational needs, and future growth potential.

This clause defines dividends linked to share price performance.

Dividends will be declared and paid based on the performance of the company’s share price. The higher the share price performance relative to industry benchmarks, the higher the dividend payout will be. Shareholders will receive a percentage of the appreciation in stock value as part of their dividend.

Dividends with a cap based on overall company performance

This clause defines dividends with a performance-based cap.

The dividend payout will be capped at a maximum amount determined by the company’s overall performance, including profitability and market conditions. If the company exceeds the performance cap, dividends will be limited to the pre-determined cap.

Dividends in the form of stock options

This clause allows dividends to be paid in stock options.

Shareholders may receive their dividends in the form of stock options, which can be exercised at a later date. The number of stock options granted will be based on the amount of the dividend and the current market price of the underlying shares.

Dividends for class-specific distributions

This clause defines class-specific dividend distribution.

Dividends will be distributed to shareholders based on the class of shares held. Preferred shareholders will receive dividends at a fixed rate before any dividends are distributed to common shareholders. The dividend rate for common shareholders will be determined annually by the Board of Directors.

Dividends contingent on future financial results

This clause defines dividends contingent on future results.

Dividends will be contingent on the future financial results of the company. If the company meets its projected financial targets for the upcoming quarter or fiscal year, dividends will be declared and paid to shareholders at that time.

Dividends paid upon satisfaction of shareholder agreements

This clause defines dividends contingent on shareholder agreements.

The payment of dividends is contingent upon the satisfaction of all shareholder agreements in place at the time of the dividend declaration. If any agreements are breached, the dividends may be deferred until the breach is resolved.

Dividends linked to capital expenditures

This clause defines dividends linked to capital expenditures.

The company may choose to limit or suspend dividend payments if capital expenditures are planned for the fiscal year. The Board of Directors will review the capital expenditure needs and may reduce or withhold dividends to ensure sufficient funds are available for business expansion or major investments.

Dividends distributed upon an equity offering

This clause defines dividends distributed upon an equity offering.

The company will distribute dividends to shareholders upon the completion of an equity offering. If the company raises new capital through the sale of equity, the dividend payments will be made to all shareholders, including those who participated in the offering.

Dividends in the event of company downsizing

This clause defines dividends in the event of downsizing.

In the event of company downsizing or cost-cutting measures, the Board of Directors may reduce or suspend dividend payments. The decision to adjust dividends will be based on the financial health of the company and its ability to meet operational expenses while supporting shareholder interests.

Dividends based on free cash flow

This clause defines dividends based on free cash flow.

Dividends will be declared based on the free cash flow generated by the company in the previous fiscal year. A percentage of the free cash flow will be allocated for dividend payments, ensuring that dividends reflect the company’s ability to generate liquid assets for distribution.

This clause defines dividends for non-voting shares.

Shareholders who hold non-voting shares shall receive dividends on the same terms as voting shareholders, with the same payout amount and timing. The only difference is the lack of voting rights associated with non-voting shares.

Dividend payment contingent on debt reduction

This clause defines dividends contingent on debt reduction.

Dividends will be declared once the company has reduced its outstanding debt to a specified level. The Board of Directors will assess the company’s debt reduction progress and may withhold dividends until the company achieves the targeted debt-to-equity ratio.

Dividends payable after employee bonuses

This clause defines dividend payments after employee bonuses.

The company shall declare dividends only after employee bonuses have been paid. Employee bonuses will be calculated based on company performance, and dividends will be distributed to shareholders after these obligations are met.

Dividends with tax efficiency focus

This clause defines dividends with a tax efficiency focus.

The company will seek to declare dividends in a tax-efficient manner, considering both corporate tax obligations and the tax implications for shareholders. The goal is to minimize the overall tax burden while ensuring that shareholders receive their fair share of the company’s profits.

Dividends based on liquidity levels

This clause defines dividends based on liquidity.

Dividends will be paid to shareholders based on the company’s available liquidity at the end of the fiscal year. If the company has sufficient liquid assets to cover dividends without affecting day-to-day operations, dividends will be declared and distributed to shareholders.

Dividends payable in multiple installments

This clause defines dividends payable in multiple installments.

Dividends will be paid in multiple installments throughout the year. The Board of Directors will declare interim dividends on a quarterly basis, with the final annual dividend payment made at the end of the fiscal year.

Dividends contingent on external funding

This clause defines dividends contingent on external funding.

The payment of dividends is contingent upon securing external funding from investors or lenders. If the company is successful in raising funds, dividends will be paid out to shareholders based on the terms agreed upon in this Agreement.

Dividends based on a shareholder loyalty program

This clause defines dividends based on shareholder loyalty.

The company will declare higher dividends to shareholders who have held their shares for a minimum of [specified number] years. The longer the shareholder retains their shares, the greater the percentage of dividends they will receive, with maximum dividends reserved for long-term holders.

This clause defines dividends based on share ownership.

Dividends will be paid to shareholders in proportion to the number of shares they hold. Each shareholder will receive a dividend equivalent to their percentage of ownership in the company, with payments made after the Board declares dividends.

Dividends subject to regulatory approval

This clause defines dividends subject to regulatory approval.

The company’s ability to pay dividends is subject to approval by relevant regulatory bodies. Dividends will only be declared if no regulatory restrictions, including those set by financial authorities or tax agencies, prohibit such payments.

Dividends distributed after operational expenses

This clause defines dividend distribution after operational expenses.

Dividends will be distributed only after the company has met all of its operational expenses and obligations. The Board will ensure that the company’s financial needs are met before any dividends are declared, with payments being made from surplus earnings.

Dividends paid in the event of a significant profit increase

This clause defines dividend payments tied to a significant profit increase.

If the company experiences a significant increase in profits exceeding [specified percentage] compared to the previous year, the Board will declare an additional special dividend. This special dividend will be distributed to shareholders alongside the regular dividend.

Dividends payable from retained earnings

This clause defines dividends paid from retained earnings.

Dividends will be paid from the company’s retained earnings, subject to the availability of funds in the retained earnings account. The Board of Directors will review the financial statements to ensure sufficient funds are available for dividend payments.

Dividends paid upon the completion of capital projects

This clause defines dividends paid after capital projects.

The company will declare dividends upon the successful completion of any major capital projects. The completion of such projects will be reviewed by the Board, and if the project is successful, dividends will be paid to shareholders based on the profits generated by the project.

Dividends based on revenue targets

This clause defines dividends based on revenue targets.

Dividends will be paid based on the company’s ability to meet or exceed its annual revenue targets. The Board of Directors will set revenue goals, and dividends will be declared based on the percentage of revenue achieved during the fiscal year.

Dividends for shareholders holding shares longer than [specified period]

This clause defines dividends for long-term shareholders.

Shareholders who hold their shares for more than [specified period] will receive a higher dividend rate than those holding shares for a shorter time. The dividend rate will increase by [percentage]% for every [time period] the shares are held.

Dividends as a function of profit margin

This clause defines dividends based on profit margin.

Dividends will be determined based on the company’s profit margin for the fiscal year. If the profit margin exceeds [specified percentage], the Board will declare a dividend based on the excess profits. The dividend rate will be directly proportional to the profit margin increase.

Dividends based on operating cash flow

This clause defines dividends based on operating cash flow.

Dividends will be paid based on the company’s operating cash flow. If the company generates positive operating cash flow, a portion will be allocated to dividend payments. The exact dividend amount will depend on the cash flow results for the fiscal year.

Dividends with an optional cash or stock choice

This clause defines the option to receive dividends in cash or stock.

Shareholders will have the option to receive their dividends in either cash or stock. If the shareholder chooses stock, the number of shares issued will be determined based on the current market value of the shares at the time the dividend is declared.

Dividends paid to preferred shareholders with no conditions

This clause defines unconditional dividend payments to preferred shareholders.

Preferred shareholders will receive dividends on a fixed schedule, without any conditions related to company performance. These dividends will be paid before any common shareholder dividends are declared, ensuring preferred shareholders are prioritized.

Dividends with an adjustment for inflation

This clause defines dividends adjusted for inflation.

Dividends will be adjusted annually for inflation, using the [specific index] as the measure for inflation. This ensures that the value of dividends remains aligned with the inflation rate, maintaining the purchasing power of the dividends over time.

Dividends with a variable payout schedule

This clause defines dividends with a variable payout schedule.

The company may pay dividends on a variable schedule, depending on the financial results for each quarter or fiscal year. If the company meets its profit targets, dividends may be paid quarterly, semi-annually, or annually, as determined by the Board.

Dividends for shareholders with voting rights

This clause defines dividends for shareholders with voting rights.

Shareholders who hold shares with voting rights will receive dividends at the same rate as non-voting shareholders. However, only voting shareholders will be entitled to vote on matters relating to dividend distributions.

Dividends in the case of restructuring

This clause defines dividends in the event of company restructuring.

In the event of company restructuring, the Board of Directors will determine whether dividends can be paid. If restructuring results in financial savings or new revenue streams, a special dividend may be declared to share the benefits with shareholders.

Dividends based on the market value of the shares

This clause defines dividends based on market value.

The dividend payment for each shareholder will be based on the market value of the company’s shares at the time of the dividend declaration. The market price will be evaluated over a specified period, and the dividend will reflect a percentage of the market value.

Dividends contingent upon debt reduction targets

This clause defines dividends contingent upon debt reduction.

The payment of dividends will be contingent upon the company meeting its debt reduction targets. If the company’s debt-to-equity ratio reaches the target level, dividends will be paid to shareholders in proportion to their holdings.

Dividends paid in the event of company growth milestones

This clause defines dividends based on company growth milestones.

Dividends will be declared upon the achievement of specific company growth milestones, such as reaching [specified revenue or profit targets]. The amount of the dividend will be tied to the degree to which these growth targets are exceeded.

Dividends for special classes of stock

This clause defines dividends for special classes of stock.

Special classes of stock, such as Series A or Series B shares, may be entitled to higher dividends than common stock. The dividend rate for these shares will be defined based on the terms of the share class agreement and will be prioritized over common stockholder dividends.

Dividends in case of liquidation or winding up

This clause defines dividends in the case of liquidation.

In the event of liquidation or winding up of the company, dividends will be paid to shareholders after all debts and liabilities have been settled. The remaining assets will be distributed based on the shareholder’s proportionate ownership, with any dividends paid after the liquidation process is completed.

Dividends contingent on liquidity position

This clause defines dividends contingent on liquidity.

Dividends will be declared only when the company has sufficient liquidity to cover its operational and capital expenditures. If the company’s liquidity falls below a specified threshold, dividend payments may be postponed until liquidity improves.

Dividends paid to shareholders in the event of a change of control

This clause defines dividend payments in the event of a change of control.

In the event of a change of control, shareholders will receive a special dividend as part of the transaction. The dividend will be equal to [percentage]% of the sale price per share, ensuring shareholders benefit from the change of control.

Dividends for investors participating in a funding round

This clause defines dividends for investors in a funding round.

Investors who participate in a new funding round will be entitled to receive dividends on their investments in the same manner as existing shareholders. The dividend payment will be based on the terms agreed upon in the investment round and will reflect the proportion of the company acquired.

Dividends linked to asset sales

This clause defines dividends linked to asset sales.

If the company sells any significant assets, the proceeds from the sale will be used to declare a special dividend to shareholders. The amount of the dividend will be proportional to the sale proceeds, ensuring shareholders benefit from the sale.

Dividends in the event of a major contract win

This clause defines dividends following a major contract win.

The company will declare a special dividend if it wins a major contract that significantly boosts revenue. The dividend will be based on the value of the contract and will be paid to shareholders within [time period] after the contract is finalized.

Dividends based on capital return

This clause defines dividends based on capital return.

The company may declare dividends based on the return on invested capital (ROIC). If the ROIC exceeds [specified percentage], a portion of the excess return will be paid out to shareholders as dividends.

Dividends for qualifying shareholders

This clause defines dividends for qualifying shareholders.

Dividends will be paid to qualifying shareholders, who are defined as those who have held shares for a minimum of [specified period]. Qualifying shareholders will receive the full dividend payout, while non-qualifying shareholders will receive a reduced amount.

Dividends linked to the company’s credit rating

This clause defines dividends linked to credit rating.

The company will declare dividends based on its credit rating. If the company’s credit rating improves or remains stable, dividends will be declared at a higher rate. If the credit rating decreases, the company may reduce or defer dividends.

Dividends in the event of excessive cash reserves

This clause defines dividends in the event of excess cash reserves.

If the company accumulates cash reserves exceeding [specified amount], the Board of Directors may declare a special dividend to distribute a portion of the excess cash to shareholders. The decision to declare such a dividend will be based on the company’s need for liquidity and strategic plans.

This clause defines dividends for specific share classes.

Shareholders who hold shares from a particular class, such as Series A, will receive dividends at a higher rate than common shareholders. These dividends will be paid based on the preferential terms set for that specific class of shares.

Dividends based on corporate restructuring

This clause defines dividends in the event of corporate restructuring.

In the event of corporate restructuring, the Board of Directors may declare a one-time dividend to shareholders as part of the restructuring process. The dividend will be determined based on the value realized from the restructuring, ensuring shareholders benefit from the change.

Dividends with deferred payments

This clause defines dividends with deferred payments.

The company may declare dividends for the fiscal year, but payments will be deferred until [specified date]. This deferral will allow the company to manage its cash flow while still acknowledging the entitlement of shareholders to the declared dividend.

Dividends in case of external regulatory compliance

This clause defines dividends contingent on regulatory compliance.

Dividends will be declared and paid only if the company complies with all relevant external regulatory requirements. If there are any regulatory issues, the company may suspend or delay dividend payments until the compliance issues are resolved.

Dividends based on shareholder approval of financial statements

This clause defines dividends based on shareholder approval of financials.

The payment of dividends will be subject to the approval of the company’s financial statements by the shareholders. The shareholders will review and approve the financial statements at the annual meeting, and dividends will be paid based on the approved profits.

Dividends distributed in the event of a successful fundraising campaign

This clause defines dividends after fundraising campaigns.

If the company successfully completes a fundraising campaign, a portion of the funds raised will be used to declare dividends to shareholders. The amount of dividends will depend on the total funds raised and the company’s financial condition at the time of distribution.

Dividends for shareholders subject to a lock-up period

This clause defines dividends for shareholders with a lock-up period.

Shareholders subject to a lock-up period will receive dividends in the same manner as other shareholders once the lock-up period expires. If dividends are declared during the lock-up period, they will be held in escrow and distributed after the lock-up period ends.

Dividends as a reward for strategic milestones

This clause defines dividends as a reward for strategic milestones.

The company may declare special dividends upon achieving certain strategic milestones, such as entering a new market or launching a successful product. The dividend amount will be determined based on the impact of the milestone on the company’s performance.

Dividends tied to employee performance goals

This clause defines dividends based on employee performance.

The company may declare dividends based on employee performance goals being met. A portion of the profits will be allocated to dividends, with a focus on rewarding employees and shareholders if specific performance targets are achieved.

Dividends tied to the reduction of operating costs

This clause defines dividends linked to cost reduction.

The company will declare dividends if it successfully reduces its operating costs by [specified percentage] within a fiscal year. The dividend will be distributed as a reward for operational efficiency and cost-saving measures implemented by management.

Dividends with a minimum payout guarantee

This clause defines a minimum dividend payout.

The company guarantees a minimum dividend payout of [fixed amount or percentage] per share, regardless of the company’s financial performance. If the company’s profits fall below expectations, the minimum dividend will still be paid to shareholders.

Dividends for minority investors in a private offering

This clause defines dividends for minority investors in a private offering.

Minority investors who participate in a private offering will be entitled to dividends based on the same terms as the majority shareholders. The dividends will be declared at the same rate, ensuring that all investors, regardless of their shareholding percentage, are treated equally.

Dividends tied to the issuance of new shares

This clause defines dividends tied to new share issuance.

The company may issue new shares and use the proceeds to declare dividends. Shareholders who hold existing shares will receive dividends proportional to their shareholding, while new shareholders will receive dividends based on the number of shares they own after the issuance.

Dividends based on short-term financial goals

This clause defines dividends based on short-term goals.

The company will declare dividends based on the achievement of short-term financial goals set by the Board of Directors. These goals will include targets for quarterly revenue, profit margins, and cash flow. Dividends will be paid once these goals are met or exceeded.

Dividends tied to the success of a specific product line

This clause defines dividends linked to product line success.

Dividends will be declared if a specific product line exceeds sales targets set by the company. The dividend amount will be directly linked to the profitability and performance of that product line, rewarding shareholders based on specific product success.

This clause defines dividends contingent on shareholder consent.

The declaration of dividends is contingent upon shareholder consent. The Board will propose the dividend payment, but shareholders must vote to approve it at the annual general meeting before any dividends are paid.

Dividends paid with priority for long-term institutional investors

This clause defines dividend priority for institutional investors.

Long-term institutional investors who hold shares for over [specified time period] may receive dividends at a higher rate than individual shareholders. The priority dividend payment will be made to these investors to encourage long-term investment in the company.

Dividends contingent on shareholder approval of company strategy

This clause defines dividends contingent on strategy approval.

The payment of dividends is contingent on the approval of the company’s strategy by the shareholders. The Board will present a strategic plan at the annual meeting, and dividends will only be declared if the shareholders approve the strategy for the upcoming year.

Dividends linked to company reputation

This clause defines dividends linked to company reputation.

Dividends will be declared based on the company’s performance in improving or maintaining its reputation in the market. If the company receives high ratings from industry analysts or improves customer satisfaction significantly, dividends will be paid to shareholders as a reward for the company’s reputation boost.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 17 Apr 2025