Exercise Extreme Caution when using many of our free forms - or any legal material. While they may provide general ideas on format & content, validity requirements can and do vary greatly from state to state. Many MUST be Properly Modified for your own location and circumstances. (Hint: If in doubt it's usually safer to include unneeded clauses than to leave out necessary ones. . . . but it's even safer to consult a competent source or use current, state specific ones like ours mentioned below.) Also, we urge people (and lawyers too) to read our Relying On Legal Info FAQ.
In addition to fixed-rate dividend payments, owners of participating preferred stock have the opportunity to participate directly in corporate profits. Preferred stock XYZ 5% participating to 10% means that a shareholder receives a 5% fixed-rate dividend annually; and, if the company had a particularly profitable year, the participating preferred shareholder may receive up to 5% in additional interest for the year.
The Current Page is:
Participating Preferred Stock