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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1999
REGISTRATION NO. [333- ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JDS UNIPHASE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 76-0151431
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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163 BAYPOINTE PARKWAY
SAN JOSE, CALIFORNIA 95134
(408) 434-1800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRAR'S PRINCIPAL EXECUTIVE OFFICES)
KEVIN N. KALKHOVEN
CO-CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
JDS UNIPHASE CORPORATION
163 BAYPOINTE PARKWAY
SAN JOSE, CALIFORNIA 95134
(408) 434-1800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
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BRUCE A. MANN, ESQ. PATRICK A. POHLEN, ESQ.
CHRISTOPHER S. DEWEES, ESQ. ERIC J. LOUMEAU, ESQ.
DAVID P. VALENTI, ESQ. DAVID B. BERGER, ESQ.
MORRISON & FOERSTER LLP COOLEY GODWARD LLP
755 PAGE MILL ROAD FIVE PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94304 3000 EL CAMINO REAL
(650) 813-5600 PALO ALTO, CALIFORNIA 94306-2155
(650) 843-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF SHARES TO BE AMOUNT TO BE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PRICE(1) REGISTRATION FEE
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common stock, $0.001 par value(2)....... 11,500,000 $956,662,000 $265,953
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(1) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended, based
on a per share price of $83.188, the average of the high and low price of
the Company's common stock on July 12, 1999 (after giving effect to a stock
dividend of one share of our common stock for each outstanding share of our
common stock, to be effective on July 23, 1999).
(2) Includes the preferred stock purchase rights associated with the common
stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell, and the selling stockholders may not resell, these securities until
the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 14, 1999
10,000,000 Shares
[JDS UNIPHASE LOGO]
Common Stock
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This prospectus relates to the offer and sale of up to 10,000,000 shares of
our common stock. Of these shares, we are selling up to 7,618,800 shares, and
the selling stockholders identified in this prospectus are selling 2,065,200
shares.
Concurrently with the offer and sale of shares of our common stock
described in this prospectus, our subsidiary, JDS Uniphase Canada Ltd., is
offering for sale outside the United States Exchangeable Shares of its capital
stock, a portion of the shares of which will be sold by JDS Uniphase Canada
Ltd., and 316,000 shares of which will be sold by certain holders of outstanding
Exchangeable Shares. The number of shares of our common stock offered by us
under this prospectus shall be reduced on a share-for-share basis by the number
of Exchangeable Shares sold by JDS Uniphase Canada Ltd. in the concurrent
offering. Shares offered by the selling stockholders shall not be affected by
such offering. See "Concurrent Offering of Exchangeable Shares."
The underwriters have an option to purchase from us a maximum of 1,500,000
additional shares to cover over-allotments of shares. The number of shares of
our common stock offered by us to cover over-allotments of shares under this
prospectus shall be reduced by the number of Exchangeable Shares offered by JDS
Uniphase Canada Ltd. allocated to cover over-allotments of Exchangeable Shares
in the concurrent offering.
Our common stock is traded on the Nasdaq National Market under the symbol
"JDSU." The last reported sale price of our common stock on the Nasdaq National
Market on July 13, 1999 was $163.313 per share ($81.656 per share after giving
effect to a stock dividend of one share of our common stock for each outstanding
share of our common stock scheduled to occur on July 23, 1999).
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
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<CAPTION>
PER SHARE TOTAL
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Public Offering Price....................................... $ $ (1)
Discounts and Commissions to Underwriters................... $ $ (1)
Proceeds to JDS Uniphase.................................... $ $ (1)
Proceeds to the Selling Stockholders........................ $ $
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(1) Assumes the sale of all 7,618,800 shares of common stock offered by us to
which this prospectus relates. Such amount shall be adjusted to the extent
we sell fewer shares of our common stock as the result of the concurrent
offering of Exchangeable Shares. See "Concurrent Offering of Exchangeable
Shares."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This is a firm commitment underwriting. Banc of America Securities LLC
expects to deliver the shares of common stock to investors on ,
1999.
JOINT LEAD AND BOOK-RUNNING MANAGERS
BANC OF AMERICA SECURITIES LLC DEUTSCHE BANC ALEX. BROWN
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CIBC WORLD MARKETS
CREDIT SUISSE FIRST BOSTON
SOUNDVIEW TECHNOLOGY GROUP
THOMAS WEISEL PARTNERS LLC
WARBURG DILLON READ LLC
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The date of this prospectus is , 1999
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TABLE OF CONTENTS
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PAGE
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Summary..................................................... 3
Recent Events............................................... 4
Concurrent Offering of Exchangeable Shares.................. 5
The Offering................................................ 5
Risk Factors................................................ 7
Use of Proceeds............................................. 20
Price Range of Common Stock................................. 20
Capitalization.............................................. 21
JDS Uniphase Summary Financial Data and Unaudited Pro Forma
Financial Data............................................ 22
Our Business................................................ 26
Management.................................................. 38
Principal and Selling Stockholders.......................... 41
Underwriting................................................ 45
Legal Opinions.............................................. 47
Experts..................................................... 47
Where You May Find More Information......................... 48
Incorporation of Certain Documents by Reference............. 49
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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may be used only where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
Information contained in our Web site does not constitute part of this
document.
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SUMMARY
You should read the following summary together with the more detailed
information regarding our company and the common stock being sold in this
offering and our Summary Financial Data and Unaudited Pro Forma Financial Data
appearing elsewhere in this prospectus. Because this is only a summary, you
should read the rest of this prospectus before you invest in our common stock.
Read the entire prospectus carefully, especially the risks described under "Risk
Factors." Unless otherwise indicated or unless the context otherwise requires,
all information in this prospectus (1) reflects no exercise of the underwriters'
over-allotment option and (2) gives effect to the stock dividend of one share of
common stock for each outstanding share of common stock and the equivalent
two-for-one stock split of the outstanding Exchangeable Shares that will be
effective as to our stockholders and JDS Uniphase Canada Ltd.'s shareholders,
respectively, on July 23, 1999. Unless otherwise indicated, all dollar amounts
referred to in this prospectus are in United States dollars.
JDS Uniphase Corporation is the result of a merger of equals between
Uniphase Corporation and JDS FITEL Inc., which became effective on June 30,
1999. Certain historic information described in this prospectus pertains only to
either Uniphase Corporation or JDS FITEL Inc. In such instances, historic
information that is specific to Uniphase Corporation or JDS FITEL Inc. is
specifically described as "Uniphase" or "JDS FITEL" information, respectively.
References to "we," "our" and "JDS Uniphase" refer to the combined entity
resulting from the merger.
JDS UNIPHASE CORPORATION
JDS Uniphase is the leading provider of advanced fiberoptic components and
modules. These products are sold to leading telecommunications and cable
television system providers worldwide, which are commonly referred to as OEMs
and include Alcatel, Ciena, General Instrument, Lucent, Nortel, Pirelli,
Scientific Atlanta, Siemens and Tyco. Our components and modules are basic
building blocks for fiberoptic networks and perform both optical-only (passive)
and optoelectronic (active) functions within these networks. Our products
include semiconductor lasers, high-speed external modulators, transmitters,
amplifiers, couplers, multiplexers, circulators, tunable filters, optical
switches and isolators for fiberoptic applications. We also supply our OEM
customers with test instruments for both system production applications and
network installation. In addition, we design, manufacture and market laser
subsystems for a broad range of commercial applications, which include
biotechnology, industrial process control and measurement, graphics and printing
and semiconductor equipment manufactured by our customers.
Businesses and consumers are increasingly accessing public
telecommunications networks to communicate, collect and distribute information.
The explosive growth of the Internet, coupled with the increasing volume of data
and video traffic across corporate and public internets and intranets, has
fueled the continuing and growing demand for more network capacity in both
long-haul telecommunications and cable television networks. Given the inherently
faster speed of light signals in fiberoptic networks and their immunity from
electromagnetic interference, fiberoptic systems are replacing existing copper
wire networks for long-haul (in excess of 600 kilometers) telecommunications
networks. Cable television networks are also shifting to fiberoptic solutions
for the distribution of signals from the central cable broadcast station to the
local cable distribution hubs. Additional capacity in these fiberoptic networks
is attained through a signal transmission method
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called wave division multiplexing, or WDM, which allows up to 128 separate light
signals of slightly different wavelengths to be simultaneously transmitted in a
single fiber. Today, fiberoptic cable is the primary medium and WDM has become
the emerging standard for long-haul telecommunications and cable television
networks, and fiber is making inroads to replace copper in the shorter distance
metropolitan, or metro, markets.
The growth of WDM traffic traveling over fiberoptic cables and the
continued demand for increased capacity represents a significant opportunity for
systems OEMs and their suppliers. With a history of innovation and successful
acquisitions, we have established ourselves as the premier supplier of advanced
components and modules to the telecommunications and cable television networking
industries. Going forward, the key elements of our business strategy to expand
our leadership position include:
- provide more integrated and broader product offerings to our customers,
- capitalize on passive and active leadership positions,
- provide cost-effective, demand-driven, faster time-to-market solutions to
our customers,
- maintain technology leadership and high product reliability,
- enhance manufacturing techniques and increase capacity, and
- seek complementary mergers and acquisitions.
Our corporate headquarters in the United States is located at 163 Baypointe
Parkway, San Jose, California 95134, where the phone number is (408) 434-1800.
Our corporate headquarters in Canada is located at 570 West Hunt Club Road,
Nepean, Ontario, and the phone number at this location is (613) 727-1304.
RECENT EVENTS
Uniphase and JDS FITEL recently completed a merger of equals. In connection
with this transaction, Uniphase changed its name from "Uniphase Corporation" to
"JDS Uniphase Corporation" and changed its stock symbol from "UNPH" to "JDSU."
We commenced combined operations on June 30, 1999 as a result of this merger. In
this transaction, JDS FITEL shareholders received a total of 7,333,652 shares of
our common stock and a total of 72,534,038 exchangeable shares ("Exchangeable
Shares") of JDS Uniphase Canada Ltd. Each Exchangeable Share is exchangeable, at
the option of its holder, at any time into one share of our common stock.
Holders of Exchangeable Shares are entitled to dividend and other rights that
are, as nearly as practicable, economically equivalent to those of our common
stockholders. On or after March 31, 2014 (subject to acceleration in certain
circumstances), the board of directors of JDS Uniphase Canada Ltd. may establish
a redemption date for the exchangeable shares on which date JDS Uniphase Canada
Ltd. would redeem all the then outstanding Exchangeable Shares for an equal
number of shares of our common stock. The Exchangeable Shares are listed for
trading on The Toronto Stock Exchange under the symbol "JDU." At the
consummation of Uniphase's combination with JDS FITEL, the outstanding options
to acquire JDS FITEL common shares became options to purchase a total of
approximately 6.8 million shares of our common stock. In addition, we granted
options to purchase approximately 7.5 million shares of our common stock to
certain former JDS FITEL employees upon the effectiveness of the merger.
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CONCURRENT OFFERING OF EXCHANGEABLE SHARES
Concurrent with the offering of shares of our common stock pursuant to this
prospectus, JDS Uniphase Canada Ltd. is offering Exchangeable Shares to persons
outside the United States in a separate underwritten offering. The number of
shares of our common stock offered by us pursuant to this prospectus shall be
reduced on a share-for-share basis by the number of Exchangeable Shares offered
by JDS Uniphase Canada Ltd. in the concurrent offering. Shares of our common
stock offered by selling stockholders shall not be reduced by such offering. The
Exchangeable Shares issued in such offering shall not be permitted to be
transferred except pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or an exemption from registration under the
Act. Each Exchangeable Share will be exchangeable, at the option of its holder,
at any time into one share of our common stock. We have filed a registration
statement with respect to the issuance of the shares of our common stock
issuable upon exchange of the Exchangeable Shares. We believe the offering of
Exchangeable Shares will expand the market and increase the liquidity of the
outstanding Exchangeable Shares. The offering of Exchangeable Shares also will
enable Canadian investors to acquire shares in a company that will not
constitute foreign property for Canadian income tax purposes and also serve as a
suitable investment for certain registered plans in Canada.
THE OFFERING
Common stock offered by us..... 7,618,800 shares(1)(2)
Common stock offered by the
selling stockholders......... 2,381,200 shares(3)
Common stock outstanding after
this offering................ 161,207,666 shares(1)(2)(4)
Use of proceeds................ For general corporate purposes, including
working capital and potential acquisitions.
See "Use of Proceeds." We will not receive any
proceeds from the sale of common stock by the
selling stockholders.
Nasdaq National Market symbol... JDSU
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(1) Includes the shares of our common stock issuable upon exchange of the
Exchangeable Shares to be offered by JDS Uniphase Canada Ltd. concurrently
herewith.
(2) Excludes the underwriters' option to purchase up to an additional 1,500,000
shares from us solely to cover over-allotments and the underwriters' option
to purchase additional Exchangeable Shares solely to cover over-allotments
in the concurrent offering of Exchangeable Shares.
(3) Includes shares of our common stock issuable upon exchange of the
Exchangeable Shares offered by certain holders of Exchangeable Shares under
the concurrent offering of Exchangeable Shares by JDS Uniphase Canada Ltd.
This represents the estimated number of shares of our common stock that we
expect the selling stockholders to sell in the offering and the number of
shares of our common stock issuable upon exchange of the Exchangeable Shares
expected to be sold by certain holders of outstanding Exchangeable Shares
under the concurrent offering of Exchangeable Shares. See "Principal and
Selling Stockholders" and "Concurrent Offering of Exchangeable Shares."
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(4) Based on the number of shares of our common stock (taking into account
72,534,038 shares thereof issuable upon conversion of the outstanding
Exchangeable Shares) outstanding as of July 9, 1999. Excludes:
- approximately 29.6 million shares of common stock issuable upon the
exercise of stock options outstanding after the offering;
- approximately 2.5 million shares of common stock reserved for future
issuance under the 1998 Employee Stock Purchase Plan; and
- any shares of common stock issuable upon conversion of the outstanding
shares of Series A Preferred Stock.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of the following risks actually occur, our business, financial condition and
results of operations could be materially adversely affected. This could cause
the trading price of our common stock to decline, and you may lose part or all
of your investment.
The statements contained in this prospectus that are not purely historical
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act,
including, without limitation, statements regarding JDS Uniphase's expectations,
hopes, beliefs, anticipations, commitments, intentions and strategies regarding
the future. Actual results could differ from those projected in any
forward-looking statements for the reasons, among others, detailed in the
following "Risk Factors." The fact that some of the "Risk Factors" described in
this prospectus may be the same or similar to those described in our past
filings means only that those risks are present in multiple periods. We believe
that many of the risks detailed here are part of doing business in the industry
in which we compete and will likely be present in all periods reported. The fact
that certain risks are endemic to the industry does not lessen the significance
of the risk. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus might not occur.
DIFFICULTIES WE MAY ENCOUNTER MANAGING OUR GROWTH COULD ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS
Both JDS FITEL and Uniphase have historically achieved their growth through
a combination of internally developed new products and acquisitions. As part of
our strategy to sustain growth, we expect to continue to pursue acquisitions of
other companies, technologies and complementary product lines. We also expect to
continue developing new components, modules and other products for our customer
base, seeking to further penetrate these markets. The success of each
acquisition will depend upon:
- our ability to manufacture and sell the products of the businesses
acquired,
- continued demand for these acquired products by our customers,
- our ability to integrate the acquired business' operations, products and
personnel,
- our ability to retain key personnel of the acquired businesses, and
- our ability to expand our financial and management controls and reporting
systems and procedures.
Difficulties in Integrating Uniphase and JDS FITEL Could Adversely Affect Our
Business
Uniphase combined its operations with JDS FITEL on June 30, 1999 in a
merger of equals. If we fail to successfully integrate the businesses of JDS
FITEL and Uniphase, the combined business will suffer. Uniphase and JDS FITEL
have complementary business operations located principally in the United States,
Canada and Europe. Our success depends in large part on the successful
integration of these geographically diverse
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operations and the technologies and personnel of the two companies. As part of
this integration, we need to combine and improve our computer systems to
centralize and better automate processing of our financial, sales and
manufacturing data. Our management came from the prior management teams of both
companies and many members of management did not previously work with other
members of management. The integration of the two businesses may result in
unanticipated operational problems, expenses and liabilities and the diversion
of management attention. The integration may not be successful, and, if so, our
operating results would suffer as a result.
If We Fail to Efficiently Combine Uniphase's and JDS FITEL's Sales and Marketing
Forces, Our Sales Could Suffer
We may experience disruption in sales and marketing in connection with our
efforts to integrate Uniphase's and JDS FITEL's sales channels, and we may be
unable to efficiently or effectively correct such disruption or achieve our
sales and marketing objectives after integration. In addition, sales cycles and
sales models for Uniphase's and JDS FITEL's various products may vary
significantly from product to product. Our sales personnel not accustomed to the
different sales cycles and approaches required for products newly added to their
portfolio may experience delays and difficulties in selling these newly added
products. Furthermore, it may be difficult to retain key sales personnel. As a
result, we may fail to take full advantage of the combined sales forces'
efforts, and Uniphase's and JDS FITEL's respective sales approaches and
distribution channels may be ineffective in promoting the other entity's
products, which may have a material adverse effect on our business, financial
condition or operating results.
Integration Costs and Expenses Associated with Uniphase's Combination with JDS
FITEL Have Been Substantial and We May Incur Additional Related Expenses in the
Future
Uniphase and JDS FITEL have incurred direct costs associated with the
combination of approximately $12 million, which will be included as a part of
the total purchase cost for accounting purposes. We may incur additional
material charges in subsequent quarters to reflect additional costs associated
with the combination.
Difficulties in Integrating Other Acquisitions Could Adversely Affect Our
Business
In March 1997, Uniphase acquired Uniphase Laser Enterprise, which produces
our 980-nanometer pump laser products. In June 1998, Uniphase acquired Uniphase
Netherlands. In the case of both acquisitions, Uniphase acquired businesses that
had previously been engaged primarily in research and development and that
needed to make the transition from a research activity to a commercial business
with sales and profit levels that are consistent with our overall financial
goals. This transition has not yet been completed at Uniphase Netherlands, which
continues to operate at higher expense levels and lower gross margins than those
required to meet our profitability goals. In addition, in November 1998,
Uniphase acquired Uniphase Broadband, which manufactures test instruments,
transmitter cards and transceivers for telecommunications applications. We may
not successfully manufacture and sell our products or successfully manage our
growth, and failure to do so could have a material adverse effect on our
business, financial condition and operating results.
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Difficulties in Commercializing New Product Lines
We intend to continue to develop new product lines to address our
customers' diverse needs and the several market segments in which we
participate. As we target new product lines and markets, we will further
increase our sales and marketing, customer support and administrative functions
to support anticipated increased levels of operations from these new products
and markets as well as growth from our existing products. We may not be
successful in creating this infrastructure nor may we realize any increase in
the level of our sales and operations to offset the additional expenses
resulting from this increased infrastructure. Uniphase commenced operations at
Uniphase Telecommunications Products in 1996 to penetrate the cable television
markets, and at Uniphase Network Components in 1998 to develop and market a line
of complementary optical components for our telecommunications customers. In
each case, Uniphase hired development, manufacturing and other staff in
anticipation of developing and selling new products. Our operations may not
achieve levels sufficient to justify the increased expense levels associated
with these new businesses.
WE ARE SUBJECT TO MANUFACTURING DIFFICULTIES
If We Do Not Achieve Acceptable Manufacturing Volumes, Yields or Sufficient
Product Reliability, Our Operating Results Could Suffer
The manufacture of our products involves highly complex and precise
processes, requiring production in highly controlled and clean environments.
Changes in our manufacturing processes or those of our suppliers, or their
inadvertent use of defective or contaminated materials, could significantly
reduce our manufacturing yields and product reliability. Because the majority of
our manufacturing costs are relatively fixed, manufacturing yields are critical
to our results of operations. Certain of our divisions have in the past
experienced lower than expected production yields, which could delay product
shipments and impair gross margins. These divisions or any of our other
manufacturing facilities may not maintain acceptable yields in the future.
Our existing Uniphase Netherlands facility has not achieved acceptable
manufacturing yields since the June 1998 acquisition, and there is continuing
risk attendant to this facility and its manufacturing yields and costs. In
addition, we recently completed construction of a new laser fabrication facility
at Uniphase Netherlands, and this facility has not yet reached targeted yields,
volumes or costs levels. Uniphase Netherlands may not successfully manufacture
laser products in the future at volumes, yields or cost levels necessary to meet
our customers' needs. In addition, Uniphase Fiber Components is establishing a
production facility in Sydney, Australia for fiber Bragg grating products. This
facility may not manufacture grating products to customers' specifications at
the volumes, cost and yield levels required. To the extent we do not achieve
acceptable manufacturing yields or experience product shipment delays, our
business, operating results and financial condition would be materially and
adversely affected.
As our customers' needs for our products increase, our ability to increase
our manufacturing volumes to meet these needs and satisfy customer demand will
have a material effect on our business, operating results and financial
condition. In some cases, existing manufacturing techniques, which involve
substantial manual labor, may be insufficient to achieve the volume or cost
targets of our customers. As such, we will need to develop new manufacturing
processes and techniques, which are anticipated to involve higher levels of
automation, to achieve the targeted volume and cost levels. In addition, it
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is frequently difficult at a number of our manufacturing facilities to hire
qualified manufacturing personnel in a timely fashion, if at all, when customer
demands increase over shortened time periods. While we continue to devote
research and development efforts to improvement of our manufacturing techniques
and processes, we may not achieve manufacturing volumes and cost levels in our
manufacturing activities that will fully satisfy customer demands.
If Our Customers Do Not Qualify Our Manufacturing Lines For Volume Shipments,
Our Operating Results Could Suffer
Customers will not purchase any of our products (other than limited numbers
of evaluation units) prior to qualification of the manufacturing line for the
product. Each new manufacturing line must go through varying levels of
qualification with our customers. This qualification process determines whether
the manufacturing line achieves the customers' quality, performance and
reliability standards. Delays in qualification can cause a product to be dropped
from a long term supply program and result in significant lost revenue
opportunity over the term of that program. As noted above, we are currently
completing a new manufacturing facility in Australia. We may experience delays
in obtaining customer qualification of this facility and our new facility at
Uniphase Netherlands. If we fail in the timely qualification of these or other
new manufacturing lines, our operating results and customer relationships would
be adversely affected.
OUR OPERATING RESULTS MAY SUFFER AS A RESULT OF PURCHASE ACCOUNTING TREATMENT,
THE IMPACT OF AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES RELATING TO OUR
COMBINATION WITH JDS FITEL
Under U.S. generally accepted accounting principles that apply to us, we
will account for the combination of Uniphase and JDS FITEL using the purchase
method of accounting. Under purchase accounting, we will record the estimated
market value of our common shares and the Exchangeable Shares issued in
connection with Uniphase's combination with JDS FITEL, the fair value of the
options to purchase JDS FITEL common shares which became options to purchase our
common shares and the amount of direct transaction costs as the cost of
acquiring the business of JDS FITEL. That cost will be allocated to the
individual assets acquired and liabilities assumed, including various
identifiable intangible assets such as in-process research and development,
acquired technology, acquired trademarks and trade names and acquired workforce,
based on their respective fair values. We will allocate the excess of the
purchase cost over the fair value of the net assets to goodwill. We estimate
that we will expense in-process research and development of $177 million as of
June 30, 1999. We will amortize goodwill over a five year period. The amount of
purchase cost to be allocated to goodwill and other intangibles is estimated to
be $3.2 billion, including the related deferred tax effect. If we amortized
goodwill and other intangible assets in equal quarterly amounts over a five year
period following completion of Uniphase's combination with JDS FITEL, the
accounting charge attributable to these items would be $161 million per quarter
and $643 million per fiscal year. As a result, purchase accounting treatment of
Uniphase's combination with JDS FITEL will result in a net loss for us in the
foreseeable future, which could have a material and adverse effect on the market
value of our stock.
10
<PAGE> 12
OUR STOCK PRICE COULD FLUCTUATE SUBSTANTIALLY
The Unpredictability of Our Quarterly Operating Results Could Cause Our Stock
Price to be Volatile or Decline
Each of JDS FITEL and Uniphase has experienced, and we expect to continue
to experience, fluctuations in our quarterly results, which in the future may be
significant and cause substantial fluctuations in the market price of our stock.
All of the concerns we discuss under Risk Factors could affect our operating
results, including, among others:
- the timing of the receipt of product orders from a limited number of
major customers,
- the loss of one or more of our major suppliers or customers,
- competitive pricing pressures,
- the costs associated with the acquisition or disposition of businesses,
- our ability to design, manufacture and ship technologically advanced
products with satisfactory yields on a timely and cost-effective basis,
- the announcement and introduction of new products by us, and
- expenses associated with any intellectual property or other litigation.
In addition to concerns potentially affecting our operating results
addressed elsewhere under Risk Factors, the following factors may also influence
our operating results:
- our product mix,
- the relative proportion of our domestic and international sales,
- the timing differences between when we incur expenses to increase our
marketing and sales capabilities and when we realize benefits, if any,
from such expenditures, and
- fluctuations in the foreign currencies of our foreign operations.
Furthermore, our sales often reflect orders shipped in the same quarter
that they are received, which makes our sales vulnerable to short term
fluctuations in customer demand and difficult to predict. Also, customers may
cancel or reschedule shipments, and production difficulties could delay
shipments. In addition, we sell our telecommunications equipment products to
OEMs who typically order in large quantities, and therefore the timing of such
sales may significantly affect our quarterly results. An OEM supplies system
level network products to telecommunications carriers and others and
incorporates our components in these system level products. The timing of such
OEM sales can be affected by factors beyond our control, such as demand for the
OEMs' products and manufacturing risks experienced by OEMs. In this regard, we
have experienced rescheduling of orders by customers in each of our markets and
may experience similar rescheduling in the future. As a result of all of these
factors, our results from operations may vary significantly from quarter to
quarter.
In addition to the effect of ongoing operations on quarterly results,
acquisitions or dispositions of businesses, our products or technologies have in
the past resulted in, and may in the future, result in reorganization of our
operations, substantial charges or other
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<PAGE> 13
expenses, which have caused and may in the future cause fluctuations in our
quarterly operating results and cash flows. See, for example, "Risk
Factors -- Our Operating Results May Suffer as a Result of Purchase Accounting
Treatment, the Impact of Amortization of Goodwill and Other Intangibles Relating
to Our Combination with JDS FITEL."
Finally, our net revenues and operating results in future quarters may be
below the expectations of public market securities analysts and investors. In
such event, the price of our common stock and the Exchangeable Shares would
likely decline, perhaps substantially.
Factors Other Than Our Quarterly Results Could Cause Our Stock Price to be
Volatile or Decline
The market price of our common stock has been and is likely to continue to
be highly volatile due to causes other than our historical quarterly results,
such as:
- announcements by our competitors and customers of technological
innovations or new products,
- developments with respect to patents or proprietary rights,
- governmental regulatory action, and
- general market conditions.
In addition, the stock market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies, which may cause the price of our stock to decline.
OUR SALES WOULD SUFFER IF ONE OR MORE OF OUR KEY CUSTOMERS SUBSTANTIALLY REDUCED
ORDERS FOR OUR PRODUCTS
Our customer base is highly concentrated. Historically, orders from a
relatively limited number of OEM customers accounted for a substantial portion
of Uniphase's and JDS FITEL's net sales from telecommunications products. We
expect that, for the foreseeable future, sales to a limited number of customers
will continue to account for a high percentage of our net sales. Sales to any
single customer may vary significantly from quarter to quarter. If current
customers do not continue to place orders we may not be able to replace these
orders with new orders from new customers. In the telecommunications markets,
our customers evaluate our products and competitive products for deployment in
their telecommunications systems. Our failure to be selected by a customer for
particular system projects can significantly impact our business, operating
results and financial condition. Similarly, even if our customers select us, if
our customers are not selected as the primary supplier for an overall system
installation, we can be similarly adversely affected. Such fluctuations could
have a material adverse effect on our business, financial condition and
operating results.
INTERRUPTIONS AFFECTING OUR KEY SUPPLIERS COULD DISRUPT PRODUCTION, COMPROMISE
OUR PRODUCT QUALITY AND ADVERSELY AFFECT OUR SALES
We currently obtain various components included in the manufacture of our
products from single or limited source suppliers. A disruption or loss of
supplies from these companies or a price increase for these components would
have a material adverse effect
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<PAGE> 14
on our results of operations, product quality and customer relationships. We
have a sole source supply agreement for a critical material used in the
manufacture of our passive products. This agreement may be terminated by either
party on six months prior notice. It is our objective to maintain strategic
inventory of the key raw material provided by this supplier. We also depend on a
single source for filters for our passive products which we obtain exclusively
through a joint venture with Optical Coating Laboratories, Inc. In addition, we
currently utilize a sole source for the crystal semiconductor chip sets
incorporated in our solid state microlaser products and acquire our pump diodes
for use in our solid state laser products from Opto Power Corporation and GEC.
We obtain lithium niobate wafers, gallium arsenide wafers, specialized fiber
components and certain lasers used in our telecommunications products primarily
from Crystal Technology, Inc., Fujikura, Ltd., Philips Key Modules and Sumitomo,
respectively. We do not have long-term or volume purchase agreements with any of
these suppliers (other than for our passive products supplier described in this
paragraph), and these components may not in the future be available in the
quantities required by us, if at all.
WE MAY BECOME SUBJECT TO COLLECTIVE BARGAINING AGREEMENTS
Our employees who are employed at manufacturing facilities located in North
America are not bound by or party to any collective bargaining agreements with
us. These employees may become bound by or party to one or more collective
bargaining agreements with us in the future. Certain of our employees outside of
North America, particularly in The Netherlands and Germany, are subject to
collective bargaining agreements. If, in the future, any such employees become
bound by or party to any collective bargaining agreements, then our related
costs and our flexibility with respect to managing our business operations
involving such employees may be materially adversely affected.
ANY FAILURE TO REMAIN COMPETITIVE IN OUR INDUSTRY WOULD IMPAIR OUR OPERATING
RESULTS
If Our Business Operations are Insufficient to Remain Competitive in Our
Industry, Our Operating Results Could Suffer
The telecommunications and laser subsystems markets in which we sell our
products are highly competitive. In each of the markets we serve, we face
intense competition from established competitors. Many of these competitors have
substantially greater financial, engineering, manufacturing, marketing, service
and support resources than do we and may have substantially greater name
recognition, manufacturing expertise and capability and longer standing customer
relationships than do we. To remain competitive, we believe we must maintain a
substantial investment in research and development, marketing, and customer
service and support. We may not compete successfully in all or some of our
markets in the future, and we may not have sufficient resources to continue to
make such investments, or we may not make the technological advances necessary
to maintain our competitive position so that our products will receive market
acceptance. In addition, technological changes or development efforts by our
competitors may render our products or technologies obsolete or uncompetitive.
See "Our Business -- Competition."
Fiberoptic Component Average Selling Prices Are Declining
Prices for telecommunications fiberoptic components are generally declining
due to, among other things, increased competition and greater unit volumes as
telecommunications service providers continue to deploy fiberoptic networks.
Uniphase and JDS FITEL have in
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<PAGE> 15
the past and we may in the future experience substantial period to period
fluctuations in average selling prices. We anticipate that average selling
prices will decrease in the future in response to product introductions by
competitors and us or to other factors, including price pressures from
significant customers. Therefore, we must continue to (1) timely develop and
introduce new products that incorporate features that can be sold at higher
selling prices and (2) reduce our manufacturing costs. Failure to achieve any or
all of the foregoing could cause our net sales and gross margins to decline,
which may have a material adverse effect on our business, financial condition
and operating results.
If We Fail to Successfully Develop and Market Solid State Lasers to Replace the
Declining Markets for Our Gas Lasers, Our Operating Results Could Suffer
The market for gas lasers is mature and expected to decline as customers
replace conventional lasers, including gas lasers, with solid state lasers.
Solid state lasers are currently expected to be the primary commercial laser
technology in the future. Consequently, Uniphase has devoted substantial
resources to developing and commercializing its solid state laser products. We
believe that some companies are further advanced than us in solid state laser
development and are competing with us for many of the same opportunities. To be
competitive in our laser markets, we believe continued manufacturing cost
reductions and enhanced performance of our laser products will be required on a
continuing basis as these markets further mature. However, our solid state laser
products may not be competitive with products of other companies as to cost or
performance in the future.
If We Fail to Attract and Retain Key Personnel, Our Business Could Suffer
Our future depends, in part, on our ability to attract and retain certain
key personnel. In particular, our research and development efforts depend on
hiring and retaining qualified engineers. Competition for highly skilled
engineers is extremely intense, and we are currently experiencing difficulty in
identifying and hiring certain qualified engineers in many areas of our
business. We may not be able to hire and retain such personnel at compensation
levels consistent with our existing compensation and salary structure. Our
future also depends on the continued contributions of our executive officers and
other key management and technical personnel, each of whom would be difficult to
replace. Uncertainty resulting from the JDS FITEL merger could further adversely
affect our ability to retain key employees. We do not maintain a key person life
insurance policy on our Chief Executive Officer, our Chief Operating Officer or
any other officer. The loss of the services of one or more of our executive
officers or key personnel or the inability to continue to attract qualified
personnel could delay product development cycles or otherwise have a material
adverse effect on our business, financial condition and operating results.
OUR PARTICIPATION IN INTERNATIONAL MARKETS CREATES RISKS TO OUR BUSINESS NOT
FACED BY COMPANIES THAT SELL THEIR PRODUCTS IN THE UNITED STATES
International sales are subject to inherent risks, including:
- unexpected changes in regulatory requirements,
- tariffs and other trade barriers,
- political and economic instability in foreign markets,
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<PAGE> 16
- difficulties in staffing and management,
- integration of foreign operations,
- longer payment cycles,
- greater difficulty in accounts receivable collection,
- currency fluctuations, and
- potentially adverse tax consequences.
International sales accounted for approximately 38.7%, 30.6% and 25.1% of
Uniphase's net sales in fiscal years 1998, 1997 and 1996, respectively.
International sales (excluding sales to the U.S.) accounted for approximately
24.5%, 20.2% and 31.8% of JDS FITEL's net sales in fiscal years 1998, 1997 and
1996, respectively. We expect that international sales will continue to account
for a significant portion of our net sales. We may continue to expand our
operations outside of the United States and to enter additional international
markets, both of which will require significant management attention and
financial resources.
Since a significant portion of our foreign sales are denominated in U.S.
dollars, our products may also become less price competitive in countries in
which local currencies decline in value relative to the U.S. dollar. Our
business and operating results may also be materially and adversely affected by
lower sales levels that typically occur during the summer months in Europe and
certain other overseas markets. Furthermore, the sales of many of our OEM
customers depend on international sales and consequently further exposes us to
the risks associated with such international sales.
THE YEAR 2000 PROBLEM MAY DISRUPT OUR AND OUR CUSTOMERS' AND SUPPLIERS'
BUSINESSES
We are aware of the risks associated with the operation of information
technology and non-information technology systems as the Year 2000 approaches.
The problem is pervasive and complex and may affect many information technology
and non-information technology systems. The Year 2000 problem results from the
rollover of the two digit year value from "99" to "00." Systems that do not
properly recognize such date-sensitive information could generate erroneous data
or fail. In addition to our own systems, we rely on external systems of our
customers, suppliers, creditors, financial organizations, utilities providers
and government entities, both domestic and international (which we collectively
refer to as "third parties"). Consequently, we could be affected by disruptions
in the operations of third parties with which we interact. Furthermore, as
customers expend resources to correct their own systems, they may reduce their
purchasing frequency and volume of our products.
We are using both internal and external resources to assess:
- our state of readiness (including the readiness of third parties with
which we interact) concerning the Year 2000 problem,
- our costs to correct material Year 2000 problems related to our internal
information technology and non-information technology systems,
- the known risks related to any failure to correct any Year 2000 problems
we identify, and
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<PAGE> 17
- the contingency plan, if any, that we should adopt should any identified
Year 2000 problems not be corrected.
To date, we have incurred costs not exceeding $2 million to upgrade our
information technology and non-information technology systems to, among other
things, make such systems Year 2000 compliant. We continue to evaluate the
estimated costs associated with the efforts to prepare for Year 2000 based on
actual experience. While the efforts will involve additional costs, we believe,
based on (1) available information, (2) amounts spent to date and (3) the fact
that our information technology and non-information technology systems depend on
third-party software which, we believe, has been or is being updated to address
the Year 2000 problem, that we will manage our total Year 2000 transition
without any material adverse effect on our business operations, financial
condition, products or financial prospects. The actual outcomes and results
could be affected by future factors including, but not limited to:
- the continued availability of skilled personnel,
- cost control,
- the ability to locate and remediate software code problems,
- critical suppliers and subcontractors meeting their Year 2000 compliance
commitments, and
- timely actions by customers.
We are working with our software system suppliers and believe that certain
of these systems are currently not Year 2000 compliant. We have targeted
September 30, 1999 as the date by which these systems shall be Year 2000
compliant. In any event, however, we anticipate that such systems will be
corrected for the Year 2000 problem prior to December 31, 1999. We are working
with those third parties to identify any Year 2000 problems affecting such third
parties that could have a material adverse affect on our business, financial
condition or results of operations. However, it would be impracticable for us to
attempt to address all potential Year 2000 problems of third parties that have
been or may in the future be identified. Specifically, Year 2000 problems have
arisen or may arise regarding the information technology and non-information
technology systems of third parties having widespread national and international
interactions with persons and entities generally (for example, certain
information technology and non-information technology systems of governmental
agencies, utilities and information and financial networks) that, if
uncorrected, could have a material adverse impact on our business, financial
condition or results of operations. We are still assessing the effect the Year
2000 problem will have on our suppliers and, at this time, cannot determine such
impact. However, we have identified alternative suppliers and, in the event that
any significant supplier suffers unresolved material Year 2000 problems, we
believe that we would only experience short term disruptions in supply, not
exceeding 90 days, while such supplier is replaced.
IF WE HAVE INSUFFICIENT PROPRIETARY RIGHTS OR IF WE FAIL TO PROTECT THOSE WE
HAVE, OUR BUSINESS WOULD BE MATERIALLY IMPAIRED
We May Not Obtain the Intellectual Property Rights We Require
The telecommunications and laser markets in which we sell our products
experience frequent litigation regarding patent and other intellectual property
rights. Numerous
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<PAGE> 18
patents in these industries are held by others, including academic institutions
and our competitors. In the past, Uniphase and JDS FITEL have acquired and in
the future we may seek to acquire license rights to these or other patents or
other intellectual property to the extent necessary for our business. Unless we
are able to obtain such licenses on commercially reasonable terms, patents or
other intellectual property held by others could inhibit our development of new
products for our markets. While in the past licenses generally have been
available to Uniphase and JDS FITEL where third-party technology was necessary
or useful for the development or production their products, in the future
licenses to third-party technology may not be available on commercially
reasonable terms, if at all. Generally, a license, if granted, includes payments
by us of up-front fees, ongoing royalties or a combination thereof. Such royalty
or other terms could have a significant adverse impact on our operating results.
We are a licensee of a number of third party technologies and intellectual
property rights and are required to pay royalties to these third party licensors
on certain of our telecommunications products and laser subsystems.
Our Products May Infringe the Property Rights of Others
The industry in which we operate experiences periodic claims of patent
infringement or other intellectual property rights. In this regard, third
parties may in the future assert claims against us concerning our existing
products or with respect to future products under development by us. Any
litigation to determine the validity of any third-party claims could result in
significant expense to us and divert the efforts of our technical and management
personnel, whether or not we are successful in such litigation. If we are
unsuccessful in any such litigation, we could be required to expend significant
resources to develop non-infringing technology or to obtain licenses to the
technology that is the subject of the litigation. We may not be successful in
such development or such licenses may not be available to us. Without such a
license, we could be enjoined from future sales of the infringing product or
products.
Our Intellectual Property Rights May Not Be Adequately Protected
Our future depends in part upon our intellectual property, including trade
secrets, know-how and continuing technological innovation. We currently hold
approximately 150 U.S. patents on products or processes and corresponding
foreign patents and have applications for certain patents currently pending. The
steps taken by us to protect our intellectual property may not adequately
prevent misappropriation or ensure that others will not develop competitive
technologies or products. Other companies may be investigating or developing
other technologies that are similar to ours. It is possible that patents may not
be issued from any application pending or filed by us and, if patents do issue,
the claims allowed may not be sufficiently broad to deter or prohibit others
from marketing similar products. Any patents issued to us may be challenged,
invalidated or circumvented. Further, the rights under our patents may not
provide a competitive advantage to us. In addition, the laws of certain
territories in which our products are or may be developed, manufactured or sold,
including Asia, Europe or Latin America, may not protect our products and
intellectual property rights to the same extent as the laws of the United
States.
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IF WE FAIL TO SUCCESSFULLY MANAGE OUR EXPOSURE TO THE WORLDWIDE FINANCIAL
MARKETS, OUR OPERATING RESULTS COULD SUFFER
We are exposed to financial market risks, including changes in interest
rates, foreign currency exchange rates and marketable equity security prices. We
utilize derivative financial instruments to mitigate these risks. We do not use
derivative financial instruments for speculative or trading purposes. The
primary objective of our investment activities is to preserve principal while at
the same time maximizing yields without significantly increasing risk. To
achieve this objective, a majority of our marketable investments are floating
rate and municipal bonds, auction instruments and money market instruments
denominated in U.S. dollars. We hedge currency risks of investments denominated
in foreign currencies with forward currency contracts. Gains and losses on these
foreign currency investments are generally offset by corresponding gains and
losses on the related hedging instruments, resulting in negligible net exposure
to us. A substantial portion of our revenue, expense and capital purchasing
activities are transacted in U.S. dollars. However, we do enter into these
transactions in other currencies, primarily Canadian and European currencies. To
protect against reductions in value and the volatility of future cash flows
caused by changes in foreign exchange rates, we have established hedging
programs. Currency forward contracts are utilized in these hedging programs. Our
hedging programs reduce, but do not always entirely eliminate, the impact of
foreign currency exchange rate movements. Actual results on our financial
position may differ materially.
IF WE FAIL TO OBTAIN ADDITIONAL CAPITAL AT THE TIMES, IN THE AMOUNTS AND UPON
THE TERMS REQUIRED, OUR BUSINESS COULD SUFFER
We are devoting substantial resources for new facilities and equipment to
the production of source lasers, fiber Bragg gratings and modules used in
telecommunications and for the development of new solid state lasers. Although
we believe existing cash balances, cash flow from operations and available lines
of credit, together with proceeds from this offering and the concurrent offering
of exchangeable shares, will be sufficient to meet our capital requirements at
least for the next 12 months, we may be required to seek additional equity or
debt financing to compete effectively in these markets. We cannot precisely
determine the timing and amount of such capital requirements and will depend on
several factors, including our acquisitions and the demand for our products and
products under development. Such additional financing may not be available when
needed, or, if available, may not be on terms satisfactory to us.
OUR CURRENTLY OUTSTANDING PREFERRED STOCK AND OUR ABILITY TO ISSUE ADDITIONAL
PREFERRED STOCK COULD IMPAIR THE RIGHTS OF OUR COMMON STOCKHOLDERS
Our Board of Directors has the authority to issue up to 799,999 shares of
undesignated preferred stock and to determine the powers, preferences and rights
and the qualifications, limitations or restrictions granted to or imposed upon
any wholly unissued shares of undesignated preferred stock and to fix the number
of shares constituting any series and the designation of such series, without
the consent of our stockholders. The preferred stock could be issued with
voting, liquidation, dividend and other rights superior to those of the holders
of common stock. The issuance of preferred stock under certain circumstances
could have the effect of delaying, deferring or preventing a change in control.
Each outstanding share of our common stock includes one right. Each right
entitles the registered holder, subject to the terms of the Rights Agreement, to
purchase from us one unit, equal to one one-thousandth of a share of Series B
Preferred Stock, at a purchase price of $135 per unit, subject to adjustment,
for each share of common stock held by the holder. The rights are attached to
all certificates representing outstanding shares of our common stock, and no
separate rights
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<PAGE> 20
certificates have been distributed. The purchase price is payable in cash or by
certified or bank check or money order payable to our order. The description and
terms of the rights are set forth in a Rights Agreement between us and American
Stock Transfer & Trust Company, as Rights Agent, dated as of June 22, 1998, as
amended from time to time.
Certain provisions contained in the rights plan, and in the equivalent
rights plan JDS Uniphase Canada Ltd. has adopted with respect to the
Exchangeable Shares, may have the effect of discouraging a third party from
making an acquisition proposal for us and may thereby inhibit a change in
control. For example, such provisions may deter tender offers for shares of
common stock or Exchangeable Shares which offers may be attractive to the
stockholders, or deter purchases of large blocks of common stock or Exchangeable
Shares, thereby limiting the opportunity for stockholders to receive a premium
for their shares of common stock or Exchangeable Shares over the then-prevailing
market prices.
WE HAVE A SUBSTANTIAL NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE
Based on shares outstanding as of July 9, 1999, we will have 161,207,666
shares of our common stock (including shares of our common stock issuable upon
exchange of the outstanding Exchangeable Shares, including Exchangeable Shares
issued in the concurrent offering (see "Concurrent Offering of Exchangeable
Shares")) outstanding upon completion of this offering. Subject to the lock-up
agreements noted below, other than for shares held by certain of our largest
stockholders, virtually all of these outstanding shares will be available for
immediate resale without restriction following the completion of this offering.
For a period of 90 days from the date of this prospectus, executive officers,
directors and stockholders holding a total of approximately 48.9 million shares
of common stock and Exchangeable Shares (inclusive of shares issuable under
options exercisable within 60 days) have agreed not to sell or otherwise dispose
of any of those shares without the prior written consent of Banc of America
Securities LLC, Deutsche Bank Securities Inc. and CIBC World Markets Inc. In
addition, upon completion of the offering, and based on options outstanding as
of July 9, 1999, there will be outstanding options to purchase a total of
approximately 29.6 million shares of our common stock under our stock option
plans, many of which options are currently exercisable. Sales of substantial
amounts of these shares in the public market or the prospect of such sales could
adversely affect the market price of our common stock and the market price of
the Exchangeable Shares. See "Principal and Selling Stockholders" and
"Underwriting."
CERTAIN ANTI-TAKEOVER PROVISIONS CONTAINED IN OUR CHARTER AND UNDER DELAWARE LAW
COULD IMPAIR A TAKEOVER ATTEMPT
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law prohibiting, under certain circumstances, publicly-held Delaware
corporations from engaging in business combinations with certain stockholders
for a specified period of time without the approval of the holders of
substantially all of its outstanding voting stock. Such provisions could delay
or impede the removal of incumbent directors and could make more difficult a
merger, tender offer or proxy contest involving us, even if such events could be
beneficial, in the short term, to the interests of the stockholders. In
addition, such provisions could limit the price that certain investors might be
willing to pay in the future for shares of our common stock. Our Certificate of
Incorporation and Bylaws contain provisions relating to the limitations of
liability and indemnification of our directors and officers, dividing our Board
of Directors into three classes of directors serving three-year terms and
providing that our stockholders can take action only at a duly called annual or
special meeting of stockholders. These provisions also may have the effect of
deterring hostile takeovers or delaying changes in control or management of us.
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<PAGE> 21
USE OF PROCEEDS
The net proceeds to us from the sale of the 7,618,800 shares of common
stock we are offering and the concurrent offering by JDS Uniphase Canada Ltd. of
Exchangeable Shares are estimated to be approximately $599.3 million (or $717.5
million if the underwriters exercise their option to purchase additional shares
to cover over-allotment) at an assumed public offering price of $81.656 per
share, the price on July 9, 1999 (adjusted for the one-for-one stock dividend
affecting our common stock and the equivalent two-for-one stock split affecting
the Exchangeable Shares, both of which will be effective July 23, 1999), after
deducting the estimated underwriting discount and offering expenses. We will not
receive any proceeds from the sale of the shares that the selling stockholders
are selling.
We intend to use the net proceeds for general corporate purposes, including
working capital and to fund potential acquisitions. Although we are currently
evaluating certain acquisition opportunities, we have no present commitments and
are not currently engaged in any negotiations with respect to any acquisitions
that are material. We cannot assure you that we will identify suitable
acquisition candidates or that we will, in fact, complete any acquisition. Until
we use the net proceeds for a particular purpose, we will invest them in
short-term interest bearing securities.
PRICE RANGE OF COMMON STOCK
Our common stock is quoted on the Nasdaq National Market currently under
the symbol "JDSU," and prior to July 6, 1999, Uniphase common stock traded under
the symbol "UNPH." All of the information in this section gives effect to the
stock dividend of one share of common stock for each outstanding share of common
stock effective July 23, 1999. The following table sets forth, for the periods
indicated, the high and low sale prices per share of our common stock as
reported on the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Fiscal Year 1998
First Quarter................................ $20.094 $ 14.469
Second Quarter............................... $23.250 $ 14.250
Third Quarter................................ $22.078 $ 16.594
Fourth Quarter............................... $31.500 $ 20.313
Fiscal Year 1999
First Quarter................................ $31.500 $ 18.813
Second Quarter............................... $34.688 $ 17.188
Third Quarter................................ $57.563 $ 31.750
Fourth Quarter............................... $83.594 $ 51.250
Fiscal Year 2000
First Quarter (through July 13, 1999)........ $88.719 $ 81.313
</TABLE>
On July 13, 1999, the last reported sale price of our common stock on the
Nasdaq National Market was $81.656 per share (adjusted for the one-for-one stock
dividend affecting our common stock and the equivalent two-for-one stock split
affecting the Exchangeable Shares, both of which will be effective July 23,
1999). As of July 9, 1999, there were approximately 337 stockholders of record
of our common stock.
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<PAGE> 22
CAPITALIZATION
The following table sets forth as of March 31, 1999:
- our pro forma capitalization prior to the offering, reflecting the
combination with JDS FITEL as if it had taken place on March 31, 1999,
and assuming that the 72,534,038 Exchangeable Shares of JDS Uniphase
Canada Ltd. issued in connection with the JDS FITEL merger were
outstanding as of March 31, 1999 and that these Exchangeable Shares have
been exchanged for 72,534,038 shares of our common stock; and
- our pro forma capitalization after the offering, reflecting the sale of
the common stock offered by this prospectus and the common stock issuable
upon exchange of the Exchangeable Shares offered concurrently herewith by
JDS Uniphase Canada Ltd. (see "Concurrent Offering of Exchangeable
Shares"), after deduction of estimated offering expenses and underwriting
discounts, and at an assumed stock dividend-adjusted offering price of
$81.656 per share. See "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
-------------------------------------
PRO FORMA PRIOR TO PRO FORMA AFTER
THE OFFERING THE OFFERING
------------------ ---------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
Stockholders' equity
Preferred stock, $0.001 par value; 1,000,000 shares
authorized; and 100,000 shares of Series A
Preferred Stock issued and outstanding............ $ -- $ --
Common stock, $0.001 par value; 200,000,000 shares
authorized; 160,640,892 shares issued and
outstanding, pro forma prior to the offering; and
168,259,692 shares issued and outstanding, pro
forma after the offering(1)....................... 161 168
Additional paid-in capital........................... 3,644,419 4,266,532
Accumulated deficit.................................. (180,147) (180,147)
Other stockholders' equity........................... (1,933) (1,933)
---------- ----------
Total stockholders' equity........................ 3,462,500 4,084,620
---------- ----------
Total capitalization............................ $3,462,500 $4,084,620
========== ==========
</TABLE>
- -------------------------
(1) Based on shares outstanding as of March 31, 1999. The authorized number of
shares of our common stock reflects an increase in the authorized number of
shares of our common stock from 100,000,000 shares to 200,000,000 shares,
effected July 2, 1999. The outstanding shares as of March 31, 1999 number
excludes:
- the underwriters' option to purchase up to an additional 1,500,000 shares
of our common stock and Exchangeable Shares from us and JDS Uniphase
Canada Ltd., respectively, solely to cover over-allotments;
- approximately 29.6 million shares of common stock issuable upon exercise
of options outstanding after the offering;
- approximately 2.5 million shares of common stock reserved for future
issuance under our 1998 Employee Stock Purchase Plan; and
- any shares of common stock issuable upon conversion of the outstanding
shares of Series A Preferred Stock.
21
<PAGE> 23
JDS UNIPHASE SUMMARY FINANCIAL DATA AND
UNAUDITED PRO FORMA FINANCIAL DATA
REPORTED PRELIMINARY RESULTS OF JDS FITEL FOR ITS QUARTER ENDED MAY 31, 1999 AND
OF UNIPHASE FOR ITS QUARTER ENDED JUNE 30, 1999; PRO FORMA COMBINED RESULTS
On July 13, 1999, we announced estimated preliminary results for Uniphase's
fourth quarter ended June 30, 1999, subject to final review, audit and
confirmation. For the quarter ended June 30, 1999, Uniphase expects to report
sales of $86 to $87 million and a loss in the quarter of approximately $3.65 per
share prior to giving effect to the one-for-one stock dividend to be effective
July 23, 1999, or a loss of $1.83 per share adjusted to reflect that dividend.
The loss per share includes a one-time charge of $177 million for acquired
in-process research and development resulting from our merger with JDS FITEL, $4
million in intangible amortization, and $500,000 in restructuring charges
related to the JDS FITEL merger. Excluding these charges, estimated pro forma
earnings for the quarter were $0.40 to $0.41 per share, or $0.20 to $0.21 per
share after giving effect to the one-for-one stock dividend. We also announced
the estimated pro forma results combining those of JDS FITEL for the quarter
ended May 31, 1999 and Uniphase for the quarter ended June 30, 1999, both
periods ended prior to our merger which became effective June 30, 1999. These
estimated pro forma combined results included sales of $188 to $190 million and
earnings of $0.45 to $0.46 per share on a pre-stock dividend diluted basis,
after excluding the in-process research and development charges, intangible
amortization and restructuring charges aggregating $181 million as described
above. The pro forma earnings per share would be $0.23 per share after giving
effect to the one-for-one stock dividend and to the same exclusions. This
information regarding expected revenue and earnings per share for the three
months ended June 30, 1999 and pro forma combined results constitutes
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Actual final and pro forma results for
the quarter ended June 30, 1999 could differ materially as a result of a number
of factors, including, but not limited to, accounting adjustments made during
the course of closing the quarter. For a more detailed discussion of factors
that affect our operating results, see "Risk Factors."
JDS UNIPHASE SUMMARY HISTORICAL FINANCIAL DATA AND UNAUDITED PRO FORMA FINANCIAL
DATA
The JDS Uniphase summary financial data and unaudited pro forma financial
data should be read in conjunction with the Uniphase audited financial
statements, the Uniphase unaudited financial statements, the JDS FITEL audited
financial statements and the JDS FITEL unaudited financial statements, all of
which are incorporated by reference into this prospectus.
The JDS Uniphase summary unaudited pro forma financial data should be read
in conjunction with the JDS Uniphase unaudited pro forma financial statements
and the related notes, which are incorporated by reference. The JDS Uniphase
unaudited pro forma financial data is not necessarily indicative of what the
actual operating results or financial position would have been had the
combination actually taken place on July 1, 1997 or March 31, 1999 and does not
purport to indicate JDS Uniphase's future results of operations.
The JDS Uniphase summary unaudited pro forma financial data gives effect to
the combination of Uniphase and JDS FITEL through the issuance of shares of our
common stock and the Exchangeable Shares for the outstanding JDS FITEL common
shares. The summary unaudited pro forma statements of operations data for the
year ended June 30, 1998 and for the nine months ended March 31, 1999 reflects
the combination as if it had taken place on July 1, 1997. The summary unaudited
pro forma consolidated combined condensed
22
<PAGE> 24
balance sheet data gives effect to the combination as if it had taken place on
March 31, 1999. The summary unaudited pro forma consolidated combined condensed
statements of operations data combines Uniphase's historical results of
operations for the year ended June 30, 1998 and the nine months ended March 31,
1999 with JDS FITEL historical results of operations for the year ended May 31,
1998 and the nine months ended February 28, 1999, respectively. The JDS Uniphase
summary unaudited pro forma financial data reflects the combination using the
purchase method of accounting.
The JDS Uniphase summary historical financial data and unaudited pro forma
financial data do not give effect to the stock dividend of one share of common
stock for each outstanding share of common stock and the equivalent two-for-one
stock split of the outstanding Exchangeable Shares which will be effective July
23, 1999.
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, 1999 MARCH 31, 1999 JUNE 30, 1998
-------------- -------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
JDS UNIPHASE SUMMARY UNAUDITED PRO FORMA STATEMENT
OF OPERATIONS DATA:
Net sales....................................... $ 155,190 $ 394,019 $ 346,331
Cost of sales................................... 74,876 193,551 173,447
--------- --------- ---------
Gross profit................................ 80,314 200,468 172,884
Operating expenses:
Research and development.................... 13,785 35,463 27,170
Selling, general, and administrative........ 17,418 46,636 65,088
Amortization of purchased intangibles....... 169,312 494,694 644,878
Acquired in-process research and
development.............................. -- -- 40,268
Merger and other costs...................... 500 6,759 --
--------- --------- ---------
Total operating expenses........................ 201,015 583,552 777,404
--------- --------- ---------
Income (loss) from operations................... (120,701) (383,084) (604,520)
Interest and other income, net.................. 4,028 9,338 4,694
--------- --------- ---------
Income (loss) before income taxes............. (116,673) (373,746) (599,826)
Income tax expense (benefit).................... 1,469 (4,706) (29,976)
--------- --------- ---------
Net income (loss)............................... $(118,142) $(369,040) $(569,850)
========= ========= =========
Basic earnings (loss) per share................. $ (1.48) $ (4.66) $ (7.77)
========= ========= =========
Dilutive earnings (loss) per share.............. $ (1.48) $ (4.66) $ (7.77)
========= ========= =========
Average number of shares outstanding............ 79,723 79,168 73,382
========= ========= =========
Average number of shares outstanding assuming
dilution...................................... 79,723 79,168 73,382
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED MARCH ENDED MARCH YEAR ENDED
31, 1999 31, 1999 JUNE 30, 1998
-------------- -------------- -------------
<S> <C> <C> <C>
JDS UNIPHASE SUMMARY UNAUDITED PRO FORMA FINANCIAL
DATA AS A PERCENTAGE OF NET SALES:
Net sales......................................... 100.0% 100.0% 100.0%
Cost of sales..................................... 48.3 49.1 50.1
------ ----- ------
Gross profit.................................. 51.7 50.9 49.9
Operating expenses:
Research and development........................ 8.9 9.0 7.9
Selling, general and administrative............. 11.2 11.8 18.8
Amortization of purchased intangibles........... 109.1 125.6 186.2
Acquired in-process research and development.... -- -- 11.6
Merger and other costs.......................... 0.3 1.7 --
------ ----- ------
Total operating expenses.......................... 129.5 148.1 224.5
------ ----- ------
Income (loss) from operations..................... (77.8) (97.2) (174.6)
Interest and other income, net.................. 2.6 2.4 1.4
------ ----- ------
Income (loss) before income taxes................. (75.2) (94.8) (173.2)
Income tax expense (benefit).................... 0.9 (1.1) (8.7)
------ ----- ------
Net income (loss)................................. (76.1)% (93.7)% (164.5)%
====== ===== ======
</TABLE>
23
<PAGE> 25
<TABLE>
<CAPTION>
AS OF
MARCH 31, 1999
----------------
(IN THOUSANDS)
<S> <C>
JDS UNIPHASE SUMMARY UNAUDITED PRO FORMA BALANCE SHEET DATA:
ASSETS
Currents assets:
Cash and cash equivalents................................. $ 21,905
Short-term investments.................................... 174,055
Accounts receivable....................................... 99,749
Inventories............................................... 56,603
Other current assets...................................... 12,833
----------
Total current assets............................... 365,145
Property, plant, and equipment, net......................... 150,797
Intangible assets, including goodwill....................... 3,307,935
Other assets................................................ 8,160
----------
Total assets....................................... $3,832,037
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 45,856
Other accrued expenses.................................... 38,968
----------
Total current liabilities.......................... 84,824
Other non-current liabilities............................... 311,660
Stockholders' equity........................................ 3,435,553
----------
Total liabilities and stockholders' equity......... $3,832,037
==========
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS YEARS ENDED JUNE 30,
ENDED -----------------------------
MARCH 31, 1999 1998 1997 1996
-------------- -------- -------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
UNIPHASE SUMMARY HISTORICAL STATEMENT OF
OPERATIONS DATA:
Net sales......................................... $ 195,694 $185,215 $113,214 $73,701
Cost of sales..................................... 98,707 96,130 60,001 38,287
--------- -------- -------- -------
Gross profit.................................... 96,987 89,085 53,213 35,414
Operating expenses:
Research and development........................ 18,774 14,857 9,861 6,445
Selling, general, and administrative............ 24,539 45,280 25,617 18,597
Amortization of purchased intangibles........... 11,807 201 206 43
Acquired in-process research and development.... -- 40,268 33,314 4,480
Merger and other costs.......................... 6,759 -- -- --
--------- -------- -------- -------
Total operating expenses.......................... 61,879 100,606 68,998 29,565
--------- -------- -------- -------
Income (loss) from operations..................... 35,108 (11,521) (15,785) 5,849
Interest and other income, net.................... 2,648 3,251 3,430 1,399
--------- -------- -------- -------
Income (loss) before income taxes............... 37,756 (8,270) (12,355) 7,248
Income tax expense................................ 14,437 11,360 5,432 4,036
--------- -------- -------- -------
Net income (loss)................................. $ 23,319 $(19,630) $(17,787) $ 3,212
========= ======== ======== =======
Basic earnings (loss) per share................... $ 0.59 $ (0.55) $ (0.53) $ 0.13
========= ======== ======== =======
Dilutive earnings (loss) per share................ $ 0.55 $ (0.55) $ (0.53) $ 0.12
========= ======== ======== =======
Average number of shares outstanding............ 39,556 35,451 33,691 25,558
========= ======== ======== =======
Average number of shares outstanding assuming
dilution...................................... 42,659 35,451 33,691 27,912
========= ======== ======== =======
</TABLE>
24
<PAGE> 26
<TABLE>
<CAPTION>
JUNE 30,
--------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
UNIPHASE SUMMARY HISTORICAL BALANCE SHEET DATA:
ASSETS
Currents assets:
Cash and cash equivalents................................. $ 40,525 $ 29,727
Short-term investments.................................... 54,831 52,009
Accounts receivable....................................... 41,922 21,763
Inventories............................................... 22,137 19,296
Other current assets...................................... 9,180 13,544
-------- --------
Total current assets.................................... 168,595 136,339
Property, plant and equipment, net.......................... 57,191 31,701
Identified intangibles, including goodwill.................. 102,979 10,969
Other assets................................................ 4,106 1,644
-------- --------
Total assets............................................ $332,871 $180,653
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable.......................... $ -- $ 6,061
Accounts payable.......................................... 15,784 5,267
Other accrued expenses.................................... 31,383 14,814
-------- --------
Total current liabilities............................... 47,167 26,142
Other non-current liabilities............................... 5,666 2,478
Stockholders' equity........................................ 280,038 152,033
-------- --------
Total liabilities and stockholders' equity.............. $332,871 $180,653
======== ========
</TABLE>
25
<PAGE> 27
OUR BUSINESS
GENERAL
JDS Uniphase is the leading provider of advanced fiberoptic components and
modules. These products are sold to leading telecommunications and cable
television system providers worldwide, which are commonly referred to as OEMs
and include Alcatel, Ciena, General Instrument, Lucent, Nortel, Pirelli,
Scientific Atlanta, Siemens and Tyco. Our components and modules are basic
building blocks for fiberoptic networks and perform both optical-only (passive)
and optoelectronic (active) functions within these networks. Our products
include semiconductor lasers, high-speed external modulators, transmitters,
amplifiers, couplers, multiplexers, circulators, tunable filters, optical
switches and isolators for fiberoptic applications. We also supply our OEM
customers with test instruments for both system production applications and
network installation. In addition, we design, manufacture and market laser
subsystems for a broad range of commercial applications, which include
biotechnology, industrial process control and measurement, graphics and printing
and semiconductor equipment manufactured by our customers.
Uniphase and JDS FITEL combined their operations effective on June 30, 1999
in a merger of equals. This merger brought together Uniphase's leadership
position and technical expertise in active optoelectronic components with the
product and technical leadership of JDS FITEL in passive optical components.
Through this merger, we intend to become a "one stop shop" for all of our
customers' fiberoptic network component and module needs. In addition, we
believe this merger will provide many technical and product synergies through a
combination of our active and passive component expertise. Given the
interdependence of these components in a network, the ability to optimize the
design of active and passive components to better interact within the network is
significant. The combination of the JDS FITEL and Uniphase technologies is also
intended to enable us to reduce design times and better respond to the
increasingly faster time-to-market demands of our common customer base. The
combined passive and active capability improves our ability to produce more
integrated solutions in the form of modules for our customers.
INDUSTRY BACKGROUND
Businesses and consumers are increasingly accessing public
telecommunications networks to communicate, collect and distribute information.
The explosive growth of the Internet, coupled with the increasing volume of data
and video traffic across corporate and public internets and intranets has fueled
the continuing and growing demand for more network capacity in both long-haul
telecommunications and cable television networks. Given the inherently faster
speed of light signals in fiberoptic networks and their immunity from
electromagnetic interference, fiberoptic systems are replacing existing copper
wire networks for long-haul (in excess of 600 kilometers) telecommunications
networks. Cable television networks are also shifting to fiberoptic solutions
for the distribution of signals from the central cable broadcast station to the
local cable distribution hubs. Today, fiberoptic cable is the primary medium for
long-haul telecommunications and cable television networks and is making inroads
to replace copper in the shorter distance metropolitan, or metro, markets that
serve larger metropolitan and other public networks with transmission distances
of less than 100 kilometers. By the end of 1998, over 44 million kilometers of
fiber was installed throughout the world, and Kessler Marketing Intelligence
estimates that this figure will grow to 67 million kilometers by the year 2001.
Demands for increased capacity in fiberoptic networks have led to a
proliferation of an advanced method of transmitting multiple signals at slightly
different wavelengths through
26
<PAGE> 28
a single fiber to achieve efficient use of fiber capacity. This technique, which
is referred to as wavelength division multiplexing, or WDM, requires separate
source lasers emitting slightly different wavelengths for each signal or
"channel" and more complex modulators and optical amplifiers to control and
amplify the signal in the network. WDM systems, which were designed for eight
separate wavelengths or channels in 1996, are currently being developed to carry
as many as 128 separate channels with 0.4 of a nanometer in wavelength
differentiation between channels. This increasing complexity of WDM systems has
contributed to the need for OEM system suppliers to rely on third party,
merchant suppliers, to supply higher performance, more integrated combinations
of active and passive components.
A typical WDM system consists of a large number of interdependent active
optoelectronic and passive optical components. An active component is a device
that has both optical and electronic properties and is different from a passive
component, which performs its functions only in the optical domain. Generally,
active components provide the source and amplification power and modulation to
fiberoptic networks, while passive components are used to mix, filter, adjust
and stabilize the optical signals in advanced fiberoptic networks. As the
performance of these networks increases to meet the significant demand for
increased bandwidth and capacity, the interaction between passive and active
components becomes vital to achieve increased speed, performance and
reliability. These components are purchased by OEM system or subsystem
providers, who in turn ultimately supply these systems to telecommunications
carriers such as AT&T, MCI WorldCom and Sprint.
The cable television markets are also participating in this rapid growth.
Continued deployment and expansion of cable services, particularly two-way
interactive service to the home, have created growing demand for more complex
and higher capacity cable networks. Secondly, the significantly faster
transmission speeds of cable television coaxial cables as compared to existing
phone lines give the cable television Internet connection substantial speed
advantages over traditional phone lines for home Internet services. This
changing marketplace is characterized by alliances between traditional cable
companies and telecommunications and Internet service providers, such as the
acquisition of TCI by AT&T and AT&T's alliance with Excite@Home.
The current demand for increased capacity in fiberoptic telecommunications
and cable television networks has caused the complexity and performance
requirements of newly deployed fiberoptic networks to substantially increase and
the product life cycles for these network systems to decrease. OEM system
suppliers are under pressure from their customers to provide higher capacity and
more complex systems in shorter time periods. These same pressures apply at all
levels of their system products, including the component and module levels.
These increasing performance requirements and associated development costs are
making it more difficult for many OEM suppliers to compete effectively by
vertically integrating their own components and modules. The growing complexity
of these network systems also results in a substantial increase in the number of
components that the OEM supplier must utilize to achieve desired system level
performance. In lieu of seeking a different vendor for each of these components,
OEM system suppliers are seeking fewer vendors for a greater variety of
components. These OEM customers also seek more integrated module solutions,
which combine a number of components as a single functional unit within the
network architecture. In addition, a single vendor of multiple components or
modules has the ability to design these products to interact more effectively
and to optimize performance between them when installed in a single network
system. Given these factors, there is an increasing trend by OEMs to reduce the
level of
27
<PAGE> 29
their vertical integration at the component and module level and to focus on the
overall system design and architecture of their products, which has historically
been the primary means by which those OEM system suppliers have differentiated
themselves from their competitors.
COMPANY STRATEGY
Our goal is to maintain and expand our position as the premier merchant
supplier of advanced components and modules to the rapidly growing
telecommunications and cable television networking marketplace. The key elements
of our business strategy are as follows:
- Provide More Integrated and Broader Product Offerings to Our Customers.
Through both internal development and the acquisition of key technologies
and manufacturing capabilities developed by others, we seek to position
ourselves as a "one-stop" source of an increasingly greater variety of
components and more integrated modules, consisting of combinations of
components, for our demanding customer base. Additionally, we believe
that our customers continue to reduce the number of suppliers for
components in their optical networks and that our ability to offer the
broadest portfolio of active and passive components to these customers is
a strategic advantage over competitive suppliers with more limited
product offerings. Our customers also continue to seek an increase in the
level of integration in the optoelectronic and optical products that they
purchase from their suppliers. We believe that reductions in the number
of suppliers and in the manufacturing steps required at the customer
level enable these customers to better focus their time and resources on
aspects of their business that leverage their core competencies and their
competitive advantages over other system providers.
- Capitalize on Passive and Active Leadership Positions. The combination of
Uniphase and JDS FITEL enables the combined entity, JDS Uniphase, to
extend the product offerings and technology leadership positions of
Uniphase in active components and JDS FITEL in passive components and to
provide the broadest line of these products to the rapidly growing
telecommunications networking marketplace. Through a combination of these
products and technologies, our strategy is to continue these leadership
positions in the active and passive markets and leverage our core
competencies in each market segment to improve performance in the other
segment and optimize the critical interoperability between these two
types of products.
- Provide Cost-Effective, Demand-Driven, Faster Time-to-Market Solutions to
Our Customers. We seek, through close relationships with our customers,
to understand their needs at an early stage in their product development
cycles and to design our products to meet these specific performance and
time-to-market needs. We believe that our core competencies in both
passive and active components will enable us to design our customer
solutions more quickly and more effectively than competitors who do not
have both capabilities. We focus on selling our components to customers
at the design-in phase of a product, creating the potential for recurring
sales throughout a product's life. Following design-in of our products,
we shift our focus to obtaining manufacturing efficiencies, quality
enhancements and cost reductions during the product life.
- Maintain Technology Leadership and High Product Reliability. We consider
our technological and product leadership and our existing relationships
with key
28
<PAGE> 30
customers to be important competitive factors. We believe one of the
barriers to entry in the long-haul, metro and submarine
telecommunications markets is the life-test and quality control criteria
established by Bellcore, one of the world's foremost commercial research
and development organizations for communications applications. Our new
product development often leverages our existing Bellcore test data,
enabling us to use our significant library of life-test and quality
control data to qualify new products more quickly than our competitors,
who may have less available test data. Our research and development
efforts continue to focus on the core technologies critical to our
success in telecommunications, which include passive components,
high-power pump lasers, new source lasers and optical modules featuring
increased reliability that leads to reduced network costs.
- Enhance Manufacturing Techniques and Increase Capacity. As market demand
for higher unit volumes and lower costs for fiberoptic components and
modules accelerates, we are seeking to improve and automate our
manufacturing processes. These development efforts involve both
enhancement and optimization of existing manufacturing techniques and
development of new, more automated manufacturing solutions. We believe
that our migration to automated manufacturing, if successful, will enable
both the cost reductions and the higher volumes we are seeking. We
further believe that such migration, if successful, will better position
us to penetrate the emerging and potentially very large metro markets.
- Seek Complementary Mergers and Acquisitions. The telecommunications
industry is experiencing rapid consolidation and realignment due to
globalization, deregulation and rapidly changing competitive technologies
such as fiberoptics for cable television, wireless communications and the
Internet. We have grown in part by acquiring or merging with
telecommunications businesses and may continue to do so in the future.
While we have no current commitments with respect to any future
acquisitions, we frequently evaluate strategic opportunities and intend
in the future to actively pursue acquisitions of additional products,
technologies and businesses.
OUR TECHNOLOGY AND PRODUCTS
The active optoelectronic components that we make perform three primary
functions within fiberoptic networks. At the beginning of the network, a source
laser powers the initial signal that will be transmitted over the network. These
source lasers are characterized by their wavelength and power levels and operate
at the 1550-nanometer wavelength range for general telecommunications networks
and 1310-nanometer or 1550-nanometer for cable television telecommunications
networks. Power, which is measured in milliwatts, generally determines the
ability of the source laser to transmit over longer distances, with higher power
source lasers enabling greater initial transmission distances. A single source
laser is required for each channel in a wavelength division multiplexing, or
WDM, system. The second key optoelectronic component is the modulator, which
generally turns the source laser light on and off to encode and send the
information throughout the network. Modulation can be achieved directly by
turning the laser light source on and off and by external modulators that
transmit or alternate a continuous source laser signal to achieve the same on
and off effect. Lower performance, shorter distance network systems are better
suited for direct modulation, while other systems are designed to utilize
external modulators to encode the information signal. The third key active
component is the pump laser, which is used in optical amplifiers within networks
to regenerate the light signal that naturally suffers loss over distance within
the network. The advent of the optical amplifier in the early 1990s has
permitted the
29
<PAGE> 31
development of today's advanced fiberoptic networks by eliminating the need
within those networks to convert attenuated optical signals back into the
electrical domain to amplify these signals for continued transmission over
distances now exceeding 600 kilometers.
We also offer a broad range of the passive components that, in combination
with our active products, allow our customers to satisfy all of their key
component needs through one-stop shopping at a single supplier. The passive
optical components that we manufacture and market perform a number of functions
with respect to the optical signals in advanced fiberoptic telecommunications
networks. We manufacture couplers, which are used to split and combine signals
in an optical network. Another category of our passive products is optical
switches, which are used to route and switch signals to different destinations
within networks. We also make attenuators, which are used to adjust the power of
the optical signal to be compatible with the optical receivers within a network
system. Our isolator products are used to cause light signals in a network to
propagate in one direction within a network but prevent that signal from
returning in the opposite direction. We also make circulators, which are similar
to isolators in causing light in a system to flow in only one direction, but are
different in that circulators incorporate multiple ports and use these multiple
ports to perform a routing function within the network.
We are developing and manufacturing modules for telecommunications and
cable television systems. Modules are assemblies of optical and optoelectronic
components, sometimes also with a limited amount of electronics, in a single
compact package. Our present module products include optical amplifiers that can
boost and equalize multiple optical signals simultaneously and add-drop modules
that selectively filter and combine optical signals of different wavelengths.
In addition to selling our own components and modules, we manufacture test
instruments and distribute complementary fiberoptic interconnect products that
are manufactured by third parties. Our customers for these products include many
of the world's leading telecommunications service providers, fiberoptic system
manufacturers and fiberoptics-related research laboratories.
We group our products into four operating segments: active products,
passive products, transmission and test instrument products, and laser
subsystems.
ACTIVE PRODUCTS
Our active products include components and modules that cause electrical
signals within a network to create, modulate or amplify the original light
signal, which enables fiberoptic systems to work. These products include source
lasers for cable television and telecommunications, pump lasers, external
modulators, wavelength stabilizing modules and integrated laser modulator
assemblies. A brief description of our active products portfolio of components
and modules is as follows:
Source Lasers. We supply both 1550-nanometer and 1310-nanometer diode
lasers as sources for telecommunications and cable television transmitters.
These lasers are either continuous wave for use with external modulators or
directly modulated. For long-haul WDM systems, lasers at up to 20 milliwatts of
power are produced to operate at the many desired optical wavelengths and used
in conjunction with 2.5 and 10 gigabit per second lithium niobate modulators.
Directly modulated 2.5 gigabits per second lasers are used for short-reach
fiberoptic systems. For cable television, higher power (60 milliwatts)
1550-nanometer continuous wave lasers are used for externally modulated trunk
transmit-
30
<PAGE> 32
ters and directly modulated 1310-nanometer analog lasers are used for
distribution transmitters.
Amplifier Pump Lasers. We supply pump lasers that are used to provide power
to optical amplifiers used in fiberoptic systems. Optical amplifiers each
contain from one to six pump lasers depending on amplifier performance
requirements. Two types of pump lasers are used, those that operate at
980-nanometer and those at 1480-nanometer. We produce both types of pump lasers.
These pumps are used to energize the erbium-doped fiber that comprises the
amplifier. Output power from the pump modules is in the range of 70 to 200
milliwatts. Optical amplifiers are commonly used in 1550-nanometer fiber systems
that exceed 60 kilometers in length. The trend in deployment of WDM OC-48 (2.5
gigabits per second) of ever-rising channel counts is greatly increasing the
number of pump lasers deployed. Pump lasers must be highly reliable and, in
1998, we began shipping the first 980-nanometer lasers meeting reliability
standards for submarine deployment.
External Modulators. We produce both of the two types of external
modulators used in long-haul fiberoptic telecommunications systems. We provide
lithium niobate external modulators used in conjunction with continuous wave
lasers, and semiconductor electroabsorption modulators which are integrated on a
chip with a diode laser. The use of external modulation enables very high
channel count systems (systems with up to 128 channels are in development) and
very long (1000 kilometers) propagation distances. Lithium niobate devices are
widely used for highest performance WDM systems such as long-haul 2.5 gigabits
per second, submarine and 10 gigabits per second terrestrial networks. We also
provide lithium niobate devices for use in externally modulated cable television
trunk transmitters.
Wavelength Locker Modules. We produce wavelength locker modules that are
used to stabilize the wavelength of lasers used in dense WDM transmission
systems. These lockers ensure that, over the lifetime of the system, the
wavelength of a source laser does not drift to interfere with an adjacent
wavelength channel. The locker operates by filtering and detecting a small
amount of the source-laser light and providing a stabilizing feedback signal to
the laser.
Data Communications Devices. The ever-increasing use of computer networks
is fueling a growth in fiber data communications systems. Fiber offers
advantages over copper-links that include longer distance transmission, higher
data rates, ease of multiplexing, and immunity from electromagnetic
interference. We offer custom packaged optical sources and detectors for a
variety of fiber-based data communications applications including Gigabit
Ethernet.
PASSIVE PRODUCTS
Passive products include components and modules that route and guide
optical signals transmitted through a fiberoptic network. These products include
isolators, couplers, gratings, circulators, optical switches, tunable filters,
amplifier modules, add-drop multiplexer modules and switching modules. Our
passive products also consist of the interconnect products that we distribute,
which include fusion splicers, connectors and cable assemblies. A brief
description of the passive products portfolio follows:
Couplers, Filters, Isolators and Circulators. We supply WDM demultiplexers,
access/bi-directional couplers, optical isolators and circulators. Many of these
products are based on thin-film filters, microlenses and/or special optical
materials. The WDM products
31
<PAGE> 33
are used to separate different wavelength channels generally at the receiver and
have one output port for each system wavelength. Other couplers, isolators and
circulators are used in multiple locations in the network to control and direct
fiberoptic signals. We also produce tunable narrow-bandpass filters that are
wavelength-tunable by voltage control.
Amplifier Components and Modules. We manufacture the majority of the
passive components used in fiber amplifiers, including the previously described
isolators and couplers as well as WDM pump combiners, monitor tap couplers, and
hybrid couplers. These are key to combining and routing the 980 or
1480-nanometer pump-wavelength light and the 1550-nanometer optical signals. In
addition, we manufacture optical amplifier gain-block modules. These modules
boost the 1550-nanometer WDM optical signals without reconversion to electrical
and permit an optical signal to travel a greater distance between electronic
terminals and regenerators.
Switches and Attenuators. We also produce fixed and variable attenuators
and switches. The attenuators are used to adjust the optical power level in
multiple locations in a network, including at the receiver for performance
optimization. Switches are being widely used for path protection, shared signal
monitoring and bandwidth provisioning. Switches will also be key in future
networks for other reconfigurability and cross-connect applications. We also
supply custom design switching modules of sub-assemblies primarily for
optical-path protection. The complexity of these switches varies and is
determined in large part by the number of fiber paths that come in and out of
the switch, and we offer switches with as many as 32 inbound and 32 outbound
light paths.
Fiber Bragg Grating. We manufacture fiber Bragg gratings to separate and
filter multiple wavelengths of light propagating in the same fiber. These
gratings are generally used in signal monitoring and gain flattening
applications. Grating-based modules, which include both gratings and
circulators, are used as add-drop multiplexers and for dispersion compensation.
TRANSMISSION AND TEST INSTRUMENT PRODUCTS
The transmission and test instrument products include transmitters,
transceivers, test instruments for optical components and packaged optical
devices for fiber-based data communications. These products generally involve a
higher level of integrated components, electronics and modules and provide OEM
customers added flexibility by enabling them to choose whether to purchase our
products at the component level or the subassembly level. A brief description of
the transmission and test instrument products portfolio follows:
Cable Television Transmitters and Amplifiers. In cable television networks,
we supply transmitters, which are modules combining a number of components that
produce the optical signals flowing through the networks, and optical
amplifiers. Principal cable television applications are externally modulated
transmitters for trunk-line applications, directly modulated transmitters for
the distribution portion of cable television networks, return-path lasers for
interactive communications and transmitters providing both analog and digital
signals to the recipient. Externally modulated transmitters operate at the
preferred optical wavelength of 1550-nanometer and incorporate high power source
lasers and modulators for the transmission of broadcast television signals over
long distances. Directly modulated transmitters are typically deployed at the
neighborhood node of the cable television network using either 1310-nanometer or
a low-cost 1550-nanometer transmitter. Return path lasers allow cable operators
to upgrade existing networks for two-way communications. Our transmitters are
designed for use in broadband systems, are operational over bandwidths of up to
1 gigahertz and are compatible with hybrid fiber coax
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<PAGE> 34
systems being deployed by certain telecommunications service providers for the
transmission of voice data and video. Optical amplifiers supplied by us are used
in the trunking (backbone) portion of cable television networks. These trunking
lines are typically 50 - 60 kilometers in length and operate at 1550-nanometers.
We also supply amplifiers that are deployed at the distribution portion of some
cable television networks, particularly in international installations.
Telecommunications Specialty Modules and Instruments. We provide a number
of specialty products for multi-gigabit fiberoptics systems. In particular, we
provide some of the transmit/receive instrumentation modules used to design and
test such systems. We also provide a variety of variable-bit rate receivers and
OC-48 transmit/receive products that operate over extended temperature ranges.
Test Instruments. Test instruments are used for testing and measuring
optical components. Many of the test instruments were originally developed for
evaluating our own optical components during the design and production phases.
An example of a test instrument is the series polarization meter, which performs
high resolution measurement of polarization dependent loss (an important
parameter for optical amplifier components used in undersea applications) in
real time. This allows for dynamic fine-tuning of components during assembly.
Other test instruments include return loss meters, broadband noise sources and
swept wavelength test systems (certain of which allow for high speed optical
spectral analysis of components such as dense WDM demultiplexers), controllable
attenuators and programmable switches. Controllable attenuators include manually
adjustable or programmable attenuators for laboratory and automated production
testing. Network attenuators perform power management functions in WDM links.
Programmable switches include matrix switches, which are used mainly in
automated test stations for manufacturing or reliability testing. Switches are
also key building blocks for network elements such as remote fiber testing
systems and automated fiber patch panels.
LASER SUBSYSTEMS PRODUCTS
Our principal laser subsystem products consist of air-cooled argon gas
laser subsystems, which generally emit blue or green light, Helium-Neon laser
subsystems, which generally emit red or green light, and solid state lasers,
which generally emit infrared, blue or green light. These systems consist of a
combination of a laser head containing the lasing medium, power supply, cabling
and packaging, including heat dissipation elements.
Solid state lasers are smaller, use less power and are expected to be the
primary laser technology in the future as compared to conventional gas lasers.
Current applications for our solid state lasers include DNA sequencing,
direct-to-plate printing, flow cytometry, particle counting, spectrometry and
semiconductor wafer inspection. Sales of our argon gas lasers have increased in
recent years primarily as a result of increased sales of such products for use
in biotechnology and semiconductor applications. Use of Helium-Neon gas lasers
has substantially declined, as most customers are now using semiconductor diode
lasers to satisfy bar code scanning applications.
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<PAGE> 35
SALES AND MARKETING
We market our telecommunications components to OEMs through our direct
sales force in Ottawa, Canada; San Jose, California; Bloomfield, Connecticut;
Chalfont, Pennsylvania; Melbourne, Florida; Switzerland; The Netherlands;
Australia; and the United Kingdom. In addition, we sell our products through
distributors and manufacturers' representatives in the United States, Europe,
Asia, South America, the Middle East and Australia. Selected OEM customers for
telecommunications components include:
<TABLE>
<S> <C> <C>
Alcatel GPT Pirelli
Ciena Hewlett-Packard Scientific Atlanta
Corning Lasertron Siemens
Fujitsu Lucent Tyco
General Instrument Nortel
</TABLE>
We market our laser subsystem products principally to OEMs through our own
sales force in the United States, United Kingdom and Germany and through a
worldwide network of representatives and distributors to service smaller
domestic accounts, including those in the research and education markets.
CUSTOMER SUPPORT AND SERVICE
We believe that a high level of customer support is necessary to
successfully develop and maintain long term relationships with our OEM customers
in our telecommunications and laser subsystems businesses. Each relationship
begins at the design-in phase and is maintained as customer needs change and
evolve. We provide direct service and support to our OEM customers through our
offices in North America and Europe. In Japan, our laser subsystems distributor,
Autex, assists in performing support and service functions.
RESEARCH AND DEVELOPMENT
For the nine months ended March 31, 1999, and fiscal years 1998 and 1997,
Uniphase incurred research and development expenditures of $18.8 million, $14.9
million and $9.9 million, respectively. During the nine month period ended
February 28, 1999, and fiscal years 1998 and 1997, JDS FITEL incurred research
and development expenses of Cdn $25.3 million, Cdn $17.4 million and Cdn $7.6
million, respectively.
We are currently developing new and enhanced telecommunications components,
modules and instruments and expanding our manufacturing capability for these
products. Once the design of a product is complete, our engineering efforts
shift to enhance both the performance of that product and our ability to
manufacture it at higher volumes and at lower cost. In addition to our research
and development efforts for our telecommunications products, we also are
developing new laser subsystem products and performing on-going engineering as
to both performance and manufacturability of our existing laser subsystem
products. For the telecommunications marketplace, we continue to increase the
power output of our pump lasers and the number of source lasers available for
multi-channel applications and to develop several other optical switching
technologies. Higher performance modulators and transmitters are under
development, as are advanced multi-gigabit modulators. We continue to develop
packaging technology for a number of our optoelectronic components so as to
enable us to supply more integrated, packaged modules to our customer base.
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<PAGE> 36
MANUFACTURING
We manufacture our optoelectronic telecommunications and cable television
component and module products at a number of our facilities located in North
America, Europe and Australia. Our passive products (other than interconnect
products) are manufactured in Nepean, Ontario at our 362,000 square foot of
owned facility and at approximately 255,000 square feet of various leased
facilities. An additional 240,000 square feet of owned manufacturing and office
space is under construction with occupancy estimated in December 1999.
We manufacture pump lasers in Zurich, Switzerland, and source lasers for
telecommunications, cable television and multimedia applications and
1480-nanometers pump lasers are manufactured in Eindhoven, The Netherlands. Our
lithium-niobate modulators are manufactured in Bloomfield, Connecticut, and our
electro-absorption modulators are manufactured in The Netherlands. Fiber Bragg
gratings are manufactured in Sydney, Australia, and cable television
transmitters and amplifiers are produced in Chalfont, Pennsylvania. Data
communications products are manufactured at our facilities in Witney, United
Kingdom. Instrumentation and telecommunications module products are manufactured
in the Melbourne, Florida facility. Solid state laser subsystem products, argon
laser subsystems, power supplies and grating-based modules are manufactured at
our San Jose, California facility and certain solid state products and
Helium-Neon lasers are manufactured at our Manteca, California facility. We have
purchasing, materials management, assembly, final testing and quality assurance
functions at each location for the products that are manufactured at that
facility.
The following table sets forth our various divisions and manufacturing
locations and the products manufactured at each location:
<TABLE>
<CAPTION>
LOCATION PRODUCTS
-------- --------
<S> <C>
Canada Isolators, couplers, circulators, optical
switches, tunable filters, optical amplifiers and
test instruments for telecommunications
Netherlands Source lasers for telecommunications, cable
television and multimedia, semiconductor external
modulators, semiconductor optical amplifiers, pump
lasers for optical amplifiers
Connecticut Lithium niobate external modulators, wavelength
stabilizing modules
Switzerland Pump lasers for optical amplifiers
Pennsylvania Cable television transmitters and amplifiers
Florida Test instruments, transmitters and transceivers
for telecommunications
Australia Fiber Bragg gratings
California Grating-based network modules
United Kingdom Laser packaging for data and telecommunications
Massachusetts Components packaging
</TABLE>
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<PAGE> 37
SOURCES AND AVAILABILITY OF RAW MATERIALS
Our policy is to establish at least two sources of supply for materials
whenever possible. In addition to the following, we have sole source supply
arrangements, the loss or interruption of any of which could have an impact on
our ability to deliver certain products on a timely basis.
We have a sole source supply agreement for a critical material used in the
manufacture of our passive products that is automatically renewed annually
unless the agreement is terminated by either party on six months prior notice.
We intend to maintain strategic inventory of the key raw material provided by
this supplier and have enjoyed excellent relations with this supplier to date.
In the third quarter of fiscal 1997, JDS FITEL entered into a contractual
joint venture with Optical Coating Laboratories, Inc. (OCLI) to capitalize on
the growing opportunities in the dense WDM business. OCLI is one of the world's
largest independent optical thin film coating manufacturers. The contractual
joint venture focuses on accelerating the development and volume supply of high
performance WDM products. Under the terms of the joint venture, OCLI contributes
its expertise to provide optical filters for certain WDM products and addresses
the rapidly evolving need for leading edge applications. Optical filters are one
of the key elements in certain WDM products. The contractual joint venture is
structured as a series of exclusive supply and distribution contracts between
the companies.
COMPETITION
The industries in which we sell our products are highly competitive. Our
overall competitive position depends upon a number of factors, including the
price, performance and reliability of our products, the breadth of our product
line, our level of customer service, the quality of our manufacturing processes,
the compatibility of our products with existing telecommunications and cable
television network architectures and our ability to participate in the growth of
emerging technologies.
In the telecommunications markets, we face competition from companies that
have substantially greater financial, engineering, research, development,
manufacturing, marketing, service and support resources, greater name
recognition than us and long-standing customer relationships. With respect to
source lasers and pump lasers for telecommunications applications, competitors
include Fujitsu, Pirelli, Furukawa, Alcatel, Nortel, Corning, Lucent and SDL.
With respect to external modulator products for cable television and
telecommunications suppliers, competitors include Lucent, Fujitsu, the
Integrated Optical Components division of SDL, and Sumitomo Cement Opto
Electronics Group. With respect to 1310-nanometer and 1550-nanometer cable
television transmitters, competitors include Harmonic Lightwaves and Ortel.
Other cable television equipment suppliers may also enter this market. With
respect to fiber-Bragg gratings and grating-based modules, competitors include
Lucent, E-Tek and Corning. With respect to laser diode products for data
communications and local telecommunications suppliers, our competitors include
Oz Optics and SDL, as well as larger optoelectronic suppliers such as the AMP
division of Tyco and Hewlett-Packard.
The market in which our instruments are sold is dominated by many
multi-national companies, such as Hewlett-Packard, Anritsu Wiltron, Ando and
Wavetek Wandel & Goltermann. Market share of the instruments product area is
generally fragmented among a number of large and small manufacturers. We have
succeeded in penetrating niche
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<PAGE> 38
market opportunities for fiberoptic instruments, often as a result of meeting
immediate requirements for advanced measurement instruments to support demanding
test requirements of the customer's optical components.
Competition for interconnect products that we distribute but do not
manufacture is market specific. The fusion splicer industry is comprised of
companies such as Fujikura, Sumitomo Electric Industries, Furukawa, Siecor,
Siemens and Ericsson. We compete against AMP, Siecor, 3M Company and Alcoa
Fujikura, as well as numerous other smaller companies in the connectors and
cable assemblies industry. Competitive suppliers of high performance polishing
machines include Seiko Instruments USA and Buehler.
In the laser subsystems market, we compete primarily with American Laser,
Coherent, Ion Laser Technology, NEC, Omnichrome, Spectra-Physics, Toshiba, Carl
Zeiss, Melles-Griot, Hitachi, Lightwave, Opto Power Corporation, SDL, Siemens
and Sony.
PATENTS AND PROPRIETARY RIGHTS
Intellectual property rights that apply to our various products include
patents, trade secrets and trademarks. Because of the rapidly changing
technology and a broad distribution of patents in the optoelectronics industry,
our intention is not to rely primarily on intellectual property rights to
protect or establish our market position. We do not intend to broadly license
our intellectual property rights unless we can obtain adequate consideration or
enter into acceptable patent cross-license agreements. We hold approximately 150
United States patents and corresponding foreign patents on technologies related
to our products and processes. Our United States patents expire on dates ranging
from 1999 to 2016.
EMPLOYEES
At June 30, 1999, we had a total of approximately 6,100 full-time employees
worldwide, including approximately 700 in research, development and engineering,
approximately 180 in sales, marketing and service, approximately 4,900 in
manufacturing, and approximately 320 in general management, administration and
finance. We intend to hire additional personnel during the next 12 months in
each of these areas. Our future success will depend in part on our ability to
attract, train, retain and motivate highly qualified employees, who are in great
demand. There can be no assurance that we will be successful in attracting and
retaining such personnel. Except for our Netherlands and Germany operations, our
employees are not represented by any collective bargaining organization. Most
hourly and salaried employees in the Netherlands are represented by the Philips
Collective Labor Agreement. We have never experienced a work stoppage, slowdown
or strike. We consider our employee relations to be good.
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<PAGE> 39
MANAGEMENT
DIRECTORS AND OFFICERS
Listed below are the names and ages of each of our executive officers and
directors. Our board of directors appoints executive officers. Our executive
officers serve at the discretion of our board. All directors hold office until
the annual meeting of our stockholders following their election or until their
successors are duly elected and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Kevin N. Kalkhoven.................. 54 Co-Chairman and Chief Executive
Officer
Jozef Straus, Ph.D.................. 52 Co-Chairman, President and Chief
Operating Officer
Anthony R. Muller................... 56 Senior Vice President, Chief
Financial Officer and Secretary
M. Zita Cobb........................ 40 Senior Vice President, Strategy and
Integration
Dan E. Pettit....................... 52 Senior Vice President
Michael C. Phillips................. 48 General Counsel/Senior Vice
President, Business Development
Frederick L. Leonberger, Ph.D. ..... 51 Senior Vice President/Chief
Technical Officer
Leo Lefebvre........................ 42 Vice President, Operations Finance
Joseph Ip........................... 41 Senior Vice President, Product
Strategy
Bruce D. Day........................ 43 Director
Robert E. Enos...................... 60 Director
Peter A. Guglielmi.................. 55 Director
Martin A. Kaplan.................... 61 Director
John MacNaughton.................... 54 Director
Wilson Sibbett, Ph.D................ 51 Director
William J. Sinclair................. 45 Director
Casimir S. Skrzypczak............... 58 Director
</TABLE>
Set forth below is certain information relating to our officers and
directors.
Mr. Kalkhoven has been President and Chief Executive Officer of Uniphase
since January 1992, a member of the Board of Directors since February 1992, and
Chairman of the our Board of Directors since April 1994. Subsequent to the JDS
FITEL combination, Mr. Kalkhoven retained his title as Chief Executive Officer
and became Co-Chairman of our Board of Directors.
Dr. Straus co-founded JDS FITEL in 1981 and served as its Chief Executive
Officer and President from September 1993 until July 6, 1999. Dr. Straus served
on the JDS FITEL Board of Directors from 1981 and held various positions with
JDS FITEL, including Vice-President, Sales and Marketing from 1990 to 1993.
Prior to 1981, Dr. Straus held various research and management positions related
to fiberoptic technology at Bell-Northern Research Ltd. and Northern Telecom
Limited.
Mr. Muller was appointed Senior Vice President, Chief Financial Officer and
Secretary of Uniphase in January 1998. From September 1984 to January 1998, when
he joined Uniphase, Mr. Muller was a member of the Uniphase Board of Directors.
From September 1996 to January 1998, he was Senior Vice President and Chief
Financial
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<PAGE> 40
Officer of Micro Focus Group Plc, a supplier of software tools. 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.
Ms. Cobb was a director of JDS FITEL as well as its Chief Financial Officer
from February 1996 until July 6, 1999. Ms. Cobb held various positions since
joining JDS FITEL as Controller in 1989. Prior to joining JDS FITEL, Ms. Cobb
held various finance-related positions with Fleet Technology Ltd., Arctec, Inc.,
Shell Canada Resources Ltd. and Texaco Canada Resources Ltd.
Mr. Pettit became President of Uniphase Europe and has been Senior Vice
President, Business Planning and Development of Uniphase since January 1998. Mr.
Pettit joined Uniphase as Corporate Controller in March 1986 and shortly
thereafter was appointed Vice President and Chief Financial Officer. Prior to
joining Uniphase, Mr. Pettit held group controller and division controller
positions at Burroughs Corporation, where he was employed from 1983 to 1986.
Mr. Phillips joined Uniphase as Senior Vice President, Business Development
and General Counsel in August 1998. Mr. Phillips is also a partner at Morrison &
Foerster LLP, a large international law firm, which serves as Uniphase's outside
counsel. At Morrison & Foerster LLP and prior to joining Uniphase in August 1998
as an officer and employee, Mr. Phillips was primarily responsible for legal
matters for each of Uniphase's prior security offerings and acquisitions.
Dr. Leonberger has been Uniphase Chief Technology Officer since April 1997
and is a Senior Vice President. He was co-founder and general manager of UTP,
and joined Uniphase upon its acquisition of UTP in May, 1995. Dr. Leonberger has
been active in the optoelectronics field for over 20 years and has held a
variety of staff and management positions at MIT Lincoln Laboratory, United
Technologies Research Center, UTP and Uniphase.
Mr. Lefebvre joined JDS FITEL in January 1998 as Vice President, Finance.
Prior to joining JDS FITEL, Mr. Lefebvre held various senior finance related
positions with Newbridge Networks Corporation, a manufacturer of
telecommunication equipment and SHL Systemhouse Inc., a multi national systems
integration and outsourcing services company.
Mr. Ip joined JDS FITEL in 1990 and since that time held various research,
development and product line management roles. Most recently he held the
position of Senior Vice President at Optical Networking Products and
Technologies. Prior to 1990, Mr. Ip held various research and development
positions related to fiberoptic technology at Bell-Northern Research Ltd and
Northern Telecom Limited.
Mr. Day was a member of the JDS FITEL Board of Directors from 1996 until
July 6, 1999. Since 1991, Mr. Day has been employed by Rogers Communications,
Inc., where he is currently the Vice President, Corporate Development and is
principally involved in mergers, acquisitions, divestitures and taxation for
Rogers Communications Inc. and its subsidiaries.
Mr. Enos has been a member of the JDS FITEL Board of Directors from 1996
until July 6, 1999. Mr. Enos was the Vice President, Product Line Management,
Cable Group and the Vice President, Transmission Network Division of Northern
Telecom Limited
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<PAGE> 41
from 1992 to 1994 and from 1989 to 1992, respectively. Mr. Enos retired from
Northern Telecom Limited in 1994.
Mr. Guglielmi has been a member of our Board of Directors since May 1998.
Mr. Guglielmi is Executive Vice President and Chief Financial Officer of
Tellabs, Inc., and has served as its Chief Financial Officer since 1988. From
1993 to 1997, he was also President of Tellabs International, Inc. Prior to
joining Tellabs, Mr. Guglielmi was Vice President of Finance and Treasurer of
Paradyne Corporation for five years. Mr. Guglielmi serves on several boards of
directors, including Tellabs, Inc. and Cherry Corporation.
Mr. Kaplan has been a member of our Board of Directors since November 1997.
Mr. Kaplan is Executive Vice President of Pacific Telesis and is responsible for
coordinating integration plans following the merger of SBC Communications, Inc.
and Pacific Telesis Group. In addition, he is responsible for the integration of
Southern New England Telephone Company and for the merger with Ameritech. From
1995 to 1997, Mr. Kaplan was Executive Vice President of Pacific Bell and
President of the Network Services Group. From 1993 to 1995, he was Chief
Technology, Quality and Re-Engineering Officer for Pacific Bell. Mr. Kaplan also
is a director of Conductus.
Mr. MacNaughton joined our Board of Directors effective July 6, 1999. Mr.
MacNaughton has been appointed President and Chief Executive Officer of the
Canada Pension Plan Investment Board and is to begin working in that position on
Sept. 7, 1999. Mr. MacNaughton was President of Nesbitt Burns Inc. and its
predecessor company from September 1994 until his retirement on March 31, 1999.
From December 1990 to September 1994, when it was acquired by a subsidiary of a
Canadian chartered bank and merged with Nesbitt Thomson Inc., he was President
and Chief Executive Officer of Burns Fry Limited. Nesbitt Burns Inc. lead
managed the initial public offering of JDS FITEL in March 1996.
Professor Sibbett has been a member of the Uniphase Board of Directors
since February 1995. Since 1994, he has been Director of Research for the School
of Physics and Astronomy at the University of St. Andrews, Scotland and since
1985, has been the head of such school. Professor Sibbett has been a member of
the Engineering and Physical Sciences Research Council ("EPSRC") of the U.K.
Department of Trade and Industry since 1986 and served as chairman of the EPSRC
Laser Committee from 1992 to 1994.
Mr. Sinclair co-founded JDS FITEL in 1981, was President of JDS FITEL from
1982 until 1993 and has served as a director of JDS FITEL since 1981. Mr.
Sinclair is currently Director, Research and Development, Fluorosense Inc. and
has held this position since 1995. Mr. Sinclair was an independent consultant in
the area of optics from 1993 to 1995. Prior to 1981, Mr. Sinclair was a member
of the Technical Staff at Bell-Northern Research Ltd. specializing in fiberoptic
technology.
Mr. Skrzypczak has been a member of the Uniphase Board of Directors since
July 1997. He has been Corporate Vice President and Group President of
Professional Services of Bellcore since March 1997. Earlier, Mr. Skrzypczak was
President, NYNEX Science & Technology and Vice President, Network & Technology
Planning for NYNEX. Mr. Skrzypczak has served as a trustee of Polytechnic
University since 1987 and is chairman of its Education Committee.
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<PAGE> 42
PRINCIPAL AND SELLING STOCKHOLDERS
The table below sets forth information with respect to the beneficial
ownership of our common stock as of June 30, 1999 and as adjusted to reflect the
sale of the shares offered hereby by each of the following:
- each person who is known by us to beneficially own 5% or more of our
common stock,
- each of our directors,
- each of our executive officers,
- all directors and executive officers as a group,
- each selling stockholder under this prospectus owning more than 1% of our
common stock, and
- other selling stockholders under this prospectus each owning less than 1%
of our common stock.
As of June 30, 1999, 81,054,828 shares of our common stock were
outstanding, giving effect to the stock dividend of one share of our common
stock for each outstanding shares of our common stock effective July 23, 1999.
As of June 30, 1999, 72,534,038 exchangeable shares of JDS Uniphase Canada Ltd.
were outstanding, giving effect to the stock split of two exchangeable shares
for each exchangeable share outstanding effective July 23, 1999. Unless
otherwise indicated, the address of each person named in the table below is JDS
Uniphase Corporation, 163 Baypointe Parkway, San Jose, California 95134. The
amounts and percentages of common stock beneficially owned are reported on the
basis of regulations of the Securities and Exchange Commission governing the
determination of beneficial ownership of securities. Under the rules of the
Commission, a person is deemed to be a "beneficial owner" of a security if that
person has or shares "voting power," which includes the power to vote or to
direct the voting of such security, or "investment power," which includes the
power to dispose of or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any securities of which that person has
a right to acquire beneficial ownership within 60 days. Under these rules, more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest. The information set forth in the following
table (1) assumes that the over-allotment option of the underwriters has been
exercised and (2) excludes any shares
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<PAGE> 43
purchased in the offering by this prospectus or the prospectus relating to the
concurrent sale of Exchangeable Shares by the respective beneficial owner .
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED
BEFORE THE OFFERING SHARES TO BE AFTER THE OFFERING
----------------------- SOLD IN THE -----------------------
NAME NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
---- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS
FEJ Holding, Inc.(1)............................. 32,913,020 28.9% -- 32,913,020 26.6%
c/o Phillips & Vineberg
250 Yonge Street, Suite 2400
Toronto, Ontario, Canada
FEJ Sales Inc.(1)................................ 5,085,500 5.9% -- 5,085,500 5.3%
c/o Phillips & Vineberg
250 Yonge Street, Suite 2400
Toronto, Ontario, Canada
Philips Electronics B.V. ........................ 5,709,634 7.0% -- 5,709,634 6.3%
Groenevousdseweg 1
5621 BA Eindhoven
The Netherlands
American Express(2).............................. 8,238,726 10.2% -- 8,238,726 9.1%
American Express Tower
200 Vesey Street
New York, NY 10285
EXECUTIVE OFFICERS AND DIRECTORS
Kevin N. Kalkhoven(3)........................ 2,151,286 2.6% 300,000 1,851,286 2.0%
Jozef Straus, Ph.D.(4)....................... 978,176 1.2% 300,000 678,176 *
Anthony R. Muller(5)......................... 2,205,034 2.7% 130,000 2,075,034 2.2%
M. Zita Cobb(6).............................. 189,728 * 188,000 1,728 *
Dan E. Pettit(7)............................. 308,900 * 190,000 118,900 *
Michael C. Phillips(8)....................... 100,350 * -- 100,350 *
Frederick L. Leonberger(9)................... 385,508 * 110,000 275,508 *
Leo Lefebvre(10)............................. 26,620 26,000 620 *
Joseph Ip(11)................................ 159,088 106,000 53,088 *
Bruce D. Day(12)............................. 75,382 * 8,000 67,382 *
Robert E. Enos(13)........................... 50,752 * -- 50,752 *
Peter A. Guglielmi(14)....................... 39,554 * 12,000 27,554 *
Martin A. Kaplan(15)......................... 61,666 * 15,000 46,666 *
John MacNaughton(16)......................... 6,290 * -- 6,290 *
Wilson Sibbett, Ph.D.(17).................... 83,750 * -- 83,750 *
William J. Sinclair(18)...................... 994,526 1.2% -- 994,526 1.1%
Casimir S. Skrzypczak(19).................... 70,554 * 15,000 55,554 *
All directors and executive officers as a group
(17 persons)(20)............................... 7,887,164 8.9% 1,400,000 6,487,164 6.6%
OTHER SELLING STOCKHOLDERS
12 other selling stockholders under this
prospectus and the prospectus relating to the
concurrent offering of Exchangeable Shares, each
of whom beneficially owns less than 1% of the
outstanding common stock (including shares of
common stock issuable upon exchange of the
72,534,038 outstanding Exchangeable Shares) prior
to the offering..................................
Kerry DeHority(21)........................... 81,166 * 26,000 51,166 *
John Scott(22)............................... 311,058 * 80,000 231,058 *
Bruce Worster(23)............................ 196,848 * 48,000 148,848 *
Lindsay Austin(24)........................... 151,760 * 40,000 111,760 *
Paul Suchoski(25)............................ 270,318 * 47,400 222,918 *
Eitan Gertel(26)............................. 166,338 * 56,000 110,338 *
Russ Johnson(27)............................. 78,504 * 62,000 16,504 *
Volker Graf(28).............................. 160,000 * 76,000 84,000 *
Tim Greaves(29).............................. 50,992 * 23,400 27,592 *
David Mackenzie(30).......................... 97,836 * 44,000 53,836 *
</TABLE>
42
<PAGE> 44
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED
BEFORE THE OFFERING SHARES TO BE AFTER THE OFFERING
----------------------- SOLD IN THE -----------------------
NAME NUMBER PERCENTAGE OFFERING NUMBER PERCENTAGE
---- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Gary Duck(31)................................ 792,116 * 300,000 492,116 *
Winfried Horsthuis(32)....................... 44,950 * 22,400 22,550 *
Yves Tremblay(33)............................ 70,662 * 18,000 52,662 *
Brian Kawasaki(34)........................... 117,080 * 50,000 67,080 *
David King(35)............................... 26,444 * 18,000 8,444 *
Jozef Finak(36).............................. 90,222 * 70,000 20,222 *
</TABLE>
- ---------------
(1) All shares are issuable upon exchange of the exchangeable shares of JDS
Uniphase Canada Ltd.
(2) As reported in a Schedule 13G filed on April 8, 1999, includes 2,595,526
shares as to which American Express Company has shared voting power and
8,238,726 shares as to which it has dispositive power.
(3) Includes 2,026,880 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(4) Includes 978,176 shares issuable upon exchange of the exchangeable shares
of JDS Uniphase Canada Ltd.
(5) Includes 2,026,880 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(6) Includes 189,728 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(7) Includes 215,510 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 21,990 shares held by Kelly
A. Pettit, Mr. Pettit's spouse.
(8) Includes 100,000 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(9) Includes 372,816 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999, and 200 shares held by
Katharine Leonberger and 200 shares held by Gregory Leonberger, Mr.
Leonberger's daughter and son, respectively.
(10) Includes 26,620 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(11) Includes 159,088 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(12) Includes 75,382 shares issuable upon exchange of the exchangeable shares of
JDS Uniphase Canada Ltd.
(13) Includes 50,752 shares issuable upon exchange of the exchangeable shares of
JDS Uniphase Canada Ltd.
(14) Includes 31,554 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(15) Includes 61,666 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(16) Includes 6,290 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(17) Includes 83,750 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(18) Includes 994,526 shares issuable upon exchange of the exchangeable shares
of JDS Uniphase Canada Ltd.
(19) Includes 70,554 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(20) Includes 5,397,976 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 2,098,836 shares issuable
upon exchange of the exchangeable shares of JDS Uniphase Canada Ltd.
(21) Includes 80,000 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(22) Includes 215,958 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(23) Includes 120,002 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(24) Includes 83,302 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(25) Includes 270,314 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(26) Includes 164,264 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(27) Includes 78,124 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(28) Includes 160,000 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(29) Includes 38,000 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
43
<PAGE> 45
(30) Includes 97,500 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(31) Includes 792,116 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(32) Includes 44,950 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(33) Includes 70,662 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(34) Includes 117,080 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(35) Includes 26,444 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(36) Includes 90,222 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
44
<PAGE> 46
UNDERWRITING
We are offering the shares of common stock described in this prospectus
through a number of underwriters. Banc of America Securities LLC and Deutsche
Bank Securities Inc. are the representatives of the underwriters for our
offering of the common stock (the "U.S. Representatives"). Concurrently with the
offer and sale of shares of our common stock described in this prospectus, our
subsidiary JDS Uniphase Canada Ltd. is offering Exchangeable Shares for sale
outside the United States. CIBC World Markets Inc. is the representative of the
underwriters for the offering of the Exchangeable Shares (the "International
Underwriters"). We have entered into a firm commitment underwriting agreement
(the "U.S. Underwriting Agreement") with the U.S. Representatives for our
offering of the common stock. JDS Uniphase Canada Ltd. has entered into a
separate firm commitment underwriting agreement with the International
Underwriters for the offering of the Exchangeable Shares. Subject to the terms
and conditions of the U.S. Underwriting Agreement, we have agreed to sell to the
underwriters of our common stock offering, and these underwriters have each
agreed to purchase the number of shares of common stock listed next to its name
in the following table:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Banc of America Securities LLC..............................
Deutsche Bank Securities Inc................................
CIBC World Markets Corp.....................................
Credit Suisse First Boston..................................
SoundView Technology Group..................................
Thomas Weisel Partners LLC..................................
Warburg Dillon Read LLC.....................................
---------
Total............................................. 7,618,800
=========
</TABLE>
The underwriters of our common stock offering initially will offer shares
to the public at the price specified on the cover page of this prospectus. The
underwriters may allow to some dealers a concession of not more than $ per
share. The underwriters also may allow, and any dealers may reallow, a
concession of not more than $ per share to some other dealers. If all the
shares are not sold at the initial public offering price, the underwriters may
change the offering price and the other selling terms. The underwriters of the
Exchangeable Shares will offer the Exchangeable Shares on the same economic
terms as the offering of our common stock, except that sales of Exchangeable
Shares will be made in Canadian dollars. The closings with respect to the sale
of shares of common stock to be purchased by U.S. Representatives and the sale
of Exchangeable Shares to be purchased by the International Underwriters are
conditioned upon one another. The common stock is offered subject to a number of
additional conditions, including:
- receipt and acceptance of our common stock by the underwriters, and
- the right to reject orders in whole or in part.
The underwriters have an option to buy up to 1,500,000 additional shares of
common stock from us. These additional shares would cover sales of shares by the
underwriters which exceed the number of shares specified in the table above. The
underwriters have 30 days to exercise this option. If the underwriters exercise
this option, they will each purchase additional shares approximately in
proportion to the amounts specified in the table above.
45
<PAGE> 47
The following table shows the per share and total underwriting discounts
and commissions to be paid to the underwriters by us and the selling
stockholders. Such amounts are shown assuming no exercise and full exercise of
the underwriters' option to purchase additional shares.
<TABLE>
<CAPTION>
PAID BY US
----------------------------
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per Share............................. $ $
Total................................. $ $
</TABLE>
<TABLE>
<CAPTION>
PAID BY THE SELLING
STOCKHOLDERS
----------------------------
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per Share............................. $ --
Total................................. $ --
</TABLE>
Our executive officers, directors and stockholders holding a total of
approximately 48.9 million shares of our common stock, including shares
convertible into or exchangeable for common stock, have entered into lock-up
agreements with the underwriters. Under those agreements, those holders of
stock, options and warrants may not dispose of or hedge any of common stock or
securities convertible into or exchangeable for shares of common stock unless
permitted to do so by Banc of America Securities LLC, Deutsche Bank Securities
Inc. and CIBC World Markets Inc. These restrictions will be in effect for a
period of 90 days after the date of this prospectus. At any time and without
notice, Banc of America Securities LLC, Deutsche Bank Securities Inc. and CIBC
World Markets Inc. may, in their sole discretion, release all or some of the
securities from these lock-up agreements. We have also agreed not to issue,
offer, sell, grant options to purchase or otherwise dispose of shares of our
common stock or securities convertible into or exchangeable for shares of our
common stock, except for shares we issue in connection with acquisitions and for
grants and exercises of stock options, subject to any remaining period of the 90
day restriction.
We and the selling stockholders will indemnify the underwriters against
liabilities, including liabilities under the Securities Act. If we and the
selling stockholders are unable to provide this indemnification, they will
contribute to payments the underwriters may be required to make in respect of
those liabilities.
In connection with this offering, the underwriters may purchase and sell
shares of common stock in the open market intended to stabilize, maintain or
otherwise affect the price of the common stock. These transactions may include:
- short sales,
- stabilizing transactions,
- purchases to cover positions created by short sales,
- over-allotment, and
- syndicate covering transactions.
Short sales involve the sale by the underwriters of a greater number of
shares than they are required to purchase in this offering. Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the common stock while this offering
is in progress.
46
<PAGE> 48
As a result of these activities, the price of the common stock may be
higher than the price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue them at any time.
The underwriters may carry out these transactions on the Nasdaq National Market,
in the over-the-counter-market or otherwise.
The underwriters also may impose a penalty bid. This means that if the
representatives purchase shares in the open market in stabilizing transactions
or to cover short sales, the representatives can require the underwriters that
sold those shares as part of this offering to repay the underwriting discount
received by them.
The underwriters do not expect sales to discretionary accounts to exceed 5%
of the total number of shares of common stock offered by this prospectus.
We will pay the expenses of the offering on behalf of the selling
stockholders, excluding underwriting discounts and commissions. The expenses of
the offering are estimated to be approximately $1,000,000.
Thomas Weisel Partners LLC, one of the underwriters, was organized and
registered as a broker-dealer in December 1998. Thomas Weisel Partners LLC has
been named as a lead or co-manager on 42 filed public offerings of equity
securities, of which 24 have been completed, and has acted as a syndicate member
in an additional 19 public offerings of equity securities. Thomas Weisel
Partners LLC does not have any material relationship with us or any of our
officers, directors or other controlling persons, except with respect to its
contractual relationship with us under the underwriting agreement entered into
in connection with this offering.
LEGAL OPINIONS
The validity of the issuance of the shares of common stock offered pursuant
to this prospectus will be passed upon for JDS Uniphase by Morrison & Foerster
LLP, Palo Alto, California, and certain matters will be passed upon for the
Underwriters by Cooley Godward LLP, Palo Alto, California. Michael C. Phillips,
a partner with Morrison & Foerster LLP, our counsel, also serves as a Senior
Vice President and General Counsel of JDS Uniphase.
EXPERTS
The consolidated financial statements of Uniphase Corporation appearing in
Uniphase Corporation's Current Report on Form 8-K/A dated April 28, 1999, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Philips Optoelectronics, a Division of
Koninklijke Philips Electronics N.V. included in its Amendment No. 2 to the
Current Report on Form 8-K/A dated August 25, 1998, have been audited by Ernst &
Young Accountants, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of JDS FITEL Inc. appearing in
Uniphase Corporation's definitive proxy statement on Form 14-A dated June 2,
1999, have been audited by PricewaterhouseCoopers LLP, Chartered Accountants, as
set forth in their
47
<PAGE> 49
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
WHERE YOU MAY FIND MORE INFORMATION
JDS Uniphase is subject to the informational requirements of the Securities
Exchange Act of 1934, and accordingly JDS Uniphase files reports, proxy
statements and other information with the Securities and Exchange Commission.
Such reports, proxy statements and other information filed can be inspected and
copied at the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C., 20549, and at the following regional offices of the
Commission: Seven World Trade Center, 13th Floor, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Commission maintains a web site (http://www.sec.gov) containing reports,
proxy and information statements and other information of registrants, including
us, that file electronically with the Commission. In addition, our common stock
is listed on the Nasdaq National Market and similar information concerning JDS
Uniphase can be inspected and copied at the offices of the National Association
of Securities Dealers, Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
We have filed with the Commission a registration statement on Form S-3 (of
which this prospectus is a part) under the Securities Act of 1933, with respect
to the shares offered by this prospectus. This prospectus does not contain all
of the information set forth in the registration statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Statements contained in this prospectus as to the contents of any
contract or other documents are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference and the exhibits and schedules thereto. For
further information regarding us and the shares offered by this prospectus,
reference is hereby made to the registration statement and such exhibits and
schedules which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this prospectus in
connection with the offer described in this prospectus and, if given or made,
such information and representations must not be relied upon as having been
authorized by us. Neither the delivery of this prospectus nor any sale made
under this prospectus shall under any circumstances create any implication that
there has been no change in our affairs since the date of this prospectus or
since the date of any documents incorporated into this prospectus by reference.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the securities to which it relates, or an
offer or solicitation in any state to any person to whom it is unlawful to make
such offer in such state.
48
<PAGE> 50
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by JDS Uniphase under the
Exchange Act with the Commission and are incorporated into this prospectus by
reference:
a. Uniphase's Annual Report on Form 10-K for the year ended June 30, 1998;
b. Uniphase's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1998, December 31, 1998 and March 31, 1999;
c. Uniphase's Quarterly Reports on Form 10-Q/A for the quarters ended
September 30, 1998 and December 31, 1998;
d. Uniphase's Report on Form 8-K/A dated as of August 24, 1998;
e. Uniphase's Report on Form 8-K/A dated as of August 25, 1998;
f. Uniphase's Report on Form 8-K dated as of January 7, 1999;
g. Uniphase's Report on Form 8-K/A dated as of April 28, 1999;
h. JDS Uniphase's Report on Form 8/K dated as of July 9, 1999;
i. Uniphase's definitive Proxy Statement on Form 14-A filed on June 2,
1999; and
j. The description of Uniphase's common stock contained in Uniphase's
Registration Statement on Form 8-A filed with the Commission on
November 15, 1993.
Each document filed by JDS Uniphase pursuant to sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering made by this prospectus shall be deemed
to be any statement contained into this prospectus or in a document incorporated
or deemed to be incorporated by reference into this prospectus shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that
a statement contained into this prospectus (or in the applicable prospectus
supplement) or in any other subsequently filed document which also is or is
deemed to be incorporated by reference into this prospectus modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
Copies of all documents which are incorporated into this prospectus by
reference (not including the exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents) will be provided
without charge to each person, including any beneficial owner, to whom this
prospectus is delivered upon written or oral request. Please direct requests to
the corporate secretary at JDS Uniphase's United States corporate headquarters
at 163 Baypointe Parkway, San Jose, California 95134 or by telephone at (408)
434-1800.
49
<PAGE> 51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10,000,000 Shares
[JDS UNIPHASE LOGO]
---------------------------
Prospectus
, 1999
---------------------------
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANC ALEX. BROWN
------------------------
CIBC WORLD MARKETS
CREDIT SUISSE FIRST BOSTON
SOUNDVIEW TECHNOLOGY GROUP
THOMAS WEISEL PARTNERS LLC
WARBURG DILLON READ LLC
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated fees and expenses payable by
JDS Uniphase in connection with the issuance and distribution of the common
stock registered hereby. All of such fees and expenses are estimates, except the
securities act registration fee.
<TABLE>
<S> <C>
Securities Act Registration Fee.................... $ 265,453
Printing and duplicating fees...................... $ 250,000
Legal fees and expenses............................ $ 250,000
Accounting fees and expenses....................... $ 100,000
NASD filing fee.................................... $ 30,500
Nasdaq National Market listing fee................. $ 19,500
Miscellaneous expenses............................. $ 70,737
----------
*Total........................................... $1,000,000
==========
</TABLE>
- -------------------------
* None of the expenses listed above will be borne by the selling stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The indemnification and liability of JDS Uniphase's directors and officers
are governed by Delaware law. Under Section 145 of the General Corporation Law
of the State of Delaware, JDS Uniphase has broad powers to indemnify its
directors and officers against liabilities that may incur in such capacities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). JDS Uniphase's Bylaws also provide for mandatory
indemnification of its directors and executive officers, and permissive
indemnification of its employees and agents, to the fullest extent permissible
under Delaware law.
JDS Uniphase's Certificate of Incorporation provides that the liability of
its directors for monetary damages shall be eliminated to the fullest extent
permissible under Delaware law. Pursuant to Delaware law, this includes
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to JDS Uniphase and its stockholders. These provisions do
not eliminate the directors' duty of care and, in appropriate circumstances,
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will continue to
be subject to liability for breach of the director's duty of loyalty to the
Company, for acts of omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision also does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
JDS Uniphase has entered into agreements with its directors and certain of
its executive officers that require JDS Uniphase to indemnify such persons
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred (including expenses of a derivative action) in connection
with any proceeding, whether actual or threatened, to which any such person may
be made a party by reason of the fact that such person is or was a director or
officer of JDS Uniphase or any of its affiliated
II-1
<PAGE> 53
enterprises, provided such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of JDS
Uniphase and, with respect to any criminal proceeding, had no reasonable cause
to believe his or her conduct was unlawful. The indemnification agreement also
sets forth certain procedures that will apply in the event of a claim for
indemnification thereunder.
JDS Uniphase has obtained a policy of directors' and officers' liability
insurance that insures JDS Uniphase's directors and officers against the cost of
defense, settlement or payment of a judgment under certain circumstances.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
3.1 Certificate of Amendment to Articles of Incorporation
3.2 Certificate of Amendment to Bylaws
4.1 Certificate of Designation
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent auditors
23.3 Consent of Ernst & Young Accountants, independent auditors
23.4 Consent of PricewaterhouseCoopers, chartered accountants
24.1 Power of Attorney (included on signature page hereto)
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) any deviation from the low or high and of the estimated
maximum offering price may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement; provided, however, that subparagraphs (i) and (ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in the periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
II-2
<PAGE> 54
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of these securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual reports pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, when applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference to this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance under Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 55
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California on July 14, 1999.
JDS UNIPHASE CORPORATION
By: /s/ KEVIN N. KALKHOVEN
-----------------------------------
Kevin N. Kalkhoven
Chief Executive Officer
and Co-Chairman of the Board
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Kevin N. Kalkhoven and
Anthony R. Muller as his/her true and lawful attorneys-in-fact and agents,
jointly and severally, with full power of substitution and resubstitution, for
and in his/her stead, in any and all capacities, to sign on his/her behalf the
Registration Statement on Form S-3 in connection with the sale by JDS Uniphase
Corporation of shares of offered securities, and to execute any amendments
thereto (including post-effective amendments) or certificates that may be
required in connection with this Registration Statement, and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission and granting unto said attorneys-in-fact
and agents, jointly and severally, the full power and authority to do and
perform each and every act and thing necessary or advisable to all intents and
purposes as he/she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, jointly and severally, or his/her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -------------
<S> <C> <C>
/s/ KEVIN N. KALKHOVEN Chief Executive Officer, Co- July 14, 1999
- --------------------------------------------- Chairman of the Board of
Kevin N. Kalkhoven Directors (Principal
Executive Officer)
/s/ ANTHONY R. MULLER Senior Vice President, Chief July 14, 1999
- --------------------------------------------- Financial Officer and
Anthony R. Muller Secretary (Principal
Financial and Accounting
Officer)
</TABLE>
II-4
<PAGE> 56
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -------------
<S> <C> <C>
/s/ JOZEF STRAUSS President, Chief Operating July 14, 1999
- --------------------------------------------- Officer and Co-Chairman of
Jozef Strauss the Board of Directors
/s/ BRUCE D. DAY Director July 14, 1999
- ---------------------------------------------
Bruce D. Day
/s/ PETER A. GUGLIELMI Director July 14, 1999
- ---------------------------------------------
Peter A. Guglielmi
/s/ ROBERT E. ENOS Director July 14, 1999
- ---------------------------------------------
Robert E. Enos
/s/ MARTIN A. KAPLAN Director July 14, 1999
- ---------------------------------------------
Martin A. Kaplan
/s/ JOHN MACNAUGHTON Director July 14, 1999
- ---------------------------------------------
John MacNaughton
/s/ WILSON SIBBETT Director July 14, 1999
- ---------------------------------------------
Wilson Sibbett, Ph.D.
/s/ CASIMIR SKRZYPCZAK Director July 14, 1999
- ---------------------------------------------
Casimir Skrzypczak
/s/ WILLIAM J. SINCLAIR Director July 14, 1999
- ---------------------------------------------
William J. Sinclair
</TABLE>
II-5
<PAGE> 57
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
3.1 Certificate of Amendment to Articles of Incorporation
3.2 Certificate of Amendment to Bylaws
4.1 Certificate of Designation
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent auditors
23.3 Consent of Ernst & Young Accountants, independent auditors
23.4 Consent of PricewaterhouseCoopers, chartered accountants
24.1 Power of Attorney (included on signature page hereto)
</TABLE>
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Uniphase Corporation, a corporation organized and existing under the laws
of the State of Delaware, (the "Corporation") hereby certifies as follows:
FIRST: That, at a meeting of the Board of Directors of the Corporation held
on January 28, 1999, the Board of Directors adopted a resolution proposing and
declaring advisable the following amendments to the Amended and Restated
Certificate of Incorporation of the Corporation, the original Certificate of
Incorporation of which was filed with the Secretary of State of the State of
Delaware on October 26, 1993:
(a) RESOLVED, that Article 1 of the Corporation's Amended and
Restated Certificate of Incorporation shall be amended, subject to
stockholder approval, to read in its entirety as follows:
"Article 1
The name of this Corporation is JDS Uniphase Corporation."
(b) RESOLVED, that paragraph 4.1 of Article 4 of the Corporation's
Amended and Restated Certificate of Incorporation shall be amended, subject
to stockholder approval, to read in its entirety as follows:
"4.1. Authorized Capital Stock. The Corporation is authorized to
issue two classes of stock to be designated, respectively, `Common
Stock' and `Preferred Stock.' The total number of shares which the
Corporation is authorized to issue is two hundred and one million
(201,000,000) shares. Two hundred million (200,000,000) shares shall
be Common Stock, each having a par value of one-tenth of one cent
($.001). One million (1,000,000) shares shall be Preferred Stock, each
having a par value of one-tenth of one cent ($.001)."
<PAGE> 2
SECOND: That the stockholders of the Corporation have approved at a Special
Meeting of Stockholders held on June 28, 1999 said amendments in accordance with
the provisions of Section 228 of the General Corporation Law of the State of
Delaware.
THIRD: That the aforesaid amendments were duly adopted in accordance with
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, Uniphase Corporation has caused this Certificate of
Amendment to Amended and Restated Certificate of Incorporation to be signed by
its Chief Executive Officer and attested to by its Secretary this _______ day of
June, 1999.
UNIPHASE CORPORATION
By /s/ KEVIN KALKHOVEN
------------------------------
Kevin Kalkhoven
Chief Executive Officer
ATTEST:
/s/ ANTHONY R. MULLER
--------------------------
Anthony R. Muller
Secretary
<PAGE> 1
Exhibit 3.2
CERTIFICATE OF AMENDMENT
OF
THE BYLAWS
OF
UNIPHASE CORPORATION
The undersigned, Anthony R. Muller, hereby certifies that:
1. He is the duly elected and acting Secretary of Uniphase Corporation, a
Delaware Corporation (the "Corporation").
2. Effective June 30, 1999, the first sentence of Article III, Section 1
of the Corporation's Bylaws was amended to read as follows:
"SECTION 1. NUMBER AND TERM OF OFFICE.
The number of directors which shall constitute the whole of the Board
of Directors shall be ten (10)."
IN WITNESS WHEREOF, the undersigned has set his hand hereto as of this 30
day of June, 1999.
/s/ ANTHONY R. MULLER
-----------------------------------
Anthony R. Muller
Secretary
<PAGE> 1
EXHIBIT 4.1
UNIPHASE CORPORATION
----------------------
CERTIFICATE OF DESIGNATION
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
---------------------
SPECIAL VOTING STOCK
The undersigned officer of Uniphase Corporation, a corporation organized
and existing under the laws of the State of Delaware (the "Company"), hereby
certifies that the following resolutions were duly adopted by the Board of
Directors of the Company and by the Uniphase Merger Committee pursuant to
authority conferred upon the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), and pursuant to authority conferred upon the Uniphase Merger
Committee in accordance with Section 141(c) of the General Corporation Law of
the State of Delaware, by Article III Section 9 of the Bylaws of the Company and
by the resolutions of the Board of Directors set forth herein, at a meeting of
the Board of Directors duly held on January 28, 1999 and by unanimous written
consent of the Uniphase Merger Committee dated June ___, 1999:
1. The Board of Directors on January 28, 1999 adopted the following
resolutions, among others, (a) authorizing the classification of the Special
Voting Stock and the issuance of one share thereof (the "Special Voting Share"),
and fixing the relative powers, preferences, rights, qualifications, limitations
and restrictions of such share, and (b) authorizing the Uniphase Merger
Committee of the Board of Directors to act on behalf of the Board of Directors
to review and approve certain matters in connection with the transactions
contemplated by that certain Merger Agreement dated as of January 28, 1999,
among the Company, 3506967 Canada Inc., and JDS FITEL Inc., as amended and
restated (the "Merger Agreement"), which Merger Agreement, among other things,
provides for the Special Voting Share:
"RESOLVED, that the classification of one share of the Company's authorized
shares of preferred stock as the Special Voting Share (as defined in the Merger
Agreement) is hereby authorized and approved;
"RESOLVED, FURTHER, that any officer of the Company be, and each hereby is,
authorized to take any and all action that such officer of the Company may deem
necessary or desirable under applicable law, including, without limitation, the
execution of one or more Certificates of Designation under Section 151 of the
General Corporation Law of the State of Delaware, to create and issue one
Special Voting Share of the Company, to have such rights, privileges,
restrictions and conditions as are consistent with the terms of the Merger
Documents and approved by the Uniphase Merger Committee, such share to be issued
in consideration of $1.00, and upon receipt by the Company of such portion of
the Merger Consideration, such Special Voting Share be issued to the Trustee, to
be held and exercised by such Trustee as contemplated therein and by the terms
of the Trust Agreement; and
1
<PAGE> 2
"RESOLVED, FURTHER, that a Committee (the "Uniphase Merger Committee"),
consisting of Directors Kalkhoven, Kaplan and Lego, is hereby appointed to
review and approve such matters in connection with the Transaction as the
Uniphase Merger Committee and/or the Authorized Officers (as defined below) of
this Company shall determine would otherwise require the review and approval of
this Board of Directors as shall be reasonably required to: (i) cause the
Company to perform its obligations under the Merger Documents and (ii) generally
consummate the Merger Transaction in accordance with the Merger Agreement.
Without limiting the powers of the Uniphase Merger Committee pursuant to the
foregoing, the Uniphase Merger Committee shall have the authority to review and
approve any alternative structure for the Merger Transaction, as contemplated by
Section 5.11 of the Merger Agreement."
2. The Uniphase Merger Committee of the Board of Directors, by unanimous
written consent to corporate action dated June ___, 1999 adopted the following
resolution pursuant to authority conferred upon the Uniphase Merger Committee by
the resolution of the Board of Directors set forth in paragraph 1:
"RESOLVED, that the Uniphase Merger Committee hereby fixes the number,
powers, designations, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions of
the Special Voting Stock as follows:
"I. AUTHORIZED NUMBER AND DESIGNATION. There is hereby created out of the
authorized and unissued shares of preferred stock of the Company a series of
preferred stock designated as "Special Voting Stock, par value $0.001 per share"
The number of shares constituting the Special Voting Stock shall be one (the
"Special Voting Share").
"II. DIVIDENDS. Neither the holder nor, if different, the owner of the
Special Voting Share shall be entitled to receive Company dividends in its
capacity as holder or owner thereof.
"III. VOTING RIGHTS. The holder of record of the Special Voting Share shall
be entitled to all of the voting rights, including the right to vote in person
or by proxy, of the Special Voting Share on any matters, questions, proposals or
propositions whatsoever that may properly come before the shareholders of the
Company at a Company meeting or in connection with a Company consent.
"IV. LIQUIDATION PREFERENCE. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holder of the Special Voting Share
shall be entitled to receive out of the assets of the Company available for
distribution to the stockholders, an amount equal to $0.001 before any
distribution is made on the common stock of the Company or any other stock
ranking junior to the Special Voting Share as to distribution of assets upon
liquidation, dissolution or winding-up.
"V. RANKING. The Special Voting Share shall, with respect to rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of
common stock of the Company and (ii) junior to any other class or series of
capital stock of the Company.
"VI. REDEMPTION. The Special Voting Share shall not be subject to
redemption, except that at such time as no exchangeable shares ("Exchangeable
Shares") of JDS Uniphase
2
<PAGE> 3
Canada Ltd. (other than Exchangeable Shares owned by the Company and its
affiliates) shall be outstanding, and no shares of stock, debt, options or other
agreements which could give rise to the issuance of any Exchangeable Shares to
any person (other than the Company and its affiliates) shall exist, the Special
Voting Share shall automatically be redeemed and canceled, for an amount equal
to $0.001 due and payable upon such redemption. Upon any such redemption or
other purchase or acquisition of the Special Voting Share by the Company, the
Special Voting Share shall be deemed retired and canceled and may not be
reissued.
"VII. OTHER PROVISIONS. Pursuant to the terms of that certain Voting and
Exchange Trust Agreement to be dated as of July 6, 1999, by and between JDS
Uniphase Canada Ltd., the Company, and CIBC Mellon Trust Company, as such
agreement may be amended, modified or supplemented from time to time (the "Trust
Agreement"):
(i) During the term of the Trust Agreement, the Company may not,
without the consent of the holders of the Exchangeable Shares (as defined
in the Trust Agreement), issue any shares of its Special Voting Stock in
addition to the Special Voting Share;
(ii) the Special Voting Share entitles the holder of record to a
number of votes at meetings of holders of Company common shares equal to
the number of Exchangeable Shares (as defined by the Trust Agreement)
outstanding from time to time (other than the Exchangeable Shares held by
the Company and its affiliates);
(iii) the Trustee (as defined by the Trust Agreement) shall exercise
the votes held by the Special Voting Share pursuant to and in accordance
with the Trust Agreement;
(iv) the voting rights attached to the Special Voting Share shall
terminate pursuant to and in accordance with the Trust Agreement; and
(v) the powers, designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions of such Special Voting Share shall be as
otherwise provided in the Trust Agreement."
3
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
to be been signed by Michael C. Phillips, its Senior Vice President, and
attested by Anthony R. Muller, its Secretary, whereby said Secretary affirms,
under penalties of perjury, that this Certificate of Designation is the act and
deed of the Company and that the facts stated herein are true, this 30th day of
June, 1999.
UNIPHASE CORPORATION
By: /s/ MICHAEL C. PHILLIPS
-----------------------------------
Name: Michael C. Phillips
Title: Senior Vice President
Attest:
By: /s/ ANTHONY R. MULLER
----------------------------
Name: Anthony R. Muller
--------------------------
Title: Secretary
4
<PAGE> 1
EXHIBIT 5.1
July 14, 1999
JDS Uniphase Corporation
210 Baypointe Parkway
San Jose, CA 95134
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 filed by JDS Uniphase Corporation, a Delaware corporation (the "Company"),
with the Securities and Exchange Commission on July , 1999 (the "Registration
Statement") relating to the registration under the Securities Act of 1933, as
amended, of up to the number of shares of the Company's common stock, $0.001 par
value per share, registered pursuant to the Registration Statement (the
"Stock").
As counsel to the Company, we have examined the proceedings taken by
the Company in connection with the registration of the shares of the Stock.
It is our opinion that, when issued, the shares of Stock that may be
sold pursuant to the Registration Statement will be legally and validly issued,
fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the prospectus constituting a part thereof and any amendments
thereto.
Very truly yours,
/s/ Morrison & Foerster LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of JDS Uniphase
Corporation for the registration of 11,500,000 shares of its common stock and to
the incorporation by reference therein of our report dated January 7, 1999
(except for the first paragraph under "Basis of Presentation" in Note 1, as to
which the date is April 23, 1999) with respect to the consolidated financial
statements and the related financial statement schedule of Uniphase Corporation
included in its Current Report on Form 8-K/A dated April 28, 1999, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Jose, California
July 13, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG ACCOUNTANTS,
INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of JDS Uniphase
Corporation for the registration of 11,500,000 shares of its common stock and to
the incorporation by reference therein of our report dated August 24, 1998, with
respect to the financial statements of Philips Optoelectronics, a division of
Koninklijke Philips Electronics N.V. included in its Amendment No. 2 to the
Current Report on Form 8-K/A dated August 25, 1998, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young Accountants
Eindhoven, the Netherlands
July 13, 1999
<PAGE> 1
EXHIBIT 23.4
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
Securities and Exchange Commission
Washington, D.C.
United States of America
20549
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Current Report S-3 of our report dated
July 3, 1998, relating to the financial statements of JDS FITEL Inc.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
Chartered Accountants
Ottawa, Ontario
July 12, 1999
