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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 29, 2001
(Date of earliest event reported)
ALLIANCE FIBER OPTIC PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-31857 77-0554122
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
735 North Pastoria Avenue, Sunnyvale, CA 94085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 736-6900
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Item 5. Other Events.
On May 18, 2001, the Board of Directors of Alliance Fiber Optic
Products, Inc. (the "Company") declared a dividend distribution of one "Right"
for each outstanding share of common stock, par value $0.001 per share (the
"Common Stock"), of the Company to stockholders of record at the close of
business on June 12, 2001 (the "Record Date"). Except as set forth below, each
Right, when exercisable, entitles the registered holder to purchase from the
Company one one-thousandth of a share of a new series of preferred stock,
designated as Series A Participating Preferred Stock, par value $0.001 per share
(the "Preferred Stock"), at a price of $80.00 per one one-thousandth of a share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Mellon Investor Services LLC, as "Rights Agent."
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earliest of the following: (i) a public
announcement that a person, entity or group of affiliated or associated persons
and/or entities (an "Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (other than (A) as a result of repurchases of
stock by the Company or certain inadvertent actions by institutional or certain
other stockholders, (B) the Company, any subsidiary of the Company or any
employee benefit plan of the Company or any subsidiary, (C) Foxconn Holding
Limited (which currently owns in excess of fifteen percent (15%) of the
outstanding shares of Common Stock), so long as such entity, together with its
affiliated or associated persons and/or entities, does not increase its
beneficial ownership by more than one percent (1%) of the outstanding shares of
Common Stock above the percentage held on May 18, 2001 (or such lesser
percentage as may result following any transfer of securities after such date
until Foxconn beneficially owns less than fifteen percent (15%) of the
outstanding shares of Common Stock)) and (D) certain other instances set forth
in the Rights Agreement); or (ii) ten (10) business days (unless such date is
extended by the Board of Directors) following the commencement of a tender offer
or exchange offer which would result in any person, entity or group of
affiliated or associated persons and/or entities becoming an Acquiring Person
(unless such tender offer or exchange offer is a Permitted Offer (defined
below)).
Until the Distribution Date (or earlier redemption or expiration of the
Rights, if applicable), (i) the Rights will be evidenced by certificates for
Common Stock and will be transferred only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date upon transfers
or new issuances of the Common Stock will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any
certificates for outstanding Common Stock will also constitute the transfer of
the Rights associated with such Common Stock. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the earliest of (i) May 29, 2011, (ii) consummation of a merger
transaction with a person, entity or
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group who (x) acquired Common Stock pursuant to a Permitted Offer (as defined
below) and (y) is offering in the merger the same price per share and form of
consideration paid in the Permitted Offer or (iii) redemption or exchange of the
Rights by the Company as described below.
The number of Rights associated with each share of Common Stock shall
be proportionately adjusted to prevent dilution in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the Common Stock. The
Purchase Price payable, and the number of one one-thousandths of a share of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights, options or warrants to subscribe for
Preferred Stock, certain convertible securities or securities having the same or
more favorable rights, privileges and preferences as the Preferred Stock at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of earnings or retained
earnings) or of subscription rights, options or warrants (other than those
referred to above). With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustments require an adjustment of at
least one percent (1%) in such Purchase Price.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction
(whether or not the Company is the surviving corporation) or fifty percent (50%)
or more of the Company's assets or earning power are sold (in one transaction or
a series of transactions), proper provision shall be made so that each holder of
a Right (other than an Acquiring Person) shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, that
number of shares of common stock of either the Company, in the event that it is
the surviving corporation of a merger or consolidation, or the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two (2) times the Purchase Price (such right being called the "Merger Right").
In the event that a person, entity or group becomes the beneficial owner of
fifteen percent (15%) or more of the outstanding shares of Common Stock (unless
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined prior to the date of the first
acceptance of payment for any of such shares by at least a majority of the
members of the Board of Directors who are not officers of the Company and are
not Acquiring Persons (or affiliated or associated persons and/or entities
thereof) to be both adequate and otherwise in the best interests of the Company
and its stockholders (a "Permitted Offer")), then proper provision shall be made
so that each holder of a Right will, for a sixty (60) day period (subject to
extension under certain circumstances) thereafter, have the right to receive
upon exercise that number of shares of Common Stock (or, at the election of the
Company, which election may be obligatory if sufficient authorized shares of
Common Stock are not available, a combination of Common Stock, property, other
securities (e.g., Preferred Stock) and/or cash (including by way of a reduction
in the Purchase Price)) having a market value of two (2) times the Purchase
Price (such right being called the "Subscription Right"). The holder of a Right
will continue to have the Merger Right whether or not such holder exercises the
Subscription Right. Notwithstanding the
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foregoing, upon the occurrence of any of the events giving rise to the
exercisability of the Merger Right or the Subscription Right, any Rights that
are or were at any time after the Distribution Date owned by an Acquiring Person
(or affiliated or associated persons and/or entities thereof) shall immediately
become null and void.
At any time prior to the earlier to occur of (i) a person, entity or
group becoming an Acquiring Person or (ii) the expiration of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $0.001
per Right (the "Redemption Price"), which redemption shall be effective upon the
action of the Board of Directors. Additionally, the Company may, following a
person, entity or group becoming an Acquiring Person, redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i) if
such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Person (or certain related persons and/or entities) or (ii) following
an event giving rise to, and the expiration of the exercise period for, the
Subscription Right if and for as long as the Acquiring Person triggering the
Subscription Right beneficially owns securities representing less than fifteen
percent (15%) of the outstanding shares of Common Stock and at the time of
redemption there are no other Acquiring Persons. The redemption of Rights
described in the preceding sentence shall be effective only as of such time when
the Subscription Right is not exercisable, and in any event, only after ten (10)
business days' prior notice. Upon the effective date of the redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Subject to applicable law, the Board of Directors, at its option, may
at any time after a person, group or entity becomes an Acquiring Person (but not
after the acquisition by such Acquiring Person of fifty percent (50%) or more of
the outstanding shares of Common Stock), exchange all or part of the then
outstanding and exercisable Rights (except for Rights which have become void)
for shares of Common Stock at a rate of one share of Common Stock per Right
(subject to adjustment) or, alternatively, for substitute consideration
consisting of cash, securities of the Company or other assets (or any
combination thereof).
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $25.00. In the event of liquidation, the holders of shares of
Preferred Stock will receive a preferred liquidation payment equal, per share,
to the greater of $1,000.00 or 1,000 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 1,000 votes, voting together with
the shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary antidilution provisions. Fractional
shares of Preferred Stock will be issuable; however, the Company may elect to
(i) distribute depositary receipts in lieu of such fractional shares and (ii)
make an adjustment in cash, in lieu of fractional shares other than
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fractions that are multiples of one one-thousandth of a share, based on the
market price of the Preferred Stock prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights should not
be taxable to stockholders or to the Company, holders of Rights may, depending
upon the circumstances, recognize taxable income in the event (i) that the
Rights become exercisable for (x) Common Stock or Preferred Stock (or other
consideration) or (y) common stock of an acquiring company in the instance of
the Merger Right as set forth above or (ii) of any redemption or exchange of the
Rights as set forth above.
The Company and the Rights Agent retain broad authority to amend the
Rights Agreement; however, following any Distribution Date any amendment may not
adversely affect the interests of holders of Rights.
The foregoing description is qualified in its entirety by reference to
the description of the Rights and their terms set forth in the Rights Agreement,
a copy of which is filed herewith and incorporated herein by reference. A copy
of the press release issued on May 29, 2001, announcing the declaration of the
dividend of Rights, also is filed herewith and incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
4.1 Rights Agreement dated as of May 29, 2001 between Alliance
Fiber Optic Products, Inc. and Mellon Investor Services LLC,
which includes as Exhibit B the form of Rights Certificate and
as Exhibit C the Summary of Rights. Pursuant to the Rights
Agreement, printed Rights Certificates will not be mailed
until after the Distribution Date (as defined in the Rights
Agreement)(filed as Exhibit 4.1 to the Company's Registration
Statement on Form 8-A relating to the Series A Participating
Preferred Stock Purchase Rights and incorporated herein by
reference).
99.1 Press release dated May 29, 2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 29, 2001.
ALLIANCE FIBER OPTIC PRODUCTS, INC.
By /s/ John M. Harland
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Name: John M. Harland
Title: Vice President & CFO
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EXHIBIT INDEX
EXHIBIT
4.1 Rights Agreement dated as of May 29, 2001 between
Alliance Fiber Optic Products, Inc. and Mellon
Investor Services LLC, which includes as Exhibit B
the form of Rights Certificate and as Exhibit C the
Summary of Rights. Pursuant to the Rights Agreement,
printed Rights Certificates will not be mailed until
after the Distribution Date (as defined in the
Rights Agreement)(filed as Exhibit 4.1 to the
Company's Registration Statement on Form 8-A
relating to the Series A Participating Preferred
Stock Purchase Rights and incorporated herein by
reference).
99.1 Press release dated May 29, 2001.
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