Unanimous Written Consent of the Board
(Share Distribution) (NY Corporation)

Summary

This is a template for a unanimous written consent of the board (share distribution) (NY corporation) that can be used by the board of directors of a New York corporation to distribute shares of stock to the corporation's shareholders of a pro rata basis. This template includes practical guidance, drafting notes, and alternate and optional clauses. The board may declare a pro rata distribution of authorized but unissued shares (also known as treasury shares) pursuant to N.Y. Bus. Corp. Law § 511. You should review (i) the corporation's certificate of incorporation to ensure that such a distribution is permitted and does not trigger any rights of holders of other series or classes of the corporation's stock, and (ii) any credit agreements or similar obligations of the corporation which may restrict the corporation's ability to make distributions on its shares. This template contemplates action by unanimous written consent of the board. Unless the corporation's certificate of incorporation or bylaws require a meeting, the board may take action without a meeting so long as all the board members consent in writing to a resolution authorizing the action. N.Y. Bus. Corp. Law § 708(b). Confirm that the certificate of incorporation permits action by written consent. This action may also be taken by less than all of the directors at a duly called meeting of the board. The optional clauses to this template include provisions relating to distributions by public companies. If the corporation is an SEC reporting company, the share distribution itself does not trigger a Form 8-K filing; however, the press release announcing the distribution should be furnished on a Form 8-K. For a full listing of key content covering New York corporate formation, organization, maintenance, ownership, management, and dissolution, see Corporation Resource Kit (NY). For more information, see Management and Indemnification (NY Corporation).