UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 8, 2016
DASAN ZHONE SOLUTIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
 
Delaware
 
000-32743
 
22-3509099
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File No.)
 
(I.R.S. Employer
Identification No.)
7195 Oakport Street
Oakland, California 94621
(Address of Principal Executive Offices, Including Zip Code)
(510) 777-7000
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))












Item 5.02    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 9, 2016, DASAN Zhone Solutions, Inc. (the “Company”) entered into a letter agreement with Eric Presworsky, the Company’s Chief Technology Officer, pursuant to which the Company agreed to pay to Mr. Presworsky a one-time cash stay bonus in the amount of $300,000 on a date to be determined by the Company but prior to March 15, 2017, subject to Mr. Presworsky’s continued employment with the Company through the date of payment. In the event Mr. Presworsky’s employment is terminated by the Company withoFORM ut cause prior to the payment of the stay bonus, subject to his execution of a general release of claims in favor of the Company, the Company will pay the stay bonus to him. This letter agreement supersedes all previous severance or retention agreements or arrangements between the Company and Mr. Presworsky.
The foregoing description of the letter agreement between the Company and Mr. Presworsky does not purport to be complete and is qualified in its entirety by reference to the letter agreement, with is filed as Exhibit 10.1 hereto, and is incorporated herein by reference.
Item 8.01    Other Events.
As previously reported, on September 12, 2016, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the Company did not satisfy Nasdaq’s initial listing standard requiring a minimum bid price of $4 per share (or a minimum closing price of $3 per share for five consecutive trading days or $2 per share for 90 consecutive trading days) at the closing of the acquisition of Dasan Network Solutions, Inc., the Company’s common stock would be subject to delisting unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”). On September 19, 2016, the Company requested a hearing before the Panel with respect to the staff’s delisting determination letter, which was held on November 3, 2016. At the hearing, the Company presented its plan to gain compliance with the initial listing minimum bid or closing price requirement, including via the implementation of a reverse stock split if necessary.
On November 8, 2016, the Company received a letter from Nasdaq stating that the Panel had granted the Company’s request for continued listing on Nasdaq, subject to the Company evidencing compliance with the initial listing minimum bid or closing price requirement by March 13, 2017. The Company expects to timely complete a reverse stock split in a ratio sufficient to gain compliance with the initial listing minimum bid or closing price requirement as needed by March 13, 2017. The compliance period granted by the Panel through March 13, 2017 is subject to the Company filing a preliminary proxy statement and a definitive proxy statement seeking stockholder approval of a reverse stock split with the Securities and










Exchange Commission (the “SEC”) by no later than January 31, 2017 and February 13, 2017, respectively. If the Company fails to implement the reverse stock split and demonstrate compliance by this date, or fails to file the required proxy statements with the SEC by the applicable deadline, the Panel will issue a final determination to delist the Company’s shares and suspend trading of the Company’s shares on Nasdaq. During the compliance period, the Company’s shares of common stock will continue to be listed and traded on the Nasdaq Capital Market.
Although the Company intends to comply with the conditions set forth in the Nasdaq determination letter for continued listing, there can be no assurance that the Company will be able to regain compliance during the compliance period. Delisting from the Nasdaq Capital Market could have a material adverse effect on the Company’s business and on the trading of its common stock.
On November 10, 2016, the Company issued a press release announcing its receipt of the Nasdaq letter regarding the Panel determination. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Cautionary Note Regarding Forward Looking Statements : This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements related to the Company’s compliance with initial listing minimum bid or closing price requirements, the Company’s compliance with the other conditions of the Panel determination, and the consequences of delisting of the Company’s common stock from the Nasdaq Capital Market. The Company uses words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and similar expressions to identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those identified in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. For information about the factors that could cause such differences, please refer to the Company’s SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent Quarterly Reports on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this Current Report on Form 8-K speak only as of the date of this report and the Company assumes no obligation to update any forward-looking statements for any reason.
Item 9.01    Financial Statements and Exhibits.
(d)
Exhibits










10.1#
Letter Agreement, dated November 9, 2016, between DASAN Zhone Solutions, Inc. and Eric Presworsky.
99.1
Press Release dated November 10, 2016 issued by DASAN Zhone Solutions, Inc.

# Management contract or compensatory plan or arrangement in which one or more executive officers, named executives or directors participates.












SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
Date: November 14, 2016
 
 
 
DASAN Zhone Solutions, Inc.
 
 
 
 
 
 
 
 
By:
 
/s/ KIRK MISAKA
 
 
 
 
 
 
Kirk Misaka
 
 
 
 
 
 
Chief Financial Officer











EXHIBIT INDEX

 
 
 
Exhibit
Number
 
Description
 
 
10.1#
 
Letter Agreement, dated November 9, 2016, between DASAN Zhone Solutions, Inc. and Eric Presworsky.

99.1
 
Press Release dated November 10, 2016 issued by DASAN Zhone Solutions, Inc.
# Management contract or compensatory plan or arrangement in which one or more executive officers, named executives or directors participates.










Exhibit 10.1

STAYBONUSPRESWORSKYFI_IMAGE1.GIF

November 9, 2016                         


Mr. Eric Presworsky
319 Calle La Mesa
Moraga, CA 94556

Re: Stay Bonus

Dear Eric:

In your capacity as Chief Technology Officer of DASAN Zhone Solutions, Inc (DZSI), DSZI wishes to confirm that you will receive a base salary of $240,000 annually.

In addition, as a key officer of DZSI, DSZI will provide you with a one time cash stay bonus of $300,000, less payroll withholdings, to be paid on a date to be determined by DSZI on or before March 15, 2017. In exchange for this payment, you agree to continue to serve, as an employee of DSZI in the position of Chief Technology Officer, through the date of payment. Except as otherwise specifically provided in the next paragraph, you will only be eligible to receive the stay bonus if you remain employed by DSZI through the date of payment.

In the event your employment is terminated by DSZI without “cause” (as defined below) prior to the payment of the stay bonus, you will be entitled to receive, in lieu of any severance benefits to which you may otherwise be entitled under any severance plan, agreement or program of or with DSZI, an amount equal to the stay bonus, which will be paid in cash in a lump sum within ten days following the effective date of your Release (as defined below). As a condition to your receipt of the stay bonus pursuant to this paragraph, you shall execute and not revoke a general release of all claims in favor of DSZI(the “ Release ”) in a form acceptable to DSZI. In the event the Release does not become effective within the fifty-five (55) day period following the date of your termination of employment, you shall not be entitled to the stay bonus. In the event of your termination of employment for any reason other than a termination by DSZI without cause, you will no longer be eligible to receive the stay bonus.

For purposes of this letter agreement, the term “cause” includes: (a) your willful or continued failure to substantially perform your duties with DZSI, (b) your conviction of, guilty plea to, or entry of a nolo contendere plea to a felony, (c) your willful or reckless misconduct that has caused or is reasonably likely to cause demonstrable and material financial injury to DZSI, or (d) your willful and material breach of the proprietary rights agreement pertaining to disclosure and assignment of inventions, confidentiality and no solicitation, regardless of its termination.
 

This letter agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and, accordingly, the retention benefits payable under Section 1 above shall be paid no later than the later of: (i) the fifteenth (15th) day of the third (3rd) month following your first taxable year in which such amounts are no longer subject to a substantial risk of


forfeiture, and (ii) the fifteenth (15th) day of the third month following first taxable year of DSZI in which such amounts are no longer subject to substantial risk of forfeiture, as determined in accordance with Code Section 409A and any Treasury Regulations and other guidance issued thereunder. To the extent applicable, this letter agreement shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder and the foregoing exemption.

Your employment is and shall continue to be at-will, as defined under applicable law, and your employment with DSZI may be terminated by either you or DSZI at any time for any or no reason, with or without notice. If your employment terminates for any reason, except as otherwise specifically provided in this letter agreement, you shall not be entitled to any payments, benefits, damages, awards or compensation other than payment of unpaid annual salary and paid time off though the date of termination, and DSZI shall have no further obligation to you.

You agree not to disclose to others any information regarding the terms of this letter, except that you may disclose this information to your immediate family (spouse, children or parents), attorney, accountant, or other professional advisor to whom you must make the disclosure in order for them to render professional services to you, or as otherwise compelled by law. You will instruct them, however, to maintain the confidentiality of this information, just as you must.
This letter agreement sets forth the entire understanding of you and DSZI with respect to the subject matter hereof and shall supersede any agreement, arrangement or policy to which DSZI is a party with respect to any retention bonus or termination benefits payable to you, including, without limitation, that certain letter agreement between you and DSZI originally dated July 21, 2008 and executed May 24, 2012, which is hereby terminated.
This letter agreement shall be interpreted, administered, and enforced in accordance with the statutes and common law of the State of California, other than any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this letter agreement to the substantive laws of any other jurisdiction.
This letter agreement may only be modified by a written amendment signed by you and an authorized officer of DSZI.
Sincerely,

/s/ Il Yung Kim
 
II Yung Kim
 
Co-Chief Executive Officer
 


I AGREE TO AND ACCEPT TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT.


/s/ Eric Presworsky
 
11/9/16
Eric Presworsky
 
Date





Exhibit 99.1

DZSINASDAQPANELDETERM_IMAGE1.GIF
DZSINASDAQPANELDETERM_IMAGE2.JPG
Contacts
 
DASAN Zhone Investor Relations:
DASAN Zhone Public Relations:
Tel: +1 510.777.7013
Tel: +1 760.814.8194
Fax: +1 510.777.7001
E: carla.vallone@portavocepr.com
E: investor-relations@zhone.com
 
DASAN Zhone Announces Receipt of Nasdaq Panel Determination to Allow Continued Listing

Oakland, California, November 10, 2016 – DASAN Zhone Solutions, Inc. (NASDAQ: DZSI), a global leader in fiber access transformation for enterprise and service provider networks, announced that, on November 8, 2016, it received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Nasdaq Hearings Panel (the “Panel”) had granted the company’s request for continued listing on Nasdaq, subject to the company evidencing compliance with the initial listing minimum bid or closing price requirement by March 13, 2017.
As previously announced, on September 12, 2016, DASAN Zhone Solutions received a letter from Nasdaq notifying the company that, because it did not satisfy Nasdaq’s initial listing standard requiring a minimum bid price of $4 per share (or a minimum closing price of $3 per share for five consecutive trading days or $2 per share for 90 consecutive trading days) at the closing of the acquisition of Dasan Network Solutions, Inc., the company’s common stock would be subject to delisting unless the company timely requested a hearing before the Panel. On September 19, 2016, the company requested a hearing before the Panel, which was held on November 3, 2016. At the hearing, the company presented its plan to gain compliance with the initial listing minimum bid or closing price requirement, including via the implementation of a reverse stock split if necessary.

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The company expects to timely complete a reverse stock split in a ratio sufficient to gain compliance with the initial listing minimum bid or closing price requirement as needed by March 13, 2017. The compliance period granted by the Panel through March 13, 2017 is subject to the company filing a preliminary proxy statement and a definitive proxy statement seeking stockholder approval of a reverse stock split with the Securities and Exchange Commission (the “SEC”) by no later than January 31, 2017 and February 13, 2017, respectively.
If the company fails to implement the reverse stock split and demonstrate compliance by this date, or fails to file the required proxy statements with the SEC by the applicable deadline, the Panel will issue a final determination to delist the company’s shares and suspend trading of the company’s shares on Nasdaq. During the compliance period, the company’s shares of common stock will continue to be listed and traded on the Nasdaq Capital Market.
Although DASAN Zhone Solutions intends to comply with the conditions set forth in the Nasdaq determination letter for continued listing, there can be no assurance that the company will be able to regain compliance during the compliance period. Delisting from the Nasdaq Capital Market could have a material adverse effect on the company’s business and on the trading of its common stock.
About DASAN Zhone Solutions
DASAN Zhone Solutions, Inc. is a global leader in broad-based network access solutions. The company provides solutions in five major product areas including broadband access, Ethernet switching, mobile backhaul, passive optical LAN (POL) and software defined networks (SDN). More than 750 of the world’s most innovative network operators, service providers and enterprises turn to DASAN Zhone Solutions for fiber access transformation. DASAN Zhone Solutions is committed to building the fastest and highest quality All IP Multi-Service solution for its customers. DASAN Zhone is headquartered in Oakland, California.
DASAN Zhone Solutions, the DASAN Zhone Solutions logo, and al DASAN Zhone product names are trademarks of DASAN Zhone Solutions, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or products names are all subject to change without notice.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and

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similar expressions are intended to identify forward-looking statements. In addition, forward-looking statements include, among others, statements that refer to the company’s compliance with initial listing minimum bid or closing price requirements, the company’s compliance with the other conditions of the Panel determination, and the consequences of delisting of the company’s common stock from the Nasdaq Capital Market. Readers are cautioned that actual results could differ materially from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, commercial acceptance of the Company's products; intense competition in the communications equipment market; the Company's ability to execute on its strategy and operating plans; and economic conditions specific to the communications, networking, internet and related industries. In addition, please refer to the risk factors contained in the Company's SEC filings available at www.sec.gov , including without limitation, the Company's most recent reports on Forms 10-K, 10-Q and 8-K. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements for any reason.

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