Dividend Treatment Clause Samples
The Dividend Treatment clause defines how dividends paid on shares are handled between parties, particularly in the context of financial transactions or agreements involving equity interests. It typically specifies whether dividends received during the term of the agreement are to be retained by the holder, paid to another party, or otherwise allocated, and may address the timing and method of such payments. This clause ensures clarity and fairness in the distribution of dividend income, preventing disputes over entitlement and aligning the parties’ expectations regarding cash flows from dividends.
Dividend Treatment. Upon the Company’s payment of a cash dividend or stock dividend in respect of the Company’s Stock and prior to vesting of this Award, the Grantee shall be credited with a number of additional RSUs in respect of RSUs outstanding on the record date for such dividend (for this purpose, the number of RSUs that are outstanding shall be based on the target number of RSUs), with such number of additional RSUs to equal the aggregate dividend payable with respect to the shares subject to the RSUs with respect to which the dividend is paid, divided by the volume weighted average trading price of the Stock for the ten (10) trading days immediately preceding the dividend record date, rounded down to the nearest whole share. Such additional RSUs shall be eligible to vest on the same schedule and subject to the same conditions as the original RSUs grant to which the additional RSUs are attributable. Notwithstanding the foregoing, additional RSUs credited pursuant to the operation of this Section 5 may be settled in cash or Stock, as determined by the Committee.
Dividend Treatment. If none of the foregoing three tests under Section 302 of the Code is satisfied, the shareholder generally will be treated as having received a dividend taxable as ordinary income in an amount equal to the amount of cash received by the shareholder pursuant to the Offer, to the extent the Company has accumulated or current earnings and profits. The Company expects that its current and accumulated earnings and profits will be sufficient to cover the amount of any payments pursuant to the Offer that are treated as dividends. Dividend income of individuals, estates, and trusts generally is subject to Federal income tax at a maximum rate of 39.6%. Dividend income of corporations, subject to the provisions discussed below, generally is subject to Federal income tax at a maximum rate of 35%. To the extent that the purchase of Shares from any shareholder pursuant to the Offer is treated as a dividend, the shareholder's tax basis in any Shares that the shareholder actually or constructively owns after consummation of the Offer should be increased by the shareholder's tax basis in the Shares surrendered pursuant to the Offer.
Dividend Treatment. If the redemption does not qualify for treatment as a sale or exchange, you will be treated as having received a distribution of property from the Company at the time that your Shares are redeemed. The tax impact upon you of such a distribution depends upon the applicable provisions of Code Section 301(c). A distribution is treated as a dividend to you to the extent that the Company has either earnings and profits accumulated from prior operations or earnings and profits of the tax year in which the distribution occurs. Because the Company had retained earnings of $5,874,000 as of June 20, 2000, it is possible that the IRS may characterize the distribution as a dividend. Proceeds from the distribution would then be applied against and reduce the adjusted basis that you have in the Shares being redeemed. Finally, if the distribution exceeds the adjusted basis that you have in the Shares being redeemed, you would recognize a capital gain on the excess for federal income tax purposes.
Dividend Treatment. If on any date the Company pays a cash dividend on common shares of the Company (the “Shares”), you will receive dividend equivalents on your Units credited in the form of additional Units. Tyco will calculate the number of Units credited to you using the formula provided in Appendix A.