tw telecom adopts rights plan

By Lisa Kerner

Charlotte, N.C., Jan. 20 - tw telecom inc. adopted a stockholder rights plan that is effective as of Tuesday.

The plan is designed to protect tw telecom's federal net operating losses from restrictions under the Internal Revenue Code Section 382.

tw telecom had a net operating loss carryforward of about $1 billion as of Dec. 31, according to a company news release.

Under the rights plan, a person or group obtaining beneficial ownership of 4.9% or more of tw telecom's common stock triggers dilution in the person or group's voting power and economic interest.

Existing shareholders with greater than 4.9% ownership who acquire at least an additional 0.5% of the company's common stock will also cause a triggering event.

The rights will expire upon the earliest of a determination by tw telecom's board of directors that preservation of the net operating losses is no longer needed; Jan. 20, 2010 if stockholders don't approve the plan by that date; or Jan. 20, 2012 if shareholder approval is obtained.

tw telecom said it plans to submit the rights plan for stockholder approval at the company's 2009 annual meeting unless legislation eliminates the Section 382 issue.

"We have made significant investments while building a substantial business, and do not want to lose the associated tax benefits due to the unintended consequences of Section 382," tw telecom chairman, chief executive officer and president Larissa Herda said.

tw telecom is a managed network services provider located in Littleton, Colo.

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