Home / Knowledge / News / Apparel/Garments / JCPenney amends stockholder rights plan for tax benefit
JCPenney amends stockholder rights plan for tax benefit
29
Jan '14
J. C. Penney Company, Inc. announced that its Board of Directors has acted to protect the Company's valuable net operating loss carryforwards ("NOLs") by amending and extending the Company's existing stockholder rights plan.

The Company has over $2 billion in NOLs, which can be used in certain circumstances to offset future taxable income and reduce federal income tax liability.  The Company's ability to use its NOLs would be substantially limited if an "ownership change" under Section 382 of the Internal Revenue Code were to occur.

Ownership changes under Section 382 generally relate to the cumulative change in ownership among stockholders with an ownership interest of 5% or more (as determined under Section 382's rules) over a rolling three year period.  The amended rights plan was adopted by the Board to reduce the likelihood of an "ownership change" occurring.

The amendments to the Company's rights plan include extending the plan's expiration date from August 20, 2014 to January 26, 2017, and lowering the beneficial ownership threshold for a person or group to become an "acquiring person" under the plan from 10% to 4.9%.

Under the amended rights plan, if any person or group acquires 4.9% or more of the outstanding shares of common stock of the Company without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the ownership interest of such person or group.  However, existing stockholders who currently own 4.9% or more of the outstanding shares of common stock will trigger a dilutive event only if they acquire additional shares, subject to specified exceptions.

The purpose of the amended rights plan is to protect stockholder value by preserving the Company's ability to fully use its NOLs.  The amended rights plan is similar to plans adopted by other public companies with significant net operating losses.

The amended rights plan, which takes effect immediately, will continue in effect until January 26, 2017, subject to earlier expiration in specific circumstances.  The Company expects to submit the amended rights plan to a vote at the next annual meeting of stockholders in May 2014.  If stockholders do not approve the amended rights plan, it will be terminated. The full text of the amended rights plan will be filed with the Securities and Exchange Commission.

Concurrently with the amendment and extension of the rights plan, the Board of Directors has adopted certain amendments to the Company's certificate of incorporation which are also designed to preserve the Company's ability to use its NOLs. 

The charter amendments would generally void transfers of shares that would result in the creation of a new 4.9% stockholder or an existing 4.9% stockholder acquiring additional shares.  The Company expects to submit the charter amendments to a stockholder vote at the 2014 annual meeting.  If stockholders do not approve the charter amendments, they will not become effective.

JCPenney


Must ReadView All

Global economic upswing became broader & stronger: IMF

Textiles | On 19th Apr 2018

Global economic upswing became broader & stronger: IMF

The global economic upswing that began around mid-2016 has become...

Courtesy: ITMA

Textiles | On 19th Apr 2018

ITMA 2019 expanding space due to overwhelming response

Due to overwhelming response, the exhibition space has been increased ...

BIDA’s Europe trip to showcase a different Bangladesh

Apparel/Garments | On 19th Apr 2018

BIDA’s Europe trip to showcase a different Bangladesh

The Bangladesh Investment Development Authority (BIDA) is taking a...

Interviews View All

Arvind Saraf
Triveni Sarees

e-Commerce is still evolving fast with constant flux and surprises

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Erik Sy

Manila-based CustomThread is a start-up offering premium custom apparel...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Adriano Goldschmied
AG Jeans

The hype around 'designer jeans' was created by him. And the new wave of...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


April 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.9%
No
12.6%
Skip
17.5%

Total Votes: 103

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.1%
No
29.1%
Skip
7.8%

Total Votes: 103

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.4%
No
8.7%
Skip
3.9%

Total Votes: 103

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
7.8%
Skip
9.7%

Total Votes: 103


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search