(Source: PRNewswire-FirstCall)
FORT LAUDERDALE, Fla., Sept. 9 /PRNewswire-FirstCall/ -- Spherion Corporation today announced that its board of directors amended its existing shareholder rights plan to help preserve and maximize the value of net operating loss benefits (NOLs) and other deferred tax assets of Spherion. The book value of the NOLs and other deferred tax assets available to the Company is $147 million, as reflected on the Company's balance sheet at June 28, 2009. This amount is available to reduce future taxable income, if properly preserved.
Spherion's ability to use its net operating losses and other tax benefits would be substantially limited by Section 382 if an "ownership change" occurred - generally, a greater than 50 percentage point change in ownership of common stock by shareholders owning (or deemed to own under Section 382 of the Code) 5 percent or more of a corporation's common stock over a defined period of time. The Company's shareholder rights plan was amended to reduce the likelihood of an unintended "ownership change" occurring as a result of ordinary buying and selling of Spherion's common shares.
Pursuant to the terms of the amended shareholder rights plan, any shareholder or group that acquires beneficial ownership of 4.9 percent (reduced from 15 percent prior to the amendment) or more of Spherion's outstanding common shares without the approval of Spherion's board of directors would be subjected to significant dilution in its holdings. Existing shareholders holding 4.9 percent or more of Spherion's common shares will not be considered acquiring persons unless they acquire an additional 1 percent (or greater) interest in the common shares of Spherion. The rights plan amendment does not ensure that the Company's NOLs will be protected from an "ownership change" as defined in the tax laws, and there can be no assurance that such an "ownership change" will not occur, but the board believes that the amendment to the existing rights plan lessens the chance that an unintended "ownership change" would occur.
The rights plan was not amended as an anti-takeover measure. The shareholder rights plan will expire on April 1, 2014 or upon the earlier exchange or redemption of the rights issued under the rights plan, and the amendment relating to preserving tax assets will expire earlier if (i) the board of directors determines the rights plan is no longer needed to preserve the deferred tax assets due to the implementation of legislative changes or (ii) the board of directors determines, at the beginning of a specified period, that no tax benefits may be carried forward.
