To implement the rights plan, the Board of Directors has declared a dividend distribution of one preferred stock purchase right on each outstanding share of common stock of Opnext. Subject to limited exceptions, the rights will be exercisable if a person or group acquires 4.99% or more of Opnext's common stock or announces a tender offer for 4.99% or more of the common stock. Under certain circumstances, each right will entitle stockholders to buy one one-hundredth of a share of newly created series A junior participating preferred stock of Opnext at an exercise price of $17.00. Opnext's Board of Directors will be entitled to redeem the rights at a price of $0.01 per right at any time before a person has acquired 4.99% or more of the outstanding common stock.
The rights plan includes a procedure whereby the Board of Directors will consider requests to exempt certain proposed acquisitions of common stock from the applicable ownership trigger if the Board of Directors determines that the requested acquisition will not limit or impair the availability of future use of the NOLs to Opnext. The rights will expire on June 22, 2012 or earlier, upon the closing of a merger or acquisition transaction that is approved by the Board of Directors prior to the time at which a person or group acquires 4.99% or more of Opnext's common stock or announces a tender offer for 4.99% or more of the common stock, or if the Board of Directors determines that the NOLs have been fully utilized or are no longer available under Section 382 of the Internal Revenue Code. Opnext will submit the continuation of the rights plan for stockholder approval at the next annual meeting of stockholders. The rights plan will terminate if Opnext stockholder approval is not obtained.
