Item
8.01 Other
Events
On
October 2, 2007, Optical Communication Products, Inc. (the “Company” or “OCP”)
began mailing the definitive proxy statement relating to the special meeting
of
stockholders of the Company, which is scheduled for October 31, 2007, to
vote on
the proposed merger by which Oplink Communications, Inc. (“Oplink”) would
acquire those shares of the Company not owned by Oplink (the
“merger”).
On
October 3, 2007, a complaint,
Merlin Partners, LP vs. Optical Communication
Products, Inc., Oplink Communications, Inc., et al.
, was filed in the Court
of Chancery of the State of Delaware by an entity identifying itself as a
stockholder of the Company purporting to represent a class of all stockholders
other than defendants. The lawsuit names the Company, all of the
members of the Company’s board of directors, a former director, and Oplink as
defendants. The complaint alleges, among other things, that Oplink
and the Company’s directors breached their fiduciary duties to the stockholders
of the Company by failing to disclose all material facts in the proxy statement
in connection with the merger and by failing to negotiate a higher merger
price. The complaint seeks, among other things, to enjoin the merger
or order defendants to pay monetary damages in an amount to be determined
at
trial.
On
October 23, 2007, the parties to the lawsuit, including the Company, executed
a
Memorandum of Understanding to settle the lawsuit. As part of the
settlement, the defendants deny all allegations of wrongdoing. The
settlement will be subject to customary conditions, including court approval
following notice to members of the proposed settlement class and consummation
of
the merger. If finally approved by the court, the settlement will
resolve all of the claims that were or could have been brought on behalf
of the
proposed settlement class in the action being settled, including all claims
relating to the merger, the merger agreement and any disclosure made in
connection therewith. In addition, in connection with the settlement,
the parties have agreed that plaintiffs’ counsel will petition the court for an
award of attorneys’ fees and expenses to be paid by us. The merger may be
consummated prior to final court approval of the settlement.
The
settlement will not affect the timing of the merger or the amount of merger
consideration to be paid in the merger.
Pursuant
to the proposed settlement, we have agreed to make the supplemental disclosures
set forth below; however, the Company does not make any admission that such
supplemental disclosures are material. The proxy statement for the
merger is supplemented by, and should be read in conjunction with, the
information set forth below.
Supplemental
Disclosure
1. The
section of the proxy statement entitled “Special Factors—Background of the
Merger,” which begins on page 8 of the proxy statement, is supplemented to add
the following sentences at the end of the third paragraph of page
10:
During
these discussions, Oplink informed Furukawa that, although Oplink had considered
a satisfactory post-acquisition supply agreement with Furukawa to be a material
term in its previous merger negotiations with OCP and Furukawa, it would
no
longer be seeking a new supply agreement as part of any acquisition transaction,
in an effort to simplify the negotiation of a transaction and narrow the
terms
to only those that the parties deemed most important.
2. The
section of the proxy statement entitled “Special Factors—Oplink’s Plans for OCP
after the Merger,” which begins on page 32 of the proxy statement, is
supplemented to add the following at the end of such section:
On
September 29, 2007, Robert Shih resigned as a director of the Company and
as an
officer of Oplink. Mr. Shih’s resignation resulted from a
disagreement with Joseph Y. Liu, Oplink’s President and Chief Executive Officer,
regarding Oplink’s potential strategies for the Company after completion of the
merger. Mr. Shih held the position of Vice President and “OCP
Liaison” at Oplink, and was likely to have been designated by Oplink to serve in
a senior executive position at OCP after the completion of the
merger. As such, Mr. Shih was likely to have been one of the persons
primarily responsible for the management of OCP’s business following the
closing. In the course of internal discussions within Oplink
regarding strategies for operating OCP’s business following the closing of the
merger, Mr. Liu and Mr. Shih came to disagree over basic business strategies
for
OCP, including the extent to which OCP’s business operations should be
integrated with Oplink’s operations post-closing and the relative priorities of
profitability versus revenue growth. It became clear that such
disagreements would lead to an untenable situation following the closing
of the
merger, so Mr. Shih resigned as an employee of Oplink and as a director of
OCP.
Oplink
continues to engage in internal discussions regarding strategies for operating
OCP’s business following the merger.
Oplink anticipates
that
after closing it will take steps to reduce costs at OCP, and that these steps
would include accelerating OCP’s existing plans to transfer its manufacturing to
China. OCP had previously determined to transfer certain
manufacturing operations to China. This transfer is underway and is
expected to continue whether or not the merger is consummated. The
cost reduction options being considered by Oplink include the possibility
of
selling one or more of OCP’s operating assets that Oplink may ultimately
determine are not essential to OCP’s post-closing operations. If the
merger is consummated, it is expected that the employment of Philip F. Otto,
OCP’s Chief Executive Officer, will terminate shortly after the closing of the
merger and that the employment of Frederic T. Boyer, OCP’s Chief Financial
Officer, will terminate after a post-closing transition period of approximately
three months. Except for a general intent to implement some of the
cost reduction measures being considered, the acceleration of OCP’s existing
plans to move manufacturing to China and the management changes referred
to
above, no final plans or decisions have been adopted by Oplink’s management or
board of directors with respect to post-closing strategies for OCP.
3. The
section of the proxy statement entitled “Important Information Regarding the
Company,” which begins on page 50 of the proxy statement, is supplemented to add
the following new subsection at the end of such section:
Sale
of Woodland Hills Facility
On
September 27, 2007, the Company entered into an Agreement of Purchase and
Sale
and Escrow Instructions with DS Ventures, LLC (the “buyer”), pursuant to which
the Company has agreed to sell its Woodland Hills, California facility to
the
buyer for the price of $28,000,000 in cash.
Under
the
purchase and sale agreement, the buyer has 30 days following the date of
the
agreement, or until October 29, 2007, to conduct a physical inspection and
examination of the property and to perform due diligence into certain matters
relating to the property (including environmental and land use
matters). The buyer has the right to terminate the purchase and sale
agreement at any time prior to the expiration of the 30-day period for any
reason or for no reason. If the 30-day period expires without the
buyer terminating the agreement, the closing of sale of the facility would
be
expected to occur on or about December 20, 2007. The closing of the
sale is not contingent upon the closing of the merger.
The
net
proceeds to the Company from the sale, if it closes, are expected to be
approximately $27,000,000.
Additional
Information and Where to Find It
This
communication may be deemed to be solicitation material in respect of the
proposed acquisition of the remaining shares of the Company by Oplink pursuant
to the merger. In connection with the proposed merger, the Company
has filed with the SEC a definitive proxy statement on October 2, 2007, a
Schedule 13E-3, most recently amended on October 12, 2007, and current reports
on Form 8-K on October 3, October 4 and October 10, 2007.
We urge
investors to read the definitive proxy statement and these other materials
carefully because they contain important information about the Company and
the
proposed acquisition
. Investors may obtain free copies of the
definitive proxy statement and white proxy card as well as other filed documents
containing information about the Company at http://www.sec.gov, the SEC’s Web
site. Free copies of the Company’s SEC filings are also available on
the investor relations portion of the Company’s web site at
www.ocp-inc.com
.
Participants
in the Solicitation
The
Company and its executive officers and directors may be deemed, under SEC
rules,
to be participants in the solicitation of proxies from the Company’s
stockholders with respect to the proposed merger. Information
regarding the officers and directors of the Company, including direct or
indirect interests in the transaction, by securities holdings or otherwise,
is
set forth in the definitive proxy statement and Schedule 13E-3 that the Company
filed with the SEC.