Centex announced Feb. 24 that it will be joining the K. Hovnanian and M/I Homes in adopting poison pill provisions, protecting the company from change-of-ownnership rules that reduce tax write-offs if more than 5% of stock is purchased.

"This rights plan serves the interests of all stockholders and attempts to protect against limitations on our ability to use deferred tax assets to offset the company's tax liabilities in the future," Timothy R. Eller, chairman and CEO of Centex said in a statement. "The rights plan is not intended for defensive, anti-takeover purposes. Once the deferred tax assets have been fully realized, the Board intends to terminate the rights plan," Mr. Eller said.

Under the company's plan, any stockholder or group that acquires beneficial ownership of 4.9% or more of Centex's outstanding shares of common stock without board approval would trigger significant dilution in the economic interest and voting power of such stockholder or group. The board may exempt certain stock acquisitions from provisions of the rights plan if it determines that the acquisitions will not jeopardize the deferred tax assets or otherwise serve the company's best interests, the company statement read.

The rights plan will expire on Feb. 24, 2019, or earlier if: (1) the board determines that the plan is no longer needed to preserve the deferred tax assets due to the implementation of legislative changes, (2) the board determines, at the beginning of a specified period, that no tax benefits may be carried forward, or (3) certain other events occur as described in the rights plan. The company plans to submit the continuation of the rights plan to stockholders for approval within the next 12 months; failure to obtain stockholders' approval will result in the rights plan's termination on Feb. 24, 2010. Centex expected to file details of the rights plan with the Securities and Exchange Commission Tuesday.