<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION VIA EDGAR AS OF AUGUST 25,
2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MRV COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 3577/3674 06-1340090
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NUMBER)
</TABLE>
20415 NORDHOFF STREET
CHATSWORTH, CALIFORNIA 91311
(818) 773-9044
(818) 773-0906 (FAX)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
NOAM LOTAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
20415 NORDHOFF STREET
CHATSWORTH, CALIFORNIA 91311
(818) 773-9044
(818) 773-0906 (FAX)
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
MARK A. KLEIN, ESQ.
KIRKPATRICK & LOCKHART LLP
9100 WILSHIRE BOULEVARD, 8-EAST
BEVERLY HILLS, CA 90212-3480
TELEPHONE: (310) 273-1870
FACSIMILE: (310) 274-8357
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(1) REGISTRATION FEE
-------------------------------------------------------------------------------------------------------------------------
Common stock, $0.0017 par
value per share(2)..... 8,979,404 $72.32 $649,345,574 $171,427.23
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(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) based on the average between the high and low
prices on The Nasdaq National Market on August 22, 2000.
(2) The shares of common stock being registered hereunder are being registered
for resale by the selling stockholders named in the prospectus (the "selling
stockholders") and include (a) 8,130,826 shares of common stock outstanding
and (b) 848,578 shares of common stock issuable upon exercise of outstanding
options.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
The information contained in this prospectus is not yet complete, and we
may supplement or amend it in the final version. We have filed a
registration statement relating to the securities described in this
prospectus with the Securities and Exchange Commission. The selling
stockholders may not sell these securities, or accept offers to buy
them, until the registration statement becomes effective. This
prospectus is not an offer to sell these securities, and we are not
soliciting offers to buy them. These securities will not be sold in any
state where their offer or sale, or solicitations of offers to buy them,
would be unlawful prior to their registration or qualification under the
securities laws of any such state.
SUBJECT TO COMPLETION -- DATED AUGUST 25, 2000
MRV COMMUNICATIONS, INC.
COMMON STOCK
The stockholders of MRV Communications, Inc. listed below in the section of
this prospectus called "Selling Stockholders" are offering and selling up to
8,979,404 shares of MRV's common stock. Of those shares, the selling
stockholders are offering
- 8,130,826 shares that they own outright; and
- 848,578 shares that are issuable upon exercise of outstanding options and
warrants.
The selling stockholders may offer their shares through public or private
transactions, in or off the over-the-counter market in the United States, at
prevailing market prices, or at privately negotiated prices. For details of how
the selling stockholders may offer their MRV common stock, please see the
section of this prospectus called "Plan of Distribution." MRV will not receive
any proceeds from the sales of shares by the selling stockholders. MRV's common
stock is quoted on the Nasdaq National Market under the symbol "MRVC." On
, 2000 the closing price of MRV's common stock on the Nasdaq
National Market was $ per share.
YOUR PURCHASE OF THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING AT PAGE 5.
-------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the MRV shares offered or sold under
this prospectus, nor have these organizations determined that this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
-------------------------
The date of this prospectus is , 2000.
<PAGE> 3
TABLE OF CONTENTS
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PAGE
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Where You Can Find More Information... 2
About MRV............................. 3
Recent Developments................... 3
Risk Factors.......................... 5
Use of Proceeds....................... 13
Dividend Policy....................... 13
</TABLE>
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PAGE
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Price Range of Common Stock........... 13
Selling Stockholders.................. 14
Plan of Distribution.................. 23
Legal Matters......................... 24
Experts............................... 24
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
MRV files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document it files at the
SEC's public reference room at 450 Fifth Street, N.W., in Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room. In addition, the SEC maintains an
Internet site that contains MRV reports, proxy and information statements and
other information at http://www.sec.gov.
The SEC allows MRV to "incorporate by reference" the information it files
with it, which means that MRV can disclose important information to you by
referring you to those documents. The information incorporated by reference is
part of this prospectus, and later information that MRV files with the SEC will
automatically update and supersede this information. MRV incorporates by
reference the documents listed below. MRV also incorporates by reference any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 until the selling stockholders sell all
their shares. This prospectus is part of a registration statement that MRV has
filed with the SEC (Registration Nos. 333- ).
- MRV's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the SEC on March 31, 2000, as amended by its Form 10-K/A filed
with the SEC on July 19, 2000.
- MRV's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000
filed with the SEC on May 15, 2000, as amended by its Form 10-Q/A filed
with SEC on July 19, 2000 and MRV's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000 filed with the SEC on August 14, 2000.
- MRV's Current Reports on Form 8-K filed with the SEC on May 3, 2000, May
9, 2000 (as amended by its 8-K/A filed with the SEC on July 7, 2000),
July 27, 2000 and August 4, 2000.
- The description of the Common Stock contained in MRV's Registration
Statement on Form 8-A filed with the SEC on June 8, 1992, as amended by
its Form 8-A/A filed with the SEC on February 24, 1994, including any
amendment or report filed for the purpose of updating such description.
You may request a copy of these filings, at no cost, by writing our
Investor Relations Department us at the following address: MRV Communications,
Inc., 20415 Nordhoff Street, Chatsworth, California 91311, or by fax at (818)
773-0906 or by telephone at (818) 773-0900. You should rely only on the
information incorporated by reference or provided in this prospectus or any
supplement. MRV has not authorized anyone else to provide you with different
information. The selling stockholders will not make an offer of these shares in
any state that does not permit the offer. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date of those documents.
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<PAGE> 4
ABOUT MRV
Our core operations include the design, manufacture and sale of two groups
of products:
- optical networking and internet infrastructure products, primarily
subscribers' management, network element management, and physical layer,
switching and routing management systems in fiber optic metropolitan
networks; and
- fiber optic components for the transmission of voice, video and data
across enterprise, telecommunications and cable TV networks.
Our advanced optical networking and Internet infrastructure solutions
greatly enhance the functionality of carrier and network service provider
networks. Our fiber optic components incorporate proprietary technology, which
delivers high performance under demanding environmental conditions.
Our business units offer active optical components, optical networking and
Internet infrastructure products, including network element management and
physical layer management in fiber optic metropolitan networks. Our In-Reach
product line manages Internet elements through secure remote monitoring of large
service providers' sites. Our Optical Networks family of products consist of
multi-layer traffic management: at Layer 1 with the Fiber Driver, at Layer 2
with the OptiSwitch and at Layer 3 and above, with the OSR8000, Linux Router. We
complement our optical networking and Internet infrastructure products with a
family of optical transmission components and modules designed for transmission
over fiber optic cable. These products enable the transmission of voice, data,
and video across fiber and are also used in optical fiber test equipment. Our
products include discrete components, such as laser diodes and LEDs, and
integrated components such as transmitters, receivers and transceivers. Our
components are used in data networks, telecommunication transmission and access
networks.
We also create and manage growth companies in optical technology and
Internet infrastructure. We have created several start-up companies and formed
independent business units in the optical technology and Internet infrastructure
area, including Zaffire, Inc (formerly known as New Access Communications),
Charlotte's Networks Inc., Hyperchannel Ltd., Zuma Networks, Inc., RedC Optical
Networks, Inc. and Optical Crossing, Inc.
Our principal executive offices are located at 20415 Nordhoff Street,
Chatsworth, California 91311. Our telephone number is (818) 773-9044 and our fax
number is (818) 773-0906.
In this prospectus, the terms "company," MRV, "we," "us," and "our" refer
to MRV Communications, Inc., a Delaware corporation, and, unless the context
otherwise indicates, "common stock" refers to the common stock, par value
$0.0017 per share, of MRV.
On May 11, 2000, we effected a two-for-one stock split of outstanding
shares and an increase in our authorized common stock from 80,000,000 to
160,000,000 shares. The stock split entitled each stockholder of record at the
close of business on May 11, 2000 to receive one additional share for every
outstanding share of common stock held on that date. All share information in
this prospectus gives effect to the two-for-one stock split.
RECENT DEVELOPMENTS
Between April 1 and August 1, 2000, we have made several acquisitions,
including the following:
On April 24, 2000, we acquired approximately 97% of the outstanding capital
stock of Fiber Optic Communications, Inc., or FOCI, a Republic of China
corporation, which manufactures passive fiber optic components and has
facilities in both Taiwan and the People's Republic of China. The purchase price
we paid was approximately $310.4 million in cash, common stock and options to
purchase our common stock.
On July 12, 2000, we acquired virtually all of the outstanding capital
stock of Quantum Optech Inc., or QOI, a Republic of China corporation, which
manufactures active and passive fiber optic components.
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<PAGE> 5
The purchase price we paid was approximately $31.2 million in common stock and
options to purchase our common stock.
On July 12, 2000, we acquired the outstanding capital stock of Astroterra
Corporation, a California corporation, which manufactures high-speed optical
wireless communications products. The purchase price paid was approximately
$159.3 million in common stock and options to purchase our common stock.
On July 21, 2000, we acquired approximately 99.9% of the outstanding
capital stock of Optronics International Corp., or OIC, a Republic of China
corporation, which manufactures active fiber optic components. The purchase
price we paid was approximately $103.2 million in common stock and options to
purchase our common stock.
In connection with the foregoing acquisitions and others we paid an
aggregate of approximately $48.6 million in cash and issued 12,138,000 shares of
our common stock and options to purchase an aggregate of 3,325,000 shares of our
common stock at an weighted average exercise price of $3.00 per share. In
addition, between January 1 and August 24, 2000 we have paid an aggregate of
approximately $12.0 million in cash and issued an aggregate of 1,157,000 shares
of our common stock in connection with investments we have made in our partner
companies, including RedC Optical Networks, Inc., Optical Crossing, Inc.,
Charlotte's Networks, Inc. and Zaffire, Inc.
We have agreed to contribute the capital stock of FOCI, QOI and OIC to our
wholly owned subsidiary, Luminent, Inc. On July 26, 2000, Luminent filed a
registration statement with the Securities and Exchange Commission for the
initial public offering of its common stock. We have announced that we currently
plan, within six to 12 months after Luminent's initial public offering, to
distribute all of the shares of Luminent common stock we own to the holders of
our common stock, subject to certain conditions including our receipt of a
favorable tax ruling, board approval as well as market conditions.
A registration statement relating to Luminent's common stock has been filed
with the Securities and Exchange Commission by Luminent but has not yet become
effective. Those Luminent securities may not be sold nor may offers to buy be
accepted, prior to the time the registration statement becomes effective. This
announcement does not constitute an offer to sell or the solicitation of an
offer to buy. There will not be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such State.
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RISK FACTORS
This prospectus contains or incorporates forward-looking statements. You
can identify these forward-looking statements by our use of the words
"believes," "anticipates," "plans," "expects," "may," "will," "intends,"
"estimates" and similar expressions, whether in the negative or affirmative.
Although we believe that these forward-looking statements reflect our plans,
intentions, and expectations reasonably, we can give no assurance that we
actually will achieve these plans, intentions or expectations. Our actual
results could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements we make. We have put in the
cautionary statements below that we believe could cause our actual results to
differ materially from the forward-looking statements that we make. We do not
intend to update information contained in any forward-looking statement we make.
WE HAVE INCURRED A NET LOSS IN THE SIX MONTHS ENDED JUNE 30, 2000 PRIMARILY AS A
RESULT OF THE FOCI ACQUISITION. AS A RESULT OF THAT ACQUISITION AND OTHERS AND
ADDITIONAL DEFERRED COMPENSATION CHARGES, WE EXPECT TO CONTINUE TO INCUR NET
LOSSES FOR THE FORESEEABLE FUTURE.
We reported a net loss of $33.6 million for the six months ended June 30,
2000. The net loss was primarily due to amortization of goodwill and deferred
stock compensation related to the FOCI acquisition. Between July 1 and August 1,
2000, we completed additional acquisitions, including the acquisitions of OIC,
QOI and Astroterra. We expect to record amortization of goodwill charges of
approximately $21.0 in the three months ending September 30, 2000 and deferred
compensation expenses of $13.7 million in the three months ending September 30,
2000. We also expect to incur substantial charges for goodwill amortization and
deferred compensation expenses in connection with the Astroterra acquisition,
the amount of which has not yet been determined.
In July 2000, we and our wholly-owned subsidiary, Luminent, Inc. entered
into four year employment agreements with Luminent's President and Chief
Executive Officer and Vice President of Finance and Chief Financial Officer. The
agreements provide for annual salaries, performance bonuses and combinations of
stock options to purchase shares of the Company's common stock and Luminent's
common stock. The options to purchase the Company's common stock are immediately
exercisable and are expected to result in deferred compensation charges of $2.4
million during the three months ending September 30, 2000. The options to
purchase Luminent's common stock vest over four years. The options granted by
Luminent to its Chief Executive Officer and Chief Financial Officer represent
the right to purchase the number of shares of Luminent common stock equal to
3.5% of the outstanding capital stock of Luminent reflected on a fully diluted
basis immediately prior to its initial public offering at an exercise price per
share equal to lower of (a) the amount determined by dividing one billion
dollars by the number of Luminent shares outstanding prior to the IPO reflected
on a fully diluted basis or (b) 60% of the low end of the filing range for
Luminent's common stock as initially filed with the Securities and Exchange
Commission. We will incur deferred stock compensation expenses relating to these
options in an amount to be determined once the number of shares underlying the
options, the exercise price of the option and the initial public offering price
of the Luminent shares are known. The deferred compensation expense will be
amortized through 2004
OUR PERFORMANCE MAY BE MATERIALLY ADVERSELY AFFECTED BY TECHNOLOGICAL CHANGES
AND PRODUCT DEVELOPMENT DELAYS.
We are engaged in the design and development of devices for the computer
networking, telecommunications and fiber optic communication industries. As with
any new technologies, there are substantial risks that the marketplace may not
accept our new products. Market acceptance of our products will depend, in large
part, upon our ability to demonstrate performance and cost advantages and
cost-effectiveness of our products over competing products and the success of
our and our customers' sales efforts. We can give no assurance that we will be
able to continue to market our technology successfully, or that any of our
current products will continue to, or that our future products will, be accepted
in the marketplace. Moreover, the computer networking, telecommunications and
fiber optic communication industries are characterized by rapidly changing
technology, evolving industry standards and frequent new
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product introductions, any of which could render our existing products obsolete.
Our success will depend upon our ability to enhance existing products and to
introduce new products to meet changing customer requirements and emerging
industry standards. We are and will be required to devote continued efforts and
financial resources to develop and enhance our existing products and conduct
research to develop new products. The development of new, technologically
advanced products is a complex and uncertain process requiring high levels of
innovation. It also requires the accurate anticipation of technological and
market trends. We can give no assurance that we will be able to identify,
develop, manufacture, market or support new or enhanced products successfully or
on a timely basis. Nor can we give assurances that new products we introduce
will gain market acceptance or that we will be able to respond effectively to
product announcements by competitors, technological changes or emerging industry
standards. Furthermore, from time to time, we may announce new products or
product enhancements, capabilities or technologies that have the potential to
replace or shorten the life cycle of our existing product offerings. This may
cause customers to defer purchasing our existing products or cause customers to
return products to us.
DEFECTS IN OUR PRODUCT RESULTING FROM THEIR COMPLEXITY OR OTHERWISE COULD HURT
OUR FINANCIAL PERFORMANCE.
Complex products, such as those we offer, may contain undetected software
or hardware errors when we first introduce them or when we release new versions.
The occurrence of such errors in the future, and our inability to correct such
errors quickly or at all, could result in the delay or loss of market acceptance
of our products. It could also result in material warranty expense, diversion of
engineering and other resources from our product development efforts and the
loss of credibility with our customers, system integrators and end users. Any of
these or other eventualities resulting from defects in our products could have a
material adverse effect on our business, operating results and financial
condition.
OUR GROWTH RATE MAY BE LOWER THAN HISTORICAL LEVELS AND OUR RESULTS COULD
FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER.
Our revenues may grow at a slower rate in the future than we have
experienced in previous periods and, on a quarter-to-quarter basis, our growth
in revenue may be significantly lower than our historical quarterly growth
rates. Our operating results for a particular quarter are extremely difficult to
predict. Our revenue and operating results could fluctuate substantially from
quarter to quarter and from year to year. This could result from any one or a
combination of factors such as
- the cancellation or postponement of orders,
- the timing and amount of significant orders from our largest customers,
- our success in developing, introducing and shipping product enhancements
and new products,
- the mix of products we sell,
- adverse effects to our financial statements resulting from, or
necessitated by, past and future acquisitions,
- new product introductions by our competitors,
- pricing actions by us or our competitors,
- the timing of delivery and availability of components from suppliers,
- changes in material costs, and
- general economic conditions.
Moreover, the volume and timing of orders we receive during a quarter are
difficult to forecast. From time to time, our customers encounter uncertain and
changing demand for their products. Customers generally order based on their
forecasts. If demand falls below such forecasts or if customers do not control
inventories effectively, they may cancel or reschedule shipments previously
ordered from us. Our expense levels during any particular period are based, in
part, on expectations of future sales. If sales in a particular
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quarter do not meet expectations, our operating results could be materially
adversely affected. Furthermore, in certain instances, sales cycles are becoming
longer and more uncertain as we bid on larger projects. As a result, we are
finding it more difficult to predict the timing of the awards of contracts and
the actual placement of orders stemming from awards. We can give no assurance
that these factors or others, such as those discussed below regarding the risks
we face from our international operations or the risks discussed immediately
below, would not cause future fluctuations in operating results. Further, there
can be no assurance that we will be able to continue profitable operations.
THE PRICES OF OUR SHARES HAVE BEEN AND MAY CONTINUE TO BE HIGHLY VOLATILE.
Historically, the market price of our shares has been extremely volatile.
The market price of our common stock is likely to continue to be highly volatile
and could be significantly affected by factors such as
- actual or anticipated fluctuations in our operating results,
- announcements of technological innovations or new product introductions
by us or our competitors,
- changes of estimates of our future operating results by securities
analysts,
- developments with respect to patents, copyrights or proprietary rights,
and
- general market conditions and other factors.
In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly affected the market prices
for the common stocks of technology companies. These broad market fluctuations
may adversely affect the market price of our common stock. For example, during
the period of less than 30 days from March 7, 2000 to April 4, 2000, our stock
price (adjusted for a two-for-one stock split effective on May 11, 2000) ranged
from a high of $96.94 to a low of $30. In addition, it is possible that in a
future fiscal quarter, our results of operations will fail to meet the
expectations of securities analysts or investors and, in such event, the market
price of our common stock would be materially adversely affected. For example,
as a result of weaker than anticipated demand for our networking products,
especially in Europe, and delays in transitions to next generation, higher
margin, networking products, in August 1998, we announced that we expected
operating results in the third quarter of 1998 to be adversely affected.
Following that announcement, the market price of our common stock dropped
substantially. Similarly, in February 1999, following our release of fourth
quarter and 1998 financial results, we announced that we did not expect revenues
in the first quarter of 1999 to be as strong as revenues reported for the fourth
quarter of 1998. Following that announcement, the market price of our stock
again dropped significantly. See the section of this prospectus captioned "Price
Range of Common Stock" below.
OUR STOCK PRICE MIGHT SUFFER AS A CONSEQUENCE OF OUR INVESTMENTS IN AFFILIATES.
We have created several start-up companies and formed independent business
units in the optical technology and Internet infrastructure areas. We account
for these investments in affiliates according to the equity or cost methods as
required by accounting principles generally accepted in the United States. The
market value of these investments may vary materially from the amounts shown as
a result of business events specific to these entities or their competitors or
market conditions. Actual or perceived changes in the market value of these
investments could have a material impact on our share price and in addition
could contribute significantly to volatility of our share price.
OUR BUSINESS IS INTENSELY COMPETITIVE AND THE EVIDENT TREND OF CONSOLIDATIONS IN
OUR INDUSTRY COULD MAKE IT MORE SO.
The markets for fiber optic components and networking products are
intensely competitive and subject to frequent product introductions with
improved price/performance characteristics, rapid technological change and the
continual emergence of new industry standards. We compete and will compete with
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numerous types of companies including companies that have been established for
many years and have considerably greater financial, marketing, technical, human
and other resources, as well as greater name recognition and a larger installed
customer base, than we do. This may give such competitors certain advantages,
including the ability to negotiate lower prices on raw materials and components
than those available to us. In addition, many of our large competitors offer
customers broader product lines, which provide more comprehensive solutions than
our current offerings. We expect that other companies will also enter markets in
which we compete. Increased competition could result in significant price
competition, reduced profit margins or loss of market share. We can give no
assurance that we will be able to compete successfully with existing or future
competitors or that the competitive pressures we face will not materially and
adversely affect our business, operating results and financial condition. In
particular, we expect that prices on many of our products will continue to
decrease in the future and that the pace and magnitude of such price decreases
may have an adverse impact on our results of operations or financial condition.
There has been a trend toward industry consolidation for several years. We
expect this trend toward industry consolidation to continue as companies attempt
to strengthen or hold their market positions in an evolving industry. We believe
that industry consolidation may provide stronger competitors that are better
able to compete. This could have a material adverse effect on our business,
operating results and financial condition.
WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH.
We have grown rapidly in recent years, with revenues increasing from $39.2
million for the year ended December 31, 1995, to $288.5 million for the year
ended December 31, 1999. Our recent growth, both internally and through the
acquisitions we have made since January 1, 1995, has placed a significant strain
on our financial and management personnel and information systems and controls.
As a consequence, we must implement new and enhance existing financial and
management information systems and controls and must add and train personnel to
operate such systems effectively. Our delay or failure to implement new and
enhance existing systems and controls as needed could have a material adverse
effect on our results of operations and financial condition in the future. Our
intention to continue to pursue a growth strategy can be expected to place even
greater pressure on our existing personnel and to compound the need for
increased personnel, expanded information systems, and additional financial and
administrative control procedures. We can give no assurance that we will be able
to successfully manage operations if they continue to expand.
WE FACE RISKS FROM OUR INTERNATIONAL OPERATIONS.
International sales have become an increasingly important segment of our
operations. The following table sets forth the percentage of our total net
revenues from sales to customers in foreign countries for the last three years:
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YEAR ENDED PERCENT OF TOTAL REVENUE
DECEMBER 31, FROM FOREIGN SALES
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1997................................. 60%
1998................................. 59
1999................................. 58
</TABLE>
We have offices in, and conduct a significant portion of our operations in and
from, Israel. We are, therefore, directly influenced by the political and
economic conditions affecting Israel. Any major hostilities involving Israel,
the interruption or curtailment of trade between Israel and its trading partners
or a substantial downturn in the economic or financial condition of Israel could
have a material adverse effect on our operations. Sales to foreign customers are
subject to government controls and other risks associated with international
sales, including difficulties in obtaining export licenses, fluctuations in
currency exchange rates, inflation, political instability, trade restrictions
and changes in duty rates.
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Although we have not experienced any material difficulties in this regard to
date, we can give no assurance that we will not experience material difficulties
in the future.
Our sales are currently denominated in U.S. dollars and to date our
business has not been significantly affected by currency fluctuations or
inflation. However, as we conduct business in several different countries,
fluctuations in currency exchange rates could cause our products to become
relatively more expensive in particular countries, leading to a reduction in
sales in that country. In addition, inflation or fluctuations in currency
exchange rates in such countries could increase our expenses. The Single
European Currency (Euro) was introduced on January 1, 1999 with complete
transition to this new currency required by January 2002. We have made and
expect to continue to make changes to our internal systems in order to
accommodate doing business in the Euro. Any delays in our ability to be
Euro-compliant could have an adverse impact on our results of operations or
financial condition. Due to numerous uncertainties, we cannot reasonably
estimate at this time the effects a common currency will have on pricing within
the European Union and the resulting impact, if any, on our financial condition
or results of operations.
To date, we have not hedged against currency exchange risks. In the future,
we may engage in foreign currency denominated sales or pay material amounts of
expenses in foreign currencies and, in such event, may experience gains and
losses due to currency fluctuations. Our operating results could be adversely
affected by such fluctuations or as a result of inflation in particular
countries where material expenses are incurred. Moreover, our operating results
could also be adversely affected by seasonality of international sales, which
are typically lower in Asia in the first calendar quarter and in Europe in the
third calendar quarter. These international factors could have a material
adverse effect on future sales of our products to international end users and,
consequently, our business, operating results and financial condition.
THE SLOWDOWN IN GROWTH RATES IN OUR INDUSTRY COULD ADVERSELY AFFECT OUR GROWTH.
Our success is dependent, in part, on the overall growth rate of the
networking industry. We can give no assurance that the Internet or the
industries that serve it will continue to grow or that the Company will achieve
higher growth rates. Our business, operating results or financial condition may
be adversely affected by any decrease in industry growth rates. In addition, we
can give no assurance that our results in any particular period will fall within
the ranges for growth forecast by market researchers.
WE FACE RISKS INVOLVED IN THE MANUFACTURE AND SUPPLY OF CRITICAL COMPONENTS FOR
OUR PRODUCTS.
We outsource the board-level assembly, test and quality control of
material, components, subassemblies and systems relating to our networking
products to third-party contract manufacturers. Though there are a large number
of contract manufacturers that we can use for outsourcing, we have elected to
use a limited number of vendors for a significant portion of our board assembly
requirements in order to foster consistency in quality of the products. These
independent third-party manufacturers also provide the same services to other
companies. Risks associated with the use of independent manufacturers include
unavailability of or delays in obtaining adequate supplies of products and
reduced control of manufacturing quality and production costs. If our contract
manufacturers failed to deliver needed components timely, we could face
difficulty in obtaining adequate supplies of products from other sources in the
near term. We can give no assurance that our third party manufacturers will
provide us with adequate supplies of quality products on a timely basis, or at
all. While we could outsource with other vendors, a change in vendors may
require significant lead-time and may result in shipment delays and expenses.
Our inability to obtain such products on a timely basis, the loss of a vendor or
a change in the terms and conditions of the outsourcing would have a material
adverse effect on our business, operating results and financial condition.
We rely heavily on our own production capability for critical semiconductor
lasers and light emitting diodes used in our products. Because we manufacture
these and other key components at our own facility and such components are not
readily available from other sources, any interruption of our manufacturing
process could have a material adverse effect on our operations. Furthermore, we
have a limited number of
9
<PAGE> 11
employees dedicated to the operation and maintenance of our wafer fabrication
equipment, the loss of any of whom could result in our inability to effectively
operate and service such equipment. Wafer fabrication is sensitive to many
factors, including variations and impurities in the raw materials, the
fabrication process, performance of the manufacturing equipment, defects in the
masks used to print circuits on the wafer and the level of contaminants in the
manufacturing environment. We can give no assurance that we will be able to
maintain acceptable production yields and avoid product shipment delays. In the
event adequate production yields are not achieved, resulting in product shipment
delays, our business, operating results and financial condition could be
materially adversely affected.
WE HAVE SUFFERED ADVERSE FINANCIAL CONSEQUENCES AS A RESULT OF THE XYPLEX
ACQUISITION.
On January 30, 1998, we completed the Xyplex acquisition from Whittaker
Corporation. Xyplex is a leading provider of access solutions between enterprise
networks and WAN and/or Internet service providers. The purchase price paid to
Whittaker consisted of $35 million in cash and three-year warrants to purchase
up to 842,804 shares of our common stock at an exercise price of $17.50 per
share. In connection with the Xyplex acquisition, we incurred charges of $20.6
million and $15.7 million for purchased technology and restructuring during the
year ended December 31, 1998. The charges resulting from the Xyplex acquisition
resulted in our incurring a net loss of $20,106,000 or $0.43 per share during
the year ended December 31, 1998.
We originally recorded charges of $30.6 million related to research and
development projects in progress at the time of the Xyplex acquisition. Although
we reported these charges in our first, second and third quarter results of 1998
in accordance with established accounting practice and valuations of Xyplex'
purchased technology in progress provided by independent valuators, we
reconsidered these valuations in light of subsequent SEC guidance regarding
valuation methodology. Based on this newer valuation methodology, we reduced the
value of the purchased technology in progress related to the Xyplex acquisition
to $20.6 million and increased the amount of goodwill and other intangibles by
$9.9 million. This has resulted in additional charges during 1998 of $759,000
and charges during 1999 of approximately $828,000 for amortization of
intangibles, including goodwill, resulting from the Xyplex acquisition charges
and will continue to result in annual charges of approximately $828,000 after
1999 as these intangibles are amortized through January 2010.
Recent actions and comments from the SEC have indicated that the SEC is
reviewing the current valuation methodology of purchased in-process research and
development related to business combinations. Unlike the case of many other
companies, the SEC has not notified us of any plans to review our methodology
for valuing purchased in-process research and development. Our action in 1998 to
reconsider that valuation of in process research and development related to the
Xyplex acquisition was voluntary. We believe we are in compliance with all of
the rules and related guidance as they currently exist. However, there can be no
assurance that the SEC will not review our accounting for the Xyplex acquisition
and seek to apply retroactively new guidance and further reduce the amount of
purchased in-process research and development we have expensed. This would
result in an additional restatement of our previously filed financial statements
and could have a material adverse impact on our financial results for periods
subsequent to the acquisition.
FUTURE HARM COULD RESULT FROM ADDITIONAL ACQUISITIONS.
An important element of our strategy is to review acquisition prospects
that would complement our existing products, augment our market coverage and
distribution ability or enhance our technological capabilities.
Future acquisitions could have a material adverse effect on our business,
financial condition and results of operations because of the
- possible charges to operations for purchased technology and restructuring
similar to those incurred in connection with the Xyplex acquisition
mentioned above,
10
<PAGE> 12
- potentially dilutive issuances of equity securities,
- incurrence of debt and contingent liabilities;
- incurrence of amortization expenses related to goodwill and other
intangible assets and deferred compensation charges similar to those
arising with the acquisitions of FOCI, OIC, QOI and Astroterra mentioned
above,
- difficulties assimilating the acquired operations, technologies and
products,
- diversion of management's attention to other business concerns,
- risks of entering markets in which we have no or limited prior
experience,
- potential loss of key employees of acquired organizations, and
- difficulties in honoring commitments made to customers by management of
the acquired entity prior to the acquisition.
We can give no assurance as to whether we can successfully integrate the
products, technologies or personnel of any business that we might acquire in the
future.
IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, WE MAY NOT BE ABLE
TO COMPETE.
We rely on a combination of trade secret laws and restrictions on
disclosure and patents, copyrights and trademarks to protect our intellectual
property rights. We cannot assure you that our pending patent applications will
be approved, that any patents that may issue will protect our intellectual
property or that third parties will not challenge any issued patents. Other
parties may independently develop similar or competing technology or design
around any patents that may be issued to us. We cannot be certain that the steps
we have taken will prevent the misappropriation of our intellectual property,
particularly in foreign countries where the laws may not protect our proprietary
rights as fully as in the United States. Any such litigation, regardless of
outcome, could be expensive and time consuming, and adverse determinations in
any such litigation could seriously harm our business.
WE COULD BECOME SUBJECT TO LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS,
WHICH COULD BE COSTLY AND SUBJECT US TO SIGNIFICANT LIABILITY.
From time to time, third parties, including our competitors, may assert
patent, copyright and other intellectual property rights to technologies that
are important to us. We expect we will increasingly be subject to license offers
and infringement claims as the number of products and competitors in our market
grows and the functioning of products overlaps. In this regard, in March 1999,
we received a written notice from Lemelson Foundation Partnership in which
Lemelson claimed to have patent rights in our vision and automatic
identification operations, which are widely used in the manufacture of
electronic assemblies. In April 1999, we received a written notice from Rockwell
Corporation in which Rockwell claimed to have patent rights in certain
technology related to our metal organic chemical vapor deposition, or MOCVD,
processes. In October 1999, we received written notice from Lucent Technologies,
Inc. in which Lucent claimed we have violated certain of Lucent's patents
falling into the general category of communications technology, with a focus on
networking functionality. In October 1999, we received a written notice from
Ortel Corporation, which has since been acquired by Lucent, in which Ortel
claimed to have patent rights in certain technology related to our triplexer and
duplexer products. We are evaluating the patents noted in the letters. Others'
patents, including Lemelson's, Rockwell's, Lucent's and Ortel's, may be
determined to be valid, or some of our products may ultimately be determined to
infringe the Lemelson, Rockwell, Lucent and Ortel patents, or those of other
companies. Lemelson, Rockwell, Lucent or Ortel or other companies may pursue
litigation with respect to these or other claims. The results of any litigation
are inherently uncertain. In the event of an adverse result in any litigation
with respect to intellectual property rights relevant to our products that could
arise in the future, we could be required to obtain licenses to the infringing
technology, to pay substantial damages under applicable law, to cease the
manufacture, use and sale of infringing products or to expend significant
resources to develop non-infringing technology. Licenses
11
<PAGE> 13
may not be available from third parties, including Lemelson, Rockwell, Lucent or
Ortel, either on commercially reasonable terms or at all. In addition,
litigation frequently involves substantial expenditures and can require
significant management attention, even if we ultimately prevail. Accordingly,
any infringement claim or litigation against us could significantly harm our
business, operating results and financial condition.
In the future, we may initiate claims or litigation against third parties
for infringement of our proprietary rights to protect these rights or to
determine the scope and validity of our proprietary rights or the proprietary
rights of competitors. These claims could result in costly litigation and the
diversion of our technical and management personnel.
NECESSARY LICENSES OF THIRD-PARTY TECHNOLOGY MAY NOT BE AVAILABLE TO US OR MAY
BE VERY EXPENSIVE, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO MANUFACTURE AND
SELL OUR PRODUCTS.
From time to time we may be required to license technology from third
parties to develop new products or product enhancements. We cannot assure you
that third-party licenses will be available to us on commercially reasonable
terms, if at all. The inability to obtain any third-party license required to
develop new products and product enhancements could require us to obtain
substitute technology of lower quality or performance standards or at greater
cost, either of which could seriously harm our ability to manufacture and sell
our products.
WE ARE DEPENDENT ON CERTAIN MEMBERS OF OUR SENIOR MANAGEMENT.
We are substantially dependent upon Dr. Shlomo Margalit, our Chairman of
the Board of Directors and Chief Technical Officer, and Mr. Noam Lotan, our
President and Chief Executive Officer. The loss of the services of either of
these officers could have a material adverse effect on us. We have entered into
employment agreements with Dr. Margalit and Mr. Lotan and are the beneficiary of
key man life insurance policies in the amounts of $1.0 million each on their
lives. However, we can give no assurance that the proceeds from these policies
will be sufficient to compensate us in the event of the death of any of these
individuals, and the policies are not applicable in the event that any of them
becomes disabled or is otherwise unable to render services to us.
OUR BUSINESS REQUIRES US TO ATTRACT AND RETAIN QUALIFIED PERSONNEL.
Our ability to develop, manufacture and market our products and our ability
to compete with our current and future competitors depends, and will depend, in
large part, on our ability to attract and retain qualified personnel.
Competition for qualified personnel in the networking and fiber optics
industries is intense, and we will be required to compete for such personnel
with companies having substantially greater financial and other resources than
we do. If we should be unable to attract and retain qualified personnel, our
business could be materially adversely affected. We can give no assurance that
we will be able to attract and retain qualified personnel.
OUR ABILITY TO ISSUE PREFERRED STOCK COULD ADVERSELY AFFECT THE RIGHTS OF
HOLDERS OF COMMON STOCK AND DETER A TAKE-OVER.
We are authorized to issue up to 1,000,000 shares of preferred stock. This
preferred stock may be issued in one or more series, the terms of which may be
determined at the time of issuance by the board of directors without further
action by stockholders. The terms of any such series of preferred stock may
include voting rights (including the right to vote as a series on particular
matters), preferences as to dividend, liquidation, conversion and redemption
rights and sinking fund provisions. No preferred stock is currently outstanding.
The issuance of any such preferred stock could materially adversely affect the
rights of the holders of our common stock, and therefore, reduce the value of
our common stock. In particular, specific rights granted to future holders of
preferred stock could be used to restrict our ability to merge with, or sell our
assets to, a third party and thereby preserve control by the present management.
12
<PAGE> 14
USE OF PROCEEDS
We will not receive any proceeds from the sales of shares of common stock
by the selling stockholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock since our
inception. We currently intend to retain all of our earnings, if any, for use in
the operation and expansion of our businesses and do not intend to pay any cash
dividends to stockholders in the foreseeable future.
PRICE RANGE OF COMMON STOCK
Our common stock is traded in the over-the-counter market and has been
included in the Nasdaq National Market since February 28, 1994 under the symbol
"MRVC." The following table sets forth the high and low closing sale prices of
our common stock for the periods indicated as reported by the Nasdaq National
Market. The prices have been adjusted to give retroactive effect to the
two-for-one stock split effected on May 11, 2000.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1998
First Quarter............................................... $14.50 $10.57
Second Quarter.............................................. 14.19 9.69
Third Quarter............................................... 12.00 2.53
Fourth Quarter.............................................. 4.53 2.57
1999
First Quarter............................................... $ 4.94 $ 2.97
Second Quarter.............................................. 7.03 2.97
Third Quarter............................................... 12.41 6.32
Fourth Quarter.............................................. 32.82 9.72
2000
First Quarter............................................... $95.25 $25.88
Second Quarter.............................................. 67.25 23.44
Third Quarter (through , 2000)..................
</TABLE>
At August 22, 2000, we had 3,883 stockholders of record, as indicated on
the records of our transfer agent, who held, we believe, for over 13 million
beneficial holders. On , 2000, the last sale price of the common
stock as reported on The Nasdaq National Market was $ per share.
13
<PAGE> 15
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of shares of common stock by the selling stockholders as of August 14,
2000. The term "selling stockholders" also includes any transferees, pledgees,
donees, or other successors in interest to the selling stockholders named in the
table below. To the extent that required, we will name any additional selling
stockholders in a supplement to this prospectus. Information in the table
concerning the selling stockholders and the shares they may offer from time to
time hereunder is based on information provided to MRV by such stockholders.
Because the selling stockholders may offer all or some of the shares pursuant to
this prospectus, and to our knowledge there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares
that may be held by the selling stockholders after completion of this offering,
we can give no estimate as to the amount of shares that will be held by the
selling stockholders after completion of this offering. Amounts in the table
reflect our two-for-one stock split for stockholders of record on May 11, 2000.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Adaptive Broadband Corp............................. 184,921(1) 184,921 *
Adhikari, Prasanna.................................. 18,357(1) 18,357 *
Adi Corporation..................................... 228,669(2) 228,669 *
Au Sai Chuen........................................ 9,310(3) 9,310 *
Barber, Debbie...................................... 754(1) 754 *
Barclay, Micah...................................... 5,278(1) 5,278 *
Barrera, Steven..................................... 11,310(1) 11,310 *
Bau, Mehng-Ji....................................... 425(4) 425 *
Bible Children's Trust.............................. 22,620(1) 22,620 *
Biological Research Consultants (UK) LTD. .......... 13,518(3) 13,518 *
Bodenheimer, Joseph................................. 2,104(3) 2,104 *
Bravo, Anna......................................... 754(1) 754 *
Casas, John......................................... 754(1) 754 *
Chan, Chih-Cheng.................................... 595(4) 595 *
Chan, Ming-Hui...................................... 1,105(4) 1,105 *
Chan, Yi-Jen........................................ 3,400(4) 3,400 *
Chang, Chien-Cheng.................................. 21,032(2) 21,032 *
Chang, Chwan-Yang................................... 38,866(4) 38,866 *
Chang, Fang-Shu..................................... 850(4) 850 *
Chang, Jung-Hua..................................... 4,250(4) 4,250 *
Chang, Min-Li....................................... 170(4) 170 *
Chang, Ray-Ching.................................... 99,875(4) 99,875 *
Chang, Tzu-Yin...................................... 1,624(2) 1,624 *
Chang, Wen-Kuang.................................... 1,700(4) 1,700 *
Chang, Wen-Yuan..................................... 8,514(2) 8,514 *
Chang, Ya-Hui....................................... 170(4) 170 *
Chang, Yung-Kuang................................... 1,624(2) 1,624 *
Charlotte's Networks, Inc........................... 1,000,000(5) 1,000,000 *
Chen Lin, A-Mei..................................... 28,900(4) 28,900 *
Chen, Chi-Chen...................................... 42,230(4) 42,230 *
Chen, Chin-Lung..................................... 850(4) 850 *
Chen, Horng-Nian.................................... 27,248(4) 27,248 *
Chen, Jenn Nan...................................... 11,097(2) 11,097 *
</TABLE>
14
<PAGE> 16
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Chen, Jian-Guang.................................... 14,450(4) 14,450 *
Chen, Li-Hua........................................ 680(4) 680 *
Chen, Shao-Chen..................................... 850(4) 850 *
Chen, Shu Ping...................................... 3,692(2) 3,692 *
Chen, Shya-Yu....................................... 170(4) 170 *
Chen, Shyu-Neny..................................... 143,480(4) 143,480 *
Chen, Szu Wen....................................... 162(2) 162 *
Chen, Ta-Tien....................................... 4,330(2) 4,330 *
Chen, Wei-Chih...................................... 10,625(4) 10,625 *
Chen, Wei-Wen....................................... 32,300(4) 32,300 *
Chen, Wen-Hsun...................................... 3,400(4) 3,400 *
Chen, Yann-Shoou.................................... 850(4) 850 *
Cheng, Shu-Chen..................................... 3,400(4) 3,400 *
Cheng, Shu-Wen...................................... 850(4) 850 *
Cheng, Tu-Tsui...................................... 850(4) 850 *
Chevitarese, Marcus................................. 1,508(1) 1,508 *
Chiang, Cheng-Chung................................. 6,866(2) 6,866 *
Chiang, Cheng-Wei................................... 2,334(2) 2,334 *
Chiang, Peng........................................ 85(4) 85 *
Chiang, Wen-Shang................................... 59,336(2) 59,336 *
Chiang, Yi-Chun..................................... 680(4) 680 *
Chiou, Jin-Chern.................................... 1,700(4) 1,700 *
Chiu, Chen Mei...................................... 18,732(2) 18,732 *
Chiu, Chien-Chia.................................... 3,145(4) 3,145 *
Chiu, Ching-Chen.................................... 85(4) 85 *
Chiu, Hsiang-Jung................................... 7,663(2) 7,663 *
Chiu, Hsiu-Lien..................................... 14,134(2) 14,134 *
Chiu, Jui-Chun...................................... 15,845(4) 15,845 *
Chiu, Kuan Heng..................................... 8,514(2) 8,514 *
Chiu, Szu-Chia...................................... 7,663(2) 7,663 *
Chiu, Wei Ming...................................... 8,514(2) 8,514 *
Chiu, Yi Ling....................................... 8,514(2) 8,514 *
Chou, Chun-Te....................................... 850(4) 850 *
Chou, Kuo-Chiang.................................... 2,165(2) 2,165 *
Chou, Ming-Huang.................................... 2,805(4) 2,805 *
Chou, Ming-Huei..................................... 2,805(4) 2,805 *
Chu, Chen-Chung..................................... 46,405(2) 46,405 *
Chu, Fang-Lan....................................... 2,125(4) 2,125 *
Chuang, Zuon-Min.................................... 38,965(4) 38,965 *
Chung Chien, Tai-Jung............................... 765(4) 765 *
Dai, Chiao-Chen..................................... 324(2) 324 *
Dai, Shui-Mu........................................ 417(2) 417 *
Delta International Holdings, Ltd................... 560,247(4) 560,247 *
Deltron Holding Limited............................. 217,808(4) 217,808 *
Euval Barrekette and Olga Barrekette................ 5,880(3) 5,880 *
Fayson, Levon....................................... 1,508(1) 1,508 *
Fishman, Yale....................................... 1,600(3) 1,600 *
</TABLE>
15
<PAGE> 17
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Fletcher, L. LeeRoy................................. 1,913(1) 1,913 *
Gabel, Seymour...................................... 1,578(3) 1,578 *
GFM -- KOLT L.P..................................... 21,502(3) 21,502 *
Gregson, Wyatt...................................... 754(1) 754 *
Hakakha, Harel...................................... 22,717(1) 22,717 *
Han, Pei-Fang....................................... 4,250(4) 4,250 *
Hill, Jennifer...................................... 2,262(1) 2,262 *
Ho, Jung-Chin....................................... 10,200(4) 10,200 *
Ho, Kuei-Chin....................................... 1,342(2) 1,342 *
Ho, Tsui-Hua........................................ 170(4) 170 *
Ho, Yi-Ju........................................... 170(4) 170 *
Ho, Yung-Ching...................................... 8,500(4) 8,500 *
Hobbs, Donna........................................ 4,381(1) 4,381 *
Hsiao, Su-Hsing..................................... 850(4) 850 *
Hsieh, Chun-Chu..................................... 935(4) 935 *
Hsieh, Hueih-Chir................................... 1,082(2) 1,082 *
Hsieh, Jen-Lu....................................... 1,745(2) 1,745 *
Hsieh, Jui Tan...................................... 11,920(2) 11,920 *
Hsieh, Meei-Chir.................................... 1,082(2) 1,082 *
Hsu, Chien-Lin...................................... 170(4) 170 *
Hsu, Hui-Chen....................................... 11,351(2) 11,351 *
Hsu, Jung-Hsiao..................................... 88,218(4) 88,218 *
Hsu, Su............................................. 487(2) 487 *
Hsu, Wen-Chang...................................... 2,550(4) 2,550 *
Hu, Hai-Ro.......................................... 170(4) 170 *
Huang, Cheng-Chao................................... 51,000(4) 51,000 *
Huang, Chen-Yu...................................... 2,386(4) 2,386 *
Huang, Chuan-Tai.................................... 130,796(4) 130,796 *
Huang, Guang-Ming................................... 2,550(4) 2,550 *
Huang, Hui-Ying..................................... 2,550(4) 2,550 *
Huang, Li-Hsuan..................................... 170(4) 170 *
Huang, Ming-Li...................................... 5,950(4) 5,950 *
Huang, Ru Pin....................................... 3,158(2) 3,158 *
Huang, Shu-Yuan..................................... 5,950(4) 5,950 *
Huang, Su-Chun...................................... 5,525(4) 5,525 *
Huang, Su-Fang...................................... 7,415(2) 7,415 *
Huang, Wen Hsi...................................... 324(2) 324 *
Huang, Yue-Tzoan.................................... 850(4) 850 *
Hung, Hsiu-Ying..................................... 4,266(4) 4,266 *
Hung, I-Sheng....................................... 255(4) 255 *
Hung, Shu-Fen....................................... 5,950(4) 5,950 *
Hwang, Cherng-Jia................................... 216,476(4)(6) 216,476 *
Israel Research and Development Co. LTD. ........... 65,234(3) 65,234 *
Itochu Techno-Science Corporation................... 32,876(3) 32,876 *
Jacobs, Harlan...................................... 746(3) 746 *
Jiang, Nan.......................................... 2,262(1) 2,262 *
Jones, Rebecca...................................... 302(1) 302 *
</TABLE>
16
<PAGE> 18
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Jotkowitz, Seymour.................................. 3,198(3) 3,198 *
Jow, Ming-Yung...................................... 32,855(4) 32,855 *
Jseng, Li-In........................................ 10,200(4) 10,200 *
Jsou, Li-Chung...................................... 11,050(4) 11,050 *
Juang, His-Sheng.................................... 15,945(4) 15,945 *
Kao, Ming-Nan....................................... 5,992(4) 5,992 *
Kim, Isaac.......................................... 17,564(1) 17,564 *
Koontz, Joseph...................................... 17,590(1) 17,590 *
Korevaar, Eric...................................... 491,468(1) 491,468 *
Kun, Mei-Hui........................................ 492(4) 492 *
Kuo, Chao-Chung..................................... 1,275(4) 1,275 *
Kuo, Shu-Shien...................................... 922(4) 922 *
Lai, Chiu-Yen....................................... 26,745(2) 26,745 *
Lath, Arunabh....................................... 4,826(1) 4,826 *
Lee, Ming-Chu....................................... 850(4) 850 *
Lee, Pai-Hua........................................ 270(2) 270 *
Lee, Pei-Ling....................................... 611(4) 611 *
Lee, Ya-Li.......................................... 13,430(4) 13,430 *
Lee, Yi-Kuan........................................ 170(4) 170 *
Leibowitz, Scott.................................... 18,850(1) 18,850 *
Lewis, Freddie...................................... 1,508(1) 1,508 *
Li, Fu-Jen.......................................... 170(4) 170 *
Liang, Chiu-Yueh.................................... 1,700(4) 1,700 *
Liang, Mei-Ling..................................... 170(4) 170 *
Liang, Shao-Preng................................... 835(2) 835 *
Liao, Fang-Mei...................................... 850(4) 850 *
Liao, Sheng Kun..................................... 974(2) 974 *
Liau, Wuen-Yi....................................... 628(4) 628 *
Lin, Chen-Kuan...................................... 2,550(4) 2,550 *
Lin, Chia-Hsiang.................................... 541(2) 541 *
Lin, Chi-Tzaw....................................... 170(4) 170 *
Lin, Chung Show-Fone................................ 850(4) 850 *
Lin, Dung-Lou....................................... 170(4) 170 *
Lin, Guei-Shiang.................................... 170(4) 170 *
Lin, Hsiao-Chang.................................... 1,082(2) 1,082 *
Lin, Hsiao-Mei...................................... 2,988(2) 2,988 *
Lin, Hsiao-O........................................ 541(2) 541 *
Lin, Hsin-Yi........................................ 13,112(2) 13,112 *
Lin, Hui-Min........................................ 1,624(2) 1,624 *
Lin, Hwa Min........................................ 2,165(2) 2,165 *
Lin, I-Chi.......................................... 17,029(2) 17,029 *
Lin, I-Jung......................................... 12,750(4) 12,750 *
Lin, Lih-Ching...................................... 5,100(4) 5,100 *
Lin, Li-Hsiang...................................... 170(4) 170 *
Lin, Ming Hui....................................... 3,296(2) 3,296 *
Lin, Pei-Wei........................................ 12,431(2) 12,431 *
Lin, Ping-Huan...................................... 98,600(4) 98,600 *
</TABLE>
17
<PAGE> 19
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Lin, Shih-Hung...................................... 170(4) 170 *
Lin, Shiow-Hwa...................................... 226,191(1) 226,191 *
Lin, Suey-Shyang.................................... 2,706(2) 2,706 *
Lin, Tan-Huei....................................... 13,317(2) 13,317 *
Lin, Wei-Ting....................................... 1,172(4) 1,172 *
Lin, Ya-Ping........................................ 475(4) 475 *
Lin, Young-Tarng.................................... 170(4) 170 *
Liu Family Trust.................................... 152,302(1) 152,302 *
Liu, Chia-Hsiang.................................... 1,275(4) 1,275 *
Liu, Chia-Hui....................................... 255(4) 255 *
Liu, Chien Yu....................................... 1,624(2) 1,624 *
Liu, Chuang-Yo...................................... 1,020(4) 1,020 *
Liu, Chung-Yuh...................................... 2,550(4) 2,550 *
Liu, Ellen A. and Sheldon Furst..................... 49,762(1) 49,762 *
Liu, Evan Y. and Donna M. .......................... 49,762(1) 49,762 *
Liu, Jasmine Mo-Li.................................. 4,466(2) 4,466 *
Liu, Keh-Shium...................................... 38,986(2)(7) 38,986 *
Liu, Laura H. and Kenneth D. Pomerantz.............. 49,762(1) 49,762 *
Liu, Li-Yun......................................... 3,643(4) 3,643 *
Liu, Yu-Ching....................................... 680(4) 680 *
Lo Ho, Mei-Fan...................................... 38,505(4) 38,505 *
Logicom Holdings Inc................................ 121,358(3) 121,358 *
Lu Chiang, Mei-Ying................................. 2,706(2) 2,706 *
Lu, Hsiu-Chen....................................... 170(4) 170 *
Lue, Fun Gyao....................................... 2,165(2) 2,165 *
Luo, Jen-Chih....................................... 1,870(4) 1,870 *
Marie Wolpert Marital Trust......................... 15,632(3) 15,632 *
Martin, Chris....................................... 4,826(1) 4,826 *
Matsueda, Penni..................................... 16,588(1) 16,588 *
Medved, Benjamin.................................... 36,820(3) 36,820 *
Medved, David....................................... 590,101(3)(8) 590,101 *
Medved, Harry....................................... 36,820(3) 36,820 *
Medved, Jonathan.................................... 37,872(3) 37,872 *
Medved, Michael..................................... 67,264(3) 67,264 *
Medved, Yael Amishav................................ 216,796(3) 216,796 *
Mitchell, Mary...................................... 3,770(1) 3,770 *
Mo, Jen-Yuan........................................ 170(4) 170 *
Moskowitz, Henry & Rose............................. 97,636(3) 97,636 *
Moursund, Carter.................................... 17,568(1) 17,568 *
Palomo, Stephanie................................... 5,278(1) 5,278 *
Pan Overseas Corporation............................ 104,884(2) 104,884 *
Pan, Chu-Fen........................................ 850(4) 850 *
Pan, Yung-Yuan...................................... 1,082(2) 1,082 *
Paul Fan............................................ 974(2) 974 *
Peng, Chuan-Hwa..................................... 4,250(4) 4,250 *
Peng, Fei-Lun....................................... 170(4) 170 *
Peng, Kuei-Lin...................................... 425(4) 425 *
</TABLE>
18
<PAGE> 20
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Peng, Min-Chen...................................... 19,413(2) 19,413 *
Peng, Ming-Chih..................................... 1,275(4) 1,275 *
Peng, Sheng-Kan..................................... 162(2) 162 *
Peng, Yi-Chuan...................................... 340(4) 340 *
Pon, Chuen-Lan...................................... 812(2) 812 *
Pourner, Thom....................................... 754(1) 754 *
Riley, Brian........................................ 11,485(1) 11,485 *
Ripley, Rob......................................... 3,016(1) 3,016 *
Rogers, Teresa...................................... 1,810(1) 1,810 *
ROM Associates...................................... 958(3) 958 *
Schottenstein, Richard.............................. 1,316(3) 1,316 *
Schuster, John...................................... 45,239(1) 45,239 *
Shek, Alex and Joyce N. Trinh, Trustees or Successor
Trustees of Maple Summit Living Trust............. 3,016(1) 3,016 *
Shen, Hui-Hwa....................................... 541(2) 541 *
Shen, Yuen.......................................... 133,450(4) 133,450 *
Shieh, Han Ping..................................... 2,977(2) 2,977 *
Shih, Chien-Hui..................................... 850(4) 850 *
Shih, Lung-Chuan.................................... 170(4) 170 *
Shilo, Nathan Trustee............................... 448,222(3)(9) 448,222 *
Slonim, Igal Trustee................................ 25,810(3)(10) 25,810 *
Smith, Christine.................................... 5,777(1) 5,777 *
Sonnenschein, Irving & Martha....................... 1,756(3) 1,756 *
Stieger, Ron........................................ 19,543(1) 19,543 *
Su, Lih-Ying........................................ 8,500(4) 8,500 *
Tai, Hsin-Chia...................................... 143,480(4) 143,480 *
Tai, Hsiu-Ju........................................ 170(4) 170 *
Tai, Jui-Chih....................................... 458(4) 458 *
Tai, Shu-Yung....................................... 170(4) 170 *
Tailink Venture Corporation......................... 7,551(2) 7,551 *
Taiwan Taffeta Fabric Co., Ltd...................... 155,688(4) 155,688 *
Tsai, Chia-Yen...................................... 1,886(4) 1,886 *
Tsai, Chun-Chin..................................... 162(2) 162 *
Tsai, Fen-Fang...................................... 170(4) 170 *
Tsai, Hsien-Te...................................... 26,629(2) 26,629 *
Tsai, Hsuan......................................... 1,700(4) 1,700 *
Tsai, Mei-Hui....................................... 170(4) 170 *
Tsao, Yung-Wen...................................... 255(4) 255 *
Tseng, Chien-Cho.................................... 1,512(4) 1,512 *
Tseng, Chun-Lin..................................... 1,148(4) 1,148 *
Tseng, Li-Wen....................................... 170(4) 170 *
Tseng, Yung-Chung................................... 798(4) 798 *
Tsou, Pao-Chi....................................... 850(4) 850 *
U.S. Investors Ltd.................................. 6,386(3) 6,386 *
Unicycle Corp. ..................................... 58,586(3) 58,586 *
Universal Textile Co.,Ltd. ......................... 311,248(4) 311,248 *
Villena, Maria...................................... 1,508(1) 1,508 *
</TABLE>
19
<PAGE> 21
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Waller, Dorris...................................... 3,016(1) 3,016 *
Walter, Michelle.................................... 9,802(1) 9,802 *
Wang Meng, Chao-Fang................................ 16,891(2) 16,891 *
Wang, E-Lin......................................... 19,089(2) 19,089 *
Wang, Fu-Ling....................................... 12,505(2) 12,505 *
Wang, Hsiang-Jui.................................... 425(4) 425 *
Wang, Hsiao-Ping.................................... 4,250(4) 4,250 *
Wang, Jake.......................................... 22,620(1) 22,620 *
Wang, Kristine...................................... 22,620(1) 22,620 *
Wang, Mei-Yun....................................... 2,125(4) 2,125 *
Wang, Shou-Yi....................................... 19,975(4) 19,975 *
Wang, Shyne Ling.................................... 22,620(1) 22,620 *
Wang, Szu-Ling...................................... 5,569(2) 5,569 *
Wang, Wang-Nang..................................... 37,840(2) 37,840 *
Wang, Yi-Hua........................................ 1,624(2) 1,624 *
Wang, Yu-Man........................................ 3,562(4) 3,562 *
Wei, De-Neng........................................ 1,857(2) 1,857 *
Wei, Li-Chung....................................... 2,550(4) 2,550 *
Wei, Te-Hai......................................... 541(2) 541 *
Wen, Chao-Hsin...................................... 1,624(2) 1,624 *
Weng, Feng-Tai...................................... 85(4) 85 *
Westhill Capital Corporation........................ 79,367(1) 79,367 *
Wong, Nicholas...................................... 3,770(1) 3,770 *
Wu Shih, Pi-Fen..................................... 4,250(4) 4,250 *
Wu, Chia-Chuan...................................... 25,500(4) 25,500 *
Wu, Chia-Jen........................................ 101,745(4) 101,745 *
Wu, Chi-Chen........................................ 765(4) 765 *
Wu, Chih-Chung...................................... 595(4) 595 *
Wu, Chin-Hsuan...................................... 8,500(4) 8,500 *
Wu, Da-Hong......................................... 1,902(4) 1,902 *
Wu, Huei-Lan........................................ 2,125(4) 2,125 *
Wu, I-Te............................................ 170(4) 170 *
Wu, Jiang-Jang...................................... 1,700(4) 1,700 *
Wu, Liao Hsiao-Cheng................................ 34,000(4) 34,000 *
Wu, Li-Chun......................................... 425(4) 425 *
Wu, Ming-Hsiu....................................... 170(4) 170 *
Wu, Ming-Wei........................................ 8,500(4) 8,500 *
Wu, Shiu Yun........................................ 3,692(2) 3,692 *
Wuan-Fuh Investment Corp. Ltd....................... 38,040(2) 38,040 *
Wuan-Sun Investment Corp. Ltd....................... 47,170(2) 47,170 *
Wu-Huang, Li-Chin................................... 5,100(4) 5,100 *
Yang, Chien-Cheng................................... 850(4) 850 *
Yang, Chin-Chang.................................... 3,805(2) 3,805 *
Yang, Wei........................................... 91,630(4) 91,630 *
Yang, Yen-Ling...................................... 2,165(2) 2,165 *
Yang, Yung-Hsieng................................... 17,000(4) 17,000 *
Yea, Yu-Jen......................................... 425(4) 425 *
</TABLE>
20
<PAGE> 22
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF OUTSTANDING
SHARES SHARES BEING SHARES
BENEFICIALLY OFFERED BY TO BE OWNED
OWNED PRIOR TO THE SELLING UPON COMPLETION
NAME OF SELLING STOCKHOLDER THIS OFFERING SHAREHOLDERS OF OFFERING
--------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
Yeh, Mei-Huei....................................... 2,452(4) 2,452 *
Yih-Chyuan Investment Corp. Ltd..................... 9,129(2) 9,129 *
Yi-Kang Investment Co. Ltd.......................... 155,688(4) 155,688 *
Yu, Hua-Lung........................................ 2,055(4) 2,055 *
Zucconi, Donna...................................... 754(1) 754 *
</TABLE>
---------------
* Less than 1%.
(1) These shares were issued in connection with MRV's acquisition of the
outstanding capital stock of Astroterra Corporation from these selling
stockholders. In connection with this acquisition, MRV agreed that in the
event the price per MRV share paid in consideration for the Astroterra
shares were to fall below $63 per share at the time the registration
statement of which this Prospectus is part is declared effective by the
Securities and Exchange Commission, MRV would issue additional shares pro
rata to the Astroterra shareholders to make up the difference in value. If
the number of shares of MRV's common stock that MRV has registered for the
Astroterra shareholders is less than the actual number required in order to
satisfy its obligation to them, MRV will issue additional shares to the
Astroterra shareholders (up to a maximum of 502,652 shares) and may either
register such additional shares in this registration statement by means of
a pre-effective amendment thereto or file a new registration statement to
register the additional shares.
(2) These shares were issued in connection with MRV's acquisition of the
outstanding capital stock of Quantum Optech Inc., or QOI, a Taiwan
corporation from these selling stockholders. Approximately 40% of the
shares listed in the table for each of these stockholders have been placed
in escrow (the "QOI Escrowed Shares") to secure indemnification obligations
incurred by the QOI shareholders in connection with that acquisition. Up to
all of the QOI Escrowed Shares may be returned to MRV to satisfy MRV's
claims for indemnification. Up to one-third of the QOI Escrowed Shares
(other than those held by the principal employees of QOI) are to be
released from the escrow in July 2001 and any QOI Escrowed Shares that are
not required to satisfy MRV's indemnity claims are to be released from the
escrow in July 2002. Each of these selling shareholders have agreed that
they will not, acting as a group with other selling shareholders, sell more
than 100,000 shares at one time in any given month. This restriction does
not apply if a selling shareholder is selling the shares alone and not in
concert in any way with any other of these selling shareholders.
(3) The shares were issued in connection with MRV's acquisition of the
outstanding capital stock of Jolt Ltd. from these selling stockholders. In
connection with this acquisition, MRV agreed that in the event the MRV
shares paid in consideration for the Jolt shares were to decline in value
below $42.5 million (but not less than $31.9 million) at the time the
registration statement of which this Prospectus is part is declared
effective by the Securities and Exchange Commission, MRV would issue
additional shares pro rata to the Jolt shareholders to make up the
difference in value. If the number of shares of MRV's common stock that MRV
has registered for the Jolt shareholders is less than the actual number
required in order to satisfy its obligation to them, MRV will issue
additional shares to the Jolt shareholders and may either register such
additional shares in this registration statement by means of a
pre-effective amendment thereto or file a new registration statement to
register the additional shares.
(4) These shares were issued in connection with MRV's acquisition of
approximately 99.9% of the outstanding capital stock of Optronics
International Corp., or OIC, a Taiwan corporation from these selling
stockholders. Approximately 40% of the shares listed in the table for each
of these stockholders have been placed in escrow (the "OIC Escrowed
Shares") to secure indemnification
21
<PAGE> 23
obligations incurred by the OIC shareholders in connection with that
acquisition. Up to all of the OIC Escrowed Shares may be returned to MRV to
satisfy MRV's claims for indemnification. Up to one-third of the OIC
Escrowed Shares (other than those held by the principal employees of OIC)
are to be released from the escrow in July 2001 and any OIC Escrowed Shares
that are not required to satisfy MRV's indemnity claims are to be released
from the escrow in July 2002. Each of these selling shareholders have
agreed that they will not, acting as a group with other selling
shareholders, sell more than 100,000 shares at one time in any given month.
This restriction does not apply if a selling shareholder is selling the
shares alone and not in concert in any way with any other of these selling
shareholders.
(5) These shares were issued in connection with MRV's investment in Charlotte's
Networks, Inc., one of MRV's partner companies. At August 24, 2000, MRV
owed approximately 51.8% of the outstanding capital stock of this partner
company.
(6) Includes 32 shares that represent an aggregation of fractional shares
issued by MRV in connection with the acquisition of the OIC common stock.
Mr. Hwang has agreed to sell these shares for the account of the selling
stockholders entitled to them and to distribute the proceeds
proportionately.
(7) Includes 36 shares that represent an aggregation of fractional shares
issued by MRV in connection with the acquisition of the QOI common stock.
Mr. Liu has agreed to sell these shares for the account of the selling
stockholders entitled to them and to distribute the proceeds
proportionately.
(8) Includes 411,523 shares issuable upon exercise of options to purchase MRV's
Common Stock at $30.375 per share. These options vest in equal installments
of 2.778% per month from May 31, 2000 so long as Dr. Medved remains with
Jolt and remain exercisable until May 30, 2005.
(9) Consists of shares issuable upon exercise of outstanding options issued in
favor of employees of Jolt, for which Mr. Shilo serves as Trustee at $2.625
per share. These options vest in equal installments of 1.667% per month
from May 31, 2000 and may be exercised by Mr. Shilo on behalf of the
respective employees entitled so long as such employee remains with Jolt
and remain exercisable until May 30, 2005.
(10) Consists of shares issuable upon exercise of outstanding options and
warrants that were issued in substitution for options and warrants of Jolt
outstanding at the time of its acquisition by MRV.
The information concerning the selling stockholders may change from time to
time and will be set forth in supplements to this prospectus as required.
MRV is paying all expenses incident to the registration of the offer and
sale of the shares of common stock to the public pursuant to this prospectus
other than selling commissions and fees.
Except as noted above, none of the selling stockholders has had any
material relationship with MRV during the past three years.
22
<PAGE> 24
PLAN OF DISTRIBUTION
We are registering the common stock covered by this prospectus for the
selling stockholders. To the extent required, we will identify any additional
selling stockholder in a supplement to this prospectus.
The selling stockholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. The selling
stockholders may sell the common stock on The Nasdaq National Market, in the
over-the-counter market or in private transactions, at market prices prevailing
at the time of sale, at prices related to the prevailing market prices, or at
negotiated prices.
In addition, the selling stockholders may sell some or all of their common
stock through:
- a block trade in which a broker-dealer may resell a portion of the block,
as principal, in order to facilitate the transaction;
- purchases by a broker-dealer, as principal, and resale by the
broker-dealers for their account; or
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
The selling stockholders may enter into hedging transactions with respect
to their shares. For example, the selling stockholders may:
- enter into transactions involving short sales of the common stock by
broker-dealers;
- sell common stock short themselves and redeliver such shares to close out
their short positions;
- enter into option or other types of transactions that require the selling
stockholders to deliver common stock to a broker-dealer, who will then
resell or transfer the common stock under this prospectus; or
- loan or pledge the common stock to a broker-dealer, who may sell the
loaned shares or, in the event of default, sell the pledged shares.
The selling stockholders may negotiate and pay broker-dealers commissions,
discounts or concessions for their services. Broker-dealers engaged by the
selling stockholders may allow other broker-dealers to participate in resales.
However, the selling stockholders and any broker-dealers involved in the sale or
resale of the common stock may qualify as "underwriters" within the meaning of
the Securities Act of 1933. In addition, the broker-dealers' commissions,
discounts or concession may qualify as underwriters' compensation under the
Securities Act of 1933. If the selling stockholders or any broker-dealers
qualify as "underwriters," they will be subject to the prospectus delivery
requirements of the Securities Act of 1933.
In addition to selling their common stock under this prospectus, the
selling stockholders may:
- to indemnify any broker-dealer or agent against certain liabilities
related to the selling of the common stock, including liabilities arising
under the Securities Act of 1933;
- transfer their common stock in other ways not involving market makers or
established trading markets, including directly by gift, distribution, or
other transfer; or
- sell their common stock under Rule 144 of the Securities Act of 1933
rather than under this prospectus, if the transaction meets the
requirements of Rule 144.
When a particular offering is made, if required, we will distribute to you
a prospectus supplement. This supplement will set forth the names of the selling
stockholders, the aggregate amount and type of shares being offered, the number
of such shares owned before and after the completion of any such offering, and,
to the extent required, the terms of the offering, including the name or names
of any underwriters, broker-dealers or agents, any discounts, commissions and
other terms constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers. Any underwriters, brokers, dealers or agents who participate in
any sale of the shares may also perform services for our affiliates or us.
23
<PAGE> 25
All expenses of the registration of the shares will be paid by us,
including, without limitation, all registration and filing fees, printing
expenses, expenses of compliance with blue sky laws, fees and disbursements of
our counsel and expenses of any audits incidental to this registration. The
selling stockholders will pay expenses related to any sales commissions or
underwriting discounts and fees and expenses of their counsel incurred in
connection with the sale of shares through this prospectus.
We have agreed to indemnify the selling stockholders who acquired their
shares in connection with our acquisition of the capital stock Astroterra
Corporation against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon for
MRV by Kirkpatrick & Lockhart LLP, Beverly Hills, California.
EXPERTS
The financial statements and schedule of MRV Communications, Inc. included
in its Form 10-K, as amended by its Form 10-K/A for the year ended December 31,
1999, incorporated by reference in this registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The financial statements of Fiber Optic Communications, Inc. and Optronics
International Corp. included in MRV's Form 8-K/A dated July 7, 2000 and Form 8-K
dated August 3, 2000, incorporated by reference into this registration statement
to the extent and for the periods indicated in their reports, have been audited
by T N Soong & Co., a Member Firm of Andersen Worldwide, SC, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
24
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the Common Stock being registered
hereby, other than underwriting commissions and discounts, all of which are
estimated except for the SEC filing fees.
<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------
<S> <C>
SEC registration fee........................................ $171,427
Printing and engraving expenses............................. 10,000
Legal fees and expenses..................................... 20,000
Accounting fees and expenses................................ 5,000
Miscellaneous expenses...................................... 3,573
--------
Total..................................................... $210,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article 8 of the Registrant's
Certificate of Incorporation and Article IX of the Registrant's Bylaws provide
for indemnification of the Registrant's directors, officers, employees, and
other agents to the extent and under the circumstances permitted by the Delaware
General Corporation Law. The Registrant has also entered into agreements with
its directors and executive officers that will require the Registrant, among
other things, to indemnify them against certain liabilities that may arise by
reason of their status or service as directors to the fullest extent not
prohibited by law.
Certain of the selling stockholders have agreed to indemnify the Company
against certain liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
4.1 Form of Common Stock certificate (incorporated by reference
to Exhibit 4.5 of the Registrant's Registration Statement of
Form S-3 (file no. 333-64017).
5 Opinion of Kirkpatrick & Lockhart LLP as to the validity of
the securities being registered.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of TN Soong & Co.
23.3 Consent of Kirkpatrick & Lockhart LLP (contained in Exhibit
5).
24.1 Power of Attorney (contained on Signature page).
</TABLE>
---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this
II-1
<PAGE> 27
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b), if in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(c) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
provided, however, that the undertakings set forth in paragraph (a) and (b)
above shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective. For the purpose of
determining any liability under the Securities Act of 1933, each post-effective
that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chatsworth, State of California, on the 24th day of
August, 2000.
MRV COMMUNICATIONS, INC.
By: /s/ NOAM LOTAN
------------------------------------
Noam Lotan,
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes an appoints Noam Lotan, Shlomo Margalit and Edmund
Glazer, and each of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution for him in any and all capacities, to sign (1)
any and all amendments (including post-effective amendments) to this
Registration Statement and (2) any registration statement or post-effective
amendment thereto to be filed with the Securities and Exchange Commission
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAMES TITLE DATE
----- ----- ----
<S> <C> <C>
/s/ NOAM LOTAN President, Chief Executive August 24, 2000
------------------------------------------------ Officer (Principal Executive
Noam Lotan Officer), and a Director
/s/ SHLOMO MARGALIT Chairman of the Board, Chief August 24, 2000
------------------------------------------------ Technical Officer, Secretary,
Shlomo Margalit and a Director
/s/ EDMUND GLAZER Vice President of Finance and August 24, 2000
------------------------------------------------ Administration, Chief Financial
Edmund Glazer Officer (Principal Financial
and Accounting Officer)
/s/ IGAL SHIDLOVSKY Director August 24, 2000
------------------------------------------------
Igal Shidlovsky
/s/ GUENTER JAENSCH Director August 24, 2000
------------------------------------------------
Guenter Jaensch
</TABLE>
II-3
<PAGE> 29
<TABLE>
<CAPTION>
NAMES TITLE DATE
----- ----- ----
<S> <C> <C>
/s/ DANIEL TSUI Director August 24, 2000
------------------------------------------------
Daniel Tsui
/s/ BARUCH FISCHER Director August 24, 2000
------------------------------------------------
Baruch Fischer
</TABLE>
II-4
