Section 260.017 - Stock Dividend(a) The term "stock dividend" as used in subdivision (f) of Section 25017 of the Code and this section means the issuance of additional shares (including treasury shares) of the issuer to its existing shareholders, or to the shareholders of a class, pro rata according to the shares previously held (except for any cash or scrip paid for fractional shares), without consideration other than the transfer from surplus to stated capital of an amount equal to or greater than the par, stated or market value of the shares distributed, but without any other consideration being paid by the shareholders, and not by an amendment to the articles of incorporation stating the effect on outstanding shares. The term "stock dividend" does not include a stock split (as defined in Section 260.103.2 of these rules), exchange or reclassification of shares.(b) A stock dividend is not payable "solely in shares of such common stock" within the meaning of subdivision (f) of Section 25017 of the Code when the shareholders are given an option to accept either cash or the additional shares of common stock.(c) A stock dividend is not payable "in shares of such common stock, if the corporation has no other class of voting stock outstanding" within the meaning of subdivision (f) of Section 25017 of the Code unless (1) such dividend is payable in shares of voting common stock and (2) such voting common stock is of the same class as the class upon which the dividend is paid.(d) Stock dividends which are included in the definition of "sale" are transactions requiring qualification under Section 25110 or 25120 of the Code, as appropriate, unless otherwise exempted by Section 25100, 25102, 25103 or 25105 of the Code.Cal. Code Regs. Tit. 10, § 260.017
1. Amendment filed 8-7-85; effective thirtieth day thereafter (Register 85, No. 32). Note: Authority cited: Section 25610, Corporations Code. Reference: Sections 25017, 25100, 25102, 25103, 25105, 25110 and 25120, Corporations Code.
1. Amendment filed 8-7-85; effective thirtieth day thereafter (Register 85, No. 32).