Cumulative Dividend Clause Samples
A cumulative dividend clause requires that any unpaid dividends on preferred shares accumulate and must be paid out before any dividends can be distributed to common shareholders. In practice, if a company is unable to pay dividends in a given period, the unpaid amounts are carried forward and added to future dividend payments owed to preferred shareholders. This clause ensures that preferred shareholders receive all dividends they are entitled to, even if payments are delayed, thereby protecting their investment and prioritizing their claims over those of common shareholders.
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Cumulative Dividend. Holders of the Preferred Stock shall be entitled to an eight (8%) percent cumulative annual cash dividend ($33.60 per share of Preferred Stock) calculated on the basis of a 360-day year consisting of twelve 30-day months, and shall be payable quarterly ($8.40 per share of Preferred Stock) in arrears on each March 31, June 30, September 30, and December 31 out of the assets of the Company legally available therefor. Dividends shall accrue daily commencing on the Issue Date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Company legally available for the payment of dividends. The Preferred Stock dividend shall be paid before any dividend shall be set apart or paid on the Common Stock for such quarter or for any other class of capital stock. If less than the full preferential dividend is paid (whether as a partial payment or if no dividend is paid) to the holders of the Preferred Stock in any quarter, the unpaid amount shall accumulate and be added to the preferential dividends due in the immediately subsequent quarter, in which case such unpaid amounts shall be paid first and the newly accrued dividends of the then current quarter, to the extent are unpaid, shall accumulate until paid. No dividends shall be paid to the holders of the Common Stock or any other security of the Company if any dividends are unpaid on the Preferred Stock. No dividends shall be paid to the holders of any class of capital stock of the Company unless and until all dividends accrued and unpaid on the Preferred Stock are paid in full. The Company may, upon approval by a majority of its entire Board of Directors, elect to pay dividends upon the Preferred Stock, by the issuance of additional shares of Preferred Stock which shall have terms and conditions identical to other shares of Preferred Stock. If the Company elects to pay any dividend by the issuance of Preferred Stock in lieu of a cash dividend, the amount of such dividend shall be thirteen (13%) percent ($54.60 per share of Preferred Stock per annum; or $13.65 per share per quarter) based on the Stated Value thereof. The failure to pay any dividend when due shall be an Event of Default under the Certificate of Designation of the Preferred Stock and shall result in additional dividend payments at the default rates as set forth therein.
Cumulative Dividend. 3 1.5 Liquidation.......................................................................
Cumulative Dividend. Holders of the Preferred Stock shall also be entitled to an eight (8%) percent cumulative quarterly cash dividend, payable quarterly in arrears calculated on a 360-day year consisting of twelve 30-day months, and payable immediately out of the assets of the Company legally available therefor. The Preferred Stock dividend shall be paid before any dividend shall be set apart or paid on the Common Stock for such quarter. If less than the full preferential dividend is paid (as a partial payment or if no dividend is paid) to the holders of the Preferred Stock in any quarter, the unpaid amount shall accumulate and be added to the preferential dividends due in any subsequent quarter, in which case such unpaid amounts shall be paid first and the newly accrued dividends of the then current quarter, to the extent are unpaid, shall accumulate until paid. No dividends shall be paid to the holders of the Common Stock if any dividends are unpaid on the Preferred Stock. Upon Pioneer Ventures' consent the dividends may be paid, in whole or in part, by the issuance of additional shares of Series C Preferred Stock upon the same terms as cash dividends payable hereunder except at an interest rate of 13%. In addition, if there is a Dividend Arrearage an Additional Dividend shall be calculated using, as one factor, the Liquidation Preference.
Cumulative Dividend. ISSUES: • Investor generally wants Dividends shall accrue on each share of Preferred on a cumulative basis at the rate of [8%-15%] per annum. some guaranteed rate of Cumulative dividends shall be payable only in the event of return before Common a liquidation, dissolution or winding up of the Company or Stock receives anything - upon redemption. [other alternatives - redemption only paid on redemption or or liquidation only, not both; cumulative dividends liquidation but typically shall be forfeited on a public offering (or acquisition)]. forfeited on a public offering
Cumulative Dividend. Each holder of Series B Preferred Stock shall be entitled to receive from the Corporation an annual dividend, paid in cash, equal to six percent (6%) of the Original Issue Price (the “Accruing Dividend”). To the extent funds are legally available therefor, the Corporation shall declare and pay an amount equal to one-fourth of the Accruing Dividend within fifteen (15) days after the end of each of the Corporation’s fiscal quarters; provided, that, to the extent that funds are not legally available therefor ,the holders of the Series B Preferred Stock elect not to receive such dividend, or the Corporation otherwise fails to timely declare and pay such Accruing Dividend (in whole or in part), any unpaid portion of the Accruing Dividend shall accrue on a cumulative basis and such unpaid portion shall bear interest daily at the rate of eight percent (8%) per annum, which interest shall become part of the Accruing Dividend. Notwithstanding the foregoing, the holders of the Series B Preferred Stock, upon the consent of the holders of no less than eighty percent (80%) of the outstanding shares of Series B Preferred Stock, may, in their sole discretion, elect to defer receipt of the Accruing Dividend by providing written notice of such election to the Corporation prior to the end of the Corporation’s fiscal quarter; provided that the Corporation shall declare and pay any such deferred Accruing Dividend no later than the second (2d) day after it shall have been provided notice by the holders of at least eighty percent (80%) of the outstanding shares of Series B Preferred Stock that such deferral has been rescinded. Except as provided in this Section 6, or as may otherwise be provided by the DGCL or the Certificate of Incorporation of the Corporation, any other dividends shall be pro rata among all holders of Common Stock, Series B Preferred Stock and all other preferred stock of the Corporation entitled to share pro rata in such dividend, on an as-converted basis.