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Press ReleaseZhone Technologies Announces Plans for Reverse Stock Split and Stock Option RepricingOakland, CA — August 27, 2008 —
Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in multi-service
access solutions, announced today that its Board of Directors has authorized a
reverse stock split and repricing of stock options. Zhone has decided to
pursue the reverse stock split in order to regain compliance with the minimum
bid price requirement of The Nasdaq Stock Market ("Nasdaq"). Zhone
plans to select a reverse stock split ratio of between 1-for-5 and 1-for-10,
such that between 5 and 10 shares of issued and outstanding common stock will
convert into one share of common stock. It also plans to exchange stock
options held by current employees, officers and directors for new stock
options with an exercise price equal to the last reported sale price of
Zhone's common stock on the date of grant.
The reverse stock split and stock option repricing are subject to the approval
of Zhone's stockholders. Zhone filed a preliminary proxy statement with
the SEC today for a special meeting of stockholders at which such approval
will be sought. The time, date, location and other details regarding the
special meeting will be communicated to stockholders at a later date. Zhone
currently expects to complete the transactions in the fourth quarter of
2008.
"After thorough evaluation, we've concluded that a reverse stock
split is the best alternative to comply with Nasdaq's minimum bid
requirements and to ensure that our stock continues to trade on The Nasdaq
Global Market," stated Mory Ejabat, Zhone's chief executive officer.
"We also believe that the repricing of stock options is necessary to
create the proper incentives going forward to ensure that the company's
actions are properly aligned with our stockholders' best
interests." About Zhone Technologies — Access for a Converging World
Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in
multi-service access network solutions, serving more than 700 of the
world’s most innovative network operators. The company offers the
industry’s broadest fully-integrated portfolio of MSAP, FTTx, EFM and
Wi-Fi access technologies, enabling a full suite of services, including
residential and business broadband, VoIP, and High-Definition IPTV.
Zhone’s converged multi-service access platform helps operators rapidly
deploy premium services using copper, fiber, and wireless while
improving network agility and reducing costs. www.zhone.com
Contacts:
Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change without notice.
Additional Information Regarding the Proposed Transactions
Zhone has filed a preliminary proxy statement with the SEC in connection
with the proposed transactions. In addition, Zhone will file other
information and documents concerning the proposed transactions with the
SEC. ZHONE URGES INVESTORS TO REVIEW THE PROXY STATEMENT AND OTHER
INFORMATION FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. These documents are available without charge on the
SEC's web site at www.sec.gov. A free copy of the final proxy
statement may also be obtained from Zhone through its Investor Relations
contacts. INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY BEFORE
MAKING ANY VOTING DECISIONS.
The officers and directors of Zhone may have interests in the proposed
transactions, some of which may differ from, or may be in addition to,
those of the stockholders of Zhone generally. A description of the
interests that the officers and directors of Zhone have in the proposed
transactions will be available in the final proxy statement.
In addition, Zhone, its officers, directors and certain other members of
its management and employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Zhone in favor of the
transactions. Information about the officers and directors of Zhone and
their ownership of Zhone securities is set forth in the preliminary
proxy statement filed with the SEC today. Investors may obtain more
detailed information concerning the participants by reading the final
proxy statement when it is filed with the SEC.
Forward-Looking Statements
This press release contains forward-looking statements that are subject
to the safe harbors created under the Securities Act of 1933 and the
Securities Exchange Act of 1934. Words such as “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,”
“plan,” “project,” “seek,” “should,” “target,” “will,” “would,”
variations of such words, and similar expressions are intended to
identify forward-looking statements. Readers are cautioned that actual
results could differ materially from those expressed in or contemplated
by the forward-looking statements. Factors that could cause actual
results to differ include, but are not limited to, the possibility that
the reverse stock split and stock option repricing may not be completed
in accordance with the timing or terms described in this release, or at
all, the possibility that the intended benefits of the reverse stock
split and stock option repricing may not be fully realized, the
possibility that Zhone may not be able to sustain a stock price adequate
to comply with Nasdaq’s minimum bid requirements even with the reverse
stock split, the possibility that Zhone may not meet other criteria for
continued listing on Nasdaq, as well as other risk factors contained in
the company's SEC filings available at www.sec.gov, including
without limitation, the company's annual report on Form 10-K for the
year ended December 31, 2007 and Zhone’s quarterly reports on Form 10-Q
for the quarters ended March 31, 2008 and June 30, 2008. Readers are
cautioned not to place undue reliance on any forward-looking statements,
which speak only as of the date on which they are made. Zhone undertakes
no obligation to update or revise any forward-looking statements for any
reason. |
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