def14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Bookham, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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BOOKHAM, INC.
2584 Junction Avenue
San Jose, California 95134
Notice of Annual Meeting of Stockholders
To be held on November 1, 2006
To the stockholders of Bookham, Inc.:
The annual meeting of stockholders of Bookham, Inc., a Delaware
corporation, will be held on Wednesday, November 1, 2006 at
3:00 p.m., local time, at the Four Seasons Hotel, 2050
University Avenue, East Palo Alto, California, for the purpose
of considering and voting upon the following matters:
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1. To elect one Class II director for the ensuing
three years; |
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2. To ratify the selection of Ernst & Young LLP as
our independent registered public accounting firm for the
current fiscal year; and |
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3. To transact such other business as may properly come
before the annual meeting, including any postponements or
adjournments thereof. |
Our board of directors has no knowledge of any other business to
be transacted at the annual meeting.
We are enclosing a copy of our annual report to stockholders for
the fiscal year ended July 1, 2006 with the proxy statement
that accompanies this notice of meeting. The annual report
contains consolidated financial statements and other information
of interest to you.
Holders of record of our common stock at the close of business
on September 15, 2006 are entitled to receive this notice
and to vote at the annual meeting.
We encourage you to attend the annual meeting in person.
However, in order to make sure that you are represented at the
annual meeting, we urge you to complete, sign and return the
enclosed proxy card as promptly as possible in the enclosed
postage-prepaid envelope.
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By order of the Board of Directors, |
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![-s- Peter F. Bordui](f23545def2354503.gif) |
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Peter F. Bordui |
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Chairman of the Board of Directors |
September 29, 2006
TABLE OF CONTENTS
BOOKHAM, INC.
2584 Junction Avenue
San Jose, California 95134
Proxy Statement
For the Annual Meeting of Stockholders
To be held on November 1, 2006
This proxy statement is furnished to you in connection with the
solicitation of proxies by our board of directors for the annual
meeting of stockholders to be held on Wednesday,
November 1, 2006 at 3:00 p.m., local time, at the Four
Seasons Hotel, 2050 University Avenue, East Palo Alto,
California, including any postponements or adjournments thereof.
The notice of the annual meeting, this proxy statement, our
annual report to stockholders for the fiscal year ended
July 1, 2006, which we sometimes refer to as fiscal
2006, and the enclosed proxy are first being mailed to
stockholders on or about September 29, 2006.
Voting of Proxies
All shares held by stockholders who are entitled to vote and who
are represented at the annual meeting by properly executed
proxies received prior to or at the annual meeting will be voted
in accordance with the instructions indicated on the proxy card,
unless it is revoked prior to the vote. If a proxy card does not
specify how the proxy is to be voted with respect to a
particular matter, the shares will be voted FOR
approval of the matter.
A proxy may be revoked before it is used to cast a vote. To
revoke a proxy, a stockholder must:
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file with the corporate secretary of the company, at or before
the taking of the vote, a written notice of revocation bearing a
later date than the proxy; |
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duly execute a later dated proxy relating to the same shares and
deliver it to the corporate secretary of the company before the
taking of the vote; or |
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attend the annual meeting and vote in person. Attendance at the
annual meeting, if a stockholder does not vote, will not be
sufficient to revoke a proxy. |
Any written notice of revocation or subsequent proxy should be
sent to us at the following address: Bookham, Inc., 2584
Junction Avenue, San Jose, California 95134, Attention:
Corporate Secretary.
Stockholders Entitled to Vote
Our board of directors has fixed September 15, 2006 as the
record date for the determination of stockholders entitled to
vote at the annual meeting. Only holders of record of our common
stock at the close of business on the record date are entitled
to notice of and to vote at the annual meeting. On
September 15, 2006, there were 66,674,908 shares of
our common stock outstanding and entitled to vote. Each share of
common stock will have one vote for each matter to be voted upon
at the annual meeting.
Votes Required
The holders of at least a majority in voting power of the shares
of our common stock issued and outstanding and entitled to vote
at the annual meeting will constitute a quorum for the
transaction of business at the annual meeting. Shares of common
stock present in person or represented by proxy, including
shares which abstain or do not vote with respect to one or more
of the matters presented for stockholder approval, will be
counted for purposes of determining whether a quorum is present
at the annual meeting.
If a broker does not have discretionary voting authority to vote
shares for which it is the holder of record with respect to a
particular matter at the annual meeting, the shares cannot be
voted by the broker, although they will be counted in
determining whether a quorum is present. Accordingly, broker
non-votes and abstentions would have no effect on the voting on
a matter that requires the affirmative vote of a certain
percentage of votes cast or shares voting on that matter.
The affirmative vote of the holders of shares representing at
least a plurality of the votes cast by the holders of our common
stock entitled to vote at the annual meeting is required for the
election of the Class II director. The affirmative vote of
the holders of a majority of the shares present or represented
and voting on the matter at the annual meeting is required to
ratify the selection of Ernst & Young LLP as our
independent registered public accounting firm.
Security Ownership of Certain Beneficial Owners and
Management
The following table shows the number of shares of our common
stock beneficially owned as of August 31, 2006 by each
entity or person who is known to us to own 5% or more of our
common stock, each director, each executive officer listed in
the Summary Compensation Table below, and all directors and
executive officers as a group.
Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission. Except as indicated
by footnote, to our knowledge, the persons named in the table
have sole voting and investment power with respect to all shares
of common stock shown as beneficially owned by them. Options to
purchase shares of common stock that are exercisable within
60 days of August 31, 2006 are deemed to be
beneficially owned by the person holding such options for the
purpose of computing ownership of such person, but are not
treated as outstanding for the purpose of computing the
ownership of any other person. Applicable percentage of
beneficial ownership is based on 57,978,908 shares of
common stock outstanding as of August 31, 2006.
The address of each of our executive officers and directors is
c/o Bookham, Inc., 2584 Junction Avenue, San Jose,
California 95134.
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Options | |
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Shares Beneficially | |
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Included in Shares | |
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Owned | |
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Beneficially Owned | |
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Name of Beneficial Owner |
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Number | |
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Percent | |
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Number | |
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5% Stockholders
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FMR Corp.(1)
82 Devonshire Street
Boston, Massachusetts 02109
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6,907,900 |
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11.9 |
% |
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GLG North American Opportunity Fund(2)
c/o GLG Partners
1 Curzon Street
London W1J 5HB
England
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4,697,026 |
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8.1 |
% |
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Nortel Networks Corporation(3)
8200 Dixie Road
Brampton, Ontario L6T 5P6
Canada
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3,999,999 |
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6.9 |
% |
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Executive Officers and Directors
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Stephen Abely
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315,850 |
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* |
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Giorgio Anania
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624,265 |
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1.1 |
% |
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138,093 |
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Jim Haynes
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152,718 |
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* |
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27,718 |
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Stephen Turley
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90,000 |
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* |
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Peter Bordui
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26,150 |
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* |
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16,150 |
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Joseph Cook
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27,783 |
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* |
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17,783 |
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Lori Holland
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68,664 |
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* |
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58,664 |
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W. Arthur Porter
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59,743 |
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* |
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49,743 |
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David Simpson
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81,591 |
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* |
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61,591 |
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All executive officers and directors as a group (10 persons)
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1,538,575 |
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2.7 |
% |
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391,553 |
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* |
Represents beneficial ownership of less than 1%. |
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Fidelity Management & Research Company is the
beneficial owner of 6,887,303 shares as a result of acting
as an investment advisor to various investment companies
registered under Section 8 of the Investment Company Act of
1940. Edward C. Johnson 3d and FMR Corp. each has sole power to
dispose of these 6,887,303 shares. Neither FMR Corp. nor
Edward C. Johnson 3d has the sole power to vote or direct the
voting of the shares owned directly by such funds, which power
resides with the funds Board of Trustees. Fidelity
Management & Research Company carries out the voting of
the shares under written guidelines established by the
funds Board of Trustees. Fidelity Management Trust Company
is the beneficial owner of 20,597 shares as a result of its
serving as an investment manager of the institutional
account(s). Edward C. Johnson 3d and FMR Corp. each has sole
dispositive power over these 20,597 shares and sole power
to vote or to direct the voting of these 20,597 shares.
Various persons have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of,
the shares. The interest of one person, Fidelity Small Cap
Independence, an investment company registered under the
Investment Company Act of 1940, in our common stock amounted to
3,014,900 shares. This information is based on a
Schedule 13G filed by FMR Corp. with the SEC on
April 10, 2006. |
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Of these shares, 110,000 are held by GLG European Opportunity
Fund, 3,229,000 are held by GLG North American Opportunity Fund,
836,000 are held by GLG Technology Fund, 306,400 are held by GLG
Investments plc through its subfund GLG North American Equity
Fund, 13,038 are held by Lyxor/ GLG Pan European Equity
Fund Ltd., 63,600 are held by The Century Fund SICAV,
4,843 are held by Orchestra
Sub-Funds SPC, 35,702
are held by GLG Equities Long-Short CI, 7,800 are held by Citi
GLG European Hedge Fund Ltd, 59,779 are held by Lyxor/ GLG
North American Alternative |
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Equity Fund Ltd, 28,539 are held by Citi GLG North American
Fund Ltd., and 2,325 are held by Sphinx Long/ Short GLG
Fund. The information is based on a Schedule 13G filed by
GLG North American Opportunity Fund with the SEC on
December 23, 2005. |
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The information is based on an Amendment No. 5 to
Schedule 13D filed by Nortel Networks Corporation with the
SEC on December 7, 2004. |
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Of these shares, 10,000 are jointly owned by
Dr. Simpsons spouse. |
PROPOSAL 1 ELECTION OF CLASS II
DIRECTOR
We have three classes of directors, currently consisting of
three Class I directors, one Class II director and two
Class III directors. The class I, class II and
class III directors serve until the annual meeting of
stockholders to be held in 2008, 2006 and 2007, respectively,
and until their respective successors are elected and qualified.
At each annual meeting, directors are elected for a full term of
three years to succeed those whose terms are expiring. The terms
of the three classes are staggered in a manner so that only one
class is elected by stockholders annually. Lori Holland is
currently serving as a Class II director. If
Ms. Holland is elected this year, she will be elected to
serve as a member of our board of directors until the 2009
annual meeting of stockholders, or until her successor is
elected and qualified.
The persons named in the enclosed proxy will vote to re-elect
Ms. Holland as a Class II director unless the proxy is
marked otherwise. Ms. Holland has indicated her willingness
to serve on our board of directors, if elected; however, if she
should be unable to serve, the person acting under the proxy may
vote the proxy for a substitute nominee designated by our board
of directors. Our board of directors has no reason to believe
that Ms. Holland would be unable to serve if elected.
For each member of our board of directors there follows
information given by each concerning his or her principal
occupation and business experience for at least the past five
years, the names of other public reporting companies of which he
or she serves as a director and his or her age and length of
service as one of our directors. There are no family
relationships among any of our directors and executive officers.
Dr. Bordui was selected by New Focus to join our board of
directors pursuant to the terms of our agreement and plan of
merger with New Focus.
Term Expiring 2006
Lori Holland, 48, has served as a director since
September 2004. Ms. Holland served as a director of Bookham
Technology plc from April 1999 until September 2004.
Ms. Holland has served as a consultant to various
technology startups since January 2001. From November 1999 until
December 2000, Ms. Holland was the Chief Financial Officer
of Zaffire, Inc., a telecommunication company in California.
Ms. Holland serves as a director and audit committee member
of Credence Systems Corporation, a test equipment supplier to
the semiconductor industry, based in Silicon Valley and as a
director and audit committee chair of WiderThan, a mobile
Internet company. Ms. Holland received a BS in Economics
from California Polytechnic University.
Terms Expiring 2007
Peter F. Bordui, 46, has served as a director since
September 2004 and as chairman of the board of directors since
February 2005. Dr. Bordui served as a director of Bookham
Technology plc from March 2004 until September 2004.
Dr. Bordui served on the board of directors of New Focus
from December 2001 to March 2004. From January 1999 to December
2001, Dr. Bordui served first as Vice President and General
Manager, Netherlands and then as Vice President and General
Manager, Source Lasers for JDS Uniphase Corporation, a fiber
optic communications product manufacturer. Dr. Bordui also
serves as director of Polytech Ventures, a Swiss-based
investment fund. Dr. Bordui holds a BS, MS and PhD in
Materials Science and Engineering from the Massachusetts
Institute of Technology.
David Simpson, 79, has served as a director since
September 2004. Professor Simpson served as a director of
Bookham Technology plc from March 1995 to June 2004. Professor
Simpson served as the vice chairman of
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Bookham Technology plcs board of directors from August
2000 to June 2004 and, before assuming that position, served as
the chairman of the board of directors of Bookham Technology
plc. In 1992, the Queen awarded Professor Simpson the CBE for
services to the electronics industry. Professor Simpson
currently serves as chairman of Simpson Research Ltd., a private
consulting company, and as a director of several privately-held
companies, including Environcom Ltd., a recycling company,
Conjunct Ltd., a chip design company and MIMIV Ltd., a display
company. Professor Simpson has received honorary doctorates in
Science and Technology from Heriot Watt, Abertay and Napier
Universities in Scotland and he is a Fellow of the Royal Society
of Edinburgh.
Terms Expiring 2008
Giorgio Anania, 47, has served as a director since June
2004, as our Chief Executive Officer since September 2004 and as
our President since March 2005. Dr. Anania has served as a
director of Bookham Technology plc since February 2001. He also
served as Chief Executive Officer of Bookham Technology plc from
February 2001 until September 2004. From August 2000 to March
2004, he served as President of Bookham Technology plc. From
October 1998, when he joined Bookham Technology plc, until
August 2000, Dr. Anania was the Senior Vice President,
Sales and Marketing of Bookham Technology plc. Dr. Anania
has a BA(Hons) in Physics from Oxford University and an MA and
PhD in Plasma Physics from Princeton University. Before joining
Bookham, he was Vice President, Sales and Marketing and Business
Development at Flamel Technologies, a French NASDAQ-quoted drug
delivery company he helped take public. He previously worked at
OC&C Strategy Consultants in Paris, at Raychem Corporation
in California and Italy and at Booz Allen & Hamilton,
Management Consultants.
Joseph Cook, 54, has served as a director since September
2004. Mr. Cook served as a director of Bookham Technology
plc from February 2002 until September 2004. Mr. Cook is
Vice President of Engineering at Verizon and has served in that
position since the merger with MCI in January 2006. He
previously served in a similar role at MCI beginning in 1999.
Mr. Cook is a member of the advisory boards of the
University of Texas at Dallas and Oklahoma State University.
Mr. Cook holds a BA and a Masters in Business
Administration from Dallas Baptist University in Texas and an
Associates degree in engineering from Prince Georges
Community College in Maryland. Mr. Cook holds a patent for
narrowband optical DWDM devices.
W. Arthur Porter, 65, has served as a director since
September 2004. Dr. Porter served as a director of Bookham
Technology plc from February 1998 until September 2004. Since
July 1998, Dr. Porter has been Vice President of Technology
Development at the University of Oklahoma. From July 1998 to
June 2005, Dr. Porter was Dean of Engineering at the
University of Oklahoma and is now Regents Chair and
University Professor. Dr. Porter serves as a director of
Electro Scientific Industries (ESI), Stewart Information
Services Corporation and Southwest Nano Technologies, Inc. He
has a PhD in Interdisciplinary Engineering from Texas A&M
University, is a fellow of the Institute of Electrical and
Electronics Engineers, and a recipient of its Centennial Medal
for extraordinary achievement.
Non-Director Executive Officers
Stephen Abely, 49, has served as our Chief Financial
Officer since September 2004. Mr. Abely served as Chief
Financial Officer of Bookham Technology plc from October 2001 to
September 2004. From August 2000 until August 2001,
Mr. Abely was the Chief Financial Officer of Arescom
Technology, a private broadband access equipment provider based
in California. Previously, Mr. Abely was an independent
consultant from May 1999 to August 2000, during which time he
served as interim Chief Financial Officer for two privately-held
companies. Mr. Abely holds a BS in Business Administration
from Northeastern University in Boston.
James Haynes, 44, has served as Chief Operating Officer
since March 2005 and as acting Chief Technology Officer since
June 2005. From August 2004 to March 2005, Mr. Haynes was
the Officer VP, U.K. Operations, of Bookham Technology plc. From
June 2003 to August 2004, Mr. Haynes served as VP
Operations and Site Leader, Caswell for Bookham, Inc. From
December 2000 to June 2003, Mr. Haynes
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served as Chief Operating Officer of Agility Communications,
Inc., a tunable laser company. From 1998 to December 2000,
Mr. Haynes served as Director of Technology of Nortel
Networks Corporation.
Adrian Meldrum, 36, has served as our Vice President,
Sales and Marketing since July 2005. From November 2004 to July
2005, Mr. Meldrum served as our Vice President,
Communication Sales. Mr. Meldrum previously served as Vice
President, Business Development and held various positions in
business development and product management roles after joining
Bookham in 2001. From 2000 to 2001, Mr. Meldrum served as
Product Line Manager for JDS Uniphase Corp., a manufacturer of
fiber optic products, in the United Kingdom and joined JDS
Uniphase Corp. through their acquisition of SDL in 2000.
Mr. Meldrum holds a BSc in Physics from Manchester
Metropolitan University.
Stephen Turley, 52, has served as our Chief Commercial
Officer since September 2004. Dr. Turley joined Bookham as
Chief Commercial Officer of Bookham Technology plc in October
2001. From June 2000 to September 2001, he was Vice President,
Strategic Partnerships, with Nortel Networks High
Performance Optical Component Solutions group. Dr. Turley
has a BA in Physics from Oxford University and a PhD in
Semiconductor Laser Physics from Sheffield University.
Director Compensation
We reimburse directors for reasonable
out-of-pocket expenses
incurred in attending meetings of the board of directors and any
meetings of its committees. Each non-employee director receives
an annual retainer of $20,000, an additional $3,000 for each
in-person meeting of our board of directors and $500 for each
teleconference of our board of directors or committee of our
board of directors the director attends. The chairman of our
board of directors receives an annual retainer of $80,000. In
addition, the chairman of our audit committee receives an annual
fee of $36,000, the chairman of our compensation committee
receives an annual fee of $16,000 and the chairman of our
nominating and corporate governance committee receives an annual
fee of $16,000. Each member of the compensation committee and
each member of the nominating and corporate governance committee
receives an annual fee of $4,000 for serving on such committee
and each member of the audit committee receives an annual fee of
$8,000 for serving on such committee. Each year at our annual
meeting of stockholders, each non-employee director is
automatically granted a nonstatutory stock option to acquire
10,000 shares of our common stock and an award of
restricted stock or restricted stock units for
10,000 shares of our common stock under our 2004 stock
incentive plan, provided that the director is serving as a
director both immediately before and immediately after the
annual meeting. The options vest immediately and the restricted
stock vests as to 50% after one year and 100% after two years,
provided that the director is serving as a director on the
applicable vesting date. The shares of restricted stock or
restricted stock units vest in full upon a consummation of a
change in control of Bookham, provided that the director serves
as a director until such date. In our discretion, we may grant
additional equity awards to our non-employee directors under our
2004 stock incentive plan.
We have a directors fee agreement with Ms. Holland,
which became effective on August 1, 2002 and which provides
for the annual payment to Ms. Holland of $40,000 as
indicated above for service as a member and chair of our audit
committee as well as our audit committee financial expert. The
agreement does not provide for any benefits if Ms. Holland
ceases to be a director.
Section 16(a) Beneficial Ownership Reporting
Compliance
Based solely on our review of copies of reports filed by
reporting persons pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended, or written
representations from reporting persons that no Form 5
filing was required for such persons, we believe that, during
fiscal 2006, other than a late Form 4 filing by David
Simpson reporting a sale of shares of our common stock, all
filings required to be made by our reporting persons were timely
made in accordance with the requirements of Section 16(a)
of the Securities Exchange Act of 1934, as amended.
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Executive Compensation
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Summary Compensation Table |
We were incorporated on June 29, 2004 and on
September 10, 2004, pursuant to a scheme of arrangement
under UK law, we became the holding company of Bookham
Technology plc, a public limited company incorporated in England
and Wales. In contemplation of the scheme of arrangement,
Bookham Technology plc changed its fiscal year end from
December 31 to the Saturday closest to June 30.
The following table provides information about the compensation
for the year ended July 1, 2006, the year ended
July 2, 2005, the period from January 1, 2004 to
July 3, 2004 and the year ended December 31, 2003 of
the individual who served as Chief Executive Officer during the
year ended July 1, 2006 and our other executive officers
during the year ended July 1, 2006. Compensation
information prior to September 10, 2004, the effective date
of the scheme of arrangement, reflects compensation from Bookham
Technology plc.
In accordance with the rules of the Securities and Exchange
Commission, the compensation set forth in the table below does
not include medical, group life or other benefits which are
available to all of our salaried employees, and perquisites and
other personal benefits, securities or property which do not
exceed the lesser of $50,000 or 10% of the total annual salary
and bonuses for each of the persons shown in the table.
Summary Compensation Table
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Long-Term Compensation | |
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Annual Compensation | |
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Securities | |
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Fiscal | |
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Other Annual | |
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Restricted Stock | |
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All Other | |
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Bonus | |
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Compensation | |
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Options | |
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Compensation(2) | |
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Giorgio Anania(3)
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2006 |
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$ |
454,879 |
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$ |
554,730 |
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|
$ |
68,665 |
(4) |
|
|
1,841,250 |
(5) |
|
|
375,000 |
|
|
$ |
40,939 |
|
|
President and Chief |
|
|
2005 |
|
|
$ |
424,992 |
|
|
$ |
|
|
|
$ |
68,140 |
(6) |
|
|
445,175 |
(7) |
|
|
120,000 |
|
|
$ |
38,249 |
|
|
Executive Officer |
|
|
2004 |
(8) |
|
$ |
212,496 |
|
|
$ |
39,843 |
|
|
$ |
18,151 |
|
|
|
|
|
|
|
150,673 |
(7) |
|
$ |
19,125 |
|
|
|
|
|
2003 |
|
|
$ |
327,244 |
|
|
$ |
|
|
|
$ |
33,276 |
|
|
|
|
|
|
|
203,559 |
(7) |
|
$ |
26,998 |
|
Stephen Abely
|
|
|
2006 |
|
|
$ |
328,362 |
|
|
$ |
386,750 |
|
|
$ |
21,840 |
|
|
|
1,227,500 |
(9) |
|
|
250,000 |
|
|
$ |
|
|
|
Chief Financial |
|
|
2005 |
|
|
$ |
330,173 |
|
|
$ |
37,000 |
|
|
$ |
8,854 |
|
|
|
309,399 |
(10) |
|
|
60,000 |
(10) |
|
$ |
|
|
|
Officer |
|
|
2004 |
(8) |
|
$ |
150,518 |
|
|
$ |
14,112 |
|
|
$ |
31,874 |
|
|
|
|
|
|
|
40,754 |
(10) |
|
$ |
|
|
|
|
|
|
2003 |
|
|
$ |
247,912 |
|
|
$ |
|
|
|
$ |
53,124 |
|
|
|
|
|
|
|
88,516 |
(10) |
|
$ |
|
|
Jim Haynes(11)
|
|
|
2006 |
|
|
$ |
264,051 |
|
|
$ |
103,735 |
|
|
$ |
16,642 |
|
|
|
613,750 |
(12) |
|
|
125,000 |
|
|
$ |
10,562 |
|
|
Chief Operating |
|
|
2005 |
|
|
$ |
301,036 |
|
|
$ |
85,309 |
|
|
$ |
19,922 |
|
|
|
|
|
|
|
14,000 |
|
|
$ |
|
|
|
Officer and Acting Chief Technology Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Turley
|
|
|
2006 |
|
|
$ |
303,252 |
|
|
$ |
144,045 |
|
|
$ |
22,189 |
|
|
|
441,900 |
(13) |
|
|
50,000 |
|
|
$ |
27,293 |
|
|
Chief Commercial |
|
|
2005 |
|
|
$ |
290,411 |
|
|
$ |
|
|
|
$ |
58,502 |
|
|
|
|
|
|
|
30,000 |
|
|
$ |
26,137 |
|
|
Officer |
|
|
2004 |
(8) |
|
$ |
145,206 |
|
|
$ |
13,614 |
|
|
$ |
10,625 |
|
|
|
|
|
|
|
22,603 |
|
|
$ |
13,069 |
|
|
|
|
|
2003 |
|
|
$ |
265,620 |
|
|
$ |
|
|
|
$ |
19,479 |
|
|
|
|
|
|
|
30,813 |
|
|
$ |
21,914 |
|
|
|
|
|
(1) |
Dollar amounts have been converted at the exchange rate in
effect on July 1, 2006 of £1.00 = $1.8491. |
|
|
(2) |
Consists of pension contributions. |
|
|
(3) |
Dr. Anania became President of Bookham in March 2005. |
|
|
(4) |
Includes a car allowance of $37,907. |
|
|
(5) |
On November 11, 2005, Dr. Anania was awarded
375,000 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on November 11, 2005, $4.91, by the number of
shares of restricted stock awarded. The value of these shares of
restricted stock as of July 1, 2006, based on the closing
price of a share of our common stock on June 30, 2006,
$3.36, was $1,260,000. These shares are entitled to receive
dividends. One-half of the shares of restricted stock vest as to
25% on the one-year anniversary of the grant date and an
additional 2.083% at the end of each month following the first
anniversary of the grant date until the fourth anniversary of
the grant date. The remaining shares of restricted stock vest as
to 50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the |
7
|
|
|
|
|
non-cash compensation expense from stock compensation) that are
cumulatively greater than zero for two successive quarters and
50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the non-cash compensation expense from stock
compensation) that are cumulatively greater than 8% of revenues
for two successive quarters. |
|
|
(6) |
Includes a car allowance of $36,301. |
|
|
(7) |
On February 9, 2005, Dr. Anania was awarded
147,409 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on February 9, 2005, $3.02, by the number of
shares of restricted stock awarded. Options to
purchase 18,941 shares of common stock granted in
2004, 203,559 shares of common stock granted in 2003 and
143,136 shares of common stock granted in 2002 were
cancelled in connection with this award. These shares vested in
full on February 9, 2006. |
|
|
(8) |
Consists of the six-month period from January 1, 2004 to
July 3, 2004. |
|
|
(9) |
On November 11, 2005, Mr. Abely was awarded
250,000 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on November 11, 2005, $4.91, by the number of
shares of restricted stock awarded. The value of these shares of
restricted stock as of July 1, 2006, based on the closing
price of a share of our common stock on June 30, 2006,
$3.36, was $840,000. These shares are entitled to receive
dividends. One-half of the shares of restricted stock vest as to
25% on the one-year anniversary of the grant date and an
additional 2.083% at the end of each month following the first
anniversary of the grant date until the fourth anniversary of
the grant date. The remaining shares of restricted stock vest as
to 50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the non-cash compensation expense from stock
compensation) that are cumulatively greater than zero for two
successive quarters and 50% if we generate non-GAAP earnings
before interest, taxes, depreciation and amortization (excluding
restructuring charges, one-time items and the non-cash
compensation expense from stock compensation) that are
cumulatively greater than 8% of revenues for two successive
quarters. |
|
|
(10) |
On February 9, 2005, Mr. Abely was awarded
102,450 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on February 9, 2005, $3.02, by the number of
shares of restricted stock awarded. Options to
purchase 263,770 shares of common stock held by
Mr. Abely were cancelled in connection with this award.
These shares vested in full on February 9, 2006. |
|
(11) |
Mr. Haynes became an executive officer of Bookham in March
2005. |
|
(12) |
On November 11, 2005, Mr. Haynes was awarded
125,000 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on November 11, 2005, $4.91, by the number of
shares of restricted stock awarded. The value of these shares of
restricted stock as of July 1, 2006, based on the closing
price of a share of our common stock on June 30, 2006,
$3.36, was $420,000. These shares are entitled to receive
dividends. One-half of the shares of restricted stock vest as to
25% on the one-year anniversary of the grant date and an
additional 2.083% at the end of each month following the first
anniversary of the grant date until the fourth anniversary of
the grant date. The remaining shares of restricted stock vest as
to 50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the non-cash compensation expense from stock
compensation) that are cumulatively greater than zero for two
successive quarters and 50% if we generate non-GAAP earnings
before interest, taxes, depreciation and amortization (excluding
restructuring charges, one-time items and the non-cash
compensation expense from stock compensation) that are
cumulatively greater than 8% of revenues for two successive
quarters. |
|
(13) |
On November 11, 2005, Dr. Turley was awarded
90,000 shares of restricted stock. The amount in the table
is calculated by multiplying the closing price of a share of our
common stock on November 11, 2005, $4.91, by the number of
shares of restricted stock awarded. The value of these shares of
restricted stock as of July 1, 2006, based on the closing
price of a share of our common stock on June 30, 2006, |
8
|
|
|
$3.36, was $302,400. These shares are entitled to receive
dividends. Of these shares, 40,000 vest in full on the first
anniversary of the grant date. The remaining 50,000 shares
vest as follows: one-half of the shares of restricted stock vest
as to 25% on the one-year anniversary of the grant date and an
additional 2.083% at the end of each month following the first
anniversary of the grant date until the fourth anniversary of
the grant date; the remaining shares of restricted stock vest as
to 50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the non-cash compensation expense from stock
compensation) that are cumulatively greater than zero for two
successive quarters and 50% if we generate non-GAAP earnings
before interest, taxes, depreciation and amortization (excluding
restructuring charges, one-time items and the non-cash
compensation expense from stock compensation) that are
cumulatively greater than 8% of revenues for two successive
quarters. |
The following table contains information concerning stock option
grants we made in the year ended July 1, 2006 to each of
the executive officers identified in the Summary Compensation
Table above. Each stock option grant has a term of ten years and
vests as to 25% on the one-year anniversary of the grant date
and an additional 2.083% at the end of each month following the
first anniversary of the grant date until the fourth anniversary
of the grant date.
Amounts described in the following table under the heading
Potential Realizable Value at Assumed Rates of Stock Price
Appreciation for Option Term represent hypothetical gains
that could be achieved for the options if exercised at the end
of the option term. These gains are based on assumed rates of
stock appreciation of 5% and 10% compounded annually from the
date the options were granted to their expiration date. Actual
gains, if any, on stock option exercises will depend on the
future performance of our common stock and the date on which the
options are exercised. No gain to the optionees is possible
without an appreciation in stock price, which will benefit all
stockholders commensurately.
Option Grants During Fiscal 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Realizable Value at | |
|
|
Number of | |
|
Percent of | |
|
|
|
|
|
Assumed Annual Rates of | |
|
|
Securities | |
|
Total Options | |
|
Exercise | |
|
|
|
Stock Price Appreciation for | |
|
|
Underlying | |
|
Granted to | |
|
or Base | |
|
|
|
Option Term(1) | |
|
|
Options | |
|
Employees in | |
|
Price per | |
|
Expiration | |
|
| |
Name |
|
Granted | |
|
Fiscal Year | |
|
Share | |
|
Date | |
|
5% | |
|
10% | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Giorgio Anania
|
|
|
375,000 |
|
|
|
7.40 |
% |
|
$ |
4.91 |
|
|
|
11/11/2015 |
|
|
$ |
1,157,952 |
|
|
$ |
2,934,478 |
|
Stephen Abely
|
|
|
250,000 |
|
|
|
4.93 |
% |
|
$ |
4.91 |
|
|
|
11/11/2015 |
|
|
$ |
771,968 |
|
|
$ |
1,956,319 |
|
Jim Haynes
|
|
|
125,000 |
|
|
|
2.47 |
% |
|
$ |
4.91 |
|
|
|
11/11/2015 |
|
|
$ |
385,984 |
|
|
$ |
978,159 |
|
Stephen Turley
|
|
|
50,000 |
|
|
|
0.99 |
% |
|
$ |
4.91 |
|
|
|
11/11/2015 |
|
|
$ |
154,394 |
|
|
$ |
391,264 |
|
|
|
(1) |
Consists of amounts that may be realized upon exercise of the
options immediately before the expiration of their respective
terms, assuming the specified compound rates of appreciation (5%
and 10%) on the market value of our common stock on the date of
the option grants over the term of the respective option. |
9
|
|
|
Option Exercises and Fiscal Year-End Option Values |
The following table sets forth information concerning options
exercised during the year ended July 1, 2006 by each of the
executive officers identified in the Summary Compensation Table
above and the number and value of unexercised stock options held
by each of those executive officers. Amounts described in the
following table under the heading Value Realized
represent the difference between the aggregate fair market value
of the underlying shares of our common stock on the date of
exercise and the aggregate exercise price. Amounts described in
the following table under the heading Value of Unexercised
In-the-Money Options at
Year End are based on the aggregate fair market value of
the underlying shares of our common stock on July 1, 2006
($3.36 per share), less the aggregate option exercise price.
Aggregated Option Exercises in Fiscal Year 2006 and
Fiscal Year-End Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares | |
|
|
|
|
|
|
|
|
Underlying Unexercised | |
|
Value of Unexercised | |
|
|
|
|
|
|
Options at | |
|
In-the-Money Options at | |
|
|
Shares | |
|
|
|
July 1, 2006 | |
|
July 1, 2006 | |
|
|
Acquired on | |
|
Value | |
|
| |
|
| |
Name |
|
Exercise | |
|
Realized | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Giorgio Anania
|
|
|
|
|
|
|
|
|
|
|
56,250 |
|
|
|
438,750 |
|
|
|
|
|
|
|
|
|
Stephen Abely
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
Jim Haynes
|
|
|
|
|
|
|
|
|
|
|
6,563 |
|
|
|
132,437 |
|
|
|
|
|
|
|
|
|
Stephen Turley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
Equity Compensation Plan Information
The following table provides information about the securities
authorized for issuance under our equity compensation plans as
of July 1, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | |
|
(b) | |
|
(c) | |
|
|
| |
|
| |
|
| |
|
|
|
|
|
|
Number of Securities | |
|
|
|
|
|
|
Remaining Available for | |
|
|
|
|
|
|
Future Issuance Under | |
|
|
Number of Securities to | |
|
Weighted-Average | |
|
Equity Compensation | |
|
|
be Issued Upon Exercise | |
|
Exercise Price of | |
|
Plans (Excluding | |
|
|
of Outstanding Options, | |
|
Outstanding Options, | |
|
Securities Reflected in | |
Plan Category |
|
Warrants and Rights(1) | |
|
Warrants and Rights | |
|
Column (a))(2) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by security holders(3)
|
|
|
6,014,385 |
(4) |
|
$ |
5.27 |
|
|
|
2,611,858 |
(5) |
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,014,385 |
(4) |
|
$ |
5.27 |
|
|
|
2,611,858 |
(5) |
|
|
(1) |
This table excludes an aggregate of 1,307,284 shares of
common stock issuable upon exercise of outstanding options we
assumed in connection with the scheme of arrangement pursuant to
which Bookham Technology plc became our wholly-owned subsidiary.
The weighted average exercise price of these options as of
July 1, 2006 was $19.57. At the time of the scheme of
arrangement, we provided that no further equity awards would be
made under the Bookham Technology plc equity plans. |
|
(2) |
In addition to being available for future issuance upon exercise
of options that may be granted after July 1, 2006,
1,611,858 shares under the 2004 stock incentive plan, as
amended, may instead be issued in the form of restricted stock,
unrestricted stock, stock appreciation rights, performance
shares or other equity-based awards. |
|
(3) |
Consists of the following equity compensation plans: the 2004
stock incentive plan, as amended, the 2004 employee stock
purchase plan and the 2004 sharesave scheme. |
|
(4) |
Consists of options granted under the 2004 stock incentive plan,
as amended. The number of shares of common stock does not
include 1,349,859 shares of restricted stock and restricted
stock units granted |
10
|
|
|
under the 2004 stock incentive plan, as amended,
1,611,858 shares of common stock currently reserved for
issuance under the 2004 stock incentive plan, as amended,
500,000 shares of common stock reserved for issuance under
the 2004 employee stock purchase plan or 500,000 shares of
common stock reserved for issuance under the 2004 sharesave
scheme. |
|
|
(5) |
Includes 500,000 shares of common stock issuable under the
2004 employee stock purchase plan and 500,000 shares of
common stock issuable under the 2004 sharesave scheme. |
Report of the Compensation Committee on Executive
Compensation
This report is submitted by the compensation committee of our
board of directors, which is responsible for making
recommendations concerning salary and incentive compensation for
our executive officers and administering and granting stock
options under our stock option plans to our executive officers.
In addition, the compensation committee consults with our
management regarding pension and other benefit plans and our
compensation policies and practices. The committee believes that
Bookhams executive compensation program provides an
overall level of compensation that is comparable to other
companies within its industry and among companies of comparable
size and complexity.
|
|
|
General Compensation Policy |
The compensation committee seeks to achieve the following three
broad goals in connection with our executive compensation
program:
|
|
|
|
|
enable Bookham to attract and retain qualified executives, |
|
|
|
create a performance-oriented environment by rewarding
executives for the achievement of Bookhams business
objectives and/or achievement in an individual executives
particular area of responsibility and |
|
|
|
provide executives with equity incentives in Bookham so as to
link a portion of the executives compensation with the
performance of Bookhams common stock. |
|
|
|
Components of Compensation |
To achieve these goals, the executive compensation program
consists principally of the following three elements:
|
|
|
|
|
base salary, |
|
|
|
cash bonuses and |
|
|
|
stock-based incentives in the form of participation in
Bookhams equity plans. |
|
|
|
General Factors for Establishing Compensation |
The compensation committee reviews the executive compensation of
industry peers with which Bookham competes for employees to
compare the competitiveness of Bookhams executive
compensation packages. In addition to reviewing industry
compensation levels, the compensation committee also
subjectively considers a number of other factors in establishing
the components of each executive officers compensation
package, as summarized below.
Salaries for executive officers, including the chief executive
officer, are generally subjectively determined on an individual
basis by evaluating the following:
|
|
|
|
|
the executives scope of responsibility, performance, prior
employment experience and salary history, |
|
|
|
Bookhams financial performance, including increases in its
revenues and profits, if any, |
|
|
|
internal consistency within Bookhams salary structure, |
|
|
|
consideration of market conditions and competitors. |
11
Cash bonuses have historically been included as part of the
compensation packages of Bookhams executive officers.
Bookhams executive officers are eligible to participate in
Bookhams bonus program, which provides for the payment of
bonuses upon the achievement of revenue targets and personal
objectives. In the case of Bookhams executive officers,
these targets and objectives, including those for fiscal 2006,
are established by the compensation committee. Cash bonuses are
based on a percentage of base compensation and are intended to
be measured and paid quarterly, with an opportunity for review
of the overall bonus at year end. Bonuses can be up to 100% of
the chief executive officers base salary and up to 50% of
the base salary of other executive officers. We paid bonuses
totaling $1,189,260 to our executive officers for fiscal 2006
based on achievement of revenue targets, personal objectives and
pursuant to the terms of retention bonus agreements granted in
fiscal year 2005.
|
|
|
Long-term Incentive Compensation |
The compensation packages of Bookhams executive officers,
including the chief executive officer, also include stock-based
incentives in the form of stock options and restricted stock.
These incentives are designed to provide an incentive to
executives to maximize stockholder value and assist in the
retention of these executives.
The size of the equity award made to each executive officer is
subjectively determined after consideration of the following
factors:
|
|
|
|
|
an evaluation of the executives past performance, |
|
|
|
the total compensation being paid to the executive, |
|
|
|
the anticipated value of the executives contribution to
Bookhams future performance, |
|
|
|
the executives scope of responsibility, |
|
|
|
the executives current position with Bookham, |
|
|
|
the size of equity awards granted to the executive officer
during previous fiscal years and |
|
|
|
comparability with equity awards made to other Bookham
executives. |
In order to promote a longer term management focus and to
provide incentive for continued employment with Bookham, stock
option awards generally become exercisable over a four year
period, with the exercise price being equal to 100% of the fair
market value of Bookhams common stock on the date of
grant, and restricted stock awards generally vest over a
four-year period. The compensation committee from time to time
grants equity awards with performance-based vesting to
Bookhams executive officers in an effort to provide an
incentive to executive officers to improve Bookhams
financial performance.
In fiscal 2006, options to purchase an aggregate of
800,000 shares of common stock and restricted stock awards
for an aggregate of 840,000 shares of common stock were
granted to all of our executive officers. An aggregate of
420,000 shares of common stock underlying restricted stock
grants made to executive officers had vesting provisions
relating to earnings targets, which were not met in fiscal 2006,
and, accordingly, did not vest.
In light of the reduced dilution to stockholders that can be
achieved through restricted stock grants, and the adoption of
FAS 123R, which eliminates the material accounting
differences in the treatment of option and restricted stock
grants, the compensation committee anticipates that it will
continue to recommend making restricted stock grants, rather
than option grants, to executive officers.
The compensation committee continues to evaluate the appropriate
weighting of base salary, cash bonus and equity compensation,
taking into account the aggregate value of the annual
compensation for our executive officers, including our chief
executive officer.
12
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Chief Executive Officers Compensation |
Dr. Anania has served as our chief executive officer since
September 2004 and has served as the chief executive officer of
Bookham Technology plc since February 2001. Pursuant to his
employment agreement, which is more fully described below,
Dr. Anania received a base salary of $454,879 for fiscal
2006. The compensation of our chief executive officer is based
upon the same elements and measures of performance as is the
compensation of our other executive officers.
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Compliance with Internal Revenue Code
Section 162(m) |
Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally disallows a tax deduction to a public company
for certain compensation over $1,000,000 paid to its chief
executive officer and its four other most highly compensated
executive officers. Qualifying performance-based compensation is
not subject to the deduction limitation if certain requirements
are met. In particular, income recognized upon the exercise of a
stock option is not subject to the deduction limitation, if,
among other things, the option was granted under a plan approved
by the public stockholders and such plan provides a limit on the
number of shares with respect to which awards may be granted
during a specified period to any individual. Based on the
compensation awarded to our chief executive officer and our
three other executive officers for fiscal 2006, it does not
appear that the Section 162(m) limitation will have a
significant impact on Bookham in the near term. However, the
committee reserves the right to use its judgment to authorize
compensation payments that may be subject to the
Section 162(m) limitation when the committee believes that
such payments are appropriate and in the best interests of
Bookham and its stockholders, after taking into account changing
business conditions or the officers performance. Although
the compensation committee considers the impact of
Section 162(m) when administering its long-term incentive
compensation plans, the committee does not make decisions
regarding executive compensation based solely on the expected
tax treatment of such compensation. As a result, the
compensation committee may deem it appropriate at times to forgo
qualified performance-based compensation under
Section 162(m) in favor of awards that may not be fully
tax-deductible.
By the compensation committee of the board of directors of
Bookham, Inc.
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Joseph Cook, Chairman |
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W. Arthur Porter |
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Peter Bordui |
13
Stock Performance Graph
Our common stock began trading on the NASDAQ National Market
(now the NASDAQ Global Market) on September 10, 2004.
Before that date there was no established public trading market
for our common stock. Prior to the closing of the scheme of
arrangement on September 10, 2004, pursuant to which
Bookham Technology plc became our wholly-owned subsidiary,
Bookham Technology plcs ordinary shares were quoted on the
Official List of the United Kingdom Listing Authority and its
American Depositary Shares, or ADSs, were quoted on the NASDAQ
National Market. Each ADS represented one ordinary share. In the
scheme of arrangement, every ten ordinary shares of Bookham
Technology plc were exchanged for one share of our common stock.
As a result, information prior to September 10, 2004
included in the stock performance graph above is based on the
price of Bookham Technology plc ADSs on the NASDAQ National
Market, adjusted to reflect the 10 for 1 exchange ratio in the
scheme of arrangement.
The stock performance graph compares the percentage change in
cumulative stockholder return on our common stock or Bookham
Technology plc ADSs, as applicable, for the period from
December 31, 2001 through July 1, 2006, with the
cumulative total return on the NASDAQ Stock Market (U.S.) and
the NASDAQ Telecommunications Index. In contemplation of the
scheme of arrangement, Bookham Technology plc changed its fiscal
year end from December 31 to the Saturday closest to
June 30. Accordingly, the measurement period for the stock
performance graph above covers the fiscal years ended
December 31, 2001, 2002 and 2003, the six-month transition
period ended July 3, 2004, the fiscal year ended
July 2, 2005 and the fiscal year ended July 1, 2006.
The graph assumes the investment of $100.00 in Bookham
Technology plc ADSs (at the closing price of the Bookham
Technology plc ADSs on December 31, 2001, adjusted to
reflect the 10 for 1 exchange ratio in the scheme of
arrangement), the NASDAQ Stock Market (U.S.) and the NASDAQ
Telecommunications Index on December 31, 2001 and assumes
dividends, if any, are reinvested.
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December 31, |
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December 31, |
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December 31, |
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July 3, |
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July 2, |
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July 1, |
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Bookham, Inc.
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$ |
100.00 |
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$ |
40.82 |
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$ |
102.04 |
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36.73 |
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12.82 |
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13.71 |
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NASDAQ Stock Market (U.S.)
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$ |
100.00 |
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$ |
70.89 |
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$ |
105.34 |
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107.96 |
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108.69 |
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115.92 |
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NASDAQ Telecommunications Index
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$ |
100.00 |
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$ |
56.60 |
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$ |
106.73 |
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116.99 |
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105.70 |
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115.01 |
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14
Employment, Change of Control and Severance Arrangements
Each of Drs. Anania and Turley and Messrs. Abely and Haynes
has an employment agreement with Bookham Technology plc. These
agreements describe the individuals salary, bonus and
other benefits including medical and life insurance coverage,
car allowance, vacation and sick days, and pension plan
participation. The agreements also contain a prohibition on the
use or disclosure of our confidential information, such as trade
secrets, patents and customer information, for non-business
purposes. Dr. Ananias agreement also contains a
non-competition clause prohibiting Dr. Anania from dealing
with our customers or prospective customers, and a
non-solicitation clause prohibiting Dr. Anania from dealing
with certain of our suppliers, prospective suppliers, senior
executives, salespersons and other key employees, for a period
of twelve months after he has stopped working for us. The
agreement with Mr. Haynes contains similar prohibitions, as
well as a prohibition on being employed by or otherwise involved
with any competitor of ours for a period of six months after he
has stopped working for us.
Our executive officers are elected by our board of directors and
serve at its discretion, subject generally to a three- or
four-month notice period, except for Dr. Anania, whose
employment agreement provides for a twelve-month notice period.
The agreements provide that the notice period does not apply if
the officer is being terminated for cause, which is defined to
include gross misconduct, conduct which our board of directors
determines brings the individuals or us into disrepute or a
serious breach of the employment agreement.
Each of Drs. Anania and Turley and Mr. Abely has entered
into a bonus agreement with us that provides for the payment of
£300,000 in the case of Dr. Anania and £150,000
in the case of each of the other individuals, in the event of a
change in control, provided that the individual is employed by
us:
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on the date of the closing of the change in control, |
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one month prior to our entering into an agreement for sale of
our assets, a merger or consolidation or a sale of our share
capital described below, provided that the individual is not
terminated for gross misconduct prior to the closing of the
change in control, or |
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one month prior to a change in the composition of our board of
directors described below, provided that the individual is not
terminated for gross misconduct prior to the closing of the
change in control. |
A change in control is defined as:
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a sale of all or substantially all of our assets, |
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a merger or consolidation of Bookham in which our voting
securities outstanding immediately prior to the merger or
consolidation no longer represent more than 50% of the total
voting power of our voting securities or the voting securities
of the surviving entity outstanding immediately following the
merger or consolidation, |
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a sale, transfer or disposition of any part of our share capital
to any person that results in that person, together with any
other person acting in concert with that person, holding more
that 50% of our issued share capital or |
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a change in the composition of our board of directors such that
continuing directors (meaning directors serving on our board of
directors on July 20, 2004 or who are nominated or elected
after July 20, 2004 by at least a majority of the directors
who were continuing directors at the time of such nomination or
election) cease to be a majority of the members of our board of
directors. |
We have entered into a restricted stock agreement with
Dr. Turley, pursuant to which Dr. Turley received
40,000 shares of restricted stock. The shares of restricted
stock will vest in full on the earlier of November 11,
2006, provided that Dr. Turley has been continuously
employed by Bookham through that date, or the termination of
Dr. Turleys employment without cause or by
Dr. Turley for good reason. The shares of restricted stock
will vest in full upon the consummation of a change of control,
provided that Dr. Turley is continuously employed by
Bookham through such date.
15
Under Dr. Turleys restricted stock agreement,
cause means any willful failure by Dr. Turley,
which failure is not cured within 30 days of written notice
to Dr. Turley from us, to perform his material
responsibilities to us or willful misconduct by Dr. Turley
which affects our business reputation. Good reason
means any significant diminution in Dr. Turleys
title, authority or responsibilities or any reduction in the
annual cash compensation payable to Dr. Turley.
We have also entered into restricted stock agreements with
Mr. Abely, Dr. Anania, Mr. Haynes and
Dr. Turley pursuant to which these individuals received
250,000, 375,000, 125,000 and 50,000 shares of restricted
stock or restricted stock units, respectively, on
November 11, 2005. One-half of these shares of restricted
stock or restricted stock units vest as to 25% on the one-year
anniversary of the grant date and an additional 2.083% at the
end of each month following the first anniversary of the grant
date until the fourth anniversary of the grant date. The
remaining shares of restricted stock or restricted stock units
underlying the awards will vest as to 50% if we generate
non-GAAP earnings before interest, taxes, depreciation and
amortization (excluding restructuring charges, one-time items
and the non-cash compensation expense from stock compensation)
that are cumulatively greater than zero for two successive
quarters and 50% if we generate non-GAAP earnings before
interest, taxes, depreciation and amortization (excluding
restructuring charges, one-time items and the non-cash
compensation expense from stock compensation) that are
cumulatively greater than 8% of revenues for two successive
quarters. The shares of restricted stock or restricted stock
units will vest in full upon the consummation of a change of
control, provided that the grantee is continuously employed by
Bookham through such date.
Under the restricted stock agreements, change of
control means:
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a sale of all or substantially all of our assets, |
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a merger, consolidation, reorganization, recapitalization or
share exchange involving Bookham with any corporation in which
our voting securities outstanding immediately prior to the
transaction no longer represent more than 50% of the total
voting power of our voting securities or the voting securities
of the surviving entity outstanding immediately following the
transaction, |
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a sale, transfer or disposition of any shares of our stock as a
result of which our existing stockholders do not continue to
hold as a group stock representing more than 50% of our total
voting securities or |
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a change in the composition of our board of directors such that
continuing directors (meaning directors serving on our board of
directors on November 11, 2005 or who are nominated or
elected after November 11, 2005 by at least a majority of
the directors who were continuing directors at the time of such
nomination or election) cease to be a majority of the members of
our board of directors. |
Compensation Committee Interlocks and Insider
Participation
In the year ended July 1, 2006, our compensation committee
consisted of Peter Bordui, Joseph Cook and W. Arthur Porter.
During the year ended July 1, 2006, no executive officer of
Bookham served as a director or member of the compensation
committee (or other committee serving an equivalent function) of
any other entity, whose executive officers served on our board
of directors or compensation committee.
Certain Relationships and Related Transactions
We are party to several agreements with Nortel Networks and its
affiliates as a result of Bookham Technology plcs
acquisition of the optical components business of Nortel
Networks in November 2002. According to an Amendment No. 5
to Schedule 13D filed by Nortel Networks Corporation with
the SEC on December 7, 2004, as of December 2, 2004,
Nortel Networks Corporation held 3,999,999 shares of our
common stock, which represents approximately 6.9% of our
outstanding shares of common stock as of August 31, 2006.
16
Relationship Deed. The relationship deed provides, among
other things, that
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Nortel Networks will abstain from voting its shares for as long
as it owns 5% or more of our issued and outstanding shares, |
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all transactions between us and Nortel Networks (or any of its
group members) are made at arms length and on a normal
commercial basis, |
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Nortel Networks will not exercise its voting rights to procure
any variation to our certificate of incorporation that is
contrary to anything contained in the relationship deed and |
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Nortel Networks will only be entitled to vote on any proposed
stockholder resolution that would have the effect, if passed, of
varying or suspending any rights attaching to shares of our
common stock held by Nortel Networks or that would result in
Nortel Networks rights becoming different from the rights
of other stockholders. |
Supply Agreement. Our supply agreement with Nortel
Networks Limited has been amended three times by an addendum,
most recently in January 2006. Under the supply agreement, as
amended, Nortel Networks Limited is obligated to purchase
$72 million of our products through calendar 2006.
The supply agreement requires us to 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:
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are unable to manufacture critical products for Nortel Networks
Limited in any material respect for a continuous period of not
less than six weeks or |
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are subject to an insolvency event, such as a petition or
assignment in bankruptcy, appointment of a trustee, custodian or
receiver, or enter into an arrangement for the general benefit
of creditors. |
In addition, if there is an insolvency event, Nortel Networks
Limited has the right to buy all Nortel inventory we hold, and
we will be obligated to grant a license to Nortel Networks
Limited or any alternative supplier for the manufacture of all
products covered by the first supply agreement addendum.
The licensing and related obligations terminate on
February 7, 2007, unless the license has been exercised, in
which case the obligations would terminate 24 months from
the date the license was exercised, provided that at that time,
among other things, we are able to meet Nortel Networks
demand for the subject products.
Registration and Lock-Up Agreement. On January 13,
2006 we entered into a Registration and Lock-Up Agreement with
Bookham Technology plc and Nortel Networks Corporation pursuant
to which we agreed to register for resale 3,999,999 shares
of our common stock held by Nortel Networks and Nortel Networks
Corporation agreed to not sell or transfer those shares prior to
July 1, 2006.
Loan Notes and Security Agreements. In connection with
our acquisition of the optical components business of Nortel
Networks, we issued two promissory notes in an aggregate
principal amount of $50 million. We and certain of our
subsidiaries entered into security agreements securing our
obligations under the notes as well as the supply agreement. On
January 13, 2006, we entered into a series of agreements
pursuant to which Nortel Networks was repaid the outstanding
amounts under the notes, the notes were cancelled and the
security agreements and related security interests were
terminated.
According to a Schedule 13G filed by GLG North American
Opportunity Fund with the SEC on December 23, 2005, as of
December 23, 2005, GLG North American Opportunity Fund and
its affiliates held 4,697,025 shares of our common stock,
which represents approximately 8.1% of our outstanding shares of
common stock as of August 31, 2006.
On August 31, 2006,we entered into definitive agreement for
a private placement pursuant to which we issued, on
September 1, 2006, 8,696,000 shares of common stock
and warrants to purchase up to
17
2,174,000 shares of common stock to institutional
accredited investors, including 1,000,000 shares of common
stock and a warrant to purchase up to 250,000 shares of
common stock to GLG North American Opportunity Fund and
800,000 shares of common stock and a warrant to purchase up
to 200,000 shares of common stock to GLG Technology Fund.
Corporate Governance
Our board of directors believes that good corporate governance
is important to ensure that Bookham is managed for the long-term
benefit of stockholders. This section describes key corporate
governance guidelines and practices that Bookham has adopted.
Complete copies of the committee charters and code of conduct
described below are available on our website at www.bookham.com.
Alternatively, you can request a copy of any of these documents
by writing to Bookham, Inc., 2584 Junction Avenue,
San Jose, California 95134, Attention: Corporate Secretary.
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Corporate Governance Guidelines |
Our board of directors has adopted corporate governance
guidelines to assist the board in the exercise of its duties and
responsibilities and to serve the best interests of Bookham and
our stockholders. These guidelines, which provide a framework
for the conduct of the boards business, provide that:
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the principal responsibility of the directors is to oversee the
management of Bookham, |
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a majority of the members of the board shall be independent
directors, |
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the independent directors shall meet regularly in executive
session, |
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directors shall have full and free access to officers and
employees of Bookham and, as necessary and appropriate,
independent advisors, |
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new directors shall participate in an orientation program and
all directors are expected to participate in continuing director
education on an ongoing basis and |
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at least annually the board and its committees shall conduct a
self-evaluation to determine whether they are functioning
effectively. |
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Board Determination of Independence |
Under applicable NASDAQ rules, a director of Bookham will
qualify as an independent director only if, in the
opinion of our board of directors, that person does not have a
relationship which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director. Our board of directors has determined that none of
Peter Bordui, Joseph Cook, Lori Holland, W. Arthur Porter or
David Simpson has a relationship which would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director and that each of these directors
is an independent director as defined under
Rule 4200(a)(15) of the NASDAQ Stock Market, Inc.
Marketplace Rules.
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Director Attendance at Annual Meeting of
Stockholders |
We do not have a written policy with respect to director
attendance at annual meetings; however, we do encourage our
directors to attend all of our meetings of stockholders. Four of
our directors attended our 2005 annual meeting of stockholders.
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Board of Directors Meetings |
Our board of directors held 19 meetings, including by telephone
conference, during fiscal 2006. The compensation committee of
our board of directors held seven meetings, including by
telephone conference, during fiscal 2006. The audit committee of
our board of directors held 11 meetings, including by telephone
conference, during fiscal 2006. The nominating and corporate
governance committee of our board of directors held four
meetings during fiscal 2006. All directors attended at least 75%
of the meetings of our board of
18
directors and the committees on which they served, if any,
during the period that they served on our board of directors or
any such committees.
Our board of directors has established three standing
committees audit, compensation, and nominating and
corporate governance each of which operates under a
charter that has been approved by our board. A current copy of
each committees charter is posted on the Governance
section of our website, www.bookham.com. In addition, a copy of
the audit committee charter, as in effect on the date of this
proxy statement, is attached as Appendix A.
The members of the compensation committee of our board of
directors are Mr. Cook, Dr. Bordui and
Dr. Porter. The members of the audit committee of our board
of directors are Ms. Holland, Dr. Bordui and
Dr. Porter. The members of our nominating and corporate
governance committee are Dr. Simpson, Dr. Bordui and
Mr. Cook.
Our board of directors has determined that all of the members of
each of the boards three standing committees are
independent as defined under the rules of the NASDAQ Stock
Market, including, in the case of all members of the audit
committee, the independence requirements contemplated by
Rule 10A-3 under the Exchange Act of 1934, as amended.
Audit Committee. The audit committees
responsibilities include:
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appointing, approving the compensation of, and evaluating the
independence of our independent registered public accounting
firm, |
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overseeing the work of our independent registered public
accounting firm, including through the receipt and consideration
of certain reports from the firm, |
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reviewing and discussing with management and our independent
registered public accounting firm our annual and quarterly
financial statements and related disclosures, |
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monitoring our internal control over financial reporting,
disclosure controls and procedures and code of business conduct
and ethics, |
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establishing procedures for the receipt and retention of
accounting related complaints and concerns and |
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meeting independently with our independent registered public
accounting firm and management. |
Our board of directors has determined that Lori Holland is an
audit committee financial expert as defined in
Item 401(h) of
Regulation S-K.
Compensation Committee. The compensation committees
responsibilities include:
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reviewing and approving, or making recommendations to the board
with respect to, the compensation of our chief executive officer
and other executive officers, |
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making recommendations to the board with respect to incentive
compensation and equity-based plans, |
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administering our incentive compensation and equity-based
plans and |
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reviewing and making recommendations to the board with respect
to director compensation. |
Nominating and Corporate Governance Committee. The
nominating and corporate governance committees
responsibilities include:
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reviewing with the board the requisite skills and criteria for
new board members and the composition of the board as a whole, |
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recommending to the board the persons to be nominated for
election as directors and to each of the boards committees, |
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developing and recommending to the board corporate governance
guidelines, |
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overseeing the self-evaluation of the board and |
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overseeing an annual review by the board of succession planning. |
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Director Nomination Process |
The process followed by the nominating and corporate governance
committee to identify and evaluate director candidates includes
requests to board members and others for recommendations,
meetings from time to time to evaluate biographical information
and background material relating to potential candidates and
interviews of selected candidates by members of the committee
and the board.
In considering whether to recommend any particular candidate for
inclusion in the boards slate of recommended director
nominees, the nominating and corporate governance committee will
apply the criteria attached to the committees charter.
These criteria include the candidates integrity, business
acumen, commitment to understanding our business and industry,
experience, conflicts of interest and the ability to act in the
interests of all stockholders. The committee does not assign
specific weights to particular criteria and no particular
criterion is a prerequisite for each prospective nominee. We
believe that the backgrounds and qualifications of our
directors, considered as a group, should provide a composite mix
of experience, knowledge and abilities that will allow the board
to fulfill its responsibilities.
Stockholders may recommend individuals to the nominating and
corporate governance committee for consideration as potential
director candidates by submitting their names, together with
appropriate biographical information and background materials
and a statement as to whether the stockholder or group of
stockholders making the recommendation has beneficially owned
more than 5% of our common stock for at least a year as of the
date such recommendation is made, to our nominating and
corporate governance committee, c/o Corporate Secretary,
Bookham, Inc., 2584 Junction Avenue, San Jose, California
95134. Assuming that appropriate biographical and background
material has been provided on a timely basis, the committee will
evaluate stockholder-recommended candidates by following
substantially the same process, and applying substantially the
same criteria, as it follows for candidates submitted by others.
Stockholders also have the right under our bylaws to directly
nominate director candidates, without any action or
recommendation on the part of the committee or the board, by
following the procedures set forth under Stockholder
Proposals for 2007 Annual Meeting.
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Communicating with the Directors |
The board will give appropriate attention to written
communications that are submitted by stockholders and will
respond if and as appropriate. The chairman of the board is
primarily responsible for monitoring communications from
stockholders and for providing copies or summaries to the other
directors as he or she considers appropriate.
Communications are forwarded to all directors if they relate to
important substantive matters and include suggestions or
comments that the chairman of the board considers to be
important for the directors to know. In general, communications
relating to corporate governance and long-term corporate
strategy are more likely to be forwarded than communications
relating to ordinary business affairs, personal grievances and
matters as to which we tend to receive repetitive or duplicative
communications.
Stockholders who wish to send communications on any topic to the
board should address such communications to our board of
directors c/o Corporate Secretary, Bookham, Inc., 2584
Junction Avenue, San Jose, California 95134.
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Code of Business Conduct and Ethics |
We have adopted a written code of business conduct and ethics
that applies to our directors, officers and employees, including
our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons
performing similar functions. We have posted a current copy of
the code on our website,
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www.bookham.com. In addition, we intend to post on our website
all disclosures that are required by law or NASDAQ listing
standards concerning any amendments to, or waivers from, any
provision of the code.
Report of the Audit Committee of the Board of Directors
The audit committee has reviewed Bookhams audited
financial statements for the fiscal year ended July 1, 2006
and has discussed these financial statements with Bookhams
management and independent registered public accounting firm.
The audit committee has also received from, and discussed with
Ernst & Young LLP, Bookhams independent
registered public accounting firm various communications that
Bookhams independent registered public accounting firm is
required to provide to the audit committee, including the
matters required to be discussed by Statement on Auditing
Standards 61 (Communication with Audit Committees).
Bookhams independent registered public accounting firm
also provided the audit committee with the written disclosures
and the letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees). The
audit committee has discussed with the independent registered
public accounting firm its independence from Bookham.
Based on its discussions with management and the independent
registered public accounting firm, and its review of the
representations and information provided by management and the
independent registered public accounting firm, the audit
committee recommended to Bookhams board of directors that
the audited financial statements be included in Bookhams
annual report on
Form 10-K for the
year ended July 1, 2006.
By the Audit Committee of the Board of Directors of Bookham, Inc.
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Lori Holland, Chairman |
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Peter F. Bordui |
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W. Arthur Porter |
Principal Accountant Fees and Services
The following table summarizes the fees of Ernst &
Young LLP, our independent registered public accounting firm,
billed to us for the fiscal years ended July 2, 2005 and
July 1, 2006. For the fiscal year ended July 1, 2006,
audit fees include an estimate of amounts not yet billed.
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Fiscal Year Ended | |
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Fiscal Year Ended | |
Fee Category |
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July 2, 2005 | |
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July 1, 2006 | |
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(In thousands) | |
Audit Fees(1)
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$ |
2,568 |
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$ |
3,369 |
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Audit-Related Fees(2)
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$ |
269 |
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$ |
333 |
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Tax Fees(3)
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$ |
596 |
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$ |
205 |
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All Other Fees(4)
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$ |
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$ |
600 |
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Total Fees
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$ |
3,432 |
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$ |
4,507 |
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(1) |
Audit fees consist of fees for the audit of our financial
statements, the audit of our internal control over financial
reporting, the review of the interim financial statements
included in our quarterly reports on
Form 10-Q, and
other professional services provided in connection with
statutory and regulatory filings or engagements. |
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(2) |
Audit-related fees consist of fees for assurance and related
services that are reasonably related to the performance of the
audit and the review of our financial statements and which are
not reported under Audit Fees. These services
primarily relate to due diligence related to mergers and
acquisitions, accounting consultations and audits in connection
with acquisitions, services in connection with the filing of
registration statements with the SEC, and consultations
concerning internal controls, financial accounting and reporting
standards. |
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(3) |
Tax fees consist of fees for tax compliance, tax advice and tax
planning services, including advice on the utilization of tax
loss carry-forwards in the fiscal years ended July 2, 2005
and July 1, 2006. |
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(4) |
In the fiscal year ended July 2, 2005 our auditors did not
bill us for services other than for the audit fees,
audit-related fees and tax fees referred to above. In the fiscal
year ended July 1, 2006, All Other Fees
primarily related to services in connection with our acquisition
of City Leasing (Creekside) Limited and consultations regarding
international matters. |
Pre-Approval Policies and Procedures
The audit committee has adopted policies and procedures relating
to the approval of all audit and non-audit services that are to
be performed by our independent registered public accounting
firm. This policy generally provides that we will not engage our
independent registered public accounting firm to render audit or
non-audit services unless the service is specifically approved
in advance by the audit committee or the engagement is entered
into pursuant to one of the pre-approval procedures described
below.
From time to time, the audit committee may pre-approve specified
types of services that are expected to be provided to us by our
independent registered public accounting firm during the next
12 months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is
also generally subject to a maximum dollar amount.
The audit committee has also delegated to each individual member
of the audit committee the authority to approve any audit or
non-audit services to be provided to us by our independent
registered public accounting firm. Any approval of services by a
member of the audit committee pursuant to this delegated
authority is reported at the next meeting of the audit committee.
Change in Independent Registered Public Accounting Firm
Effective May 26, 2006, our audit committee approved the
engagement of Ernst & Young LLP of San Jose,
California, or E&Y US, as our independent registered public
accounting firm for the fiscal year ended July 1, 2006,
thereby replacing and dismissing Ernst & Young LLP of
Reading, England, or E&Y UK. This change was made because
our financial management and consolidated financial accounting
and reporting functions are now based in our corporate
headquarters in San Jose, California.
The reports of E&Y UK on our consolidated financial
statements as of July 2, 2005 and July 3, 2004, and
for the fiscal year ended July 2, 2005, the six month
period ended July 3, 2004, and each of the two years in the
period ended December 31, 2003, contained no adverse
opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting
principles, other than, in the case of the report on our
consolidated financial statements as of July 2, 2005 and
for the fiscal year ended July 2, 2005, to include an
explanatory paragraph relating to our ability to continue as a
going concern.
During the fiscal year ended July 2, 2005, the six month
period ended July 3, 2004, each of the two years in the
period ended December 31, 2003 and through the subsequent
interim periods, there were no disagreements between Bookham and
E&Y UK on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure
which disagreements, if not resolved to the satisfaction of
E&Y UK, would have caused E&Y UK to make reference to
the subject matter of the disagreements in connection with its
report.
During our fiscal year ended July 2, 2005, the six month
period ended July 3, 2004, each of the two years in the
period ended December 31, 2003 and through the subsequent
interim periods, there were no reportable events
requiring disclosure pursuant to Item 304(a)(1)(v) of
Regulation S-K.
The report of E&Y UK on internal control over financial
reporting as of September 8, 2005 expressed an unqualified
opinion on managements assessment of the effectiveness of
internal control over financial reporting and an adverse opinion
on the effectiveness of internal control over financial
reporting because of the existence of certain material
weaknesses described in Item 9A(c) of our Annual Report on
Form 10-K for the
fiscal year ended July 2, 2005.
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During our fiscal year ended July 2, 2005, the six month
period ended July 3, 2004, each of the two years in the
period ended December 31, 2003 and through the subsequent
interim periods, we did not consult with E&Y US regarding
matters or events set forth in Item 304(a)(2)(i) or
(ii) of
Regulation S-K.
PROPOSAL 2 RATIFICATION OF THE SELECTION OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our board of directors has selected
Ernst & Young LLP as our independent registered public
accounting firm for the current fiscal year, subject to
ratification by our stockholders at the annual meeting. If our
stockholders do not ratify the selection of Ernst &
Young LLP, our audit committee will reconsider the matter. A
representative of Ernst & Young LLP, which served as
our independent registered public accounting firm for fiscal
2006, is expected to be present at the annual meeting to respond
to appropriate questions and to make a statement if he or she so
desires. Even if the selection of Ernst & Young LLP is
ratified, our audit committee may, in its discretion, select a
different independent registered public accounting firm at any
time during the year if it determines that such a change would
be in the best interest of Bookham and its stockholders.
STOCKHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
If a stockholder intends to submit a proposal for inclusion in
the proxy statement and proxy card for our 2007 annual meeting,
the stockholder must follow the procedures outlined in
Rule 14a-8 under
the Securities Exchange Act of 1934, as amended. We must receive
any proposals intended for inclusion in the proxy statement at
our principal executive offices, Bookham, Inc., 2584 Junction
Avenue, San Jose, California 95134, Attention:
Corporate Secretary, no later than June 1, 2007.
If a stockholder wishes to present a proposal at the 2007 annual
meeting, but does not wish to have the proposal considered for
inclusion in our proxy statement and proxy card, the stockholder
must also give written notice to us at the address noted above.
Our bylaws specify the information that must be included in any
such notice, including a brief description of the proposal and
the name of the stockholder proposing such business. We must
receive this notice at least 90 days, but not more than
120 days, prior to November 1, 2007. However, if the
2007 annual meeting is scheduled to be held prior to
October 12, 2007 or after December 31, 2007, the
notice must be received no earlier than the 120th day prior
to the 2007 annual meeting and no later than the close of
business on the later of (1) the 90th day prior to the
2007 annual meeting and (2) the 10th day following the
date on which notice of the date of the meeting was mailed or
public disclosure was made, whichever occurs first. If the
stockholder fails to provide timely notice of a proposal to be
presented at the 2007 annual meeting, the chairman of the
meeting may exclude the proposal from being brought before the
meeting and the proxies designated by our board of directors
will have discretionary authority to vote on such proposal
should it be allowed to come before the meeting.
HOUSEHOLDING OF PROXY STATEMENT
Some banks, brokers and other nominee record holders may be
participating in the practice of householding proxy
statements and annual reports. This means that only one copy of
our proxy statement or annual report may have been sent to
multiple stockholders in your household. We will promptly
deliver a separate copy of our annual report and/or proxy
statement to you if you call or write us at the following
address or phone number: Bookham, Inc., 2584 Junction Avenue,
San Jose, California 95134, Attention: Corporate Secretary,
(408) 383-1400. If
you would like to receive separate copies of the annual report
and proxy statement in the future, or if you are receiving
multiple copies and would like to receive only one copy for your
household, you should contact your bank, broker, or other
nominee record holder, or you may contact us at the above
address and phone number.
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OTHER MATTERS
Our board of directors knows of no other business that will be
presented for consideration at the annual meeting other than
that described above. Under our bylaws, the deadline for
stockholders to notify us of any proposals or director
nominations to be presented at the annual meeting has passed.
However, if any other business should come before the annual
meeting, it is the intention of the persons named in the
enclosed proxy to vote, or otherwise act, in accordance with
their best judgment on such matters.
We will bear the costs of soliciting proxies. In addition to
solicitations by mail, our directors, officers and regular
employees may, without additional remuneration, solicit proxies
by telephone, telegraph, facsimile and personal interviews. We
will also request brokerage houses, custodians, nominees and
fiduciaries to forward copies of the proxy material to those
persons for whom they hold shares and request instructions for
voting the proxies. We will reimburse brokerage houses and other
persons for their reasonable expenses in connection with this
distribution.
We have retained The Altman Group to assist in the solicitation
of proxies by mail, telephone or other electronic means, or in
person, for a fee of approximately $4,000 plus expenses relating
to the solicitation.
We encourage you to attend the annual meeting in person.
However, in order to make sure that you are represented at the
annual meeting, we urge you to complete, sign and return the
enclosed proxy card as promptly as possible in the enclosed
postage-prepaid envelope. Stockholders who attend the meeting
may vote their stock personally even though they have sent in
their proxies.
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By order of the Board of Directors, |
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![-s- Peter F. Bordui](f23545def2354503.gif) |
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Peter F. Bordui |
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Chairman of the Board of Directors |
September 29, 2006
San Jose, California
24
Appendix A
BOOKHAM, INC.
AMENDED AND RESTATED
AUDIT COMMITTEE CHARTER
The purpose of the Audit Committee is to assist the Board of
Directors oversight of the Companys accounting and
financial reporting processes and the audits of the
Companys financial statements.
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B. |
Structure and Membership |
1. Number. Except as otherwise permitted by
the applicable NASDAQ rules, the Audit Committee shall consist
of at least three members of the Board of Directors.
2. Independence. Except as otherwise
permitted by the applicable NASDAQ rules, each member of the
Audit Committee shall be independent as defined by NASDAQ rules,
meet the criteria for independence set forth in
Rule 10A-3(b)(1) under the Exchange Act (subject to the
exemptions provided in
Rule 10A-3(c)),
and not have participated in the preparation of the financial
statements of the Company or any current subsidiary of the
Company at any time during the past three years.
3. Financial Literacy. Each member of the
Audit Committee must be able to read and understand fundamental
financial statements, including the Companys balance
sheet, income statement, and cash flow statement, at the time of
his or her appointment to the Audit Committee. In addition, at
least one member must have past employment experience in finance
or accounting, requisite professional certification in
accounting, or any other comparable experience or background
which results in the individuals financial sophistication,
including being or having been a chief executive officer, chief
financial officer or other senior officer with financial
oversight responsibilities. Unless otherwise determined by the
Board of Directors (in which case disclosure of such
determination shall be made in the Companys annual report
filed with the Securities and Exchange Commission (the
SEC)), at least one member of the Audit Committee
shall be an audit committee financial expert (as
defined by applicable SEC rules).
4. Chair. Unless the Board of Directors
elects a Chair of the Audit Committee, the Audit Committee shall
elect a Chair by majority vote.
5. Compensation. The compensation of Audit
Committee members shall be as determined by the Board of
Directors. No member of the Audit Committee may receive,
directly or indirectly, any consulting, advisory or other
compensatory fee from the Company or any of its subsidiaries,
other than fees paid in his or her capacity as a member of the
Board of Directors or a committee of the Board of Directors.
6. Selection and Removal. Members of the
Audit Committee shall be appointed by the Board of Directors,
upon the recommendation of the Nominating and Corporate
Governance Committee. The Board of Directors may remove members
of the Audit Committee from such committee, with or without
cause.
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C. |
Authority and Responsibilities |
The Audit Committee shall discharge its responsibilities, and
shall assess the information provided by the Companys
management and the independent auditor, in accordance with its
business judgment. Management is responsible for the
preparation, presentation, and integrity of the Companys
financial statements, for the appropriateness of the accounting
principles and reporting policies that are used by the Company
and for establishing and maintaining adequate internal control
over financial reporting. The independent auditors are
responsible for auditing the Companys financial statements
and the Companys internal control over financial reporting
and for reviewing the Companys unaudited interim financial
statements. The authority and responsibilities set forth in this
Charter do not reflect or create any duty or obligation of the
Audit Committee to plan or conduct any audit, to determine or
certify that the Companys financial statements are
complete,
A-1
accurate, fairly presented, or in accordance with generally
accepted accounting principles or applicable law, or to
guarantee the independent auditors report.
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Oversight of Independent Auditors |
1. Selection. The Audit Committee shall be
solely and directly responsible for appointing, evaluating,
retaining and, when necessary, terminating the engagement of the
independent auditor. The Audit Committee may, in its discretion,
seek stockholder ratification of the independent auditor it
appoints.
2. Independence. The Audit Committee shall
take, or recommend that the full Board of Directors take,
appropriate action to oversee the independence of the
independent auditor. In connection with this responsibility, the
Audit Committee shall obtain and review a formal written
statement from the independent auditor describing all
relationships between the auditor and the Company, including the
disclosures required by Independence Standards Board Standard
No. 1. The Audit Committee shall actively engage in
dialogue with the auditor concerning any disclosed relationships
or services that might impact the objectivity and independence
of the auditor.
3. Compensation. The Audit Committee shall
have sole and direct responsibility for setting the compensation
of the independent auditor. The Audit Committee is empowered,
without further action by the Board of Directors, to cause the
Company to pay the compensation of the independent auditor
established by the Audit Committee.
4. Preapproval of Services. The Audit
Committee shall preapprove all audit services to be provided to
the Company, whether provided by the principal auditor or other
firms, and all other services (review, attest and non-audit) to
be provided to the Company by the independent auditor; provided,
however, that de minimis non-audit services may instead be
approved in accordance with applicable SEC rules.
5. Oversight. The independent auditor shall
report directly to the Audit Committee, and the Audit Committee
shall have sole and direct responsibility for overseeing the
work of the independent auditor, including resolution of
disagreements between Company management and the independent
auditor regarding financial reporting. In connection with its
oversight role, the Audit Committee shall, from time to time as
appropriate, receive and consider the reports required to be
made by the independent auditor regarding:
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critical accounting policies and practices; |
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alternative treatments within generally accepted accounting
principles for policies and practices related to material items
that have been discussed with Company management, including
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditor; and |
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other material written communications between the independent
auditor and Company management. |
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Audited Financial Statements |
6. Review and Discussion. The Audit Committee
shall review and discuss with the Companys management and
independent auditor the Companys audited financial
statements, including the matters about which Statement on
Auditing Standards No. 61 (Codification of Statements on
Auditing Standards, AU §380) requires discussion.
7. Recommendation to Board Regarding Financial
Statements. The Audit Committee shall consider whether
it will recommend to the Board of Directors that the
Companys audited financial statements be included in the
Companys Annual Report on
Form 10-K.
8. Audit Committee Report. The Audit
Committee shall prepare an annual committee report for inclusion
where necessary in the proxy or information statement of the
Company relating to its annual meeting of security holders.
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Review of Other Financial Disclosures |
9. Independent Auditor Review of Interim Financial
Statements. The Audit Committee shall direct the
independent auditor to use its best efforts to perform all
reviews of interim financial information prior to disclosure by
the Company of such information and to discuss promptly with the
Audit Committee and the
A-2
Chief Financial Officer any matters identified in connection
with the auditors review of interim financial information
which are required to be discussed by applicable auditing
standards. The Audit Committee shall direct management to advise
the Audit Committee in the event that the Company proposes to
disclose interim financial information prior to completion of
the independent auditors review of interim financial
information.
10. Oversight. The Audit Committee shall
coordinate the Board of Directors oversight of the
Companys internal control over financial reporting,
disclosure controls and procedures and code of conduct. The
Audit Committee shall receive and review the reports of the
Chief Executive Officer and Chief Financial Officer required by
Rule 13a-14 of the
Securities Exchange Act of 1934, as amended.
11. Procedures for Complaints. The Audit
Committee shall establish procedures for (i) the receipt,
retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls or auditing
matters; and (ii) the confidential, anonymous submission by
employees of the Company of concerns regarding questionable
accounting or auditing matters.
12. Related-Party Transactions. The Audit
Committee shall review all related party
transactions (defined as transactions required to be
disclosed pursuant to Item 404 of
Regulation S-K
promulgated under the Securities Act of 1933, as amended) on an
ongoing basis, and all such transactions must be approved by the
Audit Committee.
13. Additional Powers. The Audit Committee
shall have such other duties as may be delegated from time to
time by the Board of Directors.
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D. |
Procedures and Administration |
1. Meetings. The Audit Committee shall meet
as often as it deems necessary in order to perform its
responsibilities. The Audit Committee may also act by unanimous
written consent in lieu of a meeting. The Audit Committee shall
periodically meet separately with: (i) the independent
auditor and (ii) Company management. The Audit Committee
shall keep such records of its meetings as it shall deem
appropriate.
2. Subcommittees. The Audit Committee may
form and delegate authority to one or more subcommittees
(including a subcommittee consisting of a single member), as it
deems appropriate from time to time under the circumstances. Any
decision of a subcommittee to preapprove audit, review, attest
or non-audit services shall be presented to the full Audit
Committee at its next scheduled meeting.
3. Reports to Board. The Audit Committee
shall report regularly to the Board of Directors.
4. Charter. At least annually, the Audit
Committee shall review and reassess the adequacy of this Charter
and recommend any proposed changes to the Board of Directors for
approval.
5. Independent Advisors. The Audit Committee
is authorized, without further action by the Board of Directors,
to engage such independent legal, accounting and other advisors
as it deems necessary or appropriate to carry out its
responsibilities. Such independent advisors may be the regular
advisors to the Company. The Audit Committee is empowered,
without further action by the Board of Directors, to cause the
Company to pay the compensation of such advisors as established
by the Audit Committee.
6. Investigations. The Audit Committee shall
have the authority to conduct or authorize investigations into
any matters within the scope of its responsibilities as it shall
deem appropriate, including the authority to request any
officer, employee or advisor of the Company to meet with the
Audit Committee or any advisors engaged by the Audit Committee.
7. Funding. The Audit Committee is empowered,
without further action by the Board of Directors, to cause the
Company to pay the ordinary administrative expenses of the Audit
Committee that are necessary or appropriate in carrying out its
duties.
A-3
Appendix B
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BOOKHAM, INC.
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VOTE BY INTERNET www.proxyvote.com |
ATTN: STOCK ADMINISTRATION 2584 JUNCTION AVENUE
SAN JOSE, CA 95134 |
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Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59 P.M.
Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an
electronic voting instruction form. |
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ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER
COMMUNICATIONS
If you would like to reduce the costs incurred by Bookham,
Inc. in mailing proxy materials, you can consent to receiving
all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for
electronic delivery, please follow the instructions above to
vote using the Internet and, when prompted, indicate that you
agree to receive or access shareholder communications
electronically in future years. |
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VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time the day
before the cut-off date or meeting date. Have your proxy card in
hand when you call and then follow the instructions. |
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Bookham,
Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BOOKHAM, INC.
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The shares of common stock of Bookham, Inc. represented by
this proxy will be voted as directed by the undersigned for the
proposals herein proposed by the Company. If no direction is
given with respect to any proposal specified herein, this proxy
will be voted FOR the proposal. In their discretion, the proxies
are authorized to vote upon any other business that may properly
come before the meeting or any adjournment thereof. |
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Vote on Proposals |
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For |
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Withhold |
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1. To elect Lori Holland as a Class II director for
the ensuing three years: |
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For |
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Against |
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Abstain |
2. To ratify the selection of Ernst & Young LLP as
the Companys independent registered public accounting firm
for the current fiscal year |
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Please sign exactly as your name(s) appear(s) hereon. All
holders must sign. When signing as attorney, executor,
administrator or other fiduciary, please give your full title as
such. Joint owners should each sign personally. If a
corporation, please sign in full corporate name, by authorized
officer. If a partnership, please sign in partnership name by
authorized person. |
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Please be sure to sign and date this proxy below. |
For address changes and/or comments, please check this box and
write them o
on the back where indicated. |
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Yes |
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No |
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HOUSEHOLDING ELECTION Please indicate if you
consent to receive certain future investor communications in a
single package per household |
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Signature [PLEASE SIGN WITHIN BOX]
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Signature (Joint Owners) |
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B-1
PROXY
BOOKHAM, INC.
ANNUAL MEETING OF STOCKHOLDERS
November 1, 2006
This Proxy is solicited on behalf of the Board of Directors
of Bookham, Inc. (the Company).
The undersigned, having received notice of the annual meeting of
stockholders and the proxy statement thereof and revoking all
prior proxies, hereby appoints Giorgio Anania, Stephen Abely,
Thomas Kelley and John A. Burgess (with full power of
substitution), as proxies of the undersigned, to attend the
annual meeting of stockholders of the Company to be held on
Wednesday, November 1, 2006, and any adjourned or postponed
session thereof, and there to vote and act as indicated upon the
matters on the reverse side in respect of all shares of common
stock which the undersigned would be entitled to vote or act
upon, with all powers the undersigned would possess if
personally present.
Attendance of the undersigned at the annual meeting of
stockholders or at any adjourned or postponed session thereof
will not be deemed to revoke this proxy unless the undersigned
affirmatively indicate(s) thereat the intention of the
undersigned to vote said shares of common stock in person. If
the undersigned hold(s) any of the shares of common stock in a
fiduciary, custodial or joint capacity or capacities, this proxy
is signed by the undersigned in every such capacity as well as
individually.
Please vote, date and sign on reverse side and return promptly
in the enclosed postage pre-paid envelope.
Has your address changed? Do you have any comments?
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Address Changes/ Comments: |
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(If you noted any Address Changes/ Comments above, please mark
corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
B-2