§ 170. Dividends;
payment; wasting asset corporations.
(a) The directors of every corporation, subject to
any restrictions contained in its certificate of incorporation, may declare and
pay dividends upon the shares of its capital stock, or to its members if the
corporation is a nonstock corporation organized for profit, either (1) out of
its surplus, as defined in and computed in accordance with §§ 154 and 244 of
this title, or (2) in case there shall be no such surplus, out of its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. If the capital of the corporation, computed in
accordance with §§ 154 and 244 of this title, shall have been diminished by
depreciation in the value of its property, or by losses, or otherwise, to an
amount less than the aggregate amount of the capital represented by the issued
and outstanding stock of all classes having a preference upon the distribution
of assets, the directors of such corporation shall not declare and pay out of
such net profits any dividends upon any shares of any classes of its capital
stock until the deficiency in the amount of capital represented by the issued
and outstanding stock of all classes having a preference upon the distribution
of assets shall have been repaired. Nothing in this subsection shall invalidate
or otherwise affect a note, debenture or other obligation of the corporation
paid by it as a dividend on shares of its stock, or any payment made thereon,
if at the time such note, debenture or obligation was delivered by the
corporation, the corporation had either surplus or net profits as provided in
clause (1) or (2) of this subsection from which the dividend could lawfully
have been paid.
(b) Subject to any restrictions contained in its certificate of
incorporation, the directors of any corporation engaged in the exploitation of
wasting assets
(including but not limited to a corporation engaged in the exploitation of
natural resources or other wasting assets, including patents, or engaged primarily
in the liquidation of specific assets) may determine the net profits derived
from the exploitation of such wasting assets or the net proceeds derived from
such liquidation without taking into consideration the depletion of such assets
resulting from lapse of time, consumption, liquidation or exploitation of such
assets.
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