Ford Motor announces plan to preserve tax assets, protect shareholders

By Lisa Kerner

Charlotte, N.C., Sept. 11 - The board of directors of Ford Motor Co. adopted a tax benefit preservation plan designed to protect its "substantial" tax assets in the event of an ownership change under Internal Revenue Service rules, the company announced on Friday.

An ownership change would occur if persons holding 5% collectively of Ford stock increase their ownership in the company by more than 50 percentage points over a rolling three-year period with certain exceptions.

According to Ford, through year-end 2008 it had tax attributes, including net operating losses, capital losses and tax credit carryforwards, that would offset about $19 billion of taxable income.

Ford's board, as part of the tax benefit preservation plan, declared a dividend of one preferred share purchase right for each outstanding share of its common stock and class B stock to be distributed to stockholders of record as of Sept. 25.

The rights will be triggered if any person or group acquires 4.99% of more of Ford's outstanding shares of common stock, with exceptions.

"This plan is designed to protect shareholder value and safeguard valuable tax attributes by reducing the likelihood of an unintended 'ownership change' through actions involving Ford common stock," said Ford chief financial officer Lewis Booth in a news release.

Ford said the preferred share purchase rights will expire on Sept. 11, 2012; when they are redeemed or exchanged; or if shareholders do not approve the plan at the Dearborn, Mich., car company's 2010 annual meeting.

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