27 December 2011

GigOptix adopts stockholder rights plan

GigOptix Inc of San Jose, CA, USA (which supplies semiconductor and optical components including modulator and laser drivers and transimpedance amplifier ICs based on III-V materials) says that its board of directors has adopted a rights agreement under which stockholders will receive rights to purchase shares of a new series of preferred stock.

The rights agreement is designed to provide stockholders with the opportunity to benefit from the long-term prospects and value of the company and to ensure the fair and equal treatment of stockholders in the event of a proposed takeover of the company.

The board has declared a dividend to all stockholders of record (as of 6 January 2012) of one right to purchase preferred stock for each share of common stock outstanding. One preferred stock purchase right will also attach to each share of common stock issued by the company between 6 January and the earlier of either the exercisability of the rights or the expiration of the rights agreement. The preferred stock purchase rights will be exercisable only as provided for under the rights agreement. The rights will expire on 16 December 2014, unless redeemed or exchanged sooner by the company.

The exercisability of the rights to purchase preferred stock will be triggered if any person or group, including persons knowingly acting in concert to effect the control of the company, is or becomes a beneficial owner of 10% or more of the outstanding shares after the announcement of the rights agreement. Stockholders or beneficial ownership groups who currently own 10% or more of the outstanding shares will not trigger the preferred share purchase rights unless they acquire additional shares. Each right entitles a holder with the right upon exercise to purchase one one-thousandth of a share of preferred stock at an exercise price that is currently set at $8.50 per right (subject to purchase price adjustments as set forth in the rights agreement). Each share of preferred stock has voting rights equal to one thousand shares of common stock. In the event that exercisability of the rights is triggered, each right held by an acquiring person or group would become void. As a result, upon triggering of exercisability of the rights, there would be significant dilution in the ownership interest of the acquiring person or group.

No further action is required for stockholders to receive the preferred stock purchase rights. Until the rights become exercisable, they will not be evidenced by separate certificates and will trade automatically with the shares of the company’s common stock.

Tags: GigOptix

Visit: www.gigoptix.com