Amendment Regarding Any Withdrawal

• Category: Corporations - Public - Changes Affecting Capital Stock
• State: Multi-State
• Control #: US-CC-3-369
• Format: Word; Rich Text

Description

The proposed amendment to the Articles of Incorporation of Pacific Enterprises aims to enhance the corporation's ability to pay dividends on both Preferred Stock and Common Stock by removing existing restrictions related to retained earnings. Specifically, the amendment allows for distributions to be made from any legally available funds, rather than being limited to retained earnings, which have significantly decreased over the years. This change is critical given that retained earnings have dropped from approximately $770 million to about $146 million, primarily due to operational losses. With shareholder approval, the amendment would enable the company to provide approximately $250 million for distributions rather than being constrained to its current retained earnings. The Board of Directors recommends this amendment as beneficial for common shareholders while acknowledging the balance needed for preferred shareholders. Importantly, the ability to distribute dividends will still depend on the corporation's financial position and adherence to statutory requirements, ensuring responsibility in financial management. This amendment is particularly useful for attorneys, partners, owners, associates, paralegals, and legal assistants who may need to navigate corporate governance and shareholder rights. They can utilize this amendment to facilitate discussions on dividend policies and corporate strategy, ensuring compliance with California General Corporation Law while optimizing shareholder returns.