11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(Mark One): |
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ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended December 31, 2011 |
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OR |
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o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. |
Commission file number: 333-156475
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
FINISAR CORPORATION 401(K) PROFIT SHARING PLAN
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B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
FINISAR CORPORATION
1389 Moffett Park Drive
Sunnyvale, California 94089
Finisar Corporation
401(k) Profit Sharing Plan
Financial Statements and Supplemental Schedule
As of December 31, 2011 and 2010 and for the Year Ended December 31, 2011
Table of Contents
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Financial Statements: | | | | |
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Supplemental Schedules(*) | | | | |
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Exhibit Index | | | | |
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* Schedules other than listed above have been omitted because they are not applicable or are not required by 29 CFR2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, as amended.
Report of Independent Registered Public Accounting Firm
To the Participants and Plan Administrator of the
Finisar Corporation 401(k) Profit Sharing Plan
We have audited the financial statements of the Finisar Corporation 401(k) Profit Sharing Plan (the Plan) as of December 31, 2011 and 2010, and for the year ended December 31, 2011, as listed in the accompanying table of contents. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the year ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules, as listed in the accompanying table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, as amended. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Mohler, Nixon & Williams
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 15, 2012
Finisar Corporation
401(k) Profit Sharing Plan
Statements of Net Assets Available for Benefits
As of December 31, 2011 and 2010
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| | | | | | | | |
| | December 31, |
| | 2011 | | 2010 |
Assets: | | | | |
Investments, at fair value | | $ | 59,698,702 |
| | $ | 55,450,469 |
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Receivables: | | | | |
Notes receivable from participants | | 771,802 |
| | 761,573 |
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Employer's contributions | | 151,106 |
| | — |
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Participant contributions | | 117,779 |
| | 103,859 |
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Total receivables | | 1,040,687 |
| | 865,432 |
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Total assets | | 60,739,389 |
| | 56,315,901 |
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Net assets reflecting investments at fair value | | 60,739,389 |
| | 56,315,901 |
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Adjustment from fair value to contract value for fully benefit-responsive fund | | (942 | ) | | (12,629 | ) |
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Net assets available for benefits | | $ | 60,738,447 |
| | $ | 56,303,272 |
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See Notes to Financial Statements
Finisar Corporation
401(k) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2011
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Additions to net assets attributed to: | | |
Interest and dividend income | | $ | 648,197 |
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Interest income on notes receivable from participants | | 34,462 |
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Contributions: | | |
Participants' | | 5,915,094 |
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Rollovers | | 217,297 |
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Employer's | | 1,806,320 |
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Total contributions | | 7,938,711 |
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Total additions | | 8,621,370 |
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Deductions from net assets attributed to: | | |
Net realized and unrealized depreciation in fair value of investments | | 1,374,601 |
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Withdrawals and distributions | | 2,789,568 |
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Plan fees | | 22,026 |
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Total deductions | | 4,186,195 |
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Net increase in net assets | | 4,435,175 |
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Net assets available for benefits at beginning of year | | 56,303,272 |
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Net assets available for benefits at end of year | | $ | 60,738,447 |
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See Notes to Financial Statements
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2011
NOTE 1 - DESCRIPTION OF PLAN
General - The following description of the Finisar Corporation 401(k) Profit Sharing Plan ("the Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan that was established on January 1, 1996, by Finisar Corporation ("the Company" or "Plan Administrator") covering all eligible employees of the Company and affiliated entities as defined in the Plan agreement. The Plan Administrator believes that the Plan is designed and operated in compliance with the applicable requirements of the Internal Revenue Code and the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.
During 2011 year, the Plan was amended and restated for regulatory and legislative changes. Participants should refer to Plan document for specific changes made to the Plan.
Administration - The Company has contracted with Prudential Trust Company ("Prudential") to act as the trustee and custodian and to process and maintain the records of participant data. An Administrative Committee ("the Committee") manages and monitors the operations of the Plan.
Participant Contributions - Each year, participants may contribute up to the maximum allowed by law, not to exceed 20% of eligible pre-tax annual compensation, as defined in the Plan agreement. Participants who are fifty years or older by the end of a calender year can elect to make additional contributions (called "catch-up contributions") to the Plan, not to exceed the maximum allowed by law. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Participants may also make Roth contributions to the Plan.
Employer Contributions - The Company may make discretionary matching contributions and/or discretionary Profit Sharing contributions as determined by the Board of Directors. The Company may make the matching contributions in shares of Finisar stock in lieu of cash. A participant must be employed on the last day of the Plan year to be eligible for a discretionary matching contribution. In 2011, the Company matched 50% of each eligible participant's annual elective deferrals up to 6% of eligible compensation. The matching contribution consisted of 95,887 shares of the Company common stock and cash paid for fractional shares for a total contribution of $1,806,320. The Company did not make any discretionary Profit Sharing contribution to the Plan for the year ended December 31, 2011.
Participant Accounts - Each participant's account is credited with the participant's contribution, the Company's discretionary matching contribution, if any, the Company's discretionary Profit Sharing contribution, if any, Plan earnings or losses and Plan expenses as applicable to the Plan. Plan earnings and losses are allocated based on participant investment choices. Allocation of the Company's discretionary Profit Sharing contribution is based on participant compensation and is further limited to certain employment requirements. Allocation of the Company's discretionary matching contribution is based on participant contributions.
Certain investment fees are charged by Prudential, and are included in investment income and losses and charged to participant accounts. Participants should refer to the funds' prospectuses for further information on these fees.
Vesting - Participants are fully vested in their contribution amounts, rollover contributions amounts and earnings thereon. Participants vest in the employer discretionary contributions at a rate of 25% per year of credited service and are fully vested after four years of credited service. Participants become fully vested in the event of death, disability, retirement and Plan termination.
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
Forfeitures - Forfeited nonvested accounts can be used to restore previously forfeited account balances of rehired participants, and any remaining amount, at the discretion of the Administrative Committee, can be used to pay Plan expenses and/or to be applied to the Company's matching and/or Profit Sharing contribution. The amount of unallocated forfeitures as of December 31, 2011 and 2010 amounted to $220,665 and $164,993, respectively. Forfeitures utilized to pay Plan expenses in 2011 amounted to $10,909.
Notes Receivable from Participants - Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. The notes receivable from participants ("notes receivable") are secured by the vested balance in the participant's account and bear interest at rates ranging from 4.25% to 9.5% at December 31, 2011 and 2010, which are commensurate with local prevailing rates as determined by the Plan Administrator. Principal and interest is paid ratably through payroll deductions. Notes receivable must be repaid within a five-year period, unless it is used for the purchase of a principal residence in which case the maximum repayment period may be longer. Only one outstanding note receivable per participant is allowed at one time. The specific terms and conditions of such notes receivables are established by the Plan Administrator.
Payment of Benefits - Distributions from the Plan may only be made after specific events have occurred. Participants are eligible for a distribution upon termination of employment, death, disability or retirement, and are paid in accordance with Plan provisions. Participants may be eligible to receive distributions up to their vested account balances in the case of financial hardship. Participants are allowed to receive in-service distributions upon attaining age 591/2. The Plan allows for automatic lump sum distribution of participant account balances that do not exceed $1,000.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements are prepared on the accrual basis of accounting in accordance with principles generally accepted in the United States of America.
Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition - Investments of the Plan are reported at fair value as determined by Prudential. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 5 for discussion of fair value measurements.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan's gains and losses on investments bought and sold as well as held during the year.
Notes Receivable from Participants - Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participant are reclassified as distributions based upon the terms of the Plan document.
Operating Expenses - Substantially all expenses incurred for administering the Plan are paid by the Company. Certain professional fees in the amount of $4,729, recordkeeping charges in the amount of $8,908 and participant loan processing charges in the amount of $7,305 were paid by the Plan for the year ended December 31, 2011.
Payment of Benefits - Benefits are recorded when paid.
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
Recent Accounting Pronouncements - In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (Topic 820) - Fair Value Measurement (ASU 2011-04), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. ASU 2011-04 is effective for the Plan prospectively for the year ending December 31, 2011. The Plan is currently evaluating the impact of pending adoption of ASU 2011-04 on its financial statements.
Subsequent Events - The Plan has evaluated subsequent events through June 15, 2012 the date the financial statements were available to be issued.
NOTE 3 - RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market fluctuations, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits.
NOTE 4 - INVESTMENTS
The following presents the fair values of investment funds that represent 5% or more of the Plan's net assets at December 31:
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| 2011 | | 2010 |
Fundamental Investors Fund | 5,274,880 |
| | 6,058,726 |
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Growth Fund of America | * | | 9,020,331 |
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Goldman Sachs Mid Cap Value Instl | 3,492,775 |
| | 3,623,599 |
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Oppenheimer International Growth Fund | 6,049,957 |
| | 3,947,818 |
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Prudential Jennison Mid Cap Growth Fund (FKA Jennison Mid Cap Growth Fund) | 3,903,206 |
| | 3,735,025 |
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Prudential Guaranteed Interest Account | 6,731,844 |
| | 5,090,475 |
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Wells Fargo Advantage Growth Fund | 8,651,529 |
| | * |
*Represents less than 5% of Net Assets Available for Benefits.
The Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows for the year ended December 31, 2011:
NOTE 5 - FAIR VALUE MEASUREMENTS
Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
active markets that the Plan has the ability to access.
Level 2 - Inputs to the valuation methodology include:
•quoted prices for similar assets or liabilities in active markets;
•quoted prices for identical or similar assets or liabilities in inactive markets;
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• | inputs other than quoted prices that are observable for the asset or liability; and |
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• | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2011 and 2010.
Mutual funds: Valued at the net asset value ("NAV") of shares held by the Plan at year end based on closing market prices.
Money market fund: Valued at the NAV of $1.00 per single share of the fund as determined by the fund company.
Insurance company issued evergreen group annuity: Valued at fair value based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer.
Common stock: Valued at closing market price at year end.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
The following table sets forth by level, within the fair value hierarchy, the Plan's assets at fair value:
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| | Assets at Fair Value as of December 31, 2011 |
| | Level 1 | Level 2 | Level 3 | Total |
Mutual Funds | | | | | |
Foreign Large Blend | | $ | 483,305 |
| $ | — |
| $ | — |
| $ | 483,305 |
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Interm Term Bond | | 1,044,402 |
| — |
| — |
| 1,044,402 |
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Inflation Protected Bond | | 370,868 |
| — |
| — |
| 370,868 |
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Intl Emrg Mkts | | 610,896 |
| — |
| — |
| 610,896 |
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Intl Large Growth | | 6,049,957 |
| — |
| — |
| 6,049,957 |
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Large Cap Blend | | 7,553,323 |
| — |
| — |
| 7,553,323 |
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Large Cap Blend/Growth | | 8,651,529 |
| — |
| — |
| 8,651,529 |
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Mid Cap Stock/Growth | | 5,776,221 |
| — |
| — |
| 5,776,221 |
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Mid Cap Value | | 3,492,775 |
| — |
| — |
| 3,492,775 |
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Balanced Value | | 172,719 |
| — |
| — |
| 172,719 |
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Balanced Blend | | 2,282,792 |
| — |
| — |
| 2,282,792 |
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Natural Resources | | 1,883,298 |
| — |
| — |
| 1,883,298 |
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Real Estate | | 510,990 |
| — |
| — |
| 510,990 |
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Small Cap Growth | | 2,405,766 |
| — |
| — |
| 2,405,766 |
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Small Cap Value | | 684,445 |
| — |
| — |
| 684,445 |
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Specialty/Health | | 2,696,634 |
| — |
| — |
| 2,696,634 |
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Technology | | 1,617,176 |
| — |
| — |
| 1,617,176 |
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Utilities | | 1,134,132 |
| — |
| — |
| 1,134,132 |
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World Stock | | 1,448,774 |
| — |
| — |
| 1,448,774 |
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| | | | | |
Company stock | | 1,611,456 |
| — |
| — |
| 1,611,456 |
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| | | | | |
Money Market Fund | | — |
| 2,485,400 |
| — |
| 2,485,400 |
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| | | | | |
Guaranteed Interest Account | | — |
| — |
| 6,731,844 |
| 6,731,844 |
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| | | | | |
Total Assets at fair value | | $ | 50,481,458 |
| $ | 2,485,400 |
| $ | 6,731,844 |
| $ | 59,698,702 |
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Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
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| | Assets at Fair Value as of December 31, 2010 |
| | Level 1 | Level 2 | Level 3 | Total |
Mutual Funds | | | | | |
Foreign Large Blend | | $ | 566,798 |
| $ | — |
| $ | — |
| $ | 566,798 |
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Interm Term Bond | | 884,252 |
| — |
| — |
| 884,252 |
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Inflation Protected Bond | | 77,699 |
| — |
| — |
| 77,699 |
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Intl Emrg Mkts | | 543,368 |
| — |
| — |
| 543,368 |
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Intl Large Growth | | 3,947,818 |
| — |
| — |
| 3,947,818 |
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Large Cap Blend | | 8,108,789 |
| — |
| — |
| 8,108,789 |
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Large Cap Blend/Growth | | 9,020,331 |
| — |
| — |
| 9,020,331 |
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Mid Cap Blend | | 2,301,901 |
| — |
| — |
| 2,301,901 |
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Mid Cap Stock/Growth | | 3,735,025 |
| — |
| — |
| 3,735,025 |
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Mid Cap Value | | 3,623,599 |
| — |
| — |
| 3,623,599 |
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Balanced Value | | 135,334 |
| — |
| — |
| 135,334 |
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Balanced Blend | | 2,203,040 |
| — |
| — |
| 2,203,040 |
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Natural Resources | | 2,368,744 |
| — |
| — |
| 2,368,744 |
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Real Estate | | 365,094 |
| — |
| — |
| 365,094 |
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Small Cap Growth | | 2,196,313 |
| — |
| — |
| 2,196,313 |
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Small Cap Value | | 671,566 |
| — |
| — |
| 671,566 |
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Specialty/Health | | 2,626,167 |
| — |
| — |
| 2,626,167 |
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Technology | | 1,885,448 |
| — |
| — |
| 1,885,448 |
|
Utilities | | 924,988 |
| — |
| — |
| 924,988 |
|
World Stock | | 1,796,401 |
| — |
| — |
| 1,796,401 |
|
| | | | | |
Money Market Fund | | — |
| 2,377,319 |
| — |
| 2,377,319 |
|
| | | | | |
Guaranteed Interest Account | | — |
| — |
| 5,090,475 |
| 5,090,475 |
|
| | | | | |
Total Assets at fair value | | $ | 47,982,675 |
| $ | 2,377,319 |
| $ | 5,090,475 |
| $ | 55,450,469 |
|
Level 3 Gains and Losses
The following table sets forth a summary of changes in the fair value of the Plan's level 3 assets for the year ended December 31, 2011:
|
| | | | |
| | | Insurance company issued Evergreen group annuity |
Balance at December 31, 2010 | | | 5,090,475 |
|
Income | | | 174,803 |
|
Gross purchases | | | 2,987,838 |
|
Gross sales | | | (1,509,585 | ) |
Adjustment from contract value to fair value | | | (11,687 | ) |
Balance at December 31, 2011 | | | 6,731,844 |
|
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements - (Continued)
December 31, 2011
NOTE 6 — INSURANCE COMPANY ISSUED EVERGREEN GROUP ANNUITY
The Guaranteed Interest Account ("GIA") is an insurance company issued evergreen group annuity valued at contract value, which approximates fair value, as reported by Prudential. Insurance company issued evergreen group annuity contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts. The GIA is fully benefit-responsive. As of December 31, 2011 and 2010, the amount of the adjustment from fair value to contract value is $(942) and $(12,629), respectively, as presented in the accompanying statements of net assets available for benefits. The average yield for the Plan and the average yield credited to participants for 2011 and 2010 was approximately 3.00% and 3.08%, respectively. The minimum crediting interest rate under the contract is 3.00%. Interest is credited on balances using an Old Money/New Money or "bucketed" approach. Under this methodology different interest crediting rates are applied to contributions based on the calendar quarter in which contributions were made, and this rate is guaranteed through December 31 of the following calendar year. Upon expiration of the New Money rate guarantees the rates are reset annually. All rates are set at Prudential's discretion. A Company initiated termination of the contract is an event that could limit the ability of the plan to transact at contract value paid within 90 days. In this instance contract value could be paid over time, or at the Plan Administrator's discretion, paid over at most a one year period after the application of market value adjustments. The Plan Administrator does not believe that the occurrence of such event is probable.
NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The differences between the information reported in the financial statements and the information reported on the Form 5500 arise primarily from presenting the financial statements on the accrual basis of accounting and Form 5500 on the cash basis.
The following is a reconciliation of net assets available for benefits per financial statements to Form 5500 at December 31:
|
| | | | | | | | |
| | 2011 | | 2010 |
Net assets available for benefits per financial statements | | $ | 60,738,447 |
| | $ | 56,303,272 |
|
Less: Participants' contribution receivable | | (117,779 | ) | | (103,859 | ) |
Less: Employer contribution receivable | | (151,106 | ) | | — |
|
Net assets available for benefits per Form 5500 | | $ | 60,469,562 |
| | $ | 56,199,413 |
|
The following is a reconciliation of participants' contributions per the financial statements for the year ended December 31, 2011 to the Form 5500:
|
| | | | |
Contributions per financial statements | | $ | 7,938,711 |
|
Less: Contributions receivable as of December 31, 2011 | | (268,885 | ) |
Add: Contributions receivable as of December 31, 2010 | | 103,859 |
|
Contributions per Form 5500 | | $ | 7,773,685 |
|
NOTE 8 - RELATED PARTY TRANSACTIONS
Certain Plan investments are managed by Prudential and qualify as party-in interest. Such transactions, while considered party-in-interest transactions under ERISA regulations, are permitted under the provisions of the Plan and are specifically exempt from the prohibition of party-in-interest transactions under ERISA.
Finisar Corporation
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2011
As allowed by the Plan, participants may elect to invest a portion of their accounts in the Finisar Stock Fund (the Fund), which is primarily invested in shares of Company common stock. Investments in the Fund are at the direction of the Plan participants. Participants are not permitted to allocate more than 10% of their total contributions, including Company matching contributions, to the Fund and the maximum amount of the participant's account balance that can be allocated to the Fund is limited to 10% of the participant's account. The shares of Company common stock are traded in the open market.
NOTE 9 - PLAN TERMINATION AND/OR MODIFICATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to amend or terminate the Plan at any time, subject to the provisions of ERISA. In the event that the Plan is terminated in the future, participants would become fully vested in their accounts.
NOTE 10 - TAX STATUS
The Plan has adopted a prototype plan that has received a favorable opinion letter dated March 31, 2008 from the Internal Revenue Service. The Plan has been amended and restated since receiving the opinion letter, however, the Plan Administrator believes that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code and state statutes and is exempt from federal income and state franchise taxes.
Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the various taxing authorities and government agencies. The Plan Administrator has analyzed the tax position taken by the Plan, and has concluded that as of December 31, 2011, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, the Plan was not audited since inception and there are currently no audits for any tax periods in progress. Information returns for years for which the applicable statutes of limitations have not expired are subject to examination by authorities. The Plan Administrator believes the Plan is subject to income tax examinations for years since the Plan's inception.
NOTE 11 - SUBSEQUENT EVENT
As of June 15, 2012, the price per share of the Company stock has decreased by approximately 23% from the price at December 31, 2011.
Finisar Corporation
401(k) Profit Sharing Plan
EIN 94-3038428, Plan # 001
Schedule H, Line 4a - Schedule of Delinquent Participant Contributions
December 31, 2011
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Participant Contributions Transferred Late to Plan | Total that Constitute Nonexempt Prohibited Transactions | Total Fully Corrected Under VFCP and PTE 2002-51 |
Includes late Participant Loan repayments | Contributions Not Corrected | Contributions Corrected Outside VFCP | Contributions Pending Correction in VFCP |
$381,020* | | $381,020* | | |
* Note: Participant contributions and loan repayments in the amount of $381,020 in the 2010 year were not deposited with the custodian on a timely basis. The Plan Sponsor reimbursed the Plan in October 2011, in the amount of $333 related to the lost earnings. The Plan Sponsor made the necessary excise tax filing with the IRS in October 2011. See Independent Auditors' Report
Finisar Corporation
401(k) Profit Sharing Plan
EIN 94-3038428, Plan # 001
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
December 31, 2011
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| | | | | | | | |
| | | | (c) | | |
| | (b) | | Description of Investment, Including | | (e) |
| | Identity of Issue, Borrower, | | Maturity Date, Rate of Interest, | | Current |
(a) | | Lessor, or Similar Party | | Collateral, Par or Maturity Value | | value |
| | Fundamental Investors Fund | | Mutual Fund | | $ | 5,274,880 |
|
| | Columbia Communications & Information Fund (FKA Seligman Communications & Information Fund) | | Mutual Fund | | 1,617,176 |
|
* | | Prudential Stock Index Fund (FKA Dryden Stock Index Fund) | | Mutual Fund | | 2,278,443 |
|
| | Goldman Sachs Mid Cap Value Instl | | Mutual Fund | | 3,492,775 |
|
| | Lord Abbett Developing Growth Fund | | Mutual Fund | | 1,600,369 |
|
| | Lord Abbett Income Fund | | Mutual Fund | | 1,044,402 |
|
| | Highmark US Govt MMK Reinv | | Money Market Fund | | 2,485,400 |
|
| | American Funds Capital World Growth & Income Fund | | Mutual Fund | | 1,448,774 |
|
| | Oppenheimer International Growth Fund | | Mutual Fund | | 6,049,957 |
|
* | | Prudential Jennison Mid Cap Growth Fund (FKA Jennison Mid Cap Growth Fund) | | Mutual Fund | | 3,903,206 |
|
* | | Prudential Guaranteed Interest Account | | Insurance Company Issued Evergreen | | 6,730,901 |
|
| | Franklin Utilities Fund | | Group Annuity | | 1,134,132 |
|
| | Blackrock Health Science | | Mutual Fund | | 2,696,634 |
|
| | American Funds American Balanced Fund | | Mutual Fund | | 2,282,792 |
|
| | American Funds Income Fund of America | | Mutual Fund | | 172,719 |
|
| | American Funds EuroPacific Growth Fund | | Mutual Fund | | 483,305 |
|
| | American Funds New World | | Mutual Fund | | 610,896 |
|
| | JP Morgan Small Cap Equity Fund | | Mutual Fund | | 805,397 |
|
| | Fidelity Advisor Materials | | Mutual Fund | | 1,883,298 |
|
| | Invesco Real Estate | | Mutual Fund | | 510,990 |
|
| | Delaware Inflation Pro Bond Fund | | Mutual Fund | | 370,868 |
|
| | Wells Fargo Advantage Growth Fund | | Mutual Fund | | 8,651,529 |
|
| | Invesco Mid Cap Core Equity | | Mutual Fund | | 1,873,015 |
|
* | | Finisar Company Stock | | Common Stock | | 1,611,456 |
|
| | Allianz NFJ Small Cap Value | | Mutual Fund | | 684,445 |
|
| | Assets held for investment purposes | | | | 59,697,759 |
|
* | | Participant Loans | | Interest rates from 4.25% to 9.50% | | 771,802 |
|
| | Total | | | | $ | 60,469,561 |
|
| | | | | | |
* | | Indicates party-in-interest to the Plan | | | | |
Column (d) for Cost has been omitted as investments are participant-directed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the persons who administer the employee benefit plan have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized.
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| | | | |
| | | | FINISAR CORPORATION 401(K) PROFIT SHARING PLAN |
| | | | |
Date: June 15, 2012 | | By: | | /s/ Kurt Adzema |
| | | | Kurt Adzema |
| | | | Executive Vice President, Finance and Chief Financial Officer |
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| | |
EXHIBIT INDEX |
| | |
Exhibit No. | Description of Exhibit |
| |
23 | Consent of Independent Registered Public Accounting Firm |