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|
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
|
|
20-1303994
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(State or other jurisdiction of
incorporation or organization)
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|
(I.R.S. Employer
Identification Number)
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|
Large accelerated filer
|
|
¨
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Accelerated filer
|
x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
|
¨
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Page
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Item 1.
|
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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December 27, 2014
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June 28, 2014
|
||||
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(Thousands, except par value)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
74,537
|
|
|
$
|
98,973
|
|
Restricted cash
|
4,362
|
|
|
5,055
|
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||
Short-term investments
|
81
|
|
|
95
|
|
||
Accounts receivable, net of allowances for doubtful accounts and sales returns of $2,482 and $256, respectively as of December 27, 2014, and $2,750 and $579, respectively as of June 28, 2014, and including $770 and $2,706 due from related parties as of December 27, 2014 and June 28, 2014, respectively
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82,649
|
|
|
82,872
|
|
||
Inventories
|
65,798
|
|
|
71,099
|
|
||
Prepaid expenses and other current assets
|
22,290
|
|
|
45,275
|
|
||
Total current assets
|
249,717
|
|
|
303,369
|
|
||
Property and equipment, net
|
41,746
|
|
|
50,768
|
|
||
Other intangible assets, net
|
3,020
|
|
|
8,536
|
|
||
Other non-current assets
|
2,929
|
|
|
3,012
|
|
||
Total assets
|
$
|
297,412
|
|
|
$
|
365,685
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable, including $3,747 and $4,483 due to related parties at December 27, 2014 and June 28, 2014, respectively
|
$
|
57,517
|
|
|
$
|
71,283
|
|
Accrued expenses and other liabilities
|
38,185
|
|
|
51,492
|
|
||
Capital lease obligations, current
|
4,075
|
|
|
5,387
|
|
||
Total current liabilities
|
99,777
|
|
|
128,162
|
|
||
Deferred gain on sale-leaseback
|
9,330
|
|
|
10,711
|
|
||
Capital lease obligations, non-current
|
2,235
|
|
|
4,539
|
|
||
Other non-current liabilities
|
10,834
|
|
|
14,345
|
|
||
Total liabilities
|
122,176
|
|
|
157,757
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: 1,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.01 par value per share; 175,000 shares authorized; 109,001 shares issued and outstanding at December 27, 2014 and 107,779 shares issued and outstanding at June 28, 2014
|
1,090
|
|
|
1,077
|
|
||
Additional paid-in capital
|
1,461,438
|
|
|
1,458,487
|
|
||
Accumulated other comprehensive income
|
42,845
|
|
|
45,864
|
|
||
Accumulated deficit
|
(1,330,137
|
)
|
|
(1,297,500
|
)
|
||
Total stockholders’ equity
|
175,236
|
|
|
207,928
|
|
||
Total liabilities and stockholders’ equity
|
$
|
297,412
|
|
|
$
|
365,685
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands, except per share amounts)
|
||||||||||||||
Revenues, including $794 and $1,971 from related parties for the three and six months ended December 27, 2014, respectively and $3,390 and $4,701 from related parties for the three and six months ended December 28, 2013, respectively
|
$
|
86,820
|
|
|
$
|
102,914
|
|
|
$
|
176,061
|
|
|
$
|
199,562
|
|
Cost of revenues
|
73,054
|
|
|
86,001
|
|
|
147,886
|
|
|
171,431
|
|
||||
Gross profit
|
13,766
|
|
|
16,913
|
|
|
28,175
|
|
|
28,131
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
11,721
|
|
|
16,424
|
|
|
25,634
|
|
|
34,511
|
|
||||
Selling, general and administrative
|
13,646
|
|
|
18,557
|
|
|
29,060
|
|
|
39,507
|
|
||||
Amortization of other intangible assets
|
269
|
|
|
417
|
|
|
687
|
|
|
841
|
|
||||
Restructuring, acquisition and related
(income) expense, net |
(8,038
|
)
|
|
6,721
|
|
|
(6,308
|
)
|
|
9,598
|
|
||||
Flood-related (income) expense, net
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
||||
(Gain) loss on sale of property and equipment
|
(26
|
)
|
|
205
|
|
|
371
|
|
|
657
|
|
||||
Total operating expenses
|
17,572
|
|
|
42,184
|
|
|
49,444
|
|
|
84,974
|
|
||||
Operating loss
|
(3,806
|
)
|
|
(25,271
|
)
|
|
(21,269
|
)
|
|
(56,843
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
(89
|
)
|
|
(8,532
|
)
|
|
(193
|
)
|
|
(9,085
|
)
|
||||
Loss on foreign currency transactions, net
|
(675
|
)
|
|
(2,848
|
)
|
|
(2,685
|
)
|
|
(1,071
|
)
|
||||
Other income (expense), net
|
329
|
|
|
28
|
|
|
884
|
|
|
549
|
|
||||
Total other income (expense)
|
(435
|
)
|
|
(11,352
|
)
|
|
(1,994
|
)
|
|
(9,607
|
)
|
||||
Loss from continuing operations before income taxes
|
(4,241
|
)
|
|
(36,623
|
)
|
|
(23,263
|
)
|
|
(66,450
|
)
|
||||
Income tax (benefit) provision
|
(38
|
)
|
|
1,424
|
|
|
916
|
|
|
1,726
|
|
||||
Loss from continuing operations
|
(4,203
|
)
|
|
(38,047
|
)
|
|
(24,179
|
)
|
|
(68,176
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
(8,080
|
)
|
|
69,538
|
|
|
(8,458
|
)
|
|
132,945
|
|
||||
Net income (loss)
|
$
|
(12,283
|
)
|
|
$
|
31,491
|
|
|
$
|
(32,637
|
)
|
|
$
|
64,769
|
|
Basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Loss per share from continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.74
|
)
|
Income (loss) per share from discontinued operations
|
(0.07
|
)
|
|
0.75
|
|
|
(0.08
|
)
|
|
1.44
|
|
||||
Basic and diluted net income (loss) per share
|
$
|
(0.11
|
)
|
|
$
|
0.34
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.70
|
|
Shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
107,849
|
|
|
93,204
|
|
|
107,549
|
|
|
92,085
|
|
||||
Diluted
|
107,849
|
|
|
93,204
|
|
|
107,549
|
|
|
92,085
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
Net income (loss)
|
$
|
(12,283
|
)
|
|
$
|
31,491
|
|
|
$
|
(32,637
|
)
|
|
$
|
64,769
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities
|
4
|
|
|
(9
|
)
|
|
(15
|
)
|
|
(39
|
)
|
||||
Currency translation adjustments
|
(1,874
|
)
|
|
2,846
|
|
|
(3,583
|
)
|
|
(41
|
)
|
||||
Pension adjustment, net of tax benefits
|
76
|
|
|
16
|
|
|
579
|
|
|
5,833
|
|
||||
Total comprehensive income (loss)
|
$
|
(14,077
|
)
|
|
$
|
34,344
|
|
|
$
|
(35,656
|
)
|
|
$
|
70,522
|
|
|
Six Months Ended
|
||||||
|
December 27, 2014
|
|
December 28, 2013
|
||||
|
(Thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(32,637
|
)
|
|
$
|
64,769
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Amortization of deferred gain on sale-leaseback
|
(228
|
)
|
|
(1,060
|
)
|
||
Amortization and write-off of issuance costs in connection with term loan
|
—
|
|
|
4,293
|
|
||
Gain on sale of Komoro Business
|
(8,315
|
)
|
|
—
|
|
||
Gain on sale of Zurich Business
|
—
|
|
|
(62,812
|
)
|
||
Gain on sale of Amplifier Business
|
—
|
|
|
(69,705
|
)
|
||
Adjustment to the hold-backs related to the sales of the Zurich and Amplifier Businesses
|
7,650
|
|
|
—
|
|
||
Depreciation and amortization
|
9,719
|
|
|
15,847
|
|
||
Flood-related non-cash losses
|
—
|
|
|
2,011
|
|
||
Stock-based compensation expense
|
3,042
|
|
|
2,030
|
|
||
Other non-cash adjustments
|
(24
|
)
|
|
(288
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(7,368
|
)
|
|
29,005
|
|
||
Inventories
|
(4,364
|
)
|
|
(4,986
|
)
|
||
Prepaid expenses and other current assets
|
11,364
|
|
|
(26,432
|
)
|
||
Other non-current assets
|
(372
|
)
|
|
1,427
|
|
||
Accounts payable
|
(856
|
)
|
|
7,784
|
|
||
Accrued expenses and other liabilities
|
(6,911
|
)
|
|
(8,698
|
)
|
||
Net cash used in operating activities
|
(29,300
|
)
|
|
(46,815
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(9,166
|
)
|
|
(3,685
|
)
|
||
Proceeds from sale of Komoro Business
|
13,783
|
|
|
—
|
|
||
Proceeds from sale of Amplifier Business
|
—
|
|
|
84,600
|
|
||
Proceeds from sale of Zurich Business
|
—
|
|
|
90,618
|
|
||
Transfer from restricted cash
|
682
|
|
|
454
|
|
||
Net cash provided by investing activities
|
5,299
|
|
|
171,987
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock, net
|
13
|
|
|
(175
|
)
|
||
Payments on capital lease obligations
|
(2,030
|
)
|
|
(4,855
|
)
|
||
Repayments on borrowings under credit line and term loan
|
—
|
|
|
(64,964
|
)
|
||
Net cash used in financing activities
|
(2,017
|
)
|
|
(69,994
|
)
|
||
Effect of exchange rate on cash and cash equivalents
|
1,582
|
|
|
1,747
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(24,436
|
)
|
|
56,925
|
|
||
Cash and cash equivalents at beginning of period
|
98,973
|
|
|
84,635
|
|
||
Cash and cash equivalents at end of period
|
$
|
74,537
|
|
|
$
|
141,560
|
|
|
December 27, 2014
|
|
June 28, 2014
|
||||
|
(Thousands)
|
||||||
Cash and cash equivalents:
|
|
||||||
Cash-in-bank
|
$
|
73,323
|
|
|
$
|
97,759
|
|
Money market funds
|
1,214
|
|
|
1,214
|
|
||
|
$
|
74,537
|
|
|
$
|
98,973
|
|
|
December 27, 2014
|
|
June 28, 2014
|
||||
|
(Thousands)
|
||||||
Inventories:
|
|
||||||
Raw materials
|
$
|
18,018
|
|
|
$
|
20,036
|
|
Work-in-process
|
22,072
|
|
|
20,505
|
|
||
Finished goods
|
25,708
|
|
|
30,558
|
|
||
|
$
|
65,798
|
|
|
$
|
71,099
|
|
|
December 27, 2014
|
|
June 28, 2014
|
||||
|
(Thousands)
|
||||||
Property and equipment, net:
|
|
||||||
Buildings and improvements
|
$
|
11,799
|
|
|
$
|
12,989
|
|
Plant and machinery
|
27,168
|
|
|
47,247
|
|
||
Fixtures, fittings and equipment
|
5,366
|
|
|
9,701
|
|
||
Computer equipment
|
12,380
|
|
|
13,723
|
|
||
|
56,713
|
|
|
83,660
|
|
||
Less: Accumulated depreciation
|
(14,967
|
)
|
|
(32,892
|
)
|
||
|
$
|
41,746
|
|
|
$
|
50,768
|
|
|
Core and
Current Technology |
|
Development
and Supply Agreements |
|
Customer
Relationships |
|
Patent
Portfolio |
|
Other
Intangibles |
|
Amortization
|
|
Total
|
||||||||||||||
|
(Thousands)
|
||||||||||||||||||||||||||
Balance at June 28, 2014
|
$
|
8,267
|
|
|
$
|
4,660
|
|
|
$
|
5,143
|
|
|
$
|
915
|
|
|
$
|
3,338
|
|
|
$
|
(13,787
|
)
|
|
$
|
8,536
|
|
Sale of Komoro Business
|
(1,904
|
)
|
|
—
|
|
|
(2,545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,449
|
)
|
|||||||
Amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(687
|
)
|
|
(687
|
)
|
|||||||
Translations and adjustments
|
(106
|
)
|
|
(77
|
)
|
|
(197
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(380
|
)
|
|||||||
Balance at December 27, 2014
|
$
|
6,257
|
|
|
$
|
4,583
|
|
|
$
|
2,401
|
|
|
$
|
915
|
|
|
$
|
3,338
|
|
|
$
|
(14,474
|
)
|
|
$
|
3,020
|
|
|
December 27, 2014
|
|
June 28, 2014
|
||||
|
(Thousands)
|
||||||
Accrued expenses and other liabilities:
|
|
||||||
Trade payables
|
$
|
10,637
|
|
|
$
|
18,612
|
|
Compensation and benefits related accruals
|
11,060
|
|
|
10,242
|
|
||
Warranty accrual
|
3,474
|
|
|
4,672
|
|
||
Accrued restructuring, current
|
846
|
|
|
2,220
|
|
||
Other accruals
|
12,168
|
|
|
15,746
|
|
||
|
$
|
38,185
|
|
|
$
|
51,492
|
|
|
Lease Cancellations,
Commitments and
Other Charges
|
|
Termination
Payments to
Employees and
Related Costs
|
|
Total Accrued
Restructuring Charges
|
||||||
|
(Thousands)
|
||||||||||
Balance at June 28, 2014
|
$
|
1,881
|
|
|
$
|
962
|
|
|
$
|
2,843
|
|
Charged to restructuring costs
|
(126
|
)
|
|
2,133
|
|
|
2,007
|
|
|||
Paid or other adjustments
|
(1,360
|
)
|
|
(2,644
|
)
|
|
(4,004
|
)
|
|||
Balance at December 27, 2014
|
$
|
395
|
|
|
$
|
451
|
|
|
$
|
846
|
|
Current portion
|
395
|
|
|
451
|
|
|
846
|
|
|||
Non-current portion
|
—
|
|
|
—
|
|
|
—
|
|
|
December 27, 2014
|
|
June 28, 2014
|
||||
|
(Thousands)
|
||||||
Accumulated other comprehensive income:
|
|
||||||
Currency translation adjustments
|
$
|
42,907
|
|
|
$
|
46,490
|
|
Unrealized loss on marketable securities
|
(224
|
)
|
|
(209
|
)
|
||
Japan defined benefit plan
|
162
|
|
|
(417
|
)
|
||
|
$
|
42,845
|
|
|
$
|
45,864
|
|
Level 1-
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2-
|
Inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices of identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets), or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3-
|
Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
|
|
Fair Value Measurement at Reporting Date Using
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(Thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
(1)
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,214
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,214
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Total assets measured at fair value
|
$
|
1,295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,295
|
|
(1)
|
Excludes
$73.3 million
in cash held in our bank accounts at
December 27, 2014
.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
6,869
|
|
|
$
|
—
|
|
|
$
|
35,185
|
|
Cost of revenues
|
—
|
|
|
5,528
|
|
|
—
|
|
|
26,243
|
|
||||
Gross profit
|
—
|
|
|
1,341
|
|
|
—
|
|
|
8,942
|
|
||||
Operating expenses
|
(54
|
)
|
|
1,508
|
|
|
161
|
|
|
5,576
|
|
||||
Other income (expense), net
|
(3,060
|
)
|
|
69,705
|
|
|
(3,060
|
)
|
|
69,705
|
|
||||
Income (loss) from discontinued operations
before income taxes
|
(3,006
|
)
|
|
69,538
|
|
|
(3,221
|
)
|
|
73,071
|
|
||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) from discontinued operations
|
$
|
(3,006
|
)
|
|
$
|
69,538
|
|
|
$
|
(3,221
|
)
|
|
$
|
73,071
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
|
(Thousands)
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,896
|
|
Cost of revenues
|
—
|
|
|
—
|
|
|
163
|
|
|
11,593
|
|
||||
Gross profit
|
—
|
|
|
—
|
|
|
(163
|
)
|
|
2,303
|
|
||||
Operating expenses
|
484
|
|
|
—
|
|
|
484
|
|
|
3,416
|
|
||||
Other income (expense), net
|
(4,590
|
)
|
|
—
|
|
|
(4,590
|
)
|
|
61,150
|
|
||||
Income (loss) from discontinued operations
before income taxes
|
(5,074
|
)
|
|
—
|
|
|
(5,237
|
)
|
|
60,037
|
|
||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
163
|
|
||||
Income (loss) from discontinued operations
|
$
|
(5,074
|
)
|
|
$
|
—
|
|
|
$
|
(5,237
|
)
|
|
$
|
59,874
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
Service cost
|
$
|
177
|
|
|
$
|
233
|
|
|
$
|
376
|
|
|
$
|
481
|
|
Interest cost
|
18
|
|
|
23
|
|
|
38
|
|
|
47
|
|
||||
Net amortization
|
12
|
|
|
15
|
|
|
27
|
|
|
31
|
|
||||
Net periodic pension costs
|
$
|
207
|
|
|
$
|
271
|
|
|
$
|
441
|
|
|
$
|
559
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
Warranty provision—beginning of period
|
$
|
4,054
|
|
|
$
|
4,753
|
|
|
$
|
4,672
|
|
|
$
|
4,670
|
|
Warranties issued
|
764
|
|
|
529
|
|
|
893
|
|
|
1,501
|
|
||||
Warranties utilized or expired
|
(1,184
|
)
|
|
(1,031
|
)
|
|
(1,859
|
)
|
|
(2,014
|
)
|
||||
Currency translation and other adjustments
|
(160
|
)
|
|
1,236
|
|
|
(232
|
)
|
|
1,330
|
|
||||
Warranty provision—end of period
|
$
|
3,474
|
|
|
$
|
5,487
|
|
|
$
|
3,474
|
|
|
$
|
5,487
|
|
|
Capital Leases
|
||
|
(Thousands)
|
||
Fiscal Year Ending:
|
|
||
2015 (remaining)
|
$
|
2,435
|
|
2016
|
2,907
|
|
|
2017
|
1,093
|
|
|
2018
|
42
|
|
|
2019
|
28
|
|
|
Thereafter
|
77
|
|
|
Total minimum lease payments
|
6,582
|
|
|
Less amount representing interest
|
(272
|
)
|
|
Present value of capitalized payments
|
6,310
|
|
|
Less: current portion
|
(4,075
|
)
|
|
Long-term portion
|
$
|
2,235
|
|
|
Shares
Available
For Grant
|
|
Stock
Options /
SARs
Outstanding
|
|
Weighted-
Average
Exercise Price
|
|
Restricted Stock
Awards / Units
Outstanding
|
|
Weighted-
Average Grant
Date Fair Value
|
|||||||
|
(Thousands)
|
|
(Thousands)
|
|
|
|
(Thousands)
|
|
|
|||||||
Balance at June 28, 2014
|
5,703
|
|
|
4,156
|
|
|
$
|
8.43
|
|
|
4,273
|
|
|
$
|
2.59
|
|
Increase in share reserve
|
6,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Granted
|
(3,882
|
)
|
|
164
|
|
|
1.79
|
|
|
2,933
|
|
|
1.45
|
|
||
Exercised or released
|
—
|
|
|
(1
|
)
|
|
1.60
|
|
|
(1,154
|
)
|
|
2.41
|
|
||
Cancelled or forfeited
|
659
|
|
|
(388
|
)
|
|
13.51
|
|
|
(222
|
)
|
|
3.20
|
|
||
Balance at December 27, 2014
|
8,480
|
|
|
3,931
|
|
|
7.71
|
|
|
5,830
|
|
|
2.03
|
|
|
Shares
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(Thousands)
|
|
|
|
(Years)
|
|
(Thousands)
|
|||||
Options and SARs exercisable
|
3,329
|
|
|
$
|
8.65
|
|
|
4.1
|
|
$
|
46
|
|
Options and SARs outstanding
|
3,931
|
|
|
7.71
|
|
|
4.8
|
|
81
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||
Stock options:
|
|
|
|
|
|
|
|
||||
Expected life
|
5.3 years
|
|
|
5.3 years
|
|
|
5.3 years
|
|
|
5.3 years
|
|
Risk-free interest rate
|
1.6
|
%
|
|
1.5
|
%
|
|
1.6
|
%
|
|
1.5
|
%
|
Volatility
|
76.0
|
%
|
|
82.2
|
%
|
|
76.9
|
%
|
|
82.2
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
China
|
$
|
25,531
|
|
|
$
|
25,639
|
|
|
$
|
46,253
|
|
|
$
|
48,456
|
|
Malaysia
|
13,761
|
|
|
13,917
|
|
|
29,461
|
|
|
23,428
|
|
||||
United States
|
13,386
|
|
|
8,541
|
|
|
27,923
|
|
|
15,931
|
|
||||
Mexico
|
10,899
|
|
|
8,411
|
|
|
22,890
|
|
|
21,265
|
|
||||
Germany
|
6,233
|
|
|
20,619
|
|
|
14,387
|
|
|
35,014
|
|
||||
Italy
|
6,768
|
|
|
5,113
|
|
|
10,903
|
|
|
11,500
|
|
||||
Japan
|
1,704
|
|
|
8,953
|
|
|
5,448
|
|
|
21,441
|
|
||||
Thailand
|
1,286
|
|
|
2,077
|
|
|
2,722
|
|
|
5,384
|
|
||||
Rest of world
|
7,252
|
|
|
9,644
|
|
|
16,074
|
|
|
17,143
|
|
||||
|
$
|
86,820
|
|
|
$
|
102,914
|
|
|
$
|
176,061
|
|
|
$
|
199,562
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
December 27, 2014
|
|
December 28, 2013
|
||||||||
|
(Thousands)
|
||||||||||||||
100 Gb/s transmission
|
$
|
33,670
|
|
|
$
|
19,378
|
|
|
$
|
55,000
|
|
|
$
|
35,304
|
|
40 Gb/s transmission
|
19,300
|
|
|
26,322
|
|
|
41,466
|
|
|
49,254
|
|
||||
10 Gb/s and lower transmission
|
32,005
|
|
|
49,828
|
|
|
70,231
|
|
|
100,402
|
|
||||
Industrial and consumer
|
1,845
|
|
|
7,386
|
|
|
9,364
|
|
|
14,602
|
|
||||
|
$
|
86,820
|
|
|
$
|
102,914
|
|
|
$
|
176,061
|
|
|
$
|
199,562
|
|
|
Three Months Ended
|
|
|
|
Increase
|
|
|||||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
Change
|
|
(Decrease)
|
|
|||||||||||||
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
|||||||||
Revenues
|
$
|
86,820
|
|
|
100.0
|
|
|
$
|
102,914
|
|
|
100.0
|
|
|
$
|
(16,094
|
)
|
|
(15.6
|
)
|
|
Cost of revenues
|
73,054
|
|
|
84.1
|
|
|
86,001
|
|
|
83.6
|
|
|
(12,947
|
)
|
|
(15.1
|
)
|
|
|||
Gross profit
|
13,766
|
|
|
15.9
|
|
|
16,913
|
|
|
16.4
|
|
|
(3,147
|
)
|
|
(18.6
|
)
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
11,721
|
|
|
13.5
|
|
|
16,424
|
|
|
16.0
|
|
|
(4,703
|
)
|
|
(28.6
|
)
|
|
|||
Selling, general and administrative
|
13,646
|
|
|
15.7
|
|
|
18,557
|
|
|
18.0
|
|
|
(4,911
|
)
|
|
(26.5
|
)
|
|
|||
Amortization of other intangible assets
|
269
|
|
|
0.3
|
|
|
417
|
|
|
0.4
|
|
|
(148
|
)
|
|
(35.5
|
)
|
|
|||
Restructuring, acquisition and related (income) expense, net
|
(8,038
|
)
|
|
(9.3
|
)
|
|
6,721
|
|
|
6.5
|
|
|
(14,759
|
)
|
|
n/m
|
|
(1)
|
|||
Flood-related (income) expense, net
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(0.1
|
)
|
|
140
|
|
|
(100.0
|
)
|
|
|||
(Gain) loss on sale of property and equipment
|
(26
|
)
|
|
—
|
|
|
205
|
|
|
0.2
|
|
|
(231
|
)
|
|
n/m
|
|
(1)
|
|||
Total operating expenses
|
17,572
|
|
|
20.2
|
|
|
42,184
|
|
|
41.0
|
|
|
(24,612
|
)
|
|
(58.3
|
)
|
|
|||
Operating loss
|
(3,806
|
)
|
|
(4.4
|
)
|
|
(25,271
|
)
|
|
(24.6
|
)
|
|
21,465
|
|
|
(84.9
|
)
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income (expense), net
|
(89
|
)
|
|
(0.1
|
)
|
|
(8,532
|
)
|
|
(8.3
|
)
|
|
8,443
|
|
|
(99.0
|
)
|
|
|||
Loss on foreign currency transactions, net
|
(675
|
)
|
|
(0.8
|
)
|
|
(2,848
|
)
|
|
(2.7
|
)
|
|
2,173
|
|
|
(76.3
|
)
|
|
|||
Other income (expense), net
|
329
|
|
|
0.4
|
|
|
28
|
|
|
—
|
|
|
301
|
|
|
1,075.0
|
|
|
|||
Total other income (expense)
|
(435
|
)
|
|
(0.5
|
)
|
|
(11,352
|
)
|
|
(11.0
|
)
|
|
10,917
|
|
|
(96.2
|
)
|
|
|||
Loss from continuing operations before
income taxes
|
(4,241
|
)
|
|
(4.9
|
)
|
|
(36,623
|
)
|
|
(35.6
|
)
|
|
32,382
|
|
|
(88.4
|
)
|
|
|||
Income tax (benefit) provision
|
(38
|
)
|
|
(0.1
|
)
|
|
1,424
|
|
|
1.4
|
|
|
(1,462
|
)
|
|
n/m
|
|
(1)
|
|||
Loss from continuing operations
|
(4,203
|
)
|
|
(4.8
|
)
|
|
(38,047
|
)
|
|
(37.0
|
)
|
|
33,844
|
|
|
(89.0
|
)
|
|
|||
Income (loss) from discontinued
operations, net of tax
|
(8,080
|
)
|
|
(9.3
|
)
|
|
69,538
|
|
|
67.6
|
|
|
(77,618
|
)
|
|
n/m
|
|
(1)
|
|||
Net income (loss)
|
$
|
(12,283
|
)
|
|
(14.1
|
)
|
|
$
|
31,491
|
|
|
30.6
|
|
|
$
|
(43,774
|
)
|
|
n/m
|
|
(1)
|
(1)
|
Not meaningful.
|
|
|
Six Months Ended
|
|
|
|
Increase
|
|
|||||||||||||||
|
|
December 27, 2014
|
|
December 28, 2013
|
|
Change
|
|
(Decrease)
|
|
|||||||||||||
|
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
|||||||||
Revenues
|
$
|
176,061
|
|
|
100.0
|
|
|
$
|
199,562
|
|
|
100.0
|
|
|
$
|
(23,501
|
)
|
|
(11.8
|
)
|
|
|
Cost of revenues
|
147,886
|
|
|
84.0
|
|
|
171,431
|
|
|
85.9
|
|
|
(23,545
|
)
|
|
(13.7
|
)
|
|
||||
Gross profit
|
28,175
|
|
|
16.0
|
|
|
28,131
|
|
|
14.1
|
|
|
44
|
|
|
0.2
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
25,634
|
|
|
14.6
|
|
|
34,511
|
|
|
17.3
|
|
|
(8,877
|
)
|
|
(25.7
|
)
|
|
||||
Selling, general and administrative
|
29,060
|
|
|
16.5
|
|
|
39,507
|
|
|
19.8
|
|
|
(10,447
|
)
|
|
(26.4
|
)
|
|
||||
Amortization of other intangible assets
|
687
|
|
|
0.4
|
|
|
841
|
|
|
0.4
|
|
|
(154
|
)
|
|
(18.3
|
)
|
|
||||
Restructuring, acquisition and related
(income) expense, net |
(6,308
|
)
|
|
(3.6
|
)
|
|
9,598
|
|
|
4.8
|
|
|
(15,906
|
)
|
|
n/m
|
|
(1)
|
||||
Flood-related (income) expense, net
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(0.1
|
)
|
|
140
|
|
|
(100.0
|
)
|
|
||||
Loss on sale of property and equipment
|
371
|
|
|
0.2
|
|
|
657
|
|
|
0.4
|
|
|
(286
|
)
|
|
(43.5
|
)
|
|
||||
Total operating expenses
|
49,444
|
|
|
28.1
|
|
|
84,974
|
|
|
42.6
|
|
|
(35,530
|
)
|
|
(41.8
|
)
|
|
||||
Operating loss
|
(21,269
|
)
|
|
(12.1
|
)
|
|
(56,843
|
)
|
|
(28.5
|
)
|
|
35,574
|
|
|
(62.6
|
)
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income (expense), net
|
(193
|
)
|
|
(0.1
|
)
|
|
(9,085
|
)
|
|
(4.6
|
)
|
|
8,892
|
|
|
(97.9
|
)
|
|
||||
Loss on foreign currency transactions,
net |
(2,685
|
)
|
|
(1.5
|
)
|
|
(1,071
|
)
|
|
(0.5
|
)
|
|
(1,614
|
)
|
|
150.7
|
|
|
||||
Other income (expense), net
|
884
|
|
|
0.5
|
|
|
549
|
|
|
0.3
|
|
|
335
|
|
|
61.0
|
|
|
||||
Total other income (expense)
|
(1,994
|
)
|
|
(1.1
|
)
|
|
(9,607
|
)
|
|
(4.8
|
)
|
|
7,613
|
|
|
(79.2
|
)
|
|
||||
Loss from continuing operations
before income taxes |
(23,263
|
)
|
|
(13.2
|
)
|
|
(66,450
|
)
|
|
(33.3
|
)
|
|
43,187
|
|
|
(65.0
|
)
|
|
||||
Income tax provision
|
916
|
|
|
0.5
|
|
|
1,726
|
|
|
0.8
|
|
|
(810
|
)
|
|
(46.9
|
)
|
|
||||
Loss from continuing operations
|
(24,179
|
)
|
|
(13.7
|
)
|
|
(68,176
|
)
|
|
(34.1
|
)
|
|
43,997
|
|
|
(64.5
|
)
|
|
||||
Income (loss) from discontinued
operations, net of tax |
(8,458
|
)
|
|
(4.8
|
)
|
|
132,945
|
|
|
66.6
|
|
|
(141,403
|
)
|
|
n/m
|
|
(1)
|
||||
Net income (loss)
|
$
|
(32,637
|
)
|
|
(18.5
|
)
|
|
$
|
64,769
|
|
|
32.5
|
|
|
$
|
(97,406
|
)
|
|
n/m
|
|
(1)
|
(1)
|
Not meaningful.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
December 27, 2014
|
|
December 28, 2013
|
|
Change
|
|
December 27, 2014
|
|
December 28, 2013
|
|
Change
|
||||||||||||
|
(Thousands)
|
|
(Thousands)
|
||||||||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
6,869
|
|
|
$
|
(6,869
|
)
|
|
$
|
—
|
|
|
$
|
49,081
|
|
|
$
|
(49,081
|
)
|
Cost of revenues
|
—
|
|
|
5,528
|
|
|
(5,528
|
)
|
|
163
|
|
|
37,836
|
|
|
(37,673
|
)
|
||||||
Gross profit
|
—
|
|
|
1,341
|
|
|
(1,341
|
)
|
|
(163
|
)
|
|
11,245
|
|
|
(11,408
|
)
|
||||||
Operating expenses
|
430
|
|
|
1,508
|
|
|
(1,078
|
)
|
|
645
|
|
|
8,992
|
|
|
(8,347
|
)
|
||||||
Other income (expense), net
|
(7,650
|
)
|
|
69,705
|
|
|
(77,355
|
)
|
|
(7,650
|
)
|
|
130,855
|
|
|
(138,505
|
)
|
||||||
Income (loss) from discontinued operations before income taxes
|
(8,080
|
)
|
|
69,538
|
|
|
(77,618
|
)
|
|
(8,458
|
)
|
|
133,108
|
|
|
(141,566
|
)
|
||||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163
|
|
|
(163
|
)
|
||||||
Income (loss) from discontinued operations
|
$
|
(8,080
|
)
|
|
$
|
69,538
|
|
|
$
|
(77,618
|
)
|
|
$
|
(8,458
|
)
|
|
$
|
132,945
|
|
|
$
|
(141,403
|
)
|
•
|
develop or respond to new technologies or technical standards;
|
•
|
react to changing customer requirements and expectations;
|
•
|
devote needed resources to the development, production, promotion and sale of products;
|
•
|
attain high manufacturing yields on new product designs; and
|
•
|
deliver competitive products at lower prices.
|
•
|
failure to realize the potential financial or strategic benefits of the acquisition;
|
•
|
increased costs associated with merged or acquired operations;
|
•
|
increased indebtedness obligations;
|
•
|
economic dilution to gross and operating profit (loss) and earnings (loss) per share;
|
•
|
failure to successfully further develop the combined, acquired or remaining technology, which could, among other things, result in the impairment of amounts recorded as goodwill or other intangible assets;
|
•
|
unanticipated costs and liabilities and unforeseen accounting charges;
|
•
|
difficulty in integrating product offerings;
|
•
|
difficulty in coordinating and rationalizing research and development activities to enhance introduction of new products and technologies with reduced cost;
|
•
|
difficulty in coordinating and integrating the manufacturing activities, including with respect to third-party manufacturers, including coordination, integration or transfers of any manufacturing activities associated with our acquisition of Opnext in 2012;
|
•
|
delays and difficulties in delivery of products and services;
|
•
|
failure to effectively integrate or separate management information systems, personnel, research and development, marketing, sales and support operations;
|
•
|
difficulty in maintaining internal control procedures and disclosure controls that comply with the requirements of the Sarbanes-Oxley Act of 2002, or poor integration of a target’s procedures and controls;
|
•
|
difficulty in preserving important relationships of our acquired businesses and resolving potential conflicts between business cultures;
|
•
|
uncertainty on the part of our existing customers, or the customers of an acquired company, about our ability to operate effectively after a transaction, and the potential loss of such customers;
|
•
|
loss of key employees;
|
•
|
difficulty in coordinating the international activities of our acquired businesses, including Opnext, which has substantial operations in Japan as well as the United States, and which uses contract manufacturing suppliers in Southeast Asia;
|
•
|
the effect of tax laws and other legal and regulatory regimes due to increasing complexities of our global operating structure;
|
•
|
greater exposure to the impact of foreign currency changes on our business;
|
•
|
the effect of employment law or regulations or other limitations in foreign jurisdictions that could have an impact on timing, amounts or costs of achieving expected synergies; and
|
•
|
substantial demands on our management as a result of these transactions that may limit their time to attend to other operational, financial, business and strategic issues.
|
•
|
qualify our manufacturing lines and the products we produce in Shenzhen, as required by our customers; and
|
•
|
attract and retain qualified personnel to operate our Shenzhen facility.
|
•
|
currency fluctuations, which could result in increased operating expenses and reduced revenues;
|
•
|
greater difficulty in accounts receivable collection and longer collection periods;
|
•
|
difficulty in enforcing or adequately protecting our intellectual property;
|
•
|
ability to hire qualified candidates;
|
•
|
foreign taxes;
|
•
|
political, legal and economic instability in foreign markets;
|
•
|
foreign regulations;
|
•
|
changes in, or impositions of, legislative or regulatory requirements;
|
•
|
trade restrictions, including restrictions imposed by the United States government on trading with parties in foreign countries;
|
•
|
transportation delays;
|
•
|
epidemics and illnesses;
|
•
|
terrorism and threats of terrorism;
|
•
|
work stoppages and infrastructure problems due to adverse weather conditions or natural disasters;
|
•
|
work stoppages related to employee dissatisfaction;
|
•
|
changes in import/export regulations, tariffs, and freight rates; and
|
•
|
the effective protections of, and the ability to enforce, contractual arrangements.
|
•
|
fluctuations in our financial condition and results of operations, including our gross margins and cash flow;
|
•
|
changes in our business, operations or prospects;
|
•
|
hiring or departure of key personnel;
|
•
|
new contractual relationships with key suppliers or customers by us or our competitors;
|
•
|
proposed acquisitions and dispositions by us or our competitors;
|
•
|
financial results or projections that fail to meet public market analysts’ expectations and changes in stock market analysts’ recommendations regarding us, other optical technology companies or the telecommunication industry in general;
|
•
|
future sales of common stock, or securities convertible into, exchangeable or exercisable for common stock;
|
•
|
adverse judgments or settlements obligating us to pay damages;
|
•
|
future issuances of common stock in connection with acquisitions or other transactions;
|
•
|
acts of war, terrorism, or natural disasters;
|
•
|
industry, domestic and international market and economic conditions, including the global macroeconomic downturn over the last three years and related sovereign debt issues in certain parts of the world;
|
•
|
low trading volume in our stock;
|
•
|
developments relating to patents or property rights; and
|
•
|
government regulatory changes.
|
•
|
adversely affect the voting power of the holders of our common stock;
|
•
|
make it more difficult for a third-party to gain control of us;
|
•
|
discourage bids for our common stock at a premium;
|
•
|
limit or eliminate any payments that the holders of our common stock could expect to receive upon our liquidation; or
|
•
|
otherwise adversely affect the market price of our common stock.
|
•
|
authorizing the board of directors to issue preferred stock;
|
•
|
prohibiting cumulative voting in the election of directors;
|
•
|
limiting the persons who may call special meetings of stockholders;
|
•
|
prohibiting stockholder actions by written consent;
|
•
|
creating a classified board of directors pursuant to which our directors are elected for staggered three-year terms;
|
•
|
permitting the board of directors to increase the size of the board and to fill vacancies;
|
•
|
requiring a super-majority vote of our stockholders to amend our bylaws and certain provisions of our certificate of incorporation; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
|
|
|
OCLARO, INC.
(Registrant)
|
|
|
|
|
|
February 5, 2015
|
|
By:
|
/s/ G
REG
D
OUGHERTY
|
|
|
|
Greg Dougherty
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
February 5, 2015
|
|
By:
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
Chief Financial Officer
(Principal Financial Officer)
|
Exhibit
Number
|
|
Description of Exhibit
|
2.1
|
|
Agreement and Plan of Merger dated March 26, 2012, among Oclaro, Inc., Tahoe Acquisition Sub, Inc. and Opnext, Inc. (previously filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed on March 26, 2012 and incorporated herein by reference.)
|
2.2
|
|
Agreement of Merger among: Oclaro, Inc., a Delaware corporation; Nikko Acquisition Corp., a Delaware corporation; Mintera Corporation, a Delaware corporation; and Shareholder Representative Services LLC, as the Stockholders’ Agent. Dated as of July 20, 2010 (previously filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed on July 26, 2010 and incorporated herein by reference.)
|
2.3
|
|
Agreement of Merger among: Oclaro, Inc., a Delaware corporation; Rio Acquisition corp., a Delaware corporation; Xtellus Inc., a Delaware corporation; and Alta Berkeley LLP, as the Stockholders’ Agent. Dated as of December 16, 2009 (previously filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed on December 22, 2009 and incorporated herein by reference.)
|
2.4 (3)
|
|
Master Separation Agreement, dated August 5, 2014, entered into by Oclaro Japan, Inc., Ushio Opto Semiconductors, Inc., and Ushio, Inc. (previously filed as Exhibit 2.4 to Registrant's Annual Report on Form 10-K on September 10, 2013 and incorporated herein by reference.)
|
3.1
|
|
Amended and Restated By-Laws of Oclaro, Inc. (previously filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on October 29, 2014 and incorporated herein by reference.)
|
3.2
|
|
Oclaro, Inc. Restated Certificate of Incorporation (previously filed as Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on August 1, 2014 and incorporated herein by reference.)
|
10.64(1)
|
|
Settlement Agreement, dated December 30, 2014, entered into by Oclaro Technology Limited, II-VI Incorporated and II-VI Holdings B.V.
|
10.65(1)(2)
|
|
Offer Letter of Lisa Paul, Executive Vice President, Human Resources, dated October 8, 2014.
|
10.66(2)
|
|
Oclaro, Inc. Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan (previously filed as Annex A to our Proxy Statement for our 2014 Annual Meeting of Stockholders on November 14, 2014 and incorporated herein by reference.)
|
10.67(1)(2)
|
|
Oclaro, Inc. Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan, Form of Restricted Stock Unit Agreement
|
10.68(1)(2)
|
|
Oclaro, Inc. Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan, Form of Stock Option Agreement
|
10.69(1)(2)
|
|
Oclaro, Inc. Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan, Form of Performance Stock Unit Agreement
|
31.1(1)
|
|
Certification of Chief Executive Officer Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
|
31.2(1)
|
|
Certification of Chief Financial Officer Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
|
32.1(1)
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
|
32.2(1)
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Filed herewith.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(3)
|
Portions of this exhibit have been omitted pursuant to a request for confidential treatment submitted to the Securities and Exchange Commission.
|
DATED
|
30 December 2014
|
Oclaro Technologies Limited
-and-
II-VI Incorporated
-and-
II-VI Holdings B.V.
|
|
SETTLEMENT AGREEMENT
|
|
|
|
TAYLOR WESSING LLP
5 NEW STREET SQUARE
LONDON
EC4A 3TW
+44 (0)20 7300 7000
+44 (0)20 7300 7100
DX 41 London
Ref: TSS/IIV3.U1
|
(a)
|
Oclaro Technologies Limited
, a company incorporated under the laws of England and Wales (“
Oclaro
”);
|
(b)
|
II-VI Incorporated
, a Pennsylvania corporation (“
II-VI
”); and
|
(c)
|
II-VI Holdings B.V.
, a Netherlands corporation (“
II-VI BV
”, and together with II-VI, the "
II-VI Parties"
),
|
A.
|
Oclaro and II-VI BV entered into a Share and Asset Purchase Agreement, dated as of 12 September 2013 (the “
SAPA
”). Pursuant to the SAPA, Oclaro sold and transferred, and caused its Affiliates (as such term is defined in the SAPA) to sell and transfer, certain assets of Oclaro (including all outstanding shares of capital stock of Oclaro Switzerland GmbH, a limited liability company formed under the laws of the Swiss Confederation) to II-VI BV and its Affiliates, and II-VI BV assumed certain liabilities of Oclaro and its Affiliates.
|
B.
|
Pursuant to the SAPA, II-VI BV retained US$6,000,000 of the purchase price payable under the SAPA as an indemnification holdback in respect of Oclaro’s indemnification obligations under the SAPA (the “
SAPA Holdback Amount
”).
|
C.
|
Pursuant to an Option Agreement by and among Oclaro, the II-VI Parties, Oclaro, Inc., a Delaware corporation, Oclaro (North America) Inc., a Delaware corporation, and Avanex Communication Technologies Co., a company organized under the laws of the People’s Republic of China, dated September 12, 2013 (the “
Option Agreement
”), Oclaro and II-VI entered into an Asset Purchase Agreement, dated as of 10 October 2013 (the “
APA
”). Pursuant to the APA, Oclaro and its Affiliates (as such term is defined in the APA) sold and transferred, and caused its Affiliates to sell and transfer, certain assets of Oclaro to II-VI and its Affiliates, and II-VI assumed certain liabilities of Oclaro.
|
D.
|
Pursuant to the APA, II-VI retained US$4,000,000 of the purchase price payable under the APA as an indemnification holdback in respect of Oclaro’s indemnification obligations under the APA (the “
APA Holdback Amount
”).
|
E.
|
Pursuant to the SAPA and the APA, the Parties entered into the following agreements: a) Manufacturing Services and Supply Agreement dated as of September 12, 2013; b) Manufacturing Services and Supply Agreement For HPL and VCSEL dated as of September 12, 2013, and amended as of October 21, 2014 (the “
MSA Caswell Agreement
”); c) Transition Services Agreement dated as of September 12, 2013; d) Manufacturing Services and Supply Agreement (Amplifier) dated as of November 1, 2013; and e) Transition Services Agreement dated as of November 1, 2013 (collectively the “
MSA/TSA Agreements
”).
|
F.
|
A dispute has arisen between the II-VI Parties on the one hand and Oclaro on the other hand as to accounts receivable collected by Oclaro on behalf of the II-VI Parties and certain amounts due under the MSA/TSA Agreements (the “
First Dispute
”).
|
G.
|
A dispute has arisen between the II-VI Parties on the one hand and Oclaro on the other hand as to (a) alleged inaccuracies in and/or breaches, whether due to fraud or otherwise, of certain representations and warranties (other than the Fundamental Reps and/or SOL Reps, as such terms are defined in the SAPA and APA) given by Oclaro under both the SAPA and the APA (and any certificate delivered in connection therewith, to the extent in respect of such representations and warranties), (b) whether Oclaro is obliged to indemnify II-VI for Damages (as such term is defined in the SAPA and the APA) resulting from such alleged inaccuracies in and/or breaches of such representations and warranties, and (c) the resulting entitlement of the Parties to retention or payment of the SAPA Holdback Amount and the APA Holdback Amount (collectively the “
Second Dispute
,” and together with the First Dispute, the “
Disputes
”).
|
H.
|
The Parties engaged in discussions in respect of the Disputes. On or about October 21, 2014, the Parties agreed to a settlement of the First Dispute (including all claims of any Party or their Related Parties under any of the MSA/TSA Agreements, except with respect to payment obligations for services performed or charges incurred for activities occurring after October 21, 2014 under any of the MSA/TSA Agreements or under the Common Expense Allocation Agreement between certain of the Parties or their affiliates in respect of real property and certain services provided in Shenzhen, China, or under the lease between certain of the Parties or their affiliates in respect of real property in Paignton, England (such payment obligations, the “
Retained Claims
”), and Oclaro made a payment to II-VI in respect thereof.
|
I.
|
To avoid further costs and expenditure of resources, the Parties now desire to settle, compromise, and resolve the Disputes on the terms set forth in this Agreement.
|
1.
|
Definitions and Interpretation
|
2.
|
Payments, Settlement, Releases and Agreement Not To Sue
|
2.1
|
By 4.30 pm New York time on 6 January 2015, II-VI BV shall pay US$1,410,000 of the SAPA Holdback Amount to the Oclaro Account in immediately available funds.
|
2.2
|
The remaining US$4,590,000 of the SAPA Holdback Amount shall be and is hereby irrevocably and unconditionally released to II-VI BV.
|
2.3
|
By 4.30 pm New York time on 6 January 2015, II-VI shall pay US$940,000 of the APA Holdback Amount to the Oclaro Account in immediately available funds.
|
2.4
|
The remaining US$3,060,000 of the APA Holdback Amount shall be and is hereby irrevocably and unconditionally released to II-VI.
|
2.5
|
In consideration for the Parties entering into this Agreement and agreeing to the terms hereof:
|
(a)
|
The II-VI Parties hereby fully and finally settle, release and forever discharge the II-VI Parties' Released Claims on their own behalf and on behalf of their Related Parties; and
|
(b)
|
Oclaro hereby fully and finally settles, releases and forever discharges Oclaro's Released Claims on its own behalf and on behalf of its Related Parties;
|
2.6
|
The II-VI Parties on the one hand and Oclaro on the other agree, on behalf of themselves and on behalf of their Related Parties, not to commence, pursue, aid in any way (except to the extent required by law), prosecute or cause to be commenced or prosecuted against the other Party or its Related Parties any action, suit or other proceeding concerning the II-VI Parties' Released Claims and/or Oclaro's Released Claims, in this jurisdiction or any other.
|
2.7
|
For the avoidance of doubt, this Agreement and the Parties' obligations under it shall not settle, release, discharge or otherwise affect the Parties’ rights, entitlements, duties or responsibilities under the SAPA, the APA, or the MSA/TSA Agreements except those which are the subject of any of (a) either of the Disputes, (b) any other representation or warranty given under the SAPA or the APA (other than the Fundamental Reps and/or SOL Reps, as such terms are defined in the SAPA and APA), or (c) the Option Agreement.
|
3.
|
Warranties and Authority
|
3.1
|
The II-VI Parties each warrants and represents that it has not sold, transferred, assigned or otherwise disposed of its interest in the II-VI Parties' Released Claims.
|
3.2
|
Oclaro warrants and represents that it has not sold, transferred, assigned or otherwise disposed of its interest in Oclaro's Released Claims.
|
3.3
|
Each Party warrants and represents to the others with respect to itself that it has the full right, power and authority to execute, deliver and perform this Agreement on behalf of itself and its Related Parties.
|
4.
|
No Admissions, No Waiver
|
4.1
|
This Agreement, all negotiations with respect to it and steps taken pursuant to it, are not and shall not be construed as, relied upon or deemed to be, admissions or concessions by any of the Parties of any liability or wrongdoing or loss whatsoever, and may not be introduced or admitted by any person as evidence of any such admission or concession.
|
4.2
|
The waiver by one of the Parties of any breach of this Agreement shall not be deemed a waiver of any other prior or subsequent breach of this Agreement. No waiver of any right under this Agreement shall be effective unless it is in writing and signed by the Party waiving such right.
|
5.
|
Invalidity
|
6.
|
Variation
|
7.
|
Whole Agreement and Non-Reliance on Representations
|
7.1
|
This Agreement supersedes any previous written or oral agreement between the Parties in relation to the matters dealt with in this Agreement and contains the whole agreement between the Parties relating to the subject matter of this Agreement at the date hereof to the exclusion of any terms implied by law which may be excluded by contract.
|
7.2
|
Each Party acknowledges that this Agreement has not been entered into either wholly or partly in reliance on any statement, promise or representation which is not expressly set out in this Agreement made by or on the behalf of the other Party.
|
8.
|
Co-operation
|
9.
|
Contracts (Rights of Third Parties) Act 1999
|
10.
|
Costs
|
11.
|
Confidentiality
|
(a)
|
where (and only to the extent that) such Party is required to do so by law or by any relevant regulatory authority after providing the other Party with an advance copy of the disclosure at least twenty four (24) hours prior to the disclosure;
|
(b)
|
so far as is necessary for the purpose of implementing and enforcing the terms of this Agreement;
|
(c)
|
in confidence to such Party's legal and professional advisors, insurers and auditors; or
|
(d)
|
as otherwise agreed in writing by the Parties.
|
12.
|
Counterparts
|
13.
|
Time of the Essence
|
14.
|
Governing Law and Dispute Resolution
|
14.1
|
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
|
14.2
|
Each of the Parties irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that accordingly any proceedings arising out of or in connection with this Agreement shall be brought in such courts.
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Schedule
:
|
|
Issuance Schedule:
|
Subject to any change on a Capitalization Adjustment, one share of the Company’s common stock (“
Common Stock
”) will be issued for each RSU that vests at the time set forth in the Award Agreement, but in all cases within the “short term deferral” period determined under Treasury Regulations Section 1.409A-1(b)(4).
|
ALSO PROVIDED
:
|
Award Agreement, Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan, Prospectus
|
Participant:
|
_____________________________________
|
Date of Grant:
|
_____________________________________
|
Vesting Commencement Date:
|
_____________________________________
|
Number of Shares Subject to Option:
|
_____________________________________
|
Exercise Price (Per Share):
|
_____________________________________
|
Total Exercise Price:
|
_____________________________________
|
Expiration Date:
|
_____________________________________
|
Payment:
|
By one or a combination of the following items:
|
•
|
By cash, check, bank draft, electronic funds or wire transfer, or money order payable to the Company
|
•
|
Pursuant to a Regulation T Program (also called “broker assisted exercise”), if the Shares are publicly traded and to the extent permitted by the Company
|
•
|
By a “net exercise” arrangement, but only if this Option is a Non-Qualified Stock Option and if permitted by the Company at exercise
|
•
|
By delivery of already owned shares, if permitted by the Board at exercise
|
Oclaro, Inc.
|
Participant:
|
|
|
By: ________________________________
Signature |
By: ____________________________________
Signature |
Title: ______________________________
|
Date: __________________________________
|
Date: ______________________________
|
|
1.
|
The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Option Agreement.
|
2.
|
The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past.
|
3.
|
All decisions with respect to future option grants, if any, will be at the sole discretion of the Company.
|
4.
|
Your participation in the Plan does not create a right to further employment with your employer or additional time in service with the Company or any of its affiliates, and shall not interfere with the ability of your employer to terminate your employment relationship (or the ability of the Company or its affiliates to terminate any other service relationship) at any time with or without cause. The Option will not be interpreted to form an employment contract or relationship with the Company, your employer, or any subsidiary or affiliate of the Company.
|
5.
|
You are voluntarily participating in the Plan.
|
6.
|
The Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or your employer, and is outside the scope of your employment or service contract, if any. The Option is not part of your normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or your employer.
|
7.
|
The future value of the underlying Shares is unknown and cannot be predicted with certainty. If the underlying Shares do not increase in value, the Option will have no value. If you purchase the Shares subject to this Option, the value of those Shares may increase or decrease.
|
8.
|
In consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution in value of the Option or Shares purchased through exercise of the Option resulting from termination of Optionee’s employment or other service with the Company or your employer (for any reason whatsoever) and Optionee irrevocably releases the Company and your employer from any such claim that may arise; if, despite the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Option Agreement, Optionee shall be deemed irrevocably to have waived Optionee’s entitlement to pursue such claim.
|
9.
|
On the termination of your employment or service, your right to vest in the Option will terminate effective as of the date that you are no longer actively employed or otherwise providing service and will not be extended by any notice period mandated under the local law (
e.g.,
active employment would not include a period of “garden leave” or similar period pursuant to local law). Furthermore, on the termination of employment or service, your right to exercise the Option, if any, will be measured by the date of termination of your active employment or service and will not be extended by any notice period mandated under local law. The Company shall have the exclusive discretion to determine when you are no longer actively employed or rendering services for purposes of this Option.
|
1.
|
You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, your employer, the Company and its subsidiaries and affiliates for the purpose of implementing, administering and managing your participation in the Plan, as well as for the purpose of the Company’s compliance with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires certain public companies to calculate and disclose on an annual basis the ratio of the median of the annual total compensation of all employees of an issuer as compared to the annual total compensation of its chief executive officer (the “CEO Pay Ratio”).
|
2.
|
You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan and complying with the CEO Pay Ratio (“Data”).
|
3.
|
You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (
e.g.
, the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing your participation in the Plan and for compliance with the CEO Pay Ratio. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan and as is necessary for compliance with the CEO Pay Ratio. You understand that you may, at any time, view the Data, request additional information about the storage processing of the Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.
|
Vesting Schedule
:
|
|
Issuance Schedule:
|
Subject to any change on a Capitalization Adjustment, one share of the Company’s common stock (“
Common Stock
”) will be issued for each PSU that vests at the time set forth in the Award Agreement, but in all cases within the “short term deferral” period determined under Treasury Regulations Section 1.409A-1(b)(4).
|
ALSO PROVIDED
:
|
Award Agreement, Fifth Amended and Restated 2001 Long-Term Stock Incentive Plan, Prospectus
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Oclaro, Inc. for the period ended
December 27, 2014
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 5, 2015
|
|
By:
|
/s/ GREG DOUGHERTY
|
|
|
|
Greg Dougherty
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Oclaro, Inc. for the period ended
December 27, 2014
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 5, 2015
|
|
By:
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
February 5, 2015
|
By:
|
|
/s/ G
REG
D
OUGHERTY
|
|
|
|
Greg Dougherty
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
February 5, 2015
|
By:
|
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|