10-2262. Surplus and dividends
Each year a corporation shall set apart, as earned surplus, all of its net earnings
until such earned surplus shall equal the total of the capital and paid-in surplus then
outstanding or ten per cent of the total outstanding borrowings of the corporation
whichever is greater. The earned surplus shall be held in cash, shall be invested in
United States government bonds or such other securities as may be legal investments under
section 10-2263 and shall be kept and used to meet losses and contingencies of such
corporation. Whenever the amount of earned surplus shall become impaired it shall be
built up again to the required amount in the manner provided for its original
accumulation. Net earnings and surplus shall be determined by the board of directors,
after providing for such reserves as the directors deem desirable and the directors'
determination made in good faith shall be conclusive on all persons. After setting aside
the required reserves the directors may declare dividends from the balance of net
earnings.
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