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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 1999
REGISTRATION NO. 333-82795
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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AMENDMENT NO. 1
TO
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. [ ]
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 27, 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 7,572,600 shares, and
the selling stockholders identified in this prospectus are selling 2,427,400
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 211,400 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 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 additional shares, up
to a maximum of 15% of the total number of shares of common stock sold by us and
the selling stockholders under this prospectus, to cover over-allotments of
shares.
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 26, 1999 was $158.125 per share ($79.063 per share after giving
effect to a stock dividend of one share of our common stock for each outstanding
share of our common stock effected 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 7.
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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 7,572,600 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................................................ 6
Use of Proceeds............................................. 19
Price Range of Common Stock................................. 19
Capitalization.............................................. 20
JDS Uniphase Summary Financial Data and Unaudited Pro Forma
Financial Data............................................ 21
Our Business................................................ 25
Management.................................................. 37
Principal and Selling Stockholders.......................... 40
Underwriting................................................ 44
Legal Opinions.............................................. 46
Experts..................................................... 46
Where You May Find More Information......................... 47
Incorporation of Certain Documents by Reference............. 48
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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 effected 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 called wave division
multiplexing, or WDM, which allows up to 128 separate light signals
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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 6.7
million shares of our common stock. In addition, we granted options to purchase
6.8 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., and certain shareholders of JDS Uniphase
Canada Ltd., are offering Exchangeable Shares to persons outside the United
States in a separate 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 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. We cannot guarantee
that any Exchangeable Shares will be sold in the concurrent offering.
THE OFFERING
Common stock offered by us..... 7,572,600 shares(1)(2)
Common stock offered by the
selling stockholders......... 2,216,000 shares
Common stock outstanding after
this offering................ 168,495,118 shares(1)(2)(3)
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 a maximum of 15% of the
total number of shares of common stock sold by us and the selling
stockholders under this prospectus to cover over-allotments.
(3) 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 June 30, 1999. Excludes:
- 22.2 million shares of common stock issuable upon the exercise of stock
options outstanding after the offering;
- 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 has 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
are accounting for the combination of Uniphase and JDS FITEL using the purchase
method of accounting. Under purchase accounting, we recorded 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 was 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 allocated the excess of the purchase cost over
the fair value of the net assets to goodwill. We expensed in-process research
and development of $210 million as of June 30, 1999. We will amortize goodwill
over a five year period. The amount of purchase cost allocated to goodwill and
other intangibles was $3.4 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 $168 million
per quarter and $672 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.
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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> 12
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> 13
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 Laboratory, 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> 14
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> 15
- 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
22.5%, 24.2% and 26.8% 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> 16
- 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> 17
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. We have in the past and may
from time to time in the future receive notices from third parties claiming that
our products infringe upon third party propietary rights. Any litigation to
determine the validity of any third-party claims, regardless of the merit of
these 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
on terms acceptable to us if at all. 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> 19
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 June 30, 1999, we will have 168,495,118
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 48.5 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 June 30, 1999, there were outstanding options to purchase a total of 22.2
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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USE OF PROCEEDS
The net proceeds to us from the sale of the 7,572,600 shares of common
stock we are offering and the concurrent offering by JDS Uniphase Canada Ltd. of
Exchangeable Shares are estimated to be approximately $576.8 million (or $691.2
million if all 7,572,600 shares are sold pursuant to this prospectus and the
underwriters exercise their option to purchase additional shares to cover
over-allotment) at an assumed public offering price of $79.063 per share, the
price on July 26, 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 were 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 26, 1999)........ $88.719 $ 77.250
</TABLE>
On July 26, 1999, the last reported sale price of our common stock on the
Nasdaq National Market was $79.063 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 were effective July 23, 1999).
As of July 9, 1999, there were approximately 337 stockholders of record of our
common stock.
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CAPITALIZATION
The following table sets forth as of June 30, 1999:
- our pro forma capitalization prior to the offering, reflecting the
issuance of 7,333,652 shares of common stock and the 72,534,038
Exchangeable Shares of JDS Uniphase Canada Ltd. in connection with the
JDS FITEL merger and the exchange of the Exchangeable Shares 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
$79.063 per share. See "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF JUNE 30, 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; 160,922,518 shares issued and
outstanding, pro forma prior to the offering; and
168,495,118 shares issued and outstanding, pro
forma after the offering(1)....................... 161 168
Additional paid-in capital........................... 3,822,590 4,421,295
Accumulated deficit.................................. (197,823) (197,823)
Other stockholders' equity........................... (5,682) (5,682)
---------- ----------
Total stockholders' equity........................ 3,619,246 4,217,958
---------- ----------
Total capitalization............................ $3,619,246 $4,217,958
========== ==========
</TABLE>
- -------------------------
(1) Based on shares outstanding as of June 30, 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 June 30, 1999 number
excludes:
- the underwriters' option to purchase up to a maximum of 15% of the total
number of shares of common stock sold by us and the selling stockholders
under this prospectus solely to cover over-allotments;
- 22.2 million shares of common stock issuable upon exercise of options
outstanding as of June 30, 1999;
- approximately 2.5 million shares of common stock reserved for future
issuance under our 1998 Employee Stock Purchase Plan as of June 30, 1999;
and
- any shares of common stock issuable upon conversion of the outstanding
shares of Series A Preferred Stock.
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JDS UNIPHASE SUMMARY FINANCIAL DATA AND
UNAUDITED PRO FORMA FINANCIAL DATA
REPORTED RESULTS OF JDS UNIPHASE FOR ITS QUARTER ENDED JUNE 30, 1999; PRO FORMA
COMBINED RESULTS
On July 26, 1999, we announced results for JDS Uniphase's fourth quarter ended
June 30, 1999. For the quarter ended June 30, 1999, JDS Uniphase reported sales
of $87 million and a loss in the quarter of approximately $4.80 per share prior
to giving effect to the one-for-one stock dividend effected on July 23, 1999, or
a loss of $2.40 per share adjusted to reflect that dividend. The loss per share
includes a one-time charge of $210 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, pro forma net income for the quarter was $0.43
per share, or $0.21 per share after giving effect to the one-for-one stock
dividend. The Company's balance sheet as of June 30, 1999 reflects acquired
intangibles of $3.4 billion as a result of the JDS FITEL merger which will be
amortized over a five year period. We also announced the 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 $192 million and net income of $0.48 per share on a pre-stock
dividend diluted basis, after excluding the in-process research and development
charges, intangible amortization and restructuring charges aggregating $215
million as described above. The pro forma earnings per share would be $0.29 per
share after giving effect to the one-for-one stock dividend and to the same
exclusions.
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 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
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<PAGE> 23
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 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 were 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................. $ (0.74) $ (2.33) $ (3.88)
========= ========= =========
Dilutive earnings (loss) per share.............. $ (0.74) $ (2.33) $ (3.88)
========= ========= =========
Average number of shares outstanding............ 159,446 158,336 146,764
========= ========= =========
Average number of shares outstanding assuming
dilution...................................... 159,446 158,336 146,764
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, 1999 MARCH 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>
22
<PAGE> 24
<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................... $ 0.29 $ (0.28) $ (0.26) $ 0.06
========= ======== ======== =======
Dilutive earnings (loss) per share................ $ 0.27 $ (0.28) $ (0.26) $ 0.06
========= ======== ======== =======
Average number of shares outstanding............ 79,112 70,902 67,382 51,116
========= ======== ======== =======
Average number of shares outstanding assuming
dilution...................................... 85,318 70,902 67,382 55,824
========= ======== ======== =======
</TABLE>
23
<PAGE> 25
<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>
24
<PAGE> 26
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
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<PAGE> 27
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
26
<PAGE> 28
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
27
<PAGE> 29
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
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<PAGE> 30
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-
29
<PAGE> 31
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
30
<PAGE> 32
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
31
<PAGE> 33
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> 34
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> 35
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>
34
<PAGE> 36
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 Laboratory, 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
35
<PAGE> 37
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> 38
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 A. 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> 39
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> 40
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> 41
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
merger of Uniphase and JDS FITEL and 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, 88,388,480 shares of our common stock were
outstanding, giving effect to the merger of Uniphase and JDS FITEL and the stock
dividend of one share of our common stock for each outstanding share 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 merger of Uniphase and JDS FITEL and 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 not
been exercised and (2) excludes any shares
40
<PAGE> 42
purchased in the offering by this prospectus in the concurrent offering 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 27.1% -- 32,913,020 25.5%
9902 -- 49th Street
P.O. Box 939
Yellowknife, NWT, Canada
FEJ Sales Inc.(1)................................ 5,085,500 5.4% -- 5,085,500 5.0%
9902 -- 49th Street
P.O. Box 939
Yellowknife, NWT, Canada
Philips Electronics B.V. ........................ 5,709,634 6.5% -- 5,709,634 5.9%
Groenevousdseweg 1
5621 BA Eindhoven
The Netherlands
American Express(2).............................. 8,238,726 9.3% -- 8,238,726 8.6%
American Express Tower
200 Vesey Street
New York, NY 10285
EXECUTIVE OFFICERS AND DIRECTORS
Kevin N. Kalkhoven(3)........................ 2,151,286 2.4% 300,000 1,851,286 1.9%
Jozef Straus, Ph.D.(4)....................... 978,176 1.1% 300,000 678,176 *
Anthony R. Muller(5)......................... 425,424 * 130,000 295,424 *
M. Zita Cobb(6).............................. 189,728 * 188,000 1,728 *
Dan E. Pettit(7)............................. 763,134 * 190,000 573,134 *
Michael C. Phillips(8)....................... 100,350 * -- 100,350 *
Frederick L. Leonberger(9)................... 386,308 * 110,000 276,308 *
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 A. MacNaughton(16)...................... 6,290 * -- 6,290 *
Wilson Sibbett, Ph.D.(17).................... 83,750 * -- 83,750 *
William J. Sinclair(18)...................... 994,526 1.1% -- 994,526 1.0%
Casimir S. Skrzypczak(19).................... 70,554 * 15,000 55,554 *
All directors and executive officers as a group
(17 persons)(20)............................... 6,562,588 6.9% 1,400,000 5,162,588 5.1%
OTHER SELLING STOCKHOLDERS
17 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 55,166 *
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)............................ 150,316 * 47,400 102,916 *
Eitan Gertel(26)............................. 166,338 * 56,000 110,338 *
Russ Johnson(27)............................. 79,304 * 62,000 17,304 *
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>
41
<PAGE> 43
<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)................................ 801,268 * 300,000 501,268 *
Winfried Horsthuis(32)....................... 44,952 * 44,800 152 *
Yves Tremblay(33)............................ 113,394 * 18,000 95,394 *
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 *
Koichi Abe(37)............................... 119,650 * 23,800 95,850 *
</TABLE>
- ---------------
* Less than 1%
(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 257,512 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 720,664 shares issuable
upon exchange of the Exchangeable Shares (243,255 shares of which are held
by the Andarsan Trust #1, and 117,077 shares of which are held by the
Andarsan Trust #2, in each of which Mr. Straus has a beneficial interest)
of JDS Uniphase Canada Ltd. and the number of shares sold in the offering
includes 50,000 Exchangeable Shares.
(5) Includes 237,750 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999, and 9,520 shares held by Mr.
Muller's daughter.
(6) Includes 189,728 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(7) Includes 657,254 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 43,980 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 373,216 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999, and 400 shares held by
Katharine Leonberger and 400 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 72,332 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 3,050 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd. which are
held by Willowhill Limited in which Mr. Day has a beneficial interest.
(13) Includes 47,702 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 3,050 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd.
(14) Includes 35,554 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 2,222 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 4,068 shares issuable upon
exchange of Exchangeable Shares of JDS Uniphase Canada Ltd. which are held
by Leapfrog Capital Corporation in which Mr. McNaughton has a beneficial
interest.
(17) Includes 83,750 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(18) Includes 64,262 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 930,264 shares issuable
upon exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd. which
are held by The Devon Trust in which Mr. Sinclair has a beneficial
interest.
(19) Includes 70,554 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(20) Includes 5,466,090 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999, before the offering, 1,658,046
shares issuable upon exchange of the Exchangeable Shares of JDS Uniphase
Canada Ltd. and, after offering, 1,608,046 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.
42
<PAGE> 44
(24) Includes 83,302 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(25) Includes 150,312 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.
(30) Includes 97,500 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(31) Includes 189,280 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 602,836 shares issuable
upon exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd. The
number of shares sold in the offering includes 150,000 Exchangeable Shares
of JDS Uniphase Canada Ltd.
(32) Includes 44,952 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(33) Includes 26,444 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 44,218 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd. The number
of shares sold in the offering includes 4,000 Exchangeable Shares of JDS
Uniphase Canada Ltd.
(34) Includes 95,722 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 21,358 shares issuable upon
exchange of Exchangeable Shares of JDS Uniphase Canada Ltd.
(35) Includes 26,444 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999.
(36) Includes 85,646 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1999 and 4,576 shares issuable upon
exchange of Exchangeable Shares of JDS Uniphase Canada Ltd.
(37) Includes 77,804 shares subject to stock options currently exercisable or
exercisable within 60 days of June 30, 1994 and 41,846 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd. The number
of shares to be sold in the offering include 7,400 Exchangeable Shares of
JDS Uniphase Canada Ltd.
43
<PAGE> 45
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. 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 purchase agreement 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, Inc.............................
Thomas Weisel Partners LLC..................................
Warburg Dillon Read LLC.....................................
---------
Total............................................. 7,572,600
=========
</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 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 concurrent offering
of the Exchangeable Shares will be 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 common stock is offered subject to a number of 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 purchase from us up to a maximum of 15%
of the total number of shares of common stock sold by us and the selling
stockholders under this prospectus. 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.
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
44
<PAGE> 46
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.
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
45
<PAGE> 47
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 report thereon included therein and incorporated herein by
reference. Such consolidated
46
<PAGE> 48
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.
47
<PAGE> 49
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 Report on Form 10-Q for the quarter ended 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.
48
<PAGE> 50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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> 51
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> 52
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>
1.1 Form of Underwriting Agreement
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
</TABLE>
- ------------------------
*Attached as an Exhibit, with the corresponding Exhibit number, to Registrant's
Registration Statement on Form S-3, Registration Number 333-82795, filed on July
14, 1999.
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)
II-2
<PAGE> 53
of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(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> 54
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 27, 1999.
JDS UNIPHASE CORPORATION
By: /s/ KEVIN N. KALKHOVEN
-----------------------------------
Kevin N. Kalkhoven
Chief Executive Officer
and Co-Chairman of the Board
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 27, 1999
- --------------------------------------------- Chairman of the Board of
Kevin N. Kalkhoven Directors (Principal
Executive Officer)
Senior Vice President, Chief July 27, 1999
- --------------------------------------------- Financial Officer and
Anthony R. Muller* Secretary (Principal
Financial and Accounting
Officer)
President, Chief Operating July 27, 1999
- --------------------------------------------- Officer and Co-Chairman of
Jozef Straus* the Board of Directors
Director July 27, 1999
- ---------------------------------------------
Bruce D. Day*
Director July 27, 1999
- ---------------------------------------------
Peter A. Guglielmi*
Director July 27, 1999
- ---------------------------------------------
Robert E. Enos*
Director July 27, 1999
- ---------------------------------------------
Martin A. Kaplan*
</TABLE>
II-4
<PAGE> 55
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -------------
<S> <C> <C>
Director July 27, 1999
- ---------------------------------------------
John A. MacNaughton*
Director July 27, 1999
- ---------------------------------------------
Wilson Sibbett, Ph.D.*
Director July 27, 1999
- ---------------------------------------------
Casimir Skrzypczak*
Director July 27, 1999
- ---------------------------------------------
William J. Sinclair*
*By: /s/ KEVIN N. KALKHOVEN
---------------------------------------
Kevin N. Kalkhoven
Attorney-in-fact
</TABLE>
II-5
<PAGE> 56
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement
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
</TABLE>
- ------------------------
*Attached as an Exhibit, with the corresponding Exhibit number, to Registrant's
Registration Statement on Form S-3, Registration Number 333-82795, filed on July
14, 1999.
<PAGE> 1
EXHIBIT 1.1
Draft of July 26 1999
[Execution Copy]
[Conformed Copy]
_______________ Shares
JDS UNIPHASE CORPORATION
Common Stock
Underwriting Agreement
dated July 27, 1999
<PAGE> 2
UNDERWRITING AGREEMENT
July 27, 1999
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
600 Montgomery Street
San Francisco, California 94111
Ladies and Gentlemen:
INTRODUCTORY. JDS Uniphase Corporation, a Delaware corporation (the
"Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of [___] shares of its Common
Stock, par value $0.001 per share (the "Common Stock"); and the stockholders of
the Company named in Schedule B (collectively, the "Selling Stockholders")
severally propose to sell to the Underwriters an aggregate of [___] shares of
Common Stock. The [___] shares of Common Stock to be sold by the Company and the
[___] shares of Common Stock to be sold by the Selling Stockholders are
collectively called the "Firm Common Shares". In addition, the Company has
granted to the Underwriters an option to purchase up to an additional [___]
shares (the "Optional Common Shares") of Common Stock, as provided in Section 2.
The Firm Common Shares and, if and to the extent such option is exercised, the
Optional Common Shares are collectively called the "Common Shares". Banc of
America Securities LLC and Deutsche Bank Securities Inc. have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-82795), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including all documents incorporated or
deemed to be incorporated by reference therein and any information deemed to be
a part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act or the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (collectively, the "Exchange Act"), is
called the "Registration Statement". Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement", and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Common Shares, is
called the "Prospectus"; provided, however, if the Company has,
1.
<PAGE> 3
with the consent of the Representatives, elected to rely upon Rule 434 under the
Securities Act, the term "Prospectus" shall mean the Company's prospectus
subject to completion (each, a "preliminary prospectus") dated July 16, 1999
(such preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and filed by
the Company with the Commission under Rules 434 and 424(b) under the Securities
Act and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," "described" or
"stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
The Company, JDS Uniphase Canada Ltd., a subsidiary of the Company, and
certain stockholders thereof are concurrently entering into a purchase agreement
dated the date hereof (the "Exchangeable Share Purchase Agreement") with CIBC
World Markets Inc., Deutsche Bank Securities Limited, Nesbitt Burns Inc., RBC
Dominion Securities Inc., Scotia McLeod Inc., CT Securities Inc., First
Manhattan Securities Limited, Goepel McDermid Inc. and Sprott Securities Limited
(the "Exchangeable Share Purchasers"), providing for the issuance and sale to
the Exchangeable Share Purchasers of up to _____________ Exchangeable Shares of
JDS Uniphase Canada Ltd. (the "Firm Exchangeable Shares").
The Company and each of the Selling Stockholders hereby confirms
their respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the Commission
for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
2.
<PAGE> 4
Each preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to EDGAR (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date and at all subsequent times, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by the Representative expressly
for use therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
No order preventing or suspending the use of any preliminary prospectus
has been issued by the Commission.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to the Representatives two complete manually signed copies of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later of the
Second Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection with the
offering and sale of the Common Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to
be purchased by the Underwriters from the Company have been duly authorized for
issuance and
3.
<PAGE> 5
sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or included
in the offering contemplated by this Agreement, other than the Selling
Stockholders with respect to the Common Shares included in the Registration
Statement, and except for such rights as have been duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which information is
given in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(h) Independent Accountants. Ernst & Young LLP, Ernst & Young
Accountants and PricewaterhouseCoopers LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act and the Exchange Act.
(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration Statement and
included in the Prospectus present fairly the consolidated financial position of
the Company and its subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. The
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. Such financial statements and
supporting schedules have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the caption "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
The unaudited pro forma consolidated financial data of the Company and its
subsidiaries and the related notes thereto included (i) under the caption "JDS
Uniphase Summary Financial Data and Unaudited Pro Forma Financial Data," "JDS
Uniphase Summary Financial Data and
4.
<PAGE> 6
Unaudited Pro Forma Financial Data -- Reported Results of JDS Fitel for its
Quarter Ended May 31, 1999 and Uniphase for its Quarter ended June 30, 1999; Pro
Forma Combined Results" and elsewhere in the Prospectus and in the Registration
Statement and (ii) under the captions "Selected Historical Financial Data" and
"JDS Uniphase Unaudited Pro Forma Financial Statements" in the Company's
definitive Proxy Statement on Form 14-A filed with the Commission on June 2,
1999 (the "Proxy Statement") and elsewhere in the Proxy Statement present fairly
the information contained therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to proforma financial statements
and have been properly presented on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(j) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than the State of
California) where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change. Except
for the Exchangeable Shares of JDS Uniphase Canada Ltd. the Preference Shares of
JDS Inc. and the Class A Non-voting Preference Shares of JDS Uniphase Canada
Ltd., all of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. Except for certain subsidiaries of JDS Uniphase Canada Ltd., nine of
which is material to the business operations or financial performance of the
Company taken as a whole, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in the Proxy Statement.
(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company (other than the
Special Voting Share of the Company, which is described in the Proxy Statement)
is as set forth in the Prospectus under the caption "Capitalization" (other than
for subsequent issuances, if any, pursuant to employee benefit plans described
in the Prospectus or upon exercise of outstanding options described in the
Prospectus). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock (including the shares of
Common Stock owned by Selling Stockholders) have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable
5.
<PAGE> 7
for, any capital stock of the Company or any of its subsidiaries other than
those accurately described in the Prospectus. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(l) Stock Exchange Listing. The Common Stock (including the
Common Shares) is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act") and is listed on the Nasdaq National
Market, and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the National
Association of Securities Dealers, Inc. (the "NASD") is contemplating
terminating such registration or listing.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or similar organizational
documents or is in default (or, with the giving of notice or lapse of time,
would be in default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary corporate action and
will not result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any officer or director
of, or property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) there is a reasonable possibility that such action, suit or proceeding
might be determined
6.
<PAGE> 8
adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the best of
the Company's knowledge, is threatened or imminent.
(o) Intellectual Property Rights. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.
(p) All Necessary Permits, etc. The Company and each
subsidiary possess such valid and current certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings relating to
the revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.
(q) Title to Properties. The Company and each of its
subsidiaries had good and marketable title to all the properties and assets
reflected as owned in the financial statements referred to in Section 1(A)(i)
above as of the dates of such financial statements, in each case free and clear
of any security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as did not materially and adversely affect the value
of such property and did not materially interfere with the use made or proposed
to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment or
personal property by the Company or such subsidiary.
(r) Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against any
of them. The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in Section 1(A)(i) above in respect
of all federal, state and foreign income and franchise taxes for all periods as
to which the tax liability of the Company or any of its subsidiaries has not
been finally determined.
(s) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and after receipt
of payment for the Common Shares will not be, an "investment company" within the
meaning of Investment
7.
<PAGE> 9
Company Act and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries are
insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as
are generally deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or leased by
the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse Change.
Neither of the Company nor any subsidiary has been denied any insurance coverage
which it has sought or for which it has applied.
(u) No Price Stabilization or Manipulation. The Company has
not taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock or the Exchangeable Shares of JDS
Uniphase Canada Ltd. to facilitate the sale or resale of the Common Shares or
the Exchangeable Shares.
(v) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Prospectus which
have not been described therein as required by the Exchange Act or the
Securities Act.
(w) No Unlawful Contributions or Other Payments. Neither the
Company nor any of its subsidiaries nor, to the best of the Company's knowledge,
any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character required to
be disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains a
system of accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) Exchange Act Compliance. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective
8.
<PAGE> 10
and at the First Closing Date and the Second Closing Date, as the case may be,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(z) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i)
neither the Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign law or regulation applicable to it relating to pollution
or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environment Concern
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiaries
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or any of its subsidiaries
is in violation of any applicable Environmental Law; (ii) there is no claim,
action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written notice, and
no written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys' fees or
penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its subsidiaries, now or in
the past (collectively, "Environmental Claims"), pending or, to the best of the
Company's knowledge, threatened against the Company or any of its subsidiaries
or any person or entity whose liability for any Environmental Claim the Company
or any of its subsidiaries has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that reasonably
could result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company or any of its subsidiaries or
against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually
or by operation of law.
(aa) Periodic Review of Costs of Environmental Compliance. In
the ordinary course of its business, the Company conducts a periodic review of
the effect of applicable Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On
9.
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the basis of such review and the amount of its established reserves, the Company
has reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Change.
(bb) ERISA Compliance. The Company and its subsidiaries and
any "employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")), established or maintained
by the Company, its subsidiaries or their "ERISA Affiliates" (as defined below)
are in compliance in all material respects with ERISA. "ERISA Affiliate" means,
with respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such subsidiary
is a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates. No "employee benefit plan" established or maintained by the Company,
its subsidiaries or any of their ERISA Affiliates, if such "employee benefit
plan" were terminated, would have any "amount of unfunded benefit liabilities"
(as defined under ERISA). Neither the Company, its subsidiaries nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any
"employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each "employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification.
(cc) Year 2000. All disclosure regarding year 2000 compliance
that is required to be described under the 1933 Act and 1933 Regulations
(including disclosures required by Staff Legal Bulletin No. 5) has been included
in the Prospectus. The Company and its subsidiaries will not incur significant
operating expenses or costs to ensure that its information systems will be year
2000 complaint, other than as disclosed in the Prospectus.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. In
addition to the representations, warranties and covenants set forth in Section
1(A), each Selling Stockholder severally, but not jointly, represents, warrants
and covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and is a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
10.
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other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the
(i) Custody Agreement signed by such Selling Stockholder and American Stock
Transfer & Trust Company, as custodian (the "Custodian"), relating to the
deposit of the Common Shares to be sold by such Selling Stockholder (the
"Custody Agreement") and (ii) Power of Attorney appointing certain individuals
named therein as such Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact") to the extent set forth therein relating to the transactions
contemplated hereby and by the Prospectus (the "Power of Attorney"), of such
Selling Stockholder has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(c) Title to Common Shares to be Sold; All Authorizations
Obtained. Such Selling Stockholder, on the First Closing Date and the Second
Closing Date (as defined below) will have, good and valid title to all of the
Common Shares which may be sold by such Selling Stockholder pursuant to this
Agreement on such date and the legal right and power, and all authorizations and
approvals required by law to enter into this Agreement and its Custody Agreement
and Power of Attorney, to sell, transfer and deliver all of the Common Shares
which may be sold by such Selling Stockholder pursuant to this Agreement and to
comply with its other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Delivery of the
Common Shares which are sold by such Selling Stockholder pursuant to this
Agreement will pass good and valid title to such Common Shares, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or other claim.
(e) Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by such Selling Stockholder of, and the
performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney will not contravene
or conflict with, result in a breach of, or constitute a Default under, or
require the consent of any other party to, the charter or by-laws, trust
agreement or other organizational documents, if applicable, of such Selling
Stockholder or any other agreement or instrument to which such Selling
Stockholder is a party or by which it is bound or under which it is entitled to
any right or benefit, any provision of applicable law or any judgment, order,
decree or regulation applicable to such Selling Stockholder of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder. No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental authority or agency, is required for the consummation by such
Selling Stockholder of the transactions contemplated in this Agreement, except
such as have been obtained or made and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from the NASD.
11.
<PAGE> 13
(f) No Registration or Other Similar Rights. Such Selling
Stockholder does not have any registration or other similar rights to have any
equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as are described in the Prospectus under
"Shares Eligible for Future Sale".
(g) Disclosure Made by Such Selling Stockholder in the
Prospectus. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus is, and on the First Closing Date and the Second Closing Date will
be, true, correct, and complete in all material respects, and does not, and on
the First Closing Date and the Second Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make such information not misleading. Such Selling Stockholder confirms as
accurate the number of shares of Common Stock set forth opposite such Selling
Stockholder's name in the Prospectus under the caption "Principal and Selling
Stockholders" (both prior to and after giving effect to the sale of the Common
Shares).
(h) No Price Stabilization or Manipulation. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock or the
Exchangeable Shares of JDS Uniphase Canada Ltd., a subsidiary of the Company, to
facilitate the sale or resale of the Common Shares or the Exchangeable Shares.
(i) Confirmation of Company Representations and Warranties.
Such Selling Stockholder has no reason to believe that the representations and
warranties of the Company contained in Section 1(A) hereof are not true and
correct, is familiar with the Registration Statement and the Prospectus and has
no knowledge of any material fact, condition or information not disclosed in the
Registration Statement or the Prospectus which has had or may have a Material
Adverse Change and is not prompted to sell shares of Common Stock by any
information concerning the Company or its subsidiaries which is not set forth in
the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
[___] Firm Common Shares and (ii) the Selling Stockholders agree severally, but
not jointly, to sell to the several Underwriters an aggregate of [___] Firm
Common Shares, each Selling Stockholder selling the number of Firm Common Shares
set forth opposite such Selling Stockholder's name on Schedule B. On the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders the respective number of
12.
<PAGE> 14
Firm Common Shares set forth opposite their names on Schedule A. The purchase
price per Firm Common Share to be paid by the several Underwriters to the
Company and the Selling Stockholders shall be $[___] per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Banc of America Securities LLC, 600 Montgomery Street, San
Francisco, California (or such other place as may be agreed to by the Company
and the Representatives) at 6:00 a.m. San Francisco time, on July __, 1999, or
such other time and date not later than 10:30 a.m. San Francisco time, on August
__, 1999 as the Representatives shall designate by notice to the Company (the
time and date of such closing are called the "First Closing Date"). The Company
and the Selling Stockholders hereby acknowledge that circumstances under which
the Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company, the Selling Stockholders or the Representatives to recirculate to
the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of [___] Optional Common Shares from the Company
at the purchase price per share to be paid by the Underwriters for the Firm
Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representative and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representative may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
Public Offering of the Common Shares. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon
13.
<PAGE> 15
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representative, in its sole judgment, has determined
is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares to be
sold by the Company shall be made at the First Closing Date (and, if applicable,
at the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Common Shares to be sold by the
Selling Stockholders shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of immediately
available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. Banc of America Securities LLC, or Deutsche Bank Securities Inc.
individually and not as the Representatives of the Underwriters, may (but shall
not be obligated to) make payment for any Common Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representatives by
the First Closing Date or the Second Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Common Shares to be sold by such Selling Stockholder
to the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
Delivery of the Common Shares. The Company and the Selling
Stockholders shall deliver, or cause to be delivered, to the Representatives for
the accounts of the several Underwriters certificates for the Firm Common Shares
to be sold by them at the First Closing Date, against the irrevocable release of
a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase at the
Second Closing Date against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. The
certificates for the Common Shares shall be in definitive form and registered in
such names and denominations as the Representative shall have requested at least
two full business days prior to the First Closing Date (or the Second Closing
Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or the Second Closing Date, as
the case may be) at a location in New York City as the Representatives may
designate. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00
p.m. on the second business day following the date the Common Shares are first
released by the
14.
<PAGE> 16
Underwriters for sale to the public, the Company shall deliver or cause to be
delivered, copies of the Prospectus in such quantities and at such places as the
Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) Representative's Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending on the
later of the First Closing Date or such date, as in the opinion of counsel for
the Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus (including any amendment or supplement through
incorporation by reference of any report filed under the Exchange Act), the
Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representatives reasonably
objects.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Representative in writing (i)
of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus or the Prospectus, (iii) of the time
and date that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any proceedings to remove,
suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as applicable,
under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a timely
manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representative or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section
3(A)(a) hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or
15.
<PAGE> 17
supplemented will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representatives, without charge,
during the Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto (including any documents incorporated or
deemed incorporated by reference therein) as the Representatives may request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws of
those jurisdictions designated by the Representative, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company
will make generally available to its security holders and to the Representatives
an earnings statement (which need not be audited) covering the twelve-month
period ending September 30, 2000 that satisfies the provisions of Section 11(a)
of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the Commission
and the Nasdaq National Market all reports and documents required to be filed
under the Exchange Act in the manner and within the time periods required by the
Exchange Act. Additionally, the Company shall report the use of proceeds from
the issuance of the Common Shares as may be required under Rule 463 under the
Securities Act.
(j) Agreement Not To Offer or Sell Additional Securities.
During the period of 90 days following the date of the Prospectus, the Company
will not, without the prior written consent of Banc of America Securities LLC,
Deutsche Bank Securities Inc. and CIBC
16.
<PAGE> 18
World Markets Inc. (which consent may be withheld at the sole discretion of Banc
of America Securities LLC, Deutsche Bank Securities Inc. and CIBC World Markets
Inc.), directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act or any prospectus under Canadian provincial securities laws
in respect of, any shares of Common Stock, options or warrants to acquire shares
of the Common Stock or securities exchangeable or exercisable for or convertible
into shares of Common Stock, including without limitation any Exchangeable
Shares of JDS Uniphase Canada Ltd. (other than as contemplated by this Agreement
with respect to the Common Shares and in the Exchangeable Share Purchase
Agreement with respect to Exchangeable Shares); provided, however, that the
Company may issue shares of its Common Stock or options to purchase its Common
Stock, or Common Stock upon exercise of options, pursuant to any stock option,
stock bonus or other stock plan or arrangement described in the Prospectus, up
to 300,000 shares of Common Stock pursuant to a planned employee stock purchase
plan for the benefit of employees of JDS Uniphase Canada Ltd., and up to
2,000,000 additional shares of Common Stock and/or Exchangeable Shares in
connection with strategic acquisitions of businesses, assets or technology by
the Company, but only if the holders of such shares, options, or shares issued
upon exercise of such options, agree in writing not to sell, offer, dispose of
or otherwise transfer any such shares or options during such 90 day period
without the prior written consent of Banc of America Securities LLC, Deutsche
Bank Securities, Inc. and CIBC World Markets Inc. (which consent may be withheld
at the sole discretion of Banc of America Securities LLC, Deutsche Bank
Securities, Inc. and CIBC World Markets Inc.).
(k) Future Reports to the Representatives. During the period
of five years hereafter the Company will furnish to Banc of America Securities
LLC at 600 Montgomery Street, San Francisco, CA 94111, Attention:
___________________ and to Deutsche Bank Securities Inc. at 101 California
Street, 48th Floor, San Francisco, CA 94111, Attention: Tony Meneghetti: (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, the NASD or any securities exchange;
and (iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such
Selling Stockholder will not, without the prior written consent of Banc of
America Securities LLC, Deutsche Bank Securities, Inc. and CIBC World Markets
Inc. (which consent may be withheld at the sole discretion of Banc of America
Securities LLC, Deutsche Bank Securities, Inc. and CIBC World Markets Inc.),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put
17.
<PAGE> 19
equivalent position" within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock, including without limitation any
Exchangeable Shares of JDS Uniphase Canada Ltd., currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under Securities
Exchange Act of 1934, as amended) by the undersigned, or publicly announce the
undersigned's intention to do any of the foregoing, for a period commencing on
the date hereof and continuing through the close of trading on the date 90 days
after the date of the Prospectus.
(b) Delivery of Forms W-8 and W-9. To deliver to the
Representatives prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-8 (if the Selling Stockholder
is a non-United States person) or Form W-9 (if the Selling Stockholder is a
United States Person).
Without the express written consent of Banc of America Securities LLC,
Deutsche Bank Securities, Inc. and CIBC World Markets Inc., no Underwriter may
waive the performance by the Company or any Selling Stockholder of any one or
more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company and the Selling Stockholders,
jointly and severally, agree to pay in such proportions as they may agree upon
among themselves all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Common Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of
experts), each preliminary prospectus and the Prospectus, and all amendments and
supplements thereto, and this Agreement, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the state securities or blue sky laws or the provincial securities laws of
Canada, and, if requested by the Representative, preparing and printing a "Blue
Sky Survey" or memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with including the Common Shares
on the Nasdaq National Market, and (ix) all other fees, costs and expenses
referred to in Item 14 of Part II of the Registration Statement. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.
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The Selling Stockholders further agree with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement which are not otherwise specifically
provided for herein, including but not limited to (i) fees and expenses of
counsel and other advisors for such Selling Stockholders, (ii) fees and expenses
of the Custodian and (iii) expenses and taxes incident to the sale and delivery
of the Common Shares to be sold by such Selling Stockholders to the Underwriters
hereunder (which taxes, if any, may be deducted by the Custodian under the
provisions of Section 2 of this Agreement).
This Section 4 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the Company,
on the one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from each of Ernst & Young LLP and
PricewaterhouseCoopers LLP, independent public or certified public accountants
for the Company, a letter dated the date hereof addressed to the Underwriters,
in form and substance satisfactory to the Representatives, containing statements
and information of the type ordinarily included in accountant's "comfort
letters" to underwriters, delivered according to Statement of Auditing Standards
No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Registration Statement and the Prospectus (and the Representatives shall have
received an additional eight (8) conformed copies of such accountants' letter
for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required by such Rule
430A, and such post-effective amendment shall have become effective; or, if the
Company elected to rely upon Rule 434 under the Securities Act and
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obtained the Representative's consent thereto, the Company shall have filed a
Term Sheet with the Commission in the manner and within the time period required
by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For
the period from and after the date of this Agreement and prior to the First
Closing Date and, with respect to the Optional Common Shares, the Second Closing
Date in the judgment of the Representatives there shall not have occurred any
Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Morrison & Foerster, LLP counsel for the Company, dated
as of such Closing Date, the form of which is attached as Exhibit A (and the
Representatives shall have received an additional seven (7) conformed copies of
such counsel's legal opinion for each of the several Underwriters).
(e) Opinion of Counsel for Significant Subsidiaries of the
Company. On each of the First Closing Date and the Second Closing date the
Representatives shall have received the favorable opinion of local counsel to
the following subsidiaries of the Company incorporated outside the United
States: Uniphase Netherlands B.V., Uniphase International B.V., Uniphase Laser
Enterprise AG, JDS Uniphase Nova Scotia Company, JDS Uniphase Inc. and JDS
Uniphase Canada Ltd. Each such opinion shall be dated as of the Closing Date and
shall be substantially in the form attached as Exhibit B (and the
Representatives shall have received an additional seven (7) conformed copies of
such counsel's legal opinion for each of the several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the
First Closing Date and the Second Closing Date the Representatives shall have
received the favorable opinion of Cooley Godward LLP, counsel for the
Underwriters, dated as of such Closing Date, with respect to the matters set
forth in paragraphs (viii), (ix), (x) (xi) and (xiii) (with respect to the
caption "Underwriting" under subparagraph (i) only), and the next-to-last
paragraph of Exhibit A (and the Representative shall have received an additional
seven (7) conformed copies of such counsel's legal opinion for each of the
several Underwriters).
(g) Officers' Certificate. On each of the First Closing Date
and the Second Closing Date the Representative shall have received a written
certificate executed by the Co-Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:
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(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not occurred any Material
Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1(A) of this Agreement are true and correct
with the same force and effect as though expressly made on and as of such
Closing Date; and
(iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received from
each of Ernst & Young LLP, Ernst & Young Accountants and PricewaterhouseCoopers
LLP, independent public or certified public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional eight (8) conformed copies of such accountants' letter
for each of the several Underwriters).
(i) Opinion of Counsel for the Selling Stockholders. On each
of the First Closing Date and the Second Closing Date the Representatives shall
have received the favorable opinion of Morrison & Foerster LLP, counsel for the
Selling Stockholders (or such other counsel acceptable to the Representatives),
dated as of such Closing Date, the form of which is attached as Exhibit B (and
the Representatives shall have received an additional seven (7) conformed copies
of such counsel's legal opinion for each of the several Underwriters).]
(j) Selling Stockholders' Certificate. On the First Closing
Date the Representatives shall receive a written certificate executed by the
Attorney-in-Fact of each Selling Stockholder, dated as of such Closing Date, to
the effect that:
(i) the representations, warranties and covenants of
such Selling Stockholder set forth in Section 1(B) of this Agreement are true
and correct with the same force and effect as though expressly made by such
Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(k) Selling Stockholders' Documents. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by the
Representatives copies of the Powers of Attorney and Custody Agreements executed
by each of the Selling Stockholders and such further information, certificates
and documents as the Representatives may reasonably request.
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(l) Lock-Up Agreement from Certain Securityholders of the
Company Other Than Selling Stockholders. On the date hereof, the Company shall
have furnished to the Representatives an agreement substantially in the form of
Exhibit C hereto from each director, officer and each beneficial owner of Common
Stock (as defined and determined according to Rule 13d-3 under the Exchange
Act), and such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.
(m) Concurrent Offering. On the date hereof, the Company
and JDS Uniphase Canada Ltd. shall have entered into the Exchangeable Share
Purchase Agreement.
(n) Additional Documents. On or before each of the First
Closing Date and the Second Closing Date, the Representatives and counsel for
the Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representative pursuant to Section 5, Section 7, Section 10 or
Section 11 or Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Stockholders to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse the Representative and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representative and the Underwriters in connection
with the proposed purchase and the offering and sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company or the Selling
Stockholders to any Underwriter, except that the Company and the Selling
Stockholders shall be obligated to reimburse the expenses of the
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Representative and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of
any Underwriter to the Company or the Selling Stockholders, or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. Each of the Company
and each of the Selling Stockholders, jointly and severally, agree to indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company or the Selling Stockholders
contained herein; or (iv) in whole or in part upon any failure of the Company or
the Selling Stockholders to perform their respective obligations hereunder or
under law; or (v) any act or failure to act or any alleged act or failure to act
by any Underwriter in connection with, or relating in any manner to, the Common
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or expense resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by the Representatives) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company and the Selling Stockholders by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the
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benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense; and provided, however,
that the liability of each Selling Stockholder under the foregoing indemnity
agreement shall be limited to an amount equal to the initial public offering
price of the Common Shares sold by such Selling Stockholder, less the
underwriting discount, as set forth on the front cover page of the Prospectus.
The indemnity agreement set forth in this Section 8(a) shall be in addition to
any liabilities that the Company and the Selling Stockholders may otherwise
have.
(b) Indemnification of the Company, its Directors and
Officers. Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Stockholders and each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director,
officer, Selling Stockholder or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company and the Selling Stockholders by the Representative
expressly for use therein; and to reimburse the Company, or any such director,
officer, Selling Stockholder or controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. Each of the Company and each of the Selling
Stockholders, hereby acknowledges that the only information that the
Underwriters have furnished to the Company and the Selling Stockholders
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth under the caption "Underwriting" in the Prospectus; and the Underwriters
confirm that such statements are correct. The indemnity agreement set forth in
this Section 8(b) shall be in addition to any liabilities that each Underwriter
may otherwise have. The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the
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Underwriters under this Agreement as to the respective amounts of such liability
for which they each shall be responsible.
(c) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this Section
8, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 8 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (the Representatives in the case of
Section 8(b) and Section 9), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such
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indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders, on the one hand,
and the Underwriters, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholders, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders, on the one hand, and the Underwriters,
on the other hand, in connection with the offering of the Common Shares pursuant
to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Stockholders, and the total underwriting discount received by the Underwriters,
in each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate public offering price of the Common Shares as set
forth on such cover. The relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the
Selling Stockholders, on the one hand, or the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for
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contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representative with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but
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in no event for longer than seven days in order that the required changes, if
any, to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date
this Agreement may be terminated by any Underwriter, with respect to its
obligations hereunder, by notice given to the Company and the Selling
Stockholders if at any time (i) trading or quotation in any of the Company's or
JDS Uniphase Canada Ltd.'s securities shall have been suspended or limited by
the Commission, the Nasdaq National Market, Canadian provincial securities
commissions or The Toronto Stock Exchange, or trading in securities generally on
either the Nasdaq Stock Market, the New York Stock Exchange or The Toronto Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission, the NASD, Canadian provincial securities commissions or The Toronto
Stock Exchange; (ii) a general banking moratorium shall have been declared by
any of the United States or Canadian federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States, Canadian or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States', Canadian or international political, financial or economic
conditions, as in the judgment of the Underwriter is material and adverse and
makes it impracticable to market the Common Shares in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Underwriter there shall have occurred
any Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Underwriter may interfere materially with the conduct of
the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company or the Selling Stockholders
to any Underwriter, except that the Company and the Selling Stockholders shall
be obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the
Company or the Selling Stockholders, or (c) of any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
28.
<PAGE> 30
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 913-5558
Attention: __________________
Deutsche Bank Securities Inc.
One South Street
Baltimore, MD 21202
Facsimile: (410) 895-3619
Attention: Daniel McIntyre
with a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306-2155
Facsimile: (650) 857-0663
Attention: Patrick A. Pohlen, Esq.
Banc of America Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 913-5553
Attention: Jeffrey R. Lapic, Esq.
If to the Company:
JDS Uniphase Corporation
163 Baypointe Parkway
San Jose, California 95134
Facsimile: (408) 954-0540
Attention: Kevin N. Kalkhoven, Chief Executive Officer
with a copy to:
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105
Facsimile: (415) 268-7584
Attention: Bruce A. Mann, Esq.
29.
<PAGE> 31
If to the Selling Stockholders:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Facsimile: [___]
Attention: [___]
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(a) Consent to Jurisdiction. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City and County of San
Francisco or the courts of the State of California in each case located in the
City and County of San Francisco (collectively, the "Specified Courts"), and
each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive) of
such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum. Each party
not located in the United States irrevocably appoints CT Corporation System,
which currently maintains a San Francisco office at 49 Stevenson Street, San
Francisco, California 94105, United
30.
<PAGE> 32
States of America, as its agent to receive service of process or other legal
summons for purposes of any such suit, action or proceeding that may be
instituted in any state or federal court in the City and County of San
Francisco.
(b) Waiver of Immunity. With respect to any Related
Proceeding, each party irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or otherwise)
from jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the Specified
Courts, and with respect to any Related Judgment, each party waives any such
immunity in the Specified Courts or any other court of competent jurisdiction,
and will not raise or claim or cause to be pleaded any such immunity at or in
respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign
Immunities Act of 1976, as amended.
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL AND
DELIVER COMMON SHARES. If one or more of the Selling Stockholders shall fail to
sell and deliver to the Underwriters the Common Shares to be sold and delivered
by such Selling Stockholders at the First Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from the
Representatives to the Company and the Selling Stockholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 4, 6, 8 and 9 hereof, the Company or the
Selling Stockholders, or (ii) purchase the shares which the Company and other
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof. If one or more of the Selling Stockholders shall fail to sell and
deliver to the Underwriters the Common Shares to be sold and delivered by such
Selling Stockholders pursuant to this Agreement at the First Closing Date, then
the Underwriters shall have the right, by written notice from the
Representatives to the Company and the Selling Stockholders, to postpone the
First Closing Date, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in
31.
<PAGE> 33
order to assure that adequate disclosure has been made in the Registration
Statement, any preliminary prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
32.
<PAGE> 34
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company [and the Custodian] the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
JDS UNIPHASE CORPORATION
By:
----------------------------------
[Name and Title]
SELLING STOCKHOLDERS
By:
----------------------------------
(Attorney-in-fact)
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
BANC OF AMERICA SECURITIES LLC
By:
---------------------------------
Revell Horsey
Director of Capital Markets
DEUTSCHE BANK SECURITIES INC.
By:
---------------------------------
Peter Breck
Managing Director
33.
<PAGE> 35
SCHEDULE A
<TABLE>
<CAPTION>
NUMBER OF FIRM
COMMON SHARES TO BE
UNDERWRITERS PURCHASED
- ------------ -------------------
<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............................................. [___]
</TABLE>
<PAGE> 36
SCHEDULE B
<TABLE>
<CAPTION>
NUMBER OF FIRM COMMON
SELLING STOCKHOLDER SHARES TO BE SOLD
- ------------------- ---------------------
<S> <C>
Kevin N. Kalkhoven................................. 300,000
Jozef Straus, Ph.D................................. 250,000
Anthony R. Muller.................................. 130,000
M. Zita Cobb....................................... 188,000
Dan E. Pettit...................................... 190,000
Frederick L. Leonberger............................ 110,000
Leo Lefebvre....................................... 26,000
Joseph Ip.......................................... 106,000
Bruce D. Day....................................... 8,000
Peter A. Guglielmi................................. 12,000
Martin A. Kaplan................................... 15,000
Casimir S. Skrzypczak.............................. 15,000
Kerry DeHority..................................... 26,000
John Scott......................................... 80,000
Bruce Worster...................................... 48,000
Lindsay Austin..................................... 40,000
Paul Suchoski...................................... 47,400
Eitan Gertel....................................... 56,000
Russ Johnson....................................... 62,000
Volker Graf........................................ 76,000
Tim Greaves........................................ 23,400
David Mackenzie.................................... 44,000
Gary Duck.......................................... 150,000
Winfried Horsthuis................................. 44,800
Yves Tremblay...................................... 14,000
Brian Kawasaki..................................... 50,000
David King......................................... 18,000
Jozef Finak........................................ 70,000
Koichi Abe......................................... 16,400
---------
Total:....................................... 2,216,000
</TABLE>
- ----------
* Significant Selling Stockholder
<PAGE> 37
EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to
Section 5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any
supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in the State of
California and in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than the State of
California) where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.
(iv) Each significant United States subsidiary of
the Company (as defined in Rule 405 under the Securities Act) has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and, to the knowledge of such counsel, is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change.
(v) All of the issued and outstanding capital stock of
each such significant United States subsidiary of the Company has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or, to the best knowledge of such
counsel, any pending or threatened claim.
(vi) The authorized, issued and outstanding capital
stock of the Company (including the Common Stock) conform to the descriptions
thereof set forth or incorporated by reference in the Prospectus. All of the
outstanding shares of Common Stock (including the shares of Common Stock owned
by Selling Stockholders) have been duly authorized and validly issued, are fully
paid and nonassessable and, to such counsel's knowledge, have been issued in
compliance with the registration and qualification requirements of federal and
state securities laws. The form of certificate used to evidence the Common Stock
is in due and proper form and complies with all applicable requirements of the
charter and by-laws of the Company and the General Corporation Law of the State
of Delaware. The description of the Company's stock option, stock bonus and
other stock plans or arrangements,
A-1
<PAGE> 38
and the options or other rights granted and exercised thereunder, set forth in
the Prospectus accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights.
(vii) No stockholder of the Company or any other person
has any preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (i) by operation of
the charter or by-laws of the Company or the General Corporation Law of the
State of Delaware or (ii) to the knowledge of such counsel, otherwise.
(viii) The Underwriting Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(ix) The Common Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance and sale
pursuant to the Underwriting Agreement and, when issued and delivered by the
Company pursuant to the Underwriting Agreement against payment of the
consideration set forth therein, will be validly issued, fully paid and
nonassessable.
(x) The Registration Statement has been declared
effective by the Commission under the Securities Act. To the knowledge of such
counsel, no stop order suspending the effectiveness of either of the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued under the Securities Act and no proceedings for such purpose have
been instituted or are pending or, to our knowledge, are threatened by the
Commission. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made in the manner and
within the time period required by such Rule 424(b).
(xi) The Registration Statement, the Prospectus,
including any document incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectus, including any
document incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements, supporting schedules and other
financial or statistical information included or incorporated by reference
therein or in exhibits to or excluded from the Registration Statement, as to
which no opinion need be rendered) comply as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange Act.
(xii) The Common Shares have been approved for listing
on the Nasdaq National Market.
(xiii) The statements (i) in the Prospectus under the
captions "Risk Factors--Our Current Outstanding Preferred Stock and our Ability
to Issue Additional Preferred Stock Could Impair the Rights of our Common
Stockholders", "Risk Factors--We
A-2
<PAGE> 39
Have a Substantial Number of Shares Eligible for Future Sale", and "Risk
Factors--Certain Anti-takeover Provisions contained in our Charter and Under
Delaware Law Could Impair a takeover Attempt", (ii) in the Proxy Statement under
the captions "Uniphase Capital Stock," "Business of Uniphase - Indebtedness of
Officers and Directors" and "Business of Uniphase - Interests of Insiders in
Prior Transactions," and (iii) in Item 14 and Item 15 of the Registration
Statement, insofar as such statements constitute matters of law, summaries of
legal matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred to
therein.
(xiv) To the knowledge of such counsel, there are no
legal or governmental actions, suits or proceedings pending or threatened which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.
(xvi) No consent, approval, authorization or other order
of, or registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of the Underwriting
Agreement by the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations under the
indemnification section of the Underwriting Agreement, as to which no opinion
need be rendered) (i) have been duly authorized by all necessary corporate
action on the part of the Company; (ii) will not result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary; (iii)
will not constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to the best knowledge of such
counsel, any material Existing Instrument; or (iv) to the knowledge of such
counsel, will not result in any violation of any law, administrative regulation
or administrative or court decree applicable to the Company or any subsidiary.
(xviii) The Company is not, and after receipt of payment
for the Common Shares will not be, an "investment company" within the meaning of
Investment Company Act.
(xix) Except as disclosed in the Prospectus under the
caption "Risk Factors - We have a Substantial Number of Shares Eligible for
Future Sale", to the knowledge of such counsel, there are no persons with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in
A-3
<PAGE> 40
the offering contemplated by the Underwriting Agreement, other than the Selling
Stockholders, except for such rights as have been duly waived.
(xx) To the knowledge of such counsel, neither the
Company nor any United States subsidiary is in violation of its charter or
by-laws or any law, administrative regulation or administrative or court decree
applicable to the Company or any subsidiary or is in Default in the performance
or observance of any obligation, agreement, covenant or condition contained in
any material Existing Instrument, except in each such case for such violations
or Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change.
(xxi) Each document filed pursuant to the Exchange Act
(other than the financial statements and supporting schedules included therein,
as to which no opinion need be rendered) and incorporated or deemed to be
incorporated by reference in the Prospectus complied when so filed as to form in
all material respects with the Exchange Act; and nothing has come to such
counsel's attention which would lead them to believe that any of such documents,
when they were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were filed, not misleading.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included or incorporated by reference in the Registration
Statement or the Prospectus or any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
State of California or the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to
A-4
<PAGE> 41
the Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
A-5
<PAGE> 42
EXHIBIT B
Opinion of counsel for significant foreign subsidiaries of the
Company to be delivered pursuant to Section 5(e) of the Underwriting Agreement.
References to the Prospectus in this Exhibit B include any
supplements thereto at the Closing Date.
(i) The subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of [APPLICABLE
JURISDICTION].
(ii) The subsidiary has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus.
(iii) The subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.
(iv) All of the issued and outstanding capital stock
of the subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company [(with the exception of the issued
and outstanding Exchangeable Shares of JDS Uniphase Canada Ltd.)], directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or, to the best knowledge of such counsel, any pending or
threatened claim.
(v) No person has any preemptive right, right of first
refusal or other similar right to subscribe for or purchase securities of the
subsidiary arising (i) by operation of the charter or by-laws of the subsidiary
or the applicable law, rules or regulations of the jurisdiction of such
subsidiary's incorporation or (ii) to the knowledge of such counsel, otherwise.
(vi) To the knowledge of such counsel, the subsidiary is
not in violation of its charter or by-laws or any law, administrative regulation
or administrative or court decree applicable to the subsidiary.
(vii) [TO BE PROVIDED ONLY BY TORY TORY DESLAURIERS &
BINNINGTON] The statements in the Proxy Statement under the captions
"Description of the Exchangeable Shares," "Business of JDS - Interests of
Insiders in Prior Transactions," "Business of JDS - Legal Proceedings," and
"Exchange Share Capital," insofar as such statements constitute matters of law,
summaries of legal matters, the Company's or its subsidiaries' charter or by-law
provisions, documents or legal proceedings, or legal conclusions, has been
reviewed by such counsel and fairly present and summarize, in all material
respects, the matters referred to therein.
B-1
<PAGE> 43
In rendering such opinion, such counsel may rely to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representative) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; provided, however, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the applicable
subsidiary and public officials.
B-2
<PAGE> 44
EXHIBIT C
The opinion of such counsel pursuant to Section 5(i) shall be
rendered to the Representatives at the request of the Company and shall so state
therein. References to the Prospectus in this Exhibit B include any supplements
thereto at the Closing Date.
(i) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of, and is a valid and binding agreement
of, such Selling Stockholder, enforceable in accordance with its terms, except
as rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(ii) The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, the Underwriting Agreement and its Custody Agreement and its
Power of Attorney will not contravene or conflict with, result in a breach of,
or constitute a default under, the charter or by-laws, partnership agreement,
trust agreement or other organizational documents, as the case may be, if
applicable, of such Selling Stockholder, or, to such counsel's knowledge,
violate or contravene any provision of applicable law or regulation, or violate,
result in a breach of or constitute a default under the terms of any other
agreement or instrument to which such Selling Stockholder is a party or by which
it is bound, or any judgment, order or decree applicable to such Selling
Stockholder of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over such Selling Stockholder.
(iii) Such Selling Stockholder (a) to such counsel's
knowledge, has good and valid title to all of the Common Shares which may be
sold by such Selling Stockholder under the Underwriting Agreement and (b) has
the legal right and power, and all authorizations and approvals required under
its charter and by-laws, partnership agreement, trust agreement or other
organizational documents, as the case may be, if applicable, to enter into the
Underwriting Agreement and its Custody Agreement and its Power of Attorney, to
sell, transfer and deliver all of the Common Shares which may sold by such
Selling Stockholder under the Underwriting Agreement and to comply with its
other obligations under the Underwriting Agreement, its Custody Agreement and
its Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney
of such Selling Stockholder has been duly authorized, executed and delivered by
such Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(v) Assuming that the Underwriters purchase the Common
Shares which are sold by such Selling Stockholder pursuant to the Underwriting
Agreement for value, in good faith and without notice of any adverse claim, the
delivery of such Common Shares pursuant to the Underwriting Agreement will pass
good and valid title to such Common
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Shares, free and clear of any security interest, mortgage, pledge, lieu
encumbrance or other claim.
(vi) To such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing with, any court or
governmental authority or agency, is required for the consummation by such
Selling Stockholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, applicable state
securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
State of California or the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representative) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; provided, however, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (B) as to matters of fact, to the extent they
deem proper, on certificates of the Selling Stockholders and public officials
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TABLE OF CONTENTS
<TABLE>
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Section 1. Representations and Warranties............................................................... 2
A. Representations and Warranties of the Company................................................ 2
(a) Compliance with Registration Requirements........................................... 2
(b) Offering Materials Furnished to Underwriters........................................ 3
(c) Distribution of Offering Material By the Company.................................... 3
(d) The Underwriting Agreement.......................................................... 3
(e) Authorization of the Common Shares.................................................. 3
(f) No Applicable Registration or Other Similar Rights.................................. 4
(g) No Material Adverse Change.......................................................... 4
(h) Independent Accountants............................................................. 4
(i) Preparation of the Financial Statements............................................. 4
(j) Incorporation and Good Standing of the Company and its Subsidiaries................. 5
(k) Capitalization and Other Capital Stock Matters...................................... 5
(l) Stock Exchange Listing.............................................................. 6
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required.................................................................. 6
(n) No Material Actions or Proceedings.................................................. 6
(o) Intellectual Property Rights........................................................ 7
(p) All Necessary Permits, etc.......................................................... 7
(q) Title to Properties................................................................. 7
(r) Tax Law Compliance.................................................................. 7
(s) Company Not an "Investment Company"................................................. 7
(t) Insurance........................................................................... 8
(u) No Price Stabilization or Manipulation.............................................. 8
(v) Related Party Transactions.......................................................... 8
(w) No Unlawful Contributions or Other Payments......................................... 8
(x) Company's Accounting System......................................................... 8
(y) Exchange Act Compliance............................................................. 8
(z) Compliance with Environmental Laws.................................................. 9
(aa) Periodic Review of Costs of Environmental Compliance................................ 9
</TABLE>
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(CONTINUED)
<TABLE>
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(bb) ERISA Compliance.................................................................... 10
(cc) Year 2000........................................................................... 10
B. Representations and Warranties of the Selling Stockholders................................... 10
(a) The Underwriting Agreement.......................................................... 10
(b) The Custody Agreement and Power of Attorney......................................... 11
(c) Title to Common Shares to be Sold; All Authorizations Obtained...................... 11
(d) Delivery of the Common Shares to be Sold............................................ 11
(e) Non-Contravention; No Further Authorizations or Approvals Required.................. 11
(f) No Registration or Other Similar Rights............................................. 12
(g) Disclosure Made by Such Selling Stockholder in the Prospectus....................... 12
(h) No Price Stabilization or Manipulation.............................................. 12
(i) Confirmation of Company Representations and Warranties.............................. 12
Section 2. Purchase, Sale and Delivery of the Common Shares............................................. 12
The Firm Common Shares...........................................................................................12
The First Closing Date......................................................................................... 13
The Optional Common Shares; the Second Closing Date............................................................ 13
Public Offering of the Common Shares........................................................................... 13
Payment for the Common Shares.................................................................................. 14
Delivery of the Common Shares.................................................................................. 14
Delivery of Prospectus to the Underwriters..................................................................... 14
Section 3. Additional Covenants......................................................................... 15
A. Covenants of the Company..................................................................... 15
(a) Representative's Review of Proposed Amendments and Supplements...................... 15
(b) Securities Act Compliance........................................................... 15
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters....... 15
(d) Copies of any Amendments and Supplements to the Prospectus.......................... 16
(e) Blue Sky Compliance................................................................. 16
(f) Use of Proceeds..................................................................... 16
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
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(g) Transfer Agent...................................................................... 16
(h) Earnings Statement.................................................................. 16
(i) Periodic Reporting Obligations...................................................... 16
(j) Agreement Not To Offer or Sell Additional Securities................................ 16
(k) Future Reports to the Representatives............................................... 17
B. Covenants of the Selling Stockholders........................................................ 17
(a) Agreement Not to Offer or Sell Additional Securities................................ 17
(b) Delivery of Forms W-8 and W-9....................................................... 18
Section 4. Payment of Expenses.......................................................................... 18
Section 5. Conditions of the Obligations of the Underwriters............................................ 19
(a) Accountants' Comfort Letter......................................................... 19
(b) Compliance with Registration Requirements; No Stop Order; No Objection from
NASD................................................................................ 19
(c) No Material Adverse Change or Ratings Agency Change................................. 20
(d) Opinion of Counsel for the Company.................................................. 20
(e) Opinion of Counsel for Significant Subsidiaries of the Company...................... 20
(f) Opinion of Counsel for the Underwriters............................................. 20
(g) Officers' Certificate............................................................... 20
(h) Bring-down Comfort Letter........................................................... 21
(i) Opinion of Counsel for the Selling Stockholders..................................... 21
(j) Selling Stockholders' Certificate................................................... 21
(k) Selling Stockholders' Documents..................................................... 21
(l) Lock-Up Agreement from Certain Securityholders of the Company Other Than
Selling Stockholders................................................................ 22
(m) Concurrent Offering................................................................. 22
(n) Additional Documents................................................................ 22
Section 6. Reimbursement of Underwriters' Expenses...................................................... 22
Section 7. Effectiveness of this Agreement.............................................................. 22
Section 8. Indemnification.............................................................................. 23
(a) Indemnification of the Underwriters................................................. 23
(b) Indemnification of the Company, its Directors and Officers.......................... 24
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(CONTINUED)
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(c) Notifications and Other Indemnification Procedures.................................. 25
(d) Settlements......................................................................... 25
Section 9. Contribution................................................................................. 26
Section 10. Default of One or More of the Several Underwriters........................................... 27
Section 11. Termination of this Agreement................................................................ 28
Section 12. Representations and Indemnities to Survive Delivery.......................................... 28
Section 13. Notices...................................................................................... 29
Section 14. Successors................................................................................... 30
Section 15. Partial Unenforceability..................................................................... 30
Section 16. Governing Law Provisions..................................................................... 30
(a) Consent to Jurisdiction............................................................. 30
(b) Waiver of Immunity.................................................................. 31
Section 17. Failure of One or More of the Selling Stockholders to Sell and Deliver Common Shares......... 31
Section 18. General Provisions........................................................................... 31
</TABLE>
<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 Amendment No. 1 to the Registration Statement (Form S-3 No. 333-82795) and
related prospectus of JDS Uniphase Corporation for the registration of
10,000,000 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 26, 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 Amendment No. 1 to the Registration Statement (Form S-3 No. 333-82795) and
related prospectus of JDS Uniphase Corporation for the registration of
10,000,000 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 26, 1999
<PAGE> 1
EXHIBIT 23.4
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
Securities and Exchange Commission
Washington, D.C.
United States of America
20549
CONSENT OF PRICEWATERHOUSECOOPERS, LLP
INDEPENDENT ACCOUNTANTS
We hereby 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 10,000,000 shares of its common stock and
to the incorporation by reference therein of our report dated July 3, 1998,
with respect to the financial statements of JDS FITEL Inc. incorporated by
reference to JDS Uniphase Corporation's definitive proxy statement on Form 14-A
filed on June 2, 1999.
/s/ PricewaterhouseCoopers, LLP
- ------------------------------
Ottawa, Ontario
July 26, 1999
