<SUBMISSION>
<ACCESSION-NUMBER>0000912093-00-000004
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20000118
<ITEMS>5
<ITEMS>7
<FILING-DATE>20000118
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>JDS UNIPHASE CORP /CA/
<CIK>0000912093
<ASSIGNED-SIC>3674
<IRS-NUMBER>942579683
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-22874
<FILM-NUMBER>509027
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>163 BAYPOINTE PKWY
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134
<PHONE>4084341800
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>163 BAYPOINTE PARKWAY
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<DESCRIPTION>FORM 8-K FOR JANUARY 17, 2000
<TEXT>

<HTML>
<head>
<TITLE>8K doc</TITLE>
</head>

<body bgcolor=white>

<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>
<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>

<p align="center"><font size="4"><strong>UNITED STATES</br>
SECURITIES AND EXCHANGE COMMISSION</br>
Washington, D.C. 20549</strong></font></p>


<HR align=center SIZE=2 width="25%">
<br>
<p align="center"><font size="5"><strong>FORM 8-K</strong></center></font></p>
<HR align=center SIZE=2 width="25%">


<p align="center"><font size="4"><strong>
               Current Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934
</strong></font></p>

<p align="center"><font size="3"><strong>
    Date of report (Date of earliest event reported):
<font color="FF0000"> January 17, 2000
</strong></font></p>
 <br>

<p align="center"><font size="6" color="#0000FF"><strong>
                                 <u>JDS Uniphase Corporation</u>
</strong></font></br>
<font size="2">
            <i>(Exact name of registrant as specified in its charter)</i>
</font></p>


<font size="3"><strong>
                         <CENTER><u>Delaware</u></CENTER>
</font></strong>
<font size="2">
                 <i><CENTER>(State of Other Jurisdiction of Incorporation)</CENTER></i>
</font></p>


<P>&nbsp;
<TABLE COLS=2 WIDTH="100%" >
<TR>
<TD>
<font size="3"><strong>
<CENTER><u>0-22874</u></CENTER>
</font></strong>
</TD>
<TD>
<font size="3"><strong>
<CENTER><u>94-2579683</u></CENTER>
</font></strong>
</TD>
</TR>
<TR>
<TD>
<font size="2">
<CENTER>&nbsp;<i>(Commission File Number)</i></CENTER>
</font>
</TD>

<TD>
<font size="2">
<CENTER><i>(IRS Employer Identification Number)</i></CENTER>
</font>
</TD>
</TR>
</TABLE>
<BR>



<p align="center"><font size="3"><strong>
                                  163 Baypointe Parkway<br>
                        <u> San Jose, California &nbsp;&nbsp;95134
</strong></font></u><br>

<font size="2">
       <i> (Address of principal executive offices including zip code)</i>
</font></p>

<p align="center"><font size="3"><strong><u>
                                    (408) 434-1800
</strong></font></u><br>

<font size="2">
               <i>  (Registrant's telephone number, including area code)</i>
</font></p>

<p align="center"><font size="3"><strong>
                                 Not Applicable
</strong></font></u><br>


<font size="2">
          <i>(Former Name or Former Address, if Changed Since Last Report)</i>
</font></p>



<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>
<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>


<br>
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<br>
<br>
<br>
<br>
<br>
<br>
<br>


<p><strong> Item 5.</strong> On January 17, 2000, Registrant and E-TEK Dynamics, a Delaware Corporation ("E-TEK")
agreed to merge in a transaction pursuant to which, subject to the terms of a certain Agreement
and Plan of Reorganization and Merger dated January 17, 2000, among Registrant, E-TEK and a
wholly-owned subsidiary of Registrant, E-TEK will become a wholly-owned subsidiary of
Registrant.  The closing of the merger is conditioned upon, among other things, obtaining
regulatory appprovals and the consent of E-TEK stockholders.  Accordingly, there can be no
assurance that the merger will be completed.

<p>JDS Uniphase Corporation (JDS Uniphase) has included herein the consolidated financial
statements of E-TEK for the years ended June 30, 1999, 1998 and 1997 and pro forma financial
information referred to below.


<p><strong> Item 7.</strong>       Financial Statements, Pro Forma Information and Exhibits

<p>&nbsp;&nbsp;&nbsp;&nbsp;               (a)  Financial Statements of Business Acquired


<p align="center"><strong>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
</strong><br>

<BLOCKQUOTE>

<p><A HREF="#report">
Report of Independent Accountants</A>


<p><A HREF="#bs">
Consolidated Balance Sheet</A>

<p><A HREF="#ops">
Consolidated Statement of Operations</A>

<p><A HREF="#equity">
Consolidated Statement of Stockholders' Equity</A>

<p><A HREF="#flows">
Consolidated Statement of Cash Flows</A>

<p><A HREF="#notes">
Notes to Consolidated Financial Statements</A>

</BLOCKQUOTE>








<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="report"></A>
<p align="center"><strong>
                       REPORT OF INDEPENDENT ACCOUNTANTS
</strong><br>

<p>To the Board of Directors and Stockholders of<br>
E-TEK Dynamics, Inc.

<p>In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of E-TEK Dynamics, Inc.
and its subsidiaries at June 30, 1998 and 1999 and the results of
their operations and their cash flows for each of the three years in the period
ended June 30, 1999, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.


<p>PricewaterhouseCoopers LLP<br>
<br>
<p>San Jose, California<br>
July 20, 1999, except as to<br>
Note 14, which is as of July 27, 1999


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="bs"></A>
<p align="center"><strong>
                              E-TEK Dynamics, Inc.<br>
                           CONSOLIDATED BALANCE SHEET<br>
                                 (In thousands)
</strong><br>
<pre>
                                                                   June 30,
                                                             --------------------
                                                               1998       1999
                                                             ---------  ---------
ASSETS
Current assets:
  Cash and cash equivalents  .............................   $ 21,918   $ 55,090
  Accounts receivable  ...................................     15,463     29,831
  Advance to joint venture  ..............................      7,000         --
  Inventories  ...........................................      6,909     20,367
  Deferred tax assets  ...................................      7,873     13,542
  Other current assets  ..................................        343      3,542
                                                             --------   --------
     Total current assets  ...............................     59,506    122,372
Property and equipment, net  .............................     30,872     61,874
Long-term investments  ...................................         --     11,665
Goodwill and other intangibles, net  .....................         --     34,585
                                                             --------   --------
     Total assets  .......................................   $ 90,378   $230,496
                                                             ========   ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable  ......................................   $  8,281   $ 17,762
  Accrued liabilities  ...................................     16,187     26,352
  Income taxes payable  ..................................         --      4,337
  Current portion of capital lease obligations............      1,240      1,277
  Current portion of long-term debt  .....................        216      6,101
                                                             --------   --------
     Total current liabilities  ..........................     25,924     55,829
Capital lease obligations, net of current portion.........      3,557      2,281
Long-term debt, net of current portion  ..................     10,251     19,232
Deferred income taxes  ...................................         --      3,481
                                                             --------   --------
     Total liabilities  ..................................     39,732     80,823
                                                             --------   --------
Commitments and contingencies (Note 13)
Mandatorily Redeemable Convertible Preferred Stock, no
 par value, 30,000 shares authorized, issued and
 outstanding; none authorized, issued or outstanding  ....    125,144         --
                                                             --------   --------
Stockholders' equity:
  Preferred Stock, none authorized, issued or
    outstanding; $0.01 par value, 25,000 shares
    authorized, none issued and outstanding  .............         --         --

  Common Stock, no par value, 65,000 shares authorized,
    27,299 shares issued and outstanding; $0.001 par
    value, 300,000 shares authorized, 62,054 shares
    issued and outstanding  ..............................     19,468         63
  Additional paid-in capital  ............................         --    216,124
  Notes receivable from stockholders  ....................    (14,215)   (11,454)
  Deferred compensation  .................................     (4,753)    (3,805)
  Distribution in excess of net book value  ..............    (83,901)   (83,901)
  Retained earnings  .....................................      8,903     32,646
                                                             --------   --------
     Total stockholders' equity  .........................    (74,498)   149,673
                                                             --------   --------
     Total liabilities and stockholders' equity  .........   $ 90,378   $230,496
                                                             ========   ========

</pre>
<p align="center"><strong>
                See Notes to Consolidated Financial Statements.
</strong><br>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="ops"></A>
<p align="center"><strong>
                              E-TEK Dynamics, Inc.<br>
<br>
                      CONSOLIDATED STATEMENT OF OPERATIONS<br>
                    (In thousands, except per share amounts)
</strong><br>
<pre>

                                                     Fiscal Year Ended June 30,
                                                   -----------------------------
                                                     1997      1998      1999
                                                   --------- --------- ---------
Net revenues  ....................................  $73,076  $106,924  $172,664
Cost of goods sold  ..............................   30,599    49,063    85,123
                                                   --------- --------- ---------
  Gross profit  ..................................   42,477    57,861    87,541
                                                   --------- --------- ---------
Operating expenses:
  Research and development  ......................    3,953     7,702    14,687
  Selling, general and administrative  ...........   15,290    21,097    24,516
  Purchased in-process research and development  .      --         --     4,207
  Amortization of intangibles  ...................      --         --       300
                                                   --------- --------- ---------
     Total operating expenses  ...................   19,243    28,799    43,710
                                                   --------- --------- ---------
Operating income  ................................   23,234    29,062    43,831
Interest income  .................................      962     1,992     3,784
Interest expense  ................................     (571)     (988)   (1,573)
                                                   --------- --------- ---------
Income before income taxes  ......................   23,625    30,066    46,042
Provision for income taxes  ......................    8,477    12,142    18,417
                                                   --------- --------- ---------
Net income  ......................................   15,148    17,924    27,625
Convertible Preferred Stock accretion  ...........      --      9,021     3,882
                                                   --------- --------- ---------
Net income available to Common Stockholders  .....  $15,148    $8,903   $23,743
                                                   ========= ========= =========
Net income per share:
  Basic  .........................................    $0.30     $0.39     $0.55
  Diluted  .......................................    $0.30     $0.32     $0.45
Shares used in net income per share calculations:
  Basic  .........................................   50,000    22,970    43,152
  Diluted  .......................................   50,000    55,561    61,746


</pre>
<p align="center"><strong>
                See Notes to Consolidated Financial Statements.
</strong><br>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="equity"></A>
<p align="center"><strong>
                              E-TEK Dynamics, Inc.<br>
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY<br>
                                 (In thousands)
</strong><br>
<pre>
<font size="1">

                                                            Notes               Distri-
                                                          Receivable             bution               Total
                               Common Stock    Additional    from    Deferred  in Excess              Stock-
                            ------------------  Paid-in     Stock-    Compen-    of Net   Retained   holders'
                             Shares    Amount   Capital    holders    sation   Book Value Earnings    Equity
                            --------- -------- ---------- ---------- --------- ---------- --------- ----------
Balance at June 30, 1996  ..  50,000   $1,963     $  --      $  --      $  --     $  --    $18,988    $20,951
Net income  ................     --       --         --         --         --        --     15,148     15,148
                            --------- -------- ---------- ---------- --------- ---------- --------- ----------
Balance at June 30, 1997  ..  50,000    1,963        --         --         --        --     34,136     36,099
Repurchase of Common Stock   (30,000)  (1,963)       --         --         --    (83,901)  (34,136)  (120,000)
Exercise of Common Stock
 options for cash  .........      88      210        --         --         --        --         --        210
Exercise of Common Stock
 options for Notes
 Receivable from
 stockholders  .............   7,211   18,215        --     (13,615)   (4,600)       --         --         --
Deferred compensation
 related to Common Stock
 options  ..................     --     1,043        --         --     (1,043)       --         --         --
Amortization of deferred
 compensation related to
 Common Stock options  .....     --       --         --         --        290        --         --        290
Imputed interest and
 compensation
 expense related to Notes
 Receivable  ...............     --       --         --        (600)      600        --         --         --
Convertible Preferred Stock
 accretion  ................     --       --         --         --         --        --     (9,021)    (9,021)
Net income  ................     --       --         --         --         --        --     17,924     17,924
                            --------- -------- ---------- ---------- --------- ---------- --------- ----------
Balance at June 30, 1998  ..  27,299   19,468        --     (14,215)   (4,753)   (83,901)    8,903    (74,498)
Effect of Delaware
 re-incorporation  .........     --   (19,441)    19,441        --         --        --         --         --
Exercise of Common Stock
 options for cash  .........     158      --         460        --         --        --         --        460
Issuance of Common Stock
 under Employee Stock
 Purchase Plan  ............     120      --       1,225        --         --        --         --      1,225
Exercise of Common Stock
 options for Notes
 Receivable from
 stockholders  .............     125        1      1,249       (934)     (316)       --         --         --
Repurchase of Common Stock       (48)     --        (131)        93        38        --         --         --
Deferred compensation
 related to Common Stock
 options  ..................     --       --       1,413        --     (1,413)       --         --         --
Amortization of deferred
 compensation related to
 Common Stock options  .....     --       --         --         --        540        --         --        540
Imputed interest and
 compensation expense
 related to Notes
 Receivable  ...............     --       --         --        (960)      960        --         --         --
Repayment of Notes
 Receivable from
 Stockholders  .............     --       --         --       4,562     1,139        --         --      5,701
Issuance of Common Stock
 in conjunction with
 initial public offering,
 net of issuance costs  ....   4,000        4     43,386        --         --        --         --     43,390
Convertible Preferred Stock
 accretion  ................     --       --         --         --         --        --     (3,882)    (3,882)
Conversion of Convertible
 Preferred Stock
 to Common Stock  ..........  30,000       30    128,996        --         --        --         --    129,026
Issuance of Common Stock
 in conjunction with the
 purchase of
 ElectroPhotonics   ........     400        1     13,708        --         --        --         --     13,709
Increase in investment
 carrying value
 in ADVA (Note 5)  .........     --       --       5,222        --         --        --         --      5,222
Tax benefit from
 stock options  ............     --       --       1,155        --         --        --         --      1,155
Net income  ................     --       --         --         --         --        --     27,625     27,625
                            --------- -------- ---------- ---------- --------- ---------- --------- ----------
Balance at June 30, 1999  ..  62,054      $63   $216,124    $(11,454)  $(3,805)  $(83,901) $32,646   $149,673
                            ========= ======== ========== ========== ========= ========== ========= ==========

</font size="1">
</pre>
<p align="center"><strong>
                See Notes to Consolidated Financial Statements.
</strong><br>



<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="flows"></A>
<p align="center"><strong>
                              E-TEK Dynamics, Inc.<br>
                      CONSOLIDATED STATEMENT OF CASH FLOWS<br>
                                 (In thousands)
</strong><br>
<pre>

                                                     Fiscal Year Ended June 30,
                                                   -----------------------------
                                                     1997      1998      1999
                                                   --------- --------- ---------
Cash flows from operating activities:
 Net income  ...................................... $15,148   $17,924   $27,625
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization  ..................   3,086     6,148    11,805
  Stock compensation expense  .....................      --       890     1,500
  Imputed interest income  ........................      --      (600)     (960)
  Tax benefits from employee stock options  .......      --         --    1,155
  Purchased in-process research and development  ..      --         --    4,207
  Changes in assets and liabilities (net of the
    effect of the acquisition of ElectroPhotonics):
    Accounts receivable  ..........................  (9,977)      586   (14,238)
    Inventories  ..................................  (2,519)   (2,808)  (13,458)
    Deferred income taxes  ........................  (2,478)   (4,017)   (5,668)
    Other current assets  .........................     160       342    (2,729)
    Accounts payable  .............................   3,273     3,567     8,924
    Accrued liabilities  ..........................   5,909     6,875     9,681
    Income taxes payable  .........................     854    (1,215)    4,337
                                                   --------- --------- ---------
     Net cash provided by operating activities  ...  13,456    27,692    32,181
                                                   --------- --------- ---------
Cash flows from investing activities:
 Additions to property and equipment  ............. (15,284)  (16,267)  (41,792)
 Payment from (advance to) joint venture  .........      --    (7,000)    7,000
 Long-term investments  ...........................      --         --   (2,964)
 Acquisition of ElectroPhotonics, net of cash
  received  .......................................      --         --  (25,654)
 Maturities and sale of short-term investments  ...     354    14,983        --
 Purchase of short-term investments  ..............  (6,426)   (4,143)       --
                                                   --------- --------- ---------
     Net cash used in investing activities  ....... (21,356)  (12,427)  (63,410)
                                                   --------- --------- ---------
Cash flows from financing activities:
 Repurchase of Common Stock  ......................      --  (120,000)       --
 Proceeds from issuance of Mandatorily
  Redeemable Convertible Preferred Stock  .........      --   116,123        --
 Payment to stockholder for note  .................    (200)        --       --
 Proceeds from exercise of Common Stock options  ..      --       210       460
 Proceeds from issuance of Common Stock, net  .....      --         --   43,390
 Proceeds from Employee Stock Purchase Plan  ......      --         --    1,225
 Principal repayments by stockholders on note
  receivable  .....................................   1,384         --    5,701
 Principal payments on capital lease obligations  .    (700)     (757)   (1,240)
 Borrowings on long-term debt  ....................   7,700     3,000    20,175
 Payments on long-term debt  ......................     (51)     (182)   (5,310)
                                                   --------- --------- ---------
     Net cash provided by (used in) financing
         activities  .............                    8,133    (1,606)   64,401
                                                   --------- --------- ---------
Net increase in cash and cash equivalents  ........     233    13,659    33,172
Cash and cash equivalents at beginning of period  .   8,026     8,259    21,918
                                                   --------- --------- ---------
Cash and cash equivalents at end of period  .......  $8,259   $21,918   $55,090
                                                   ========= ========= =========
Supplemental disclosure of cash flow information:
 Interest paid  ...................................    $514    $1,036    $1,525
 Income taxes paid  ............................... $10,103   $17,549   $17,243
Non-cash investing and financing activities:
 Common Stock issued for the acquisition of
   ElectroPhotonics  ..............................   $  --     $  --   $13,709
 Acquisition of property and equipment through
   capital leases  ................................  $2,918    $2,783     $  --


</pre>
<p align="center"><strong>
                See Notes to Consolidated Financial Statements.
</strong><br>



<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>

<A NAME="notes"></A>
<p align="center"><strong>
                              E-TEK Dynamics, Inc.<br>
<br>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</strong><br>

<p><strong>Note 1:  Summary of Significant Accounting Policies</strong></p>

<p><strong><i>  The company and description of business</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  E-TEK Dynamics, Inc. ("E-TEK" or "the Company") is a leader in the design
and manufacture of components and modules for fiber optic networks. The product
range includes WDM components and modules, isolators, couplers and micro-optic
integrated components. These products are designed into Optical Amplifiers and
WDM systems for communication networks. Applications include land and undersea,
as well as emerging metropolitan and access, networks. E-TEK's customers are
telecommunications equipment manufacturers that build optical networks for
service providers. E-TEK operates in one business segment.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Until July 23, 1997, the Company was owned by two founders ("the Founders").
In July 1997, the Company underwent a recapitalization in which it sold a
controlling stake for $120 million in Mandatorily Redeemable Class A Convertible
Preferred Stock ("Convertible Preferred Stock") which had significant rights
and preferences over the Common Stock, including rights to elect a majority of
E-TEK's directors, cumulative dividends and a liquidation preference. In
connection with the recapitalization, the Company also repurchased $120 million
in Common Stock from the Founders. The redemption was accounted for as a
recapitalization and, accordingly, no change in the accounting basis of E-TEK's
net assets has been made in the accompanying consolidated financial statements.
The amount of cash paid to the stockholders exceeded the net assets of the
Company at the time of the redemption by $83,901,000. This amount has been
recorded in the equity section as distribution in excess of net book value.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Pursuant to the recapitalization, the Company amended its articles of
incorporation to change the authorized number of shares to 90,000,000, of which
30,000,000 were designated as Convertible Preferred Stock and 60,000,000 were
designated as Common Stock. Also as of that date, there was a stock split in
which each outstanding share of Common Stock was converted into 493.72476 shares
of Common Stock. All shares and per share amounts were restated to reflect the
stock split.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In June and November 1998, the Company amended its articles of incorporation
again to increase authorized shares of Common Stock to 65,000,000 shares and
300,000,000 shares, respectively. The Company is also authorized to issue
25,000,000 shares of Preferred Stock.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company completed its initial public offering on December 2, 1998.
Following the completion of the initial public offering, all shares of
Convertible Preferred Stock converted into an aggregate of 30,000,000 shares of
Common Stock.


<p><strong><i>  Use of estimates</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.


<p><strong><i>  Principles of consolidation</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  All intercompany transactions and accounts have been eliminated.


<p><strong><i>  Equity method of accounting</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company accounts for its investment in foreign joint ventures using the
equity method of accounting. The Company accounts for the increase or decrease
of its proportionate share of net book value in equity basis investees from the
investees' issuance of stock at a price above or below the net book value per
share as a change to additional paid-in capital.

<p><strong><i>  Revenue recognition</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Revenue from product sales is recognized at the time the product is shipped,
with provisions established for estimated product returns and allowances.
Revenue is deferred on shipments of new products as to which customer acceptance
is considered to be uncertain.


<p><strong><i>  Warranty expense</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  At the time of product shipment, the Company provides for the estimated costs
that may be incurred under warranties for the product shipped.


<p><strong><i>  Research and development</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Research and development costs are expensed as incurred.


<p><strong><i>  Stock-based compensation</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company accounts for its stock-based awards using the intrinsic value
method in accordance with Accounting Principles Board No. 25, "Accounting for
Stock Issued to Employees". The Company provides additional pro forma
disclosures as required under Statement of Financial Accounting Standard No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123").


<p><strong><i>  Cash and cash equivalents</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  E-TEK considers all liquid investments purchased with an original maturity of
three months or less to be cash equivalents.


<p><strong><i>  Inventories</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Inventories are valued at the lower of cost or market, cost being determined
using the first-in, first-out basis.


<p><strong><i>  Property and equipment</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Property and equipment are stated at cost. Depreciation is computed using the
straight-line method based upon the estimated useful lives of the assets, which
is fifteen years for buildings and range from three to five years for other
property and equipment.


<p><strong><i>  Goodwill and other intangible assets</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Goodwill and other intangible assets are being amortized using the straight-
line method over two to three years.

<p><strong><i>  Impairment of long-lived assets</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Pursuant to Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-lived Assets to be Disposed
of" ("SFAS 121"), the Company reviews long-lived assets based upon a gross
cash flow basis and will reserve for impairment whenever events or changes in
circumstances indicate the carrying amount of the assets may not be fully
recoverable. Based on its most recent analysis, the Company believes that there
was no impairment of the long-lived assets as of June 30, 1999.


<p><strong><i>  Income taxes</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Deferred tax assets and liabilities are recognized for the expected tax
consequences of temporary differences between the tax basis of assets and
liabilities and the amounts reported for financial reporting purposes. Deferred
income taxes are provided on unremitted earnings from the foreign joint ventures
to the extent they are not considered permanently reinvested.


<p><strong><i>  Fair value of financial instruments</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  For certain of the Company's financial instruments, including cash, cash
equivalents, accounts receivable, accounts payable and other accrued
liabilities, the carrying amount approximates fair value due to their short
maturities. The estimated fair value of fixed rate long-term debt is primarily
based on the borrowing rates currently available to the Company for bank loans
with similar terms and maturities. This fair value approximated the carrying
amount of long-term debt at June 30, 1999.


<p><strong><i>  Comprehensive income</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1999, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income". Comprehensive income is defined as the change in equity
of a company during a period from transactions and other events and
circumstances excluding transactions resulting from investments from owners and
distributions to owners. The comprehensive income did not differ from the net
income for the years presented.


<p><strong><i>  Recently issued accounting standards</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In June 1998, the Financial Accounting Standards Board issued SFAS 133
"Accounting for Derivative Instruments and Hedging Activities". SFAS 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities and is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. The Company does not expect the adoption of SFAS
133 to have a material impact on its results of operations.


<p><strong>NOTE 2--ACQUISITION OF ELECTROPHOTONICS:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company completed the acquisition of ElectroPhotonics Corporation in
Canada on June 22, 1999. ElectroPhotonics develops optical networks components
and modules including WDM components, dispersion equalization modules and
optical network performance monitoring subsystems. The Company accounted for the
transaction as a purchase and has included the operating results of
ElectroPhotonics since the acquisition date in the accompanying consolidated
financial statements. The Company issued approximately 400,000 shares of Common
Stock with a market value of $13,709,000 and paid $26,728,000 in cash in
exchange for all of the equity of ElectroPhotonics. Including acquisition costs
of $460,000 and assumed liabilities of $582,000, the total purchase price was
$41,479,000. The purchase price was allocated to identifiable tangible and
intangible assets and to goodwill as follows (in thousands):

<pre>

   Cash and marketable securities  .....................       $ 1,074
   Property & equipment  ...............................           712
   Developed technology  ...............................           933
   Core technology  ....................................         2,335
   In-process research and development  ................         4,207
   Acquired workforce  .................................           230
   Trade names  ........................................           238
   Other assets  .......................................           601
   Residual goodwill  ..................................        31,149
                                                               -------
                                                               $41,479
                                                               =======

</pre>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The valuations of the intangible assets, including developed technology, core
technology, in-process research and development, acquired workforce and trade
names, were based on an independent appraisal. In the appraisal, projected
incremental cash flows of projects were discounted using discount rates ranging
from 14% for developed technology to 24% for in-process research and
development. The discount rates used reflect difficulties and risks regarding
technological feasibility, market acceptance and other matters.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Goodwill is being amortized over three years. Developed technology and core
technology are being amortized over two to three years. In-process research and
development was expensed at the time of the acquisition in accordance with
generally accepted accounting principles.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The following unaudited pro forma summary presents the consolidated results of
operations of the Company, excluding acquired in-process research and
development, as if the acquisition of ElectroPhotonics had occurred at the
beginning of fiscal 1998. The unaudited pro forma summary is not necessarily
indicative of what would have occurred had the acquisition been made as of the
beginning of fiscal 1998 or of results which may occur in the future.

<pre>
                                                          June 30,
                                                   -----------------------
                                                      1998          1999
                                                   ---------     ---------
   Net revenues................................     $107,407      $173,094
   Net income..................................        8,202        19,706
   Diluted net income per share................     $   0.14      $   0.32

</pre>

<p><strong>NOTE 3--BALANCE SHEET DETAIL:</strong></p>


<pre>
                                                            June 30,
                                                      --------------------
                                                        1998       1999
                                                      ---------  ---------
  Accounts receivable:
     Trade receivables  ...........................   $ 20,358   $ 39,980
     Less: Allowances for doubtful accounts
         and sales returns  .......................     (4,895)   (10,149)
                                                      --------   --------
                                                      $ 15,463   $ 29,831
                                                      ========   ========
  Inventories:
     Raw materials  ...............................   $  3,459   $ 10,613
     Work in process  .............................      1,566      7,577
     Finished goods  ..............................      1,884      2,177
                                                      --------   --------
                                                      $  6,909   $ 20,367
                                                      ========   ========
  Property and equipment:
     Machinery and equipment  .....................   $ 22,429   $ 49,237
     Computers and software  ......................      2,008      3,078
     Furniture and fixtures  ......................        470      2,163
     Automobiles  .................................        138         27
     Building improvements  .......................      4,734     16,669
     Land and buildings  ..........................     11,610     11,610
                                                      --------   --------
                                                        41,389     82,784
     Less: Accumulated depreciation  ...............   (10,517)   (20,910)
                                                      --------   --------
                                                      $ 30,872   $ 61,874
                                                      ========   ========
  Goodwill and other intangible assets:
     Goodwill  ....................................         --   $ 31,149
     Purchased technologies  ......................         --      3,268
     Other intangible assets  .....................         --        468
                                                      --------   --------
                                                            --     34,885
     Less: Accumulated amortization  ...............        --       (300)
                                                      --------   --------
                                                      $     --   $ 34,585
                                                      ========   ========
  Accrued liabilities:
     Accrued compensation  ........................   $  7,408   $ 10,887
     Accrued warranty  ............................      3,735      4,620
     Accrued commissions  .........................      2,151      3,120
     Accrued professional services  ...............        839      1,221
     Accrued marketing expenses  ..................        270      1,185
     Deferred revenues  ...........................      1,000        915
     Accrued sales and property taxes  ............        127        504
     Other  .......................................        657      3,900
                                                      --------   --------
                                                      $ 16,187   $ 26,352
                                                      ========   ========

</pre>

<p><strong> NOTE 4--NET INCOME PER SHARE:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Basic net income per share is computed by dividing net income available to
Common Stockholders by the weighted average number of common shares outstanding
during the period.

<p>&nbsp;&nbsp;&nbsp;&nbsp;Diluted net income per share is calculated using the weighted average number of
outstanding shares of Common Stock plus dilutive Common Stock equivalents. For
all periods presented, Common Stock equivalents consist of Convertible Preferred
Stock, unvested Common Stock subject to repurchase and Common Stock options
using the treasury stock method based on the average stock price for the period.


<p>&nbsp;&nbsp;&nbsp;&nbsp;  The following table sets forth the computation of basic and diluted earnings
per share (in thousands, except per share data):

<pre>

                                                     1997      1998      1999
                                                   --------- --------- ---------
Numerator:
  Net income  ....................................  $15,148   $17,924   $27,625
  Convertible Preferred Stock accretion  .........      --      9,021     3,882
  Net income available to Common
    Stockholders (Basic)  ........................   15,148     8,903    23,743
  Convertible Preferred Stock accretion  .........      --      9,021     3,882
  Net income available to Common
    Stockholders and assumed
    conversions (Diluted)  .......................  $15,148   $17,924   $27,625

Denominator:
  Denominator for basic earnings per
    share--weighted average
    common shares  ...............................   50,000    22,970    43,152
  Effect of dilutive securities
     Common Stock options  .......................      --        296     1,998
     Unvested Common Stock subject to
       repurchase  ...............................      --      4,104     4,166
     Convertible Preferred Stock  ................      --     28,191    12,430
  Denominator for dilutive earnings per
    share--adjusted weighted average
    common shares and assumed conversions            50,000    55,561    61,746

  Basic earnings per share  ......................    $0.30     $0.39     $0.55

  Diluted earnings per share  ....................    $0.30     $0.32     $0.45


</pre>


<p><strong>NOTE 5--JOINT VENTURES:</strong></p>

<p><strong><i>  FibX</strong></i>
<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1998, the Company entered into an agreement with a Taiwanese
company to form a joint venture in Taiwan to develop, manufacture and distribute
fiber optic components and products. The Company and the other investor each
contributed $7,000,000 in cash for a 50% interest in the joint venture. Under
the joint venture agreement and a related license agreement, the Company
received $7,000,000 from the joint venture for certain technology of the Company
that was licensed to the joint venture.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The $7,000,000 cash contributed by the Company and the $7,000,000 receivable
from the joint venture offset so that, in substance, the Company received a 50%
interest in the joint venture in exchange for a technology license that had no
carrying value in the Company's financial statements. In accordance with
Emerging Issues Task Force Consensus No. 89-7, the Company did not record any
gain on the exchange and, therefore, the carrying value of the Company's
investment in FibX as of June 30, 1998 was nil. The Company's equity interest in
FibX was subsequently diluted to 45% through the issuance of equity to other
parties.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1999, FibX began to manufacture certain products for the
Company. The Company sells certain components to and buys finished goods from
FibX. The transactions between the Company and FibX during fiscal 1999 were
immaterial. The Company's share of the equity loss in FibX was immaterial for
fiscal 1999 and, therefore, the carrying value of the Company's investment in
FibX was still nil as of June 30, 1999.

  On July 6, 1999, the Company purchased an additional interest in FibX from
other investors for $12,000,000 in cash. After the purchase, the Company's
interest in FibX was increased to approximately 96%. The purchase resulted in
goodwill and other intangible assets of approximately $6,000,000 (unaudited),
which will be amortized in accordance with the Company's accounting policy. The
pro forma combined results of operations for fiscal 1998 and 1999 were not
materially different than the actual results.


<p><strong><i>  ADVA</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1995, the Company contributed $250,000 for a 40% ownership
interest in a German company ("ADVA") that develops and manufactures fiber
optic components and products. The other 60% interest was held by the Company's
German distributor, AMS Opto Tech GmbH ("AMS"). During the quarter ended April
1, 1999, the Company contributed an additional $2,500,000 to maintain its 40%
interest in ADVA. On March 30, 1999, ADVA completed its initial public offering
and began trading on the Neuer Markt of the Frankfurt Stock Exchange. The
Company's ownership interest in ADVA was reduced to 33% after ADVA's initial
public offering. The Company increased the carrying value of its investment to
reflect the increase in the Company's share of ADVA's net book value. The
Company recorded the increase, net of the deferred tax liability, as a credit to
additional paid-in capital. At June 30, 1999, the carrying value of the
Company's investment in ADVA was $10,665,000. The market value of the investment
at June 30, 1999 was $121,803,000.


<p><strong>NOTE 6--DEBT:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In November 1996, the Company obtained a $7,700,000 term loan from a financial
institution, which bears interest at a rate of 7.85% per annum. Monthly
principal and interest payments are $59,000, with a final payment of all
remaining unpaid principal and interest on December 1, 2001. This loan is
secured by the Company's land and buildings with a net book value of $11,610,000
at June 30, 1999. The outstanding balance of this note as of June 30, 1999 was
$7,426,000.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In September 1997, the Company obtained a $3,000,000 term loan from a bank,
which bore interest at a rate of LIBOR plus 1.7% per annum. Monthly principal
and interest payments amounted to $27,000, with a final payment of all remaining
unpaid principal and interest on September 30, 2000. This note was paid off
fully during fiscal 1999.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In November 1998, the Company obtained a $5,440,000 term loan from a financial
institution, which bears interest at a rate of 6.46% per annum. Monthly
principal and interest payments amount to $129,000 with a final payment of all
remaining unpaid principal and interest in October 2002. Should the Company
elect to prepay any remaining balance of this note, they are subject to a
penalty not to exceed 3% of the original principal balance. This note is secured
by certain equipment owned by the Company. At June 30, 1999, the outstanding
balance of this note was $4,525,000.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In January 1999, the Company obtained a $7,890,000 term loan from a financial
institution, which bears interest at a rate of 6.38% per annum. Monthly
principal and interest payments amount to $241,000 with a final payment of all
remaining unpaid principal and interest in January 2002. Should the Company
elect to prepay any remaining balance of this note, it would pay a penalty not
to exceed 3% of the original principal balance. This note is secured by certain
equipment owned by the Company. At June 30, 1999, the outstanding balance of
this note was $6,882,000.


<p>&nbsp;&nbsp;&nbsp;&nbsp;  In April 1999, the Company obtained a $6,845,000 term loan from a financial
institution, which bears interest at a rate of 6.89% per annum. Monthly
principal and interest payments amount to $211,000 with a final payment of all
remaining unpaid principal and interest in April 2002. Should the Company elect
to prepay any remaining balance of this note, it would pay a penalty not to
exceed 3% of the original principal balance. This note is secured by certain
equipment owned by the Company. At June 30, 1999, the outstanding balance of
this note was $6,501,000.


<p>&nbsp;&nbsp;&nbsp;&nbsp;  Future principal payments under long-term debt are as follows (in thousands):


<pre>

Fiscal Year ending June 30,
---------------------------
   2000  ...................................................        $ 6,101
   2001  ...................................................          6,523
   2002  ...................................................         12,342
   2003  ...................................................            367
                                                                    -------
   Total principal payments  ...............................         25,333
   Less: Current portion  ..................................         (6,101)
                                                                    -------
   Long-term portion of principal payments  ................        $19,232
                                                                    =======

</pre>

<p><strong>NOTE 7--INCOME TAXES:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The provision for income taxes was as follows (in thousands):


<pre>

                                                     Fiscal Year Ended June 30,
                                                   -----------------------------
                                                     1997      1998      1999
                                                   --------- --------- ---------
     Current
        Federal  .................................   $9,492   $14,216   $21,586
        State  ...................................    1,463     1,943     2,499
                                                   --------- --------- ---------
                                                     10,955    16,159    24,085
                                                   --------- --------- ---------
     Deferred
        Federal  .................................   (2,170)   (3,500)   (4,855)
        State  ...................................     (308)     (517)     (813)
                                                   --------- --------- ---------
                                                     (2,478)   (4,017)   (5,668)
                                                   --------- --------- ---------
                                                     $8,477   $12,142   $18,417
                                                   ========= ========= =========
     Tax rate reconciliation:
        Federal income tax statutory rate  .......     35.0%     35.0%     35.0%
        State taxes, net of federal tax benefit  .      2.9       2.6       2.3
        Permanent differences  ...................      --        4.7       3.9
        Foreign sales corporation benefit  .......     (2.7)     (4.2)     (3.0)
        Research and development credit  .........     (0.7)     (1.0)     (1.1)
        Other  ...................................      1.4       3.3       2.9
                                                   --------- --------- ---------
                                                       35.9%     40.4%     40.0%
                                                   ========= ========= =========

</pre>



<p>&nbsp;&nbsp;&nbsp;&nbsp;   Deferred tax assets and liabilities were comprised of the following (in
thousands):

<pre>

                                                        June 30,
                                                   -------------------
                                                     1998      1999
                                                   --------- ---------
  Deferred tax assets:
     Inventory reserves  ..........................  $1,444    $2,579
     Uniform cost capitalization for inventory  ...     789     1,250
     Sales return and bad debt reserves  ..........   2,268     3,906
     Warranty reserves  ...........................   1,437     1,780
     Vacation and other accruals  .................     657     2,428
     State taxes  .................................     693       910
     Other  .......................................     585       689
                                                   --------- ---------
                                                      7,873    13,542
  Deferred tax liabilities  .......................    --      (3,481)
                                                   --------- ---------
  Net deferred tax assets  ........................  $7,873   $10,061
                                                   ========= =========


</pre>


<p>&nbsp;&nbsp;&nbsp;&nbsp;  Deferred tax liabilities of $3,481,000 at June 30, 1999 related to the tax
effect of a book/tax basis difference for the Company's investment in ADVA.

<p><strong>NOTE 8--MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  On December 2, 1998, all shares of Convertible Preferred Stock converted into
an aggregate of 30,000,000 shares of Common Stock. Prior to the conversion, the
holders of the Convertible Preferred Stock had various rights and preferences as
follows:

<p><strong><i>  Voting</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Each share of Convertible Preferred Stock had voting rights equal to an
equivalent number of shares of Common Stock into which it was convertible and
voted together as one class with the Common Stock. Holders of Convertible
Preferred Stock had the right to elect three of the five members of the Board of
Directors.

<p><strong><i>  Cumulative dividends</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Dividends on each share of Convertible Preferred Stock accrued at a rate of 8%
per annum of the liquidation value of $4.00 per share. For the years ended June
30, 1998 and 1999, the Company recorded $9,021,000 and $3,882,000, respectively,
for the accretion of the value of the Convertible Preferred Stock related to the
8% dividend per annum on the $120,000,000 liquidation value of the Convertible
Preferred Stock.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The holders of the Convertible Preferred Stock were also entitled to
participate in dividends on Common Stock, when and if declared by the Board of
Directors, based on the number of shares of Common Stock held on an as-if
converted basis.

<p><strong><i>  Redemption</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The holders of the Convertible Preferred Stock had the option to redeem the
stock at the then liquidation value if there were a change in ownership of the
Company. The liquidation value was defined as the greater of (i) an amount of
$4.00 per share, plus any unpaid dividends or (ii) the consideration per share
payable to holders of Common Stock assuming conversion to Common Stock of all
outstanding Convertible Preferred Stock, plus any unpaid dividends, prior to
liquidation.


<p><strong>NOTE 9--RESTRICTED STOCK AND STOCK OPTION PLANS:</strong></p>

<p><strong><i>  Restricted stock</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1998 and 1999, under the Company's 1997 stock option plans, the
Company issued 7,211,000 and 125,000 shares of Common Stock, respectively, to
employees and officers of the Company in exchange for promissory notes in an
aggregate principal amount of $18,215,000 and $1,250,000, respectively. These
notes, which are secured by the shares of Common Stock, are generally full
recourse and payable in five years from the purchase date or upon termination of
employment by the Company, whichever comes first. Because these notes do not
bear interest, the $18,215,000 and $1,250,000 face values were discounted using
a 6% interest rate to $13,615,000 and $934,000, respectively, with the
difference recorded as deferred compensation cost. During fiscal 1998 and 1999,
the Company recognized $600,000 and $960,000, respectively, of compensation
expense and $600,000 and $960,000, respectively, of interest income related to
this imputed interest income. These shares sold in exchange for the promissory
notes are subject to a right of repurchase by the Company, subject to vesting,
which is generally over a four year period from the grant date, until vesting is
complete.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In addition, under the Company's 1997 stock option plans, the Company issued
88,000 and 158,000 shares of Common Stock to employees of the Company for
$210,000 and $460,000 in cash during fiscal 1998 and fiscal 1999, respectively.
These shares sold are subject to a right of repurchase by the Company, subject
to vesting, which is generally over a four year period from the date of grant,
until vesting is complete.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  At June 30, 1999, there were 3,139,000 shares of Common Stock purchased under
the Company's 1997 stock option plans subject to repurchase.


<p><strong><i>  1997 Equity Incentive Plan</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In July 1997, the Company adopted the 1997 Equity Incentive Plan (the "Equity
Plan") which provided for granting of incentive stock options and non-statutory
stock options to employees, officers and consultants of the Company for up to
10,556,000 shares of Common Stock.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Under the Equity Plan, incentive stock options were granted at a price that is
not less than 100% of the fair market value of the stock on the date of grant,.
Non-statutory stock options were granted at a price that was not to be less than
85% of the fair market value of the stock on the date of grant. The exercise
price of any option granted to a 10% stockholder would not be less than 110% of
the fair market value of the stock on the date of grant.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Options are exercisable immediately subject to repurchase options held by the
Company which generally lapse over a maximum period of four years at such times
and under such conditions as determined by the Board of Directors. In August
1998, the Equity Plan was terminated and the remaining options available for
grant under the Equity Plan were transferred to the 1998 Stock Plan.


<p><strong><i>  1997 Executive Equity Incentive Plan</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In October 1997, the Company adopted the 1997 Executive Equity Incentive Plan
(the "Executive Plan") which provided for granting of incentive stock options
and non-statutory stock options to officers or directors of the Company for up
to 4,444,000 shares of Common Stock.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Under the Executive Plan, incentive stock options are granted at a price that
was not less than 100% of the fair market value of the stock on the date of
grant. Non-statutory stock options were granted at a price that was not to be
less than 85% of the fair market value of the stock on the date of grant. The
exercise price of any option granted to a 10% stockholder would not be less than
110% of the fair market value of the stock on the date of grant.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Options were exercisable immediately subject to repurchase by the Company
which generally lapse over a maximum period of four years at such times and
under such conditions as determined by the Board of Directors. In August 1998,
the Executive Plan was terminated and the remaining options available for grant
under the Executive Plan were transferred to the 1998 Stock Plan.


<p><strong><i>  1998 Stock Option Plan</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In August 1998, the Company adopted the 1998 Stock Plan (the "1998 Plan") to
replace the Equity Plan and Executive Plan. The 1998 Plan provides for the grant
of incentive stock options to employees (including officers and employee
directors) and for the grant of non-statutory stock options and stock purchase
rights to employees, directors and consultants. A total of (i) 3,000,000 shares
of the Company's Common Stock (plus shares which have been reserved but unissued
under the Company's Equity Plan and Executive Plan), (ii) any share returned to
the Equity Plan and the Executive Plan as a result of termination of options or
repurchase of shares by the Company, and (iii) annual increases equal to the
lesser of 3,000,000 shares, or 4% of the outstanding shares, are currently
reserved for issuance pursuant to the 1998 Plan.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The term of stock options granted under the 1998 Plan is generally 10 years.
Under the 1998 Plan, incentive stock options are granted at a price that is not
less than 100% of the fair market value of the stock on the date of grant. Non-
statutory stock options are granted at a price that is not to be less than 85%
of the fair market value of the stock on the date of grant. The exercise price
of any option granted to a 10% stockholder will not be less than 110% of the
fair market value of the stock on the date of grant. Options vest in four years
under the 1998 Plan.


<p><strong><i>  Directors' Stock Option Plan</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In August, 1998, the Company adopted the 1998 Director Option Plan (the
"Director Plan"). A total of 250,000 shares of the Company's Common Stock,
plus an annual increase equal to the optioned stock underlying options granted
in the immediately preceding year, have been reserved for issuance under the
Director Plan.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Under the Director Plan, non-statutory stock options are granted at 100% of
the fair value of the stock on the date of grant. The term of stock options
granted under the Director Plan is generally 10 years. Options vest in four
years. At June 30, 1999, no options have been issued under the Director Plan.


<p><strong><i>  1998 Employee Stock Purchase Plan</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  In August 1998, the Company adopted the 1998 Employee Stock Purchase Plan (the
"1998 Purchase Plan"). Under the 1998 Purchase Plan, eligible employees may
purchase Common Stock at a price equal to 85% of the lower of the fair market
value of the Common Stock at the beginning of a 24-month period or end of each
six-month segment within such offering period. Participation is limited to 10%
of an employee's compensation (not to exceed amounts allowed by the Internal
Revenue Code). A total of 750,000 shares of Common Stock have been reserved for
issuance under the 1998 Purchase Plan, plus annual increases equal to the lesser
of (i) 750,000 shares, (ii) 1% of the outstanding shares on such date, or (iii)
such lesser amount as may be determined by the Board of Directors. To date,
120,000 shares of Common Stock have been issued under the 1998 Purchase Plan.


<p>&nbsp;&nbsp;&nbsp;&nbsp;  The following table summarizes activities under all of E-TEK's stock option
plans:

<pre>

                                                                       Weighted
                                            Options                    Average
                                           Available    Outstanding    Exercise
                                           for Grant       Shares       Price
                                         ------------- -------------- ----------
                                         (in thousands)(in thousands)
  Shares authorized  ..................        15,000           --       $   --
  Granted  ............................       (10,525)        10,525       2.97
  Exercised  ..........................         --            (7,299)      2.52
  Cancelled  ..........................           176           (176)      2.41
                                         ------------- --------------
  Balance at June 30, 1998  ...........         4,651          3,050       4.05
  Shares authorized  ..................         3,250           --           --
  Granted  ............................        (3,095)         3,095      18.68
  Exercised  ..........................         --              (283)      6.05
  Repurchased  ........................            48           --         2.65
  Cancelled  ..........................           123           (123)      8.39
                                         ------------- --------------
  Balance at June 30, 1999  ...........         4,977          5,739     $11.75
                                         ============= ==============

</pre>


<p>&nbsp;&nbsp;&nbsp;&nbsp;   The weighted average fair value of options granted for fiscal 1998 and 1999
was $0.75 and $10.18, respectively.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Under the 1997 option plans, options are exercisable immediately and subject
to repurchase by the Company which generally lapse over a period of four years.
At June 30, 1999, 4,150,000 options with a weighted average exercise price of
$6.08 were outstanding and exercisable, of which 1,316,000 options were vested.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Management calculated deferred compensation of $1,043,000 and $1,413,000
related to the option grants during fiscal 1998 and fiscal 1999, respectively.
Such deferred compensation is amortized over the vesting period, which is
generally four years. Amortization expense amounted to $290,000 and $540,000 for
fiscal 1998 and 1999, respectively.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Option groups outstanding at June 30, 1999 and related weighted average
exercise price and contractual life information are as follows:

<pre>

                 Options outstanding at June 30, 1999     Options exercisable
                 -------------------------------------     at June 30, 1999
                               Weighted                 ----------------------
                                Average      Weighted                Weighted
                               Remaining     Average                  Average
   Range of        Number     Contractual    Exercise     Number     Exercise
Exercise Price   Outstanding  Life (years)    Price     Exercisable    Price
---------------  -----------  ------------  ----------  -----------  ---------
                     (in                                    (in
                 thousands)                             thousands)
$ 2.30 - $ 2.30         876          8.11       $2.30          876      $2.30
$ 3.25 - $ 3.25       1,281          8.60       $3.25        1,281      $3.25
$ 4.20 - $ 8.00         273          8.83       $6.42          273      $6.42
$10.00 - $10.00       2,143          9.13      $10.00        1,674     $10.00
$12.00 - $43.50       1,166          9.76      $32.64           46     $12.00
                 -----------                            -----------
$ 2.30 - $43.50       5,739          8.97      $11.75        4,150      $6.08
                 ===========                            ===========
</pre>


<p><strong><i>  Fair value disclosures</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant dates for the awards under a method
prescribed by SFAS No. 123, the Company's net income and pro forma net income
per share would have been decreased to the pro forma amounts indicated below (in
thousands, except per share data):

<pre>

                                                    Fiscal Year Ended
                                                        June 30,
                                                   -------------------
                                                     1998      1999
                                                   --------- ---------
  Net income:
    As reported  .................................. $17,924   $27,625
                                                   ========= =========
    Pro forma  .................................... $16,681   $24,398
                                                   ========= =========
  Net income available for Common Stockholders:
    As reported  ..................................  $8,903   $23,744
                                                   ========= =========
    Pro forma  ....................................  $7,660   $20,517
                                                   ========= =========
  Net income per share:
    As reported:
     Basic  .......................................   $0.39     $0.55
                                                   ========= =========
     Diluted  .....................................   $0.32     $0.45
                                                   ========= =========
    Pro forma:
     Basic  .......................................   $0.33     $0.48
                                                   ========= =========
     Diluted  .....................................   $0.30     $0.34
                                                   ========= =========

</pre>




<p>&nbsp;&nbsp;&nbsp;&nbsp;  The fair value of each option granted is estimated on the date of grant using
the Black-Scholes Model. The minimum value method was used for fiscal 1998 and
for the period between July 1, 1998 and December 1, 1998 with the following
assumptions: a risk-free interest rate of 6.00% for fiscal 1998 and 5.91% for
the period between July 1, 1998 and December 1, 1998; an expected term of option
of 5 years and a dividend yield of 0.00% for both periods. For the period
between December 2, 1998 and June 30, 1999, the following assumptions were used
in the fair value calculations: a risk-free interest rate of 5.91%, a volatility
rate of 82%, an expected term of option of 5 years and a dividend yield of
0.00%.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Sales under the 1998 Purchase Plan were 120,000 shares at an average price per
share of $10.20 in fiscal 1999. Pro forma compensation expense for the grant
date fair value, as defined by SFAS 123, of the purchase rights granted under
the 1998 Purchase Plan was calculated using the Black-Scholes Model with the
following assumptions: an expected life of 1.25 years, an expected volatility
rate of 80%, a dividend yield of 0.00 % and a risk-free interest rate of 5.91%.
The weighted average fair value per share, as defined by SFAS 123, of rights to
purchase stock under the 1998 Purchase Plan was $4.95.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Because additional option grants are expected to be made each year, the above
pro forma disclosures are not representative of pro forma effects of reported
net income for future years.


<p><strong>NOTE 10--EMPLOYEE BENEFIT PLAN:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company sponsors a 401(k) Savings Plan (the "Plan"). All employees are
eligible to participate in the Plan following certain minimum eligibility
requirements. Under the Plan, employees may elect to contribute up to 15% of
their pre-tax compensation to the Plan, subject to annual limitations. Matching
employer contributions are 25% of the employees' contributions but limited to
the first 10% of the employees' deferral. Employer contributions are vested over
five years after employees' two years of services and employee contributions are
100% vested at all times. The Company's contribution to the plan was $211,000,
$313,000 and $1,027,000 for fiscal 1997, 1998 and 1999, respectively.



<p><strong>NOTE 11--MAJOR CUSTOMERS AND CONCENTRATION OF RISKS:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash equivalents and trade
accounts receivable. The Company invests primarily in money market accounts and
marketable securities with high quality financial, government or corporate
institutions. The Company sells its products to original equipment manufacturers
and distributors. The Company performs ongoing credit evaluations of its
customers' financial condition and maintains an allowance for uncollectible
accounts receivable based upon the expected collectibility of all accounts
receivable. At June 30, 1998, two customers and their affiliates accounted for
43% and 11% of accounts receivable. At June 30, 1999, four customers and their
affiliates accounted for 30%, 15%, 11% and 11% of accounts receivable.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1997, three customers and their affiliates accounted for 27%,
22% and 12% of total revenues. During fiscal 1998, three customers and their
affiliates accounted for 30%, 16% and 14% of total revenues. During fiscal 1999,
three customers and their affiliates accounted for 35%, 17% and 12% of total
revenues. Export sales were approximately 42%, 53%, and 42% of total net sales
for fiscal 1997, 1998 and 1999, respectively.


<p><strong>NOTE 12--INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company operates in a single industry segment--the design and manufacture
of components and modules for fiber optic networks. The Company operates in
three geographic regions: the United States, Europe and Asia/Pacific. The
following is a summary of sales by geographic area (in thousands):

<pre>

                                               Fiscal Year ended June 30,
                                        ----------------------------------------
                                            1997            1998          1999
                                        --------------  --------------  --------
   United States  ................        $42,532         $50,724      $92,319
   Europe  .......................         27,107          49,251       73,090
   Asia/Pacific  .................          3,437           6,949        7,255

</pre>

<p><strong>NOTE 13--COMMITMENTS AND CONTINGENCIES:</strong></p>

<p><strong><i>  Leases</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company has entered into a number of noncancelable lease agreements
involving machinery and equipment and automobiles. The principal portions of the
minimum rentals have been capitalized and the related assets and obligations
recorded using the interest rates implicit in the respective leases.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  During fiscal 1999, the Company entered into a facility lease for one
manufacturing plant. The lease expires in 2006.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Future minimum payments under all noncancelable leases are as follows (in
thousands):

<pre>
                                               Operating         Capital
   Fiscal Year Ending June 30,                   Leases          Leases
   ---------------------------                ---------        ---------
   2000  ..................................       1,964         $ 1,508
   2001  ..................................       1,908           1,508
   2002  ..................................       1,908             546
   2003  ..................................       1,908             417
   2004  ..................................       1,908              --
   Thereafter  ............................       3,498              --
                                                 ------         -------
   Total minimum lease payments.  .........      13,094           3,979
                                                =======
   Less: Amount representing interest  ....                        (421)
                                                                -------
   Present value of capitalized lease
     obligations  .........................                       3,558
   Less: Current portion  .................                      (1,277)
                                                                -------
   Long-term portion of capitalized lease
     obligations  .........................                     $ 2,281
                                                                =======

</pre>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  At June 30, 1998 and June 30, 1999, the cost of machinery and equipment and
automobiles under capital leases, net of accumulated depreciation, was
$4,025,000 and $2,195,000, respectively.

<p>&nbsp;&nbsp;&nbsp;&nbsp;  Total rent expense on all operating leases was $283,000, $472,000 and $365,000
for fiscal 1997, 1998 and 1999, respectively.


<p><strong><i>  Contingencies</strong></i>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  The Company is party to litigation matters and claims which are normal in the
course of its operations. While the results of such litigations and claims
cannot be predicted with certainty, the Company believes that the final outcome
of such matters will not have a material adverse effect on its financial
position and results of operations or cash flows.


<p><strong>NOTE 14--SUBSEQUENT EVENT:</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;  On July 27, 1999, the Company signed a definitive agreement to acquire SMC
Kaifa (Holdings) Ltd., for a total purchase price of 697,000 shares of its
Common Stock and cash of $12,000,000. The Company estimates that the purchase
will result in approximately $36,000,000 of goodwill and other intangible assets
which will be amortized over 3 years. The closing of the transaction is subject
to several conditions, including required governmental approvals. The Company
cannot be certain that the acquisition will be completed.


<p><strong>NOTE 15--ACQUISITION BY JDS UNIPHASE CORPORATION (UNAUDITED)</strong></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;On January 17, 2000, the Company entered into a definitive agreement to be
acquired by JDS Uniphase Corporation for common stock valued at approximately
$15.5 billion. The acquisition is subject to regulatory approval and approval by
the Company's stockholders. Upon closing of the acquisition, the Company will
exchange each share of its outstanding common stock for 74.1 million shares of
common stock of JDS Uniphase Corporation. In addition, JDS Uniphase will issue
options in exchange for outstanding options of the Company with the number of
shares and the exercise prices appropriately adjusted by the exchange ratio. If
the acquisition is completed as expected, transaction costs incurred by E-TEK
estimated at approximately $30 million will be expensed on the date prior to
closing of the transaction.


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>


<p align="center"><strong>
                      Pro Forma Financial Information
</strong>
<p><strong>Item 7.</strong>     Financial Statements, Pro Forma Information and Exhibits
(Continued)

<p>(b)  Pro Forma Financial Information

<p>On January 17, 2000, E-TEK agreed to merge with JDS Uniphase Corporation in a
transaction accounted for as a purchase.  After the merger, E-TEK will be
operated as a wholly-owned subsidiary of JDS Uniphase.

<p>The following unaudited pro forma financial statements reflect the issuance of
74,134,500 JDS Uniphase common shares for all the outstanding E-TEK shares as of
September 30, 1999 using the exchange ratio of 1.1 for each E-TEK common share as specified in the merger agreement and an
average market price per JDS Uniphase common share of $190.325 per share.  The
average market price per share of JDS Uniphase common share is preliminary and is
based on the average closing price for a range of trading days (January 10
through January 17, 2000) around the announcement date of the merger.  For
accounting purposes, the final average market price will be based on a date range using JDS Uniphase's historical practice and will
encompass January 10 through January 24, 2000. The actual number of JDS
Uniphase common shares to be issued will depend on the actual number of E-TEK
common shares outstanding on the date the merger closes. In addition, JDS Uniphase will
assume all E-TEK options with the number of shares and the exercise price appropriately
adjusted by the exchange ratio.  Based on the total number of E-TEK options outstanding
at September 30, 1999, JDS Uniphase would  issue options to purchase 7,755,020 JDS
Uniphase common shares at a weighted  average exercise price of $23.70.  The actual
number of options granted will depend on the actual number of E-TEK options outstanding
on the date the merger closes. The fair value of the options, currently estimated at
$1.4 billion, as well as estimated direct transaction expenses of $40 million, have been
included as a part of the total estimated purchase cost. The completion of the merger is
conditioned upon regulatory approvals, as well as approval by E-TEK's stockholders.

<p>In November 1999, JDS Uniphase signed a definitive agreement to acquire Optical
Coating Laboratory, Inc. (OCLI) in a transaction accounted for as a purchase.
The OCLI merger has received all the necessary regulatory approvals and is only
contingent upon OCLI shareholder vote scheduled for February 4, 2000.

<p>The following unaudited pro forma financial statements reflect the impact of (i)
the merger between E-TEK and JDS Uniphase, and (ii) the mergers between E-TEK,
Optical Coating Laboratory, Inc. (OCLI) and JDS Uniphase.


<p><strong>PRO FORMA FINANCIAL STATEMENTS OF E-TEK AND JDS UNIPHASE COMBINED</strong></p>


<p>Effective June 30, 1999, Uniphase Corporation combined its operations with JDS
FITEL Inc. to form JDS Uniphase Corporation in a transaction accounted for as a
purchase. Accordingly, the historical balance sheet of JDS Uniphase as of June
30, 1999 includes the financial position of JDS FITEL Inc. as of that date, but
the historical statement of operations for JDS Uniphase for the year ended June
30, 1999 does not include the results of operations for JDS FITEL Inc. for that
period.

<p>The Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
of JDS Uniphase and E-TEK for the fiscal year ended June 30, 1999 is based on the
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations of
JDS Uniphase included in form 8-K/A filed November 3, 1999 (combining Uniphase
and JDS FITEL Inc.) after giving effect to the merger with E-TEK under the
purchase method of accounting and the assumptions and adjustments described in
the accompanying Notes to the Unaudited Pro Forma Condensed Combined Consolidated
Financial Statements of JDS Uniphase and E-TEK.  E-TEK has the same fiscal periods as
JDS Uniphase.

<p>The Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
of JDS Uniphase and E-TEK for the three months ended September 30, 1999 and the
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheets at September
30, 1999 are based on the historical financial statements of JDS Uniphase and E-TEK,
after giving effect to the merger with E-TEK under the purchase method of
accounting and the assumptions and adjustments described in the accompanying
Notes to the Unaudited Pro Forma Condensed Combined Consolidated Financial
Statements of JDS Uniphase and E-TEK.

<p>JDS Uniphase acquired AFC Technologies in August 1999, Ramar Corporation in
October 1999, EPITAXX, Inc. in November 19999 and SIFAM Limited and
Oprel Technologies, Inc. in December 1999.  The Unaudited Pro Forma
Condensed Combined Consolidated Financial Statements of JDS Uniphase and E-TEK do
not include these acquisitions since, collectively, they are not significant to
JDS Uniphase.

<p>The Unaudited Pro Forma Condensed Combined Consolidated Financial Statements
should be read in conjunction with the historical financial statements of JDS
Uniphase and E-TEK and the Unaudited Pro Forma Condensed Combined Consolidated
Statement of Operations of JDS Uniphase included in Form 8-K/A filed November 3,
1999 (combining Uniphase Corporation and JDS FITEL Inc.)

<p>The Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
of JDS Uniphase and E-TEK are presented as if the combination had taken place on
July 1, 1998. The Unaudited Pro Forma Condensed Combined Consolidated Balance
Sheet of JDS Uniphase and E-TEK is presented to give effect to the proposed
merger as if it occurred on September 30, 1999. The pro forma information does
not purport to be indicative of the results that would have been reported if the
above transaction had been in effect for the period presented or which may result
in the future.


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                       Statement of Operations<br>
                          JDS Uniphase and E-TEK<br>
                      Year ended June 30, 1999<br>
                 (in thousands, except per share data)
</strong>


<pre>

                                 JDS                                Pro Forma
                              Uniphase                                 JDS
                             (Pro Forma                 Pro          Uniphase
                             Uniphase and              Forma           and
                              JDS FITEL               Adjust-         E-TEK
                              Combined)    E-TEK       ments         Combined
                             ----------- ---------- ------------   ------------
Net sales...................   $587,889   $172,664        ($100)(B)   $760,453
Cost of sales...............    284,358     85,123          (50)(B)    369,431
                             ----------- ---------- ------------   ------------
  Gross profit..............    303,531     87,541          (50)       391,022

Operating expenses:
  Research and development..     52,544     14,687       --             67,231
  Selling, general, and
   administrative...........     71,488     24,516       --             96,004
  Amortization of purchased
   intangibles..............    687,502        300    3,004,998 (A)  3,692,800
  Acquired in-process
   research and development.    210,400      4,207       --            214,607
  Other operating expenses..      6,759       --         --              6,759
                             ----------- ---------- ------------   ------------
Total operating expenses....  1,028,693     43,710    3,004,998      4,077,401
                             ----------- ---------- ------------   ------------
Income (loss) from
 operations.................   (725,162)    43,831   (3,005,048)    (3,686,379)
Interest and other
 income, net................     10,395      2,211       --             12,606
                             ----------- ---------- ------------   ------------
Income (loss) before
 income taxes...............   (714,767)    46,042   (3,005,048)    (3,673,773)
Income tax expense
 (benefit)..................     (2,511)    18,417      (36,593)(C)    (20,687)
                             ----------- ---------- ------------   ------------
Net income (loss)...........   (712,256)    27,625   (2,968,455)    (3,653,086)
Accretion on preferred
  stock.....................       --        3,882       --              3,882
                             ----------- ---------- ------------   ------------
Net income (loss)
  available to common
   stockholders.............  ($712,256)   $23,743  ($2,968,455)   ($3,656,968)
                             =========== ========== ============   ============

Basic earnings (loss)
 per share..................     ($2.24)     $0.55              (D)    ($10.01)
                             =========== ==========                ============
Dilutive earnings (loss)
 per share..................     ($2.24)     $0.45              (D)    ($10.01)
                             =========== ==========                ============
Average number of shares
 outstanding................    317,776     43,152                     365,243
                             =========== ==========                ============
Average number of shares
 outstanding assuming
 dilution ..................    317,776     61,746                     365,243
                             =========== ==========                ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                       Statement of Operations<br>
                          JDS Uniphase and E-TEK<br>
                    Three Months ended September 30, 1999<br>
                 (in thousands, except per share data)
</strong>


<pre>

                                                                    Pro Forma
                                                                       JDS
                                                        Pro          Uniphase
                                                       Forma           and
                                 JDS                  Adjust-         E-TEK
                              Uniphase     E-TEK       ments         Combined
                             ----------- ---------- ------------   ------------
Net sales...................   $230,059    $60,342     $ --            290,401
Cost of sales...............    125,214     30,181       --            155,395
                             ----------- ---------- ------------   ------------
  Gross profit..............    104,845     30,161       --            135,006

Operating expenses:
  Research and development..     17,248      4,913       --             22,161
  Selling, general, and
   administrative...........     27,857      7,622       --             35,479
  Amortization of purchased
   intangibles..............    172,884      6,265      751,249 (A)    930,398
  Acquired in-process
   research and development.         --      1,630       --              1,630
                             ----------- ---------- ------------   ------------
Total operating expenses....    217,989     20,430      751,249        989,668
                             ----------- ---------- ------------   ------------
Income (loss) from
 operations.................   (113,144)     9,731     (751,249)      (854,662)
Interest and other
 income, net................      5,488      1,047       --              6,535
                             ----------- ---------- ------------   ------------
Income (loss) before
 income taxes...............   (107,656)    10,778     (751,249)      (848,127)
Income tax expense
 (benefit)..................      6,264      4,096       (9,148)(C)      1,212
                             ----------- ---------- ------------   ------------
Net income (loss)...........  ($113,920)    $6,682    ($742,101)     ($849,339)
                             =========== ========== ============   ============

Basic earnings (loss)
 per share..................     ($0.34)     $0.11              (D)     ($2.10)
                             =========== ==========                ============
Dilutive earnings (loss)
 per share..................     ($0.34)     $0.10              (D)     ($2.10)
                             =========== ==========                ============
Average number of shares
 outstanding................    336,930     61,938                     405,062
                             =========== ==========                ============
Average number of shares
 outstanding assuming
 dilution ..................    336,930     67,322                     405,062
                             =========== ==========                ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                             Balance Sheet<br>
                          JDS Uniphase and E-TEK<br>
                            September 30, 1999<br>
                                (in thousands)
</strong>


<pre>

                                                                    Pro Forma
                                                                       JDS
                                                        Pro          Uniphase
                                                       Forma           and
                                 JDS                  Adjust-         E-TEK
                              Uniphase     E-TEK       ments         Combined
                             ----------- ---------- ------------   ------------
Assets:
Cash and cash equivalents..    $495,613   $178,718     ($40,000)(A)   $634,331
Short-term investments.....     463,631       --         --            463,631
Accounts receivable........     140,175     35,996       --            176,171
Inventories................      98,034     35,156       --            133,190
Other current assets.......      21,260     19,064       --             40,324
                             ----------- ---------- ------------   ------------
   Total current assets....   1,218,713    268,934      (40,000)     1,447,647

Property, plant, and                                                         0
  equipment, net...........     209,222     73,971       --            283,193
Intangible assets,                                                           0
  including goodwill.......   3,311,309     90,543   14,883,579 (A) 18,285,431
Other assets...............       6,212     12,666      273,000 (A)    291,878
                             ----------- ---------- ------------   ------------
   Total assets............  $4,745,456   $446,114  $15,116,579    $20,308,149
                             =========== ========== ============   ============

Liabilities and
Stockholders' Equity:
Current portion of
 long-term obligations.....      $   --     $8,285     $ --             $8,285
Accounts payable...........      51,671     21,261       --             72,932
Other accrued expenses.....      97,113     40,192       --            137,305
                             ----------- ---------- ------------   ------------
   Total current
     liabilities...........     148,784     69,738       --            218,522

Long-term obligations......          --     19,602       --             19,602
Other non-current
 liabilities...............       8,295       --         --              8,295
Deferred tax liabilities...     304,012     18,802      271,816 (C)    594,630
                                                       (337,972)(A)
                                                       (297,100)(A)
Stockholders' equity.......   4,284,365    337,972   15,479,835 (A) 19,467,100
                             ----------- ---------- ------------   ------------
   Total liabilities and
     stockholders' equity..  $4,745,456   $446,114  $15,116,579    $20,308,149
                             =========== ========== ============   ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>



<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
                         Notes to Unaudited Pro Forma<br>
            Condensed Combined Consolidated Financial Statements<br>
                           Of JDS Uniphase and E-TEK
</strong>

<p>(A)     On January 17, 2000, E-TEK agreed to merge with JDS Uniphase, in a
transaction accounted for as a purchase. The total purchase price of $15.5
billion included consideration of 74.1 million shares of common stock, the
assumption of 7.0 million stock options valued at $1.4 billion and estimated
direct costs of $40 million.

<p>The estimated total purchase cost of the E-TEK merger is as follows (in
thousands):

<pre>

     Value of securities issued................    $14,109,649
     Assumption of E-TEK options...............      1,370,185
                                                   ------------
                                                    15,479,834
     Estimated transaction costs and expenses..         40,000
                                                   ------------
     Total purchase cost.......................    $15,519,834
                                                   ============

</pre>



<p>The purchase price allocation, which is preliminary and therefore subject to
change based on the Company's final analysis, is as follows:

<pre>

                                                              Annual       Useful
                                                 Amount    Amortization    Lives
                                              ------------ ------------ ------------
Purchase Price Allocation:
  Tangible net assets.....................       $247,429          n/a          n/a
  Carrying value of equity investment.....        273,000          n/a          n/a
  Intangible assets acquired:
   Existing technology....................         68,900       22,966       3 years
   Core technology........................        259,700       51,940       5 years
   Trademark and tradename................         58,200       11,640       5 years
   Assembled workforce....................         19,740        4,935     3-5 years
   In-process research and development....        297,100          n/a          n/a
   Goodwill...............................     14,567,581    2,913,517       5 years
   Deferred tax liabilities...............       (271,816)         n/a
                                              ------------ ------------
         Total estimated purchase
             price allocation.............    $15,519,834   $3,004,998
                                              ============ ============

</pre>

<p>PricewaterhouseCoopers LLP ("PwC") performed an allocation of the total purchase
price of E-TEK to its individual assets. Of the total purchase price, $297.1
million has been allocated to in-process research and development and will be
charged to expense in the period the transaction closes.  Due to their non-
recurring nature, the in-process research and development attributed to the E-TEK
transaction and the transaction costs incurred by E-TEK estimated at $30 million
have been excluded in the pro forma statements of operations. The remaining
purchase price has been allocated to specifically identifiable assets acquired,
including an increase of $273 million in the carrying value of certain
investments under the equity method of accounting.

<p>After allocating value to the in-process research and development projects and E-TEK's
tangible assets, specific intangible assets were then identified and
valued. The related amortization of the identifiable intangible assets is
reflected as a pro forma adjustment to the Unaudited Pro Forma Condensed Combined
Statements of Operations. The identifiable assets include existing technology,
core technology, trademarks and tradenames, and assembled workforce.

<p>The acquired existing technology, which is comprised of products that are already
technologically feasible, includes products such as wavelength division
multplexing ("WDM") components and modules, isolators, couplers, and micro-optic
integrated components.  The Company expects to amortize the acquired existing
technology of approximately $68.9 million on a straight-line basis over an
average estimated remaining useful life of 3 years.

<p>The acquired core technology represents E-TEK trade secrets, patents, and
technologies that are leveraged by the existing products and new product
offerings.  The core technology has been developed through years of experience
designing and manufacturing high quality fiber optic components and modules for
optical networks.  This know-how enables the Company to develop new and improve
existing products, processes, and manufacturing equipment, thereby providing
E-TEK with a distinct advantage over its competitors and providing the Company with
a reputation for technological superiority in the industry. The Company expects
to amortize the proprietary know-how of approximately $259.7 million on a
straight-line basis over an average estimated remaining useful life of 5 years.

<p>The trademarks and trade names include the E-TEK trademark and trade name as well
as all branded E-TEK products such as TIGRA<font size="1"><sup>TM</sup></font size="1">.  The Company expects to amortize
the trademark and trade names of approximately $58.2 million on a straight-line
basis over an estimated remaining useful life of 5 years.

<p>The acquired assembled workforce is comprised of over 1,300 skilled employees
across E-TEK's Administration, Research and Development, Sales and Marketing, and
Manufacturing groups. The Company expects to amortize the assembled workforce of
approximately $19.7 million on a straight-line basis over an estimated remaining
useful life of 3-5 years.

<p>Goodwill, which represents the excess of the purchase price of an investment in
an acquired business over the fair value of the underlying net identifiable
assets, is amortized on a straight-line basis over its estimated remaining useful
life of 5 years.

<p>E-TEK's research and development department is currently developing the following
new products and significant enhancements relating to several of the existing
products that qualify as in-process research and development:

<p><strong>Existing Products:</strong></p>

<p>E-TEK's existing technology is comprised of wideband and dense WDM,
isolators, couplers, and micro-optic integrated components ("MOIC").
There are also isolator, coupler, circulator, and MOIC components that
are utilized in the submarine optical systems market which requires
high reliability and quality.  In the short-term, the majority of
revenue and revenue growth is derived from the WDM product category.
WDM combines or separates light sources of different wavelengths that
are simultaneously transmitted along a single optical fiber.

<p><strong>New Products:</strong></p>


<p>In-process research and development efforts at E-TEK are focused on
multiple product opportunities which include a dispersion equalization
module, optical performance monitoring sub-systems, and erbium-doped
fiber amplifiers.  Other areas of technology under development will
address market needs for attenuators, circulators, configurable
add/drop multiplexers, and pump lasers.  E-TEK'S expertise and
successful track record in developing high performance, reliable
optical components for the telecommunications equipment market will
allow it to meet the evolving needs of its customers.  E-TEK can also
leverage knowledge from its product portfolio to more effectively
design value-added components for advanced optical systems.


<p>These new products vary in terms of percentage of completion from 17 percent to 90 percent
based on research and development costs expended to date relative to the expected
remaining costs to reach technological feasibility. The expected completion dates
of these projects range from March 2000 to October 2000.

<p>(B)     Reflects the elimination of sales between (pro forma) JDS Uniphase and E-TEK.


<p>(C)     The pro forma combined provisions for income taxes do not represent the
amounts that would have resulted had (pro forma) JDS Uniphase and E-TEK filed
consolidated income tax returns during the periods presented. The provision for
income tax includes the amortization of deferred tax liabilities originating from
the transaction.

<p>(D)     The pro forma basic and dilutive net loss per share are based on the
weighted average number of (pro forma) JDS Uniphase common shares outstanding
during each period and weighted average number of E-TEK common shares outstanding
multiplied by the exchange ratio. Dilutive securities including the replacement
E-TEK options are not included in the computation of pro forma dilutive net loss
per share as their effect would be anti-dilutive.



<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>


<p><strong>PRO FORMA FINANCIAL STATEMENTS OF E-TEK, JDS UNIPHASE and OCLI COMBINED</strong></p>

<p>In November 1999, JDS Uniphase signed a definitive agreement to acquire Optical
Coating Laboratory, Inc. (OCLI) in a transaction accounted for as a purchase.
The OCLI merger has received all the necessary regulatory approvals and is only
contingent upon OCLI shareholder vote scheduled for February 4, 2000.

<p>Effective June 30, 1999, Uniphase Corporation combined its operations with JDS
FITEL Inc. to form JDS Uniphase Corporation in a transaction accounted for as a
purchase. Accordingly, the historical balance sheet of JDS Uniphase as of June
30, 1999 includes the financial position of JDS FITEL Inc. as of that date, but
the historical statement of operations for JDS Uniphase for the year ended June
30, 1999 does not include the results of operations for JDS FITEL Inc. for that
period.

<p>The Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
of JDS Uniphase, OCLI and E-TEK for the fiscal year ended June 30, 1999 is based
on the Unaudited Pro Forma Condensed Combined Consolidated Statement of
Operations of JDS Uniphase and OCLI included in Form S-4 filed December 22, 1999
(combining Uniphase, JDS FITEL Inc. and OCLI) after giving effect to the merger
with E-TEK under the purchase method of accounting and the assumptions and
adjustments described in the accompanying Notes to the Unaudited Pro Forma
Condensed Combined Consolidated Financial Statements of JDS Uniphase, OCLI and E-TEK.


<p>The Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
of JDS Uniphase, OCLI and E-TEK for the three months ended September 30, 1999 and
the Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet at
September 30, 1999 are based on the Unaudited Pro Forma Condensed Combined
Consolidated Statement of Operations and Balance Sheet of JDS Uniphase included
in Form S-4 filed December 22, 1999 (combining JDS Uniphase and OCLI) and the
historical financial statements of E-TEK, after giving effect to the merger with
E-TEK  under the purchase method of accounting and the assumptions and
adjustments described in the accompanying Notes to the Unaudited Pro Forma
Condensed Combined Consolidated Financial Statements of JDS Uniphase, OCLI and E-TEK.


<p>The Unaudited Pro Forma Condensed Combined Consolidated Financial Statements of
JDS Uniphase, OCLI and E-TEK should be read in conjunction with the historical
financial statements of JDS Uniphase, OCLI and E-TEK and the Unaudited Pro Forma
Condensed Combined Consolidated Financial Statements of JDS Uniphase and OCLI
included in Form S-4 filed December 22, 1999 (combining JDS Uniphase and OCLI)
and the Unaudited Pro Forma Condensed Combined Consolidated Financial Statements
of JDS Uniphase included in Form 8-K/A filed November 3, 1999 (combining Uniphase
Corporation and JDS FITEL Inc.).

<p>The Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
of JDS Uniphase, OCLI and E-TEK are presented as if the combination had taken
place on July 1, 1998. The Unaudited Pro Forma Condensed Combined Consolidated
Statement of Operations for the three month ended September 30, 1999 combines the
three months ended September 30, 1999 for JDS Uniphase and E-TEK and the three
months ended July 31, 1999 for OCLI. The Unaudited Pro Forma Condensed Combined
Consolidated Statement of Operations for the year ended June 30 ,1999 combines
the year ended June 30, 1999 for pro forma JDS Uniphase, the historical results
of E-TEK and the historical twelve months ended April 30, 1999 for OCLI. The
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet is presented to
give effect to the proposed mergers as if they occurred on September 30, 1999 and
combines the balance sheet for JDS Uniphase and E-TEK at September 30, 1999 with
the balance sheet of OCLI at July 31, 1999. The pro forma information does not
purport to be indicative of the results that would have been reported if the
above transactions had been in effect for the period presented or which may
result in the future.

<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                       Statement of Operations<br>
                          JDS Uniphase, OCLI and E-TEK<br>
                      Year ended June 30, 1999<br>
                 (in thousands, except per share data)
</strong>


<pre>

                              Pro Forma
                                 JDS                                 Pro Forma
                               Uniphase                                 JDS
                              (Uniphase,                 Pro         Uniphase,
                              JDS FITEL                 Forma         OCLI and
                               and OCLI                Adjust-         E-TEK
                              Combined)     E-TEK       ments         Combined
                             ------------ ---------- ------------   ------------
Net sales...................    $794,362   $172,664        ($100)(B)   $966,926
Cost of sales...............     396,313     85,123          (50)(B)    481,386
                             ------------ ---------- ------------   ------------
  Gross profit..............     398,049     87,541          (50)       485,540

Operating expenses:
  Research and development..      71,928     14,687       --             86,615
  Selling, general, and
   administrative...........     118,653     24,516       --            143,169
  Amortization of purchased
   intangibles..............   1,034,144        300    3,004,998 (A)  4,039,442
  Acquired in-process
   research and development.     213,306      4,207       --            217,513
  Other operating expenses..      13,947       --         --             13,947
                             ------------ ---------- ------------   ------------
Total operating expenses....   1,451,978     43,710    3,004,998      4,500,686
                             ------------ ---------- ------------   ------------
Income (loss) from
 operations.................  (1,053,929)    43,831   (3,005,048)    (4,015,146)
Interest and other
 income, net................       7,754      2,211       --              9,965
                             ------------ ---------- ------------   ------------
Income (loss) before
 income taxes...............  (1,046,175)    46,042   (3,005,048)    (4,005,181)
Income tax expense
 (benefit)..................     (17,823)    18,417      (36,593)(C)    (35,999)
Minority interest...........       1,287       --         --              1,287
                             ------------ ---------- ------------   ------------
Net income (loss)...........  (1,029,639)    27,625   (2,968,455)    (3,970,469)
Accretion on preferred
  stock.....................       --        $3,882       --              3,882
                             ------------ ---------- ------------   ------------
Net income (loss)
  available to common
   stockholders............. ($1,029,639)   $23,743  ($2,968,455)   ($3,974,351)
                             ============ ========== ============   ============

Basic earnings (loss)
 per share..................      ($3.03)     $0.55              (D)    ($10.25)
                             ============ ==========                ============
Dilutive earnings (loss)
 per share..................      ($3.03)     $0.45              (D)    ($10.25)
                             ============ ==========                ============
Average number of shares
 outstanding................     340,332     43,152                     387,799
                             ============ ==========                ============
Average number of shares
 outstanding assuming
 dilution ..................     340,332     61,746                     387,799
                             ============ ==========                ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase, OCLI and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                       Statement of Operations<br>
                          JDS Uniphase, OCLI and E-TEK<br>
                    Three Months ended September 30, 1999<br>
                 (in thousands, except per share data)
</strong>


<pre>

                              Pro Forma
                                 JDS                                 Pro Forma
                               Uniphase                                 JDS
                              (Uniphase,                 Pro         Uniphase,
                              JDS FITEL                 Forma         OCLI and
                               and OCLI                Adjust-         E-TEK
                              Combined)     E-TEK       ments         Combined
                             ------------ ---------- ------------   ------------
Net sales...................    $282,447    $60,342     $ --            342,789
Cost of sales...............     150,929     30,181       --            181,110
                             ------------ ---------- ------------   ------------
  Gross profit..............     131,518     30,161       --            161,679

Operating expenses:
  Research and development..      24,671      4,913       --             29,584
  Selling, general, and
   administrative...........      37,535      7,622       --             45,157
  Amortization of purchased
   intangibles..............     259,969      6,265      751,249 (A)  1,017,483
  Acquired in-process
   research and development.         --       1,630       --              1,630
                             ------------ ---------- ------------   ------------
Total operating expenses....     322,175     20,430      751,249      1,093,854
                             ------------ ---------- ------------   ------------
Income (loss) from
 operations.................    (190,657)     9,731     (751,249)      (932,175)
Interest and other
 income, net................       5,734      1,047       --              6,781
                             ------------ ---------- ------------   ------------
Income (loss) before
 income taxes...............    (184,923)    10,778     (751,249)      (925,394)
Income tax expense
 (benefit)..................       4,497      4,096       (9,148)(C)       (555)
                             ------------ ---------- ------------   ------------
Net income (loss)...........   ($189,420)    $6,682    ($742,101)     ($924,839)
                             ============ ========== ============   ============

Basic earnings (loss)
 per share..................      ($0.52)     $0.11              (D)     ($2.15)
                             ============ ==========                ============
Dilutive earnings (loss)
 per share..................      ($0.52)     $0.10              (D)     ($2.15)
                             ============ ==========                ============
Average number of shares
 outstanding................     362,251     61,938                     430,383
                             ============ ==========                ============
Average number of shares
 outstanding assuming
 dilution ..................     362,251     67,322                     430,383
                             ============ ==========                ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase, OCLI and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
             Unaudited Pro Forma Condensed Combined Consolidated<br>
                             Balance Sheet<br>
                          JDS Uniphase, OCLI and E-TEK<br>
                            September 30, 1999<br>
                                (in thousands)
</strong>


<pre>

                              Pro Forma
                                 JDS                                 Pro Forma
                               Uniphase                                 JDS
                              (Uniphase,                 Pro         Uniphase,
                              JDS FITEL                 Forma         OCLI and
                               and OCLI                Adjust-         E-TEK
                              Combined)     E-TEK       ments         Combined
                             ------------ ---------- ------------   ------------
Assets:
Cash and cash equivalents..     $607,631   $178,718     ($40,000)(A)   $746,349
Short-term investments.....      463,631       --         --            463,631
Accounts receivable........      174,846     35,996       --            210,842
Inventories................      116,978     35,156       --            152,134
Other current assets.......       30,455     19,064       --             49,519
                             ------------ ---------- ------------   ------------
   Total current assets....    1,393,541    268,934      (40,000)     1,622,475

Property, plant, and
  equipment, net...........      335,465     73,971       --            409,436
Intangible assets,
  including goodwill.......    5,868,738     90,543   14,883,579 (A) 20,842,860
Other assets...............        7,811     12,666      273,000 (A)    293,477
                             ------------ ---------- ------------   ------------
   Total assets............   $7,605,555   $446,114  $15,116,579    $23,168,248
                             ============ ========== ============   ============

Liabilities and
Stockholders' Equity:
Current portion of
 long-term obligations.....       $4,790     $8,285     $ --            $13,075
Accounts payable...........       57,816     21,261       --             79,077
Other accrued expenses.....      114,874     40,192       --            155,066
                             ------------ ---------- ------------   ------------
   Total current
     liabilities...........      177,480     69,738       --            247,218

Long-term obligations......       54,935     19,602       --             74,537
Other non-current
 liabilities...............       11,351       --         --             11,351
Deferred tax liabilities...      502,148     18,802      271,816 (C)    792,766
                                                        (337,972)(A)
                                                        (297,100)(A)
Stockholders' equity.......    6,859,641    337,972   15,479,835 (A) 22,042,376
                             ------------ ---------- ------------   ------------
   Total liabilities and
     stockholders' equity..   $7,605,555   $446,114  $15,116,579    $23,168,248
                             ============ ========== ============   ============

</pre>

<P ALIGN="CENTER"><strong>
See accompanying notes to JDS Uniphase, OCLI and E-TEK unaudited pro forma
condensed combined consolidated financial statements
</strong>




<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>
<P ALIGN="CENTER"><strong>
Notes to Unaudited Pro Forma<br>
Condensed Combined Consolidated Financial Statements<br>
Of JDS Uniphase, OCLI and E-TEK
</strong>


<p>(A)     On January 17, 2000, E-TEK agreed to merge with JDS Uniphase, in a
transaction accounted for as a purchase. The total purchase price of $15.5
billion included consideration of 74.1 million shares of common stock, the
assumption of 7.0 million stock options valued at $1.4 billion and estimated
direct costs of $40 million.

<p>The estimated total purchase cost of the E-TEK merger is as follows (in
thousands):

<pre>

     Value of securities issued................    $14,109,649
     Assumption of E-TEK options...............      1,370,185
                                                   ------------
                                                    15,479,834
     Estimated transaction costs and expenses..         40,000
                                                   ------------
     Total purchase cost.......................    $15,519,834
                                                   ============

</pre>



<p>The purchase price allocation, which is preliminary and therefore subject to
change based on the Company's final analysis, is as follows:


<pre>

                                                              Annual       Useful
                                                 Amount    Amortization    Lives
                                              ------------ ------------ ------------
Purchase Price Allocation:
  Tangible net assets.....................       $247,429          n/a          n/a
  Carrying value of equity investment.....        273,000          n/a          n/a
  Intangible assets acquired:
   Existing technology....................         68,900       22,966       3 years
   Core technology........................        259,700       51,940       5 years
   Trademark and tradename................         58,200       11,640       5 years
   Assembled workforce....................         19,740        4,935     3-5 years
   In-process research and development....        297,100          n/a          n/a
   Goodwill...............................     14,567,581    2,913,517       5 years
   Deferred tax liabilities...............       (271,816)         n/a
                                              ------------ ------------
         Total estimated purchase
             price allocation.............    $15,519,834   $3,004,998
                                              ============ ============

</pre>

<p>PricewaterhouseCoopers LLP ("PwC") performed an allocation of the total purchase
price of E-TEK to its individual assets. Of the total purchase price, $297.1
million has been allocated to in-process research and development and will be
charged to expense in the period the transaction closes.  Due to their non-
recurring nature, the in-process research and development attributed to the E-TEK
transaction and the transaction costs incurred by E-TEK estimated at $30 million
have been excluded in the pro forma statements of operations. The remaining
purchase price has been allocated to specifically identifiable assets acquired,
including an increase of $273 million in the carrying value of certain
investments under the equity method of accounting.

<p>After allocating value to the in-process research and development projects and E-TEK's
tangible assets, specific intangible assets were then identified and
valued. The related amortization of the identifiable intangible assets is
reflected as a pro forma adjustment to the Unaudited Pro Forma Condensed Combined
Statements of Operations. The identifiable assets include existing technology,
core technology, trademarks and tradenames, and assembled workforce.

<p>The acquired existing technology, which is comprised of products that are already
technologically feasible, includes products such as wavelength division
multplexing ("WDM") components and modules, isolators, couplers, and micro-optic
integrated components.  The Company expects to amortize the acquired existing
technology of approximately $68.9 million on a straight-line basis over an
average estimated remaining useful life of 3 years.

<p>The acquired core technology represents E-TEK trade secrets, patents, and
technologies that are leveraged by the existing products and new product
offerings.  The core technology has been developed through years of experience
designing and manufacturing high quality fiber optic components and modules for
optical networks.  This know-how enables the Company to develop new and improve
existing products, processes, and manufacturing equipment, thereby providing E-TEK
with a distinct advantage over its competitors and providing the Company with
a reputation for technological superiority in the industry. The Company expects
to amortize the proprietary know-how of approximately $259.7 million on a
straight-line basis over an average estimated remaining useful life of 5 years.

<p>The trademarks and trade names include the E-TEK trademark and trade name as well
as all branded E-TEK products such as TIGRA<font size="1"><sup>TM</sup></font size="1">.  The Company expects to amortize
the trademark and trade names of approximately $58.2 million on a straight-line
basis over an estimated remaining useful life of 5 years.

<p>The acquired assembled workforce is comprised of over 1,300 skilled employees
across E-TEK's Administration, Research and Development, Sales and Marketing, and
Manufacturing groups. The Company expects to amortize the assembled workforce of
approximately $19.7 million on a straight-line basis over an estimated remaining
useful life of 3-5 years.

<p>Goodwill, which represents the excess of the purchase price of an investment in
an acquired business over the fair value of the underlying net identifiable
assets, is amortized on a straight-line basis over its estimated remaining useful
life of 5 years.

<p>E-TEK's research and development department is currently developing the following
new products and significant enhancements relating to several of the existing
products that qualify as in-process research and development:

<p><strong>Existing Products:</strong></p>

<p>E-TEK's existing technology is comprised of wideband and dense WDM,
isolators, couplers, and micro-optic integrated components ("MOIC").
There are also isolator, coupler, circulator, and MOIC components that
are utilized in the submarine optical systems market which requires
high reliability and quality.  In the short-term, the majority of
revenue and revenue growth is derived from the WDM product category.
WDM combines or separates light sources of different wavelengths that
are simultaneously transmitted along a single optical fiber.

<p><strong>New Products:</strong></p>


<p>In-process research and development efforts at E-TEK are focused on
multiple product opportunities which include a dispersion equalization
module, optical performance monitoring sub-systems, and erbium-doped
fiber amplifiers.  Other areas of technology under development will
address market needs for attenuators, circulators, configurable
add/drop multiplexers, and pump lasers.  E-TEK'S expertise and
successful track record in developing high performance, reliable
optical components for the telecommunications equipment market will
allow it to meet the evolving needs of its customers.  E-TEK can also
leverage knowledge from its product portfolio to more effectively
design value-added components for advanced optical systems.


<p>These new products vary in terms of percentage of completion from 17 percent to 90 percent
based on research and development costs expended to date relative to the expected
remaining costs to reach technological feasibility. The expected completion dates
of these projects range from March 2000 to October 2000.

<p>(B)     Reflects the elimination of sales between (pro forma) JDS Uniphase and E-TEK.


<p>(C)     The pro forma combined provisions for income taxes do not represent the
amounts that would have resulted had (pro forma) JDS Uniphase and E-TEK filed
consolidated income tax returns during the periods presented. The provision for
income tax includes the amortization of deferred tax liabilities originating from
the transaction.

<p>(D) The pro forma basic and dilutive net loss per share are based on the
weighted average number of (pro forma) JDS Uniphase common shares
outstanding during each period and weighted average number of E-TEK common
shares outstanding multiplied by the exchange ratio. Dilutive securities
including the replacement E-TEK options are not included in the computation
of pro forma dilutive net loss per share as their effect would be anti-
dilutive.

<p><strong>Item 7.</strong> Financial Statements, Pro Forma Information and Exhibits (continued)</p>

<p>(C) Exhibits
<p>&nbsp;&nbsp;&nbsp;&nbsp;23.1    Consent of PricewaterhouseCoopers LLP.
<p>&nbsp;&nbsp;&nbsp;&nbsp;99.1    Press release dated January 17, 2000.
<p>&nbsp;&nbsp;&nbsp;&nbsp;99.2    Agreement and Plan of Reorganization and Merger.
<p>&nbsp;&nbsp;&nbsp;&nbsp;99.3    Company Stock Option Agreement.
<p>&nbsp;&nbsp;&nbsp;&nbsp;99.4    Voting Agreement.


<p>The documents listed below have been filed by E-TEK under the Exchange Act with
the Commission and are incorporated herein by reference:

<UL>

<p><LI> E-TEK's Quarterly Report on Form 10-Q for the quarter ended September
30, 1999.
</UL>



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<p align="center"><strong>
                                   SIGNATURES
</strong></p>
<p>     Pursuant to the requirement of the Security Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<P>
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                                 JDS Uniphase Corporation
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    <TD>By:&nbsp;</TD>
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                                                /s/ Anthony R. Muller
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              Anthony R. Muller
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    <TD>&nbsp;</TD>
    <TD align=left><I>
                                        Senior Vice President of Finance
                                         and CFO
  </I></TD></TR></TABLE></P>


<p>Date: January 18, 2000

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<TYPE>EX-23.1
<SEQUENCE>2
<DESCRIPTION>INDEPENDENT AUDITORS' CONSENT
<TEXT>

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                                                            EXHIBIT 23.1



<p align="center"><strong>
                         CONSENT OF INDEPENDENT ACCOUNTANTS
</strong></p>


<p>We hereby consent to the use in this Report on Form 8-K of our report dated
July 20, 1999, except as to Note 14, which is as of July 27, 1999, relating to
the financial statements of E-TEK Dynamics, Inc. as of June 30, 1998 and 1999
and for each of the three years in the period ended June 30, 1999, which report
appears in this Report on Form 8-K.


<p>/s/ PricewaterhouseCoopers LLP

<p>San Jose, California<br>
January 17, 2000










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<TYPE>EX-99.1
<SEQUENCE>3
<DESCRIPTION>PRESS RELEASE DATED JANUARY 17, 2000.
<TEXT>

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<FONT SIZE=3>
</FONT><B><FONT SIZE=4><P ALIGN="CENTER">JDS Uniphase and E-TEK Dynamics Agree
to $15 Billion Merger</P>
</B></FONT>
<B><P ALIGN="JUSTIFY">San Jose, Calif., and Nepean, Ontario, January 17, 2000
</B>- JDS Uniphase Corporation (NASDAQ: JDSU; TSE: JDU) and E-TEK Dynamics Inc.
(NASDAQ: ETEK) announced today the signing of a definitive merger agreement
valued at approximately $15 billion based on January 14, 2000 closing stock
prices.</P>
<P ALIGN="JUSTIFY">The merger agreement provides for the exchange of 1.1 shares
of JDS Uniphase common stock for each common share of E-TEK.  Completion of the
transaction is subject to customary closing conditions, including an E-TEK
stockholders' vote and regulatory approvals.  Following completion of the
transaction, E-TEK will operate as a wholly-owned subsidiary of JDS Uniphase.
</P>
<P ALIGN="JUSTIFY">The companies are proposing to merge in response to
unprecedented growth in the telecommunications industry today.  As a result of
the explosive demand for bandwidth, service providers have accelerated
deployment of fiberoptic systems in their networks.  To meet these aggressive
deployment plans, systems manufacturers are looking both internally and to
merchant optical component and module suppliers to expand production, shorten
development cycles and provide new products and functionalities.  </P>
<P ALIGN="JUSTIFY">The merger brings together the complementary strengths of JDS
Uniphase and E-TEK Dynamics and is expected to enable a more rapid scaling of
operations bringing greater volume and a broader range of products to customers
faster.  One of the many expected benefits of the merger will be the combination
of E-TEK's packaging technology and capacity with JDS Uniphase's optical filter
capability and supply which was enhanced by its pending merger with OCLI. </P>
<P ALIGN="JUSTIFY">In addition to the merger, the companies also announced the
signing of a mutual supply agreement in order to immediately increase the supply
of certain of the companies' products to customers.</P>
<P ALIGN="JUSTIFY">Kevin Kalkhoven, JDS Uniphase Co-Chairman and CEO stated,
&quot;We are very pleased to be joining E-TEK with JDS Uniphase.  As a combined
entity, we expect to have deeper resources to continue our strategy of expanding
our scale and scope to enable the industry to fulfill the optical promise of
unlimited bandwidth.&quot; </P>
<P ALIGN="JUSTIFY">Michael Fitzpatrick, E-TEK Chairman, President and CEO added,
&quot;We are very excited about the merger of our two companies.  By joining
together, we believe we will eliminate inefficiencies in the supply chain,
allowing us to deliver more products to our customers.  In doing so, we hope to
catalyze the evolution of optical networking.&quot;</P>
<P ALIGN="JUSTIFY">Jozef Straus, JDS Uniphase, Co-Chairman, President and COO
commented, &quot;Today's announcement marks the beginning of a great partnership
between two companies with a common passion for optical networking. We strongly
believe that our combined manufacturing capacity and product innovation
capability will strengthen our ability to meet and exceed our customer
expectations.&quot;</P>
<P ALIGN="JUSTIFY">E-TEK has approximately 2,450 employees and reported revenues
of $72.5 million in its second quarter ended January 1, 2000.  JDS Uniphase has
over 8,200 employees and reported sales of $230.1 million in its first quarter
ended September 30, 1999. </P>
<P ALIGN="JUSTIFY">E-TEK Dynamics, Inc., headquartered in San Jose, Calif., is a
leader in the design and manufacturing of high quality passive components and
modules for fiberoptic systems. E-TEK's wavelength division multiplexers
("WDMs") are designed to increase the bandwidth capacity of new and existing
fiberoptic networks. Other E-TEK components, including isolators, couplers and
integrated optics, are important in enabling optical communications systems.
These products are utilized in terrestrial and submarine long-haul fiberoptic
networks as well as in emerging short-haul applications, such as metropolitan
area networks. More information on E-TEK is available at www.e-tek.com. </P>
<P ALIGN="JUSTIFY">JDS Uniphase, headquartered in San Jose, Calif., and Nepean,
Ontario, is a high technology company that designs, develops, manufactures and
distributes a comprehensive range of products for the growing fiberoptic
communications market. These products are deployed by system manufacturers
worldwide to develop advanced optical networks for the telecommunications and
cable television industries. JDS Uniphase Corporation is traded on the Nasdaq
National Market under the symbol JDSU and the exchangeable shares of JDS
Uniphase Canada Ltd. are traded on The Toronto Stock Exchange under the symbol
JDU. More information on JDS Uniphase is available at "http://www.jdsunph.com/".</P>

<P ALIGN="JUSTIFY">The statements contained in this press release that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934.
These statements may be identified by their use of forward-looking terminology
such as &quot;believes&quot; and &quot;expects&quot; and similar words. Such
forward-looking statements include, but are not limited to, statements regarding
the expected benefits of the merger, the expectation that the combined entity
will have deeper resources, and the belief that the merger will strengthen E-
TEK's ability to deliver more products to its customers.  Such forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those projected for both companies. Risks and
uncertainties that could cause actual results to differ materially from such
forward-looking statements include, but are not limited to, factors discussed
from time to time in reports filed by JDS Uniphase Corporation and E-TEK
Dynamics with the Securities and Exchange Commission. The forward-looking
statements contained in this news release are made as of the date hereof and JDS
Uniphase Corporation and E-TEK Dynamics do not assume any obligation to update
the reasons why actual results could differ materially from those projected in
the forward-looking statements.</P>
<P ALIGN="JUSTIFY"></P>
<B><P>For More Information, Please Contact:</P>
</B><FONT SIZE=3><P>Kevin N. Kalkhoven, Co-Chairman and CEO, JDS Uniphase, 408-
434-1800</P>
<P>Anthony R. Muller, Senior Vice President and CFO, JDS Uniphase, 408-434-
1800</P>
<P>Alison Reynders, Investor Relations Manager, E-TEK Dynamics, 408-546-4608</P>
</FONT>
<P ALIGN="JUSTIFY">&nbsp;</P>



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<TYPE>EX-99.2
<SEQUENCE>4
<DESCRIPTION>AGREEMENT AND PLAN OF REORGANIZATION AND MERGER.
<TEXT>

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<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">AGREEMENT AND PLAN OF
REORGANIZATION AND MERGER</P>
</B></FONT><P>This AGREEMENT AND PLAN OF REORGANIZATION AND MERGER, is dated as
of January&nbsp;17, 2000 (this &quot;<B>Agreement</B>&quot;), among JDS UNIPHASE
CORPORATION, a Delaware corporation (&quot;<B>Parent</B>&quot;), RAINBOW
ACQUISITION, INC., a Delaware corporation and a wholly owned subsidiary of
Parent (&quot;<B>Merger Sub</B>&quot;), and E-TEK DYNAMICS, INC., a Delaware
corporation (the &quot;<B>Company</B>&quot;).</P>
<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">WITNESSETH:</P>
</B></FONT><P>WHEREAS, the boards of directors of Parent, Merger Sub and the
Company have each determined that it is advisable and in the best interests of
their respective stockholders for Parent to enter into a strategic business
combination with the Company upon the terms and subject to the conditions set
forth herein;</P>
<P>WHEREAS, in furtherance of such combination, the boards of directors of
Parent, Merger Sub and the Company have each approved the merger (the
&quot;<B>Merger</B>&quot;) of Merger Sub with and into the Company in accordance
with the applicable provisions of the Delaware General Corporation Law (the
&quot;<B>DGCL</B>&quot;), and upon the terms and subject to the conditions set
forth herein;</P>
<P>WHEREAS, concurrently with the execution and delivery of this Agreement and
as a condition and inducement to Parent's willingness to enter into this
Agreement, the Company has entered into a Company Stock Option Agreement dated
as of the date hereof in the form of Exhibit&nbsp;A (the &quot;<B>Stock Option
Agreement</B>&quot;), pursuant to which the Company has granted to Parent an
option to purchase validly issued, fully paid and nonassessable shares of the
common stock of the Company, par value $0.001 per share (the &quot;<B>Company
Common Stock</B>&quot;), in an aggregate amount equal to 19.9% of the
outstanding shares of Company Common Stock as of the date specified therein;</P>
<P>WHEREAS, concurrently with the execution and delivery of this Agreement and
as a condition and inducement to Parent's willingness to enter into this
Agreement, certain stockholders of the Company have entered into voting
agreements with Parent upon the terms and conditions specified therein;</P>
<P>WHEREAS, Parent, Merger Sub and the Company intend that the Merger qualify as
a reorganization under Section&nbsp;368(a) of the Internal Revenue Code of 1986,
as amended (the &quot;<B>Code</B>&quot;), and that, by approving resolutions
authorizing this Agreement, this Agreement be adopted as a plan of
reorganization under Section&nbsp;368(a) of the Code; and</P>
<P>WHEREAS, pursuant to the Merger, each outstanding share of Company Common
Stock (a &quot;<B>Share</B>&quot;) shall be exchanged for the right to receive
the Merger Consideration (as defined in Section&nbsp;1.07(b)), upon the terms
and subject to the conditions set forth herein.</P>
<P>NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:</P>
<OL TYPE="I">

<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697567">THE MERGER</A></LI></P>
<OL>

<LI><A NAME="_Toc472697568"></B></FONT><I>The Merger.</A></LI>
<OL TYPE="a">

</I><LI>At the Effective Time (as defined in Section&nbsp;1.02 hereof), and
subject to and upon the terms and conditions of this Agreement and in accordance
with the DGCL, Merger Sub shall be merged with and into the Company and the
separate corporate existence of Merger Sub shall cease upon the filing of a
certificate of merger with the Secretary of State of the State of Delaware
pursuant to the DGCL.  The Company shall continue as the surviving company being
the successor to all the property, rights, powers, privileges, liabilities and
obligations of both Merger Sub and the Company.  The Company as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
&quot;<B>Surviving Company</B>.&quot;</LI>
<LI>The closing of the Merger (the &quot;<B>Closing</B>&quot;) shall take place
at a time and on a date to be specified by the parties, which shall be no later
than the second business day after satisfaction or waiver of the conditions set
forth in Article&nbsp;VI, unless another time or date is agreed to in writing by
the parties hereto.  The Closing will be held at the offices of Morrison &amp;
Foerster LLP, 425&nbsp;Market Street, San Francisco, California 94105, unless
another place is agreed to in writing by the parties hereto.</LI></OL>

<LI><A NAME="_Toc472697569"><I>Effective Time.</A></LI>
</I><P>  As promptly as practicable after the satisfaction or waiver of the
conditions set forth in Article&nbsp;VI, but in no event later than two business
days thereafter, the parties hereto shall cause the Merger to be consummated by
filing all necessary documentation (the &quot;<B>Merger Documents</B>&quot;),
together with any required related certificates, with the Secretary of State of
the State of Delaware, in such form as required by, and executed in accordance
with the relevant provisions of, the DGCL (the time of such filing being the
&quot;<B>Effective Time</B>&quot;).</P>
<LI><A NAME="_Toc472697570"><I>Effect of the Merger.</A></LI>
</I><P>  At the Effective Time, the effect of the Merger shall be as provided in
this Agreement, the Merger Documents and the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and privileges of
the Company and Merger Sub shall vest in the Surviving Company, and all
liabilities and obligations of the Company and Merger Sub shall become the
liabilities and obligations of the Surviving Company.</P>
<LI><A NAME="_Toc472697571"><I>Certificate of Incorporation and Bylaws.</A></LI>
</I><P>  Unless otherwise determined by Parent prior to the Effective Time, at
the Effective Time the certificate of incorporation and bylaws of Merger Sub, as
in effect immediately prior to the Effective Time shall be the certificate of
incorporation and bylaws of the Surviving Company (the &quot;<B>Certificate of
Incorporation</B>&quot; and &quot;<B>Bylaws</B>&quot;) until thereafter changed
or amended as provided therein or by the DGCL; provided, however, that
Article&nbsp;I of the Certificate of Incorporation shall be amended to read as
follows: &quot;The name of the company is E-TEK Dynamics, Inc.&quot;</P>
<LI><A NAME="_Toc472697572"><I>Directors and Officers.</A></LI>
</I><P>  The directors of Merger Sub immediately prior to the Effective Time
shall be the initial directors of the Surviving Company, each to hold office in
accordance with the Certificate of Incorporation and Bylaws, and the officers of
Merger Sub immediately prior to the Effective Time shall be the initial officers
of the Surviving Company, in each case until their respective successors are
duly elected or appointed and qualified.</P>
<LI><A NAME="_Toc472697573"><I>Merger Consideration; Conversion and Cancellation
of Securities.</A></LI>
</I><P>  At the Effective Time, by virtue of the Merger and without any action
on the part of Parent, Merger Sub, the Company or the holders of any of the
Shares:</P>
<OL TYPE="a">

<I><LI>Conversion of Securities</I>.  Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section&nbsp;1.06(b) and any Dissenting Shares as defined in
Section&nbsp;1.09) shall be converted, subject to Section&nbsp;1.06(f), into the
right to receive 1.1 shares (the &quot;<B>Exchange Ratio</B>&quot;) of validly
issued, fully paid and nonassessable shares of Parent Common Stock, $0.001 par
value per share (&quot;<B>Parent Common Shares</B>&quot;).</LI>
<I><LI>Cancellation</I>.  Each Share owned by the Company, Parent, Merger Sub or
any direct or indirect wholly owned subsidiary of the Company or Parent
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be canceled and retired
without payment of any consideration therefor and cease to exist.</LI>
<I><LI>Assumption of Stock Options</I>.</LI>
<OL TYPE="i">

<LI>At the Effective Time, each outstanding option to purchase Company Common
Stock (a &quot;<B>Stock Option</B>&quot;) granted under the Company's 1998 Stock
Plan, 1998 Director Option Plan, 1997 Equity Incentive Plan and 1997 Executive
Equity Incentive Plan (collectively, the &quot;<B>Company Stock Option
Plans</B>&quot;), whether vested or unvested, shall be deemed assumed by Parent
and deemed to constitute an option to acquire, on the same terms and conditions
as were applicable under such Stock Option prior to the Effective Time, the
number (rounded down to the nearest whole number) of Parent Common Shares as the
holder of such Stock Option would have been entitled to receive pursuant to the
Merger had such holder exercised such option in full immediately prior to the
Effective Time (not taking into account whether or not such option was in fact
exercisable), at a price per share rounded up to the nearest whole cent equal to
(x) the aggregate exercise price for Company Common Stock otherwise purchasable
pursuant to such Stock Option divided by (y) the number of Parent Common Shares
deemed purchasable pursuant to such Stock Option; provided, however, that the
vesting schedule of the assumed options shall continue to be determined by
reference to the applicable Company Stock Option Plan.</LI>
<LI>As soon as practicable after the Effective Time, Parent shall deliver to
each holder of an outstanding Stock Option an appropriate notice setting forth
such holder's rights pursuant thereto and such Stock Option shall continue in
effect on the same terms and conditions (including any applicable anti-dilution
provisions, and subject to the adjustments required by this Section&nbsp;1.06(c)
after giving effect to the Merger).  Parent shall comply with the terms of all
such Stock Options and ensure, to the extent required by, and subject to the
provisions of, the applicable Company Stock Option Plan that any Stock Options
which qualified for special tax treatment prior to the Effective Time continue
to so qualify after the Effective Time.  Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of Parent Common Shares
for delivery pursuant to the terms set forth in this
Section&nbsp;1.06(c).</LI></OL>

<I><LI>Common Stock of Merger Sub</I>.  Each share of the common stock of Merger
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for a validly issued, fully paid and nonassessable
share of common stock of the Surviving Company.  Each share certificate of
Merger Sub evidencing ownership of any such shares shall evidence, from and
after the Effective Time, ownership of such shares of the Surviving
Company.</LI>
<I><LI>Adjustments to Exchange Ratio</I>.  The Exchange Ratio shall be adjusted
to reflect fully the effect of any share split, reverse split, share dividend
(including any dividend or distribution of securities convertible into Parent
Common Shares or Company Common Stock), reorganization, recapitalization or
other like change with respect to Parent Common Shares or Company Common Stock
occurring or having a record date after the date hereof and prior to the
Effective Time, including without limitation the two-for-one stock split
announced by Parent on January 3, 1999 proposed to be paid March 10, 2000.</LI>
<I><LI>Fractional Shares</I>.  No fraction of a Parent Common Share will be
issued, but in lieu thereof each holder of Company Common Stock who would
otherwise be entitled to a fraction of a Parent Common Share (after aggregating
all fractional Parent Common Shares to be received by such holder) shall receive
from Parent an amount of cash (rounded up to the nearest whole cent), without
interest, equal to the product of (i)&nbsp;such fraction, multiplied by
(ii)&nbsp;the closing price of a Parent Common Share on the Nasdaq National
Market on the last trading day immediately prior to the Effective Time (as
reported in the Wall Street Journal or, if not reported therein, any other
authoritative source).</LI></OL>

<LI><A NAME="_Toc472697574"><I>Exchange of Certificates.</A></LI>
<OL TYPE="a">

<LI>Exchange Agent</I>.  Promptly after the Effective Time, Parent shall supply,
or shall cause to be supplied, to or for the account of a bank or trust company
designated by Parent (the &quot;<B>Exchange Agent</B>&quot;), in trust for the
benefit of the holders of Company Common Stock (other than Dissenting Shares),
for exchange in accordance with this Section 1.07, through the Exchange Agent,
certificates evidencing the Parent Common Shares issuable pursuant to Section
1.06 in exchange for outstanding Shares.  Parent shall promptly make available
to the Exchange Agent from time to time as needed, cash sufficient to pay cash
in lieu of fractional shares.</LI>
<I><LI>Exchange Procedures</I>.  On or prior to the tenth (10) Business Day
after the Effective Time, Parent will instruct the Exchange Agent to mail to
each holder of record of a certificate or certificates which immediately prior
to the Effective Time evidenced outstanding Shares (other than Dissenting
Shares) (the &quot;<B>Certificates</B>&quot;) (i)&nbsp;a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other provisions as
Parent may reasonably specify) and (ii)&nbsp;instructions to effect the
surrender of the Certificates in exchange for the certificates evidencing Parent
Common Shares and, in lieu of any fractional shares thereof, cash pursuant to
Section 1.06(f).  Upon surrender of a Certificate to the Exchange Agent for
cancellation together with such letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor
(A)&nbsp;certificates evidencing that number of whole Parent Common Shares which
such holder has the right to receive in accordance with the Exchange Ratio in
respect of the Shares formerly evidenced by such Certificate, (B)&nbsp;any
dividends or other distributions with respect to Shares to which such holder was
entitled to receive prior to the Effective Time, and (C)&nbsp;cash in lieu of
fractional Parent Common Shares to which such holder is entitled pursuant to
Section&nbsp;1.06(f) (the Parent Common Shares, dividends, distributions and
cash described in clauses (A)-(C) delivered for each Share being, collectively,
the &quot;<B>Merger Consideration</B>&quot;), and the Certificate so surrendered
shall forthwith be canceled.  In the event of a transfer of ownership of Shares
which is not registered in the transfer records of the Company as of the
Effective Time, Parent Common Shares and cash may be issued and paid in
accordance with this Article&nbsp;I to a transferee if the Certificate
evidencing such Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer pursuant to this
Section&nbsp;1.07(b) and by evidence that any applicable stock/share transfer
taxes have been paid.  Until so surrendered, each outstanding Certificate that,
prior to the Effective Time, represented Shares will be deemed from and after
the Effective Time, for all corporate purposes, other than the payment of
dividends, to evidence the ownership of the number of full Parent Common Shares
into which such Shares shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in accordance
with Section&nbsp;1.06.</LI>
<I><LI>Distributions With Respect to Unexchanged Parent Common Shares</I>.  No
dividends or other distributions declared or made after the Effective Time with
respect to Parent Common Shares with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
Parent Common Shares they are entitled to receive until the holder of such
Certificate shall surrender such Certificate.  Subject to applicable law,
following surrender of any such Certificate, there shall be paid to the record
holder of the certificates representing whole shares of Parent Common Shares
issued in exchange therefor, without interest, at the time of such surrender,
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Shares and cash in lieu of any fractional Parent Common Share pursuant to
Section&nbsp;1.06(f) above.</LI>
<I><LI>Transfers of Ownership</I>.  If any certificate for Parent Common Shares
is to be issued in a name other than that in which the Certificate surrendered
in exchange therefor is registered, it will be a condition of the issuance
thereof that the Certificate so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
exchange will have paid to Parent or any agent designated by it any transfer or
other taxes required by reason of the issuance of a certificate for Parent
Common Shares in any name other than that of the registered holder of the
Certificate surrendered, or established to the reasonable satisfaction of Parent
or any agent designated by it that such tax has been paid or is not
payable.</LI>
<I><LI>No Liability</I>.  Neither Parent, Merger Sub nor the Company shall be
liable to any holder of Shares for any Merger Consideration (or dividends or
distributions with respect thereto) properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.</LI>
<I><LI>Withholding Rights</I>.  Parent or the Exchange Agent shall be entitled
to deduct and withhold from the Merger Consideration otherwise payable pursuant
to this Agreement to any holder of Shares such amounts as Parent or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law.  To
the extent that amounts are so withheld by Parent or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.</LI></OL>

<LI><A NAME="_Toc472697575"><I>Stock Transfer Books.</A>  </LI>
</I><P>  At the Effective Time, the stock transfer books of the Company shall be
closed, the Merger Consideration delivered upon the surrender for exchange of
Shares in accordance with the terms hereof shall be deemed to have been issued
in full satisfaction of all rights pertaining to such Shares, and there shall be
no further registration of transfers on the records of the Surviving Company of
Shares which were outstanding immediately prior to the Effective Time.  If,
after the Effective Time, Certificates are presented to the Surviving Company
for any reason, they shall be canceled and exchanged as provided in this
Article&nbsp;I.</P>
<LI><A NAME="_Toc472697576"><I>Dissenting Shares.</A></LI>
<OL TYPE="a">

</I><LI>Notwithstanding any provision of this Agreement to the contrary, any
shares of capital stock of the Company held by a holder who has exercised
appraisal rights for such shares in accordance with the DGCL and who, as of the
Effective Time, has not effectively withdrawn or lost such appraisal rights
(&quot;<B>Dissenting Shares</B>&quot;), shall not be converted into or represent
a right to receive Merger Consideration pursuant to Section&nbsp;1.06, but the
holder thereof shall only be entitled to such rights as are granted under the
DGCL.</LI>
<LI>Notwithstanding the provisions of subsection&nbsp;(a) if any holder of
Dissenting Shares shall effectively withdraw or lose (through failure to perfect
or otherwise) such holder's appraisal rights, then, as of the later of the
Effective Time or the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right to receive the
Merger Consideration, without interest thereon, upon surrender of the
certificate or certificates representing such Dissenting Shares.</LI>
<LI>The Company shall give Parent (i)&nbsp;prompt notice of any written demands
received by the Company to require the Company to purchase shares of capital
stock of the Company pursuant to the DGCL, withdrawals of such demands, and any
other instruments served pursuant to the DGCL and received by the Company and
(ii)&nbsp;the opportunity to participate in all negotiations and proceedings
with respect to such demands.  The Company shall not, except with the prior
written consent of Parent, voluntarily make any payment with respect to any such
demands or offer to settle or settle any such demands.</LI></OL>

<LI><A NAME="_Toc472697577"><I>Lost, Stolen or Destroyed Certificate.</A></LI>
</I><P>  In the event any Certificates shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereof, such Parent Common Shares and cash as may be required pursuant
to Section&nbsp;1.06; provided, however, that Parent may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against Parent
or the Exchange Agent with respect to the Certificates alleged to have been
lost, stolen or destroyed.</P>
<LI><A NAME="_Toc472697578"><I>Federal Income Tax Consequences.</A></LI>
</I><P>  It is intended by the parties here to that the Merger shall constitute
a reorganization within the meaning of Section&nbsp;368(a) of the Code.  The
parties hereto hereby adopt this Agreement as a &quot;plan of
reorganization&quot; within the meaning of Section&nbsp;368 of the Code.</P>
<LI><A NAME="_Toc472697579"><I>Material Adverse Effect.</A></LI></OL>

</I><P>  When used in connection with the Company or any of its subsidiaries, or
Parent or any of its respective subsidiaries, as the case may be, the term
&quot;<B>Material Adverse Effect</B>&quot; means any change or effect that,
individually or in the aggregate, is materially adverse to the business, assets
(including intangible assets), financial condition or results of operations of
the Company and its subsidiaries (a &quot;<B>Company Material Adverse
Effect</B>&quot;) or Parent and its respective subsidiaries (a &quot;<B>Parent
Material Adverse Effect</B>&quot;), respectively, in each case taken as a whole,
but other than those adverse effects occurring as a result of the execution and
public announcement of this Agreement, the pendency of this Agreement or the
consummation of the transactions contemplated hereby (including, without
limitation, loss of customers, orders, suppliers or employees resulting
therefrom) or general market or industry conditions (including, without
limitation, any change in trading prices, in and of itself and without the
occurrence of any other Material Adverse Effect, of either Parent's or the
Company's outstanding publicly traded equity securities).</P>
<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697580">REPRESENTATIONS AND WARRANTIES OF THE
COMPANY</A></LI></P>
</B></FONT><P>The Company hereby represents and warrants to Parent and Merger
Sub that, except as set forth in the written disclosure schedule previously
delivered by the Company to Parent, the paragraphs of which are numbered to
correspond to the Sections of this Agreement (the &quot;<B>Company Disclosure
Schedule</B>&quot;):</P>
<OL>

<LI><A NAME="_Toc472697581"><I>Organization and Qualification;
Subsidiaries.</A></LI>
</I><P>  The Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority and is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
(&quot;<B>Approvals</B>&quot;) necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on its business as
it is now being conducted, except where the failure to have such power,
authority and Approvals would not, individually or in the aggregate, have a
Company Material Adverse Effect.  The Company and each subsidiary is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not, either individually
or in the aggregate, have a Company Material Adverse Effect.  The Company's
subsidiaries are the only entities in which the Company has any equity
interest.</P>
<LI><A NAME="_Toc472697582"><I>Charter Documents.</A></LI>
</I><P>  The Company has heretofore furnished or made available to Parent a
complete and correct copy of the charter documents (including the articles or
certificate of incorporation and bylaws, if any), as most recently amended to
date of the Company and each of its subsidiaries.  Each such charter document is
in full force and effect.  Neither the Company nor any subsidiary is in
violation or any of the provisions of its respective charter documents.</P>
<LI><A NAME="_Toc472697583"><I>Capitalization.</A></LI>
</I><P>  The authorized capital stock of the Company consists of shares of
Company Common Stock and shares of Preferred Stock.  As of January 1, 2000,
(i)&nbsp;67,915,191 shares of Company Common Stock were issued and outstanding,
all of which are validly issued, fully paid and nonassessable, and issued in
compliance with applicable securities laws, (ii)&nbsp;no shares of Company
Common Stock were held in the Company's treasury or by any subsidiary,
(iii)&nbsp;no shares of Company Preferred Stock were issued and outstanding and
(iv)&nbsp;6,733,218 shares of Company Common Stock were reserved for future
issuance pursuant to outstanding employee stock options granted pursuant to the
Company's Stock Option Plans.  No shares of Company Common Stock have been
issued between January 1, 2000 and the date hereof, other than pursuant to the
Company's Stock Option Plans.  Except as set forth in Sections&nbsp;2.03, 2.08
or 2.10 of the Company Disclosure Schedule, as of the date hereof, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued shares (or other equity
interests) of the Company or of any subsidiary or obligating the Company or any
subsidiary to issue or sell any shares of, or other equity interests in, the
Company or any subsidiary.  All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable.  As of the date hereof, there are
no obligations, contingent or otherwise, of the Company or of any subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
the shares of any subsidiary or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any subsidiary or any
other entity other than guarantees of bank obligations of a subsidiary entered
into in the ordinary course of business.  None of the options, warrants, rights,
agreements, arrangements or commitments identified in Section&nbsp;2.03 or 2.10
of the Company Disclosure Schedule provide that, absent action by the board of
directors of the Company or a committee thereof, upon exercise or conversion the
holder thereof shall receive cash, and no such action of the board of directors
or a committee thereof has been taken.  Except as set forth in Section&nbsp;2.03
of the Company Disclosure Schedule, all of the outstanding shares of each
subsidiary (and all shares to be issued prior to the Effective Time) are or will
be duly authorized, validly issued, fully paid and nonassessable, and issued in
compliance with applicable securities laws, and all such shares are or will be
owned by the Company free and clear of all security interests, liens, claims,
pledges, agreements, limitations in voting rights, charges, encumbrances or
rights or interests of others of any nature whatsoever (collectively,
&quot;<B>Liens</B>&quot;), other than Liens for taxes not yet due and
payable.</P>
<LI><A NAME="_Toc472697584"><I>Authority Relative to this Agreement.</A></LI>
</I><P>  The Company has all necessary corporate power and authority to execute
and deliver this Agreement and subject to obtaining any necessary stockholder
approval of this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.  The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than the approval and adoption of the Merger
by a majority of the holders of the outstanding Shares entitled to vote in
accordance with the DGCL and the Company's certificate of incorporation and
bylaws).  This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Merger Sub, as applicable, constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms.
The board of directors of the Company has on the date of this Agreement
unanimously determined that it is advisable and in the best interest of the
Company's stockholders for the Company to enter into a strategic business
combination with Parent upon the terms and subject to the conditions of this
Agreement, and has on the date of this Agreement unanimously recommended that
the Company's stockholders approve and adopt this Agreement and the transactions
contemplated hereby, and, subject to Section 4.03 hereof, such resolutions of
the board of directors shall be in effect as of the Effective Time.</P>
<LI><A NAME="_Toc472697585"><I>SEC Filings; Financial Statements.</A></LI>
<OL TYPE="a">

</I><LI>The Company has filed all forms, reports, exhibits and other documents
required to be filed with the Securities and Exchange Commission (the
&quot;<B>SEC</B>&quot;) between December 2, 1998 and the date of this Agreement
and has made available to Parent (i)&nbsp;its Quarterly Report on Form&nbsp;10-Q
for the period ended October 2, 1999 and its Annual Report on Form 10-K for the
year ended June 30, 1999 (the &quot;<B>1999 10-K</B>&quot;), respectively,
(ii)&nbsp;all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held between December 2, 1998 and the
date of this Agreement, (iii)&nbsp;all other reports or registration statements
(other than reports on Forms&nbsp;3, 4 or 5 filed on behalf of affiliates of the
Company) filed by the Company with the SEC between December 2, 1998 and the date
hereof, and (iv)&nbsp;all amendments and supplements to all such reports and
registration statements filed by the Company with the SEC (collectively, the
&quot;<B>Company SEC Reports</B>&quot;).  The Company SEC Reports (i)&nbsp;were
prepared in accordance with applicable requirements of the Securities Act of
1933, as amended (the &quot;<B>Securities Act</B>&quot;) or the Securities
Exchange Act of 1934, as amended (the &quot;<B>Exchange Act</B>&quot;) and the
SEC's rules and regulations thereunder (collectively, the &quot;<B>Federal
Securities Laws</B>&quot;), as the case may be, and (ii)&nbsp;did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  No subsidiary is
required to file any forms, reports or other documents with the SEC.</LI>
<LI>Each of the consolidated financial statements (including, in each case, any
related notes thereto) contained in the Company SEC Reports was prepared in
accordance with U.S. generally accepted accounting principles
(&quot;<B>GAAP</B>&quot;) applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and each fairly
presented the consolidated financial position of the Company and its
subsidiaries as of the respective dates thereof and the consolidated results of
its operations and cash flows and stockholder equity for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount.</LI>
<LI>The Company has heretofore furnished to Parent a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by the Company with the SEC pursuant
to the Securities Act or the Exchange Act.</LI></OL>

<LI><A NAME="_Toc472697586"><I>Absence of Certain Changes or Events</A></LI>
</I><P>  Except as set forth in Section&nbsp;2.06 of the Company Disclosure
Schedule or the Company SEC Reports, between June 30, 1999 and the date hereof,
there has not occurred: (i)&nbsp;any Company Material Adverse Effect;
(ii)&nbsp;any amendments or changes in the certificate of incorporation or
bylaws of the Company; (iii)&nbsp;any damage to, destruction or loss of any
asset of the Company, (whether or not covered by insurance) that has had or is
reasonably likely to have a Company Material Adverse Effect; (iv)&nbsp;any
change by the Company in its accounting methods, principles or practices, except
any such change as required by any concurrent change in GAAP or Federal
Securities Law applicable to companies generally; (v)&nbsp;any revaluation of
any of the Company's or any subsidiary's assets, including, without limitation,
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business; (vi)&nbsp;any sale, pledge,
disposition of or encumbrance upon a material amount of property of the Company
or of any subsidiary, except in the ordinary course of business; (vii)&nbsp;any
material Tax (as defined below) election inconsistent with past practices or the
settlement or compromise of any material Tax liability; (viii)&nbsp;any
declaration, issuance or payment of any dividend or other distribution (whether
in cash, stock or property or any combination thereof); or (ix)&nbsp;the
creation of any indebtedness for borrowed money or the issuance of any debt
securities or the assumption, guarantee (other than guarantees of bank debt of a
subsidiary entered into in the ordinary course of business) or endorsement or
other accommodation whereby the Company became responsible for, the obligations
of any person, or the making of any loans or advances, except in the ordinary
course of business consistent with past practice.</P>
<LI><A NAME="_Toc472697587"><I>No Undisclosed Liabilities.</A></LI>
</I><P>  Except as is disclosed in Section&nbsp;2.07 of the Company Disclosure
Schedule and in the Company SEC Reports, neither the Company nor any subsidiary
has any liabilities (absolute, accrued, contingent or otherwise) which are, in
the aggregate, material to the business, operations or financial condition of
the Company and its subsidiaries taken as a whole, except liabilities
(a)&nbsp;adequately provided for in the Company's audited balance sheet
(including any related notes thereto) for the fiscal year ended June 30, 1999;
(b)&nbsp;not required under U.S. GAAP to be reflected on such balance sheet; or
(c)&nbsp;incurred since June 30, 1999 in the ordinary course of business, and
liabilities incurred in connection with this Agreement.</P>
<LI><A NAME="_Toc472697588"><I>Material Contracts; No Violation.</A> </LI>
<OL TYPE="a">

</I><LI>Section&nbsp;2.08(a) of the Company Disclosure Schedule includes a list
of each of the following currently outstanding agreements under which the
Company or any of its subsidiaries is a party or by which any of their assets
are bound: (i)&nbsp;joint venture, technology sharing and noncompetition
agreements; (ii)&nbsp;intellectual property licensing agreements other than
commercial shrinkwrap licenses; (iii)&nbsp;agreements with any consultant,
employee, officer or director of the Company or any of its subsidiaries,
including employee benefit plans; (iv)&nbsp;distribution agreements;
(v)&nbsp;agreements, contracts or other instruments (including all amendments
thereto) which, in each case, as of the date hereof, will be required to be
filed by the Company with the SEC pursuant to the requirements of the Exchange
Act as &quot;material contracts&quot; and have not been filed ((i) through (v)
collectively with all agreements, contracts and other instruments (including
amendments thereto) which have been filed by the Company with the SEC, being,
collectively, the &quot;Material Contracts&quot; of the Company and its
subsidiaries).  The Company has made available to Parent prior to the date
hereof, true, correct and complete copies in all material respects of each such
Material Contract.</LI>
<LI>Except as set forth in Section&nbsp;2.08(b) of the Company Disclosure
Schedule, (i)&nbsp;neither the Company nor any subsidiary has breached, is in
default under, or has received written notice of any  breach of or default
under, any Material Contract, (ii)&nbsp;to the knowledge of the Company, no
other party to any of the Material Contracts has  breached or is in  default of
any of its obligations thereunder, and (iii)&nbsp;each of the Material Contracts
is in full force and effect, except in any such case for breaches, defaults or
failures to be in full force that in the aggregate do not constitute a Company
Material Adverse Effect.</LI>
<LI>Except as set forth in Section&nbsp;2.08(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement and the consummation of the transactions
contemplated by this Agreement by the Company will not, (i)&nbsp;conflict with
or violate the certificate of incorporation or bylaws of the Company,
(ii)&nbsp;conflict with or violate any federal, foreign, state or provincial
law, rule, regulation, order, judgment or decree (collectively,
&quot;<B>Laws</B>&quot;) applicable to the Company or any subsidiary or by which
any of their respective properties are bound or affected, or (iii)&nbsp;result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair the Company's or any
subsidiary's rights or alter the rights or obligations of any third party under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any contract, or result in the creation of a Lien on any of the
properties or assets of the Company or any subsidiary pursuant to, any Material
Contract or other note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any subsidiary is a party or by which the Company or any subsidiary
or any of their respective properties are bound or affected, except in the case
of clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults
or other occurrences that would not, individually or in the aggregate, have a
Company Material Adverse Effect.</LI></OL>

<LI><A NAME="_Toc472697589"><I>Absence of Litigation.</A></LI>
</I><P>  Except as set forth in Section&nbsp;2.09 of the Company Disclosure
Schedule or the Company SEC Reports, (i)&nbsp;there are no claims, actions,
suits, proceedings or investigations pending or, to the knowledge of the
Company, threatened, against the Company or against any subsidiary and
(ii)&nbsp;there is no judgment, decree, injunction, rule or order of any
Governmental or Regulatory Authority (as defined in Section 2.14(g) below)
outstanding against the Company or its subsidiaries other than, in each case,
those that the outcome of which, individually or in the aggregate, would not
have a Company Material Adverse Effect or a material adverse effect on the
Company's ability to consummate the Merger.</P>
<LI><A NAME="_Toc472697590"><I>Employee Benefit Plans; Employment
Agreements.</A></LI>
<OL TYPE="a">

</I><LI>For purposes of this Section&nbsp;2.10: &quot;<B>ERISA</B>&quot; means
the Employee Retirement Income Security Act of 1974, as amended;
&quot;<B>Company ERISA Affiliate</B>&quot; means any trade or business (whether
or not incorporated) which is a member of a controlled group including the
Company or which is under common control with the Company or any subsidiary of
the Company; and &quot;<B>Company Employee Plans</B>&quot; means all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other fringe or employee benefit plans, programs or
arrangements, and any current or former employment or executive compensation or
severance agreements, written or otherwise, for the benefit of, or relating to,
any employee of the Company, as well as each such plan with respect to which the
Company or a Company ERISA Affiliate could incur liability under applicable law
(if such plan has been or were terminated), and excluding agreements with former
employees under which the Company has no remaining monetary obligations.</LI>
<LI>Except as set forth in Section 2.10(b) of the Company Disclosure Schedule,
none of the Company Employee Plans promises or provides retiree medical or other
retiree welfare benefits to any person other than coverage mandated by
applicable law or benefits, the full cost of which is borne by the retiree.</LI>
<LI>Except as would not have a Company Material Adverse Effect: (i)&nbsp;the
Company and its subsidiaries have complied with ERISA, the Code and all laws and
regulations applicable to the Company Employee Plans and each Company Employee
Plan has been maintained and administered in compliance with its terms; and
(ii)&nbsp;each Company Employee Plan intended to qualify under
Section&nbsp;401(a) of the Code and each trust intended to qualify under
Section&nbsp;501(a) of the Code is the subject of a favorable determination
opinion, notification or advisory letter from the Internal Revenue Service (the
&quot;<B>IRS</B>&quot;), and nothing has occurred which may reasonably be
expected to impair such determination.</LI>
<LI>Neither the Company nor its subsidiaries have incurred any material
liability under Title&nbsp;IV of ERISA (other than liability for premiums to the
Pension Benefit Guaranty Corporation arising in the ordinary course).  No
Company Employee Plan has incurred a material &quot;accumulated funding
deficiency&quot; (within the meaning of Section&nbsp;302 of ERISA or
Section&nbsp;412 of the Code), whether or not waived.  To the knowledge of the
Company, there are not any facts or circumstances that would materially change
the funded status of any Company Employee Plan that is a &quot;defined
benefit&quot; plan (as defined in Section&nbsp;3(35) of ERISA) since the date of
the most recent actuarial report for such plan.  No Company Employee Plan is a
&quot;multiemployer plan&quot; within the meaning of Section&nbsp;3(37) of
ERISA.</LI>
<LI>With respect to each of the Company Employee Plans that is subject to Title
IV of ERISA, the present value of accrued benefits under each such plan did not,
as of its latest valuation date, materially exceed the then current value of the
aggregate assets of such plans allocable to the payment of such
benefits.</LI></OL>

<LI><A NAME="_Toc472697591"><I>Labor Matters.</A></LI>
</I><P>  Except as set forth in Section&nbsp;2.11 of the Company Disclosure
Schedule, (i)&nbsp;there are no controversies pending or, to the knowledge of
the Company, threatened, between the Company or any of its subsidiaries and any
of their respective employees, which controversies have or may reasonably be
expected to have a Company Material Adverse Effect; (ii)&nbsp;neither the
Company nor any of its subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or by any of its subsidiaries nor does the Company or any of its
subsidiaries know of any activities or proceedings of any labor union to
organize any such employees, and (iii)&nbsp;neither the Company nor any of its
subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the Company
or of any of its subsidiaries.</P>
<LI><A NAME="_Toc472697592"><I>Disclosure Documents.</A></LI>
</I><P>  The proxy statement of the Company to be filed with the SEC in
connection with the Merger (the &quot;<B>Company Proxy Statement</B>&quot;) and
any amendments or supplements thereto will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act.  At the
time the Company Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company and at the time such stockholders vote on
the approval and adoption of this Agreement, the Company Proxy Statement, as
supplemented or amended, if applicable, will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading.  The foregoing representations and warranties will
not apply to statements or omissions included in the Company Proxy Statement or
any amendment or supplement thereto based upon information furnished to the
Company by Parent for use therein.  None of the information furnished to Parent
for use in (or incorporation by reference in) the Registration Statement (as
defined in Section&nbsp;3.10) or any amendment or supplement thereto will
contain, at the time the Registration Statement or any amendment or supplement
thereto becomes effective or at the Effective Time, any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein not
misleading.</P>
<LI><A NAME="_Toc472697593"><I>Taxes.</A></LI>
<OL TYPE="a">

</I><LI>For purposes of this Agreement, &quot;<B>Tax</B>&quot; or
&quot;<B>Taxes</B>&quot; shall mean taxes, fees, levies, duties, tariffs,
imposts and governmental impositions or charges of any kind in the nature of (or
similar to) taxes, payable to any federal, state, local or foreign taxing
authority, including (without limitation) (i)&nbsp;income, franchise, profits,
gross receipts, ad valorem, net worth, goods and services, fringe benefits,
withholding, sales, use, service, real or personal property, special
assessments, Common Stock, license, payroll, withholding, employment, social
security, accident compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes and (ii)&nbsp;interest, penalties, additional taxes and additions to
tax imposed with respect thereto; and &quot;<B>Tax Returns</B>&quot; shall mean
returns, reports and information statements with respect to Taxes required to be
filed with the IRS or any other taxing authority, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax
returns.</LI>
<LI>The Company has made available to Parent all Tax Returns filed by the
Company and its subsidiaries for all periods ending on or after June 30, 1999
and before the date of this Agreement.  Except as disclosed on
Schedule&nbsp;2.13(b) of the Company Disclosure Schedule, the Company and each
of its subsidiaries have filed all United States federal income Tax Returns and
all other material Tax Returns required to be filed by them, and such Tax
Returns are complete and correct in all material respects.  Each of the Company
and its subsidiaries has duly paid or made adequate provision on its books and
records and financial statements for the payment of all material Taxes which
have accrued or have become payable.  Except as disclosed on
Schedule&nbsp;2.13(b) of the Company Disclosure Schedule (i)&nbsp;there are no
pending audits, examinations or proposed audits or examinations of any Tax
Returns filed by the Company or by any of its subsidiaries, (ii)&nbsp;with
respect to any period for which material Tax Returns have not yet been filed, or
for which material Taxes are not yet due or owing, each of the Company and its
subsidiaries has made due and sufficient accruals for such Taxes in its
respective books and records and financial statements, and (iii)&nbsp;neither
the Company nor any of its subsidiaries has given or been requested to give
waivers or extensions of any statute of limitations relating to the filing of
Tax Returns or the assessment of Taxes for which the Company or any of its
subsidiaries may have any undisclosed liability, except for any waiver or
extension which has expired or any extensions resulting from the filing of a Tax
Return after its original due date in the ordinary course of business.  Except
as set forth on Schedule&nbsp;2.13(b) of the Company Disclosure Schedule, as of
the date of this Agreement the consolidated Tax Returns of the Company and its
subsidiaries have not been audited by the IRS (or the appropriate statute of
limitations has expired) for all fiscal years through June 30, 1999.</LI>
<LI>Except as set forth on Schedule&nbsp;2.13(c) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries: (i)&nbsp;is a party
to any agreement providing for the allocation, payment or sharing of taxes
between the Company or its subsidiaries, on the one hand, and any third party,
on the other hand; or (ii)&nbsp;has an application pending with respect to any
Tax requesting permission for a change in accounting method.</LI></OL>

<LI><A NAME="_Toc472697594"><I>Environmental Matters.</A></LI>
<OL TYPE="a">

</I><LI>Each of the Company and its subsidiaries has obtained all licenses,
permits, authorizations, approvals and consents from Governmental or Regulatory
Authorities which are required under any applicable Environmental Law (as
defined below) in respect of its business or operations (&quot;<B>Environmental
Permits</B>&quot;), except for such failures to have Environmental Permits
which, individually or in the aggregate, are not reasonably expected to have a
Company Material Adverse Effect.  Each of such Environmental Permits is in full
force and effect and each of the Company and its subsidiaries is in compliance
with the terms and conditions of all such Environmental Permits and with any
applicable Environmental Law, except for such failures to be in compliance
which, individually or in the aggregate, are not reasonably expected to have a
Company Material Adverse Effect.</LI>
<LI>There is no Environmental Claim (as defined below) pending or to the
knowledge of the Company threatened against the Company or any of its
subsidiaries or to the knowledge of the Company, pending or threatened against
any person or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has or may have retained or assumed either contractually
or by operation of law that is reasonably expected to have a Company Material
Adverse Effect.</LI>
<LI>To the knowledge of the Company, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, threatened release or presence of any Hazardous
Material (as defined below) which could form the basis of any Environmental
Claim against the Company or any of its subsidiaries, or to the knowledge of the
Company, against any person or entity whose liability for any Environmental
Claim the Company or any of its subsidiaries has or may have retained or assumed
either contractually or by operation of law, except for such liabilities which,
individually or in the aggregate, are not reasonably expected to have a Company
Material Adverse Effect.</LI>
<LI>To the knowledge of the Company, no site or facility now or previously
owned, operated or leased by the Company or any of its subsidiaries is listed or
proposed for listing on the National Priorities List promulgated pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, and the rules and regulations thereunder
(&quot;<B>CERCLA</B>&quot;).</LI>
<LI>No Liens have arisen under or pursuant to any Environmental Law on any site
or facility owned, operated or leased by the Company or any of its subsidiaries,
other than any such Liens which would not, individually or in the aggregate,
have a Company Material Adverse Effect, and no action of any Governmental or
Regulatory Authority (as defined below) has been taken or, to the knowledge of
the Company, is in process which could subject any of such properties to such
Liens.</LI>
<LI>To the best of the Company's knowledge, the Company has delivered or
otherwise made available for inspection to the Parent true, complete and correct
copies and results of any material reports, studies, analyses, tests or
monitoring possessed or initiated by the Company or any of its subsidiaries
pertaining to Hazardous Materials in, on, beneath or adjacent to any property
currently or formerly owned, operated or leased by the Company or any of its
subsidiaries, or regarding the Company's or any of its subsidiaries' compliance
with applicable Environmental Laws.</LI>
<LI>As used herein: (i)&nbsp;&quot;<B>Governmental or Regulatory
Authority</B>&quot; means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision; (ii)&nbsp;&quot;<B>Environmental Claim</B>&quot; means any claim,
action, cause of action, investigation or notice (written or oral) by any person
or entity alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (A)&nbsp;the presence, or release or
threatened release, of any Hazardous Materials at any location, whether or not
owned or operated by the Company or any of its subsidiaries, or
(B)&nbsp;circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law; (iii)&nbsp;&quot;<B>Environmental Law</B>&quot; means
any law or order of any Governmental or Regulatory Authority relating to the
regulation or protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of Hazardous Material,
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes into the environment; and (iv)&nbsp;&quot;<B>Hazardous
Material</B>&quot; means (A)&nbsp;any petroleum or petroleum products, flammable
materials, radioactive materials, friable asbestos, urea formaldehyde foam
insulation and transformers or other equipment that contain dielectric fluid
containing regulated levels of polychlorinated biphenyls (PCBs); (B)&nbsp;any
chemicals or other materials or substances which are now or hereafter become
defined as or included in the definition of &quot;hazardous substances,&quot;
&quot;hazardous wastes,&quot; &quot;hazardous materials,&quot; &quot;extremely
hazardous wastes,&quot; &quot;restricted hazardous wastes,&quot; &quot;toxic
substances,&quot; &quot;toxic pollutants&quot; or words of similar import under
any Environmental Law; and (C)&nbsp;any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental or Regulatory Authority under any Environmental
Law.</LI></OL>

<LI><A NAME="_Toc472697595"><I>Brokers.</A></LI>
</I><P>  No broker, finder or investment banker (other than Goldman, Sachs &amp;
Co., Inc. (&quot;<B>GS</B>&quot;)) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.  The
Company has heretofore furnished to Parent a complete and correct copy of all
agreements between the Company and GS pursuant to which such firm would be
entitled to any payment relating to the transactions contemplated hereunder.</P>
<LI><A NAME="_Toc472697596"><I>Full Disclosure.</A></LI>
</I><P>  No statement contained in any representation or warranty contained
herein or any statement contained in any certificate or schedule furnished or to
be furnished by the Company or by any subsidiary to Parent or Merger Sub in, or
pursuant to the provisions of, this Agreement contains or shall contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in the light of the circumstances under which it was made, in
order to make the statements herein or therein not misleading.</P>
<LI><A NAME="_Toc472697597"><I>Opinion of Financial Advisor.</A></LI>
</I><P>  The Company has been advised by its financial advisor, GS, that, in its
opinion, as of the date of this Agreement, the Exchange Ratio is fair from a
financial point of view to the Company's stockholders and has agreed to deliver
a written copy of such opinion dated the date hereof to Parent.</P>
<LI><A NAME="_Toc472697598"><I>Intellectual Property.</A></LI>
</I><P>The Company, directly or indirectly, owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications therefor, technology,
know-how and tangible or intangible proprietary information, inventions, trade
secrets, processes or material that are required for the conduct of the business
of the Company and its subsidiaries as currently conducted (the &quot;<B>Company
Intellectual Property Rights</B>&quot;).  Section&nbsp;2.18 of the Company
Disclosure Schedule contains a list of all registered Company Intellectual
Property Rights and the jurisdictions where such registrations have been
made.</P>
<P>Either the Company or a subsidiary is the sole and exclusive owner of, or the
exclusive or non-exclusive licensee of, with all right, title and interest in
and to (free and clear of any Liens), the Company Intellectual Property Rights,
and, in the case of Company Intellectual Property Rights owned by the Company or
a subsidiary, has sole and exclusive rights (and is not contractually obligated
to pay any compensation to any third party in respect thereof) to the use
thereof or the material covered thereby in connection with the services or
products in respect of which the Company Intellectual Property Rights are
currently being used.  To the knowledge of the Company, there is no and there
has not been any unauthorized use, infringement or misappropriation by the
Company or any of its subsidiaries of any patents, trademarks, trade names,
service marks, copyrights, and any applications therefor, technology, know-how
and tangible or intangible proprietary information, inventions, trade secrets or
processes of any third party.  All registered patents, trademarks, service marks
and copyrights held by the Company are valid and subsisting.  To the knowledge
of the Company, there is no unauthorized use, infringement or misappropriation
of any of the Company Intellectual Property Rights by any third party, including
any employee or former employee of the Company or any subsidiary.  No Company
Intellectual Property Right or product of the Company or any subsidiary is
subject to any outstanding decree, order, judgment, or stipulation restricting
in any manner the licensing thereof by the Company or any subsidiary, except to
the extent any such restriction does not constitute a Company Material Adverse
Effect.  Neither the Company nor any subsidiary has entered into any agreement
under which the Company or any subsidiary is restricted from selling, licensing
or otherwise distributing any of its products to any class of customers, in any
geographic area, during any period of time or in any segment of the market,
except to the extent any such restriction does not constitute a Company Material
Adverse Effect.  Each of the Company and its subsidiaries has used commercially
reasonable efforts to (i)&nbsp;protect through nondisclosure agreements or other
appropriate means all material patent, copyright, trademark and trade secret
rights and confidential information of the Company and its subsidiaries, and
(ii)&nbsp;otherwise to secure and protect for the Company's benefit all Company
Intellectual Property Rights of the Company.  Each employee, officer and
consultant of the Company and each of its subsidiaries has executed a
proprietary information and inventions agreement substantially in the form
provided by the Company to Parent.  The execution of this Agreement and the
consummation of the transactions contemplated hereby will not impair or
invalidate in any way any of the Company Intellectual Property Rights.</P>
<LI><A NAME="_Toc472697599"><I>Change in Control Payments.</A></LI>
</I><P>  Except as set forth in Section 2.19 of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries have any plans, programs or
agreements to which they are parties, or to which they are subject, pursuant to
which payments (whether in cash or property or the vesting of property) may be
required upon, or may become payable directly or indirectly as a result of, a
change of control of the Company.</P>
<LI><A NAME="_Toc472697600"><I>Antitakeover Statutes.</A></LI>
</I><P>  The board of directors of the Company has approved this Agreement and
the transactions contemplated hereby and neither Section&nbsp;203 of the DGCL
nor any other antitakeover or similar statute or regulation applies or purports
to apply to the transactions contemplated hereby.</P>
<LI><A NAME="_Toc472697601"><I>Title to Property.</A></LI>
</I><P>  The Company and its subsidiaries own or lease no material real property
other than as set forth in Section&nbsp;2.21 of the Company Disclosure Schedule
or the Company SEC Reports.  Except as reflected in the Company's financial
statements included in the Company SEC Reports, each of the Company and its
subsidiaries has good and valid title to all of its respective properties and
assets, free and clear of all Liens except Liens for Taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or materially interfere with the present
use of the property affected thereby; and, to the knowledge of the Company, all
leases pursuant to which the Company or any subsidiary leases from others
material amounts of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, to the
knowledge of the Company, under any of such leases, any existing material
default or event of default (or event which with notice or lapse of time, or
both, would constitute a material default and in respect of which the Company or
any of its subsidiaries, as applicable, has not taken adequate steps to prevent
such a default from occurring).</P>
<LI><A NAME="_Toc472697602"><I>Year 2000 Matters.</A></LI></OL>

</I><P>  Any reprogramming required to permit the proper functioning in and
following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Company or any of
its subsidiaries or used or relied upon in the conduct of their respective
businesses (including any systems and other equipment supplied by others or with
which the computer systems of the Company or any of its subsidiaries interface)
has been completed.  The testing of all such systems and other equipment as so
reprogrammed has been completed.  The costs to the Company and its subsidiaries
for such reprogramming and testing and for other foreseeable consequences to
them of any improper functioning of other computer systems and equipment
containing embedded microchips due to the occurrence of the year 2000 will not
have a Company Material Adverse Effect.</P>

<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697603">REPRESENTATIONS AND WARRANTIES OF PARENT <BR>
AND MERGER SUB</A></LI></P>
</B></FONT><P>Parent and Merger Sub hereby represent and warrant to the Company
that, except as set forth in the written disclosure schedule previously
delivered by Parent to the Company, the paragraphs of which are numbered to
correspond to the Sections of this Agreement (the &quot;<B>Parent Disclosure
Schedule</B>&quot;):</P>
<OL>

<LI><A NAME="_Toc472697604"><I>Organization and Qualification;
Subsidiaries.</A></LI>
</I><P>  Parent and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and is in
possession of all Approvals necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure to have such power, authority and
Approvals would not, individually or in the aggregate, have a Parent Material
Adverse Effect.  Parent and each of its subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not, either individually or in the
aggregate, have a Parent Material Adverse Effect.</P>
<LI><A NAME="_Toc472697605"><I>Certificate of Incorporation and Bylaws.</A></LI>
</I><P>  Parent has heretofore furnished to the Company a complete and correct
copy of the Certificate of Incorporation and Bylaws, as amended to date, of
Parent and the Certificate of Incorporation and Bylaws, as amended to date, of
Merger Sub.  Such Certificates of Incorporation and Bylaws of Parent and Merger
Sub are in full force and effect.  Neither Parent nor any of its subsidiaries is
in violation of any of the provisions of its charter documents.</P>
<LI><A NAME="_Toc472697606"><I>Capitalization.</A></LI>
<OL TYPE="a">

</I><LI>The authorized capital stock of Parent consists of (i)&nbsp;600,000,000
shares of Parent Common Stock and (ii)&nbsp;1,000,000 shares of Preferred Stock,
$0.001 par value (&quot;<B>Parent Preferred Stock</B>&quot;) were authorized, of
which (x) 100,000 shares of Series A Preferred Stock were authorized, (y)
100,000 shares of Series B Preferred Stock were authorized, and (z) one share of
special voting stock is authorized.  As of December&nbsp;31, 1999,
(1)&nbsp;349,825,511 shares of Parent Common Stock were issued and outstanding
(including 107,753,682 shares of Parent Common Stock issuable upon exchange of
the outstanding exchangeable shares of Parent's subsidiary, JDS Uniphase Canada,
Ltd.), (2)&nbsp;100,000 shares of Series A Preferred Stock were issued and
outstanding, (3)&nbsp;no shares of Series B Preferred Stock were issued and
outstanding and one share of special voting stock was issued and outstanding,
(4)&nbsp;no shares of capital stock were held in its treasury, and
(5)&nbsp;58,127,797 shares of Parent Common Stock were reserved for issuance
pursuant to outstanding options under Parent's stock option plans
(&quot;<B>Parent's Stock Option Plans</B>&quot;).  No shares of Parent Common
Stock or Parent Preferred Stock have been issued between December&nbsp;31, 1999
and the date hereof, except for shares of Parent Common Stock issued upon
exercise of options outstanding under Parent's Stock Option Plans.  The
authorized common stock of Merger Sub consists of 100 shares of common stock,
all of which, as of the date hereof, are issued and outstanding.  All of the
outstanding shares of Parent's and Merger Sub's respective common stock have
been duly authorized and validly issued and are fully paid and nonassessable,
and issued in compliance with applicable securities laws.  As of the date
hereof, except for options outstanding under Parent's Stock Option Plans and as
set forth in Section&nbsp;3.03 of the Parent Disclosure Schedule and as
described in the Parent SEC Reports, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued common stock of Parent or any of its subsidiaries or
obligating Parent or any of its subsidiaries to issue or sell any shares of
common stock of, or other equity interests in, Parent or any of its
subsidiaries.  As of the date hereof, there are no obligations, contingent or
otherwise, of Parent or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Parent Common Shares or the common stock of any
subsidiary.  Except as set forth in Section&nbsp;3.03(a) of the Parent
Disclosure Schedule or as will not have a Parent Material Adverse Effect, all of
the outstanding shares of common stock (or other equity interests) of each of
Parent's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and issued in compliance with applicable securities laws and all
such shares are owned by Parent or another subsidiary free and clear of all
Liens, other than Liens for taxes not yet due and payable.</LI>
<LI>The Parent Common Shares to be issued pursuant to the Merger will be duly
authorized, validly issued, fully paid and nonassessable and shall be available
for trading on the Nasdaq National Market.  </LI></OL>

<LI><A NAME="_Toc472697607"><I>Authority Relative to this Agreement.</A></LI>
</I><P>  Each of Parent and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.  The execution
and delivery of this Agreement by Parent and Merger Sub and the consummation by
Parent and Merger Sub of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Parent and
Merger Sub, and no other corporate proceedings on the part of Parent or Merger
Sub are necessary to authorize this Agreement or to consummate the transactions
so contemplated.  This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Merger Sub, enforceable against each in accordance with
its terms.  The board of directors of Parent has determined that it is advisable
and in the best interest of Parent's stockholders for Parent to enter into a
strategic business combination with the Company upon the terms and subject to
the conditions of this Agreement.</P>
<LI><A NAME="_Toc472697608"><I>SEC Filings; Financial Statements.</A></LI>
<OL TYPE="a">

</I><LI>Parent has filed all forms, reports, exhibits and other documents
required to be filed with the SEC between June&nbsp;30, 1999 and the date of
this Agreement and has made available to the Company, in the form filed with the
SEC, (i)&nbsp;its Quarterly Report on Form&nbsp;10-Q for the period ended
September&nbsp;30, 1999 and its Annual Reports on Form&nbsp;10-K for the fiscal
year ended June&nbsp;30, 1999 and June&nbsp;30, 1998, respectively,
(ii)&nbsp;all proxy statements relating to Parent's meetings of stockholders
(whether annual or special) held between June&nbsp;30, 1998 and the date of this
Agreement, (iii)&nbsp;all other reports or registration statements (other than
Reports on Form&nbsp;3, 4 or 5 filed on behalf of affiliates of the Parent)
filed by Parent with the SEC between June&nbsp;30, 1998 and the date of this
Agreement, and (iv)&nbsp;all amendments and supplements to all such reports and
registration statements filed by Parent with the SEC (collectively, the
&quot;<B>Parent SEC Reports</B>&quot;).  The Parent SEC Reports (i)&nbsp;were
prepared in accordance with applicable requirements of the Federal Securities
Laws, and (ii)&nbsp;did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  None of Parent's subsidiaries is required to file any forms,
reports or other documents with the SEC.</LI>
<LI>Each of the consolidated financial statements (including, in each case, any
related notes thereto) contained in the Parent SEC Reports has been prepared in
accordance with U.S. GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and each fairly
presented the consolidated financial position of Parent and its subsidiaries as
of the respective dates thereof and the consolidated results of its operations
and cash flows and stockholder equity for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount.</LI>
<LI>Parent has heretofore furnished to the Company a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Parent with the SEC pursuant to
the Securities Act or the Exchange Act.</LI></OL>

<LI><A NAME="_Toc472697609"><I>Absence of Certain Changes or Events.</A></LI>
</I><P>  Except as set forth in Section&nbsp;3.06 of the Parent Disclosure
Schedule or the Parent SEC Reports, between June&nbsp;30, 1999 and the date
hereof, there has not occurred: (i)&nbsp;any Parent Material Adverse Effect;
(ii)&nbsp;any amendments or changes in the certificate of incorporation or
bylaws of Parent (other than amendments to increase the authorized common stock
of Parent); (iii)&nbsp;any damage to, destruction or loss of any asset of
Parent, (whether or not covered by insurance) that has had or is reasonably
likely to have a Parent Material Adverse Effect; (iv)&nbsp;any change by Parent
in its accounting methods, principles or practices, except any such change as
required by any concurrent change in GAAP or Federal Securities Law applicable
to companies generally; (v)&nbsp;any revaluation of any of Parent's or any
subsidiary's assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business; (vi)&nbsp;any sale, pledge, disposition of or encumbrance
upon a material amount of property of Parent or of any subsidiary, except in the
ordinary course of business; (vii)&nbsp;any material Tax (as defined above)
election inconsistent with past practices or the settlement or compromise of any
material Tax liability; or (viii) any declaration, issuance or payment of any
dividend or other distribution (whether in cash, stock or property or any
thereof), other than the two-for-one stock split paid by Parent on December 29,
1999 and the two-for-one stock split announced by Parent on January 3, 1999
proposed to be paid March 10, 2000.</P>
<LI><A NAME="_Toc472697610"><I>No Undisclosed Liabilities.</A></LI>
</I><P>  Except as is set forth in the Parent SEC Reports, neither the Parent
nor any of its subsidiaries has any liabilities (absolute, accrued, contingent
or otherwise) which are, in the aggregate, material to the business, operations
or financial condition of the Parent and its subsidiaries taken as a whole,
except liabilities (a)&nbsp;adequately provided for in the Parent's balance
sheet (including any related notes thereto) as of June&nbsp;30, 1999,
(b)&nbsp;not required under U.S.  GAAP to be reflected on such balance sheet, or
(c)&nbsp;incurred since June&nbsp;30, 1999 in the ordinary course of business,
and liabilities incurred in connection with this Agreement.</P>
<LI><A NAME="_Toc472697611"><I>Absence of Litigation.</A></LI>
</I><P>  Except as set forth in the Parent SEC Reports, (i)&nbsp;there are no
claims, actions, suits, proceedings or investigations pending or, to the
knowledge of the Parent, threatened, against Parent or against any subsidiary
and (ii)&nbsp;there is no judgment, decree, injunction, rule or order of any
Governmental or Regulatory Authority outstanding against Parent or its
subsidiaries, other than, in each case those that the outcome of which,
individually or in the aggregate, would not have a Parent Material Adverse
Effect or a material adverse effect on Parent's ability to consummate the
Merger.</P>
<LI><A NAME="_Toc472697612"><I>Labor Matters.</A></LI>
</I><P>  Except as set forth in Section&nbsp;3.09 of the Parent Disclosure
Schedule, (i)&nbsp;there are no controversies pending or, to the knowledge of
Parent or any of its subsidiaries, threatened between Parent or any of its
subsidiaries and any of their respective employees, which controversies have or
may reasonably be expected to have a Parent Material Adverse Effect;
(ii)&nbsp;neither Parent nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Parent or its subsidiaries nor does Parent or any of its
subsidiaries know of any activities or proceedings of any labor union to
organize any such employees, and (iii)&nbsp;neither Parent nor any of its
subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts or threats thereof, by or with respect to any employees of Parent or
any of its subsidiaries.</P>
<LI><A NAME="_Toc472697613"><I>Disclosure Documents.</A></LI>
</I><P>  The registration statement of Parent to be filed with the SEC with
respect to the offering of Parent Common Shares in connection with the Merger
(&quot;the &quot;<B>Registration Statement</B>&quot;) and any amendments or
supplements thereto will, when filed, comply as to form in all material respects
with the applicable requirements of the Securities Act.  At the time the
Registration Statement or any amendment or supplement thereto becomes effective
and at the Effective Time, the Registration Statement, as amended or
supplemented, if applicable, shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein not misleading.  The
foregoing representations and warranties will not apply to statements or
omissions included in the Registration Statement or any amendment or supplement
thereto based upon information furnished to Parent or Merger Sub by the Company
for use therein.  None of the information furnished to the Company for use in
(or incorporation by reference in) the Company Proxy Statement or any amendment
or supplement thereto will contain, at the time the Company Proxy Statement or
any amendment or supplement thereto is first mailed to stockholders of the
Company or at any time the stockholders vote on the approval and adoption of
this Agreement, any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.</P>
<LI><A NAME="_Toc472697614"><I>Taxes.</A></LI>
</I><P>  Except as disclosed on Schedule&nbsp;3.11 of the Parent Disclosure
Schedule, Parent and its subsidiaries have filed all United States federal
income Tax Returns and all other material Tax Returns required to be filed by
them for all periods ending on or after June 30, 1999 and before the date of
this Agreement, which Tax Returns are correct and complete in all material
respects, and have duly paid or made adequate provision on their books, records
and financial statements for the payment of all material Taxes which have
accrued or have become payable.</P>
<LI><A NAME="_Toc472697615"><I>Environmental Matters.</A></LI>
<OL TYPE="a">

</I><LI>Each of the Parent and its subsidiaries has obtained all Environmental
Permits, except for such failures to have Environmental Permits which,
individually or in the aggregate, are not reasonably expected to have a Parent
Material Adverse Effect.  Each of such Environmental Permits is in full force
and effect and each of the Parent and its subsidiaries is in compliance with the
terms and conditions of all such Environmental Permits and with any applicable
Environmental Law, except for such failures to be in compliance which,
individually or in the aggregate, are not reasonably expected to have a Parent
Material Adverse Effect.</LI>
<LI>Except as described in the Parent SEC Reports, there is no Environmental
Claim pending or to the knowledge of the Parent threatened against the Parent or
any of its subsidiaries or to the knowledge of the Parent, against any person or
entity whose liability for any Environmental Claim the Parent or any of its
subsidiaries has or may have retained or assumed either contractually or by
operation of law that is reasonably expected to have a Parent Material Adverse
Effect.</LI>
<LI>Except as described in the Parent SEC Reports, to the knowledge of Parent,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, threatened
release or presence of any Hazardous Material which could form the basis of any
Environmental Claim against Parent or any of its subsidiaries, or to the
knowledge of Parent, against any person or entity whose liability for any
Environmental Claim Parent or any of its subsidiaries has or may have retained
or assumed either contractually or by operation of law, except for such
liabilities which, individually or in the aggregate, are not reasonably expected
to have a Parent Material Adverse Effect.</LI>
<LI>To the knowledge of Parent, no site or facility now or previously owned,
operated or leased by Parent or any of its subsidiaries is listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA.</LI>
<LI>No Liens have arisen under or pursuant to any Environmental Law on any site
or facility owned, operated or leased by Parent or any of its subsidiaries,
other than any such Liens which would, individually or in the aggregate, have a
Parent Material Adverse Effect, and no action of any Governmental or Regulatory
Authority has been taken or, to the knowledge of Parent, is in process which
could subject any of such properties to such Liens.</LI></OL>

<LI><A NAME="_Toc472697616"><I>Brokers.</A></LI>
</I><P>  No broker, finder or investment banker (other than Thomas Weisel
Partners ("<B>TWP</B>") and Banc of America Securities LLC
(&quot;<B>BAS</B>&quot;) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Parent or Merger Sub.  Parent
has heretofore furnished to the Company a complete and correct copy of all
agreements between Parent and TWP and BAS pursuant to which such firms would be
entitled to any payment relating to the transaction contemplated hereunder.</P>
<LI><A NAME="_Toc472697617"><I>Full Disclosure.</A></LI>
</I><P>  No statement contained in any representation or warranty contained
herein or any statement contained in any certificate or schedule furnished or to
be furnished by Parent or Merger Sub to the Company in, or pursuant to the
provisions of, this Agreement contains or will contain any untrue statement of a
material fact or omits or shall omit to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.</P>
<LI><A NAME="_Toc472697618"><I>Opinion of Financial Advisor.</A></LI>
</I><P>  Parent has been advised by its financial advisor, BAS, that, in its
opinion, as of the date of this Agreement, the Exchange Ratio is fair from a
financial point of view to Parent and has delivered a written copy of such
opinion dated the date hereof to the Company.</P>
<LI><A NAME="_Toc472697619"><I>Intellectual Property.</A></LI>
</I><P>Parent, directly or indirectly, owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications therefor, technology,
know-how and tangible or intangible proprietary information, inventions, trade
secrets, processes or material that are required for the conduct of the business
of Parent and its subsidiaries as currently conducted (the &quot;<B>Parent
Intellectual Property Rights</B>&quot;).  Section 3.16 of the Parent Disclosure
Schedule contains a list of all registered Parent Intellectual Property Rights
and the jurisdictions where such registrations have been made.</P>
<P>Either Parent or a subsidiary is the sole and exclusive owner of, or the
exclusive or non-exclusive licensee of, with all right, title and interest in
and to (free and clear of any Liens), the Parent Intellectual Property Rights,
and, in the case of Parent Intellectual Property Rights owned by Parent or a
subsidiary, has sole and exclusive rights (and is not contractually obligated to
pay any compensation to any third party in respect thereof) to the use thereof
or the material covered thereby in connection with the services or products in
respect of which the Parent Intellectual Property Rights are currently being
used.  To the knowledge of Parent, there is no and there has not been any
unauthorized use, infringement or misappropriation by Parent or any of its
subsidiaries of any patents, trademarks, trade names, service marks, copyrights,
and any applications therefor, technology, know-how and tangible or intangible
proprietary information, inventions, trade secrets or processes of any third
party.  All registered patents, trademarks, service marks and copyrights held by
Parent are valid and subsisting.  To the knowledge of Parent, there is no
unauthorized use, infringement or misappropriation of any of the Parent
Intellectual Property Rights by any third party, including any employee or
former employee of Parent or any subsidiary.  No Parent Intellectual Property
Right or product of Parent or any subsidiary is subject to any outstanding
decree, order, judgment, or stipulation restricting in any manner the licensing
thereof by Parent or any subsidiary, except to the extent any such restriction
does not constitute a Parent Material Adverse Effect.  Neither Parent nor any
subsidiary has entered into any agreement under which Parent or any subsidiary
is restricted from selling, licensing or otherwise distributing any of its
products to any class of customers, in any geographic area, during any period of
time or in any segment of the market, except to the extent any such restriction
does not constitute a Parent Material Adverse Effect.  Each of Parent and its
subsidiaries has used commercially reasonable efforts to (i) protect through
nondisclosure agreements or other appropriate means all material patent,
copyright, trademark and trade secret rights and confidential information of
Parent and its subsidiaries, and (ii) otherwise to secure and protect for
Parent's benefit all Parent Intellectual Property Rights of Parent.  Each
employee, officer and consultant of Parent and each of its subsidiaries has
executed a proprietary information and inventions agreement substantially in the
form provided by Parent to the Company.  The execution of this Agreement and the
consummation of the transactions contemplated hereby will not impair or
invalidate in any way any of the Parent Intellectual Property Rights.  </P>
<LI><A NAME="_Toc472697620"><I>Title to Property.</A></LI>
</I><P>  Parent and its subsidiaries own or lease no material real property
other than as set forth in Section 3.17 of the Parent Disclosure Schedule or the
Parent SEC Reports.  Except as reflected in Parent's financial statements
included in the Parent SEC Reports, each of Parent and its subsidiaries has good
and valid title to all of its respective properties and assets, free and clear
of all Liens except Liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, do not materially detract from the value
of or materially interfere with the present use of the property affected
thereby; and, to the knowledge of Parent, all leases pursuant to which Parent or
any subsidiary leases from others material amounts of real or personal property
are in good standing, valid and effective in accordance with their respective
terms, and there is not, to the knowledge of Parent, under any of such leases,
any existing material default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which Parent or any of its subsidiaries, as applicable, has not taken adequate
steps to prevent such a default from occurring).<I>  </P>
<LI><A NAME="_Toc472697621">Year 2000 Matters.</A></LI>
</I><P>  Any reprogramming required to permit the proper functioning in and
following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by Parent or any of its
subsidiaries or used or relied upon in the conduct of their respective
businesses (including any systems and other equipment supplied by others or with
which the computer systems of Parent or any of its subsidiaries interface) has
been completed.  The testing of all such systems and other equipment as so
reprogrammed has been completed.  The costs to Parent and its subsidiaries for
such reprogramming and testing and for other foreseeable consequences to them of
any improper functioning of other computer systems and equipment containing
embedded microchips due to the occurrence of the year 2000 will not have a
Parent Material Adverse Effect.</P>
<LI><A NAME="_Toc472697622"><I>Material Contracts; No Violation</I>.</A>  </LI>
<OL TYPE="a">

<LI>Except as set forth in Section 3.19(a) of the Parent Disclosure Schedule,
(i) neither the Parent nor any subsidiary has breached, is in default under, or
has received written notice of any breach or default under, any contract filed
as an exhibit or required to be filed as an exhibit to the Parent SEC Reports (a
&quot;<B>Parent Material Contract</B>&quot;), (ii) to the knowledge of Parent,
no other party to any of the Parent Material Contracts has breached or is in
default of any of its obligations thereunder, and (iii) each of the Parent
Material Contracts is in full force and effect, except in any such case for
breaches, defaults or failures to be in full force that in the aggregate do not
constitute a Parent Material Adverse Effect.</LI>
<LI>Except as set forth in Section 3.19(b) of the Parent Disclosure Schedule,
the execution and delivery of this Agreement by the Parent does not, and the
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement by Parent will, (i) conflict with or violate the
certificate of incorporation or bylaws of Parent, (ii) conflict with or violate
any Laws applicable to the Parent or any subsidiary or by which any of their
respective properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair the Company's or any subsidiary's
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any contract, or result in the creation of a Lien on any of the properties or
assets of the Company or any subsidiary pursuant to, any material contract filed
as an exhibit or required to be filed as an exhibit to the Parent SEC Reports or
other note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or any
subsidiary is a party or by which Parent or any subsidiary or any of their
respective properties are bound or affected, except in the case of clauses (ii)
and (iii) for any such conflicts, violations, breaches, defaults or other
occurrences that would not, individually or in the aggregate, have a Parent
Material Adverse Effect.  </LI></OL>
</OL>

<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697623">CONDUCT OF BUSINESS PENDING THE MERGER</A></LI></P>
<OL>

<LI><A NAME="_Toc472697624"></B></FONT><I>Conduct of Business by the Company
Pending the Merger.</A></LI>
</I><P>  During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time, the
Company covenants and agrees that, unless Parent shall otherwise agree in
writing or as required or permitted under this Agreement, the Company shall
conduct its business and shall cause the business of its subsidiaries to be
conducted only in, and the Company and its subsidiaries shall not take any
action except in the ordinary course of business and in a manner consistent with
past practice; and the Company shall use reasonable commercial efforts to
preserve substantially intact the business organization of the Company and its
subsidiaries, to keep available the services of the present officers, employees
and consultants of the Company and its subsidiaries and to preserve the present
relationships of the Company and its subsidiaries with customers, suppliers and
other persons with which the Company or any subsidiary has significant business
relations.  By way of amplification and not limitation, except as contemplated
by this Agreement and except as disclosed in Section 4.01 of the Company
Disclosure Schedule, neither the Company nor any subsidiary shall, during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, directly or indirectly do,
or propose to do, any of the following without the prior written consent of
Parent:</P>
<OL TYPE="a">

<LI>amend or otherwise change the Company's certificate of incorporation or
bylaws;</LI>
<LI>issue, sell, pledge, dispose of or encumber, or authorize the issuance,
sale, pledge, disposition or encumbrance of, any shares of Company capital stock
of any class, or any options, warrants, convertible securities or other rights
of any kind to acquire any shares of Company capital stock, or any other
ownership interest (including, without limitation, any phantom interest) of the
Company, any subsidiary or any of its affiliates, except for the issuance of (i)
options under the Company Stock Option Plans to purchase up to 2,000,000 shares
of Company Common Stock granted to Company employees in the ordinary course of
business, which options shall have exercise prices no less than the fair market
value at the time of grant and (ii) shares of Company Common Stock issuable to
participants in the Company's employee stock purchase plan in the ordinary
course of business and upon issuance of outstanding Stock Options granted under
the Company Stock Option Plans;</LI>
<LI>sell, pledge, dispose of or encumber any assets or inventory of the Company
or of any subsidiary (except for (i)&nbsp;sales of assets or inventory in the
ordinary course of business, (ii)&nbsp;dispositions of obsolete or worthless
assets, and (iii) pledges of assets pursuant to existing agreements, or
agreements the Company is permitted to enter into in connection with the
purchase of assets), or take any action that would reasonably be expected to
result in any damage to, destruction or loss of any material asset of the
Company (whether or not covered by insurance);</LI>
<LI>except as is contemplated by this Agreement, or the applicable award
agreement or Employee Plan, accelerate, amend or change the period (or permit
any acceleration, amendment or change) of exercisability of options or
restricted stock granted under the Employee Plans (including the Company Stock
Option Plans) or authorize cash payments in exchange for any options granted
under any of such plans;</LI>
<LI>(i)&nbsp;declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its common stock, except that a subsidiary may declare and pay a dividend
to the Company, (ii)&nbsp;split, combine or reclassify any of its common stock
or issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its common stock,
(iii)&nbsp;amend the terms of, repurchase, redeem or otherwise acquire, or
permit any subsidiary to repurchase, redeem or otherwise acquire, any of its
securities or any securities of a subsidiary, except in accordance with
preexisting commitments as of the date hereof, or propose to do any of the
foregoing;</LI>
<LI>(i)&nbsp;acquire (by merger, consolidation, or acquisition of stock or
assets) any company, corporation, partnership or other business organization or
division thereof, or enter into or amend any contract, agreement, commitment or
arrangement to effect any such acquisition, except with respect to those
transactions as set forth in Section 4.01(f) of the Company Disclosure Schedule,
(ii)&nbsp;incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee (other than guarantees of bank debt of a subsidiary entered
into in the ordinary course of business) or endorse or otherwise as an
accommodation become responsible for, the obligations of any person, or make any
loans or advances, except in each case in the ordinary course of business
(including pursuant to existing credit lines and lease facilities); (iii) to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any subsidiary or any other entity other than
guarantees of bank obligations of a subsidiary entered into in the ordinary
course of business; (iv)&nbsp;except in the ordinary course of business or
otherwise provided or permitted by this Agreement, to enter into or amend any
material agreement or contract which provides for the sale, license, or purchase
by the Company or any of its subsidiaries of assets; (iv)&nbsp;authorize any
capital expenditures or purchase of fixed assets which are, in the aggregate, in
excess of $100,000,000; or (v)&nbsp;enter into or amend any contract, agreement,
commitment or arrangement to effect any of the matters prohibited by this
Section&nbsp;4.01(f); <U>provided</U>, <U>however</U>, notwithstanding anything
to the contrary contained in the foregoing, the Company shall be permitted to
make minority equity investments in other entities not to exceed $5 million
individually, or $30 million in the aggregate (including without limitation the
right to enter into appropriate investment agreements);</LI>
<LI>increase the compensation payable or to become payable to its officers or
employees, except for increases in salary or wages of employees of the Company
or of any subsidiary who are not executive officers of the Company in the
ordinary course of business in accordance with past practices, or grant any
severance or termination pay to, or enter into any employment or severance
agreement with any director, officer (except for officers who are terminated on
an involuntary basis), or, except as consistent with past practice and in the
ordinary course of business, establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any current or former directors, officers or
employees, except, in each case, as may be required by law;</LI>
<LI>take any action to change accounting policies or procedures (including,
without limitation, procedures with respect to revenue recognition, payments of
accounts payable and collection of accounts receivable), except as required by
concurrent changes in GAAP or Federal Securities Law applicable to companies
generally;</LI>
<LI>make any material Tax election inconsistent with past practices or settle or
compromise any material federal, state, local or foreign Tax liability or agree
to an extension of a statute of limitations except to the extent the amount of
any such settlement has been reserved for on the most recent Company SEC Report
or incurred in the ordinary course of business since such date;</LI>
<LI>pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business; </LI>
<LI>Engage in any action or enter into any transaction or permit any action to
be taken or transaction to be entered into that could reasonably be expected to
delay the consummation of, or otherwise adversely affect, any of the
transactions contemplated by this Agreement;</LI>
<LI>undertake any revaluation of any of the Company's or any subsidiary's
assets, including, without limitation, writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary course of
business or in accordance with GAAP consistently applied; </LI>
<LI>take, or agree in writing or otherwise to take, any of the actions described
in Sections&nbsp;4.01 (a) through (l) above.  </LI></OL>

<LI><A NAME="_Toc472697625"><I>Conduct of Business by Parent and Merger Sub
Pending the Merger.</A></LI>
</I><P>  During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time, Parent
covenants and agrees that, unless the Company shall otherwise agree in writing
or as required or permitted under this Agreement, Parent shall conduct its
business and shall cause the business of its subsidiaries to be conducted only
in, and Parent and its subsidiaries shall not take any action except in the
ordinary course of business and in a manner consistent with past practice; and
Parent shall use reasonable commercial efforts to preserve substantially intact
the business organization of Parent and its subsidiaries, to keep available the
services of the present officers, employees and consultants of Parent and its
subsidiaries and to preserve the present relationships of Parent and its
subsidiaries with customers, suppliers and other persons with which Parent or
any subsidiary has significant business relations.  By way of amplification and
not limitation, except as contemplated by this Agreement and except as disclosed
in Section 4.02 of the Parent Disclosure Schedule, neither Parent nor any of its
subsidiaries shall, unless the Company shall otherwise agree in writing or as
required or permitted under this Agreement, during the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, directly or indirectly do, or propose to do,
any of the following without the prior written consent of the Company:</P>
<OL TYPE="a">

<LI>Engage in any action or enter into any transaction or permit any action to
be taken or transaction to be entered into that could reasonably be expected to
delay the consummation of, or otherwise adversely affect, any of the
transactions contemplated by this Agreement;</LI>
<LI>Acquire (by merger, consolidation, or acquisition of stock or assets) any
company, corporation, partnership or other business organization or division
thereof or enter into or amend any contract, agreement, commitment or
arrangement to effect any such acquisition, except with respect to those
transactions as set forth in Section 4.02(b) of the Parent Disclosure Schedule;
provided that Parent (or its subsidiaries) may make minority equity investments
in other entities not to exceed $5 million individually, or $30 million in the
aggregate (including without limitation the right to enter into appropriate
investment agreements); or</LI>
<LI>Take, or agree in writing or otherwise to take, any of the actions described
in Sections 4.02(a) through (b) above.</LI></OL>

<LI><A NAME="_Toc472697626"><I>No Solicitation.</A></LI>
<OL TYPE="a">

</I><LI>The Company shall not, and shall not permit or authorize the Company's
subsidiaries, its and their officers, directors, employees, affiliates, agents
or other representatives (including without limitation any investment banker,
financial advisor, attorney or accountant retained by it or any of its
subsidiaries) to initiate, solicit or knowingly encourage (including by way of
furnishing information or assistance) or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any Alternative Transaction (as defined in
Section&nbsp;7.03(d)), or enter into discussions (except as to the existence of
these provisions) or negotiate with any person or entity in furtherance of such
inquiries or to obtain an Alternative Transaction, or agree to, or endorse, any
Alternative Transaction and the Company shall promptly notify Parent of all
relevant terms of any such inquiries or proposals received by the Company or by
any subsidiary or by any such officer, director, employee, agent, investment
banker, financial advisor, attorney, accountant or other representative relating
to any of such matters and if such inquiry or proposal is in writing, the
Company shall promptly deliver or cause to be delivered to Parent a copy of such
inquiry or proposal and promptly update Parent as to any material changes with
respect to such inquiry or proposal; provided, however, that nothing contained
in this subsection (a) shall prohibit the board of directors of the Company, any
of its subsidiaries, and each of their officers, directors, employees,
affiliates, agents or other representatives (including without limitation any
investment banker, financial advisor, attorney or accountant retained by it or
any of its subsidiaries) from (i)&nbsp;furnishing information to, entering into
a confidentiality agreement with, or entering into discussions or negotiations
with, any persons or entity in connection with an unsolicited bona fide proposal
in writing by such person or entity relating to an Alternative Transaction if,
and only to the extent that (A)&nbsp;the board of directors of the Company
determines in good faith, after consultation with its outside legal counsel,
that such action is reasonably necessary to comply with its fiduciary duties
under Delaware law, (B) such action is in response to an unsolicited bona fide
written proposal made by a third party relating to an Alternative Transaction on
terms which the Company's board of directors believes to be more favorable to
the Company's stockholders than the Merger or may reasonably be expected to
result in an Alternative Transaction on terms that the Company's board of
directors believe is more favorable to the Company's stockholders than the
Merger, and in each case for which financing, to the extent required, is then
committed (a "<B>Superior Proposal</B>"), and (C)&nbsp; prior to furnishing such
information to, or entering into discussions or negotiations with, such person
or entity the Company provides written notice to Parent to the effect that it is
furnishing information to, or entering into discussions or negotiations with,
such person or entity; (ii)&nbsp;complying with Rule&nbsp;14e-2 promulgated
under the Exchange Act with regard to an Alternative Transaction; or (iii) in
the event of a Superior Proposal, to enter an agreement or understanding with
respect to the Superior Proposal.</LI>
<LI>The Company shall immediately cease and cause to be terminated any existing
discussions or negotiations with any parties (other than Parent and Merger Sub)
conducted heretofore with respect to any of the foregoing.  The Company agrees
not to release any third party from any confidentiality or standstill agreement
to which the Company is a party.</LI>
<LI>The Company shall ensure that the officers, directors and employees of the
Company and of each subsidiary and any investment banker or other advisor or
representative retained by the Company are aware of the restrictions described
in this Section.</LI></OL>
</OL>

<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697627">ADDITIONAL AGREEMENTS</A></LI></P>
<OL>

<LI><A NAME="_Toc472697628"></B></FONT><I>Proxy Statement; Form S-4.</A></LI>
</I><P>  In connection with the meeting of the Company's stockholders to approve
this Agreement and the transactions contemplated hereby (the &quot;<B>Company
Stockholders' Meeting</B>&quot;), after the date hereof the Company will
promptly prepare and file with the SEC a proxy statement (the "<B>Company Proxy
Statement</B>"), conforming to the requirements of the applicable provisions of
the Exchange Act, soliciting the Company stockholders' approval of this
Agreement and the transactions contemplated herein at the Company Stockholders'
Meeting.  After the date hereof, Parent shall prepare and Parent shall file with
the SEC the Registration Statement in which a prospectus and the Company Proxy
Statement will be included as part.  Each of Parent and the Company will respond
to any comments of the SEC, will use commercially reasonable efforts to cause
the Registration Statement to become effective and will cause the Company Proxy
Statement/Prospectus to be mailed to all stockholders of the Company at the
earliest practicable time after the Registration Statement is declared
effective.  Each of Company and Parent will notify the other promptly upon the
receipt of any comments from the SEC or its staff of any request by the SEC or
its staff for amendments or supplements to the Registration Statement, Company
Proxy Statement, or for additional information and will supply the other copies
with all such correspondence between such party or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Registration Statement, Company Proxy Statement or Merger.  The Company
Proxy Statement and all other proxy materials shall be subject to the review and
reasonable approval of Parent.</P>
<LI><A NAME="_Toc472697629"><I>Company Stockholders' Meeting; Voting
Agreements.</A></LI>
</I><P>  The Company shall call and use commercially reasonable efforts to hold
the Company Stockholders' Meeting as promptly as practicable after the date on
which the Registration Statement becomes effective for the purpose of voting
upon the approval of the Merger.  The Company shall use commercially reasonable
efforts to solicit from its stockholders proxies in favor of the approval of the
Merger, and shall use commercially reasonable efforts to take all other action
necessary or advisable to secure the vote or consent of stockholders required by
the DGCL and the certificate of incorporation and bylaws of the Company to
obtain such approvals.  Concurrently herewith each of the persons listed on
Exhibit 5.02(a) has entered into a Voting Agreement with Parent in substantially
the form of Exhibit&nbsp;5.02(b) hereto (the &quot;<B>Voting
Agreements</B>&quot;) and the Company shall in no way challenge the validity, or
enforceability of any of the Voting Agreements or any proxy entered into in
connection therewith. </P>
<LI><A NAME="_Toc472697630"><I>Access to Information; Confidentiality.</A></LI>
</I><P>  Upon reasonable notice and subject to restrictions contained in
confidentiality agreements to which such party is subject, the Company and
Parent shall each (and shall cause each of their subsidiaries to) afford to the
officers, employees, accountants, counsel and other representatives of the
other, reasonable access, during the period prior to the Effective Time, to all
its properties, books, contracts, commitments and records and, during such
period.  The Company and Parent each shall (and shall cause each of their
subsidiaries to) furnish promptly to the other all information concerning its
business, properties and personnel as such other party may reasonably request,
and each shall make available to the other the appropriate individuals
(including attorneys, accountants and other professionals) for discussion of the
other's business, properties and personnel as either party may reasonably
request.  Each party shall keep such information confidential in accordance with
the terms of the letter agreement, entered into on January 7, 2000 (the
&quot;<B>Confidentiality Agreement</B>&quot;) between Parent and the Company.
The Company and Parent shall file all reports required to be filed by each of
them with the SEC between the date of this Agreement and the Effective Time and
shall deliver to the other party copies of such reports promptly after the same
are filed.</P>
<LI><A NAME="_Toc472697631"><I>Consents; Approvals.</A></LI>
</I><P>  The Company and Parent shall coordinate and cooperate with one another
and shall each use their reasonable best efforts to obtain (and shall each
refrain from taking any willful action that would impede obtaining) all
consents, waivers, approvals, authorizations or orders (including, without
limitation, all rulings, decisions or approvals by any Governmental or
Regulatory Authority), and the Company and Parent shall make all filings
(including, without limitation, the pre-merger notification filings required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (&quot;<B>HSR
Act</B>&quot;), as amended, and all other filings with Governmental or
Regulatory Authorities) required in connection with the authorization, execution
and delivery of this Agreement by the Company and Parent and the consummation by
them of the transactions contemplated hereby, excepting only those merger
notification filings with foreign jurisdictions for which the failure to file
would not have a Material Adverse Effect on the Company or the transactions
contemplated hereby.  The Company and Parent shall furnish all information
required to be included in the Company Proxy Statement and the Registration
Statement, or for any application or other filing to be made pursuant to the
rules and regulations of any Governmental or Regulatory Authority in connection
with the transactions contemplated by this Agreement.  Except where prohibited
by applicable statutes and regulations, and subject to the Confidentiality
Agreement, each party shall coordinate with one another in preparing and
exchanging such information, and shall promptly provide the other (or its
counsel) with copies of all filings, presentations or submissions made by such
party with any Governmental or Regulatory Authority in connection with this
Agreement or the transactions contemplated hereby.</P>
<LI><A NAME="_Toc472697632"><I>Agreements of Affiliates.</A></LI>
</I><P>  The Company shall deliver to Parent, prior to the date the Registration
Statement becomes effective under the Securities Act, a letter (the
&quot;<B>Affiliate Letter</B>&quot;) identifying all persons who are, or may be
deemed to be, at the time of the Company Stockholders' Meeting,
&quot;affiliates&quot; of the Company for purposes of Rule&nbsp;145 under the
Securities Act.  The Company shall use commercially reasonable efforts to cause
each person who is identified as an &quot;affiliate&quot; in the Affiliate
Letter to deliver to Parent, prior to the Effective Time, a written agreement
(an &quot;<B>Affiliate Agreement</B>&quot;) in a form mutually agreeable to the
Company and Parent.</P>
<LI><A NAME="_Toc472697633"><I>Notification of Certain Matters.</A></LI>
</I><P>  The Company shall give prompt notice to Parent, and Parent shall give
prompt notice to the Company, of (i)&nbsp;the occurrence or non-occurrence of
any event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be materially untrue
or inaccurate such that the conditions to closing set forth in Section 6.02(a)
and 6.03(b), as the case may be, shall not be met and (ii)&nbsp;any failure of
the Company, Parent or Merger Sub, as the case may be, to materially comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder such that the conditions to closing set forth in Section 6.02(a)
and 6.03(b), as the case may be, shall not be met; provided, however, that the
delivery of any notice pursuant to this Section 5.06 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice and further provided that failure to give such notice shall not be
treated as a breach of covenant for the purposes of Section&nbsp;6.02(b) or
6.03(b) unless the failure to give such notice results in material prejudice to
the other party.</P>
<LI><A NAME="_Toc472697634"><I>Further Assurances; Tax Treatment.</A></LI>
<OL TYPE="a">

</I><LI>Upon the terms and subject to the conditions hereof, each of the parties
hereto shall use reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and to otherwise satisfy or cause to be satisfied all
conditions precedent to its obligations under this Agreement.  </LI>
<LI>Each of Parent, Merger Sub and the Company shall use its best efforts to
cause the Merger to qualify, and will not (both before and after consummation of
the Merger) take any actions which could prevent the Merger from qualifying, as
a reorganization under the provisions of Section&nbsp;368 of the Code.</LI>
<LI>Each of Parent, Merger Sub and the Company shall cooperate with each other
in obtaining the opinions of Morrison &amp; Foerster LLP and Wilson Sonsini
Goodrich &amp; Rosati Professional Corporation described in
Section&nbsp;6.01(c).  In connection therewith, each of Parent and the Company
shall deliver to such counsel customary representation letters substantially in
the form of Exhibit&nbsp;5.07(c) hereto.</LI></OL>

<LI><A NAME="_Toc472697635"><I>Public Announcements.</A></LI>
</I><P>  Parent and the Company shall consult with each other before issuing any
press release with respect to the Merger or this Agreement and shall not issue
any such press release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other party, issue
such press release or make such public statement as may upon the advice of
counsel be required by law or the Nasdaq National Market if it has used all
reasonable efforts to consult with the other party.  Each of Parent and Company
shall make all necessary filings with Governmental or Regulatory Authorities and
shall promptly provide the other party with copies of filings made by such party
between the date hereof and the Effective Time. </P>
<LI><A NAME="_Toc472697636"><I>Listing of Parent Common Shares.</A></LI>
</I><P>  Parent shall use its commercially reasonable best efforts to cause the
shares of Parent Common Shares to be issued in the Merger to be approved for
quotation on the Nasdaq National Market prior to the Effective Time.  Parent
shall use its commercially reasonable best efforts to cause shares of Parent
Common Stock, when issued upon exercise of Company Stock Options, to be approved
for quotation on the Nasdaq National Market.</P>
<LI><A NAME="_Toc472697637"><I>Form S-8</I>.</A></LI>
<P>  Parent shall file with the SEC, no later than 10 days after the Effective
Time, a registration statement on Form S-8 relating to Parent Common Stock
issuable pursuant to assumed awards under the Company Stock Option Plans and the
Company's Employee Stock Purchase Plan (the &quot;<B>Company
ESPP</B>&quot;).</P>
<LI><A NAME="_Toc472697638"><I>Conveyance Taxes.</A></LI>
</I><P>  Parent and the Company shall cooperate in the preparation, execution
and filing of all returns, questionnaires, applications, or other documents
regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees, and any similar taxes which become payable in connection with the
transactions contemplated hereby that are required or permitted to be filed on
or before the Effective Time.</P>
<LI><A NAME="_Toc472697639"><I>Director and Officer Liability.</A></LI>
</I><P>  From and after the Effective Time, Parent will cause the Surviving
Company to indemnify and hold harmless the present and former officers and
directors of the Company in respect of acts or omissions occurring prior to the
Effective Time to the extent provided under the Company's certificate of
incorporation and bylaws in effect on the date hereof.  For a period of six
years after the Effective Time, Parent shall cause to be maintained in effect
the policies of directors' and officers' liability insurance maintained by the
Company for the benefit of those persons who are covered by such policies at the
Effective Time (or Parent and/or the Surviving Company may substitute therefor
policies of at least the same coverage with respect to matters occurring prior
to the Effective Time); provided, however, that in no event shall Parent and/or
the Surviving Company be required to expend in excess of 150 percent of the
annual premium currently paid by the Company for such coverage, and provided
further, that if the premium for such coverage exceeds such amount, Parent
and/or the Surviving Company shall purchase a policy with the greatest coverage
available for such 150 percent of the annual premium.</P>
<LI><A NAME="_Toc472697640"><I>Action by Parent and Company's Boards.</A></LI>
</I><P>  Prior to the Effective Time, the boards of directors of Parent and the
Company shall each comply as applicable with the provisions of the SEC's no-
action letter dated January&nbsp;12, 1999 addressed to Skadden, Arps, Slate,
Meagher and Flom LLP relating to Rule&nbsp;l6b of the Exchange Act.</P>
<LI><A NAME="_Toc472697641"><I>Composition of the Board of Directors.</A></LI>
</I><P>  Parent's board of directors currently consists of ten members, divided
into three classes and the members of each class of directors serve staggered
three-year terms.  At the Effective Time, Parent shall cause (a)&nbsp;the size
of its Board of Directors to be increased to twelve members, and (b)&nbsp;the
persons listed on Exhibit 5.14 to be appointed to Parent's Board of Directors
(each to be in such class as shall be reasonably approved by the Company and
Parent) to serve until such time as successors are duly elected and qualified.
</P>
<LI><A NAME="_Toc472697642"><I>Employee Benefits</I>.</A></LI></OL>

<P>  Parent agrees that all employees of the Company and its subsidiaries who
continue employment with Parent, the Surviving Company or any subsidiary thereof
after the Effective Time (the &quot;<B>Continuing Employees</B>&quot;) shall be
eligible to participate in Parent's employee benefit plans and arrangements to
the same extent as and on a basis no less favorable than similarly situated
employees of Parent.  The Continuing Employees shall be given credit for service
with the Company and its subsidiaries for all purposes under Parent's employee
benefit plans and arrangements.  With respect to the Continuing Employees,
Parent shall waive all pre-existing condition limitations in its health and
welfare plans and shall give credit for co-payments, deductibles and out-of-
pocket maximums already incurred by the Continuing Employees under the Company
Employee Plans.  Upon the Effective Time, the Parent shall assume the Company
ESPP and each outstanding option thereunder.  Each ESPP option so assumed by
Parent shall continue to have, and be subject to the same terms and conditions
set forth in the ESPP, except that (a)&nbsp;the fair market value per share of
Company Common Stock at the beginning of each offering period in effect as of
the Effective Time shall be equal to the fair market value per share of the
Company's Common Stock at the beginning of each such offering period divided by
the Exchange Ratio, rounded up to the nearest whole cent, and (b)&nbsp;no ESPP
option shall be terminated by Parent prior to its normal expiration in
accordance with the terms of the ESPP.  In the event that following the
expiration of all ESPP options, Parent terminates the Company ESPP, Continuing
Employees will be eligible to participate in the Parent Employees' Stock
Purchase Plan (&quot;<B>Parent ESPP</B>&quot;) in accordance with the terms and
conditions of the Parent ESPP.</P>
<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697643">CONDITIONS TO THE MERGER</A></LI></P>
<OL>

<LI><A NAME="_Toc472697644"></B></FONT><I>Conditions to Obligations of Each
Party to Effect the Merger.</A></LI>
</I><P>  The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:</P>
<OL TYPE="a">

<I><LI>Effectiveness of the Registration Statement</I>.  The Registration
Statement shall have been declared effective by the SEC under the Securities
Act.  No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose and no
similar proceeding in respect of the Company Proxy Statement shall have been
initiated or threatened by the SEC;</LI>
<I><LI>No Injunctions or Restraints; Illegality</I>.  No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; and there shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger, which makes the consummation of the Merger
illegal;</LI>
<I><LI>Tax Opinions</I>.  Parent and the Company shall have received opinions of
Morrison &amp; Foerster LLP and Wilson Sonsini Goodrich &amp; Rosati,
Professional Corporation, respectively, in form and substance reasonably
satisfactory to Parent and the Company, respectively, on the basis of certain
facts, representations and assumptions set forth in such opinion, dated the
Effective Time, to the effect that the Merger will be treated for federal income
tax purposes as a reorganization qualifying under the provisions of
Section&nbsp;368(a) of the Code and that each of Parent, Merger Sub and the
Company will be a party to the reorganization within the meaning of
Section&nbsp;368(b) of the Code; <U>provided</U>, <U>however</U>, that if the
counsel to either Parent or the Company does not render such opinion this
condition shall nonetheless be deemed to be satisfied with respect to such party
if counsel to the other party renders such opinion to such party; </LI>
<I><LI>HSR Act</I>.  The waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated and any other applicable waiting period under any other premerger
notification statute of a foreign jurisdiction, to the extent material, has
either expired or been terminated; and</LI>
<I><LI>Stockholder Approval</I>.  This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of the
Company.</LI></OL>

<LI><A NAME="_Toc472697645"><I>Additional Conditions to Obligations of Parent
and Merger Sub.</A></LI>
</I><P>  The obligations of Parent and Merger Sub to effect the Merger are also
subject to the following conditions:</P>
<OL TYPE="a">

<I><LI>Representations and Warranties</I>.  The representations and warranties
of the Company contained in this Agreement shall be true and correct on and as
of the Effective Time, except (i)&nbsp;for changes contemplated by this
Agreement, (ii)&nbsp;those representations and warranties which address matters
only as of a particular date (which shall remain true and correct as of such
date (subject to the qualifications in clause&nbsp;(iii) below)); and
(iii)&nbsp;where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation as to
&quot;materiality&quot; or &quot;material adverse effect&quot; set forth
therein) would not have a Company Material Adverse Effect, with the same force
and effect as if made on and as of the Effective Time, and Parent and Merger Sub
shall have received a certificate to such effect signed by the President and
Chief Financial Officer of the Company;</LI>
<I><LI>Agreements and Covenants</I>.  The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Parent and Merger Sub shall have received a certificate to
such effect signed by the President and Chief Financial Officer of the
Company;</LI>
<I><LI>Material Adverse Effect</I>.  Since the date of this Agreement, there
shall not have occurred a Company Material Adverse Effect.</LI></OL>

<LI><A NAME="_Toc472697646"><I>Additional Conditions to Obligation of the
Company.</A></LI>
</I><P>  The obligation of the Company to effect the Merger is also subject to
the following conditions:</P>
<OL TYPE="a">

<I><LI>Representations and Warranties</I>.  The representations and warranties
of Parent and Merger Sub contained in this Agreement shall be true and correct
on and as of the Effective Time, except (i)&nbsp;for changes contemplated by
this Agreement, (ii)&nbsp;those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as of
such date (subject to the qualifications in clause&nbsp;(iii) below)), and
(iii)&nbsp;where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation as to
&quot;materiality&quot; or &quot;material adverse effect&quot; set forth
therein) would not have, individually or in the aggregate, a Parent Material
Adverse Effect, with the same force and effect as if made on and as of the
Effective Time, and the Company shall have received a certificate to such effect
signed by the President and Chief Financial Officer of Parent;</LI>
<I><LI>Agreements and Covenants</I>.  Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate to such effect
signed by the President and Chief Financial Officer of Parent;</LI>
<I><LI>Material Adverse Effect</I>.  Since the date of this Agreement, there
shall not have been a Parent Material Adverse Effect.</LI></OL>
</OL>

<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697647">TERMINATION</A></LI></P>
<OL>

<LI><A NAME="_Toc472697648"></B></FONT><I>Termination.</A></LI>
</I><P>  This Agreement may be terminated at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of the Company:</P>
<OL TYPE="a">

<LI>by mutual written consent duly authorized by the boards of directors of
Parent and the Company; or</LI>
<LI>by either Parent or the Company if the Merger shall not have been
consummated by October&nbsp;31, 2000 (the &quot;<B>Final Date</B>&quot;)
(provided that the right to terminate this Agreement under this
Section&nbsp;7.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been a principal cause of or
resulted in the failure of the Merger to occur on or before such date and such
action or failure to act constitutes a material breach of this Agreement);
or</LI>
<LI>by either Parent or the Company if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued a non-appealable final order, decree or ruling or taken any other action,
in each case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger, except if the party relying on such order,
decree or ruling or other action has not complied with its obligations under
Sections&nbsp;5.04 and 5.07; or </LI>
<LI>by Parent or the Company if, at the Company Stockholders' Meeting (including
any adjournment or postponement thereof), the requisite vote of the stockholders
of the Company as required by the DGCL (the &quot;<B>Requisite Vote</B>&quot;)
shall not have been obtained; <U>provided</U>, <U>however</U>, that the right to
terminate this Agreement under this Section 7.01(d) shall not be available to
the Company where the failure to obtain the Requisite Vote shall have been
caused by the Company's breach of this Agreement (subject solely to any actions
taken by the Company in connection with a Superior Proposal to the extent
permitted by and pursuant to Section&nbsp;4.03(a)); or</LI>
<LI>by Parent, if (i)&nbsp;the board of directors of the Company shall withdraw,
modify or change its recommendation of this Agreement or the Merger in a manner
adverse to Parent or shall have resolved to do any of the foregoing;
(ii)&nbsp;the board of directors of the Company shall have recommended to the
stockholders of the Company an Alternative Transaction (as defined in
Section&nbsp;7.03(d)); or (iii)&nbsp;a tender offer or exchange offer for 15% or
more of the outstanding shares of Company Common Stock is commenced (other than
by Parent or an affiliate of Parent), and the board of directors of the Company
recommends that the stockholders of the Company tender their shares in such
tender or exchange offer; </LI>
<LI>by the Company, prior to the receipt of the Requisite Vote, if the Company
receives, without violating its obligations under Section 4.03 hereof, a
Superior Proposal; provided that in order for the termination of this Agreement
to be deemed effective pursuant to this paragraph (f), the Company shall have
complied with all its obligations under Section 4.03 hereof and with applicable
requirements of Section 7.03 hereof, including payment of the Fee Payable By
Company (as defined in Section 7.03(b) hereof) pursuant to Section 7.03(b)
hereof; </LI>
<LI>by Parent or the Company, upon a material breach of any representation,
warranty, covenant or agreement on the part of the Company or Parent,
respectively, set forth in this Agreement such that the conditions set forth in
Section&nbsp;6.02(a) or 6.02(b), or Section&nbsp;6.03(a) or 6.03(b), would not
be satisfied, provided, that if such breach is curable through the exercise of
commercially reasonable efforts, then the other party may not terminate pursuant
to this Section&nbsp;7.01(g) in respect of such breach if such breach is curable
and shall have been cured within 30&nbsp;days following notice by the other
party of such breach, provided the breaching party continues to use commercially
reasonable efforts to cure such breach during the 30 day period (it being
understood that (i)&nbsp;the other party may not terminate this Agreement
pursuant to this Section&nbsp;7.01(g) after notice of such breach if such breach
shall have been cured within 30&nbsp;days or the party seeking to terminate
shall then be in material breach of this Agreement and (ii)&nbsp;no cure period
shall be required for a breach which by its nature cannot be cured).</LI></OL>

<LI><A NAME="_Toc472697649"><I>Effect of Termination.</A></LI>
</I><P>  In the event of the termination of this Agreement pursuant to
Section&nbsp;7.01, this Agreement shall forthwith become void and there shall be
no liability on the part of any party hereto or any of its affiliates,
directors, officers or stockholders except (i)&nbsp;as set forth in
Sections&nbsp;7.03 and 8.01 hereof, and (ii)&nbsp;nothing herein shall relieve
any party from liability for any willful breach hereof.</P>
<LI><A NAME="_Toc472697650"><I>Fees and Expenses.</A></LI>
<OL TYPE="a">

</I><LI>Except as set forth in this Section&nbsp;7.03, (i)&nbsp;all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, if the
Merger is not consummated, or (ii)&nbsp;if the Merger is consummated, then the
Surviving Company shall pay all such fees and expenses; provided however, that
Parent and the Company shall share equally all fees and expenses, other than
attorneys' fees, incurred in relation to the printing and filing of the Company
Proxy Statement (including any preliminary materials related thereto) and the
Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto.</LI>
<LI>The Company shall pay Parent a fee of  $350 million in cash (the
&quot;<B>Fee Payable By Company</B>&quot;), less the Expenses (as defined in
Section 7.03(c) hereof) to the extent that the Expenses have already been paid
to Parent pursuant to Section 7.03(c) hereof,  upon the earliest to occur of the
following events:</LI>
<OL TYPE="i">

<LI>the termination by Parent or the Company pursuant to Section&nbsp;7.01(d);
provided, that an Alternative Transaction has been publicly announced at or
prior to the time the Requisite Vote is sought to be obtained and either:  (i)
such proposed Alternative Transaction has not been withdrawn by the Third Party
(as defined below) or otherwise affirmatively rejected by the Board of Directors
of the Company; or (ii) notwithstanding the withdrawal and/or rejection of such
Alternative Transaction as provided in the foregoing clause (i), an Alternative
Transaction with such Third Party is consummated within twelve (12) months of
the date the Requisite Vote is sought to be obtained as provided above; or</LI>
<LI>the termination of this Agreement by Parent pursuant to
Section&nbsp;7.01(e); or</LI>
<LI>the termination of this Agreement by Company pursuant to Section
7.01(f).</LI></OL>

<LI>The Company shall pay Parent an amount equal to $15 million, which the
parties agree represents a reasonable estimate of the out-of-pocket expenses
that Parent will incur in connection with the transactions contemplated by this
Agreement and which amount shall represent the entire amount that Parent is
entitled to receive with respect to such expenses, including, but not limited
to, fees and expenses of Parent's counsel, accountants and financial advisers
(the &quot;<B>Expenses</B>&quot;) upon the termination by Parent or the Company
pursuant to Section 7.01(d) if payment of the Fee Payable By Company is not
required in connection with such termination by Section 7.03(b)(i) above.  </LI>
<LI>As used herein, &quot;<B>Alternative Transaction</B>&quot; means any of the
following:  (i) transaction pursuant to which any person (or group of persons)
other than Parent or its affiliates (a &quot;<B>Third Party</B>&quot;) seeks to
acquire, directly or indirectly, more than 25&nbsp;percent of the outstanding
Shares, whether from the Company or pursuant to a tender offer or exchange offer
or otherwise, (ii)&nbsp;a merger or other business combination involving the
Company pursuant to which any Third Party acquires more than 25&nbsp;percent of
the outstanding equity securities of the Company or the entity surviving such
merger or business combination, (iii)&nbsp;any other transaction pursuant to
which any Third Party acquires control of all or substantially all of the assets
of the Company (including for this purpose the outstanding equity securities of
the Company's subsidiaries), (iv)&nbsp;the adoption by the Company of a plan of
liquidation, the declaration or payment by the Company of an extraordinary
dividend on any of its shares of capital stock or the effectuation by the
Company of a recapitalization or other type of transaction that would involve
either a change in the Company's outstanding capital stock or a distribution of
assets of any kind to the holders of such capital stock or (v)&nbsp;the
repurchase by the Company or any of its subsidiaries of shares of the Company's
capital stock representing at least 25&nbsp;percent or more of the aggregate
voting power of all voting securities of the Company; provided, however, that
the term Alternative Transaction shall not include any acquisition of securities
by a broker dealer in connection with a bona fide public offering of such
securities.</LI>
<LI>Parent shall pay the Company a fee of $100 million (the &quot;<B>Fee Payable
By Parent</B>&quot;) upon a termination of this Agreement pursuant to Section
7.01(b); provided  that the Fee Payable by Parent shall not be payable if either
(i) any of the conditions set forth in Section 6.02 is not satisfied as of the
Final Date; or (ii) the failure to effect the Closing prior to the Final Date is
not solely the result of the failure of any of the conditions set forth in
Sections 6.01(c), 6.01(e) or 6.03 hereof.</LI>
<LI>&#9;(i)&#9;The Fee Payable By Company payable pursuant to
Section&nbsp;7.03(b)(ii) and 7.03(b)(iii) hereof, Expenses payable pursuant to
Section&nbsp;7.03(c) hereof, or the Fee Payable By Parent payable pursuant to
Section 7.03(e) hereof shall be paid within one business day after the
termination of the Agreement.</LI>
<OL TYPE="i">

<FONT COLOR="#ff00ff"><LI></LI>
</FONT><LI>The Fee Payable By Company payable pursuant to
Section&nbsp;7.03(b)(i) hereof shall be paid within one business day after the
later of (x)&nbsp;the termination of the Agreement and (y)&nbsp;the date on
which the contingencies described in Section&nbsp;7.03(b)(i) shall have been
satisfied.</LI></OL>
</OL>
</OL>


<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER"><LI><BR>
<A NAME="_Toc472697651">GENERAL PROVISIONS</A></LI></P>
<OL>

<LI><A NAME="_Toc472697652"></B></FONT><I>Effectiveness of Representations,
Warranties and Agreements; Knowledge, Etc.</A></LI>
<OL TYPE="a">

</I><LI>Except as otherwise provided in this Section&nbsp;8.01, the
representations, warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any person controlling any such party or
any of their officers or directors, whether prior to or after the execution of
this Agreement.  The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section&nbsp;7.01(a) through (g), as the case may be,
except that the agreements set forth in Article&nbsp;I, Section 5.07(b) and
Section 5.11 shall survive the Effective Time indefinitely and the agreements
and liabilities set forth or otherwise described in Section 7.03 shall survive
termination indefinitely.  The Confidentiality Agreement shall survive
termination of this Agreement as provided therein.</LI>
<LI>Any disclosure made with reference to one or more Sections of the Company
Disclosure Schedule or the Parent Disclosure Schedule shall be deemed disclosed
with respect to each other section therein as to which such disclosure is
relevant provided that such relevance is reasonably apparent.</LI></OL>

<LI><A NAME="_Toc472697653"><I>Notices.</A></LI>
</I><P>  All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered or mailed if delivered personally or mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address which shall be effective upon receipt):</P>
<P>(a)&#9;If to Parent or Merger Sub:</P>
<P>&#9;JDS Uniphase Corporation</P>
<P>&#9;163 Baypointe Parkway</P>
<P>&#9;San Jose, CA 95134</P>
<P>&#9;Attention: Michael C. Phillips</P>
<P>&#9;Facsimile No.: (408) 954-0540</P>
<P>&#9;Telephone No.: (408) 434-1800</P>

<P>With copies to:</P>
<P>&#9;Morrison &amp; Foerster LLP</P>
<P>&#9;425 Market Street</P>
<P>&#9;San Francisco, CA 94105</P>
<P>&#9;Attention: John W. Campbell</P>
<P>&#9;Fax: (415) 268-7522</P>
<P>&#9;Telephone No.: (415) 268-7000</P>
<P>&#9;</P>
<P>(b)&#9;If to the Company:</P>
<P>&#9;E-TEK Dynamics, Inc.</P>
<P>&#9;1865 Lundy Avenue</P>
<P>&#9;San Jose, CA 95131</P>
<P>&#9;Attention: William N. Gerson</P>
<P>&#9;Fax: (408) 273-6342</P>
<P>&#9;Telephone No.: (408) 546-5000</P>

<P>&nbsp;</P>
<P>With copies to:</P>
<P>&#9;Wilson Sonsini Goodrich &amp; Rosati</P>
<P>&#9;Professional Corporation</P>
<P>&#9;650 Page Mill Road</P>
<P>&#9;Palo Alto, CA  94304</P>
<P>&#9;Attention: Larry W. Sonsini</P>
<P>&#9;&#9;      Daniel R. Mitz</P>
<P>&#9;Fax: (650) 493-6811</P>
<P>&#9;Telephone No.: (650) 493-9300</P>

<LI><A NAME="_Toc472697654"><I>Certain Definitions.</A></LI>
</I><P>  For purposes of this Agreement, the term:</P>
<OL TYPE="a">

<LI>&quot;<B>affiliates</B>&quot; means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;</LI>
<LI>&quot;<B>business day</B>&quot; means any day other than a day on which
banks in San Francisco are required or authorized to be closed;</LI>
<LI>&quot;<B>control</B>&quot; (including the terms &quot;<B>controlled
by</B>&quot; and &quot;<B>under common control with</B>&quot;) means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise;</LI>
<LI>&quot;<B>knowledge</B>&quot; means, in the case of Parent, the actual
knowledge of Parent's Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer and General Counsel after reasonable inquiry, and, in the case
of the Company, the actual knowledge of the Company's Chief Executive Officer,
Director, Strategy and Business Development, Chief Financial Officer and General
Counsel after reasonable inquiry;  </LI>
<LI>&quot;<B>Person</B>&quot; means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section&nbsp;13(d)(3) of the Exchange Act); and</LI>
<LI>&quot;<B>subsidiary</B>&quot; or &quot;<B>subsidiaries</B>&quot; of the
Company, the Surviving Company, Parent or any other person means (i)&nbsp;a
corporation or other entity in which the Company, the Surviving Company, Parent
or such other person, as the case may be, owns, directly or indirectly, 50% or
more of the shares of capital stock or other securities having ordinary voting
power to elect the board of directors or any similar governing body or
(ii)&nbsp;any partnership, limited liability company or other unincorporated
entity of which the Company, the Surviving Company, Parent or such other person,
as the case may be, is the general partner or of which it owns, directly or
indirectly, securities or other ownership interests which entitle them to
receive more than 50% of the distributions made by such partnership, limited
liability company or other entity.</LI></OL>

<LI><A NAME="_Toc472697655"><I>Amendment.</A></LI>
</I><P>  This Agreement may be amended by the parties hereto by action taken by
or on behalf of their respective boards of directors at any time prior to the
Effective Time; provided, however, that, after approval of the Merger by the
stockholders of the Company, no amendment may be made which by law requires
further approval by such stockholders without such further approval.  This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.</P>
<LI><A NAME="_Toc472697656"><I>Waiver.</A></LI>
</I><P>  At any time prior to the Effective Time, any party hereto may with
respect to any other party hereto (a)&nbsp;extend the time for the performance
of any of the obligations or other acts, (b)&nbsp;waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c)&nbsp;waive compliance with any of the agreements or
conditions contained herein.  Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.</P>
<LI><A NAME="_Toc472697657"><I>Headings.</A></LI>
</I><P>  The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.</P>
<LI><A NAME="_Toc472697658"><I>Severability.</A></LI>
</I><P>  If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.</P>
<LI><A NAME="_Toc472697659"><I>Entire Agreement.</A></LI>
</I><P>  This Agreement (including the documents and instruments referred to
herein) constitute the entire agreement and supersede all prior agreements and
undertakings (other than the Stock Option Agreement and the Confidentiality
Agreement), both written and oral, among the parties, or any of them, with
respect to the subject matter hereof and, except as otherwise expressly provided
herein, are not intended to confer upon any other person any rights or remedies
hereunder.</P>
<LI><A NAME="_Toc472697660"><I>Assignment, Merger Sub.</A></LI>
</I><P>  This Agreement shall not be assigned by operation of law or otherwise,
except that Parent and Merger Sub may assign all or any of their rights
hereunder to any affiliate provided that no such assignment shall relieve the
assigning party of its obligations hereunder.</P>
<LI><A NAME="_Toc472697661"><I>Parties in Interest.</A></LI>
</I><P>  This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement, except as
provided in Sections&nbsp;5.12 and 5.14 hereof.</P>
<LI><A NAME="_Toc472697662"><I>Governing Law.</A></LI>
</I><P>  This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Delaware applicable to contracts executed and
fully performed within the State of Delaware, without regard to the conflicts of
laws provisions thereof.</P>
<LI><A NAME="_Toc472697663"><I>Counterparts.</A></LI>
</I><P>  This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.</P>
<LI><A NAME="_Toc472697664"><I>WAIVER OF JURY TRIAL.</A></LI></OL>
</OL>

</I><P>  EACH OF PARENT, MERGER SUB AND THE COMPANY HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.</P>
<B><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">[SIGNATURE PAGE
FOLLOWS]</P>
</B></FONT><P>IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement and Plan of Reorganization and Merger to be executed as of the
date first written above by their respective officers thereunto duly
authorized.</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>PARENT</P>

<P>&nbsp;</P>
<P>By:&#9;________________________</P>
<P>Name:&#9;________________________</P>
<P>Title:&#9;________________________</P>

<P>&nbsp;</P>
<P>MERGER SUB</P>

<P>&nbsp;</P>
<P>By:&#9;________________________</P>
<P>Name:&#9;________________________</P>
<P>Title:&#9;_______________________</P>

<P>&nbsp;</P>
<P>COMPANY</P>

<P>&nbsp;</P>
<P>By:&#9;________________________</P>
<P>Name:&#9;________________________</P>
<P>Title:&#9;________________________</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P ALIGN="CENTER">TABLE OF CONTENTS</P>
<U><P ALIGN="RIGHT">Page</P>
</U><P>Article I. THE MERGER&#9;<A HREF="#_Toc472697567">*</A><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.01.</B></FONT>&#9;The
Merger.&#9;<A HREF="#_Toc472697568">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.02.</B></FONT>&#9;Effective
Time.&#9;<A HREF="#_Toc472697569">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.03.</B></FONT>&#9;Effect of
the Merger.&#9;<A HREF="#_Toc472697570">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.04.</B></FONT>&#9;Certificate
of Incorporation and Bylaws.&#9;<A HREF="#_Toc472697571">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.05.</B></FONT>&#9;Directors
and Officers.&#9;<A HREF="#_Toc472697572">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.06.</B></FONT>&#9;Merger
Consideration; Conversion and Cancellation of Securities.&#9;<A
HREF="#_Toc472697573">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.07.</B></FONT>&#9;Exchange of
Certificates.&#9;<A HREF="#_Toc472697574">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.08.</B></FONT>&#9;Stock
Transfer Books.&#9;<A HREF="#_Toc472697575">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.09.</B></FONT>&#9;Dissenting
Shares.&#9;<A HREF="#_Toc472697576">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.10.</B></FONT>&#9;Lost, Stolen
or Destroyed Certificate.&#9;<A HREF="#_Toc472697577">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.11.</B></FONT>&#9;Federal
Income Tax Consequences.&#9;<A HREF="#_Toc472697578">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 1.12.</B></FONT>&#9;Material
Adverse Effect.&#9;<A HREF="#_Toc472697579">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY&#9;<A
HREF="#_Toc472697580">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.01.</B></FONT>&#9;Organization
and Qualification; Subsidiaries.&#9;<A HREF="#_Toc472697581">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.02.</B></FONT>&#9;Charter
Documents.&#9;<A HREF="#_Toc472697582">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
2.03.</B></FONT>&#9;Capitalization.&#9;<A HREF="#_Toc472697583">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.04.</B></FONT>&#9;Authority
Relative to this Agreement.&#9;<A HREF="#_Toc472697584">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.05.</B></FONT>&#9;SEC Filings;
Financial Statements.&#9;<A HREF="#_Toc472697585">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.06.</B></FONT>&#9;Absence of
Certain Changes or Events&#9;<A HREF="#_Toc472697586">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.07.</B></FONT>&#9;No
Undisclosed Liabilities.&#9;<A HREF="#_Toc472697587">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.08.</B></FONT>&#9;Material
Contracts; No Violation.&#9;<A HREF="#_Toc472697588">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.09.</B></FONT>&#9;Absence of
Litigation.&#9;<A HREF="#_Toc472697589">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.10.</B></FONT>&#9;Employee
Benefit Plans; Employment Agreements.&#9;<A HREF="#_Toc472697590">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.11.</B></FONT>&#9;Labor
Matters.&#9;<A HREF="#_Toc472697591">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.12.</B></FONT>&#9;Disclosure
Documents.&#9;<A HREF="#_Toc472697592">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.13.</B></FONT>&#9;Taxes.&#9;<A
HREF="#_Toc472697593">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
2.14.</B></FONT>&#9;Environmental Matters.&#9;<A HREF="#_Toc472697594">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
2.15.</B></FONT>&#9;Brokers.&#9;<A HREF="#_Toc472697595">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.16.</B></FONT>&#9;Full
Disclosure.&#9;<A HREF="#_Toc472697596">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.17.</B></FONT>&#9;Opinion of
Financial Advisor.&#9;<A HREF="#_Toc472697597">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.18.</B></FONT>&#9;Intellectual
Property.&#9;<A HREF="#_Toc472697598">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.19.</B></FONT>&#9;Change in
Control Payments.&#9;<A HREF="#_Toc472697599">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.20.</B></FONT>&#9;Antitakeover
Statutes.&#9;<A HREF="#_Toc472697600">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.21.</B></FONT>&#9;Title to
Property.&#9;<A HREF="#_Toc472697601">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 2.22.</B></FONT>&#9;Year 2000
Matters.&#9;<A HREF="#_Toc472697602">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article III. REPRESENTATIONS AND WARRANTIES OF PARENT  AND MERGER SUB&#9;<A
HREF="#_Toc472697603">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.01.</B></FONT>&#9;Organization
and Qualification; Subsidiaries.&#9;<A HREF="#_Toc472697604">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.02.</B></FONT>&#9;Certificate
of Incorporation and Bylaws.&#9;<A HREF="#_Toc472697605">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
3.03.</B></FONT>&#9;Capitalization.&#9;<A HREF="#_Toc472697606">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.04.</B></FONT>&#9;Authority
Relative to this Agreement.&#9;<A HREF="#_Toc472697607">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.05.</B></FONT>&#9;SEC Filings;
Financial Statements.&#9;<A HREF="#_Toc472697608">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.06.</B></FONT>&#9;Absence of
Certain Changes or Events.&#9;<A HREF="#_Toc472697609">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.07.</B></FONT>&#9;No
Undisclosed Liabilities.&#9;<A HREF="#_Toc472697610">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.08.</B></FONT>&#9;Absence of
Litigation.&#9;<A HREF="#_Toc472697611">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.09.</B></FONT>&#9;Labor
Matters.&#9;<A HREF="#_Toc472697612">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.10.</B></FONT>&#9;Disclosure
Documents.&#9;<A HREF="#_Toc472697613">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.11.</B></FONT>&#9;Taxes.&#9;<A
HREF="#_Toc472697614">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
3.12.</B></FONT>&#9;Environmental Matters.&#9;<A HREF="#_Toc472697615">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
3.13.</B></FONT>&#9;Brokers.&#9;<A HREF="#_Toc472697616">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.14.</B></FONT>&#9;Full
Disclosure.&#9;<A HREF="#_Toc472697617">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.15.</B></FONT>&#9;Opinion of
Financial Advisor.&#9;<A HREF="#_Toc472697618">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.16.</B></FONT>&#9;Intellectual
Property.&#9;<A HREF="#_Toc472697619">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.17.</B></FONT>&#9;Title to
Property.&#9;<A HREF="#_Toc472697620">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.18.</B></FONT>&#9;Year 2000
Matters.&#9;<A HREF="#_Toc472697621">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 3.19.</B></FONT>&#9;Material
Contracts; No Violation.&#9;<A HREF="#_Toc472697622">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article IV. CONDUCT OF BUSINESS PENDING THE MERGER&#9;<A
HREF="#_Toc472697623">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 4.01.</B></FONT>&#9;Conduct of
Business by the Company Pending the Merger.&#9;<A
HREF="#_Toc472697624">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 4.02.</B></FONT>&#9;Conduct of
Business by Parent and Merger Sub Pending the Merger.&#9;<A
HREF="#_Toc472697625">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 4.03.</B></FONT>&#9;No
Solicitation.&#9;<A HREF="#_Toc472697626">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article V. ADDITIONAL AGREEMENTS&#9;<A HREF="#_Toc472697627">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.01.</B></FONT>&#9;Proxy
Statement; Form S-4.&#9;<A HREF="#_Toc472697628">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.02.</B></FONT>&#9;Company
Stockholders' Meeting; Voting Agreements.&#9;<A HREF="#_Toc472697629">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.03.</B></FONT>&#9;Access to
Information; Confidentiality.&#9;<A HREF="#_Toc472697630">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.04.</B></FONT>&#9;Consents;
Approvals.&#9;<A HREF="#_Toc472697631">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.05.</B></FONT>&#9;Agreements
of Affiliates.&#9;<A HREF="#_Toc472697632">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.06.</B></FONT>&#9;Notification
of Certain Matters.&#9;<A HREF="#_Toc472697633">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.07.</B></FONT>&#9;Further
Assurances; Tax Treatment.&#9;<A HREF="#_Toc472697634">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.08.</B></FONT>&#9;Public
Announcements.&#9;<A HREF="#_Toc472697635">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.09.</B></FONT>&#9;Listing of
Parent Common Shares.&#9;<A HREF="#_Toc472697636">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.10.</B></FONT>&#9;Form S-
8.&#9;<A HREF="#_Toc472697637">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.11.</B></FONT>&#9;Conveyance
Taxes.&#9;<A HREF="#_Toc472697638">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.12.</B></FONT>&#9;Director and
Officer Liability.&#9;<A HREF="#_Toc472697639">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.13.</B></FONT>&#9;Action by
Parent and Company's Boards.&#9;<A HREF="#_Toc472697640">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.14.</B></FONT>&#9;Composition
of the Board of Directors.&#9;<A HREF="#_Toc472697641">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 5.15.</B></FONT>&#9;Employee
Benefits.&#9;<A HREF="#_Toc472697642">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article VI. CONDITIONS TO THE MERGER&#9;<A
HREF="#_Toc472697643">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION 6.01.</B></FONT>&#9;Conditions
to Obligations of Each Party to Effect the Merger.&#9;<A
HREF="#_Toc472697644">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 6.02.</B></FONT>&#9;Additional
Conditions to Obligations of Parent and Merger Sub.&#9;<A
HREF="#_Toc472697645">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 6.03.</B></FONT>&#9;Additional
Conditions to Obligation of the Company.&#9;<A
HREF="#_Toc472697646">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article VII. TERMINATION&#9;<A HREF="#_Toc472697647">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION
7.01.</B></FONT>&#9;Termination.&#9;<A HREF="#_Toc472697648">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 7.02.</B></FONT>&#9;Effect of
Termination.&#9;<A HREF="#_Toc472697649">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 7.03.</B></FONT>&#9;Fees and
Expenses.&#9;<A HREF="#_Toc472697650">*</A></P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Article VIII. GENERAL PROVISIONS&#9;<A HREF="#_Toc472697651">*</A></P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.01.</B></FONT>&#9;Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.&#9;<A HREF="#_Toc472697652">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.02.</B></FONT>&#9;Notices.&#9;<A HREF="#_Toc472697653">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.03.</B></FONT>&#9;Certain
Definitions.&#9;<A HREF="#_Toc472697654">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.04.</B></FONT>&#9;Amendment.&#9;<A HREF="#_Toc472697655">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.05.</B></FONT>&#9;Waiver.&#9;<A HREF="#_Toc472697656">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.06.</B></FONT>&#9;Headings.&#9;<A HREF="#_Toc472697657">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.07.</B></FONT>&#9;Severability.&#9;<A HREF="#_Toc472697658">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.08.</B></FONT>&#9;Entire
Agreement.&#9;<A HREF="#_Toc472697659">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.09.</B></FONT>&#9;Assignment,
Merger Sub.&#9;<A HREF="#_Toc472697660">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.10.</B></FONT>&#9;Parties in
Interest.&#9;<A HREF="#_Toc472697661">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.11.</B></FONT>&#9;Governing
Law.&#9;<A HREF="#_Toc472697662">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION
8.12.</B></FONT>&#9;Counterparts.&#9;<A HREF="#_Toc472697663">*</A></P>
<B><FONT FACE="Times New Roman Bold"><P>SECTION 8.13.</B></FONT>&#9;WAIVER OF
JURY TRIAL.&#9;<A HREF="#_Toc472697664">*</A></P>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</P>





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<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>5
<DESCRIPTION>COMPANY STOCK OPTION AGREEMENT.
<TEXT>

<HTML>
<head>
<TITLE>Stock Option</TITLE>
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<B><P ALIGN="CENTER">COMPANY STOCK OPTION AGREEMENT</P>
</B><P>This STOCK OPTION AGREEMENT (this &quot;<B>Stock Option
Agreement</B>&quot;), dated as of January 17, 2000, is by and between JDS
Uniphase Corporation, a Delaware corporation (&quot;<B>Grantee</B>&quot;), and
E-TEK Dynamics, Inc., a Delaware corporation (&quot;<B>Issuer</B>&quot;). </P>
<P ALIGN="CENTER">RECITALS</P>
<P>A.&#9;Grantee and Issuer propose to enter into an Agreement and Plan of
Reorganization and Merger, dated as of the date hereof (the &quot;<B>Merger
Agreement</B>&quot;), which has been executed in connection with this Agreement
(each capitalized term used herein without definition shall have the meaning
specified in the Merger Agreement).</P>
<P> B. As a condition to Grantee's entering into the Merger Agreement and in
consideration therefor, Issuer has agreed to grant Grantee the Option (as
hereinafter defined).</P>
<P>NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:</P>
<P>1.&#9;<B><U>Grant of Option</B></U>. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the &quot;<B>Option</B>&quot;) to purchase,
subject to the terms hereof, up to 19.9% as of the date hereof, as adjusted in
accordance with the provisions of Section 5 of this Agreement, of the
outstanding shares of common stock of the Issuer, par value $0.001 per share
(the &quot;<B>Common Stock</B>&quot;), fully paid and nonassessable, at a
purchase price of $211.41 per share,  (such price, as adjusted if applicable,
the &quot;<B>Option Price</B>&quot;).</P>
<P>2.&#9;<B><U>Exercise of Option</B></U>.</P>
<P>(a) <I>Exercise</I>. Grantee may exercise the Option, in whole or part, and
from time to time, if, but only if, a Triggering Event (as hereinafter defined)
shall have occurred prior to the occurrence of an Option Termination Event (as
hereinafter defined).</P>
<P>(b)&#9;<I>Option Termination Events</I>. The term &quot;<B>Option Termination
Event</B>&quot; shall mean any of the following events: (i) immediately prior to
the Effective Time of the Merger; (ii) termination of the Merger Agreement
pursuant to Section 7.01 of the Merger Agreement (other than where a Triggering
Event has occurred); or (iii) one year following any termination of the Merger
Agreement  where a Triggering Event has occurred (or if, at the expiration of
such one year period the Option cannot be exercised by reason of any applicable
judgment, decree, order, law or regulation, 10 business days after such
impediment to exercise shall have been removed or shall have become final and
not subject to appeal). Notwithstanding the foregoing, the Option may not be
exercised if there has not been a Triggering Event, or Grantee is in material
breach of its representation or warranties, or in material breach of any of its
covenants or agreements contained in this Agreement or the Merger Agreement.</P>
<P>(c)&#9;<I>Triggering Events</I>. The term &quot;<B>Triggering Event</B>&quot;
shall mean any event which would result in the Fee Payable By Company being
unconditionally payable to Grantee pursuant to Section 7.03(b) of the Merger
Agreement.</P>
<P>(d)&#9;<I>Notice of Exercise; Closing</I>. In the event Grantee is entitled
to and wishes to exercise the Option, it shall send to Issuer a written notice
(the date of which being herein referred to as the &quot;<B>Notice
Date</B>&quot;) specifying (i) the total number of shares it will purchase
pursuant to such exercise and (ii) a place and date not earlier than three
business days nor later than 10 business days from the Notice Date for the
closing of such purchase (the &quot;<B>Closing Date</B>&quot;); <I>provided</I>,
that if the closing of the purchase and sale pursuant to the Option (the
&quot;<B>Closing</B>&quot;) cannot reasonably be consummated by reason of any
applicable judgment, decree, order, law or regulation, the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which the restriction on consummation has expired or been terminated; and
<I>provided</I> <I>further</I>, without limiting the foregoing, that if, prior
notification to or approval of any regulatory agency is reasonably required in
connection with such purchase, Grantee or Issuer, as the case may be, shall
promptly file the required notice or application for approval and shall
expeditiously process the same, and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have been
obtained and any requisite waiting period or periods shall have passed. Any
exercise of the Option shall be deemed to occur on the Notice Date relating
thereto. Notwithstanding this subsection (d), in no event shall any Closing Date
be more than two years after the related Notice Date, and if the Closing Date
shall not have occurred within two years after the related Notice Date due to
the failure to obtain any such required approval, the exercise of the Option
effected on the Notice Date shall be deemed to have expired.</P>
<P>(e)&#9;<I>Purchase Price</I>. At the Closing referred to in subsection (d)
above, Grantee shall pay to Issuer the aggregate purchase price for the shares
of Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer,
provided that failure or refusal of Issuer to designate such a bank account
shall not preclude Grantee from exercising the Option.</P>
<P>(f)&#9;<I>Maximum Proceeds</I>.  If Grantee, or any of its wholly-owned
subsidiaries, receives an aggregate amount in excess of six hundred million
dollars ($600,000,000.00) from:</P>
<P>(i)&nbsp;the Fee Payable By Company pursuant to Section 7.03 of the Merger
Agreement, (ii)&nbsp;proceeds, if any, from the sale to any entity that is not a
wholly-owned subsidiary of Grantee of shares purchased pursuant to the exercise
of the Option in excess of the aggregate Option Price for such shares;
(iii)&nbsp;any dividends received by Grantee declared on the shares purchased
pursuant to the exercise of the Option; and (iv) proceeds, if any, received
pursuant to Section 6(b) and 7 hereof, less the aggregate Option Price paid by
Grantee, or any of its wholly-owned subsidiaries, for any shares purchased
pursuant to the exercise of the Option being purchased by Issuer pursuant to
Section  6(b) and 7 hereof,</P>
<P>then Grantee shall notify Issuer within three business days of receipt of
such excess proceeds and all such excess proceeds shall promptly be remitted by
Grantee to Issuer by wire transfer to a bank account designated by Issuer.  </P>
<P>(g)&#9;<I>Issuance of Common Stock</I>. At the Closing, simultaneously with
the delivery of immediately available funds as provided in subsection (e) of
this Section 2, Issuer shall deliver to Grantee a certificate or certificates
representing the number of shares of Common Stock purchased by the Grantee and,
if the Option is exercised in part only, a new Option evidencing the rights of
Grantee thereof to purchase the balance of the shares purchasable hereunder, and
the Grantee shall deliver to Issuer a copy of this Agreement and a letter
agreeing that Grantee will not offer to sell or otherwise dispose of such shares
in violation of applicable law or the provisions of this Agreement.</P>
<P>(h)&#9;<I>Legend</I>. Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:</P>
<P>&quot;The transfer of the shares represented by this certificate are subject
to certain provisions of an agreement between the registered holder hereof and
Issuer and to resale restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the principal office of Issuer
and will be provided to the holder hereof without charge upon receipt by Issuer
of a written request therefor.&quot;</P>
<P>It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if Grantee shall
have delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel, in form and substance reasonably satisfactory to Issuer, to
the effect that such legend is not required for purposes of the Securities Act;
(ii) the reference to the provisions of this Agreement in the above legend shall
be removed by delivery of substitute certificate(s) without such reference if
the shares have been sold or transferred in compliance with the provisions of
this Agreement and under circumstances that do not require the retention of such
reference; and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required by
law.</P>
<P>(i)&#9;<I>Record Grantee; Expenses</I>. Upon the giving by Grantee to Issuer
of the written notice of exercise of the Option provided for under subsection
(d) of this Section 2 and the tender of the applicable purchase price in
immediately available funds, Grantee shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of Issuer shall then be closed or that certificates,
representing such shares of Common Stock shall not then be actually delivered to
Grantee. Issuer shall pay all expenses and any and all United States federal,
state and local taxes and other charges that may be payable in connection with
the preparation, issuance and delivery of stock certificates under this Section
2 in the name of Grantee or its assignee, transferee or designee.</P>
<P>3.&#9;<B><U>Reservation of Shares</B></U>. Issuer agrees: (i) that it shall
at all times maintain, free from preemptive rights, sufficient authorized but
unissued or treasury shares of Common Stock (and other securities issuable
pursuant to Section 5(a)) so that the Option may be exercised without additional
authorization of Common Stock (or such other securities) after giving effect to
all other options, warrants, convertible securities and other rights to purchase
Common Stock (or such other securities); (ii) that it will not, by charter
amendment or through reorganization, consolidation, merger, dissolution or sale
of assets, or by any other voluntary act, avoid or seek to avoid the observance
or performance of any of the covenants, stipulations or conditions to be
observed or performed hereunder by Issuer; and (iii) promptly to take all action
as may from time to time be reasonably required (including without limitation
complying with all premerger notification, reporting and waiting periods under
the HSR Act) in order to permit Grantee to exercise the Option and Issuer duly
and effectively to issue shares of Common Stock pursuant hereto.</P>
<P>4.&#9;<B><U>Lost Options</B></U>.  Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
the sole contractual obligation on the part of Issuer, and the Agreement so
lost, stolen, destroyed or mutilated shall be deemed cancelled and of no further
force and effect.</P>
<P>5.&#9;<B><U>Adjustment Upon Changes in Capitalization</B></U>. The shares of
Common Stock purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as provided in this Section 5.</P>
<P>In the event of any change in Common Stock by reason of stock dividends,
splits, mergers, recapitalizations, combinations, subdivisions, conversions,
exchanges of shares or other similar transactions, then (i) the type and number
of shares of Common Stock purchasable upon exercise hereof shall be
appropriately adjusted so that Grantee shall receive upon exercise of the Option
and payment of the aggregate Option Price hereunder the number and class of
shares or other securities or property that Grantee would have received in
respect of Common Stock if the Option had been exercised in full immediately
prior to such event, or the record date therefor, as applicable, and (ii) the
Option Price shall be adjusted by multiplying the Option Price by a fraction,
the numerator of which shall be equal to the aggregate number of shares of
Common Stock purchasable prior to the adjustment and the denominator of which
shall be equal to the aggregate number of shares of Common Stock purchasable
immediately after the adjustment.</P>
<P>6.&#9;<B><U>Registration Rights</B></U>. </P>
<P>(a)&#9;Following the Closing Date, Issuer shall, at the written request of
Grantee,  subject to subsection (b) below, delivered at any time on or prior to
an Option Termination Event, promptly prepare and file a shelf registration
statement under the Securities Act (including a shelf registration under Rule
415 of the Securities Act or similar provision, if available) covering any
shares issued and issuable pursuant to this Option and shall use its reasonable
best efforts to cause such registration statement to become effective and remain
current in order to permit the sale or other disposition of any shares of Common
Stock issued upon total or partial exercise of this Option (&quot;<B>Option
Shares</B>&quot;) in accordance with any plan of disposition requested by
Grantee. Grantee agrees to cause, and to cause any underwriters of any sale or
other disposition to cause, any sale or other disposition pursuant to such
registration to be effected on a widely distributed basis so that upon
consummation thereof no purchaser or transferee will beneficially own more than
4.9% of the then-outstanding voting power of Issuer.  Issuer will use its
reasonable best efforts to cause such registration statement first to become
effective and then to remain effective for such period not in excess of 180 days
from the day such registration statement first becomes effective or such shorter
time as may be reasonably necessary to effect such sales or other dispositions.
The obligations of Issuer hereunder to file a registration statement and to
maintain its effectiveness may be suspended for up to 90 calendar days in the
aggregate during any 360 day period if the Board of Directors of Issuer shall
have determined in good faith that the filing of such registration statement or
the maintenance of its effectiveness would require the premature disclosure of
material nonpublic information that would adversely affect Issuer and interfere
with or adversely affect any pending or proposed offering of securities of
Issuer or any other material transaction involving Issuer.  Grantee for a period
of three years following such first request shall have the right to demand a
second such registration if reasonably necessary to effect such sales or
dispositions. The foregoing notwithstanding, if, at the time of any request by
Grantee for registration of Option Shares as provided above, Issuer is in
registration with respect to an underwritten public offering of shares of Common
Stock, and if in the good faith judgment of the managing underwriter or managing
underwriters, or, if none, the sole underwriter or underwriters, of such
offering the sale of the Grantee's Option Shares would interfere with the
successful marketing of the shares of Common Stock offered by Issuer, the number
of Option Shares otherwise to be covered in the registration statement
contemplated hereby may be reduced; <I>provided</I>, <I>however</I>, that after
any such required reduction the number of Option Shares to be sold by Grantee
shall constitute at least 25% of the total number of shares to be sold by Issuer
in the aggregate; and <I>provided</I> <I>further</I>, that if such reduction
occurs, then the Issuer shall file a registration statement for the balance as
promptly as practicable and no reduction shall thereafter occur (and such
registration shall not be charged against Grantee). Grantee shall provide all
information reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder. If requested by any Grantee in connection with
such registration, Issuer shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for the Issuer. </P>
<P>(b)&#9;Upon request for registration, the Issuer will have the option
exercisable by written notice delivered to Grantee within five business days
after receipt of the written request for registration,  to purchase all, but not
some, of the Option Shares for cash at the price (the &quot;<B>Purchase
Price</B>&quot;) equal to the product of (i) the number of Option Shares and
(ii) the per share average of the closing sale prices of the Issuer's Common
Stock on the Nasdaq Stock Market for the ten trading days immediately preceding
the date of the written request for registration.  Any such purchase of shares
of Option Shares hereto will take place at a closing to be held at the principal
executive offices of the Issuer or its counsel at any reasonable date and time
designated by Grantee within five business days after the delivery of such
notice.  The payment for the Option Shares to be purchased under this subsection
(b) shall be made by delivery at the time of such closing of the Purchase Price
in immediately available funds.</P>
<P>7.&#9;<B><U>Repurchase of Option and Option Shares</B></U>.</P>
<P>(a)&#9;Within ten business days following the occurrence of a Repurchase
Event (as defined below), Issuer shall (i) deliver an offer (a
&quot;<B>Repurchase Offer</B>&quot;) to repurchase the Option from Grantee at a
price (the &quot;<B>Option Repurchase Price</B>&quot;) equal to the amount by
which (A) the Alternative Transaction Price (as defined below) exceeds (B) the
Option Price, multiplied by the number of shares for which the Option may then
be exercised, and (ii) deliver an offer (also, a &quot;<B>Repurchase
Offer</B>&quot;) to repurchase the Option Shares from Grantee at a price (the
&quot;<B>Option Share Repurchase Price</B>&quot;) equal to the Alternative
Transaction Price multiplied by the number of Option Shares then held by such
Grantee. The term &quot;<B>Alternative Transaction Price</B>&quot; shall mean,
as of any date for the determination thereof, the price per share of Common
Stock paid pursuant to the Alternative Transaction or, in the event of a sale of
assets of Issuer, the last per-share sale price of Common Stock on the fourth
trading day following the announcement of such sale. If the consideration paid
or received in the Alternative Transaction shall be other than in cash, the
value of such consideration shall be based on the average of the closing trading
prices for such securities on their principal trading market during the five
business days immediately preceding the payment or receipt of such
consideration, or, if such securities are not traded on a market or exchange,
determined by a nationally recognized investment banking firm selected by
Grantee, which determination shall be conclusive for all purposes of this
Agreement.</P>
<P>(b)&#9;Upon the occurrence of a Repurchase Event and whether or not Issuer
shall have made a Repurchase Offer under Section 7(a), (i) at the request (the
date of such request being the &quot;<B>Option Repurchase Request
Date</B>&quot;) of Grantee delivered prior to an Option Termination Event,
Issuer shall repurchase the Option from Grantee in cash at the Option Repurchase
Price, and (ii) at the request (the date of such request being the
&quot;<B>Option Share Repurchase Request Date</B>&quot;) of Grantee delivered
prior to an Option Termination Event, Issuer shall repurchase such number of the
Option Shares from the Grantee as Grantee shall designate at the Option Share
Repurchase Price.</P>
<P>(c)&#9;Grantee may accept Issuer's Repurchase Offer under Section 7(a) or may
exercise its right to require Issuer to repurchase the Option and/or any Option
Shares pursuant to Section 7(b) by a written notice or notices stating that
Grantee elects to accept such offer or to require Issuer to repurchase the
Option and/or the Option Shares in accordance with the provisions of this
Section 7.  As promptly as practicable, and in any event within five business
days following receipt of a notice under this Section 7(c) and the surrender to
Issuer of this Agreement and/or Certificates for Option Shares, as applicable,
and the occurrence of a Repurchase Event, Issuer shall deliver or cause to be
delivered to Grantee the Option Repurchase Price and/or to the Grantee the
Option Share Repurchase Price and/or the portion thereof that Issuer is not then
prohibited from so delivering under applicable law.</P>
<P>(d)&#9;Issuer hereby undertakes to use its reasonable best efforts to obtain
all required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish any repurchase contemplated by
this Section 7. Nonetheless, to the extent that Issuer is prohibited under
applicable law, from repurchasing the Option and/or any Option Shares in full,
Issuer shall immediately so notify Grantee and thereafter deliver or cause to be
delivered, from time to time, to Grantee the portion of the Option Repurchase
Price and the Option Share Repurchase Price, respectively, that it is no longer
prohibited from delivering, in every case within five business days after the
date on which Issuer is no longer so prohibited; <I>provided</I>,
<I>however</I>, that if Issuer at any time after delivery of a notice of
repurchase pursuant to Section 7(c) is prohibited under applicable law, from
delivering to Grantee the Option Repurchase Price or the Option Share Repurchase
Price, respectively, in full, Grantee may revoke its notice of repurchase of the
Option or the Option Shares either in whole or in part whereupon, in the case of
a revocation in part, Issuer shall promptly (i) deliver to Grantee that portion
of the Option Repurchase Price or the Option Share Repurchase Price that Issuer
is not prohibited from delivering after taking into account any such revocation
and (ii) deliver, as appropriate, either (A) to Grantee, a new Agreement
evidencing the right of Grantee to purchase that number of shares of Common
Stock equal to the number of shares of Common Stock purchasable immediately
prior to the delivery of the notice of repurchase less the number of shares of
Common Stock covered by the portion of the Option repurchased or (B) to the
Grantee, a certificate for the number of Option Shares covered by the
revocation. If an Option Termination Event shall have occurred prior to the date
of the notice by Issuer described in the first sentence of this subsection (d),
or shall be scheduled to occur at any time before the expiration of a period
ending on the thirtieth day after such date, Grantee shall nonetheless have the
right to exercise the Option until the expiration of such 30-day period.</P>
<P>(e)&#9;The term &quot;<B>Repurchase Event</B>&quot; shall mean the occurrence
of a Triggering Event prior to the occurrence of an Option Termination Event
followed by the consummation of an Alternative Transaction within twelve months
after such Triggering Event.</P>
<P>8.&#9;<B><U>Substitute Option in the Event of Corporate Change</B></U>. (a)
In the event that prior to an Option Termination Event, Issuer shall enter into
an agreement (i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than Grantee or one of its subsidiaries, to merge into Issuer and Issuer shall
be the continuing or surviving corporation, but, in connection with such merger,
the then-outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other person or cash or any other property
or the then outstanding shares of Common Stock shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the merged
company, or (iii) to sell or otherwise transfer all or substantially all of its
assets to any person, other than Grantee or one of its subsidiaries, then, and
in each such case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the &quot;<B>Substitute Option</B>&quot;),
for the publicly traded common stock of either (x) the Acquiring Corporation (as
hereinafter defined) or (y) any person that controls the Acquiring Corporation;
provided that, if both the Acquiring Corporation and the person that controls
the Acquiring Corporation have common stock that is publicly traded (or neither
do) Grantee may elect to substitute either the common stock of the Acquiring
Corporation or the person that controls the Acquiring Corporation.</P>
<P>(b)  &quot;<B>Acquiring Corporation</B>&quot; shall mean any of (i) the
continuing or surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the continuing or
surviving person, or (iii) the transferee of all or substantially all of
Issuer's assets.</P>
<P>(c)&#9;The Substitute Option shall have the same terms as the Option,
<I>provided</I>, that if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Grantee. The issuer of the Substitute
Option shall also enter into an agreement with Grantee in substantially the same
form as this Agreement, which agreement shall be applicable to the Substitute
Option.</P>
<P>(d)&#9;Issuer shall not enter into any transaction described in subsection
(a) of this Section 8 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.</P>
<P>9.&#9;<B><U>Representations and Warranties of the Issuer</B></U>. Issuer
hereby represents and warrants to Grantee as follows:</P>
<P>(a)&#9;Issuer has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Issuer and no other corporate proceedings on the part of
Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer. This Agreement is the valid and legally binding
obligation of Issuer, enforceable against Issuer in accordance with its
terms.</P>
<P>(b)&#9;Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant hereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests, and not subject to any preemptive
rights.</P>
<P>(c)&#9;The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation pursuant to any provisions of the Certificate of
Incorporation or Bylaws of Issuer or the incorporation documents of any of its
subsidiaries (as that term is defined in the Merger Agreement), subject to
obtaining any approvals or consents contemplated hereby, result in any violation
of any loan or credit agreement, note, mortgage, indenture, lease, plan, or
other agreement, obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Issuer or its subsidiaries or their respective properties or assets which
violation would have, individually or in the aggregate, a Material Adverse
Effect on the Issuer.</P>
<P ALIGN="JUSTIFY">&#9;&#9;(d)&#9;The Board of Directors of Issuer has taken all
necessary action to approve this Agreement and the consummation of the
transactions contemplated hereby and the provisions of Section&nbsp;243 of the
Delaware General Corporation Law will not apply to this Agreement or the
purchase of shares of Issuer Common Stock pursuant to this Agreement.</P>
<P>10.&#9;<B><U>Application for Regulatory Approval</B></U>. Each of Grantee and
Issuer will use its reasonable best efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities necessary to
the consummation of the transactions contemplated by this Agreement, including
without limitation making application to list the shares of Common Stock
issuable hereunder on the Nasdaq Stock Market upon official notice of
issuance.</P>
<P>11.&#9;<B><U>Specific Performance</B></U>. The parties hereto acknowledge
that damages would be an inadequate remedy for a breach of this Agreement by
either party hereto and that the obligations of the parties hereto shall be
enforceable by either party hereto through injunctive or other equitable
relief.</P>
<P>12.&#9;<B><U>Separability of Provisions</B></U>. If any term, provision,
covenant, or restriction, contained in this Agreement is held by a court or a
federal or state regulatory agency of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, and covenants and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated.</P>
<P>13.&#9;<B><U>Notices</B></U>. All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made when
delivered in person, by registered or certified mail (postage prepaid, return
receipt requested), by overnight courier, or by facsimile at the respective
addresses of the parties set forth in the Merger Agreement.</P>
<P>14.&#9;<B><U>Governing Law</B></U>. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.</P>
<P>15.&#9;<B><U>Counterparts</B></U>. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original, but all of
which shall constitute one and the same agreement.</P>
<P>16.&#9;<B><U>Expenses</B></U>. Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.</P>
<P>17.&#9;<B><U>Entire Agreement</B></U>. Except as otherwise expressly provided
herein or in the Merger Agreement and the Confidentiality Agreement, this
Agreement contains the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein. Any provision of this Agreement
may be waived only in writing at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended,
altered, or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.</P>
<P>18.  <B><U>Assignment</B></U>.  Neither of the parties may sell, transfer,
assign or otherwise dispose of any of its rights or obligations under this
Agreement or the Option created hereunder to any other person, without the
express written consent of the other party, except that the rights and
obligations hereunder will inure to the benefit of and be binding upon any
successor of a party hereto; provided, however, that Grantee shall be entitled
to transfer its rights or obligations under this Agreement to a wholly-owned
subsidiary of Grantee, provided such subsidiary remains a wholly-owned
subsidiary.</P>
<P>19. <B><U>Further Assurances</B></U>. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
Nothing contained in this Agreement shall be deemed to authorize Issuer or
Grantee to breach any provision of the Merger Agreement.</P>
<P>IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be
signed by their respective officers hereunto duly authorized, all as of the date
first written above.</P><DIR>
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<P>ISSUER</P>
<U>
</U><P>By:______________________</P>
<U>
</U><P>Name:___________________</P>

<P>Title:____________________</P>

<P>&nbsp;</P>
<P>GRANTEE</P>

<P>By:______________________</P>
<U>
</U><P>Name:____________________</P>

<P>Title:_____________________</P>

<P>&nbsp;</P>
<P>&nbsp;</P></DIR>
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<TYPE>EX-99.4
<SEQUENCE>6
<DESCRIPTION>VOTING AGREEMENT
<TEXT>

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<B><P ALIGN="CENTER">VOTING AGREEMENT</P>
</B><P ALIGN="CENTER"></P>
<P ALIGN="JUSTIFY">This VOTING AGREEMENT (the &quot;<B>Agreement</B>&quot;) is
made and entered into as of January 17, 2000, between and among JDS Uniphase
Corporation, a corporation incorporated under the laws of the State of Delaware
(&quot;<B>JDSU</B>&quot;), and the undersigned stockholder (the
&quot;<B>Stockholder</B>&quot;) of E-TEK Dynamics, Inc., a corporation organized
under the laws of the State of Delaware (&quot;<B>Rainbow</B>&quot;).  All
capitalized terms herein not otherwise defined shall have the meaning ascribed
to them in the Merger Agreement (as defined below).</P>
<B><P ALIGN="CENTER">RECITALS</P>
<OL TYPE="A">

<OL TYPE="A">

</B><P ALIGN="JUSTIFY"><LI>Pursuant to an Agreement and Plan of Reorganization
and Merger dated as of the date hereof (the &quot;<B>Merger Agreement</B>&quot;)
by and among JDSU, Rainbow Acquisition, Inc. a corporation organized under the
laws of the State of Delaware (&quot;<B>Sub</B>&quot;) and wholly owned
subsidiary of JDSU, and Rainbow, Sub is merging with and into Rainbow (the
&quot;<B>Merger</B>&quot;) and Rainbow, as the surviving corporation of the
Merger, will thereby become a wholly owned subsidiary of JDSU;  </LI></P>
<P ALIGN="JUSTIFY"><LI>Stockholder is the beneficial owner (as defined in
Rule&nbsp;13d-3 under the Securities Exchange Act of 1934, as amended (the
&quot;<B>Exchange Act</B>&quot;)) of the shares of the outstanding Common Stock,
$0.001 par value per share, of Rainbow in the amounts indicated on the final
page of this Agreement (the &quot;<B>Shares</B>&quot;); and </LI></P>
<P ALIGN="JUSTIFY"><LI>In consideration of the execution of the Merger Agreement
by JDSU, Stockholder agrees (i)&nbsp;not to transfer or otherwise dispose of any
of its Shares, or any other shares of capital stock of Rainbow acquired by such
Stockholder hereafter and prior to the Expiration Date (as defined in
Section&nbsp;1.1 below) and (ii)&nbsp;agrees to vote its Shares and any other
such shares of capital stock of Rainbow in favor of approval of the Merger.
</LI></P></OL>
</OL>

<P>NOW, THEREFORE, the parties agree as follows:</P>
<OL>

<OL>

<B><U><LI>Agreement to Retain Shares</B></U>.</LI>
<OL>

<I><P ALIGN="JUSTIFY"><LI>Transfer and Encumbrance</I>.  Stockholder agrees to
be subject to such Stockholder's Proxy (as defined in Section&nbsp;3) and agrees
not to transfer (except as may be specifically required by court order), sell,
exchange, or pledge prior to the Expiration Date or otherwise dispose of or
encumber Stockholder's Shares or any New Shares (as defined in Section 1.2)
prior to the Expiration Date, or to make any offer or agreement relating
thereto, at any time prior to the Expiration Date.  As used herein, the term
&quot;<B>Expiration Date</B>&quot; shall mean the earlier to occur of
(i)&nbsp;the Effective Time (as such term is defined in the Merger Agreement)
and (ii)&nbsp;the date on which the Merger Agreement is terminated in accordance
with its terms (including any extensions to the Merger Agreement, as provided
for therein).  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>New Shares</I>.  Stockholder agrees that any shares of
capital stock of Rainbow that such Stockholder purchases or with respect to
which Stockholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date (&quot;<B>New Shares</B>&quot;) shall
be subject to the terms and conditions of this Agreement to the same extent as
if they constituted Shares.  </LI></P></OL>

<B><U><P ALIGN="JUSTIFY"><LI>Agreement to Vote Shares</B></U>.  At every meeting
of the stockholders of Rainbow called with respect to any of the following, and
at every adjournment thereof, and on every action or approval by written consent
of the stockholders of Rainbow with respect to any of the following, Stockholder
agrees such Stockholder shall vote Stockholder's Shares and any New Shares in
favor of approval of the Merger Agreement, the Merger, and the transactions
contemplated thereby. This Agreement is intended to bind Stockholder as a
stockholder of Rainbow only with respect to the specific matters set forth
herein.  </LI></P>
<B><U><P ALIGN="JUSTIFY"><LI>Proxy</B></U>.  Concurrently with the execution of
this Agreement, Stockholder agrees to deliver to JDSU a proxy in the form
attached hereto as <U>Exhibit&nbsp;A</U> (the &quot;<B>Proxy</B>&quot;), which
shall be irrevocable to the extent provided in Section&nbsp;212 of the Delaware
General Corporation Law, covering the total number of Shares and New Shares
beneficially owned or as to which beneficial ownership is acquired (as such term
is defined in Rule&nbsp;13d-3 under the Exchange Act) by such Stockholder set
forth therein.  </LI></P>
<B><U><P ALIGN="JUSTIFY"><LI>Representations, Warranties and Covenants of
Stockholder</B></U>.  Stockholder hereby represents, warrants and covenants to
JDSU that such Stockholder (i)&nbsp;is the beneficial owner of Stockholder's
Shares, which at the date of this Agreement and at all times up until the
Expiration Date will be free and clear of any liens, claims, options, charges or
other encumbrances; (ii)&nbsp;does not beneficially own any shares of capital
stock of Rainbow other than Stockholder's Shares (excluding shares as to which
such Stockholder currently disclaims beneficial ownership in accordance with
applicable law); (iii)&nbsp;has full power and authority to make, enter into and
carry out the terms of this Agreement and such Stockholder's Proxy; and (iv) the
execution, delivery and performance of this Agreement by such Stockholder and
the consummation of the transactions contemplated hereby, will not (a) require
the consent, waiver, approval, or authorization  of any governmental authority
or any other person or entity or (b) violate, conflict with, result in a breach
of or the acceleration of any obligation under, or constitute a default (or an
event which with notice or the lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Stockholder pursuant to any provision of any indenture,
mortgage, lien, lease, agreement, contract, instrument, order, judgment,
ordinance, regulation or decree to which the Stockholder is subject or by which
the Stockholder or any of Stockholder's property or assets is bound.</LI></P>
<B><U><P ALIGN="JUSTIFY"><LI>Additional Documents</B></U>.  Stockholder hereby
covenants and agrees to execute and deliver any additional documents necessary
or desirable, in the reasonable opinion of JDSU, to carry out the purpose and
intent of this Agreement.  </LI></P>
<B><U><P ALIGN="JUSTIFY"><LI>Consent and Waiver</B></U>.  Stockholder hereby
gives any consents or waivers that are reasonably required for the consummation
of the Merger under the terms of any agreement to which such Stockholder is a
party or pursuant to any rights such Stockholder may have.  Stockholder further
agrees to give such additional consents and waivers as may be reasonably
required for the consummation of the Merger under the terms of any agreement to
which such Stockholder is a party or pursuant to any rights such Stockholder may
have.  As further clarification, but not limitation, of the foregoing,
Stockholder further agrees to waive any registration rights it may have with
respect to Stockholder's Shares (including piggyback registration rights) prior
to the Expiration Date.</LI></P>
<B><U><P ALIGN="JUSTIFY"><LI>Termination</B></U>.  This Agreement and the
Proxies delivered in connection herewith shall terminate and shall have no
further force or effect as of the Expiration Date.  </LI></P>
<B><U><LI>Miscellaneous</B></U>.  </LI>
<OL>

<I><P ALIGN="JUSTIFY"><LI>Severability</I>.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions  of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Binding Effect and Assignment</I>.  This Agreement and
all of the provisions hereof shall be binding upon and insure to the benefit of
the parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without the prior written consent of the other.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Amendment and Modification</I>.  This Agreement may
not be modified, amended, altered or supplemented except by the execution and
delivery of a written agreement executed by the parties hereto.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Specific Performance; Injunctive Relief</I>.  The
parties hereto acknowledge that JDSU will be irreparably harmed and that there
will be no adequate remedy at law for a violation of any of the covenants or
agreements of Stockholder set forth herein.  Therefore, it is agreed that, in
addition to any other remedies that may be available to JDSU upon such
violation, JDSU shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to JDSU
at law or in equity.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Notices</I>.  All notices that are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered by hand or national
overnight courier service, transmitted by telecopy or mailed by registered or
certified mail, postage prepaid (effective when delivered by hand or telecopy,
one day after dispatch by overnight courier, and three business days after
dispatch by mail), as follows:</LI></P>
<OL TYPE="a">

<LI>if to JDSU or Sub, to:</LI>
<P>JDS Uniphase Corporation</P>
<P>163 Baypointe Parkway</P>
<P>San Jose, CA 95134</P>
<P>Attention: Michael C. Phillips  </P>
<P>Facsimile No.: (408) 954-0540 </P>
<P>Telephone No.: (408) 434-1800 </P>

<P>with a copy to:</P>

<P>Morrison&nbsp;&amp; Foerster LLP</P>
<P>425 Market Street</P>
<P>San Francisco, CA 94105</P>
<P>Attention: John W. Campbell, Esq.</P>
<P>Facsimile No.:  (415) 268-7522</P>
<P>Telephone No.:  (415) 268-7000</P>

<LI>if to Stockholder, to the address set forth beneath such Shareholder's
signature below.</LI></OL>

<I><P ALIGN="JUSTIFY"><LI>Governing Law; Forum</I>.  This Agreement shall be
governed by, construed and enforced in accordance with the internal laws of the
State of Delaware.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Entire Agreement</I>.  This Agreement and the Proxies
contain the entire understanding of the parties in respect of the subject matter
hereof, and supersede all prior negotiations and understandings between the
parties with respect to such subject matters.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Counterparts</I>.  This Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.  </LI></P>
<I><P ALIGN="JUSTIFY"><LI>Effect of Headings</I>.  The section headings herein
are for convenience only and shall not affect the construction or interpretation
of this Agreement.</LI></P>
<I><P ALIGN="JUSTIFY"><LI>Jurisdiction</I>.&#9;The parties to this Agreement
agree that any suit, action or proceeding arising out of, or with respect to,
this Agreement or any judgment entered by any court in respect thereof shall be
brought in the courts of Delaware or in the U.S. District Court for Delaware as
the commencing party may elect, and Stockholder hereby accepts the exclusive
jurisdiction of those courts for the purpose of any suit, action or proceeding.
In addition, Stockholder hereby irrevocably waives, to the fullest extent
permitted by law, any objection which Stockholder may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or any judgment entered by any court in respect thereof
brought in Delaware or the U.S. District Court for the District of Delaware, as
selected by the commencing party, and hereby further irrevocably waives any
claim that any suit, action or proceedings brought in Delaware or in such
District Court has been brought in an inconvenient forum.</LI></P>
<I><P ALIGN="JUSTIFY"><LI>No Limitation on Actions of Stockholder as
Director</I>.  Notwithstanding anything to the contrary in this Agreement, in
the event Stockholder is a director of the Company, nothing in this Agreement is
intended or shall be construed to require Stockholder, in Stockholder's capacity
as a director of the Company, to act or fail to act in accordance with
Stockholder's fiduciary duties in such capacity.</LI></P></OL>
</OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed the day and year first above written.  </P><DIR>
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<P>JDS UNIPHASE CORPORATION</P>

<P>By:&#9;</P>
<P>Title:&#9;</P>

<P>STOCKHOLDER</P>

<P>By:&#9;</P>

<P>Stockholder's Address for Notice:</P>

<P>&#9;</P>
<P>&#9;</P>
<P>&#9;</P>

<P>Shares beneficially owned:</P>
<P>_______ shares of Rainbow Common Stock</P>

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<B><P ALIGN="CENTER">[SIGNATURE PAGE TO VOTING AGREEMENT]</P>
<U><P ALIGN="CENTER">EXHIBIT&nbsp;A</P>
</U><P ALIGN="CENTER">PROXY</P>
<P ALIGN="CENTER">TO VOTE STOCK OF</P>
<P ALIGN="CENTER">E-TEK DYNAMICS, INC.</P>
</B><P ALIGN="JUSTIFY">The undersigned stockholder of E-Tek Dynamics, Inc., a
corporation organized under the laws of the State of Delaware,
(&quot;<B>Rainbow</B>&quot;), hereby irrevocably (to the full extent permitted
by Section&nbsp;212 of the Delaware General Corporation Law) appoints Michael C.
Phillips and Anthony R. Muller of JDS Uniphase Corporation, a corporation
organized under the laws of State of Delaware (&quot;<B>JDSU</B>&quot;), and
each of them, as the sole and exclusive attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote with
respect to all of the shares of capital stock of Rainbow that now are or
hereafter may be beneficially owned by the undersigned (including, without
limitation, the power to execute and deliver written consents pursuant to
Section 228 of the Delaware General Corporation Law), and any and all other
shares or securities of Rainbow issued or issuable in respect thereof on or
after the date hereof (collectively, the &quot;<B>Shares</B>&quot;) in
accordance with the terms of this Proxy.  The Shares beneficially owned by the
undersigned stockholder of Rainbow as of the date of this Proxy are listed on
the final page of this Proxy.  Upon the undersigned's execution of this Proxy,
any and all prior proxies given by the undersigned with respect to any Shares
are hereby revoked and the undersigned agrees not to grant any subsequent
proxies with respect to the Shares until after the Expiration Date (as defined
below).</P>
<P ALIGN="JUSTIFY">This Proxy is irrevocable (to the extent provided in
Section&nbsp;212 of the Delaware General Corporation Law), is coupled with an
interest and is granted pursuant to that certain Voting Agreement dated as of
January&nbsp;17, 2000, by and among JDSU and the undersigned stockholder (the
&quot;<B>Voting Agreement</B>&quot;), and is granted in consideration of JDSU
entering into that certain Agreement and Plan of Reorganization and Merger,
dated as of January 17, 2000, by and among Rainbow, JDSU and Rainbow
Acquisition, Inc., a corporation organized under the laws of the State of
Delaware (&quot;<B>Sub</B>&quot;) and wholly owned subsidiary of JDSU (the
&quot;<B>Merger Agreement</B>&quot;).  The Merger Agreement provides for the
merger of Sub with and into Rainbow (the &quot;<B>Merger</B>&quot;).  As used
herein, the term &quot;<B>Expiration Date</B>&quot; shall mean the earlier to
occur of (i)&nbsp;the Effective Time (as such term is defined in the Merger
Agreement) and (ii)&nbsp;the date on which the Merger Agreement is terminated in
accordance with its terms (including any extensions to the Merger Agreement, as
provided for therein).</P>
<P ALIGN="JUSTIFY">The attorneys and proxies named above, and each of them are
hereby authorized and empowered by the undersigned, at any time prior to the
Expiration Date, to act as the undersigned's attorney and proxy to vote the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to Section&nbsp;228 of the Delaware General Corporation Law),
at every annual, special or adjourned meeting of the stockholders of Rainbow and
in every written consent in lieu of such meeting in favor of approval of the
Merger and the Merger Agreement.  The attorneys and proxies named above may not
exercise this Proxy on any other matter except as provided above.  The
undersigned stockholder may vote the Shares on all other matters.</P>
<P ALIGN="JUSTIFY">Any obligation of the undersigned hereunder shall be binding
upon the successors and assigns of the undersigned.</P>
<P ALIGN="JUSTIFY">This Proxy is irrevocable (to the extent provided in
Section&nbsp;212 of the Delaware General Corporation Law).  This Proxy shall
terminate, and be of no further force and effect, automatically upon the
Expiration Date.</P>
<P>Dated:  January 17, 2000</P><DIR>
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<P>&#9;</P>
<P>(Signature of Stockholder)</P>
<P>&#9;</P>
<P>(Print Name of Stockholder)</P>
<P>Shares beneficially owned:</P>
<P>_______ shares of Rainbow Common Stock</P>
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