Alliance Fiber Optic Products, Inc

Rights were initially distributed under the original agreement to holders of the Company’s common stock at a rate of one Right for each share of common stock. Since the occurrence of a one-for-five reverse split of the common stock at the close of business on August 27, 2010, five Rights had been associated with each outstanding share of common stock. The Restated Rights Agreement restores the initial one Right per share of common stock ratio of the original agreement, but is subject to adjustment following the Restatement Date as provided in the Restated Rights Agreement.
The Restated Rights Agreement is designed to enable all of the Company’s stockholders to realize the full value of their investment and to continue to provide for fair and equal treatment for all stockholders in the event that an unsolicited attempt is made to acquire AFOP. The amendment and restatement of the Agreement is intended as an ongoing means to guard against abusive takeover tactics.
The Rights continue to be exercisable only if a person or group acquires 15 percent or more of AFOP’s common stock, subject to certain exceptions set forth in the Restated Rights Agreement.
The Rights will continue to trade with the Company’s common stock unless and until they are separated upon the occurrence of certain future events. AFOP’s Board of Directors may terminate the Restated Rights Agreement at any time or redeem the Rights prior to the time a person acquires 15 percent or more of AFOP’s common stock. A copy of the Amended and Restated Rights Agreement will be filed with the Securities and Exchange Commission.