<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
UNIPHASE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
UNIPHASE CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 11, 1997
The Annual Meeting of Stockholders (the "Annual Meeting") of Uniphase
Corporation, a Delaware corporation (the "Company"), will be held at the
Uniphase Corporate Headquarters located at 210 Baypointe Parkway, San Jose,
California 95134 on Tuesday, November 11, 1997, at 1:00 p.m., Pacific Time, for
the following purposes:
1. To elect three Class I directors and one Class III director of the
Company to serve until the 2000 and 1999 Annual Meeting of Stockholders,
respectively, and until their successors are elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the independent
auditors for the Company for the fiscal year ending June 30, 1998; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached and made a part hereof.
The Board of Directors has fixed the close of business on September 15,
1997 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ENSURE YOUR REPRESENTATION
AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND IN YOUR PROXY
CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR SHARES IN PERSON,
YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES
SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors,
LOGO
Danny E. Pettit
Secretary
San Jose, California
September 29, 1997
<PAGE> 3
Mailed to Stockholders on or about September 30, 1997
UNIPHASE CORPORATION
163 BAYPOINTE PARKWAY
SAN JOSE, CA 95134
------------------------
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Uniphase Corporation,
a Delaware corporation (the "Company"), in connection with the solicitation by
the Board of Directors (the "Board") of the Company of proxies in the
accompanying form for use in voting at the Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held on Tuesday, November 11, 1997, at 1:00
p.m., Pacific Time, at the Uniphase Corporate Headquarters located at 210
Baypointe Parkway, San Jose, California 95134, and any adjournment or
postponement thereof. The shares represented by the proxies received, properly
marked, dated, executed and not revoked will be voted at the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Danny E. Pettit) a written notice of revocation or a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct solicitation personally,
telephonically or by facsimile through its officers, directors and regular
employees, none of whom will receive additional compensation for assisting with
the solicitation.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy at the Annual Meeting, and an officer of the
Company will tabulate votes cast in person at the Annual Meeting. Abstentions
and broker non-votes are each included in the determination of the number of
shares present and voting, and each is tabulated separately. In determining
whether a proposal has been approved, abstentions are counted as votes against
the proposal and broker non-votes are not counted as votes for or against the
proposal.
The close of business on September 15, 1997 has been fixed as the record
date (the "Record Date") for determining the holders of shares of Common Stock
of the Company entitled to notice of and to vote at the Annual Meeting. As of
the close of business on the Record Date, the Company had 17,181,518 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. The
presence at the Annual Meeting of a majority, or at least 8,590,760 of these
shares of Common Stock of the Company, either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. Each
outstanding share of Common Stock on the Record Date is entitled to one (1) vote
on all matters. Directors should be elected by a plurality of the votes cast.
PROPOSAL ONE:
ELECTION OF DIRECTORS
The number of directors on the Board is currently fixed at eight. The
Company's Certificate of Incorporation divides the Company's Board of Directors
into three classes. The members of each class of directors serve staggered
three-year terms. The Board is composed of three Class I directors (Mr. Johnson,
Mr. Muller and Mr. Fink), two Class II directors (Dr. Bridges and Professor
Sibbett) and two Class III
<PAGE> 4
directors (Mr. Kalkhoven and Ms. Goodrich), whose terms will expire upon the
election and qualification of directors at the Annual Meeting of Stockholders
held in 1997, 1998 and 1999, respectively. At each annual meeting of
stockholders, directors will be elected for a full term of three years to
succeed those whose terms are expiring.
At the Annual Meeting, the stockholders will elect three Class I directors
to serve a three (3) year term until the 2000 Annual Meeting of Stockholders and
one Class III director to serve a two (2) year term until the 1999 Annual
Meeting of Stockholders and until a successor is elected and qualified or until
the director's earlier resignation or removal. The Board has no reason to
believe that these persons named below will be unable or unwilling to serve as a
nominee or as a director if elected.
Certain information about the Board of Directors nominees, is furnished
below.
CLASS I DIRECTOR NOMINEES
Mr. Fink has been a member of the Company's Board of Directors since April
1995. Mr. Fink has served as Senior Vice President of Lam Research since October
1995. From July 1993 to October 1995, Mr. Fink served as Chief Operating Officer
of Lam Research, following its acquisition of Drytek Inc., where he had served
as President since 1988. From 1984 to 1988, Mr. Fink served as Director of VLSI
Operations for ITT Corporation's Semiconductor Division. Mr. Fink also currently
serves on the board of directors of Consilium Corporation, a publicly held
software manufacturer for the pharmaceutical and semiconductor industries.
Mr. Johnson has been a member of the Company's Board of Directors since
April 1984. He has been President and Chief Executive Officer of Komag
Incorporated, a publicly held supplier of high density computer disks, since
1983. Mr. Johnson also is a director of 3Com Corporation, a local area network
company.
Mr. Muller has been a member of the Company's Board of Directors since
September 1984. He is Senior Vice President and Chief Financial Officer for
Micro Focus since September 1996. From November 1990 to September 1996, Mr.
Muller served as Senior Vice President of Operations and Administration and
Chief Financial Officer of Centigram Communications Corporation, a supplier of
telecommunications systems. From March 1985 to July 1990, Mr. Muller was Vice
President of Finance and Chief Financial Officer of Silicon Valley Group, Inc.,
a manufacturer of production processing systems for the semiconductor industry.
CLASS III DIRECTOR NOMINEE
Mr. Skrzypczak has been a member of the Company's Board of Directors since
July 1997. He is currently Corporate Vice President and Group President of
Professional Services of Bellcore since March 1997. Prior to his present
position, Mr. Skrzypczak was the president -- NYNEX Science & Technology and
vice president -- Network & Technology Planning. He holds a B.S. in Mechanical
Engineering from Villanova University and a M.S. in Operations Research from
Hofstra University. Mr. Skrzypczak has been a Polytechnic Trustee since 1987. He
is also chairman of the Education Committee.
The four nominees receiving the highest number of affirmative votes of the
shares represented and voting on this particular matter of the Annual meeting
will be elected directors of the Company, to serve their respective terms or
until their successors have been elected and qualified.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES
NAMED ABOVE.
2
<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers and directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ----------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Kevin N. Kalkhoven 53 Chairman and Chief Executive Officer
R. Clark Harris 60 President of Uniphase Telecommunications Products, Inc.
Danny E. Pettit 50 Vice President, Finance, Chief Financial Officer and Secretary
John M. Scott 53 President of Ultrapointe
Ian Jenks 43 President of the Laser Division
William B. Bridges, Ph.D.(1) 62 Director
Robert C. Fink(2) 62 Director
Catherine P. Lego(1) 40 Director
Stephen C. Johnson(2) 54 Director
Anthony R. Muller (1)(2) 54 Director
Wilson Sibbett, Ph.D. 49 Director
Casimir S. Skrzypczak 56 Director
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Mr. Kalkhoven has been President and Chief Executive Officer of the Company
since January 1992, a member of the Board of Directors of the Company since
February 1992, and Chairman of the Board since April 1994. From September 1988
to January 1992, Mr. Kalkhoven was President of Demax Software, a systems
software company. From 1986 to August 1988, Mr. Kalkhoven was President and
Chief Executive Officer of AIDA Corporation, a computer aided engineering
company that was acquired in October 1987 by Teradyne Corporation. Mr. Kalkhoven
is a member of the Board of Directors of Network Express, a manufacturer of
telecommunications equipment.
Mr. Harris joined the Company in May 1995 as President of Uniphase
Telecommunications Products, Inc. Prior to joining the Company, Mr. Harris held
several executive positions with United Technologies Corporation, most recently
as General Manager of United Technologies Technology Center from 1990 to March
1995. From 1987 to 1989, Mr. Harris served as Senior Vice President of Sikorsky
Aircraft Division.
Mr. Pettit joined the Company as Corporate Controller in March 1986 and has
been Vice President of Finance since November 1986. In June 1994, he became the
Company's Chief Financial Officer. Prior to joining the Company, Mr. Pettit held
the positions of Group Controller and Division Controller at Burroughs
Corporation, where he was employed from 1983 to 1986.
Mr. Scott joined the Company as President of Ultrapointe in April 1994.
Before joining the Company, Mr. Scott held numerous executive positions at
companies in the semiconductor equipment industry, most recently as Vice
President of Sales and Service at Tencor Instruments, a manufacturer of wafer
defect inspection systems, where he was employed from 1987 to 1994.
Mr. Jenks joined the Company as President of the Laser Division in August
1995. Before joining the Company, Mr. Jenks had been serving as a consultant to
the Company since February 1995. Mr. Jenks was the founder and Chief Executive
Officer of I.E. Optomech Ltd., a solid state laser company, until its
acquisition by Uniphase in July 1995. Prior to founding I.E. Optomech, he was
the Chief Executive Officer of the International Projects Division of the
management consulting firm Ingersol Engineers, Inc.
Dr. Bridges has been a member of the Company's Board of Directors since May
1986. He has been a Professor of Electrical Engineering and Applied Physics at
the California Institute of Technology since June 1977 and the Carl F. Braun
Professor of Engineering since 1983. Dr. Bridges served as President of the
Optical Society of America, a nonprofit professional society, in 1988.
3
<PAGE> 6
Ms. Lego has been a member of the Company's Board of Directors since
January 1994. Ms. Lego is President of Lego Ventures, Inc., a consulting firm
specializing in business development of early stage electronics companies since
June 1992. Prior to establishing her own firm, Ms. Lego was a general partner in
Oak Investment Partners, a venture capital group, from 1981 to 1992. Ms. Lego
also serves on the board of directors of Etec Corporation, SanDisk Corporation
and Zitel Corporation, all publicly held companies, as well as on the board of
directors of several privately held companies.
Professor Sibbett has been a member of the Company's Board of Directors
since February 1995. Professor Sibbett has been Director of Research for the
School of Physics and Astronomy at the University of St. Andrews in Scotland
since 1994. Since 1985, Professor Sibbett has been the head of the School of
Physics and Astronomy at the University of St. Andrews. Professor Sibbett has
been a member of the Science and Engineering Research Council (SERC) of the
Department of Trade and Industry since 1986 and served as chairman of the SERC
Laser Committee from 1992 to 1994.
RELATIONSHIPS AMONG DIRECTORS OR EXECUTIVE OFFICERS
There are no family relationships among any of the directors or executive
officers of the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1997, the Board met six times. Mr. Sibbett participated in
four of the six board meetings held in fiscal 1997. All other directors attended
no fewer than 75 percent of all the fiscal 1997 meetings of the Board and its
committees on which he or she served after becoming a member of the Board. The
Board has two committees: the Audit Committee and the Compensation Committee.
The Board does not have a nominating committee or a committee performing the
functions of a nominating committee.
The Audit Committee, which met four times in fiscal 1997, consisted of
William B. Bridges, Ph.D., Catherine P. Lego and Anthony R. Muller. The Audit
Committee recommends engagement of the Company's independent auditors and is
primarily responsible for reviewing (i) the scope of the independent auditors'
annual audit and their compensation, (ii) the general policies and procedures of
the Company with respect to accounting and financial controls and (iii) any
change in accounting principles, significant audit adjustments proposed by the
auditors and any recommendations that the auditors may have with respect to
policies and procedures.
The Compensation Committee, which met two times in fiscal 1997, consisted
of Stephen C. Johnson, Anthony R. Muller and Robert C. Fink. The Compensation
Committee's functions are to establish and apply the Company's compensation
policies with respect to its executive officers and administer the Company's
1984 Amended and Restated Stock Option Plan, Amended and Restated 1993 Flexible
Stock Incentive Plan and 1993 Amended and Restated Employee Stock Purchase Plan.
EMPLOYEE AGREEMENTS
None of the Company's executive officers is a party to an employment
agreement with the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of Mr.
Fink, Mr. Johnson and Mr. Muller, none of whom is an officer of the Company.
There are no compensation committee interlocks involving members of the
Company's Compensation Committee.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive any compensation
for their services as directors. Directors who are not employees of the Company
receive a $1,500 fee for attendance at each Board meeting (and a $500 fee for
attendance at committee meetings held on a separate day). All directors will be
reimbursed for expenses incurred in connection with attending Board and
committee meetings.
4
<PAGE> 7
The Company's Amended and Restated 1993 Flexible Stock Incentive Plan (the
"Plan") also provides for automatic grants of nonqualified stock options to
non-employee directors ("Outside Directors"). Under the Plan, each Outside
Director who first joins the Board after the effective date of the Plan
automatically will receive at that time an option to purchase 20,000 shares of
Common Stock. In addition, immediately after each Annual Meeting of
Stockholders, each individual who is at that time continuing to serve as an
Outside Director automatically will be granted an option to purchase 5,000
additional shares of Common Stock, whether or not such Outside Director stood
for re-election at such annual meeting, provided that each such individual has
served as an Outside Director for at least nine months. All such options granted
prior to September 1996 to Outside Directors have an exercise price equal to
100% of the fair market value of the Common Stock on the date of grant and vest
at the rate of 25% of the shares subject to the option at the end of the first
year and as to approximately 6.25% of the shares subject to the option each
quarter (three-month period) for twelve quarters thereafter, and terminate 5
years from the date of granting. All such options granted subsequent to
September 1996 to Outside Directors will have an exercise price equal to 100% of
the fair market value of the Common Stock on the date of grant and vest monthly
on a straight-line basis over a three-year period for the initial 20,000 shares
received on joining the board of directors and over twelve-months for the
subsequent grantings of 5,000 shares, and terminate 8 years from the date of
grant.
In fiscal 1997, Dr. Bridges, Mr. Fink, Mr. Johnson, Ms. Lego, Mr. Muller
and Professor Sibbett were each granted options to purchase 5,000 shares of
Common Stock at a price of $50.00 per share.
PROPOSAL TWO:
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors recommend the appointment of Ernst & Young LLP,
Independent Auditors for the Company during the fiscal year 1998, to serve in
the same capacity for the fiscal year ending June 30, 1998, and is asking the
stockholders to ratify this appointment. The affirmative vote of a majority of
the shares represented and voting at the Annual Meeting is required to ratify
the selection of Ernst & Young LLP. Unless otherwise instructed, the proxy
holder will vote the proxies received for the ratification of Ernst & Young LLP
as the independent auditors for fiscal 1998.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board of Directors
believes that such a change would be in the best interests of the Company and
its stockholders.
A representative of Ernst & Young LLP, is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
Ernst and Young LLP has audited the Company's financial statements since
the fiscal year ended June 30, 1987.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP, AS THE COMPANY'S INDEPENDENT AUDITOR FOR
THE YEAR ENDING JUNE 30, 1998.
5
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership as of June 30, 1997 by (i) all persons
who are beneficial owners of five percent (5%) or more of the Company's Common
Stock ("5% Stockholder"), (ii) each director and nominee, (iii) the Named
Executive Officers (defined below) and (iv) all current directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially owned,
subject to community property laws, where applicable.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED(1) BENEFICIALLY OWNED(2)
------------------------------------------------------ ------------ ---------------------
<S> <C> <C>
5% STOCKHOLDERS
Fidelity Management & Research 1,140,500 6.74%
82 Devonshire Street E15C
Boston, MA 02109
Denver Investment 1,108,100 6.55%
Seventeenth Street Plaza
1225-17th Street - 26th Floor
Denver, CO 80202
Prudential Equity Management 986,700 5.83%
751 Broad Street
Newark, NJ 07102-3777
Kopp Investment Advisors 968,362 5.72%
7701 France Ave. South - Suite 500
Edina, MN 55435
Pilgram Baxter Grieg & Associates 959,100 5.67%
1255 Drummers Lane
Wayne, PA 19087-1590
Chancellor Capital Management 886,100 5.24%
1166 Avenue of the Americas
New York, NY 10036
NAMED EXECUTIVE OFFICERS
Kevin N. Kalkhoven(3) 413,477 *
Danny E. Pettit(4) 114,443 *
John M. Scott(5) 47,891 *
Ian Jenks(6) 6,843 *
R. Clark Harris(7) 38,141 *
William B. Bridges, Ph.D.(8) 40,074 *
Robert Fink(9) 5,000 *
Catherine P. Lego(10) 45,626 *
Stephen C. Johnson(11) 59,450 *
Anthony R. Muller(12) 51,522 *
Wilson Sibbett, Ph.D.(13) 5,000 *
Casimir Skrzypczak(14) 556 *
All officers and directors as a group (11 persons)(15) 828,023 *
</TABLE>
- ---------------
* Less than 5%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of June 30, 1997 are
deemed outstanding. Such shares, however, are not deemed outstanding for
the purposes of computing the percentage ownership of each other person. To
the Company's knowledge, except as set forth in the footnotes to this table
and
6
<PAGE> 9
subject to applicable community property laws, each person named in the
table has sole voting and investment power with respect to the shares set
forth opposite such person's name.
(2) Percentage of ownership is based on 16,921,967 shares of Common Stock
outstanding on June 30, 1997.
(3) Includes 389,858 shares subject to stock options exercisable as of August
30, 1997.
(4) Includes 97,751 shares subject to stock options exercisable as of August
30, 1997 and 10,995 shares held by Kelly A. Pettit, Mr. Pettit's spouse.
(5) Includes 29,616 shares subject to stock options exercisable as of August
30, 1997.
(6) Includes 6,500 shares subject to stock options exercisable as of August 30,
1997.
(7) Includes 35,508 shares subject to stock options exercisable as of August
30, 1997.
(8) Includes 9,126 shares subject to stock options exercisable as of August 30,
1997.
(9) Includes 5,000 shares subject to stock options exercisable as of August 30,
1997.
(10) Includes 45,626 shares subject to stock options exercisable as of August
30, 1997.
(11) Includes 13,126 shares subject to stock options exercisable as of August
30, 1997.
(12) Includes 7,126 shares subject to stock options exercisable as of August 30,
1997 and 2,380 shares held by Lesley Muller, Mr. Muller's daughter.
(13) Includes 5,000 shares subject to stock options exercisable as of August 30,
1997.
(14) Includes 556 shares subject to stock options exercisable as of August 30,
1997.
(15) Includes 644,7890 shares subject to stock options exercisable as of August
30, 1997.
7
<PAGE> 10
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION COMMITTEE REPORT
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph which follows shall not be deemed to be filed with the
Securities and Exchange Commission nor be incorporated by reference into any
such filings.
The Compensation Committee of the Board of Directors is responsible for
establishing the base salary and incentive cash bonus programs for the Company's
executive officers and administering certain other compensation programs for
such individuals, subject in each instance to approval by the full Board. The
Compensation Committee also has the exclusive responsibility for the
administration of the Amended and Restated 1993 Flexible Stock Incentive Plan,
1984 Amended and Restated Stock Option Plan and the 1993 Amended and Restated
Employee Stock Purchase Plan under which grants may be made to executive
officers and other key employees.
The fundamental policy of the Compensation Committee is to provide the
Company's chief executive officer and executive vice presidents with competitive
compensation opportunities based upon their contribution to the financial
success of the Company and their personal performance. It is the Compensation
Committee's objective to have a substantial portion of each officer's
compensation contingent upon the Company's performance as well as upon his own
level of performance. Accordingly, the compensation package for the CEO and
executive vice presidents is comprised of three elements: (i) base salary which
reflects individual performance and is designed primarily to be competitive with
salary levels in the industry, (ii) annual variable performance awards payable
in cash and tied to the Company's achievement of financial performance targets,
and (iii) long-term stock-based incentive awards which strengthen the mutuality
of interests between the executive officers and the Company's stockholders. As
an executive officer's level of responsibility increases, it is the intent of
the Compensation Committee to have a greater portion of his total compensation
be dependent upon Company performance and stock price appreciation rather than
base salary.
Several of the more important factors which the Compensation Committee
considered in establishing the components of each executive officer's
compensation package for the 1998 fiscal year are summarized below. Additional
factors were also taken into account, and the Compensation Committee may in its
discretion apply entirely different factors, particularly different measures of
financial performance, in setting executive compensation for future fiscal
years.
Base Salary. The base salary for each officer is determined on the
basis of the following factors: experience, personal performance, the
average salary levels in effect for comparable positions within and without
the industry and internal comparability considerations. The weight given to
each of these factors differs from individual to individual, as the
Compensation Committee deems appropriate. In selecting comparable companies
for the purposes of maintaining competitive compensation, the Compensation
Committee considers many factors including geographic location, growth
rate, annual revenue and profitability, and market capitalization. The
Compensation Committee also considers companies outside the industry which
may compete with the Company in recruiting executive talent.
Annual Incentive Compensation. Annual bonuses are earned by each
executive officer primarily on the basis of the Company's achievement of
certain corporate financial performance goals established for each fiscal
year. For fiscal 1997, bonuses were earned on the basis of the following
factors: (i) the Company's consolidated operating profit performance net of
certain non-recurring adjustments, relative to the target established by
the Compensation Committee, and (ii) the revenue and operating profit
performance of the respective division or subsidiary relative to the
targets established by the Compensation Committee. A portion of the
Company's earnings for the 1997 fiscal year was accordingly set aside for
distribution under the bonus pool, and the CEO and each executive vice
president was awarded a share of that pool on the basis of the respective
responsibilities assigned to him and his relative position in
8
<PAGE> 11
the Company. The actual bonus paid for the year to each of the Named
Executive Officers is indicated in the Bonus column of the Summary
Compensation Table.
Deferred Compensation Plan. The Company maintains a deferred
compensation plan, pursuant to which certain members of management
(including the executive officers) may elect to defer a portion of his or
her annual compensation. The participants' funds are invested among various
funds designated by the plan administrator and currently may not be
invested in Common Stock or other Company securities. Upon the death or
retirement of a participant, the funds attributable to the participant
(including any earnings on contributions) are distributed to the
participant or the participant's beneficiary in a lump sum or in annual
installments over a period of 3, 5, 10 or 15 years.
Long-Term Compensation. Long-term incentives are provided through
stock option grants. The grants are designed to align the interests of each
executive officer with those of the stockholders and provide each
individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Each grant
allows the individual to acquire shares of the Company's Common Stock at a
fixed price per share (the market price on the grant date) over a specified
period of time (up to ten years). Options granted become exercisable at the
rate of 25% of the shares subject thereto one year from the grant date and
as to approximately 6.25% of the shares subject to the option at the end of
each three-month period thereafter such that the option is fully
exercisable four years from the grant date, contingent upon the executive
officer's continued employment with the Company. Accordingly, the option
will provide a return to the executive officer only if the executive
officer remains employed by the Company during the four-year vesting
period, and then only if the market price of the underlying shares
appreciates over the option term. The number of shares subject to each
grant is set at a level intended to create a meaningful opportunity for
stock ownership based on the officer's current position with the Company,
the base salary associated with that position, the average size of
comparable awards made to individuals in similar positions within the
industry, the individual's potential for increased responsibility and
promotion over the option term, and the individual's personal performance
in recent periods. The Compensation Committee also takes into account the
number of vested and unvested options held by the executive officer in
order to maintain an appropriate level of equity incentive for that
individual. However, the Compensation Committee does not adhere to any
specific guidelines as to the relative option holdings of the Company's
executive officers. The actual options granted to each of the current
executive officers named in the Summary Compensation Table is indicated in
the Long-Term Compensation Awards column.
The Company is required to disclose its policy regarding qualifying
executive compensation for deductibility under Section 162(m) of the Internal
Revenue Code which provides that, for purposes of the regular income tax and the
alternative minimum tax, the otherwise allowable deduction for compensation paid
or accrued with respect to a covered employee of a publicly-held corporation is
limited to no more than $1 million per year. It is not expected that the
compensation to be paid to the Company's executive officers for fiscal 1996 will
exceed the $1 million limit per officer. The Company's Amended and Restated 1993
Flexible Stock Incentive Plan is structured so that any compensation deemed paid
to an executive officer when he exercises an outstanding option under the Plan,
with an exercise price equal to the fair market value of the option shares on
the grant date, will qualify as performance-based compensation which will not be
subject to the $1 million limitation. Until final Treasury regulations are
issued with respect to the new $1 million limitation, the Compensation Committee
will defer any decision on whether or not to limit the dollar amount of all
other compensation payable to the Company's executive officers to the $1 million
limitation, should the individual compensation of any executive officer ever
approach that level.
Compensation Committee
Robert C. Fink
Stephen C. Johnson
Anthony R. Muller
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid during the last three
fiscal years to the Company's Chief Executive Officer and to the five other most
highly compensated executive officers of the Company whose compensation exceeded
$100,000 for fiscal 1997 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
---------------------------- COMPENSATION
BONUS AWARDS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($)(1) OPTIONS (#)
- ------------------------------------- ---- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Kevin N. Kalkhoven 1997 $ 251,675 $ 109,290 60,000
Chairman and Chief 1996 238,400 152,090 60,000
Executive Officer 1995 218,301 121,253 30,000
R. Clark Harris(2) 1997 168,187 20,787 20,000
President of Uniphase 1996 160,644 62,010 46,498
Telecommunications 1995 18,460 -- 40,757
Products, Inc.
Ian Jenks(3) 1997 165,851 44,631 20,000
President of Laser 1996 126,165 33,206 50,000
Division 1995 -- -- --
Dan E. Pettit 1997 155,497 47,267 25,000
Vice President 1996 148,584 66,084 40,000
Finance, Chief 1995 137,971 45,981 25,000
Financial Officer and Secretary
John M. Scott 1997 190,331 33,032 --
President of 1996 181,166 83,350 30,000
Ultrapointe 1995 165,006 48,180 --
</TABLE>
- ---------------
(1) For fiscal 1995, includes bonus amounts earned in fiscal 1995 and paid in
fiscal 1996. For fiscal 1996, includes bonus amounts earned in fiscal 1996
and paid in fiscal 1997. For fiscal 1997, includes bonus amounts earned in
fiscal 1997 and paid in fiscal 1998.
(2) Mr. Harris joined the Company during fiscal 1995. On an annualized basis,
his salary would have been $160,000 in fiscal 1995.
(3) Mr. Jenks joined the Company during fiscal 1996. On an annualized basis, his
salary would have been $160,014 in fiscal 1996.
OPTIONS GRANTED AND OPTIONS EXERCISED IN THE LAST FISCAL YEAR
The following tables set forth information regarding stock options granted
to and exercised by the Named Executive Officers during the last fiscal year, as
well as options held by such officers as of June 30, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATE OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION FOR
EMPLOYEES PRICE PER OPTION TERM(1)
OPTIONS IN FISCAL SHARE EXPIRATION -----------------------
NAME GRANTED(#)(2) YEAR(3) ($/SH) DATE 5%($) 10%($)
- ----------------------- ------------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kevin N. Kalkhoven 60,000 6.0% $ 50.00 11/7/04 $1,432,366 $3,430,766
Ian Jenks 20,000 2.0 50.00 11/7/04 477,455 1,143,589
R. Clark Harris 20,000 2.0 50.00 11/7/04 477,455 1,143,589
Dan E. Pettit 25,000 2.5 50.00 11/7/04 596,819 1,429,486
</TABLE>
- ---------------
(1) The potential realizable value is calculated based on the term of the option
at its time of grant. It is calculated assuming that the stock price on the
date of grant appreciates at the indicated annual rate, compounded annually
for the entire term of the option, and that the option is exercised and sold
on the last day of its term for the appreciated stock price.
(2) Except in the event of a change in control of the Company, options granted
become exercisable at the rate of 25% of the shares subject thereto one year
from the grant date and as to approximately 6.25% of the shares subject to
the option at the end of each three-month period thereafter such that the
option is fully exercisable four years from the grant date.
(3) Based on a total of 1,001,700 options granted to employees of the Company in
fiscal year 1997, including the Named Executive Officers.
10
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR END(#) AT YEAR END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- --------------------- --------------- ----------- ------------------- -----------------------
<S> <C> <C> <C> <C>
Kevin N. Kalkhoven 106,392 $4,801,000 376,421/122,188 $21,119,750/$3,568,767
Ian Jenks 18,500 745,000 3,375/48,125 156,938/1,472,813
R. Clark Harris 36,500 1,532,000 27,507/84,005 1,284,219/3,294,625
Dan E. Pettit 75,000 3,688,000 86,915/71,461 4,574,171/2,520,879
John M. Scott 12,259 3,833,000 18,366/54,375 991,831/2,823,750
</TABLE>
- ---------------
(1) Represents the difference between the exercise price of the options (ranges
from $1.60 to $50.00) and the closing price of the Company's Common Stock on
June 30, 1997 ($58.25).
STOCK PERFORMANCE GRAPH
The following graph sets forth the Company's total cumulative stockholder
return as compared to Nasdaq Market Index and the peer group chosen for the
Company for fiscal 1996 ("Peer Group I") and fiscal 1997 ("Peer Group II"),
respectively. Due to the Company's increased emphasis on solid state laser
technology and its recent entry into the telecommunications market, the Company
revised its peer group to represent more accurately the markets in which it
sells its products. Peer Group I consists of the following companies: Coherent,
Inc., KLA-Tencor Corporation, Laser Industries, Ltd., Harmonic Lightwave, Inc.,
Ortel Corporation, Summitt Technology Inc. and II - VI, Inc. Peer Group II
consists of the following companies: Coherent, Inc., KLA-Tencor Corporation,
Laser Industries, Ltd., Harmonic Lightwave, Inc., Ortel Corporation, II - VI,
Inc. and SDL, Inc.
The total stockholder return assumes $100 invested at the beginning of the
period in (a) Common Stock of the Company, (b) the Nasdaq Market Index, and (c)
a peer group of companies that, like the Company, (i) are publicly-traded and
(ii) are either laser, semiconductor capital equipment or telecommunications
equipment companies. Total return assumes reinvestment of dividends. Historical
stock price performance is not necessarily indicative of future price
performance.
<TABLE>
<CAPTION>
Measurement Period Uniphase Nasdaq Market
(Fiscal Year Covered) Corporation Index Peer Group I Peer Group II
<S> <C> <C> <C> <C>
11/17/93 100 100 100 100
6/30/94 96.97 132.38 104.14 149.17
6/30/95 259.09 249.88 122.14 311.72
6/30/96 860.61 211.33 153.75 300.02
6/30/97 1412.12 268.47 185.21 396.08
</TABLE>
ASSUMES $100 INVESTED ON NOV. 17, 1993
ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDED JUNE 30, 1997
11
<PAGE> 14
STOCKHOLDER PROPOSALS
To be considered for presentation to the Annual Meeting of the Stockholders
to be held in 1998, a stockholder proposal must be received by Danny E. Pettit,
Secretary, Uniphase Corporation, 163 Baypointe Parkway, San Jose, California,
95134, no later than June 8, 1998.
STOCKHOLDER NOMINATIONS FOR DIRECTOR
Stockholders wishing to directly nominate candidates for election to the
Board of Directors at an annual meeting or any special meeting of the
stockholders held for the purpose of electing directors, must do so in
accordance with the Company's Bylaws by giving timely notice in writing to the
Secretary of the Company. The notice must set forth (a) the name and address of
the stockholder who intends to make the nomination, (b) the name, age, business
address and residence address of each nominee, (c) the principal occupation or
employment of each nominee, (d) the class and number of shares of the Company
which are beneficially owned by each nominee and by the nominating stockholder,
and (e) any other information concerning the nominee that must be disclosed of
nominees in proxy solicitations pursuant to Regulation 14A of the Securities
Exchange Act of 1934. To be timely, the notice by the stockholder must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 30 days nor more than 60 days prior to the meeting;
provided however, that in the event that less than 40 days notice or prior
public disclosure of the date of the meeting is made or given to stockholders,
notice by the stockholder to be timely must be received not later than the close
of business on the tenth day following the day on which such notice of the
meeting was mailed or such public disclosure was made. The chairman of the
meeting may, if the facts warrant, determine that a nomination was not made in
accordance with the procedures prescribed by the Bylaws; and so declare to the
meeting and the defective nomination will be disregarded.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and any persons holding more than ten percent of
the Company's Common Stock ("Reporting Persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC").
Reporting Persons are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received or written
representation from certain reporting persons for the 1997 fiscal year that no
such forms were required, the Company believes that during fiscal 1997, all
Reporting Persons complied with all applicable filing requirements on a timely
basis, except John Scott and Danny E. Pettit were late in filing two and one of
their Form 4, respectively, each such form reporting a single transaction.
12
<PAGE> 15
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
By Order of the Board of Directors,
Danny E. Pettit
Secretary
LOGO
September 29, 1997
San Jose, California
13
<PAGE> 16
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNIPHASE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 11, 1997
The undersigned hereby appoints Danny E. Pettit as proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and to vote as
designated below all of the shares of Common Stock of Uniphase Corporation that
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held at 1:00 p.m., local time on November 11, 1997 at the Uniphase Corporate
Headquarters located at 210 Baypointe Parkway, San Jose, California 95134, or
any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED
STOCKHOLDER. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS
AND FOR PROPOSAL 2.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-------------
SEE REVERSE
SIDE
-------------
<PAGE> 17
[X] Please mark your
votes as indicated
in the example.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WITHHOLD
AUTHORITY
FOR ALL FOR ALL
NOMINEES NOMINEES FOR AGAINST ABSTAIN
1. ELECTION OF [ ] [ ] Nominees: Robert C. Fink, 2. Proposed to ratify the [ ] [ ] [ ]
DIRECTORS Stephen C. Johnson appointment of Ernst &
Anthony R. Muller, Young LLP as the Independent
Casimir S. Skrzypczak auditors for the Company for
For, except vote withheld the fiscal year ending
from the following nominee(s) June 30, 1998.
- ---------------------------------------
FOR AGAINST ABSTAIN
3. Authority is hereby given [ ] [ ] [ ]
to the proxy identified on
the front of this card to
vote in their discretion upon
such other business as may
properly come before the
meeting.
YES NO
I plan to attend this meeting [ ] [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
SIGNATURE(S) DATED: , 1997
-------------------------------------------------- ----------
</TABLE>
Please sign exactly as your name appears on this proxy card. If shares are held
jointly, each person should sign. When signing as attorney, executor,
administrator, trustee or custodian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
