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As filed with the Securities and Exchange Commission on September 29, 2006
Registration Statement No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BOOKHAM, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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20-1303994 |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) |
2584 Junction Avenue
San Jose, California 95134
408-383-1400
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Giorgio Anania
Chief Executive Officer
2584 Junction Avenue
San Jose, California 95134
408-383-1400
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Thomas S. Ward, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6000
Telecopy: (617) 526-5000
Approximate date of commencement of proposed sale to public: As soon as practicable after
this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
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. þ
If this form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If this form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Proposed |
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Proposed |
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Amount |
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Maximum |
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Maximum |
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to be |
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Offering Price |
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Aggregate |
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Amount of |
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Title of Shares to be Registered |
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Registered (1) |
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Per Share(2) |
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Offering Price(2) |
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Registration Fee |
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Common Stock, $.01 par value per share |
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14,493,334 |
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2.90 |
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42,030,669 |
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4,497.28 |
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(1) |
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Shares of common stock that may be offered pursuant to this registration statement consists
of 11,594,667 shares of common stock and 2,898,667 shares of common stock issuable upon the
exercise of warrants issued to the selling stockholders. Pursuant to Rule 416 under the
Securities Act of 1933, as amended, the amount to be registered also includes an indeterminate
number of shares of common stock issuable as a result of stock splits, stock dividends,
recapitalizations or similar events. |
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(2) |
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Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c)
under the Securities Act and based upon the average of the high and low prices on the NASDAQ
Global Market on September 22, 2006. |
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 a further amendment which
specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), shall determine.
The information in this prospectus is not complete and may be changed. The selling
stockholders named in this prospectus may not sell 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 the selling stockholders named in this prospectus are not
soliciting offers to buy these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to completion, dated September 29, 2006
PROSPECTUS
BOOKHAM, INC.
14,493,334
SHARES OF COMMON STOCK
This prospectus relates to resales of shares of common stock and shares of common stock
issuable upon exercise of warrants issued to the selling stockholders in a private placement.
We will not receive any proceeds from the sale of the shares.
The selling stockholders identified in this prospectus, or their pledgees, donees, transferees
or other successors-in-interest, may offer the shares from time to time through public or private
transactions at prevailing market prices, at prices related to prevailing market prices or at
privately negotiated prices. See Plan of Distribution.
Our common stock is traded on the NASDAQ Global Market under the symbol BKHM. On September
27, 2006, the closing sale price of the common stock on the NASDAQ Global Market was $3.12 per
share. You are urged to obtain current market quotations for the common stock.
Investing in our common stock involves a high degree of risk. See Risk Factors
beginning on page 4.
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.
The date of this prospectus is _____, 2006.
TABLE OF CONTENTS
Our executive offices are located at 2584 Junction Avenue, San Jose, California 95134, our
telephone number is 408-383-1400 and our Internet address is www.bookham.com. The information on
our Internet website is not incorporated by reference in this prospectus. Unless the context
otherwise requires references in this prospectus to Bookham, we, us, and our refer to
Bookham, Inc. and its subsidiaries.
We have not authorized anyone to provide you with information different from that contained or
incorporated by reference in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales
are permitted. The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any sale of common
stock.
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PROSPECTUS SUMMARY
This summary highlights important features of this offering and the information included or
incorporated by reference in this prospectus. You should read the entire prospectus carefully,
especially the risks of investing in our common stock discussed under Risk Factors.
BOOKHAM, INC.
Our Company
We design, manufacture and market optical components, modules and subsystems that
generate, detect, amplify, combine and separate light signals with primary application in fiber
optic telecommunications networks. We principally sell our optical component products to
telecommunications systems vendors as well as to customers in the data communications, military,
aerospace, industrial and manufacturing industries. Customers for our photonics and microwave
product portfolio include academic and governmental research institutions that engage in advanced
research and development activities, and semiconductor capital equipment manufacturers.
We operate in two business segments: optics, and research and industrial. Optics relates to
the design, development, manufacture, marketing and sale of optical solutions for
telecommunications and industrial applications. Research and industrial relates to the design,
manufacture, marketing and sale of photonics and microwave solutions. Our products typically have
a long sales cycle. The period of time between our initial contact with a customer and the receipt
of a purchase order is frequently a year or more. In addition, many customers perform, and require
us to perform, extensive process and product evaluation and testing of components before entering
into purchase arrangements.
Effective September 10, 2004, we changed our corporate domicile from the United Kingdom to the
United States and our reporting currency from pounds sterling to U.S. dollars. Our consolidated
financial statements are stated in U.S. dollars as opposed to pounds sterling, which was the
currency we previously used to present our financial statements. In addition, in connection with
the change in domicile, we changed our fiscal year end from December 31 to the Saturday closest to
June 30. Our financial statements are now prepared based on fifty-two/fifty-three week annual
cycles.
THE OFFERING
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Common Stock offered by selling
stockholders
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14,493,334 shares |
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Use of proceeds
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Bookham will not receive any proceeds from
the sale of shares in this offering |
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NASDAQ Global Market symbol
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BKHM |
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RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider
the risks and uncertainties described below before purchasing our common stock. If any of the
following risks actually occur, our business, financial condition or results of operations would
likely suffer. In that case, the trading price of our common stock could fall, and you may lose
all or part of the money you paid to buy our common stock.
Risks Related to Our Business
We have a history of large operating losses and we expect to generate losses in the future
unless we achieve further cost reductions and revenue increases.
We have never been profitable. We have incurred losses and negative cash flow from
operations since our inception. As of July 1, 2006, we had an accumulated deficit of $954 million.
Our net loss for the year ended July 1, 2006 was $87.5 million, which included an $18.8
million loss on conversion of convertible debt and early extinguishment of debt, a $11.7 million
tax gain, and an aggregate of $11.2 million of restructuring charges. For the year ended July 2,
2005 our net loss was $248 million, which included goodwill and intangibles impairment charges of
$114.2 million and restructuring charges of $20.9 million.
Even though we generated positive gross margins in each of the past five fiscal quarters,
we have a history of negative gross margins. In the quarter ended April 1, 2006, we experienced a
decrease in margins when compared with the prior fiscal quarter, which is the result of a shift to
lower margin products as we transition to new products, underutilization of our semiconductor
facility located in Caswell, U.K. as a result of the changing product mix, and costs associated
with the shutdown of certain production lines in our Paignton assembly and test facility. We may
not be able to maintain positive gross margins if we do not address these issues, continue to
reduce our costs, improve our product mix and generate sufficient revenues from new and existing
customers to offset the revenues we will lose after Nortel Networks completes its last-time-buy
purchases and its other purchases pursuant to the supply agreement, as amended.
In order to continue as a going concern, we will need capital in excess of our current cash
resources.
Based
on our cash balances, and given our continuing and expected losses for the foreseeable future, if we
fail to meet managements current cash flow forecasts, or we are unable to draw sufficient amounts
under the three year $25 million senior secured revolving credit agreement with Wells Fargo
Foothill, Inc. and other lenders, which was entered into in August 2006, for any reason, we will
need to raise additional funding of at least $2 million to $12 million through external sources
prior to July 2007 in order to maintain sufficient financial resources in order to operate as a
going concern through the end of fiscal 2007. If necessary, we will attempt to raise additional
funds by any one or a combination of the following:
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completing the sale of certain assets |
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issuing equity, debt or convertible debt and |
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selling certain non core businesses. |
Although we have
entered into an agreement for the sale of our assembly and test facility in the U.K. for
approximately $9.5 million which is expected to close in November 2007, there can be no assurance
of our ability to raise sufficient capital through the above, or any other efforts.
We remain highly dependent on sales to Nortel Networks and we expect revenues from Nortel Networks
to decrease at least through calendar 2006.
Historically, Nortel Networks has been our largest customer. In the fiscal year ended
July 1, 2006 and in the fiscal year ended July 2, 2005, we sold $110.5 million and $89.5 million of
products and services to Nortel Networks, or 48% and 45% of our total revenues, respectively.
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In connection with the third addendum to the supply agreement with Nortel Networks we entered
into on January 13, 2006, Nortel Networks is obligated to purchase $72 million of our products
through calendar year 2006. Nortel Networks may not continue to buy any of our products after the
supply agreement, as amended, is completed, and if Nortel Networks does not continue to buy at its
current level, we may not be able to replace the loss of revenue from Nortel Networks with revenue
from other customers. To the extent that we may rely on Nortel Networks for revenues in the future,
Nortel Networks has experienced significant losses in the past and any future adverse change in
Nortel Networks financial condition could adversely affect its demand for our products.
Our success will depend on our ability to anticipate and respond to evolving technologies and
customer requirements.
The market for telecommunications equipment is characterized by substantial capital
investment and diverse and evolving technologies. For example, the market for optical components is
currently characterized by a trend toward the adoption of pluggable components and tunable
transmitters that do not require the customized interconnections of traditional fixed wave length
gold box devices and the increased integration of components on subsystems. Our ability to
anticipate and respond to these and other changes in technology, industry standards, customer
requirements and product offerings and to develop and introduce new and enhanced products will be
significant factors in our ability to succeed. We expect that new technologies will continue to
emerge as competition in the telecommunications industry increases and the need for higher and more
cost efficient bandwidth expands. The introduction of new products embodying new technologies or
the emergence of new industry standards could render our existing products uncompetitive from a
pricing standpoint, obsolete or unmarketable.
We may encounter unexpected costs or delays in transferring our assembly and test operations
from the United Kingdom to Shenzhen, China.
A key element of our restructuring and cost reduction efforts is the successful transfer
of substantially all of our assembly and test operations from Paignton, U.K. to Shenzhen, China.
Accordingly, we expect that our ability to transfer manufacturing capabilities to, and to operate
effectively in, China is critical to the overall success of our business. We began to implement the
transfer of our assembly and test operations from Paignton to Shenzhen in the fall of 2004. The
substantial portion of the manufacturing transfer has been completed as of July 1, 2006. In
November 2005, we announced that our chip-on-carrier assembly will also be transferred from
Paignton to Shenzhen. We expect that the transfer of chip-on-carrier assembly operation to Shenzhen
will continue at least into the quarter ending December 31, 2006. In May 2006, we announced that
substantially all remaining manufacturing and supply chain management and related activities in
Paignton would also be transferred to Shenzhen, and that transfer will also continue at least into
the quarter ended December 31, 2006. Our business and results of operations would be materially
adversely affected if we experience delays in, increased costs related to, or if we are ultimately
unable to:
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qualify our manufacturing lines and the products we produce in Shenzhen, as
required by our customers; |
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transfer our assembly and test equipment, including chip-on-carrier equipment, from
Paignton to Shenzhen; |
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attract qualified personnel to operate our Shenzhen facility; |
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retain employees at our Shenzhen facility; |
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achieve the requisite production levels for products manufactured at our Shenzhen facility; or |
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wind down operations at our Paignton facility. |
During the year ended July 1, 2006, we recorded significant unanticipated costs related
to the wind-down of manufacturing activities in Paignton, and the transfer of the related
activities to Shenzhen, and we may continue to do so in the future. If we continue to incur these
unanticipated costs in connection with transferring certain operations to our Shenzhen facility,
our business and results of operations will be adversely affected.
The market for optical components continues to be characterized by excess capacity and intense
price competition which has had, and will continue to have, a material adverse affect on our
results of operations.
In 2002, actual demand for optical communications equipment and components was
dramatically less than that forecasted by leading market researchers only two years before. Even
though the market for optical components
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has been recovering recently, particularly in the metro market segment, there continues to be
excess capacity, intense price competition among optical component manufacturers and continued
consolidation of the industry. As a result of this excess capacity, and other industry factors,
pricing pressure remains intense. The continued uncertainties in the telecommunications industry
and the global economy make it difficult for us to anticipate revenue levels and therefore to make
appropriate estimates and plans relating to cost management. Continued uncertain demand for optical
components has had, and will continue to have, a material adverse effect on our results of
operations.
A default under our supply agreement with Nortel Networks would have an adverse impact on our
ability to conduct our business.
We are party to a supply agreement with Nortel Networks that has been amended three
times, most recently in January 2006. The supply agreement, as amended, requires that we grant a
license for the assembly, test, post-processing and test intellectual property (but excluding wafer
technology) of certain critical products to Nortel Networks and to any designated alternative
supplier, if at any time, we are unable to manufacture critical products for Nortel Networks in any
material respect for a continuous period of not less than six weeks, or are subject to an
insolvency event, such as a petition or assignment in bankruptcy, appointment of a trustee,
custodian or receiver, or entrance into an arrangement for the general benefit of creditors. In
addition, if there is an insolvency event, Nortel Networks will have the right to buy all Nortel
Networks inventory we hold, and we will be obligated to grant a license to Nortel Networks or any
alternative supplier for the manufacture of all products covered by the first addendum to the
supply agreement. Our revenues and business would be substantially harmed if we were required to
license this assembly, test, post-processing and test intellectual property to Nortel Networks or
any supplier it were to designate.
We and our customers are each dependent upon a limited number of customers.
Historically, we have generated most of our revenues from a limited number of customers. Sales
to one customer, Nortel Networks, accounted for 48% and 45% of our revenues for the year ended July
1, 2006 and the year ended July 2, 2005, respectively. In addition to the reduced outlook for
revenue from Nortel Networks after the purchase orders under the supply agreement, as amended, are
filled, we expect that revenue from our other major customers may decline or fluctuate
significantly during the remainder of calendar year 2006 and beyond. We may not be able to offset
any such decline in revenues from our existing major customers with revenues from new customers.
Our dependence on a limited number of customers is due to the fact that the optical
telecommunications systems industry is dominated by a small number of large companies. Similarly,
our customers depend primarily on a limited number of major telecommunications carrier customers to
purchase their products that incorporate our optical components. Many major telecommunication
systems companies and telecommunication carriers are experiencing losses from operations. The
further consolidation of the industry, coupled with declining revenues from our major customers,
may have a material adverse impact on our business.
As a result of our global operations, our business is subject to currency fluctuations that
have adversely affected our results of operations in recent quarters and may continue to do so in
the future.
Our financial results have been materially impacted by foreign currency fluctuations and
our future financial results may also be materially impacted by foreign currency fluctuations. At
certain times in our history, declines in the value of the U.S. dollar versus the U.K. pound
sterling have had a major negative effect on our profit margins and our cash flow. Despite our
change in domicile from the United Kingdom to the United States and the implementation of our
restructuring program to move all assembly and test operations from Paignton, U.K. to Shenzhen,
China, the majority of our expenses are still denominated in U.K. pounds sterling and substantially
all of our revenues are denominated in U.S. dollars. Fluctuations in the exchange rate between
these two currencies and, to a lesser extent, other currencies in which we collect revenues and pay
expenses will continue to have a material affect on our operating results. Additional exposure
could result should the exchange rate between the U.S. dollar and the Chinese Yuan vary more
significantly than it has to date.
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We engage in currency transactions in an effort to cover any exposure to such fluctuations,
and we may be required to convert currencies to meet our obligations. Under certain circumstances,
these transactions can have an adverse effect on our financial condition.
We are increasing manufacturing operations in China, which exposes us to risks inherent in
doing business in China.
We are taking advantage of the comparatively low manufacturing costs in China by
transferring substantially all of our assembly and test operations, chip-on-carrier operations and
manufacturing and supply chain management operations to our facility in Shenzhen, China. Operations
in China are subject to greater political, legal and economic risks than our operations in other
countries. In order to operate the facility, we must obtain and retain required legal authorization
and train and hire a workforce. In particular, the political, legal and economic climate in China,
both nationally and regionally, is fluid and unpredictable. Our ability to operate in China may be
adversely affected by changes in Chinese laws and regulations such as those related to taxation,
import and export tariffs, environmental regulations, land use rights, intellectual property and
other matters. In addition, we may not obtain or retain the requisite legal permits to continue to
operate in China and costs or operational limitations may be imposed in connection with obtaining
and complying with such permits.
We have been advised that power may be rationed in the location of our Shenzhen facility, and
were power rationing to be implemented, it could either have an adverse impact on our ability to
complete manufacturing commitments on a timely basis or, alternatively, could require significant
investment in generating capacity to sustain uninterrupted operations at the facility. Our ability
to transfer chip-on-carrier operations and manufacturing and supply chain management operations
from our facilities in the U.K. to China would be hindered by a power rationing. We may also be
required to expend greater amounts than we currently anticipate in connection with increasing
production at the facility. Any one of these factors, or a combination of them, could result in
unanticipated costs, which could materially and adversely affect our business.
We intend to export the majority of the products manufactured at our Shenzhen facility. Under
current regulations, upon application and approval by the relevant governmental authorities, we
will not be subject to certain Chinese taxes and will be exempt from certain duties on imported
materials that are used in the manufacturing process and subsequently exported from China as
finished products. However, Chinese trade regulations are in a state of flux, and we may become
subject to other forms of taxation and duties in China or may be required to pay export fees in the
future. In the event that we become subject to new forms of taxation in China, our business and
results of operation could be materially adversely affected.
Fluctuations in operating results could adversely affect the market price of our common stock.
Our revenues and operating results are likely to fluctuate significantly in the future.
The timing of order placement, size of orders and satisfaction of contractual customer acceptance
criteria, as well as order or shipment delays or deferrals, with respect to our products, may cause
material fluctuations in revenues. Our lengthy sales cycle, which may extend to more than one year,
may cause our revenues and operating results to vary from period to period and it may be difficult
to predict the timing and amount of any variation. Delays or deferrals in purchasing decisions may
increase as we develop new or enhanced products for new markets, including data communications,
aerospace, industrial and military markets. Our current and anticipated future dependence on a
small number of customers increases the revenue impact of each customers decision to delay or
defer purchases from us. Our expense levels in the future will be based, in large part, on our
expectations regarding future revenue sources and, as a result, net income for any quarterly period
in which material orders fail to occur, or are delayed or deferred could vary significantly.
Because of these and other factors, quarter-to-quarter comparisons of our results of
operations may not be an indication of future performance. In future periods, results of operations
may differ from the estimates of public market analysts and investors. Such a discrepancy could
cause the market price of our common stock to decline.
We may incur additional significant restructuring charges that will adversely affect our results of
operations.
Over the past five years, we have enacted a series of restructuring plans and cost
reduction plans designed to reduce our manufacturing overhead and our operating expenses. In 2001,
we reduced manufacturing overhead and
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our operating expenses in response to the initial decline in demand in the optics components
industry. In connection with our acquisitions of Nortel Networks optical components business in
November 2002 and New Focus in March 2004, we enacted restructuring plans related to the
consolidation of our operations, which we expanded in September 2004 to include the transfer of our
main corporate functions, including consolidated accounting, financial reporting, tax and treasury,
from Abingdon, U.K. to our new U.S headquarters in San Jose, California.
In May and November of 2004, we adopted additional restructuring plans, which included
the transfer of our assembly and test operations from Paignton, U.K. to Shenzhen, China, a process
that commenced in the quarter ended October 2, 2004. This transition was substantially complete by
the end of March 2006, except for a chip-on-carrier assembly process we added to the transition
plan in November 2005, and which we expect to be completed by the end of December 2006. In May
2006, we announced our latest cost reduction plans, which included transitioning all remaining
manufacturing support and supply chain management, along with pilot line production and production
planning, from Paignton to Shenzhen, also by the end of December 2006.
With respect to the transfer of the operations described in the previous paragraph, some
of which are still in the process of being transferred, we have spent $22.6 million as of July 1,
2006, and we anticipate spending a total of approximately $30 million to $37 million, including
$6.0 million to $7.0 million on the cost reduction plan announced in May 2006. The substantial
portion of the remaining spending relates to personnel and personnel related costs. We expect the
cost reduction plan announced in May 2006 to reduce our costs by between $5.5 million and $6.5
million a quarter, when compared to the expenses incurred in the quarter ended April 1, 2006, with
the cost savings expected to be realized in the quarter ending
March 31, 2007.
We may incur charges in excess of amounts currently estimated for these restructuring and
cost reduction plans. We may incur additional charges in the future in connection with future
restructurings and cost reduction plans. These charges, along with any other charges, have
adversely affected, and will continue to adversely affect, our results of operations for the
periods in which such charges have been, or will be, incurred.
Our results of operations may suffer if we do not effectively manage our inventory, and we may
incur inventory-related charges.
We need to manage our inventory of component parts and finished goods effectively to meet
changing customer requirements. The ability to accurately forecast customers product needs is
difficult. Some of our products and supplies have in the past, and may in the future, become
obsolete while in inventory due to rapidly changing customer specifications or a decrease in
customer demand. If we are not able to manage our inventory effectively, we may need to write down
the value of some of our existing inventory or write off unsaleable or obsolete inventory, which
would adversely affect our results of operations. We have from time to time incurred significant
inventory-related charges. During the year ended July 1, 2006, we incurred significant costs for
inventory production variances associated with unanticipated shifts in the mix of our customers
product orders. Any such charges we incur in future periods could significantly adversely affect
our results of operations.
Charges to earnings resulting from the application of the purchase method of accounting may
adversely affect the market value of our common stock.
We account for our acquisitions using the purchase method of accounting. In accordance
with GAAP, we allocate the total estimated purchase price to the acquired companys net tangible
assets, amortizable intangible assets, and in-process research and development based on their fair
values as of the date of announcement of the transaction, and record the excess of the purchase
price over those fair values as goodwill. With respect to our acquisition of New Focus, we expensed
the portion of the estimated purchase price allocated to in-process research and development in the
third quarter of fiscal 2004. We will incur an increase in the amount of amortization expense over
the estimated useful lives of certain of the intangible assets acquired in connection with the
acquisition on an annual basis. To the extent the value of goodwill or intangible assets with
indefinite lives becomes impaired, we may be required to incur material charges relating to the
impairment of those assets. In the year ended July 2, 2005, following a triggering event in the
third quarter and in accordance with our policy of evaluating long-lived assets for impairment in
the fourth quarter, we recorded charges totaling $114.2 million related to the impairment of
goodwill and purchased intangible assets. In addition, in the past, after the completion of a
transaction, we have amended the provisional values of assets and liabilities we obtained as part
of transactions, specifically the acquisition of the optical components business of Nortel
Networks. This amendment resulted in the value of our inventory being
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increased by $20.2 million, current liabilities being increased by approximately $1.3 million,
intangible assets being decreased by approximately $9.1 million and property, plant and equipment
being increased by $9.8 million. In March 2006, we acquired Avalon Photonics AG, and recorded $2.5
million as the value of goodwill and $2.2 million as the value of purchased intangible assets, both
of which will be subject to reviews for impairment of value in the future. We may incur charges in
the future as a result of any such transaction, which charges may have an adverse effect on our
earnings.
Bookham Technology plc may not be able to utilize tax losses and other tax attributes against
the receivables that arise as a result of its transaction with Deutsche Bank.
On August 10, 2005, Bookham Technology plc purchased all of the issued share capital of
City Leasing (Creekside) Limited, a subsidiary of Deutsche Bank. Creekside is entitled to
receivables of £73.8 million (approximately $135.8 million, based on an exchange rate of £1.00 to
$1.8403, the noon buying rate on September 2, 2005 for cable transfers in foreign currencies as
certified by the Federal Reserve Bank of New York) from Deutsche Bank in connection with certain
aircraft subleases and will in turn apply those payments over a two-year term to obligations of
£73.1 million (approximately $134.5 million based on an exchange rate of £1.00 to $1.8403) owed to
Deutsche Bank. As a result of these transactions, Bookham Technology plc will have available
through Creekside cash of approximately £6.63 million (approximately $12.2 million based on an
exchange rate of £1.00 to $1.8405). We expect Bookham Technology plc to utilize certain expected
tax losses and other tax attributes to reduce the taxes that might otherwise be due by Creekside as
the receivables are paid. In the event that Bookham Technology plc is not able to utilize these tax
losses and other tax attributes when U.K. tax returns are filed for the relevant periods (or these
tax losses and other tax attributes do not arise), Creekside may have to pay taxes, reducing the
cash available from Creekside. In the event there is a future change in applicable U.K. tax law,
Creekside, and in turn Bookham Technology plc, would be responsible for any resulting tax
liabilities, which amounts could be material to our financial condition or operating results.
Our products are complex and may take longer to develop than anticipated and, as a result, we
may not recognize revenues from new products until after long field testing and customer acceptance
periods.
Many of our new products must be tailored to customer specifications. As a result, we are
constantly developing new products and using new technologies in those products. For example, while
we currently manufacture and sell discrete gold box technology, we expect that many of our sales
of gold box technology will soon be replaced by pluggable modules. New products or modifications to
existing products often take many quarters to develop because of their complexity and because
customer specifications sometimes change during the development cycle. We often incur substantial
costs associated with the research and development and sales and marketing activities in connection
with products that may be purchased long after we have incurred the costs associated with
designing, creating and selling such products. In addition, due to the rapid technological changes
in our market, a customer may cancel or modify a design project before we begin large-scale
manufacture of the product and receive revenue from the customer. It is unlikely that we would be
able to recover the expenses for cancelled or unutilized design projects. It is difficult to
predict with any certainty, particularly in the present economic climate, the frequency with which
customers will cancel or modify their projects, or the effect that any cancellation or modification
would have on our results of operations.
If our customers do not qualify our manufacturing lines or the manufacturing lines of our
subcontractors for volume shipments, our operating results could suffer.
Most of our customers do not purchase products, other than limited numbers of evaluation
units, prior to qualification of the manufacturing line for volume production. Our existing
manufacturing lines, as well as each new manufacturing line, must pass through varying levels of
qualification with our customers. Our manufacturing lines have passed our qualification standards,
as well as our technical standards. However, our customers may also require that we pass their
specific qualification standards and that we, and any subcontractors that we may use, be registered
under international quality standards. In addition, we have in the past, and may in the future,
encounter quality control issues as a result of relocating our manufacturing lines or introducing
new products to fill production. We may be unable to obtain customer qualification of our
manufacturing lines or we may experience delays in obtaining customer qualification of our
manufacturing lines. Such delays would harm our operating results and customer relationships.
-9-
Delays, disruptions or quality control problems in manufacturing could result in delays in
product shipments to customers and could adversely affect our business.
We may experience delays, disruptions or quality control problems in our manufacturing
operations or the manufacturing operations of our subcontractors. As a result, we could incur
additional costs that would adversely affect gross margins, and product shipments to our customers
could be delayed beyond the shipment schedules requested by our customers, which would negatively
affect our revenues, competitive position and reputation. Furthermore, even if we are able to
deliver products to our customers on a timely basis, we may be unable to recognize revenues at the
time of delivery based on our revenue recognition policies.
We may experience low manufacturing yields.
Manufacturing yields depend on a number of factors, including the volume of production
due to customer demand and the nature and extent of changes in specifications required by customers
for which we perform design-in work. Higher volumes due to demand for a fixed, rather than
continually changing, design generally result in higher manufacturing yields, whereas lower volume
production generally results in lower yields. In addition, lower yields may result, and have in the
past resulted, from commercial shipments of products prior to full manufacturing qualification to
the applicable specifications. Changes in manufacturing processes required as a result of changes
in product specifications, changing customer needs and the introduction of new product lines have
historically caused, and may in the future cause, significantly reduced manufacturing yields,
resulting in low or negative margins on those products. Moreover, an increase in the rejection rate
of products during the quality control process, either before, during or after manufacture, results
in lower yields and margins. Finally, manufacturing yields and margins can also be lower if we
receive or inadvertently use defective or contaminated materials from our suppliers.
We depend on a number of suppliers who could disrupt our business if they stopped, decreased
or delayed shipments.
We depend on a number of suppliers of raw materials and equipment used to manufacture our
products. Some of these suppliers are sole sources. We typically have not entered into long-term
agreements with our suppliers and, therefore, these suppliers generally may stop supplying
materials and equipment at any time. The reliance on a sole supplier or limited number of suppliers
could result in delivery problems, reduced control over product pricing and quality, and an
inability to identify and qualify another supplier in a timely manner. Any supply deficiencies
relating to the quality or quantities of materials or equipment we use to manufacture our products
could adversely affect our ability to fulfill customer orders or our financial results of
operations.
Our intellectual property rights may not be adequately protected.
Our future success will depend, in large part, upon our intellectual property rights,
including patents, design rights, trade secrets, trademarks, know-how and continuing technological
innovation. We maintain an active program of identifying technology appropriate for patent
protection. Our practice is to require employees and consultants to execute non-disclosure and
proprietary rights agreements upon commencement of employment or consulting arrangements. These
agreements acknowledge our exclusive ownership of all intellectual property developed by the
individuals during their work for us and require that all proprietary information disclosed will
remain confidential. Although such agreements may be binding, they may not be enforceable in all
jurisdictions and any breach of a confidentiality obligation could have a very serious effect on
our business and the remedy for such breach may be limited.
Our intellectual property portfolio is an important corporate asset. The steps we have
taken and may take in the future to protect our intellectual property may not adequately prevent
misappropriation or ensure that others will not develop competitive technologies or products. We
cannot assure investors that our competitors will not successfully challenge the validity of our
patents or design products that avoid infringement of our proprietary rights with respect to our
technology. There can be no assurance that other companies are not investigating or developing
other similar technologies, that any patents will be issued from any application pending or filed
by us or that, if patents are issued, the claims allowed will be sufficiently broad to deter or
prohibit others from marketing similar products. In addition, we cannot assure investors that any
patents issued to us will not be challenged, invalidated or circumvented, or that the rights under
those patents will provide a competitive advantage to us. Further, the laws of certain regions in
which our products are or may be developed, manufactured or sold, including Asia-Pacific,
-10-
Southeast Asia and Latin America, may not protect our products and intellectual property
rights to the same extent as the laws of the United States, the U.K. and continental European
countries. This is especially relevant as we transfer of our assembly and test operations and
chip-on-carrier operations from our facilities in the U.K. to Shenzhen, China and as our
competitors establish manufacturing operations in China to take advantage of comparatively low
manufacturing costs.
Our products may infringe the intellectual property rights of others which could result in
expensive litigation, require us to obtain a license to use the technology from third parties, or
we may be prohibited from selling certain products in the future.
Companies in the industry in which we operate frequently receive claims of patent
infringement or infringement of other intellectual property rights. In this regard, third parties
may in the future assert claims against us concerning our existing products or with respect to
future products under development. We have entered into and may in the future enter into
indemnification obligations in favor of some customers that could be triggered upon an allegation
or finding that we are infringing other parties proprietary rights. If we do infringe a third
partys rights, we may need to negotiate with holders of patents relevant to our business. We have
from time to time received notices from third parties alleging infringement of their intellectual
property and where appropriate have entered into license agreements with those third parties with
respect to that intellectual property. We may not in all cases be able to resolve allegations of
infringement through licensing arrangements, settlement, alternative designs or otherwise. We may
take legal action to determine the validity and scope of the third-party rights or to defend
against any allegations of infringement. In the course of pursuing any of these means or defending
against any lawsuits filed against us, we could incur significant costs and diversion of our
resources. Due to the competitive nature of our industry, it is unlikely that we could increase our
prices to cover such costs. In addition, such claims could result in significant penalties or
injunctions that could prevent us from selling some of our products in certain markets or result in
settlements that require payment of significant royalties that could adversely affect our ability
to price our products profitably.
If we fail to obtain the right to use the intellectual property rights of others necessary to
operate our business, our ability to succeed will be adversely affected.
Certain companies in the telecommunications and optical components markets in which we sell
our products have experienced frequent litigation regarding patent and other intellectual property
rights. Numerous patents in these industries are held by others, including academic institutions
and our competitors. Optical component suppliers may seek to gain a competitive advantage or other
third parties may seek an economic return on their intellectual property portfolios by making
infringement claims against us. In the future, we may need to obtain license rights to patents or
other intellectual property held by others 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. Licenses
granting us the right to use third-party technology may not be available on commercially reasonable
terms, if at all. Generally, a license, if granted, would include payments of up-front fees,
ongoing royalties or both. These payments or other terms could have a significant adverse impact on
our operating results. Our larger competitors may be able to obtain licenses or cross-license their
technology on better terms than we can, which could put us at a competitive disadvantage.
The markets in which we operate are highly competitive, which could result in lost sales and
lower revenues.
The market for fiber optic components is highly competitive and such competition could
result in our existing customers moving their orders to competitors. Certain of our competitors may
be able more quickly and effectively to:
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respond to new technologies or technical standards; |
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react to changing customer requirements and expectations; |
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devote needed resources to the development, production, promotion and sale of products; and |
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deliver competitive products at lower prices. |
Many of our current competitors, as well as a number of our potential competitors, have
longer operating histories, greater name recognition, broader customer relationships and industry
alliances and substantially greater
-11-
financial, technical and marketing resources than we do. In addition, market leaders in
industries such as semiconductor and data communications, who may also have significantly more
resources than we do, may in the future enter our market with competing products. All of these
risks may be increased if the market were to further consolidate through mergers or other business
combinations between competitors.
We may not be able to compete successfully with our competitors and aggressive
competition in the market may result in lower prices for our products or decreased gross profit
margins. Any such development would have a material adverse effect on our business, financial
condition and results of operations.
We generate a significant portion of our revenues internationally and therefore are subject to
additional risks associated with the extent of our international operations.
For the year ended July 1, 2006, the year ended July 2, 2005, the six months ended July
3, 2004, and the year ended December 31, 2003, 21%, 28%, 26%, and 9% of our revenues, respectively,
were derived in the United States and 79%, 72%, 74%, and 91%, respectively, were derived outside
the United States. We are subject to additional risks related to operating in foreign countries,
including:
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currency fluctuations, which could result in increased operating expenses and reduced revenues; |
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greater difficulty in accounts receivable collection and longer collection periods; |
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difficulty in enforcing or adequately protecting our intellectual property; |
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foreign taxes; |
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political, legal and economic instability in foreign markets; and |
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foreign regulations. |
Any of these risks, or any other risks related to our foreign operations, could
materially adversely affect our business, financial condition and results of operations.
Our business will be adversely affected if we cannot manage the significant changes in the
number of our employees and the size of our operations.
We have significantly reduced the number of employees and scope of our operations because
of declining demand for certain of our products and continue to reduce our headcount in connection
with our on-going restructuring and cost reduction efforts. There is a risk that, during periods of
growth or decline, management will not sufficiently coordinate the roles of individuals to ensure
that all areas of our operations receive appropriate focus and attention. If we are unable to
manage our headcount, manufacturing capacity and scope of operations effectively, the cost and
quality of our products may suffer, we may be unable to attract and retain key personnel and we may
be unable to market and develop new products. Further, the inability to successfully manage the
substantially larger and geographically more diverse organization, or any significant delay in
achieving successful management, could have a material adverse effect on us and, as a result, on
the market price of our common stock.
We may be faced with product liability claims.
Despite quality assurance measures, there remains a risk that defects may occur in our
products. The occurrence of any defects in our products could give rise to liability for damages
caused by such defects and for consequential damages. They could, moreover, impair the markets
acceptance of our products. Both could have a material adverse effect on our business and financial
condition. In addition, we may assume product warranty liabilities related to companies we acquire
which could have a material adverse effect on our business and financial condition. In order to
mitigate the risk of liability for damages, we carry product liability insurance with a $26 million
aggregate annual limit and errors and omissions insurance with a $5 million annual limit. This
insurance may not adequately cover our costs arising from defects in our products or otherwise.
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 key personnel.
Competition for highly skilled technical people is extremely intense and we continue to face
difficulty identifying and hiring 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
-12-
executive management team and other key management and technical personnel, each of whom would
be difficult to replace. The loss of services of these or other executive officers or key personnel
or the inability to continue to attract qualified personnel could have a material adverse effect on
our business.
Similar to other technology companies, we rely upon our ability to use stock options and
other forms of equity-based compensation as key components of our executive and employee
compensation structure. Historically, these components have been critical to our ability to retain
important personnel and offer competitive compensation packages. Without these components, we would
be required to significantly increase cash compensation levels (or develop alternative compensation
structures) in order to retain our key employees. Accounting rules relating to the expensing of
equity compensation may cause us to substantially reduce, modify, or even eliminate, all or
portions of our equity compensation programs.
Our business and future operating results may be adversely affected by events outside of our
control.
Our business and operating results are vulnerable to interruption by events outside of
our control, such as earthquakes, fire, power loss, telecommunications failures, political
instability, military conflict and uncertainties arising out of terrorist attacks, including a
global economic slowdown, the economic consequences of additional military action or additional
terrorist activities and associated political instability, and the effect of heightened security
concerns on domestic and international travel and commerce.
Risks Related to Regulatory Compliance and Litigation
If we fail to maintain an effective system of internal controls, we may not be able to
accurately report our financial results, which may cause stockholders to lose confidence in the
accuracy of our financial statements.
Effective internal controls are necessary for us to provide reliable financial reports
and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud,
our brand and operating results could be harmed. In addition, compliance with the internal control
requirements, as well as other financial reporting standards applicable to a public company,
including the Sarbanes-Oxley Act of 2002, has in the past and will in the future continue to
involve substantial cost and investment of our managements time.
Included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2006 is
managements report on our internal controls over our financial reporting and Ernst & Young LLPs
attestation audit report thereon, both of which identify a material weakness in our internal
controls over financial reporting as of July 1, 2006 related to the inconsistent classification of
intercompany loan translation between two subsidiaries which led to an adjustment to translation
gain/loss and to cumulative translation adjustment in our statement of operations for the fiscal
year ended July 1, 2006. At July 2, 2005, we also reported on four additional material weaknesses
in our systems of internal control over financial reporting. While we have implemented procedures
to remediate these four material weaknesses identified in 2005, we are currently undertaking
efforts to remediate the material weakness related to the inconsistent classification of the
intercompany loan translation.
In fiscal 2007, and beyond, we will continue to spend significant time and incur
significant costs to assess and report on the effectiveness of internal controls over financial
reporting as required by Section 404 of the Sarbanes-Oxley Act. Discovering additional material
weaknesses in the future could make it more difficult for us to attract and retain qualified
persons to serve on our board of directors or as executive officers, which could harm our business.
In addition, if we discover future material weaknesses, disclosure of that fact could reduce the
markets confidence in our financial statements, which could harm our stock price and our ability
to raise capital.
Our business involves the use of hazardous materials, and environmental laws and regulations
may expose us to liability and increase our costs.
We historically handled small amounts of hazardous materials as part of our manufacturing
activities and now handle more and different hazardous materials as a result of the manufacturing
processes related to New Focus, the optical components business acquired from Nortel Networks and
the product lines we acquired from Marconi. Consequently, our operations are subject to
environmental laws and regulations governing, among other things, the use and handling of hazardous
substances and waste disposal. We may be required to incur environmental costs to comply with
current or future environmental laws. As with other companies engaged in manufacturing activities
that involve hazardous materials, a risk of environmental liability is inherent in our
manufacturing activities, as is the
-13-
risk that our facilities will be shut down in the event of a release of hazardous waste. The
costs associated with environmental compliance or remediation efforts or other environmental
liabilities could adversely affect our business. In addition, under applicable EU regulations, we,
along with other electronics component manufacturers, are prohibited from using lead and certain
other hazardous materials in our products. We have incurred unanticipated expenses in connection
with the related reconfiguration of our products, and could lose business or face product returns
if we failed to implement these requirements properly or on a timely basis.
Litigation regarding Bookham Technology plcs initial public offering and follow-on offering
and any other litigation in which we become involved, including as a result of acquisitions, may
substantially increase our costs and harm our business.
On June 26, 2001, a putative securities class action captioned Lanter v. New Focus, Inc.
et al., Civil Action No. 01-CV-5822, was filed against New Focus, Inc. and several of its officers
and directors, or the New Focus Individual Defendants, in the United States District Court for the
Southern District of New York. Also named as defendants were Credit Suisse First Boston
Corporation, Chase Securities, Inc., U.S. Bancorp Piper Jaffray, Inc. and CIBC World Markets Corp.,
or the Underwriter Defendants, the underwriters in New Focuss initial public offering. Three
subsequent lawsuits were filed containing substantially similar allegations. These complaints have
been consolidated. On April 19, 2002, plaintiffs filed an amended class action complaint, described
below, naming as defendants the New Focus Individual Defendants and the Underwriter Defendants.
On November 7, 2001, a class action complaint was filed against Bookham Technology plc
and others in the United States District Court for the Southern District of New York. On April 19,
2002, plaintiffs filed an amended complaint, or the Amended Complaint. The Amended Complaint names
as defendants Bookham Technology plc, Goldman, Sachs & Co. and FleetBoston Robertson Stephens,
Inc., two of the underwriters of Bookham Technology plcs initial public offering in April 2000,
and Andrew G. Rickman, Stephen J. Cockrell and David Simpson, or the Bookham Individual Defendants,
each of whom was an officer and/or director at the time of the initial public offering.
The Amended Complaint asserts claims under certain provisions of the securities laws of
the United States. It alleges, among other things, that the prospectuses for Bookham Technology
plcs and New Focuss initial public offerings were materially false and misleading in describing
the compensation to be earned by the underwriters in connection with the offerings, and in not
disclosing certain alleged arrangements among the underwriters and initial purchasers of ordinary
shares, in the case of Bookham Technology plc, or common stock, in the case of New Focus, from the
underwriters. The Amended Complaint seeks unspecified damages (or in the alternative rescission for
those class members who no longer hold our or New Focus common stock), costs, attorneys fees,
experts fees, interest and other expenses. In October 2002, the New Focus Individual Defendants
and the Bookham Individual Defendants were dismissed, without prejudice, from the action. In July
2002, all defendants filed motions to dismiss the Amended Complaint. The motion was denied as to
Bookham Technology plc and New Focus in February 2003. Special committees of the board of directors
authorized the companies to negotiate a settlement of pending claims substantially consistent with
a memorandum of understanding negotiated among class plaintiffs, all issuer defendants and their
insurers.
Plaintiffs and most of the issuer defendants and their insurers have entered into a
stipulation of settlement for the claims against the issuer defendants, including Bookham and New
Focus. Under the stipulation of settlement, the plaintiffs will dismiss and release all claims
against participating defendants in exchange for a payment guaranty by the insurance companies
collectively responsible for insuring the issuers in the related cases, and the assignment or
surrender to the plaintiffs of certain claims the issuer defendants may have against the
underwriters. On February 15, 2005, the court issued an Opinion and Order preliminarily approving
the settlement provided that the defendants and plaintiffs agree to a modification narrowing the
scope of the bar order set forth in the original settlement agreement. The parties agreed to the
modification narrowing the scope of the bar order, and on August 31, 2005, the court issued an
order preliminarily approving the settlement and setting a public hearing on its fairness which
took place on April 24, 2006. The judge has yet to issue a decision on this hearing.
Litigation is subject to inherent uncertainties, and an adverse result in these or other
matters that may arise from time to time could have a material adverse effect on our business,
results of operations and financial condition. Any litigation to which we are subject may be costly
and, further, could require significant involvement of our senior management and may divert
managements attention from our business and operations.
-14-
A variety of factors could cause the trading price of our common stock 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 in addition to publication of our business results, such as:
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announcements by our competitors and customers of their historical results or
technological innovations or new products; |
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developments with respect to patents or proprietary rights; |
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governmental regulatory action; and |
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general market conditions. |
Since Bookham Technology plcs initial public offering in April 2000, Bookham Technology
plcs ADSs and ordinary shares, our shares of common stock and the shares of our customers and
competitors have experienced substantial price and volume fluctuations, in many cases without any
direct relationship to the affected companys operating performance. An outgrowth of this market
volatility is the significant vulnerability of our stock price and the stock prices of our
customers and competitors to any actual or perceived fluctuation in the strength of the markets we
serve, regardless of the actual consequence of such fluctuations. As a result, the market prices
for these companies are highly volatile. These broad market and industry factors caused the market
price of Bookham Technology plcs ADSs and ordinary shares, and our common stock to fluctuate, and
may in the future cause the market price of our common stock to fluctuate, regardless of our actual
operating performance or the operating performance of our customers.
The future sale of substantial amounts of our common stock could adversely affect the price of
our common stock.
As of July 1, 2006, affiliates of Nortel Networks held 3,999,999 shares of our common
stock. Other stockholders or groups of stockholders also hold significant percentages of our shares
of common stock. In January and March 2006, pursuant to a series of transactions we issued an
aggregate of 10,507,158 shares of common stock and warrants to purchase an aggregate of 1,086,001
shares of common stock. On September 1, 2006, we entered into an agreement to sell 8,696,000 shares
of our common stock and warrants to purchase 2,174,00 shares of our common stock, in a private
placement. In connection with that private placement, on September 19, 2006, certain institutional
investors purchased an additional 2,898,667 shares of common stock and additional warrants to
purchase up to 724,667 shares of common stock at the same purchase price sold to the initial
purchasers in the private placement. Sales by Nortel Networks or other holders of substantial
amounts of shares of our common stock in the public or private market could adversely affect the
market price of our common stock by increasing the supply of shares available for sale compared to
the demand in the public and private markets to buy our common stock. These sales may also make it
more difficult for us to sell equity securities in the future at a time and price that we deem
appropriate to meet our capital needs.
Some anti-takeover provisions contained in our charter and under Delaware laws could hinder a
takeover attempt.
We are subject to the provisions of Section 203 of the General Corporation Law of the
State of Delaware prohibiting, under some circumstances, publicly-held Delaware corporations from
engaging in business combinations with some stockholders for a specified period of time without the
approval of the holders of substantially all of our 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 some
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.
-15-
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements, other than statements of historical facts, included or incorporated in this
prospectus regarding our strategy, future operations, financial position, future revenues,
projected costs, prospects, plans and objectives of management are forward-looking statements. The
words anticipates, believes, estimates, expects, intends, may, plans, projects,
will, would and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words. We cannot guarantee
that we actually will achieve the plans, intentions or expectations disclosed in our
forward-looking statements and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make. We have included important
factors in the cautionary statements included or incorporated in this prospectus, particularly
under the heading Risk Factors, that we believe could cause actual results or events to differ
materially from the forward-looking statements that we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or
investments we may make. We do not assume any obligation to update any forward-looking statements.
-16-
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling stockholders.
The selling stockholders will pay any underwriting discounts and commissions and expenses
incurred by the selling stockholders for brokerage, accounting, tax or legal services or any other
expenses incurred by the selling stockholders in disposing of the shares. We will bear all other
costs, fees and expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees, NASDAQ listing fees
and fees and expenses of our counsel and our accountants.
SELLING STOCKHOLDERS
The shares of common stock to be offered by the selling stockholders consists of shares of
common stock and shares of common stock issuable upon exercise of warrants issued to the selling
stockholders in a private placement.
The following table sets forth, to our knowledge, certain information about the selling
stockholders as of September 20, 2006. The number of shares held by any selling stockholder may
fluctuate from time to time. Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission, or SEC, and includes voting or investment power with
respect to shares. Pursuant to the terms of the warrants, no selling stockholder owning a warrant
may exercise the warrant to the extent that such exercise would cause such selling stockholder to
beneficially own a number of shares of common stock which, when added to the number of shares of
common stock held by such stockholder, would exceed 4.99% of the number of shares of common stock
then outstanding. The stockholder owning a warrant may, however, waive this limitation on exercise
in certain circumstances, including by providing us sixty days prior written notice. The number of
shares beneficially owned by the selling stockholders in the second column does not reflect this
limitation.
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Shares of Common Stock |
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Shares of Common Stock |
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Beneficially Owned Prior to |
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Number of Shares |
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to be Beneficially Owned |
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Offering (1) |
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of Common Stock |
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After Offering (1)(2) |
Name of Selling Stockholder |
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Number |
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Percentage |
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Being Offered |
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Number |
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Percentage |
Alexandra Global Master Fund
Ltd (3) |
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812,500 |
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1.2 |
% |
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812,500 |
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* |
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Cranshire Capital, L.P (4) |
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115,741 |
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* |
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115,741 |
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* |
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Enable Growth Partners LP
(5) |
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2,473,708 |
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3.6 |
% |
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2,473,708 |
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* |
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Enable Opportunity Partners
LP (5) |
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475,714 |
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* |
|
|
|
475,714 |
|
|
|
|
|
|
|
* |
|
GLG North American
Opportunity Fund (6) |
|
|
1,250,000 |
|
|
|
1.8 |
% |
|
|
1,250,000 |
|
|
|
|
|
|
|
* |
|
GLG Technology Fund (6) |
|
|
2,244,284 |
|
|
|
3.2 |
% |
|
|
1,000,000 |
|
|
|
1,244,284 |
|
|
|
1.8 |
% |
Iroquois Master Fund Ltd
(7) |
|
|
127,315 |
|
|
|
* |
|
|
|
127,315 |
|
|
|
|
|
|
|
* |
|
Leo Ventures Fund SPC for
and on behalf of its
Segregated Portfolio Class A
(8) |
|
|
1,375,000 |
|
|
|
2.0 |
% |
|
|
1,375,000 |
|
|
|
|
|
|
|
* |
|
Leonardo Capital Fund Ltd
(9) |
|
|
1,375,000 |
|
|
|
2.0 |
% |
|
|
1,375,000 |
|
|
|
|
|
|
|
* |
|
Penn Distressed Fund, LP
3NJ-10021 (10) |
|
|
67,310 |
|
|
|
* |
|
|
|
67,310 |
|
|
|
|
|
|
|
* |
|
Penn High Yield Fund, LP
102-19645 (10) |
|
|
160,799 |
|
|
|
* |
|
|
|
160,799 |
|
|
|
|
|
|
|
* |
|
Penn Micro Cap Fund, LP
655-10032 (10) |
|
|
44,080 |
|
|
|
* |
|
|
|
44,080 |
|
|
|
|
|
|
|
* |
|
Perennial Fund LP (11) |
|
|
49,765 |
|
|
|
* |
|
|
|
16,690 |
|
|
|
33,075 |
|
|
|
* |
|
Perennial Fund Ltd (11) |
|
|
361,651 |
|
|
|
* |
|
|
|
121,260 |
|
|
|
240,391 |
|
|
|
* |
|
Permal Investment Holdings
NV (11) |
|
|
218,009 |
|
|
|
* |
|
|
|
73,100 |
|
|
|
144,909 |
|
|
|
* |
|
-17-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of Common Stock |
|
|
|
Shares of Common Stock |
|
|
Beneficially Owned Prior to |
|
Number of Shares |
|
to be Beneficially Owned |
|
|
Offering (1) |
|
of Common Stock |
|
After Offering (1)(2) |
Name of Selling Stockholder |
|
Number |
|
Percentage |
|
Being Offered |
|
Number |
|
Percentage |
Peter Kaltman 105-91098. |
|
|
18,635 |
|
|
|
* |
|
|
|
18,635 |
|
|
|
|
|
|
|
* |
|
Pierce Diversified Strategy
Master Fund LLC, Ena (5) |
|
|
221,999 |
|
|
|
* |
|
|
|
221,999 |
|
|
|
|
|
|
|
* |
|
Portside Growth and
Opportunity Fund
(12) |
|
|
1,229,446 |
|
|
|
1.8 |
% |
|
|
796,296 |
|
|
|
433,150 |
|
|
|
* |
|
Radcliffe SPC, Ltd for and
on behalf of the Class A
Convertible Crossover
Segregated Portfolio (13) |
|
|
465,625 |
|
|
|
* |
|
|
|
465,625 |
|
|
|
|
|
|
|
* |
|
Rockmore Investment Master
Fund Ltd. (14) |
|
|
115,741 |
|
|
|
* |
|
|
|
115,741 |
|
|
|
|
|
|
|
* |
|
Satellite Strategic Finance
Associates, LLC (15) |
|
|
1,319,907 |
|
|
|
1.9 |
% |
|
|
1,319,907 |
|
|
|
|
|
|
|
* |
|
SDS Capital Group SPC, Ltd.
(16) |
|
|
187,500 |
|
|
|
* |
|
|
|
187,500 |
|
|
|
|
|
|
|
* |
|
The Perennial Master Fund
Ltd (11) |
|
|
302,575 |
|
|
|
* |
|
|
|
101,450 |
|
|
|
201,125 |
|
|
|
* |
|
UBS OConnor LLC FBO
OConnor PIPES Corporate
Strategies Master Limited
(17) |
|
|
812,500 |
|
|
|
1.2 |
% |
|
|
812,500 |
|
|
|
|
|
|
|
* |
|
Vicis Capital Master Fund
(18) |
|
|
960,834 |
|
|
|
1.4 |
% |
|
|
960,834 |
|
|
|
|
|
|
|
* |
|
Wachovia Bank for the
Benefit of Penn Diversified
Micro Cap Fund LP (10) |
|
|
4,630 |
|
|
|
* |
|
|
|
4,630 |
|
|
|
|
|
|
|
* |
|
Total |
|
|
16,790,268 |
|
|
|
24.1 |
% |
|
|
14,493,334 |
|
|
|
2,296,934 |
|
|
|
3.3 |
% |
|
|
|
* |
|
Less than one percent. |
|
(1) |
|
As of September 20, 2006, there were 69,573,575 shares of our common stock outstanding. |
|
(2) |
|
We do not know when or in what amounts a selling stockholder may offer shares for sale. The
selling stockholders might not sell any or all of the shares offered by this prospectus.
Because the selling stockholders may offer all or some of the shares pursuant to this
offering, and because there are currently no agreements, arrangements or understandings with
respect to the sale of any of the shares, we cannot estimate the number of the shares that
will be held by the selling stockholders after completion of the offering. However, for
purposes of this table, we have assumed that, after completion of the offering, none of the
shares covered by this prospectus will be held by the selling stockholders. |
|
(3) |
|
Alexandra Investment Management, LLC, a Delaware limited liability company (AIM), serves as
investment adviser to Alexandra Global Master Fund Ltd., a British Virgin Islands company
(Alexandra). By reason of such relationship, AIM may be deemed to share dispositive power
over the shares of common stock stated as beneficially owned by Alexandra. AIM disclaims
beneficial ownership of such shares of common stock. Mr. Mikhail A. Filimonov (Filimonov)
is the Chairman, Chief Executive Officer, Chief Investment Officer and a managing member of
AIM. By reason of such relationships, Filimonov may be deemed to share dispositive power over
the shares of common stock stated as beneficially owned by Alexandra. Filimonov disclaims
beneficial ownership of such shares of common stock. |
|
(4) |
|
Mitchell P. Kopin, President of Downsview Capital, Inc., the General Partner of Cranshire
Capital, L.P., has sole voting and investment control over these securities. |
|
(5) |
|
Mitch Levine, managing partner of the selling stockholder,
has voting and investment control over these securities.
|
|
(6) |
|
Noam Gottesman, Emmanuel Roman and Piere Lagrange, managing
directors of GLG Partners Limited, the General Partner of GLG
Partners, LP, the investment manager of the selling stockholder, have
voting and dispositive power over these securities. |
|
(7) |
|
Joshua Silverman has voting and investment control over the shares held by Iroquois Master
Fund Ltd. Mr. Silverman disclaims beneficial ownership of the shares. |
|
(8) |
|
Helen Forrest and Pierangelo Bottinelli have voting and investment control over these
securities. |
|
(9) |
|
Stefano Roma has voting and investment control over these securities.
|
|
(10) |
|
Paulo Silva and Scott Schumacher have voting and investment
control over these securities. |
|
(11) |
|
The general partner of Perennial Fund LP is Ampere Capital
LLC. The managing member/owner of Ampere Capital LLC is Wayne C.
Wilkey. The investment manager of Perennial Fund Ltd. is Ampere Capital
Management LP. The general partner of Ampere Capital Management LP is
Ampere Management GP Inc. The shareholder/owner of Ampere Management GP
Inc. is Wayne C. Wilkey. Permal Investment Holdings NV cedes
investment control to Ampere Capital Management, LP per the
Investment Management Agreement between the companies. The investment
adviser with investment control of The Perennial Master Fund Ltd is
Ampere Capital Management LP. |
-18-
|
|
|
(12) |
|
Ramius Capital Group, L.L.C. (Ramius Capital) is the investment adviser of Portside Growth
and Opportunity Fund (Portside) and consequently has voting and investment discretion over
securities held by Portside. Ramius Capital disclaims beneficial ownership of the shares held
by Portside. Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon are
the sole managing members of C4S & Co., L.L.C., the sole managing member of Ramius Capital.
As a result, Messrs. Cohen, Stark, Strauss and Solomon may be considered beneficial owners of
any shares deemed to be beneficially owned by Ramius Capital. Messrs. Cohen, Strauss and
Solomon disclaim beneficial ownership of these shares. |
|
(13) |
|
Pursuant to an investment management agreement, RG Capital Management, L.P. (RG Capital)
serves as the investment manager of Radcliffe SPC, Ltd.s Class A Convertible Crossover
Segregated Portfolio. RGC Management Company, LLC (Management) is the general partner of RG
Capital. Steve Katznelson and Gerald Stahlecker serve as the managing members of Management.
Each of RG Capital, Management and Messrs. Katznelson and Stahlecker disclaims beneficial
ownership of the securities owned by Radcliffe SPC, Ltd. for and on behalf of the Class A
Convertible Crossover Segregated Portfolio. |
|
(14) |
|
Rockmore Capital, LLC (Rockmore Capital) and Rockmore Partners, LLC (Rockmore Partners),
each a limited liability company formed under the laws of the State of Delaware, serve as the
investment manager and general partner, respectively, to Rockmore Investments (US) LP, a
Delaware limited partnership, which invests all of its assets through Rockmore Investment
Master Fund Ltd., an exempted company formed under the laws of Bermuda (Rockmore Master
Fund). By reason of such relationships, Rockmore Capital and Rockmore Partners may be deemed
to share dispositive power over the shares of our common stock owned by Rockmore Master Fund.
Rockmore Capital and Rockmore Partners disclaim beneficial ownership of such shares of our
common stock. Rockmore Partners has delegated authority to Rockmore Capital regarding the
portfolio management decisions with respect to the shares of common stock owned by Rockmore
Master Fund and, as of September 17, 2006, Mr. Bruce T. Bernstein and Mr. Brian Daly, as
officers of Rockmore Capital, are responsible for the portfolio management decisions of the
shares of common stock owned by Rockmore Master Fund. By reason of such authority, Messrs.
Bernstein and Daly may be deemed to share dispositive power over the shares of our common
stock owned by Rockmore Master Fund. Messrs. Berstein and Daly disclaim beneficial ownership
of such shares of our common stock and neither of such persons has any legal right to maintain
such authority. No other person has sole or shared voting or
dispositive power with respect to
the shares of our common stock as those terms are used for purposes under Regulation 13D-G of
the Securities Exchange Act of 1934, as amended. No person or group (as that term is used
in Section 13(d) of the Securities Exchange Act of 1934, as amended, or the SECs Regulation
13D-G) controls Rockmore Master Fund. |
|
(15) |
|
The discretionary investment manager of the selling stockholder is Satellite Asset
Management, L.P. (SAM). The controlling entity of SAM is Satellite Fund Management, LLC
(SFM). The managing members of SFM are Lief Rosenblatt, Mark Sonning and Gabe Nechamkin.
SAM, SFM and each named individual disclaims beneficial ownership of the securities. |
|
(16) |
|
Steve Derby, the Managing Member of SDS Management, LLC, the Investment Advisor of SDS
Capital Group SPC, Ltd., is the individual with voting and investment control over these
securities. Mr. Derby disclaims beneficial ownership of the securities except to the extent
of his pecuniary interest, if any. |
|
(17) |
|
The selling stockholder (OConnor PIPES Corporate Strategies Master Limited) of this security
is a fund which cedes investment control to UBS OConnor LLC (the Investment Manager). The
Investment Manager makes all of the investment/voting decisions. UBS OConnor LLC is a wholly
owned subsidiary of UBS AG which is listed on the NYSE. |
|
(18) |
|
Shad Stastney, John Succo and Sky Lucas, the members of Vicis
Capital LLC, have voting and investment control over these
securities. |
None of the selling stockholders has held any position or office with, or has otherwise had a
material relationship with, us or any of our subsidiaries within the past three years.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to time by the selling
stockholders. The term selling stockholders includes donees, pledgees, transferees or other
successors-in-interest selling shares received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other non-sale related transfer. The
selling stockholders will act independently of us in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and under terms then prevailing or at prices
-19-
related to the then current market price or in negotiated transactions. The selling
stockholders may sell their shares by one or more of, or a combination of, the following methods:
|
|
|
purchases by a broker-dealer as principal and resale by such broker-dealer for its
own account pursuant to this prospectus; |
|
|
|
|
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; |
|
|
|
|
block trades in which the broker-dealer so engaged will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to facilitate
the transaction; |
|
|
|
|
an over-the-counter distribution in accordance with the rules of the Nasdaq National Market; |
|
|
|
|
in privately negotiated transactions; |
|
|
|
|
in options, swaps or derivatives transactions; |
|
|
|
|
in transactions otherwise than on exchanges or systems or in the over-the-counter market; |
|
|
|
|
an exchange distribution in accordance with the rules of the applicable exchange; |
|
|
|
|
a combination of any of these methods of sale; and |
|
|
|
|
any other method permitted by applicable law. |
In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In connection with distributions of the shares or
otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may also sell the common
stock short and redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may also pledge shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution, may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange
for other broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions from the selling stockholders in amounts to be negotiated immediately
prior to the sale.
The selling stockholders may pledge or grant a security interest in some or all of the
warrants or shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus, any supplement to this
prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933
-20-
amending, if necessary, the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this prospectus. The
selling stockholders may also transfer and donate the shares of common stock in other
circumstances, in which case the transferees, donees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this prospectus.
In offering the shares covered by this prospectus, the selling stockholders and any
broker-dealers or agents who execute sales for the selling stockholders may be deemed to be
underwriters within the meaning of the Securities Act in connection with such sales. Any profits
realized by the selling stockholders and the compensation of any broker-dealer or agent may be
deemed to be underwriting discounts and commissions. Neither we nor any selling stockholder can
presently estimate the amount of such compensation. We know of no existing arrangements between
any selling stockholder and any other selling stockholder, underwriter, broker/dealer or other
agent relating to the sale or distribution of the shares. No underwriter, broker/dealer or agent
has been engaged by us in connection with the distribution of the shares.
In order to comply with the securities laws of certain states, if applicable, the shares must
be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition,
in certain states the shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification requirement is
available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of shares in the market and to the activities of the
selling stockholders and their affiliates, which may limit the timing of purchases and sales of any
of the shares of common stock by the selling stockholders and any other participating person.
Regulation M may also restrict the ability of any person engaged in the distribution of the shares
of common stock to engage in market-making activities with respect to the shares of common stock.
In addition, we will make copies of this prospectus available to the selling stockholders
for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in transactions involving
the sale of the shares against certain liabilities, including liabilities arising under the
Securities Act.
At the time a particular offer of shares is made, a prospectus supplement, if required, will
be distributed that will set forth the number of shares being offered and the terms of the
offering, including the name of any underwriter, dealer or agent, the purchase price paid by any
underwriter, any discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price
to the public.
We have agreed to indemnify the selling stockholders against certain liabilities, including
certain liabilities under the Securities Act. We will be indemnified by the selling stockholders
severally against certain liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the Registration Statement of which this
prospectus constitutes a part effective until the earlier of (i) such time as all of the shares
covered by this prospectus have been publicly sold pursuant to the Registration Statement or
pursuant to Rule 144 of the Securities Act or (ii) such time as all of the shares covered by this
prospectus may be immediately sold to the public under Rule 144(k) of the Securities Act or (iii)
the date that is two years after the date the Registration Statement is declared effective by the
Securities and Exchange Commission.
The SEC staff is of a view that selling stockholders who are registered broker-dealers or
affiliates of registered broker-dealers may be underwriters under the Securities Act. Each of
Enable Growth Partners LP, Enable Opportunity Partners LP, Pierce Diversified Strategy Master Fund
LLC, Ena and Portside Growth and Opportunity Fund is an affiliate of registered broker-dealers. We
will not pay any compensation or give any discounts or commissions to any underwriter in connection
with the securities being registered by this prospectus.
-21-
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed upon by Wilmer Cutler
Pickering Hale and Dorr LLP, Boston, Massachusetts.
EXPERTS
Ernst
& Young LLP, San Jose, California, independent registered public
accounting firm, has audited our consolidated financial statements and schedule
as of and for the year ended July 1, 2006 included in our Annual Report on Form
10-K for the year ended July 1, 2006, and managements assessment of the
effectiveness of our internal control over financial reporting as of July 1, 2006, as
set forth in their reports (which contain an explanatory paragraph describing
conditions that raise substantial doubt about the Companys ability to continue as
a going concern as described in Note 1 to the consolidated financial statements
and which conclude, among other things, that Bookham, Inc. did not maintain
effective internal control over financial reporting as of July 1, 2006, based on
Internal Control Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, because of the effects of the material
weakness described therein), which are incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
for the year ended July 1, 2006 and managements assessment are incorporated
by reference in reliance on Ernst & Young LLPs reports, given on their authority
as experts in accounting and auditing.
Ernst & Young LLP, Reading, England, independent registered public accounting
firm, has audited our consolidated financial statements and schedule as of July 2,
2005 and for the year ended July 2, 2005, the six months ended July 3, 2004 and
the year ended December 31, 2003, included in our Annual Report on Form 10-K
for the year ended July 1, 2006, as set forth in their report (which contains an
explanatory paragraph describing conditions that raise substantial doubt about the
Companys ability to continue as a going concern as described in Note 1 to the
consolidated financial statements), which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
as of July 2, 2005 and for the year ended July 2, 2005, the six months ended July
3, 2004 and the year ended December 31, 2003, are incorporated by reference in
reliance on Ernst & Young LLPs report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the SEC. You may read and copy any
document we file at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549.
You should call 1-800-SEC-0330 for more information on the public reference room. The SEC
maintains an Internet website at http://www.sec.gov that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC. Our SEC
filings are also available to you on the SECs Internet site.
This prospectus is part of a registration statement that we filed with the SEC. The
registration statement contains more information than this prospectus regarding us and our common
stock, including certain exhibits and schedules. You can obtain a copy of the registration
statement from the SEC at the address listed above or from the SECs Internet site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC requires us to incorporate into this prospectus information that we file with the
SEC in other documents. This means that we can disclose important information to you by referring
to other documents that contain that information. The information incorporated by reference is
considered to be part of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this prospectus
automatically updates and supersedes previously filed information. We incorporate by reference the
documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, prior to the termination of the offering of the
shares covered by this prospectus.
|
(1) |
|
Our Annual Report on Form 10-K for the fiscal year ended July
1, 2006; |
|
|
(2) |
|
Our Current Report on Form 8-K filed with the SEC on September
21, 2006; |
|
|
(3) |
|
All of our filings pursuant to the Exchange Act after the date
of filing the initial registration statement and prior to effectiveness of the
registration statement; and |
|
|
(4) |
|
The description of our securities contained in the Current
Report on Form 8-K dated September 10, 2004, including any amendment or report
filed for the purpose of updating such description. |
-22-
A statement contained in a document 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 in this prospectus, any prospectus supplement or in any other subsequently filed document
which is also incorporated in this prospectus modifies or replaces such statement. Any statements
so modified or superceded shall not be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
You may request a copy of these documents, which will be provided to you at no cost, by
writing or telephoning us using the following contact information:
Bookham, Inc.
2584 Junction Avenue
Sane Jose, California 95134
Attention: Corporate Secretary
Telephone: 408-383-1400
-23-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses to be incurred in connection with the sale
and distribution of the securities being registered hereby, all of which will be borne by Bookham,
Inc. (except any underwriting discounts and commissions and expenses incurred by the selling
stockholders for brokerage, accounting, tax or legal services or any other expenses incurred by the
selling stockholders in disposing of the shares). All amounts shown are estimates except the
Securities and Exchange Commission registration fee.
|
|
|
|
|
Filing Fee Securities and Exchange Commission |
|
$ |
4,497 |
|
|
|
|
|
|
Legal fees and expenses |
|
$ |
25,000 |
|
|
|
|
|
|
Printing and engraving expenses |
|
$ |
1,000 |
|
|
|
|
|
|
Accounting fees and expenses |
|
$ |
20,000 |
|
|
|
|
|
|
Miscellaneous expenses |
|
$ |
20,000 |
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
$ |
70,497 |
|
|
|
|
|
Item 15. Indemnification of Directors and Officers.
Article SEVENTH of the Registrants Restated Certificate of Incorporation (the Restated
Certificate of Incorporation) provides that no director of the Registrant shall be personally
liable for any monetary damages for any breach of fiduciary duty as a director, except to the
extent that the General Corporation Law of the State of Delaware prohibits the elimination or
limitation of liability of directors for breach of fiduciary duty.
Section 102 of the General Corporation Law of the State of Delaware allows a corporation to
eliminate the personal liability of directors of a corporation to the corporation or its
stockholders for monetary damages for a breach of fiduciary duty as a director, except where the
director breached his duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware corporate law or obtained an improper personal benefit.
Article EIGHTH of the Registrants Restated Certificate of Incorporation provides that a
director or officer of the Registrant (a) shall be indemnified by the Registrant against all
expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed action, suit or
proceeding (other than an action by or in the right of the Registrant) brought against him by
virtue of his position as a director or officer of the Registrant if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant,
and, with respect to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful and (b) shall be indemnified by the Registrant against all expenses (including
attorneys fees) and, to the extent permitted by law, amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed action or suit by or in
the right of the Registrant brought against him by virtue of his position as a director or officer
of the Registrant if he acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, except that no indemnification shall be made with
respect to any matter as to which such person shall have been adjudged to be liable to the
Registrant, unless the Court of Chancery of Delaware determines that, despite such adjudication but
in view of all of the circumstances, he is entitled to indemnification of such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has been successful, on the
merits or otherwise, including, without limitation, the dismissal of an action without prejudice,
he is required to be indemnified by the Registrant against all expenses (including attorneys fees)
actually and reasonably incurred in connection therewith. Expenses shall be advanced to a director
or officer at his request, provided that he undertakes
to repay the amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
II-1
Indemnification shall be made upon a determination by the Registrant that indemnification is
proper because the applicable standard of conduct for indemnification has been met. As a condition
precedent to the right of indemnification, the director or officer must give the Registrant notice
of the action for which indemnity is sought and the Registrant has the right to participate in such
action or assume the defense thereof.
Article EIGHTH of the Registrants Restated Certificate of Incorporation further provides that
the indemnification provided therein is not exclusive.
Section 145 of the General Corporation Law of the State of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of the corporation
and certain other persons serving at the request of the corporation in related capacities against
amounts paid and expenses incurred in connection with an action or proceeding to which he is or is
threatened to be made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
corporation, and, in any criminal proceeding, if such person had no reasonable cause to believe his
conduct was unlawful; provided that, in the case of actions brought by or in the right of the
corporation, no indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the extent that the
adjudicating court determines that such indemnification is proper under the circumstances.
The Registrant has entered into indemnification agreements with each of its directors to give
such directors additional contractual assurances regarding the indemnification provisions set forth
in the Registrants certificate of incorporation and to provide additional procedural protections.
The Registrant has purchased directors and officers liability insurance which would
indemnify its directors and officers against damages arising out of certain kinds of claims which
might be made against them based on their negligent acts or omissions while acting in their
capacity as such.
Item 16. Exhibits
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EXHIBIT |
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NUMBER |
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DESCRIPTION |
4.1
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Restated Certificate of Incorporation of Registrant (previously filed as Exhibit
3.1 to Current Report on Form 8-K (file no. 000-30684) dated September 10, 2004,
and incorporated herein by reference). |
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|
4.2
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By-laws of the Registrant (previously filed as Exhibit 3.2 to Transition Report
on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004
to July 3, 2004, and incorporated herein by reference). |
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5.1
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Opinion of Wilmer Cutler Pickering Hale and Dorr LLP. |
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23.1
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Consent of Ernst & Young LLP,
San Jose, California, Independent Registered Public Accounting Firm.
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23.2
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Consent of Ernst & Young LLP,
Reading, England, Independent Registered Public Accounting Firm. |
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23.3
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Consent of Wilmer Cutler Pickering
Hale and Dorr LLP, included in Exhibit 5.1 filed herewith. |
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24.1
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Power of Attorney (See page II-4 of this Registration Statement). |
Item 17. Undertakings.
Item 512(a) of Regulation S-K. The undersigned registrant hereby undertakes:
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(1) |
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To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: |
II-2
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(i) |
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To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; and |
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(ii) |
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To reflect in the prospectus any facts or
events arising after the effective date of this 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 the 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) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective registration
statement; and |
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(iii) |
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To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement; |
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this
section do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
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(2) |
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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 therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. |
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(3) |
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To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering. |
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(4) |
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That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser: |
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(A) |
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Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part
of the registration statement as of the date the filed
prospectus was deemed part of and included in this Registration
Statement; and |
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(B) |
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Each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a
registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by Section
10(a) of the Securities Act of 1933 shall be deemed to be part
of and included in the registration statement as of the earlier
of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall
be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of this Registration Statement or
made in any such document immediately prior to such effective
date. |
II-3
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(5) |
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That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: |
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The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell
such securities to such purchaser: |
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(i) |
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Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be filed
pursuant to Rule 424; |
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(ii) |
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Any free writing prospectus relating to the
offering prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant; |
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(iii) |
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The portion of any other free writing
prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and |
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(iv) |
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Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser. |
Item 512(b) of Regulation S-K. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each filing of the
registrants annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended (and, where applicable, each filing of an employee benefit plans annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the 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.
Item 512(h) of Regulation S-K. 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 indemnification provisions described herein, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 the Act and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant
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
September 29, 2006.
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BOOKHAM, INC.
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By: |
/s/ Giorgio Anania
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Giorgio Anania |
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President and Chief Executive Officer |
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SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Bookham, Inc., hereby severally constitute and
appoint Giorgio Anania, Stephen Abely and Thomas Kelley and each of them singly, our true and
lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in
our names in the capacities indicated below the Registration Statement on Form S-3 filed herewith
and any and all pre-effective and post-effective amendments to said Registration Statement and
generally to do all such things in our name and behalf in our capacities as officers and directors
to enable Bookham, Inc. to comply with the provisions of the Securities Act of 1933, as amended,
and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature |
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Title |
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Date |
/s/ Giorgio Anania
Giorgio Anania
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President, Chief Executive
Officer and Director
(Principal Executive Officer)
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September 29, 2006 |
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/s/ Stephen Abely
Stephen Abely
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Chief Financial Officer
(Principal Financial and
Accounting Officer)
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|
September 29, 2006 |
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/s/ Peter Bordui
Peter Bordui
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Director
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September 29, 2006 |
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Director
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/s/ Lori Holland
Lori Holland
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Director
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September 29, 2006 |
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/s/ W. Arthur Porter
W. Arthur Porter
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Director
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September 29, 2006 |
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Director
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II-5
EXHIBIT INDEX
|
|
|
EXHIBIT |
|
|
NUMBER |
|
DESCRIPTION |
4.1
|
|
Restated Certificate of Incorporation of Registrant (previously filed as
Exhibit 3.1 to Current Report on Form 8-K (file no. 000-30684) dated
September 10, 2004, and incorporated herein by reference). |
|
|
|
4.2
|
|
By-laws of the Registrant (previously filed as Exhibit 3.2 to Transition
Report on Form 10-K (file no. 000-30684) for the transition period from
January 1, 2004 to July 3, 2004, and incorporated herein by reference). |
|
|
|
5.1
|
|
Opinion of Wilmer Cutler Pickering Hale and Dorr LLP. |
|
|
|
23.1
|
|
Consent of Ernst & Young LLP,
San Jose, California, Independent Registered Public Accounting Firm. |
|
|
|
23.2
|
|
Consent of Ernst & Young LLP,
Reading, England, Independent Registered Public Accounting Firm. |
|
|
|
23.3
|
|
Consent of Wilmer Cutler Pickering Hale and Dorr LLP, included in Exhibit
5.1 filed herewith. |
|
|
|
24.1
|
|
Power of Attorney (See page II-4 of this Registration Statement). |
II-6