Spin-off Transaction Memorandum to Board of Directors
(DE)

Summary

This template Memorandum to the Board of Directors may be provided by counsel to the board of directors of a public company that is contemplating a spin-off to advise the board members regarding (1) their fiduciary duties in connection with the spin-off and (2) statutory limitations on the payment of the spin-off dividend. This template includes practical guidance and drafting notes. The memorandum typically would be provided to the board at a relatively early stage of its consideration of a spin-off. The memorandum describes a typical spin-off, various benefits, and detriments that may be associated with a spin-off, and potential alternatives to a spin-off for the purpose of providing a framework for the board's consideration of the merits of the spin-off in relation to other alternatives that may be available to the company. Because these descriptions are both generic and truncated, the memorandum expressly contemplates other board presentations relating to the spin-off that would provide the board with additional information regarding both the specific terms of the spin-off and other topics relevant to the board's consideration of the spin-off. This template assumes that Delaware law applies to the corporate law matters addressed herein and should be modified as appropriate in light of the specific facts and circumstances presented. For a broad collection of content related to divestiture transactions, see Divestitures of Divisions and Subsidiaries Resource Kit. For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit.