Meritage Homes adopts bylaw provision to protect use of carryforwards; special meeting set for Feb. 16

By Lisa Kerner

Charlotte, N.C., Dec. 24 - Meritage Homes Corp. announced it is taking steps to preserve the long-term value to the company of some tax assets associated with net operating loss carryforwards in the event of an ownership change as defined under tax law.

The company has adopted a bylaw provision restricting transfers or issuances of stock that would create more than 4.9% stockholders or that would change the ownership percentage of such holders.

In addition, Meritage shareholders will be asked to approve a provision in the company's articles of incorporation creating the same transfer restrictions at a special meeting on Feb. 16, a company news release said.

Record date for the special meeting is Jan. 5.

Meritage estimated it had, at Sept. 30, $137 million in deferred tax assets, before reserves, generated by about $360 million in net operating losses.

"Without these changes, a potential unintended consequence of changes in the stock ownership of Meritage Homes investors could limit our potential realization of deferred tax assets," Meritage chief financial officer Larry Seay said.

"The steps we have adopted are intended to allow stockholders to accumulate stock with board approval, while preserving our tax assets with certain transfer restrictions."

Meritage is a Scottsdale, Ariz.-based homebuilder.

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