Certificate of Designation of Preferred Shares (Convertible, Double-Dip Participating)

A Certificate of Designation of Preferred Shares (Convertible, Double-Dip Participating) is a legal template that outlines the rights and obligations associated with a specific class of preferred shares issued by a corporation under USA law. This template document is customized to include specific provisions related to convertible and double-dip participating preferred shares.

Convertible preferred shares are a type of equity security that grants shareholders the option to convert their preferred shares into a predetermined number of common shares of the corporation, usually at a specified conversion ratio. This template would specify the terms and conditions under which the conversion can take place, including the conversion price, conversion ratio, and any adjustments or limitations to the conversion feature.

Double-dip participating preferred shares, on the other hand, provide the holders with both a preferential dividend payout and the right to participate alongside common shareholders in the distribution of any remaining profits. This means that after the preferred shareholders receive their preferential dividends, they can also share in the wealth created by the company's success, receiving additional payments alongside common shareholders.

The Certificate of Designation would further enumerate the specific rights, preferences, privileges, and restrictions applicable to the convertible, double-dip participating preferred shares. This may include voting rights, liquidation preferences, redemption provisions, restrictions on transfer, and any other special considerations related to the preferred shares.

This legal template serves as an important document for corporations looking to issue preferred shares with convertible and double-dip participating features. It provides clarity and transparency to both the corporation and the shareholders, ensuring that all parties are fully aware of their rights and obligations.