United Adopts Tax Benefits Preservation Plan To Protect Valuable Tax Assets
As of Sept.30, 2020, UAL reported consolidated federal NOLs of approximately
In light of the volatility and decline in the market price of UAL's common stock resulting from the sharp decline in demand for air travel caused by the COVID-19 pandemic and other macroeconomic factors and in light of potential transactions involving the sale or issuance of UAL common stock, UAL's Board of Directors determined to adopt the Plan to prevent an inadvertent impairment of the Company's NOLs.
Pursuant to the Plan, UAL will issue, by means of a dividend, one preferred share purchase right for each outstanding share of UAL common stock to stockholders of record at the close of business on
UAL intends to submit the Plan to a vote of its stockholders at its 2021 annual meeting. The Plan will expire on the first business day following the certification of the voting results for UAL's 2021 annual meeting, unless UAL's stockholders ratify the Plan at such meeting, in which case the Plan will continue in effect until
Under the Plan, the rights generally become exercisable only if a person or group (an "acquiring person") acquires beneficial ownership of 4.9% or more of the outstanding shares of UAL common stock in a transaction not approved by the Board. In that situation, each holder of a right (other than the acquiring person, whose rights will become void and will not be exercisable) will be entitled to purchase, at the then-current exercise price, additional shares of UAL common stock at a 50% discount. The Board, at its option, may exchange each right (other than rights owned by the acquiring person that have become void) in whole or in part, at an exchange ratio of one share of UAL common stock per outstanding right, subject to adjustment. Except as provided in the Plan, the Board is entitled to redeem the rights at
If a person or group beneficially owns 4.9% or more of the outstanding shares of UAL common stock prior to today's announcement of the Plan, then that person's or group's existing ownership percentage will be grandfathered. However, grandfathered shareholders will generally not be permitted to acquire any additional shares.
Additional information regarding the Plan will be contained in a Current Report on Form 8-K to be filed by UAL with the
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
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