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Filed by JDS Uniphase Corporation
Pursuant to Rule 425 under the Securities Act of 1933,
as amended, and deemed filed pursuant to Rule 14a-12
of the Securities and Exchange Act of 1934, as amended.
Commission File No.: 333-45300
Subject Company: JDS Uniphase Corporation and SDL, Inc.
JDS UNIPHASE/SDL MERGER
DOJ APPROVAL AND NORTEL AGREEMENT CONFERENCE CALL SCRIPT
JOZEF STRAUS
Good morning everyone and thank you for joining us. We are pleased to report
that we have received the permission United States Department of Justice ("DOJ")
to conclude our very important merger with SDL, Inc. Closing of this merger now
awaits approval of the stockholders of JDS Uniphase and SDL at our meetings
scheduled for next Monday, February 12. We expect the merger to close shortly
after the stockholder votes. We are very excited to be near the end of this
process so we can begin to focus on the new combined organization. I'm joined by
SDL Chairman, President, and CEO Don Scifres and Tony Muller of Executive Vice
President and CFO of JDS Uniphase. Both of them will be sharing their thoughts
on the DOJ approval. But first, the safe harbor language before we begin:
ANTHONY MULLER
I would like to advise you that the discussions we will have today will include
"forward looking statements," as that term is defined under the Private
Securities Litigation Reform Act of 1995. What the Act and we mean by forward
looking statements are all statements we make, other than those dealing
specifically with historical matters (that is any statements we make about the
conduct of our business, operations and finances up to this moment). All other
statements we make are forward looking statements. Our forward looking
statements include any information we provide on future business operations
(including any expectations regarding the agreements with Nortel Networks
discussed on this call and any benefits we may receive resulting from these
agreements) and any information regarding the closing of our pending merger with
SDL, Inc.
All forward looking statements mentioned are subject to risks and uncertainties
that could cause the actual results to differ, possibly materially, from those
projected in the forward looking statements. Some, but not all, of these risks
and uncertainties are discussed from time to time in the press releases and
securities filings of the company with the SEC, particularly the "Risk Factor"
section of our Form 10-Q filed on November 14, 2000 and our Form S-4/A filed in
conjunction with the SDL transaction on November 17th.
Good morning everyone. Let me begin by saying today's call is about two very
related announcements - the DOJ permission, which is one that I'm very excited
about, and the sale of our Zurich subsidiary, which we fought very hard to
avoid.
In connection with securing the approval of the DOJ, we have agreed to sell our
Zurich operations, where we manufacture 980-nm pump lasers for optical
amplifiers, to Nortel Networks. We will be selling this for Nortel Networks
common stock valued at $2.5 billion, as well as up to an additional $500 million
in Nortel Networks common stock payable to the extent Nortel Networks' purchases
do not meet certain levels under new and existing programs through December 31,
2003. In addition, JDS Uniphase and Nortel
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have entered into certain other purchase/supply agreements with each other,
which are expected to enhance our ongoing relationship.
Completion of the sale of Zurich to Nortel is subject to completion of the SDL
merger, along with customary closing conditions. The transaction has received
United States Department of Justice and Canadian Competition Bureau approval. No
additional regulatory approvals are required in connection with this
transaction. Following completion of the transaction, the Zurich subsidiary will
become a wholly owned subsidiary of Nortel.
When we announced our agreement to merge with SDL in July, there was widespread
speculation that we would sell Zurich in connection with securing DOJ approval
for the transaction. Several interested buyers, including both industrial and
financial parties subsequently approached us. Yet we elected to sell Zurich to
Nortel for very compelling reasons:
o Nortel is a major customer of JDS Uniphase, and this transaction gave us
the opportunity to build even further on this important relationship;
o Nortel was the largest customer for Zurich pump lasers;
o We have the highest regard for Nortel and the attractive career
opportunities they could provide to our Zurich employees; and
o Nortel was willing to pay a fair price for Zurich.
MORE ON THE SALE
We will be selling the Zurich operations to Nortel. In addition, the sale to
Nortel includes an 8-employee operation in Poughkeepsie, NY, which supports the
tool requirements of Zurich. We will not, however, be selling our new laser
packaging operations in Plymouth, UK.
SUPPLY RELATIONSHIP
As I said earlier, our new supply relationship with Nortel was a key part of
this transaction. Nortel is one of our largest customers and a major force in
optical communications. With our expanded supply relationship, we will have the
opportunity to meet a broader range of Nortel's expanding needs in the future.
This relationship covers many important product lines, although we cannot
provide you with any specifics because of its confidential nature. Of course, we
will have to continue to perform to earn this business, and we are confident we
will.
USE OF NORTEL STOCK
The Nortel common shares we will receive from the sale will represent an
important asset to JDS Uniphase, although we have not yet conclusively
determined the use of these proceeds. We are considering a variety of options,
one or more of which we will soon
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implement. Please note, however that the shares will not initially be tradable,
so we will not be selling them now.
ZURICH EMPLOYEES AND THE ROLE OF ZURICH
Selling Zurich was of course a most difficult decision. Uniphase acquired this
promising business from IBM in March 1997 and the business has flourished as a
part of Uniphase, and then JDS Uniphase. It was one of the two early
acquisitions that formed the core of Uniphase's emerging business in optical
components for telecommunications. Zurich's many talented people were part of
our team and contributed significantly to the growth and success of our
customers and JDS Uniphase. While we will truly miss our colleagues from Zurich
after the close, we believe they will have bright career prospects as a part of
Nortel, a global leader in telecommunications. In addition, the sale transaction
includes attractive financial terms to reward them for their contributions to
JDS Uniphase (including option accelerations) and to provide them with
incentives to continue their world-class performance with Nortel.
GUIDANCE
We will provide you with revised guidance for the current quarter and the fiscal
year ending June 30, 2001 at the time the SDL merger closes, which we expect to
occur next week. This revised guidance will include the operations of JDS
Uniphase and SDL, elimination of intercompany transactions between the two
merger partners, removal of Zurich results, an update of business conditions,
and pro rating of all numbers to the exact date of the close.
Now let me turn the call over to Don.
DONALD SCIFRES:
We have worked hard to make this day come about. Let me share with you our
vision for this merger.
The JDS Uniphase/SDL vision for this merger is to create a better partner for
our customers and add value for our shareholders. To realize this vision, we
must:
o Capitalize on the combined expertise and energy our outstanding teams
bring to the merged organization
o Expand our product lines and introduce new value added products
rapidly to our customers
o Continue to grow our business rapidly and profitably for our
shareholders
From a product and technology standpoint, the merger is expected to facilitate
the creation and deployment of high-capacity, flexible optical networks by
accelerating the delivery of advanced products and basic building blocks of
optical networks. These include optical amplifiers, lossless optical switches,
integrated optical modules and other innovative solutions. The strong technology
platforms from both companies encompass
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high-speed electronics, different forms of modulation, advanced multiplexing,
enhanced active technologies, and a broad passive portfolio intended to make
these products a reality. This combination brings together world class technical
and manufacturing teams that promise to deliver best-in-class products at
increased volumes for today's systems while developing advanced module-level
solutions for tomorrow. We also expect to enable the migration from today's
hybrid integration and module level products to tomorrow's truly integrated
"system on a chip."
Our complementary skills in actives and passives will be able to create these
advanced products for next-generation optical networks. Our complementary skills
sets are expected to speed the introduction of low cost amplets, advanced module
level transmitters and receivers, and leading edge mux, demux, and switching
products.
I'm also looking forward to taking our combined technology tool kit and creating
a truly integrated optical circuit on a wafer. This has been my goal for over 30
years and this merger should help enable this dream to come true. Finally, I
anticipate that our joint manufacturing capabilities, which have different
manufacturing bottlenecks or limitations, will be able to turn out more products
for our customers. We expect they will continue to need faster delivery and
higher volumes in a variety of advanced products.
In short, I believe, as I did last July, that JDS Uniphase is the best company,
strategically, culturally, technically, and product-wise, for us to partner with
and set new standards for the industry. This merger will clearly benefit our
employees, customers, and stockholders.
Let me turn this call back to Jozef.
JOZEF STRAUS:
To add on to Don's remarks, we are already building modules that integrate
several components on a single board but we are not building enough and we are
not keeping up with the demand for new designs that include even more functions
and true integration. This merger addresses all of these areas - including a
wide range of technologies needed for tomorrow's products: micro-optics,
electronics, lithium niobate, gallium arsenide, MEMS..., the list could go on
and on.
The days of a system on a chip have always seemed to be very far away. But with
this merger, I believe we have significantly condensed the time frame. We have
gone from a market that was primarily using high power erbium doped fiber
amplifiers to one where the demand for Raman amplification and low-power amplets
is beginning to take off. We intend to provide the best-in-class amplifiers in
all three areas addressing long haul, ultra long haul, and short haul
applications. And our technical teams will be embarking on development of
next-generation amplification, which we believe will be incorporated into many
aspects of all optical networks for low loss routing and switching.
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Now, let me switch gears and make a few comments about our integration
activities. As you no doubt know, JDS Uniphase has made several acquisitions
over the past year, and we have been working hard to realize their maximum
potential through integration. Our integration philosophy is actually quite
straightforward. We:
o Focus on actions that drive value for our customers,
o Capitalize on new opportunities, and
o Execute against the transaction rationale
In particular, we focus on building a very strong integrated management team.
Most of our acquisitions come with strong entrepreneurial leaders who have
achieved great success in running their independent businesses. We are very
proud that we have been able to fuse this team into a cohesive, focused,
management team for our company as a whole. In general terms, our integration
approach is action- and customer-oriented and focused around ensuring we remain
agile and flexible as we grow into a larger integrated company.
JOZEF STRAUS:
The merger will enable both organizations access to a broad base of technologies
for next generation design and creation of module level products. The merger
will also better position us to improve penetration in high growth markets such
as Access and Metro. Within the company, we expect that capability and
productivity will be increased through the sharing of best practices and
technology between our talented workforce. Both Don and I are very much looking
forward to working closely together to create a new company that will forge the
future and raise the standard for the optoelectronics industry.
I now turn it back to Tony for questions.
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ADDITIONAL INFORMATION AND WHERE TO FIND IT
JDS UNIPHASE CORPORATION HAS FILED A REGISTRATION STATEMENT WITH THE SEC ON FORM
S-4 WHICH INCLUDES A JOINT PROXY STATEMENT-PROSPECTUS IN CONNECTION WITH THE
MERGER, AND JDS UNIPHASE AND SDL HAVE MAILED A JOINT PROXY STATEMENT-PROSPECTUS
TO THEIR RESPECTIVE STOCKHOLDERS CONTAINING INFORMATION ABOUT THE MERGER. JDS
UNIPHASE AND SDL SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT
AND THE JOINT PROXY STATEMENT-PROSPECTUS CAREFULLY. THE REGISTRATION STATEMENT
AND THE JOINT PROXY STATEMENT-PROSPECTUS CONTAIN IMPORTANT INFORMATION ABOUT JDS
UNIPHASE, SDL, THE MERGER AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS
ARE ABLE TO OBTAIN FREE COPIES OF THESE DOCUMENTS THROUGH THE WEB SITE
MAINTAINED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION AT HTTP://WWW.SEC.GOV.
FREE COPIES OF THE JOINT PROXY STATEMENT-PROSPECTUS AND THESE OTHER DOCUMENTS
MAY ALSO BE OBTAINED BY REQUEST FROM JDS UNIPHASE AND SDL BY MAIL. REQUESTS FOR
DOCUMENTS RELATING TO JDS UNIPHASE SHOULD BE DIRECTED TO JDS UNIPHASE
CORPORATION, 210 BAYPOINTE PARKWAY, SAN JOSE, CALIFORNIA, 95134 ATTENTION:
INVESTOR RELATIONS (408) 434-1800. REQUESTS FOR DOCUMENTS RELATING TO SDL SHOULD
BE DIRECTED TO SDL, INC., 80 ROSE ORCHARD WAY, SAN JOSE, CALIFORNIA 95134
ATTENTION: INVESTOR RELATIONS (408) 943-4343. IN ADDITION TO THE REGISTRATION
STATEMENT AND THE JOINT PROXY STATEMENT-PROSPECTUS, JDS UNIPHASE AND SDL FILE
ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
WITH THE SEC. YOU MAY READ AND COPY ANY REPORTS, STATEMENTS OR OTHER INFORMATION
FILED BY JDS UNIPHASE AND SDL AT THE SEC PUBLIC REFERENCE ROOMS AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549 OR AT ANY OF THE SEC'S OTHER PUBLIC
REFERENCE ROOMS IN NEW YORK, NEW YORK AND CHICAGO, ILLINOIS. PLEASE CALL THE SEC
AT 1-800-SEC-0330 FOR FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOMS. JDS
UNIPHASE AND SDL FILINGS WITH THE SEC ARE ALSO AVAILABLE TO THE PUBLIC FROM
COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC
AT HTTP://WWW.SEC.GOV.