What is the Tax Benefit Preservation Plan (TBPP) and why is it important for Ford?

The Tax Benefit Preservation Plan (TBPP) is a corporate governance measure designed to protect a company's ability to utilize its valuable tax assets, such as net operating loss (NOL) carryforwards. These assets can significantly reduce future tax liabilities. The TBPP aims to prevent 'ownership shifts' that could trigger a limitation under tax laws (like Section 382 of the Internal Revenue Code), thereby preserving the value of these tax benefits for the company and its shareholders.

What specifically did the amendment to the TBPP change?

The amendment, known as Amendment No. 1 to the TBPP, primarily extended the expiration date of the plan. It moved the expiration from September 11, 2012, to September 30, 2015. The purpose of this extension is to continue the protection of Ford's tax assets for a longer period.

Why did Ford feel the need to extend this plan?

Ford extended the TBPP to ensure the continued preservation of its substantial tax assets. These assets are crucial for offsetting future taxable income and reducing the company's tax burden. The extension provides greater certainty that these benefits will remain available to Ford, supporting its financial strategy and long-term profitability.

Are there any conditions for the extended TBPP's validity?

Yes, the extension to September 30, 2015, is subject to earlier termination events. One such event is the final adjournment of Ford's 2013 annual meeting of shareholders if shareholder approval for the extension has not been obtained by that time. This suggests that while the Board approved the extension, shareholder ratification might be sought or required.

F 8-K: Material Agreements & Shareholder Matters

Summary

Ford Motor Company (F) filed a Form 8-K on September 12, 2012, to report a material modification to the rights of its security holders and the entry into a material definitive agreement. Specifically, the company announced an amendment to its Tax Benefit Preservation Plan (TBPP), extending its expiration date from September 11, 2012, to September 30, 2015. This plan is crucial for preserving Ford's substantial tax assets, which could be jeopardized by significant changes in ownership. The amendment was unanimously approved by the Board of Directors and aims to maintain the value of these tax assets for the company and its shareholders. The extension of the TBPP is a strategic move to ensure Ford can continue to utilize its net operating loss (NOL) carryforwards and other tax assets. These assets can significantly reduce future tax liabilities, making their preservation vital for financial health and future profitability. The filing indicates that the original TBPP was established in September 2009, and this amendment represents a continuation of that strategy.

Key Highlights

1Ford Motor Company extended its Tax Benefit Preservation Plan (TBPP) through an amendment.
2The TBPP's expiration date was moved from September 11, 2012, to September 30, 2015.
3The primary purpose of the TBPP is to preserve Ford's substantial tax assets.
4This extension was unanimously approved by Ford's Board of Directors.
5The amendment aims to protect the company's ability to utilize net operating loss (NOL) carryforwards and other valuable tax assets.
6The original TBPP was put in place in September 2009.
7Shareholder approval for the extension may be required by the 2013 annual meeting to avoid earlier termination.

FORD MOTOR CO 8-K Report, Material Agreement (Sep 12, 2012)

Summary

Key Highlights

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