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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 29, 2000
ONI SYSTEMS CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-30633 77046-9657
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(Commission File Number) (IRS Employer Identification No.)
166 Baypointe Parkway, San Jose, California 95134-1621
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(Address of Principal Executive Offices) (Zip Code)
(408) 965-2600
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5: Other Events.
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On September 28, 2000, ONI Systems filed two registration statements with
the Securities and Exchange Commission:
. a registration statement providing for an underwritten public offering
of 8,000,000 shares of Common Stock of which 5,026,914 shares are
being offered by ONI and 2,973,086 shares are being offered by certain
stockholders of ONI (Registration No. 333-46782), and
. a registration statement for an underwritten public offering of $250
million of Convertible Subordinated Notes due in 2005 (Registration
No. 333-46784).
In connection with these filings, Goldman, Sachs & Co., representative of
the underwriters in ONI Systems' May 31, 2000 initial public offering, has
authorized an early release of approximately 14,300,000 shares from the 180-day
lock-up agreements, which stockholders signed in connection with the Company's
initial public offering. The released shares are expected to become available
for sale on October 2, 2000. See "Shares Eligible for Future Sale". These shares
are owned by stockholders who have agreed to enter into new lock-up agreements
in connection with the registration statements covering Common Stock and
Convertible Subordinated Notes filed on September 28, 2000 with the Securities
and Exchange Commission.
In addition, if additional stockholders enter into a lock-up agreement in
connection with the proposed offerings, up to approximately two million
additional shares may first become available for sale on October 2, 2000 rather
than on the third day following the release of our third quarter financial
results or November 28, 2000 as reflected in the Shares Eligible for Future Sale
table.
In the future, we may issue additional shares of common stock upon
conversion or redemption of the convertible subordinated notes to be offered
by us in the proposed offering.
This Current Report on Form 8-K contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, and
is subject to the safe harbor created by this section. Except for historical
information, the matters discussed in this Current Report are forward-looking
statements that are subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. For example,
the timing of when shares eligible for resale are resold in the public market
is difficult to predict. These risks and uncertainties are described from
time-to-time in ONI's filings with the Securities and Exchange Commission,
including ONI's final Prospectus dated May 31, 2000 for its initial public
offering, ONI's report on Form 10-Q for the quarter ended June 30, 2000, the
registration statements relating to ONI's current public offerings and other
documents on file with the SEC.
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SHARES ELIGIBLE FOR FUTURE SALE
Future sales of substantial amounts of our common stock, including shares
issued upon exercise of outstanding options and warrants, in the public market
could adversely affect the market price of our common stock and could impair our
future ability to raise capital through the sale of our equity securities.
Upon the completion of the proposed offerings, we will have 131,170,380
shares of common stock outstanding, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options or warrants, based
on shares outstanding as of June 30, 2000. Of these shares,
. 8,000,000 shares to be sold by us and the selling stockholders in the
proposed offerings,
. 9,200,000 shares sold in our initial public offering, and
. 9,371,392 other shares sold in the public market prior to the proposed
offerings or eligible for resale in the public market at the time of
this offering
are freely tradable, except that any shares held by our affiliates, as that term
is defined in Rule 144 promulgated under the Securities Act, may only be sold in
compliance with limitations described below. The remaining 104,598,988 shares of
common stock will be deemed restricted securities as defined under Rule 144.
Restricted shares may be sold in the public market only if registered or if they
qualify for an exemption from registration, such as the exemptions provided
under Rule 144, 144(k) or 701 promulgated under the Securities Act, which rules
are summarized below. As a result of the lock-up agreements described below
under "--Lock-up Agreements" and the provisions of Rules 144, 144(k) and 701, we
anticipate that additional shares will be available for sale in the public
market as follows:
Number of Shares Comment
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14,268,898 On October 2, 2000, these shares are expected to be
released from the lock-up relating to our initial public
offering, if a sufficient number of existing stockholders
enter into lock-up agreements in connection with the
proposed offerings; these shares are saleable under Rule
144 (subject in some cases to volume limitations), Rule
144(k) or Rule 701 (subject in some cases to rights of
repurchase by ONI Systems) to rights of repurchase by ONI
Systems).
1,628,250 On the third day following the release of our third quarter
financial results, if the closing price of the common stock
has been at least $50.00 for 20 of the 30 prior trading
days, these shares will be released from the lock-up
agreement related to our initial public offering.
4,233,449 On November 28, 2000, the 180-day lock-up relating to our
initial public offering terminates and these shares are
saleable under Rule 144 (subject in some cases to volume
limitations), Rule 144(k) or Rule 701 (subject in some
cases to rights of repurchase by ONI Systems).
3,259,539 From December 22-30, 2000, these shares are saleable under
Rule 144.
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9,469,156 91 days from the date of the prospectuses in our proposed
offerings, the 90-day lock-up relating to the proposed
offering terminates and these shares are saleable under Rule
144 (subject in some cases to volume limitations), Rule
144(k) or Rule 701 (subject in some cases to a right of
repurchase by ONI Systems).
339,000 On March 9, 2001, these shares are saleable under Rule 144.
969,697 On May 9, 2001, these shares are saleable under Rule 144.
560,000 On June 6, 2001, these shares are saleable under Rule 144.
Some of the shares in the table above listed as not being saleable until 91
days after the date of this prospectus may become saleable at a sooner date, as
described below. In addition, if additional stockholders enter into a lock-up
agreement in connection with the proposed offerings, up to approximately two
million additional shares may first become available for sale on October 2, 2000
rather than on the third day following the release of our third quarter
financial results or November 28, 2000 as reflected in the table above.
Lock-Up Agreements
In connection with the proposed offerings, ONI Systems and some holders
of our common stock, including each of our officers and directors, have entered
into lock-up agreements under which they have agreed not to offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of any
shares of our common stock or options to acquire shares of our common stock
during the 90-day period following the date of this offering, without the prior
written consent of Goldman, Sachs & Co. These restrictions will expire with
respect to:
. 14,268,898 shares held by the holders subject to these lock-up
agreements on or about October 2, 2000, if a sufficient number of
existing stockholders enter into lock-up agreements in connection with
this offering; and
. 21,307,962 shares held by the holders subject to these lock-up
agreements on the date that is 60 days after the date of this
offering, provided the last reported sale price of our common stock is
at least 125% of the initial price to public of the shares sold in
this offering for 20 of the 30 trading days preceding that date.
Our employees, other than our officers, have not entered lock-up agreements
with the underwriters. However, under prior agreements these employees have
agreed with ONI Systems to be bound by the restrictions of the lock-up
agreements. These agreements with ONI Systems do not restrict transactions by
those shareholders to hedge their shares. However, hedging transactions are not
permitted by ONI Systems' insider trading policy. ONI Systems has agreed with
the underwriters in the proposed offerings that it will take reasonable steps to
enforce these agreements and policies and that it will not amend or waive these
agreements or this policy without the underwriters' prior written consent.
Goldman, Sachs & Co. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to lock-up
agreements.
For stockholders who have not agreed to the 90-day lock-up period described
above and who are not employees of ONI Systems, the 180-day restriction relating
to our initial public
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offering will expire as to 25% of their shares subject to the restriction, an
aggregate of 4,233,449 shares, on the date that is two days after we have made
our financial statements for the fiscal quarter ending September 30, 2000
publicly available, if the reported last sale price of our common stock on the
Nasdaq National Market for 20 of the 30 trading days ending on the last trading
day preceding that date is at least $50.00 per share.
Our insider trading policy prohibits employees from selling shares from the
first day of the last month of each quarter until the third day following the
release of financial results for the quarter. As a result, the release of shares
held by them under lock-up agreements, as reflected in the Shares Eligible for
Future Sale table above, may be delayed until our insider trading policy permits
sales by employees. For example, as a result of our insider trading policy,
539,682 shares will first become eligible for resale on the third day following
the release of our third quarter financial results rather than September 6, 2000
or October 2, 2000.
Rule 144
In general, under Rule 144 as currently in effect, a person, or group
of persons whose shares are required to be aggregated, who has beneficially
owned shares that are restricted securities as defined in Rule 144 for at least
one year, is entitled to sell within any three-month period a number of shares
that does not exceed the greater of one percent of the then outstanding shares
of our common stock, which will be approximately 1,311,704 shares immediately
after this offering, or the average weekly trading volume in our common stock
during the four calendar weeks preceding the date on which notice of the sale
is filed. In addition, a person who is not deemed to have been an affiliate at
any time during the three months preceding a sale and who has beneficially
owned the shares proposed to be sold for at least two years would be entitled
to sell these shares under Rule 144(k) without regard to the requirements
described above. To the extent that shares were acquired from one of our
affiliates, a person's holding period for the purpose of effecting a sale under
Rule 144 would commence on the date of transfer from the affiliate.
Rule 701
In general, under Rule 701 of the Securities Act, any of our employees,
officers, directors, consultants or advisors who purchased shares from us in
connection with a compensatory stock or option plan or other written agreement
is eligible to resell those shares in reliance on Rule 144, but without
compliance with certain restrictions, including the holding period contained in
Rule 144.
Stock Options
As of June 30, 2000, options to purchase a total of 20,249,990 shares of
common stock were outstanding. We filed Form S-8 registration statements under
the Securities Act to register all shares of common stock subject to outstanding
options, all shares of our common stock issued upon exercise of stock options
and all shares of our common stock issuable under our stock option and employee
stock purchase plans. Accordingly, shares of our common stock issued under these
plans will be eligible for sale in the public markets, subject to vesting
restrictions and the lock-up agreement described above.
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Registration Rights
Following the proposed offerings, subject to specified blackout periods,
holders of approximately 79 million shares of outstanding common stock will have
two demand registration rights with respect to their shares of our common stock,
subject to the lock-up arrangements described above, to require us to register
their shares of our common stock under the Securities Act, or rights to
participate in any future registration of securities by us. If the holders of
these registrable securities request that we register their shares, and if the
registration is effected, these shares will become freely tradable without
restriction under the Securities Act. Any sales of securities by these
stockholders could have a material adverse effect on the trading price of our
common stock.
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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.
Date: September 29,2000
ONI SYSTEMS CORP.
By: /s/ Michael A. Dillon
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Michael A. Dillon
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
Exhibit
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99.01 Press Release titled "ONI Systems Announces Early Release of Shares of
Common Stock".
99.02 Press Release titled "ONI Systems Files Registrations Statements for
Public Offerings".
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