BOARD RESOLUTION - DECLARATION OF DIVIDEND

[COMPANY NAME], a Delaware Corporation

[// GUIDANCE: This resolution authorizes the declaration of a dividend pursuant to DGCL Section 170. Under Section 170, dividends may only be paid out of (a) surplus (excess of net assets over stated capital) or (b) if no surplus exists, out of net profits for the current and/or preceding fiscal year. Directors may be personally liable under DGCL Section 174 for unlawful dividends. MBCA Section 6.40 uses a different test based on insolvency.]

I. DOCUMENT HEADER

Document Type:
☐ Minutes of a Meeting of the Board of Directors
☐ Unanimous Written Consent of the Board of Directors in Lieu of Meeting

Corporation: [COMPANY NAME], a Delaware corporation (the "Company")
Date: [DATE]
Effective Time: [TIME] [TIME ZONE]

II. RECITALS

WHEREAS, the Board of Directors (the "Board") of the Company is authorized under DGCL Section 170 to declare and pay dividends upon the shares of the Company's capital stock;

WHEREAS, pursuant to DGCL Section 170(a), dividends may be paid out of:
(1) The surplus of the corporation; or
(2) In case there shall be no surplus, out of the corporation's net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year;

WHEREAS, the Board has reviewed the financial statements of the Company as of [DATE] and has determined that:
☐ The Company has surplus in the amount of $[AMOUNT], which is sufficient to pay the dividend declared herein; OR
☐ The Company has net profits for the [current/preceding] fiscal year in the amount of $[AMOUNT], which is sufficient to pay the dividend declared herein;

WHEREAS, the Board has determined that the payment of such dividend will not:
(a) Render the Company insolvent; or
(b) Reduce the Company's capital below the amount represented by all classes of stock having a preference upon the distribution of assets (per DGCL Section 170(a));

WHEREAS, the Board has determined that declaration of the dividend set forth herein is in the best interests of the Company and its stockholders;

NOW, THEREFORE, BE IT RESOLVED, that the Board hereby adopts the following resolutions:

III. DIVIDEND DETAILS

3.1 Type of Dividend

☐ Cash Dividend
☐ Stock Dividend (additional shares of [CLASS] Stock)
☐ Property Dividend (describe): [DESCRIPTION]

3.2 Dividend Amount/Rate

For Cash Dividend:
- Per Share Amount: $[AMOUNT] per share of [CLASS] Stock
- Aggregate Amount: $[TOTAL AMOUNT]

For Stock Dividend:
- Dividend Rate: [NUMBER] shares of [CLASS] Stock for each [NUMBER] shares held
- Total Shares to be Issued: [NUMBER]

For Property Dividend:
- Description of Property: [DESCRIPTION]
- Fair Market Value: $[AMOUNT]
- Per Share Value: $[AMOUNT]

3.3 Applicable Stock Class(es)

☐ Common Stock
☐ Preferred Stock, Series [DESIGNATION]
☐ All Classes (specify distribution priority): [DESCRIPTION]

3.4 Record Date and Payment Date

[// GUIDANCE: The record date determines which stockholders are entitled to receive the dividend. Under DGCL Section 213, the record date may not be more than 60 days before the payment date.]

• Record Date: [DATE] (close of business)
• Payment Date: [DATE]

IV. FINANCIAL CERTIFICATION

4.1 Surplus/Net Profits Determination

The Chief Financial Officer has certified that as of [DATE]:

Option A - Surplus Test (DGCL Section 170(a)(1)):
| Item | Amount |
|------|--------|
| Total Assets | $[AMOUNT] |
| Total Liabilities | $[AMOUNT] |
| Net Assets | $[AMOUNT] |
| Stated Capital | $[AMOUNT] |
| Surplus | $[AMOUNT] |
| Dividend to be Declared | $[AMOUNT] |
| Surplus After Dividend | $[AMOUNT] |

Option B - Net Profits Test (DGCL Section 170(a)(2)):
| Fiscal Year | Net Profits |
|-------------|-------------|
| Current Fiscal Year | $[AMOUNT] |
| Preceding Fiscal Year | $[AMOUNT] |
| Total Available | $[AMOUNT] |
| Dividend to be Declared | $[AMOUNT] |

4.2 Preferred Stock Limitations

[// GUIDANCE: DGCL Section 170(a) prohibits dividends from net profits if capital would be reduced below the capital represented by preferred stock with distribution preferences.]

☐ No preferred stock with distribution preferences is outstanding
☐ Preferred stock exists; capital after dividend ($[AMOUNT]) exceeds preferred capital ($[AMOUNT])

V. OPERATIVE RESOLUTIONS

5.1 Declaration of Dividend

RESOLVED, that pursuant to DGCL Section 170, the Board hereby declares a [cash/stock/property] dividend of [AMOUNT/RATE] per share on the [CLASS] Stock of the Company, payable on [PAYMENT DATE] to stockholders of record as of the close of business on [RECORD DATE];

5.2 Source of Funds

RESOLVED FURTHER, that the Board hereby determines that said dividend shall be paid from the [surplus/net profits] of the Company in accordance with DGCL Section 170;

5.3 Solvency Determination

RESOLVED FURTHER, that the Board, having reviewed the Company's financial condition, hereby determines that:
(a) After giving effect to the dividend, the Company will be able to pay its debts as they become due in the ordinary course of business; and
(b) The payment of the dividend will not reduce the Company's capital below the amount of capital represented by all classes of stock having a preference upon the distribution of assets;

5.4 Director Reliance

[// GUIDANCE: DGCL Section 141(e) permits directors to rely in good faith on reports and financial statements prepared by officers or accountants.]

RESOLVED FURTHER, that in determining the availability of surplus or net profits for the payment of this dividend, the Board has relied in good faith upon the financial statements and reports prepared by the Company's Chief Financial Officer and independent accountants, as permitted by DGCL Section 141(e);

5.5 Stock Dividend - Additional Authorizations (if applicable)

[// GUIDANCE: Include only if declaring a stock dividend.]

RESOLVED FURTHER, that the issuance of shares as a stock dividend is hereby authorized pursuant to DGCL Sections 151 and 173, and that such shares shall be validly issued, fully paid, and nonassessable;

RESOLVED FURTHER, that the Secretary is directed to update the stock ledger to reflect the issuance of additional shares as of the payment date;

5.6 Tax Reporting

RESOLVED FURTHER, that the Authorized Officers are directed to prepare and distribute to stockholders any required tax information, including Forms 1099-DIV, in accordance with applicable tax laws;

5.7 Payment Authorization

RESOLVED FURTHER, that the Chief Financial Officer, Treasurer, or other Authorized Officer is hereby authorized to transfer funds from the Company's accounts as necessary to effect payment of the dividend declared herein;

5.8 Authorization of Officers

RESOLVED FURTHER, that the Chief Executive Officer, President, Chief Financial Officer, Treasurer, and Secretary (each, an "Authorized Officer"), acting singly, are hereby authorized and directed to take all actions and execute all documents necessary or appropriate to effectuate the purposes of these resolutions;

5.9 Ratification

RESOLVED FURTHER, that all actions heretofore taken by any director, officer, employee, or agent of the Company in connection with the matters contemplated by these resolutions are hereby ratified, confirmed, and approved in all respects.

VI. DIRECTOR LIABILITY ACKNOWLEDGMENT

[// GUIDANCE: Under DGCL Section 174, directors who willfully or negligently vote for or assent to an unlawful dividend may be jointly and severally liable to the corporation. This liability cannot be exculpated under Section 102(b)(7).]

The Board acknowledges that:
1. Directors may be personally liable under DGCL Section 174 for dividends paid in violation of Section 170;
2. Such liability is not subject to exculpation under DGCL Section 102(b)(7);
3. The determination that sufficient surplus or net profits exist has been made in good faith based on reliable financial information.

VII. COMPLIANCE CHECKLIST

☐ Financial statements reviewed and certified
☐ Surplus or net profits sufficient for dividend
☐ Preferred stock preferences analyzed
☐ Solvency test satisfied
☐ Record date established (not more than 60 days before payment)
☐ Stockholder notification prepared
☐ Bank transfer authorized
☐ Tax reporting requirements identified (1099-DIV, etc.)
☐ D&O insurance coverage confirmed

VIII. GOVERNING LAW

This resolution shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles, and specifically DGCL Sections 170, 173, and 174.

IX. EXECUTION

Option A - Unanimous Written Consent

IN WITNESS WHEREOF, the undersigned, being all of the members of the Board of Directors of the Company, hereby consent to the adoption of the foregoing resolutions effective as of the date first written above, pursuant to DGCL Section 141(f).

Option B - Meeting Minutes Certification

I, [NAME], Secretary of [COMPANY NAME], hereby certify that the foregoing resolutions were duly adopted by the Board of Directors at a meeting duly called and held on [DATE], at which a quorum was present and acting throughout.

_________________________________
[NAME], Secretary
Date: ______________

EXHIBITS

Exhibit A - Financial Statement Summary

[Attach current financial statements]

Exhibit B - CFO Certificate of Surplus/Net Profits

[Attach certification]

LEGAL REFERENCES

• DGCL Section 141(e) - Good Faith Reliance
• DGCL Section 170 - Dividends; Payment; Wasting Asset Corporations
• DGCL Section 172 - Liability of Directors as to Dividends or Stock Redemption
• DGCL Section 173 - Declaration and Payment of Dividends
• DGCL Section 174 - Liability of Directors for Unlawful Payment of Dividend
• DGCL Section 213 - Fixing Date for Determination of Stockholders of Record
• MBCA Section 6.40 - Distributions to Shareholders
• IRC Section 301 - Distributions of Property
• IRC Section 316 - Dividend Defined

This template is designed for Delaware corporations but may be adapted for use in MBCA jurisdictions. Note that MBCA Section 6.40 uses an insolvency-based test rather than the surplus/net profits test of DGCL Section 170. Consult qualified legal counsel before use.