17-6420.   Dividends; declaration and payment;determination of net profits by "wasting assets" corporation.(a) The directors of every corporation, subject to any restrictions containedin its articles of incorporation, may declare and pay dividends upon the sharesof its capital stock, or to its members if the corporation is a nonstockcorporation, either (1) out of its surplus, as defined in and computed inaccordance with K.S.A. 17-6404 and 17-6604, and amendments thereto, or (2) incase there shall be no such surplus, out of its net profits for the fiscal yearin which the dividend is declared or the preceding fiscal year, or both. If thecapital of the corporation, computed in accordance with K.S.A. 17-6404 and17-6604, and amendments thereto, shall have been diminished by depreciation inthe value of its property, or by losses, or otherwise, to an amount less thanthe aggregate amount of the capital represented by the issued and outstandingstock of all classes having a preference upon the distribution of assets, thedirectors of such corporation shall not declare and pay out of such net profitsany dividends upon any shares of any classes of its capital stock until thedeficiency in the amount of capital represented by the issued and outstandingstock of all classes having a preference upon the distribution of assets shallhave been repaired. Nothing in this subsection shall invalidate or otherwiseaffect a note, debenture or other obligation of the corporation paid by it as adividend on shares of its stock, or any payment made thereon, if at the timesuch note, debenture or obligation was delivered by the corporation, thecorporation had either surplus or net profits as provided in clause (1) or (2)from which the dividend could lawfully have been paid.

      (b)   Subject to any restrictions contained in its articles 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 ofnatural resources or other wasting assets, including patents, or engagedprimarily in the liquidation of specific assets, may determine the net profitsderived from the exploitation of such wasting assets or the net proceedsderived from such liquidation without taking into consideration the depletionof such assets resulting from lapse of time, consumption, liquidation orexploitation of such assets.

      History:   L. 1972, ch. 52, § 47;L. 1988, ch. 99, § 18;Revived and amend., L. 1988, ch. 100, § 18;L. 2004, ch. 143, § 20; Jan. 1, 2005.