LivePerson Adopts Tax Benefits Preservation Plan To Protect Valuable Tax Assets
Preserving long-term stockholder value by adopting a rights plan intended to protect tax assets effective immediately, to be submitted for stockholder ratification at 2024 annual meeting
The Company's NOL Plan is similar to NOL Plans adopted by other companies with significant NOL tax assets. The purpose of the NOL Plan is to reduce the risk of substantial impairment to the Company's NOL assets that could result from inadvertent triggering of an "ownership change" within the meaning of Section 382 of the Internal Revenue Code. In general, an "ownership change" would occur if the Company's "5% stockholders" (within the meaning of Section 382 of the Internal Revenue Code) increase their aggregate ownership in LivePerson over a rolling three-year period by more than 50 percentage points over their lowest aggregate ownership percentage.
The Board has adopted the NOL Plan after determination that, as a result of a recently announced accumulation of more than 10% of the Company's common stock by a new stockholder, taken together with other changes in ownership of LivePerson common stock over the last three years, the Company is significantly closer to triggering an "ownership change" within the meaning of Section 382, which would substantially impair its ability to utilize its NOLs.
LivePerson intends to submit the NOL Plan for stockholder ratification at its 2024 Annual Meeting of Stockholders. The NOL Plan is not designed to prevent any action that the Board determines is in the best interest of all LivePerson stockholders.
The NOL Plan aims to preserve the Company's NOL assets by creating a disincentive for any stockholder to accumulate beneficial ownership of LivePerson common stock of 4.9% or more, or further accumulate LivePerson common stock if the stockholder's beneficial ownership already exceeds 4.9%, in each case without the approval of the Board. If a stockholder beneficially owns 4.9% or more of the outstanding shares of LivePerson common stock prior to today's announcement of the Plan, then that stockholder's existing ownership percentage will be exempted. However, such stockholder will not be permitted under the NOL Plan to acquire any additional shares without approval of the Board.
In connection with its adoption of the NOL Plan, the Board declared a dividend of one "right" under the NOL Plan for each outstanding share of LivePerson common stock. The dividend will be made to holders of record as of the close of business on
The rights will expire on
There is no assurance, however, that the NOL Plan will prevent an "ownership change" within the meaning of Section 382 and it is possible that acquisitions or sales of LivePerson common stock by other persons or groups, not yet publicly disclosed, may already have resulted in an "ownership change".
Further details about the NOL Plan will be contained in a Form 8-K and in a Registration Statement on Form 8-A to be filed with the
LivePerson (NASDAQ: LPSN) is the global leader in enterprise conversations. Hundreds of the world's leading brands — including HSBC, Chipotle, and
Statements in this press release regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding LivePerson's plan to seek stockholder ratification of the NOL Plan at its 2024 Annual Meeting of Stockholders; LivePerson's future
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