Notice and Proxy Statement to effect a 2-for-1 split of outstanding common stock
Overview of this form
This Notice and Proxy Statement to Effect a 2-for-1 Split of Outstanding Common Stock is a legal document used by corporations to communicate with their stockholders. The primary purpose of this form is to inform stockholders about a proposed amendment to the company's certificate of incorporation regarding a stock split and to solicit their votes on this proposal. It is essential for ensuring that stockholders are properly informed and can participate in decision-making regarding significant changes to share structure.
Key components of this form
- Notice of the special meeting of stockholders
- Proposal for a two-for-one stock split
- Information on voting rights and procedures
- Details on quorum requirements
- Revocability of proxy votes
- Financial implications of the stock split and dividend information
Common use cases
This form should be used when a corporation plans to conduct a special meeting for stockholders to vote on a proposed two-for-one stock split. It is necessary when the company wishes to amend its articles of incorporation to increase the number of authorized shares and notify stockholders of their right to vote on this important matter.
Intended users of this form
- Corporations looking to propose a stock split to their stockholders
- Company boards of directors responsible for corporate governance
- Legal teams involved in preparing corporate documents
- Stockholders wanting to understand changes affecting their shares
Instructions for completing this form
- Identify the corporate name and address at the top of the document.
- Clearly state the date of the special meeting.
- Outline the proposal's details, including the plan for the stock split and changes to the certificate of incorporation.
- Include voting instructions for stockholders, including how they may submit their proxies.
- Ensure to include the record date to determine eligibility to vote.
- Distribute the completed Notice and Proxy Statement to all eligible stockholders.
Does this form need to be notarized?
Notarization is not commonly needed for this form. However, certain documents or local rules may make it necessary. Our notarization service, powered by Notarize, allows you to finalize it securely online anytime, day or night.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to provide adequate notice of the meeting to stockholders.
- Not clearly stating the record date for voting eligibility.
- Omitting details about how stockholders can submit their proxies.
- Confusing the terms of the stock split in the proposal.
Benefits of using this form online
- Convenience of downloading and filling out the document at any time.
- Editability allows for easy customization to fit specific needs.
- Reliable templates drafted by licensed attorneys ensure compliance with legal standards.
- Accessibility simplifies the process for both corporations and stockholders.
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FAQ
Divide your per share basis by the number of new shares you received for each old share in the first stock split. For example, if your stock split five new shares for every old share, divide $25 by 5 to get a new basis of $5 per share.
Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per-share cost basis ($10,000/2,000 = $5). Take your previous cost basis per share ($10) and divide it by the split factor of 2:1 ($10.00/2 = $5).
If the stock undergoes a 2-for-1 split before the shares are returned, it simply means that the number of shares in the market will double along with the number of shares that need to be returned. When a company splits its shares, the value of the shares also splits.
In a 2-for-1 stock split, the number of outstanding shares is doubled and the price is reduced by half. The total market value (market cap) of the issuer's stock remains the same.The investor will receive an additional 100 shares from a 3 for 2 stock split.
While a stock split adjusts the price of an option's underlying security, the contract is adjusted so that any changes in price due to the split do not affect the value of the option.
For example, in a 2-for-1 stock split, an additional share is given for each share held by a shareholder. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.
A 2 for 1 stock split results in twice the number of shares at half the price. The holder of an option contract as a result of a 2 for 1 stock split will now have twice as many option contracts at half the strike price.
What happens to an option if the underlying stock has a 3-for-1 split? The exercise price would become one third of what it was and the number of options held would triple.
A stock split will cause certain financial ratios to be refigured, but no changes to the corporate financial reports.The earnings per share is the amount of net income for the quarter or the year divided by the stock price. A split changes the stock price without affecting earnings, so EPS declines.
