Imation Adopts Shareholder Rights Plan To Protect NOLs

(RTTNews) - Imation Corp. (IMN), a data storage and data security company, said its Board of Directors has adopted a shareholder rights plan to preserve the value of its significant net operating loss carryforwards or NOLs and other related tax assets.

The company intends to seek shareholder approval of the rights plan at its 2016 Annual Meeting of Shareholders.

The company's ability to utilize these tax assets would be substantially limited upon an "ownership change." An "ownership change" would occur if the company's "5 percent shareholders" increase their ownership in Imation common stock by more than 50 percentage points during a rolling three-year period.

The rights plan was adopted to reduce the likelihood of an "ownership change" occurring by deterring the acquisition of company stock by persons or groups that would create such "5% shareholders."

As part of the rights plan, the Board declared a dividend of one right for each outstanding share of its common stock to stockholders of record at the close of business on September 10.

Initially, the rights will not be exercisable and will be attached to all common stock and no separate rights certificates will be distributed.

If any person or group acquires beneficial ownership of 4.9 percent or more of the outstanding shares of the company's common stock without the Board's approval, significant dilution in the economic interest and voting power of such person or group would occur.

Existing shareholders who currently beneficially own 4.9 percent or more of the outstanding shares of common stock will cause this dilutive event to occur only if they acquire beneficial ownership of additional common stock of the company in an amount in excess of 0.5 percent of the outstanding shares of common stock.

The rights expire on August 7, 2018 unless terminated earlier.