UTSTARCOM HOLDINGS CORP. — Major Shareholding Notification 2004

Jun 21, 2004

SC 13D 1 a04-7035_1sc13d.htm SC 13D

| UNITED
STATES |
| --- |
| SECURITIES
AND EXCHANGE COMMISSION |
| Washington,
D.C. 20549 |
| SCHEDULE
13D |

Under the Securities Exchange Act of 1934 (Amendment No. )*

*Audiovox Corporation*

(Name of Issuer)

*Class A Common Stock, par value $0.01*

*Class B Common Stock, par value $0.01*

(Title of Class of Securities)

*050757103 (Class A Common Stock)*

(CUSIP Number)

*Hong L. Lu*

*President and Chief Executive Officer*

*UTStarcom, Inc.*

*1275 Harbor Bay Parkway*

*Alameda, California 94502*

*(510) 864-8800*

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

*June 11, 2004*

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

*Note* : Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

• The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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| CUSIP
No. 050757103 — 1. | Names of Reporting
Persons. I.R.S. Identification Nos. of above persons (entities only) UTSTARCOM, INC., I.R.S IDENTIFICATION NO: N/A | |
| --- | --- | --- |
| 2. | Check
the Appropriate Box if a Member of a Group (See Instructions) | |
| | (a) | o |
| | (b) | o |
| 3. | SEC
Use Only | |
| 4. | Source
of Funds (See Instructions) WC | |
| 5. | Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e) o | |
| 6. | Citizenship or Place of Organization STATE OF DELAWARE | |
| Number of Shares Beneficially Owned by Each Reporting Person With | 7. | Sole
Voting Power N/A |
| | 8. | Shared
Voting Power 1,918,977 shares of Class A Common Stock (1) 2,144,152 shares of Class B Common Stock (1) |
| | 9. | Sole
Dispositive Power N/A |
| | 10. | Shared Dispositive Power N/A |
| 11. | Aggregate
Amount Beneficially Owned by Each Reporting Person 1,918,977 shares of Class A Common Stock (1) 2,144,152 shares of Class B Common Stock (1) | |
| 12. | Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) o | |
| 13. | Percent
of Class Represented by Amount in Row (11) 9.2% of Class A Common Stock and 94.8% of Class B Common Stock, representing
an aggregate of approximately 53.8% of the aggregate outstanding voting power
of Audiovox Corporation. If all of
the shares of Class B Common Stock were converted into shares of Class A
Common Stock, the aggregate shares of Class A Common Stock beneficially owned
by UTStarcom, Inc. would be 4,063,129 shares, representing 19.6% of Class A
Common Stock and 19.6% of the aggregate outstanding voting power of Audiovox
Corporation. (2) | |
| 14. | Type of Reporting Person
(See Instructions) CO | |

(1) Beneficial ownership of the Audiovox Corporation Class A Common Stock and the Class B Common Stock referred to herein is being reported hereunder solely because UTStarcom, Inc. may be deemed to have beneficial ownership of 1,918,977 shares of Audiovox Corporation Class A Common Stock and 2,144,152 shares of Class B Common Stock (all of which are outstanding as of June 11, 2004) as a result of the Voting Agreement (described in this Statement) between UTStarcom, Inc. and John J. Shalam, a stockholder of Audiovox Corporation. If all of the shares of Class B Common Stock were converted into shares of Class A Common Stock, the aggregate shares of Class A Common Stock beneficially owned by UTStarcom, Inc. would be 4,063,129 shares. The filing of this Statement shall not be construed as an admission that UTStarcom, Inc. is, for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, the beneficial owner of any of the shares of Audiovox Corporation Class A Common Stock or Class B Common Stock subject to the Voting Agreement.

(2) The calculation of the percentage is based on the number of shares of Audiovox Corporation Class A Common Stock and Class B Common Stock outstanding as of April 9, 2004, as disclosed in Audiovox Corporation’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2004.

2

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Item 1.	Security and Issuer
This Statement on
Schedule 13D (this “ Statement ”) relates to the Class A Common Stock,
par value $0.01 per share (the “ Class A Common Stock ”) and Class B
Common Stock, par value $0.01 per share (the “ Class B Common Stock ”),
of Audiovox Corporation, a Delaware corporation (“ Audiovox ” or the “ Issuer ”). The Issuer’s principal executive offices
are located at 150 Marcus Boulevard, Hauppauge, New York 11788.
Item 2.	Identity and Background
	(a) This Statement is being filed by UTStarcom, Inc., a
Delaware corporation (“ UTStarcom ”).
	(b) The address of the principal business and principal
office of UTStarcom is 1275 Harbor Bay Parkway, Alameda, California 94502.
	(c) UTStarcom is a global leader in IP access networking
solutions and international service and support. The company sells its wireline, wireless, optical and switching
solutions to operators in both fast growth and established telecommunications
markets around the world. UTStarcom
enables its customers to rapidly deploy revenue-generating access services
using their existing infrastructure, while providing a migration path to
cost-efficient end-to-end IP networks.
Founded in 1991 and headquartered in Alameda, California, the company
has research and design operations in New Jersey, China, and India.
	(d) During the past five years, UTStarcom has not been
convicted in a criminal proceeding.
	(e) During the last five years, UTStarcom has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Set forth on Schedule A
to this Statement, and incorporated herein by reference, is the (a) name, (b)
residence or business address, (c) present principal occupation or employment
and the name, principal business and address of any corporation or other
organization in which such employment is conducted and (d) citizenship, of
each executive officer and director of UTStarcom.
During the last five
years, to the knowledge of UTStarcom, none of its directors or executive
officers, (a) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.

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Item 3.	Source and Amount of Funds or Other Consideration
On June 11, 2004,
Audiovox Communications Corp., a Delaware corporation (“ ACC ”), a
subsidiary of the Issuer, Quintex Mobile Communications Corporation, a
Delaware corporation and a wholly owned subsidiary of ACC (“ Quintex ”),
Audiovox Communications Canada Co., a Nova Scotia company (“ ACCC ”;
and, together with ACC and Quintex, collectively, the “ Seller ”), the
Issuer, UTStarcom and its Canadian subsidiary, UTStarcom Canada Company, a
Nova Scotia company, entered into an Asset Purchase Agreement (the “ Asset
Purchase Agreement ”).
Pursuant to the Asset
Purchase Agreement, and subject to the conditions set forth therein
(including approval of the Issuer’s stockholders, certain regulatory
approvals and other customary conditions), UTStarcom agreed, among other things,
to acquire certain of the assets, and to assume certain of the liabilities,
of the Seller relating to the wireless handset business of the Issuer, for
$165.1 million in cash (the “ Acquisition ”). As a part of the transaction, UTStarcom is expected to assume
approximately $40 million in net working capital, including inventories,
pre-paids, property, plant & equipment, third-party payables and certain
accrued expenses. UTStarcom will
obtain such funds from existing resources or borrowing availability.
References to, and
descriptions of, the Acquisition and the Asset Purchase Agreement set forth
herein are qualified in their entirety by reference to the copy of the Asset
Purchase Agreement included as Exhibit 99.1 to this Statement, which is
incorporated by reference herein in its entirety where such reference and
description appear.
The information set
forth in Item 4 of this Statement is hereby incorporated by reference herein.
Item 4.	Purpose of Transaction
As described in Item 3
above, pursuant to the Asset Purchase Agreement, and subject to the
conditions set forth therein (including approval of the Issuer’s
shareholders, certain regulatory approvals and other customary conditions),
UTStarcom agreed, among other things, to acquire certain of the assets, and
to assume certain of the liabilities, of the Seller relating to the wireless
handset business of the Issuer, including approximately 269 employees. As a part of the transaction, UTStarcom is
expected to assume approximately $40 million in net working capital,
including inventories, pre-paids, property, plant & equipment,
third-party payables and certain accrued expenses.
As a condition to
UTStarcom’s agreement to enter into the Asset Purchase Agreement and in
consideration thereof, UTStarcom and John J. Shalam, a stockholder of the
Issuer (the “ Stockholder ”) entered into a Voting Agreement and
Irrevocable Proxy (the “ Voting Agreement ”) pursuant to which the
Stockholder agreed that at any meeting of the stockholders of the Issuer,
however called, or any adjournment thereof, or by written consent, the
Stockholder shall be present (in person or by proxy) and vote (or cause to be
voted) all of his Voting Shares (as defined below), in favor of the approval
of the Asset Purchase Agreement and the transactions contemplated
thereby. “ Voting Shares ” is
defined as 1,918,977 shares of Class A Common Stock and 2,144,152 shares of
Class B Common Stock, together with any shares of Class A Common Stock

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| and Class B Common
Stock, acquired after June 11, 2004, whether upon the exercise of options,
conversion of convertible securities or otherwise, and any other voting
securities of the Issuer (whether acquired theretofore or thereafter) that
are directly owned by the Stockholder.
In addition, the Stockholder appoints UTStarcom as its proxy (which
proxy is irrevocable and which appointment is coupled with an interest,
including for purposes of Section 212 of the Delaware General Corporation
Law) to vote solely in favor of the approval of the Asset Purchase Agreement
and the transactions contemplated thereby.
The Stockholder agreed to execute any further agreement or form
reasonably necessary or appropriate to confirm and effectuate the grant of
the proxy contained in the Voting Agreement. |
| --- |
| In addition, pursuant
to the Voting Agreement, the Stockholder agreed not to (a) sell, transfer,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of, or
limitation on the voting rights of, any of the Voting Shares, (b) grant any
proxies or powers of attorney, deposit any Voting Shares into a voting trust
or enter into a voting agreement with respect to any Voting Shares, (c) take
any action that would cause any representation or warranty of the Stockholder
contained in the Voting Agreement to become untrue or incorrect or have the
effect of preventing or disabling Stockholder from performing his obligations
under the Voting Agreement or (d) commit or agree to take any of the actions
prohibited by this sentence provided, that nothing in the Voting Agreement
will limit or restrict the Stockholder from acting in such Stockholder’s
capacity as an officer or director of the Company (it being understood that
the Voting Agreement shall apply to the Stockholder solely in his capacity as
a stockholder of the Issuer). The
Stockholder further agreed that any transfer of Voting Shares not permitted
by the Voting Agreement shall be null and void and that the any such
prohibited transfer may and should be enjoined. If any involuntary transfer of any of the Voting Shares shall
occur (including, but not limited to, a sale by the Stockholder’s trustee in
any bankruptcy, or a sale to a purchaser at any creditor’s or court sale),
the transferee shall take and hold such Voting Shares subject to all of the
restrictions, liabilities and rights under the Voting Agreement, which shall
continue in full force and effect; provided, however, that such restriction
shall not apply to any sale, transfer, pledge, encumbrance, assignment or
other disposition if, after such action, the remaining Voting Shares
constitute 50.5% of the voting power of all outstanding shares of the
Issuer. In furtherance of the Voting
Agreement, and concurrently therewith, the Stockholder shall authorize the
Issuer or the Issuer’s counsel to notify the Issuer’s transfer agent that
there is a stop transfer order with respect to the Voting Shares that
constitute 50.5% of the voting power of all outstanding shares of the Issuer. |
| Except as set forth
above or in Item 5 below, neither UTStarcom nor, to the best of UTStarcom’s
knowledge, any of its executive officers, directors or controlling persons
has any plan or proposal which relates to or would result in any of the
actions specified in clause (a) through (j) of Item 4 of Schedule 13D. |
| References to, and
descriptions of, the Acquisition, the Asset Purchase Agreement and the Voting
Agreement set forth herein are qualified in their entirety by reference to
the copies of the Asset Purchase Agreement and the Voting Agreement included
as Exhibits 99.1 and 99.2, respectively, to this Statement, which are
incorporated by reference herein in their entirety where such references and
descriptions appear. |

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Item 5.	Interest in Securities of the Issuer
(a)-(b) As a result of the Voting Agreement,
UTStarcom may be deemed to be the beneficial owner of 1,918,977 shares of
Class A Common Stock (which represents approximately 9.2% of the outstanding
Class A Common Stock) and 2,144,152 shares of Class B Common Stock (which
represents approximately 94.8% of the Class B Common Stock), representing approximately
53.8% of the aggregate outstanding voting power of the Issuer, together with
any shares of Class A Common Stock and Class B Common Stock, acquired after
June 11, 2004, whether upon the exercise of options, conversion of
convertible securities or otherwise, and any other voting securities of the
Issuer (whether acquired theretofore or thereafter) that are directly owned
by Stockholder. If all of the shares of Class B Common Stock were converted
into shares of Class A Common Stock, the aggregate shares of Class A Common
Stock beneficially owned by UTStarcom would be 4,063,129 shares, representing
19.6% of Class A Common Stock and 19.6% of the aggregate outstanding voting
power of the Issuer. The calculation of the foregoing percentages is based on
the number of shares of Class A Common Stock and Class B Common Stock
outstanding as of April 9, 2004, as disclosed in the Issuer’s Quarterly
Report on Form 10-Q for the quarter ended February 29, 2004. UTStarcom has shared power to vote the
Voting Shares for the limited purposes described in Item 4 of this Statement;
UTStarcom does not have the power to dispose of such shares.
Except as disclosed in
this Item 5(a)-(b), neither UTStarcom nor, to the best of its knowledge, any
of the persons listed on Schedule A to this Statement, beneficially owns any
shares of Class A Common Stock or Class B Common Stock or has the right to
acquire any shares of Class A Common Stock or Class B Common Stock.
The filing of this
Statement shall not be construed as an admission by UTStarcom that it is, for
purposes of Section 13(d) of the Exchange Act, the beneficial owner of shares
of Class A Common Stock or Class B Common Stock owned by the Stockholder.
(c) Except as disclosed in this Statement,
neither UTStarcom nor, to its knowledge, any of the persons listed on
Schedule A to this Statement has effected any transaction in the Class A
Common Stock or Class B Common Stock during the past 60 days.
(d) Except as disclosed in this Statement,
to the knowledge of UTStarcom, the Stockholder has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Voting Shares.
(e) Not applicable.
References to, and
descriptions of, the Asset Purchase Agreement and the Voting Agreement set
forth herein are qualified in their entirety by reference to the copies of
the Asset Purchase Agreement and the Voting Agreement included as Exhibits
99.1 and 99.2, respectively, to this Statement, which are incorporated by
reference herein in their entirety where such references and descriptions
appear.
Item 6.	Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
	The information set
forth in Item 4 of this Statement is hereby incorporated by reference herein.

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| Other than the Asset
Purchase Agreement and the Voting Agreements, to the knowledge of UTStarcom,
there are no contracts, arrangements, understandings or relationships (legal
or otherwise) among the persons named in Item 2 of this Statement and between
such persons and any person with respect to any securities of the Issuer,
including but not limited to transfer or voting of any of the securities,
finder’s fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or
withholding of proxies. | |
| --- | --- |
| Item 7. | Material to Be Filed as Exhibits |

| Exhibit
No. | Description |
| --- | --- |
| 99.1 | Asset
Purchase Agreement by and among Audiovox Communications Corp., Quintex Mobile
Communications Corporation, Audiovox Communications Canada Co., UTStarcom,
Inc., UTStarcom Canada Company and Audiovox Corporation, dated as of June 11,
2004 |
| 99.2 | Voting
Agreement and Irrevocable Proxy between UTStarcom, Inc. and John J. Shalam,
dated as of June 11, 2004 |

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Signature

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: June 21, 2004
UTSTARCOM, INC.
/s/ Michael J.
Sophie
Name:	Michael J.
Sophie
Title:	CFO and
Senior Vice President

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SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF UTSTARCOM, INC.

The following table sets forth the name and present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted of each director and executive officer of UTStarcom. Unless otherwise indicated, the business address of each such person is c/o UTStarcom, Inc., 1275 Harbor Bay Parkway, Alameda, California 94502, and each person is a citizen of the United States, except for Mr. Masayoshi Son who is a citizen of Japan and whose business address is c/o Softbank Corp., 24-1 Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103-8501, Japan. The name of each person who is a director of UTStarcom is marked with an asterisk.

Name	Present Principal Occupation or Employment
Betsy S. Atkins*	Chief Executive Officer of Baja
Corporation; Member of the Board of Directors of Polycom, Inc. and McData
Corporation
Shao-Ning J. Chou	Senior Vice President; President and Chief
Operating Officer for UTStarcom China of UTStarcom, Inc.
Larry D. Horner*	Member of the Board of Directors of
ConocoPhillips, Atlantis Plastics, Inc., Novitron International, Inc., and
Technical Olympic USA, Inc.
William Huang	Senior Vice President and Chief Technology
Officer of UTStarcom, Inc.
Hong Liang Lu*	President, Chief Executive Officer, and
Chairman of the Board
Gerald Soloway	Senior Vice President for Engineering of
UTStarcom, Inc.
Masayoshi Son*	President, Chief Executive Officer, and
Director of Softbank Corporation; Chairman of the Board of Directors of
Softbank Holdings, Inc.; Chairman of the Board of Directors of Softbank
America, Inc.
Michael J. Sophie	Senior Vice President of Finance, Chief
Financial Officer, and Assistant Secretary of UTStarcom, Inc.
Thomas J. Toy*	Managing Director of PacRim Venture
Partners; Member of the Board of Directors of White Electronic Designs
Corporation

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Ying Wu* Executive Vice President and Vice Chairman of the Board; President and Chief Executive Officer of UTStarcom China Company; Chairman of the Board of Directors of UTStarcom Telecom Company

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*EXHIBIT INDEX*

| Exhibit
No. | Description |
| --- | --- |
| 99.1 | Asset
Purchase Agreement by and among Audiovox Communications Corp., Quintex Mobile
Communications Corporation, Audiovox Communications Canada Co., UTStarcom,
Inc., UTStarcom Canada Company and Audiovox Corporation, dated as of June 11,
2004 |
| 99.2 | Voting
Agreement and Irrevocable Proxy between UTStarcom, Inc. and John J. Shalam,
dated as of June 11, 2004 |

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