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Screenshot of a breaking news alert e-mail from Q2 2017
FXCM Inc. (NYSE:FXCM), today announced that its board of directors has voted to extend and amend the terms of the company’s stockholder rights plan. The rights have been amended in order to protect the interests of the company and its stockholders by helping preserve the value of the company’s net operating loss carryforwards and tax credits. The amended rights plan is similar to shareholder rights plans adopted by several other public companies with significant net operating loss carryforwards.
In addition to protecting the company’s net operating loss carryforwards and tax credits, the amended rights plan, by maintaining the fundamental features of the rights plan adopted in 2015, is designed to assure that all stockholders of the company receive fair and equal treatment in the event of any proposed takeover of the company, to guard against two-tier or partial tender offers, open market accumulations and other tactics designed to gain control of the company without paying all stockholders a fair price, and to enhance the board’s ability to negotiate with a prospective acquirer.
The amendment was not adopted in response to any effort to acquire control of FXCM.
Effect of the Amendment
Each right initially entitles stockholders to buy one one-thousandth of a share of the Series A Junior Participating Preferred Stock of the company, at an initial exercise price of $44.12, in the event the rights become exercisable. As amended, the rights generally become exercisable if a person or group becomes the beneficial owner of 4.9% or more of (a) the outstanding Class A common stock of the company or (b) the fair market value of all capital stock of the company. Prior to this amendment, the beneficial ownership percentage threshold to trigger the rights plan was 10% of all voting securities, a trigger that, after this amendment, remains in place in addition to the above mentioned 4.9% trigger.
Any person or group that owns 4.9% or more of FXCM’s outstanding Class A common stock or the fair market value of all capital stock of the company as of January 26, 2016 will not trigger exercisability of the rights, so long as they do not acquire any additional shares. In each case, rights held by the person or group triggering the rights will become void and will not be exercisable.
The rights will expire on January 26, 2019, unless the rights are earlier redeemed or exchanged in accordance with the rights plan or the rights plan is earlier terminated by the company’s board of directors.
For the official release click here.