Poll: Capital Movement and Allocation Features (Special Dividends and Other)

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I presume that there are probably other posts that request for special dividend so that you can get cash back to your parent company or between subsidiaries. Here are some additional suggestions so that we have better options to move capital around to its best use. Allowing us to recapitalize our subsidiary companies so we have the right mix of debt and equity financing.

Capital Movement/Allocation:

• Addition of Special Dividends:
o Special Cash Dividend
- Goal to Transfer Earnings from previous years, excess capital contributions, or asset liquidations back to parent company or shareholders. So that it can be used more effectively.
- Limited by Balance Sheet must keep 50% Equity in Assets and Minimum Cash Balance of say ~$20 million.
o Subsidiary Shares
- Same Restrictions as Special Cash Dividend Above.

• Special Dividend Example:
o Starting Scenario:
- Assets $100 Million Assets ($40 Million Cash)
- Debt $40 Million 40% D/A Ratio
- Equity $60 Million 60% Equity

o Max Distribution $20 Million per rules

o Post Distribution:
- Assets $80 Million Assets ($20 Million Cash)
- Debt $40 Million 50% D/A Ratio
- Equity $40 Million 50% Equity


• Change to Earnings Distributions:
o Have Regular Dividend Paid Quarterly
- 10%-20% of Percentage of Earnings set by Chairman or CEO paid out for first through third quarters.
- Remainder of years earnings paid out at End of Year as a sort of True up.
o Allocate % of earnings to regular Share Buyback for shares.
- Needed because it wont let a subsidiary you control buy back its own shares.
- Would only work on public shares.
- Ability to do it quarterly as suggested with dividends above.


• Option for Stock Splits (2 for 1) or (3 for 1) Must Maintain minimum value of $10/Share