S-4: Registration of securities issued in business combination transactions
Published on January 23, 2002
As filed with the Securities and Exchange Commission on January 23, 2002
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
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REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EMCORE CORPORATION
(Exact name of registrant as specified in its charter)
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145 BELMONT DRIVE
SOMERSET, NEW JERSEY 08873
(732) 271-9090
(Address, including zip code, and telephone number, including
area code, of registrant's agent for service and principal executive offices)
THOMAS G. WERTHAN
EMCORE CORPORATION
145 BELMONT DRIVE
SOMERSET, NEW JERSEY 08873
(732) 271-9090
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
JORGE L. FREELAND, ESQ.
WHITE & CASE LLP
200 SOUTH BISCAYNE BLVD.
MIAMI, FLORIDA 33131
TEL: (305) 371-2700
FAX: (305) 358-5744
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
CALCULATION OF REGISTRATION FEE
(1) Estimated solely for purposes of calculating the amount of the
registration fee, pursuant to Rule 457(c), based upon the average of the
high and low prices of the Company's common stock reported on the NASDAQ
National Market on January 22, 2002.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
SUBJECT TO COMPLETION, DATED JANUARY 23, 2002
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
1,500,000 SHARES
EMCORE CORPORATION
COMMON STOCK
By this prospectus, we may issue up to 1,500,000 shares of our common
stock from time to time in connection with acquisitions of other businesses,
assets or securities of other companies whether by purchase, merger or any other
form of acquisition or business combination.
The amount and type of consideration we will offer and the other
specific terms of each acquisition will be determined by negotiations with the
owners or the persons who control the businesses, assets or securities to be
acquired. We may structure business acquisitions in a variety of ways, including
acquiring stock, other equity interests or assets of the acquired business or
merging the acquired business with us or one of our subsidiaries. We expect that
the price of the shares we issue will be related to their market price, either
when we tentatively or finally agree to the particular terms of the acquisition,
when we issue the shares, when the acquisition is completed, or during some
other negotiated period and may be based on average market prices or otherwise.
We may be required to provide further information by means of a post-effective
amendment to the registration statement or a supplement to this prospectus once
we know the actual information concerning a specific acquisition.
We will pay all expenses of this offering. We do not expect to pay any
underwriting discounts or commissions in connection with issuing these shares,
although we may pay finder's fees in connection with certain acquisitions. Any
person receiving a finder's fee may be deemed an underwriter within the meaning
of the Securities Act of 1933.
We may also permit individuals or entities that have received or will
receive shares of our common stock in connection with the acquisitions described
above to use this prospectus to cover resales of those shares. If this happens,
we will not receive any proceeds from the resale of such shares. See "Selling
Stockholders" for the identity of any such individuals or entities and more
information about resales of the securities.
Our common stock is quoted on the Nasdaq National Market under the
symbol "EMKR". On January 22, 2002, the last reported sales price of our common
stock on the Nasdaq National Market was $10.42 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE 'RISK
FACTORS" BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSIONS NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is ___________, 200_
TABLE OF CONTENTS
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This prospectus incorporates important business and financial information about
EMCORE Corporation that is not included in or delivered with this document. This
means that we may satisfy our disclosure obligations to you by referring you to
one or more documents separately filed with the SEC. See "Documents Incorporated
by Reference" on page 15 for a list of documents that we have incorporated by
reference into this prospectus. This information is available to you without
charge upon written request to:
EMCORE Corporation
145 Belmont Drive
Somerset, New Jersey 08873
Attention: Investor Relations
Tel: (732) 271-9090
To ensure timely delivery, you must request the information at least
five business days before the date on which you must make a decision on whether
to invest in EMCORE.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, which we refer to as the SEC, using the
SEC's shelf registration rules. Under the shelf registration rules, using this
prospectus, together with a prospectus supplement, we may issue from time to
time, in one or more offerings, up to 1,500,000 shares of our common stock in
connection with the acquisition of various businesses. We may issue the
securities in connection with our acquisition of the assets, business or
securities of other companies whether by purchase, merger or any other form of
acquisition or business combination.
For each acquisition, we expect to negotiate the terms with the owner
or controlling persons of the assets, businesses, or securities we plan to
acquire. We expect that the price of the shares we issue will be related to
their market price, either when we tentatively or finally agree to the
particular terms of the acquisition, when we issue the shares, when the
acquisition is completed, or during some other negotiated period and may be
based on average market prices or otherwise. Securities may be sold at a fixed
offering price, which may be changed, or at other negotiated prices.
With our consent, persons or entities who have received or will receive
securities under this prospectus in connection with acquisitions may use this
prospectus to sell such securities at a later date. We refer to these persons in
the prospectus as selling stockholders. Please see the information described
under the heading "Selling Stockholders" to find out more information about
resales of the securities by the selling stockholders.
In this prospectus, "EMCORE," "the Company," "we," "us," and "our"
refer to EMCORE Corporation, a New Jersey corporation, and its consolidated
subsidiaries, unless the context otherwise requires.
This prospectus provides you with a general description of the
securities we may issue. If necessary, each time we issue securities under this
prospectus, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
this prospectus, the applicable prospectus supplement and the information
incorporated by reference. See "Documents Incorporated by Reference."
In making your investment decision, you should rely only on the
information contained or incorporated by reference in the prospectus and any
prospectus supplement. We have not authorized anyone to provide you with any
other information. If you receive any unauthorized information, you must not
rely on it. This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state or jurisdiction where
the offer or sale of these securities is not permitted. You should not assume
that the information contained or incorporated by reference in this prospectus
is accurate as of any date other than the date on which it is released by
Emcore.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information we file with the SEC at its public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at l-800-SEC-0330 for
further information on the public reference room. Our filings are also available
to the public on the Internet, through a database maintained by the SEC at
http://www.sec.gov.
We filed a registration statement on Form S-4 to register with the SEC
the securities described in this prospectus. This prospectus is part of that
registration statement. As permitted by SEC rules, this prospectus does not
contain all the information contained in the registration statement or the
exhibits to the registration statement. You may refer to the registration
statement and accompanying exhibits for more information about our securities
and us.
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FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act. We
have based these forward-looking statements largely on our current expectations
and projections about future events and financial trends affecting the financial
condition of our business. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions about us, including, among other
things:
- general economic and business conditions, both globally and in
our markets;
- our expectations and estimates concerning our future financial
performance, financing plans and the effect of competition;
- our ability to integrate any future business acquisitions into
our operations, as well as the future success of such
businesses;
- anticipated trends in the compound semiconductor capital
equipment, wafers and devices business;
- existing and future regulations affecting the compound
semiconductor capital equipment, wafers and devices business;
and
- other risk factors set forth in the "Risk Factors" section of
this prospectus.
In addition, in this prospectus, the words "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect" and similar
expressions, as they relate to us, our business or our management, are intended
to identify forward-looking statements.
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EMCORE CORPORATION
We design, develop and manufacture compound semiconductor wafers and
devices and are a leading developer and manufacturer of the tools and
manufacturing processes used to fabricate compound semiconductor wafers and
devices. Compound semiconductors are composed of two or more elements and
usually consist of a metal, such as gallium, aluminum or indium, and a non-metal
such as arsenic, phosphorus or nitrogen. Many compound semiconductors have
unique physical properties that enable electrons to move through them at least
four times faster than through silicon-based devices and are therefore well
suited to serve the growing need for efficient, high performance electronic
systems.
We offer a comprehensive portfolio of products and systems for the
rapidly expanding broadband, wireless communications and solid state lighting
markets. We have developed extensive materials science expertise and process
technology to address our customers' needs. Customers can take advantage of our
vertically integrated solutions approach by purchasing custom-designed wafers
and devices from us, or by manufacturing their own devices in-house using one of
our metal organic chemical vapor deposition ("MOCVD") production systems
configured to their specific needs. Our products and systems enable our
customers to cost effectively introduce new and improved high performance
products to the market faster in high volumes.
The growth in our business is driven by the widespread deployment of
fiber optic networks, introduction of new wireless networks and services, rapid
build-out of satellite communication systems, increasing use of more power
efficient lighting sources, increasing use of electronics in automobiles and
emergence of advanced consumer electronic applications. Also, the growing
demands for higher volumes of a broad range of higher performance devices has
resulted in manufacturers increasingly outsourcing their needs for compound
semiconductor wafers and devices. Our expertise in materials science and process
technology provides us with a competitive advantage to manufacture compound
semiconductor wafers and devices in high volumes.
WAFERS AND DEVICES. We offer a broad array of compound semiconductor
wafers and devices, including optical components and components for use in
high-speed data communications and telecommunications networks, radio frequency
materials ("RF materials") used in mobile communications products such as
wireless modems and handsets, solar cells that power commercial and military
satellites, high brightness light-emitting diodes ("HB LEDs") for several
lighting markets and magneto resistive sensors ("MR sensors") for various
automotive applications.
- Optical Components and Modules. Our family of vertical cavity
surface emitting lasers ("VCSELs") and VCSEL array transceiver
and transponder products, as well as our photodiode array
components, serve the rapidly growing high-speed data
communications network markets, including the Gigabit Ethernet,
FibreChannel, Infiniband(SM), and Very Short Reach OC-192, the
emerging Very Short Reach OC-768, OC-48 and related markets. Our
strategy is to manufacture high cost optical components and
subassemblies in-house, using our proprietary technologies, to
reduce the overall cost of our transceiver and transponder
modules.
- RF materials. We currently produce 4-inch and 6-inch InGaP HBT
and pHEMT materials that are used by our wireless customers for
power amplifiers for GSM, TDMA, CDMA and the emerging 3G
multiband wireless handsets.
- Solar Cells. Solar cells are typically the largest single cost
component of a satellite. Our compound semiconductor solar
cells, which are used to power satellites, have achieved
industry-leading efficiencies. Solar cell efficiency dictates
the electrical power of the satellite and bears upon the weight
and launch costs of the satellite. We began shipping our triple
junction solar cells in December 2000.
- HB LEDs. Through our joint venture with General Electric
Lighting, we provide advanced HB LED technology used in such
applications as traffic lights, miniature lamps, automotive
lighting, and flat panel displays.
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PRODUCTION SYSTEMS.
We are a leading provider of compound semiconductor technology
processes and MOCVD production tools. We believe that our proprietary TurboDisc
deposition technology makes possible one of the most cost-effective production
processes for the commercial volume manufacture of high-performance compound
semiconductor wafers and devices, which are integral to broadband communication
applications.
CUSTOMERS
Our customers include Agilent Technologies Ltd., AMP, Inc., Anadigics
Inc., Blaze Networking Products, Boeing-Spectrolab, Corning, Inc., General
Motors Corp., Hewlett Packard Co., Honeywell International Inc., Infineon
Technologies AG, Loral Space & Communications Ltd., Lucent Technologies, Inc.,
LumiLeds Lighting LLC (a joint venture between Philips Lighting and Agilent
Technologies), Motorola, Inc., Nortel Networks Corp., Siemens AG's Osram GmbH
subsidiary, TriQuint Semiconductor, Inc. and more than a dozen of the largest
electronics manufacturers in Japan.
BENEFITS OF COMPOUND SEMICONDUCTORS
Recent advances in information technologies have created a growing need
for efficient, high-performance electronic systems that operate at very high
frequencies, have increased storage capacity and computational and display
capabilities and can be produced cost-effectively in commercial volumes. In the
past, electronic systems manufacturers have relied on advances in silicon
semiconductor technology to meet many of these demands. However, the newest
generation of high-performance electronic and optoelectronic applications
require certain functions that are generally not achievable using silicon-based
components.
Compound semiconductors have emerged as an enabling technology to meet
the complex requirements of today's advanced information systems. Many compound
semiconductor materials have unique physical properties that allow electrons to
move at least four times faster than through silicon-based devices. Advantages
of compound semiconductor devices over silicon devices include:
- operation at higher speeds;
- lower power consumption;
- less noise and distortion; and
- optoelectronic properties that enable these devices to emit
and detect light.
Although compound semiconductors are more expensive to manufacture than
the more traditional silicon-based semiconductors, electronics manufacturers are
increasingly integrating compound semiconductors into their products in order to
achieve the higher performance demands of today's electronic products and
systems.
STRATEGY
Our objective is to capitalize on our position as a leading developer
and manufacturer of compound semiconductor tools and manufacturing processes to
become the leading supplier of compound semiconductor wafers and devices. The
key elements of our strategy are to:
- apply our core materials and manufacturing expertise across
multiple product applications;
- target high growth market opportunities;
- strategic acquisitions and partnerships with industry leading
companies; and
- continue investment in research and development to maintain
technology leadership.
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Our principal executive offices are located at 145 Belmont Drive,
Somerset, New Jersey 08873, and our telephone number is (732) 271-9090.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. If any of the following risks actually occurs, our
business, financial condition or results of operations could be materially and
adversely affected.
We caution the reader that these risk factors may not be exhaustive. We
operate in a continually changing business environment, and new risk factors
emerge from time to time. We cannot predict such new risk factors, nor can we
assess the effect, if any, of such new risk factors on our businesses or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those projected in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. In addition, our management's estimates of future
operating results are based on the current complement of businesses, which is
constantly subject to change as management implements its fix, sell or grow
strategy.
WE MAY CONTINUE TO INCUR OPERATING LOSSES.
We started operations in 1984 and as of September 30, 2001 had an
accumulated deficit of $121.2 million. We incurred net losses of $12.3 million
in fiscal 2001, $25.5 million in fiscal 2000 and $22.7 million in fiscal 1999.
In addition, as a result of the downturn in the economy, we expect a decline in
revenues in fiscal year 2002. Many of our expenses, particularly those relating
to capital equipment, debt service and manufacturing overhead, are fixed.
Accordingly, reduced revenue causes our fixed production costs to be allocated
across reduced production volumes, which adversely affects our gross margin and
profitability. Therefore, we expect to continue to incur operating losses until
revenues increase. We cannot currently predict whether or when demand will
strengthen across our product lines or how quickly our customers will consume
their inventories of our products. In addition, several of our customers have
reduced the lead times they give us when ordering product from us. While this
trend has enabled us to reduce inventory, it also restricts our ability to
forecast revenues. If our sales and profit margins do not increase to support
the higher levels of operating expenses and if our new product offerings are not
successful, our business, financial condition and results of operations will be
materially and adversely affected.
WE MAY ENGAGE IN ACQUISITIONS THAT COULD RESULT IN INTEGRATION CHALLENGES,
STOCKHOLDER DILUTION, AND CAUSE US TO INCUR DEBT OR ASSUME CONTINGENT
LIABILITIES.
We may pursue acquisitions to acquire new technologies, products or
service offerings. Future acquisitions by us may involve the following:
- use of significant amounts of cash
- potentially dilutive issuances of equity securities on
potentially unfavorable terms; and
- incurrence of debt on potentially unfavorable terms as well as
amortization expenses related to goodwill and other intangible
assets.
The process of integrating any acquisition may create unforeseen
operating difficulties and expenditures and is itself risky. The areas where we
may face difficulties include:
- diversion of management time (at both companies) during the
period of negotiation through closing and further diversion of
such time after closing from focus on operating the businesses
to issues of integration and future products;
- decline in employee morale and retention issues resulting from
changes in compensation, reporting relationships, future
prospects or the direction of the business;
- the need to integrate each company's accounting, management
information, human resource and other administrative systems to
permit effective management, and the lack of control if such
integration is delayed or not implemented; and
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- the need to implement controls, procedures and policies
appropriate for a larger public company at companies that prior
to acquisition had been smaller, private companies.
From time to time, we have engaged in discussions with acquisition
candidates regarding potential acquisitions of product lines, technologies and
businesses. If such an acquisition does occur, we cannot be certain that our
business, operating results and financial condition will not be materially and
adversely affected.
OUR LEVERAGE MAY AFFECT OUR BUSINESS AND AFFECT OUR OPERATING FLEXIBILITY.
At January 15, 2002, we had approximately $175.0 million in total
indebtedness. We may incur or assume additional debt in the future in connection
with acquisitions or otherwise, subject to the terms of our existing senior
credit facility. In addition, at September 30, 2001, our cash, cash equivalents
and marketable securities totaled approximately $147.7 million. For a
description of our indebtedness, please see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our annual report
on Form 10-K for the fiscal year ended September 30, 2001 and any future Forms
10-Q and 10-K which we file, which are incorporated by reference in this
prospectus. The level of our indebtedness could:
- limit cash flow available for general corporate purposes, such
as acquisitions and capital expenditures, due to the ongoing
cash flow requirements for debt service;
- limit our ability to obtain, or obtain on favorable terms,
additional debt financing in the future for working capital,
capital expenditures or acquisitions;
- limit our flexibility in reacting to competitive and other
changes in the industry and economic conditions generally;
- expose us to a risk that a substantial decrease in net operating
cash flows due to economic developments or adverse developments
in our business could make it difficult to meet debt service
requirements; and
- expose us to risks inherent in interest rate fluctuations in
connection with any borrowings at variable rates of interest,
which could result in higher interest expense in the event of
increases in interest rates.
Our ability to make scheduled payments of principal of, to pay interest
on, or to refinance our indebtedness and to satisfy our other debt obligations
will depend upon our future operating performance, which may be affected by
general economic, financial, competitive, legislative, regulatory, business and
other factors beyond our control. We will not be able to control many of these
factors, such as the economic conditions in the markets in which we operate and
initiatives taken by our competitors. In addition, there can be no assurance
that future borrowings or equity financing will be available for the payment or
refinancing of our indebtedness. If we are unable to service our indebtedness,
whether in the ordinary course of business or upon acceleration of such
indebtedness, we may be forced to pursue one or more alternative strategies,
such as restructuring or refinancing our indebtedness, selling assets, reducing
or delaying capital expenditures or seeking additional equity capital. There can
be no assurance that any of these strategies could be effected on satisfactory
terms, if at all.
OUR RAPID GROWTH PLACES A STRAIN ON OUR RESOURCES.
We have experienced rapid growth, having added a significant number of
new employees within the last year. We have also expanded our manufacturing
facilities in Albuquerque, New Mexico and in Somerset, New Jersey. This growth
has placed and will continue to place a significant strain on our management,
financial, sales and other employees and on our internal systems and controls.
If we are unable to effectively manage multiple facilities and operations in
geographically distant locations, our business, financial condition and results
of operations will be materially and adversely affected. We are also in the
process of installing new manufacturing and accounting software at our New
Jersey facility. Most of the new manufacturing software is customized to our
particular business and manufacturing processes. It will take time and require
evaluation to eliminate any of the
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malfunctions in the software and to train personnel to use the new software. In
this transition we may experience delays in production, cost overruns and
disruptions in our operations.
WE MUST CONTINUALLY IMPROVE EXISTING PRODUCTS, DESIGN AND SELL NEW PRODUCTS AND
MANAGE THE COSTS OF RESEARCH AND DEVELOPMENT IN ORDER TO EFFECTIVELY COMPETE.
We compete in markets characterized by rapid technological change,
evolving industry standards and continuous improvements in products. Due to
constant changes in these markets, our future success depends on our ability to
improve our manufacturing processes, tools and products. To remain competitive
we must continually introduce manufacturing tools with higher capacity and
better production yields.
The life cycles of some of our products depend heavily upon the life
cycles of the end products into which our products are designed. Products with
short life cycles require us to manage production and inventory levels closely.
We cannot assure investors that obsolete or excess inventories, which may result
from unanticipated changes in the estimated total demand for our products and/or
the estimated life cycles of the end products into which our products are
designed, will not affect us beyond the inventory charges that we have already
taken during fiscal year 2001.
We have recently introduced a number of new products, and we will be
introducing additional new products in the future. The commercialization of new
products involves substantial expenditures for research and development,
production and marketing. We may be unable to successfully design, develop or
manufacture these new products and may have difficulty penetrating new markets.
Because it is generally not possible to predict the amount of time
required and the costs involved in achieving certain research, development and
engineering objectives, actual development costs may exceed budgeted amounts and
estimated product development schedules may be extended. Our business, financial
condition and results of operations may be materially and adversely affected if:
- we are unable to improve our existing products on a timely
basis;
- our new products are not introduced on a timely basis or do not
achieve sufficient market penetration;
- we incur budget overruns or delays in our research and
development efforts; or
- our new products experience reliability or quality problems.
OUR INDUSTRY IS RAPIDLY CHANGING.
The compound semiconductor industry is changing rapidly due to, among
other things, continuous technological improvements in products and evolving
industry standards. This industry is marked by the continuous introduction of
new products and increased capacity for services similar to those provided by
us. Future technological advances in the compound semiconductor industry may
result in the availability of new products or increase the efficiency of
existing products. If a technology becomes available that is more cost-effective
or creates a superior product, we may be unable to access such technology or its
use may involve substantial capital expenditures which we may be unable to
finance. We cannot assure you that existing, proposed or as yet undeveloped
technologies will not render our technology less profitable or that we will have
available the financial and other resources necessary to compete effectively
against companies possessing such technologies. We cannot assure you that we
will be able to adapt to technological changes or offer competitive products on
a timely or cost effective basis.
FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS MAY NEGATIVELY AFFECT OUR STOCK
PRICE.
Our revenues and operating results may vary significantly from quarter
to quarter due to a number of factors particular to us and the compound
semiconductor industry. Not all of these factors are in our control. These
factors include:
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- the volume and timing of orders for our products, particularly
TurboDisc systems, which have an average selling price in excess
of $1.0 million;
- the timing of our announcements and introduction of new products
and of similar announcements by our competitors;
- downturns in the market for our customers' products;
- regional economic conditions, particularly in Asia where we
derive a significant portion of our revenues;
- price volatility in the compound semiconductor industry;
- changes in product mix; and
- timing of customer orders.
These factors may cause our operating results for future periods to be
below the expectations of analysts and investors. This may cause a decline in
the price of our common stock.
OUR JOINT VENTURE PARTNER, WHO HAS CONTROL OF THE VENTURE, MAY MAKE DECISIONS
THAT WE DO NOT AGREE WITH AND THAT MAY ADVERSELY AFFECT OUR NET INCOME.
We do not have a majority interest in our joint venture with General
Electric Lighting. A board of managers governs this joint venture with
representatives from both the strategic partner and us. Many fundamental
decisions must be approved by both parties to the joint venture, which means we
will be unable to direct the operation and direction of this joint venture
without the agreement of our joint venture partner. If we are unable to agree on
important issues with a joint venture partner, the business of that joint
venture may be delayed or interrupted, which may, in turn, materially and
adversely affect our business, financial condition and results of operations.
We have devoted and will be required to continue to devote significant
funds and technologies to our joint venture to develop and enhance its products.
In addition, our joint venture will require that some of our employees devote
much of their time to joint venture projects. This will place a strain on our
management, scientific, financial and sales employees. If our joint venture is
unsuccessful in developing and marketing their products, our business, financial
condition and results of operations may be materially and adversely affected.
We have agreed with General Electric Lighting that our joint venture
will be the sole vehicle for each party's participation in the solid state
lighting market. We have also agreed with General Electric Lighting to several
limitations during the life of the venture and thereafter relating to how each
of us can make use of the joint venture's technology. One consequence of these
limitations is that in certain circumstances, such as a material default by us
or certain sales of our interest in the joint venture, we would not be permitted
to use the joint venture's technology to compete against General Electric
Lighting in the solid state lighting market.
WE HAVE A SIGNIFICANT AMOUNT OF INVESTMENTS IN MARKETABLE SECURITIES.
EMCORE accounts for its investment in marketable securities as
available for sale securities in accordance with the provisions of SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." Unrealized
gains and losses for these securities are excluded from earnings and reported as
a separate component of shareholders' equity. Realized gains and losses on sales
of investments, as determined on a specific identification basis, are included
in the consolidated statements of operations. Fair values are determined by
reference to market prices for securities as quoted based on publicly traded
exchanges. In August 2001, EMCORE sold its minority ownership position in its
joint venture with Uniroyal Technology Corporation (UTCI) in exchange for
approximately 2.0 million shares of UTCI common stock. EMCORE's cost basis in
the UTCI stock is $7.10 per share or approximately $14.0 million. Since
September 30, 2001, UTCI's stock price has declined dramatically to a
9
recent low of $0.48 per share. As a result of this significant decline in the
value of the UTCI common stock, in the quarter ending December 31, 2001, we
expect to be required to write off a significant portion of our investment in
UTCI, and our results of operations could be materially and adversely affected.
SINCE A LARGE PERCENTAGE OF OUR REVENUES ARE FROM FOREIGN SALES, CERTAIN EXPORT
RISKS MAY DISPROPORTIONATELY AFFECT OUR REVENUES.
Sales to customers located outside the United States accounted for
approximately 47.7% of our revenues in fiscal 2001, 38.6% of our revenues in
fiscal 2000 and 52.5% of our revenues in fiscal 1999. Sales to customers in Asia
represent the majority of our international sales. We believe that international
sales will continue to account for a significant percentage of our revenues.
Because of this, the following export risks may disproportionately affect our
revenues:
- political and economic instability may inhibit export of our
systems and devices and limit potential customers' access to
U.S. dollars;
- shipping and installation costs of our systems may increase;
- we may experience difficulties in the timeliness of collection
of foreign accounts receivable and be forced to write off
receivables from foreign customers;
- a strong dollar may make our systems less attractive to foreign
purchasers who may decide to postpone making such capital
expenditures;
- tariffs and other barriers may make our systems and devices less
cost competitive;
- we may have difficulty in staffing and managing our
international operations;
- the laws of certain foreign countries may not adequately protect
our trade secrets and intellectual property; and
- potentially adverse tax consequences to our customers may make
our systems and devices not cost-competitive.
WE WILL LOSE SALES IF WE ARE UNABLE TO OBTAIN GOVERNMENT AUTHORIZATION TO EXPORT
OUR PRODUCTS.
Exports of our products to certain destinations, such as the People's
Republic of China, Malaysia and Taiwan, may require pre-shipment authorization
from U.S. export control authorities, including the U.S. Departments of Commerce
and State. Authorization may be conditioned on end-use restrictions. On certain
occasions, we have been denied authorization, particularly with respect to the
People's Republic of China. Failure to receive these authorizations may
materially and adversely affect our revenues and in turn our business, financial
condition and results of operations from international sales. Additionally,
export jurisdiction relating to exports of satellites and associated components
has not been definitively settled. Such exports may in the future require a
license from the Department of State. This may cause delays in shipping products
abroad. Delays in receiving export licenses for products may materially and
adversely affect our revenues and in turn our business, financial condition and
results of operations.
OUR OPERATING RESULTS COULD BE HARMED IF WE LOSE ACCESS TO SOLE OR LIMITED
SOURCES OF MATERIALS OR SERVICES.
We currently obtain some components and services for our products from
limited or single sources. We purchase these components and services on a
purchase order basis, do not carry significant inventories of these components
and do not have any long-term supply contracts with these vendors. Because we
often do not account for a significant part of our vendors' business, we may not
have access to sufficient capacity from these vendors in periods of high demand.
If we were to change any of our limited or sole source vendors, we would be
required to
10
re-qualify each new vendor. Re-qualification could prevent or delay product
shipments that could negatively affect our results of operations. In addition,
our reliance on these vendors may negatively affect our production if the
components vary in quality or quantity. If we are unable to obtain timely
deliveries of sufficient components of acceptable quality or if the prices of
components for which we do not have alternative sources increase, our business,
financial condition and results of operations could be materially and adversely
affected.
OUR PRODUCTS ARE DIFFICULT TO MANUFACTURE AND OUR PRODUCTION COULD BE DISRUPTED
IF WE ARE UNABLE TO AVOID MANUFACTURING DIFFICULTIES.
We manufacture all of our wafers and devices in our manufacturing
facilities. Minute impurities, difficulties in the production process, defects
in the layering of the devices' constituent compounds, wafer breakage or other
factors can cause a substantial percentage of wafers and devices to be rejected
or numerous devices on each wafer to be non-functional. These factors can result
in lower than expected production yields, which would delay product shipments
and may materially and adversely affect our operating results. We have
experienced difficulties in achieving planned yields in the past, particularly
in pre-production and upon initial commencement of full production volumes,
which have adversely affected our gross margins. Because the majority of our
costs of manufacture are relatively fixed, the number of shippable devices per
wafer for a given product is critical to our financial results. Therefore, it is
critical for us to improve the number of shippable product per wafer and
increase the production volume of wafers in order to maintain and improve our
results of operations. Additionally, because we manufacture all of our products
at our facilities in Somerset, New Jersey and Albuquerque, New Mexico, any
interruption in manufacturing resulting from fire, natural disaster, equipment
failures or otherwise would materially and adversely affect our business,
financial condition and results of operations.
WE FACE LENGTHY SALES AND QUALIFICATIONS CYCLES FOR OUR PRODUCTS AND, IN MANY
CASES, MUST INVEST A SUBSTANTIAL AMOUNT OF TIME AND FUNDS BEFORE WE RECEIVE
ORDERS.
Sales of our TurboDisc systems primarily depend upon the decision of a
prospective customer to increase its manufacturing capacity, which typically
involves a significant capital commitment by the customer. Customers usually
place orders with us between two to nine months after our initial contact with
them. We often experience delays in obtaining system sales orders while
customers evaluate and receive internal approvals for the purchase of these
systems. These delays may include the time necessary to plan, design or complete
a new or expanded compound semiconductor fabrication facility. Due to these
factors, we expend substantial funds and sales, marketing and management efforts
to sell our compound semiconductor production systems. These expenditures and
efforts may not result in sales.
In order to expand our materials production capabilities, we have
dedicated a number of our TurboDisc systems to the manufacture of wafers and
devices. Several of our products are currently being tested to determine whether
they meet customer or industry specifications. During this qualification period,
we invest significant resources and dedicate substantial production capacity to
the manufacture of these new products, prior to any commitment to purchase by
the prospective customer and without generating significant revenues from the
qualification process. If we are unable to meet these specifications or do not
receive sufficient orders to profitably use the dedicated production capacity,
our business, financial condition and results of operations would be materially
and adversely affected.
Our historical and future budgets for operating expenses, capital
expenditures, operating leases and service contracts are based upon our
assumptions as to the anticipated market acceptance of our products. Because of
the lengthy lead time required for our product development and the changes in
technology that typically occur during such period, it is difficult to estimate
customer demand for a product accurately. If our products do not achieve
expected customer demand, our business, financial condition and results of
operation will be materially and adversely affected.
INDUSTRY DEMAND FOR SKILLED EMPLOYEES, PARTICULARLY SCIENTIFIC AND TECHNICAL
PERSONNEL WITH COMPOUND SEMICONDUCTOR EXPERIENCE, EXCEEDS THE NUMBER OF SKILLED
PERSONNEL AVAILABLE.
Our future success depends, in part, on our ability to attract and
retain certain key personnel, including scientific, operational and management
personnel. The competition for attracting and retaining these employees,
11
especially scientists, is intense. Because of this intense competition for these
skilled employees, we may be unable to retain our existing personnel or attract
additional qualified employees in the future. If we are unable to retain our
skilled employees and attract additional qualified employees to keep up with our
expansion, our business, financial condition and results of operations will be
materially and adversely affected.
PROTECTING OUR TRADE SECRETS AND OBTAINING PATENT PROTECTION IS CRITICAL TO OUR
ABILITY TO EFFECTIVELY COMPETE FOR BUSINESS.
Our success and competitive position depend on protecting our trade
secrets and other intellectual property. Our strategy is to rely both on trade
secrets and patents to protect our manufacturing and sales processes and
products, and we are actively pursuing patents on some of our recent inventions.
Reliance on trade secrets is only an effective business practice insofar as
trade secrets remain undisclosed and a proprietary product or process is not
reverse engineered or independently developed. We take certain measures to
protect our trade secrets, including executing non-disclosure agreements with
our employees, joint venture partner, customers and suppliers. If parties breach
these agreements or the measures we take are not properly implemented, we may
not have an adequate remedy. Disclosure of our trade secrets or reverse
engineering of our proprietary products, processes or devices could materially
and adversely affect our business, financial condition and results of
operations.
Moreover, we cannot assure you that any patents will afford
commercially significant protection of our technologies or that we will have
adequate resources to enforce our patents. Furthermore, the laws of certain
other countries may not protect our intellectual property to the same extent as
U.S. laws.
OUR FAILURE TO OBTAIN OR MAINTAIN THE RIGHT TO USE CERTAIN INTELLECTUAL PROPERTY
MAY ADVERSELY AFFECT OUR FINANCIAL RESULTS.
The compound semiconductor, optoelectronics, and fiberoptic
communications industries are characterized by frequent litigation regarding
patent and other intellectual property rights. From time to time we have
received and may receive in the future, notice of claims of infringement of
other parties' proprietary rights and licensing offers to commercialize third
party patent rights. Although we are not currently involved in any litigation
relating to our intellectual property, there can be no assurance that:
- infringement claims (or claims for indemnification resulting
from infringement claims) will not be asserted against us or
that such claims will not be successful;
- future assertions will not result in an injunction against the
sale of infringing products or otherwise significantly impair
our business and results of operations; or
- we will not be required to obtain licenses, the expense of which
may adversely affect our results of operations and
profitability.
INTERRUPTIONS IN OUR BUSINESS AND A SIGNIFICANT LOSS OF SALES TO ASIA MAY RESULT
IF OUR PRIMARY ASIAN DISTRIBUTOR FAILS TO EFFECTIVELY MARKET AND SERVICE OUR
PRODUCTS.
We rely on a single marketing, distribution and service provider,
Hakuto Co. Ltd., to market and service many of our products in Japan, China and
Singapore. Hakuto is one of our shareholders and Hakuto's president is a member
of our Board of Directors. We have distributorship agreements with Hakuto which
expire in March 2008 and give Hakuto exclusive distribution rights for certain
of our products in Japan. Hakuto's failure to effectively market and service our
products or termination of our relationship with Hakuto could result in
significant delays or interruption in our marketing and service programs in
Asia. This could materially and adversely affect our business, financial
condition and results of operations.
12
OUR MANAGEMENT'S STOCK OWNERSHIP GIVES THEM THE POWER TO CONTROL BUSINESS
AFFAIRS AND PREVENT A TAKEOVER THAT COULD BE BENEFICIAL TO UNAFFILIATED
SHAREHOLDERS.
Certain members of our management, specifically Thomas J. Russell,
Chairman of our Board, Reuben F. Richards, Jr., President, Chief Executive
Officer and a director, and Robert Louis-Dreyfus, a director, are former members
of Jesup & Lamont Merchant Partners, L.L.C. They collectively beneficially own
more than 25% of our common stock. Accordingly, such persons will continue to
hold sufficient voting power to control our business and affairs for the
foreseeable future. This concentration of ownership may also have the effect of
delaying, deferring or preventing a change in control of our Company, which
could have a material adverse effect on our stock price.
UNSUCCESSFUL CONTROL OF THE HAZARDOUS RAW MATERIALS USED IN OUR MANUFACTURING
PROCESS COULD RESULT IN COSTLY REMEDIATION FEES, PENALTIES OR DAMAGES UNDER
ENVIRONMENTAL AND SAFETY REGULATIONS.
The production of wafers and devices involves the use of certain
hazardous raw materials, including, but not limited to, ammonia, phosphine and
arsine. If our control systems are unsuccessful in preventing a release of these
materials into the environment or other adverse environmental conditions occur,
we could experience interruptions in our operations and incur substantial
remediation and other costs. Failure to comply with environmental and health and
safety laws and regulations may materially and adversely affect our business,
financial condition and results of operations.
OUR BUSINESS OR OUR STOCK PRICE COULD BE ADVERSELY AFFECTED BY ISSUANCE OF
PREFERRED STOCK.
Our board of directors is authorized to issue up to 5,882,352 shares of
preferred stock with such dividend rates, liquidation preferences, voting
rights, redemption and conversion terms and privileges as our board of
directors, in its sole discretion, may determine. The issuance of shares of
preferred stock may result in a decrease in the value or market price of our
common stock, or our board of directors could use the preferred stock to delay
or discourage hostile bids for control of us in which shareholders may receive
premiums for their common stock or to make the possible sale of the Company or
the removal of our management more difficult. The issuance of shares of
preferred stock could adversely affect the voting and other rights of the
holders of common stock.
CERTAIN PROVISIONS OF NEW JERSEY LAW AND OUR CHARTER MAY MAKE A TAKEOVER OF OUR
COMPANY DIFFICULT EVEN IF SUCH TAKEOVER COULD BE BENEFICIAL TO SOME OF OUR
SHAREHOLDERS.
New Jersey law and our certificate of incorporation, as amended,
contain certain provisions that could delay or prevent a takeover attempt that
our shareholders may consider in their best interests. Our board of directors is
divided into three classes. Directors are elected to serve staggered three-year
terms and are not subject to removal except for cause by the vote of the holders
of at least 80% of our capital stock. In addition, approval by the holders of
80% of our voting stock is required for certain business combinations unless
these transactions meet certain fair price criteria and procedural requirements
or are approved by two-thirds of our continuing directors. We may in the future
adopt other measures that may have the effect of delaying or discouraging an
unsolicited takeover, even if the takeover were at a premium price or favored by
a majority of unaffiliated shareholders. Certain of these measures may be
adopted without any further vote or action by our shareholders.
THE PRICE OF OUR COMMON STOCK HAS FLUCTUATED WIDELY IN THE LAST YEAR AND MAY
FLUCTUATE WIDELY IN THE FUTURE.
Our common stock is traded on The NASDAQ National Market, which has
experienced and may continue to experience significant price and volume
fluctuations that could adversely affect the market price of our common stock
without regard to our operating performance. In addition, we believe that
factors such as quarterly fluctuations in financial results, earnings below
analysts' estimates, and financial performance and other activities of other
publicly traded companies in the semiconductor industry could cause the price of
our common stock to fluctuate substantially. In addition, in recent periods, our
common stock, the stock market in general, and the market for shares of small
capitalization and semiconductor industry-related stocks in particular, have
experienced extreme price fluctuations which have often been unrelated to the
operating performance of affected companies. Any similar fluctuations in the
future could adversely affect the market price of our common stock.
13
Our stock price has fluctuated widely in the last year and may
fluctuate widely in the future. Since September 30, 2000, our closing stock
price has been as high as $55.38 per share and as low as $7.67 per share.
Volatility in the price of our common stock may be caused by other factors
outside of our control and may be unrelated or disproportionate to our operating
results.
THE MARKETS IN WHICH WE COMPETE ARE HIGHLY COMPETITIVE. AN INCREASE IN
COMPETITION WOULD LIMIT OUR ABILITY TO MAINTAIN AND INCREASE OUR MARKET SHARE.
We face substantial competition from a number of companies, many of
which have greater financial, marketing, manufacturing and technical resources.
Larger competitors could spend more on research and development, which could
give those competitors an advantage in meeting customer demand. We expect that
existing and new competitors will improve the design of their existing products
and will introduce new products with enhanced performance characteristics. The
introduction of new products or more efficient production of existing products
by our competitors could diminish our market share and gross margins.
USE OF PROCEEDS
This prospectus relates to securities that may be offered and issued by
us from time to time in connection with the acquisition of various assets,
businesses or securities. Other than the assets, business, or securities
acquired, there usually will be no proceeds to us from these offerings. When
this prospectus is used by a selling stockholder in a public re-offering or
resale of securities acquired pursuant to this prospectus, we will usually not
receive any proceeds from such sale by the selling stockholder. However, any
proceeds received by us from the offering of securities pursuant to this
prospectus or upon any resale of securities acquired pursuant to this prospectus
will, unless otherwise stated in the applicable prospectus supplement, be used
for general corporate purposes.
14
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this document the
information we filed with it. This means that we can disclose important
business, financial and other information to you by referring you to other
documents separately filed with the SEC. All information incorporated by
reference is part of this document, unless and until that information is updated
and superseded by the information contained in this document or any information
incorporated later.
We incorporate by reference the documents listed below:
- Our annual report on Form 10-K for the fiscal year ended
September 30, 2001; and
- The description of our common share, no par value, contained our
registration statement on Form 8-A, filed on February 26, 1997,
pursuant to Section 12 of the Exchange Act, and any amendment or
report filed for the purpose of updating such description.
We also incorporate by reference all future filings we make with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act
of 1934 on or (i) after the date of the filing of the registration statement
containing this prospectus and prior to the effectiveness of such registration
statement and (ii) after the date of this prospectus and prior to the closing of
the offering made hereby. Such documents will become a part of this prospectus
from the date that the documents are filed with the SEC.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
EMCORE Corporation
145 Belmont Drive
Somerset, New Jersey 08873
Attn: Investor Relations
Tel: (732) 271-9090
Exhibits to the filings will not be sent, however, unless those
exhibits have specifically been incorporated by reference.
You should rely only on the information contained or incorporated by
reference in this prospectus and any prospectus supplement. We have not
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not making an offer to sell these securities in any jurisdiction
where the offer and sale is not permitted. You should assume that the
information appearing in this prospectus and information incorporated by
reference into this prospectus, is accurate only as of the date of the documents
containing the information. Our business, financial condition, results of
operation and prospects may have changed since that date.
15
DISTRIBUTION OF SECURITIES
The shares of EMCORE common stock covered by this prospectus are
available for use in connection with acquisitions by us of other businesses,
assets or securities in business combination transactions. The consideration
offered by us in such acquisitions, in addition to any shares of common stock
offered by this prospectus, may include cash, assets, debt or other securities,
that may be convertible into shares of common stock of EMCORE, including shares
covered by this prospectus, or assumption by EMCORE of liabilities of the
businesses, assets or securities being acquired, or a combination of any of
these. The amount and type of consideration we will offer and the other specific
terms of each acquisition will be determined by negotiations with the owners or
the persons who control the businesses, assets or securities to be acquired
after taking into account the current and anticipated future value of such
businesses, assets or securities, along with all other relevant factors. The
securities issued to the owners of the businesses, assets or securities to be
acquired normally are valued at a price reasonably related to the market value
of such common stock either at the time an agreement is reached regarding the
terms of the acquisition or upon delivery of the shares.
In an effort to maintain an orderly market in our securities or for
other reasons, we may negotiate agreements with persons receiving common stock
covered by this prospectus that will limit the number of shares that they may
sell at specified intervals. These agreements may be more or less restrictive
than restrictions on sales made under the exemption from registration
requirements of the Securities Act, including the requirements under Rule 144 or
Rule 145(d), and the persons party to these agreements may not otherwise be
subject to the Securities Act requirements. We anticipate that, in general,
negotiated agreements will be of limited duration and will permit the recipients
of securities issued in connection with acquisitions to sell up to a specified
number of shares per business day or days. We may also determine to waive any
such agreements without public notice. See "Selling Stockholders," as it may be
amended or supplemented from time to time, for a list of those individuals or
entities that are authorized to use this prospectus to sell their shares of
EMCORE common stock.
SELLING STOCKHOLDERS
The selling stockholders listed in any supplement to this prospectus,
and any transferee or successors-in-interest to those persons, may from time to
time offer and sell, pursuant to this prospectus, some or all of the shares
covered by this prospectus.
Resales by selling stockholders may be made directly to investors or
through a securities firm acting as an underwriter, broker or dealer. When
resales are to be made through a securities firm, such securities firm may be
engaged to act as the selling stockholder's agent in the sale of the shares by
such selling stockholder, or the securities firm may purchase shares from the
selling stockholders as principal and thereafter resell such shares from time to
time. The fees earned by or paid to such securities firm may be the normal stock
exchange commission or negotiated commissions or underwriting discounts to the
extent permissible. In addition, such securities firm may effect resales through
ether securities dealers, and customary commissions or concessions to such other
dealers may be allowed. Sales of shares may be at negotiated prices, at fixed
prices, at market prices or at prices related to market prices then prevailing.
Any such sales may be made on the Nasdaq National Market, in the
over-the-counter market, by block trade, in special or other offerings, directly
to investors or through a securities firm acting as agent or principal, or
through a combination of such methods. Any participating securities firm may be
indemnified against certain liabilities including liabilities under the
Securities Act. Any participating securities firm may be deemed to be an
underwriter within the meaning of the Securities Act, and any commission earned
by such firm may be deemed to be underwriting discounts or commissions under the
Securities Act.
In connection with resales of the shares sold under this prospectus, a
prospectus supplement, if required, will be filed under Rule 424 (b) under the
Securities Act, disclosing the name of any selling stockholder, the
participating securities firm, if any, the number of shares involved, any
material relationship a selling stockholder may have with us or our affiliates,
and other details of such resale to the extent appropriate. Information
concerning the selling stockholders will be obtained from the selling
stockholders.
Stockholders may also offer shares of stock issued in past and future
acquisitions by means of prospectuses under other available registration
statements or pursuant to exemptions from the registration requirements of the
16
Securities Act, including sales which meet the requirements of Rule 145(d) under
the Securities Act, and stockholders should seek the advice of their own counsel
with respect to the legal requirements for such sales.
The terms of the acquisition of shares of common stock by the selling
stockholder may include a provision for the sharing or reallocation of the
selling stockholder's costs in connection with the resale of the securities,
including the cost of registering the securities issued in the acquisition and
preparing and printing the amendment or supplement, commissions and other costs
or resale.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
EMCORE by White & Case LLP, Miami, Florida, who may rely upon Dillon, Bitar &
Luther, New Jersey counsel for EMCORE, as to matters of New Jersey law.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended September 30, 2001 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, (which report expresses an unqualified opinion
and includes an explanatory paragraph referring to the change in method of
accounting for revenue recognition) and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
WE HAVE NOT AUTHORIZED ANY DEALER, SALES PERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER OF THESE SECURITIES IN ANY STATE
WHERE AN OFFER IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT
AS OF [ ], 200__. YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS
ACCURATE AS OF ANY OTHER DATE.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
EMCORE's Restated Certificate of Incorporation provides that the
Company shall indemnify its directors and officers to the full extent permitted
by New Jersey law, including in circumstances in which indemnification is
otherwise discretionary under New Jersey law.
Section 14A:2-7 of the New Jersey Business Corporation Act provides
that a New Jersey corporation's:
"certificate of incorporation may provide that a director or officer
shall not be personally liable, or shall be liable only to the extent therein
provided, to the corporation or its shareholders for damages for breach of any
duty owed to the corporation or its shareholders, except that such provision
shall not relieve a director or officer from liability for any breach of duty
based upon an act or omission (a) in breach of such person's duty of loyalty to
the corporation or its shareholders, (b) not in good faith or involving a
knowing violation of law or (c) resulting in receipt by such person of an
improper personal benefit. As used in this subsection, an act or omission in
breach of a person's duty of loyalty means an act or omission which that person
knows or believes to be contrary to the best interests of the corporation or its
shareholders in connection with a matter in which he has a material conflict of
interest."
In addition, Section 14A:3-5 (1995) of the New Jersey Business Corporation Act
(1995) provides as follows:
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
(1) As used in this section,
(a) "Corporate agent" means any person who is or was a
director, officer, employee or agent of the indemnifying corporation or
of any constituent corporation absorbed by the indemnifying corporation
in a consolidation or merger and any person who is or was a director,
officer, trustee, employee or agent of any other enterprise, serving as
such at the request of the indemnifying corporation, or of any such
constituent corporation, or the legal representative of any such
director, officer, trustee, employee or agent;
(b) "Other enterprise" means any domestic or foreign
corporation, other than the indemnifying corporation, and any
partnership, joint venture, sole proprietorship, trust or other
enterprise, whether or not for profit, served by a corporate agent;
(c) "Expenses" means reasonable costs, disbursements and
counsel fees;
(d) "Liabilities" means amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties;
(e) "Proceeding" means any pending, threatened or completed
civil, criminal, administrative or arbitrative action, suit or
proceeding, and any appeal therein and any inquiry or investigation
which could lead to such action, suit or proceeding; and
(f) References to "other enterprises" include employee benefit
plans; references to "fines" include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to
"serving at the request of the indemnifying corporation" include any
service as a corporate agent which imposes duties on, or involves
services by, the corporate agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in
good faith and in a manner the person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
(2) Any corporation organized for any purpose under any general or
special law of this State shall have the power to indemnify a corporate agent
against his expenses and liabilities in connection with any proceeding
II-1
involving the corporate agent by reason of his being or having been such a
corporate agent, other than a proceeding by or in the right of the corporation,
if
(a) such corporate agent acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the corporation; and
(b) with respect to any criminal proceeding, such corporate
agent had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall
not of itself create a presumption that such corporate agent did not
meet the applicable standards of conduct set forth in paragraphs
14A:3-5(2)(a) and 14A:3-5(2)(b).
(3) Any corporation organized for any purpose under any general or
special law of this State shall have the power to indemnify a corporate agent
against his expenses in connection with any proceeding by or in the right of the
corporation to procure a judgment in its favor which involves the corporate
agent by reason of his being or having been such corporate agent, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation. However, in such proceeding no
indemnification shall be provided in respect of any claim, issue or matter as to
which such corporate agent shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court or the court
in which such proceeding was brought shall determine upon application that
despite the adjudication of liability, but in view of all circumstances of the
case, such corporate agent is fairly and reasonably entitled to indemnity for
such expenses as the Superior Court or such other court shall deem proper.
(4) Any corporation organized for any purpose under any general or
special law of this State shall indemnify a corporate agent against expenses to
the extent that such corporate agent has been successful on the merits or
otherwise in any proceeding referred to in subsections 14A:3-5(2) and 14A:3-5(3)
or in defense of any claim, issue or matter therein.
(5) Any indemnification under subsection 14A:3-5(2) and, unless ordered
by a court, under subsection 14A:3-5(3) may be made by the corporation only as
authorized in a specific case upon a determination that indemnification is
proper in the circumstances because the corporate agent met the applicable
standard of conduct set forth in subsection 14A:3-5(2) or subsection 14A:3-5(3).
Unless otherwise provided in the certificate of incorporation or bylaws, such
determination shall be made
(a) by the board of directors or a committee thereof, acting
by a majority vote of a quorum consisting of directors who were not
parties to or otherwise involved in the proceeding; or
(b) if such a quorum is not obtainable, or, even if obtainable
and such quorum of the board of directors or committee by a majority
vote of the disinterested directors so directs, by independent legal
counsel, in a written opinion, such counsel to be designated by the
board of directors; or
(c) by the shareholders if the certificate of incorporation or
bylaws or a resolution of the board of directors or of the shareholders
so directs.
(6) Expenses incurred by a corporate agent in connection with a
proceeding may be paid by the corporation in advance of the final disposition of
the proceeding as authorized by the board of directors upon receipt of an
undertaking by or on behalf of the corporate agent to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified as
provided in this section.
(7) (a) If a corporation upon application of a corporate agent has
failed or refused to provide indemnification as required under subsection
14A:3-5(4) or permitted under subsections 14A:3-5(2), 14A:3-5(3) and 14A:3-5(6),
a corporate agent may apply to a court for an award of indemnification by the
corporation, and such court
(i) may award indemnification to the extent authorized under
subsections 14A:3-5(2) and 14A:3-5(3) and shall award indemnification
to the extent required under subsection 14A:3-5(4), notwithstanding any
contrary determination which may have been made under subsection
14A:3-5(5); and
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(ii) may allow reasonable expenses to the extent authorized
by, and subject to the provisions of, subsection 14A:3-5(6), if the
court shall find that the corporate agent has by his pleadings or
during the course of the proceeding raised genuine issues of fact or
law.
(b) Application for such indemnification may be made:
(i) in the civil action in which the expenses were or are to
be incurred or other amounts were or are to be paid; or
(ii) to the Superior Court in a separate proceeding. If the
application is for indemnification arising out of a civil action, it
shall set forth reasonable cause for the failure to make application
for such relief in the action or proceeding in which the expenses were
or are to be incurred or other amounts were or are to be paid.
The application shall set forth the disposition of any previous
application for indemnification and shall be made in such manner and form as may
be required by the applicable rules of court or, in the absence thereof, by
direction of the court to which it is made. Such application shall be upon
notice to the corporation. The court may also direct that notice shall be given
at the expense of the corporation to the shareholders and such other persons as
it may designate in such manner as it may require.
(8) The indemnification and advancement of expenses provided by or
granted pursuant to the other subsections of this section shall not exclude any
other rights, including the right to be indemnified against liabilities and
expenses incurred in proceedings by or in the right of the corporation, to which
a corporate agent may be entitled under a certificate of incorporation, bylaw,
agreement, vote of shareholders, or otherwise; provided that no indemnification
shall be made to or on behalf of a corporate agent if a judgment or other final
adjudication adverse to the corporate agent establishes that his acts or
omissions (a) were in breach of his duty of loyalty to the corporation or its
shareholders, as defined in subsection (3) of N.J.S.14A:2-7, (b) were not in
good faith or involved a knowing violation of law or (c) resulted in receipt by
the corporate agent of an improper personal benefit.
(9) Any corporation organized for any purpose under any general or
special law of this State shall have the power to purchase and maintain
insurance on behalf of any corporate agent against any expenses incurred in any
proceeding and any liabilities asserted against him by reason of his being or
having been a corporate agent, whether or not the corporation would have the
power to indemnify him against such expenses and liabilities under the
provisions of this section. The corporation may purchase such insurance from, or
such insurance may be reinsured in whole or in part by, an insurer owned by or
otherwise affiliated with the corporation, whether or not such insurer does
business with other insureds.
(10) The powers granted by this section may be exercised by the
corporation, notwithstanding the absence of any provision in its certificate of
incorporation or bylaws authorizing the exercise of such powers.
(11) Except as required by subsection 14A:3-5(4), no indemnification
shall be made or expenses advanced by a corporation under this section, and none
shall be ordered by a court, if such action would be inconsistent with a
provision of the certificate of incorporation, a bylaw, a resolution of the
board of directors or of the shareholders, an agreement or other proper
corporate action, in effect at the time of the accrual of the alleged cause of
action asserted in the proceeding, which prohibits, limits or otherwise
conditions the exercise of indemnification powers by the corporation or the
rights of indemnification to which a corporate agent may be entitled.
(12) This section does not limit a corporation's power to pay or
reimburse expenses incurred by a corporate agent in connection with the
corporate agent's appearance as a witness in a proceeding at a time when the
corporate agent has not been made a party to the proceeding.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
The following exhibits are filed with this Registration Statement:
* Filed herewith
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the registration statement;
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided however, that paragraphs (1)(a) and
(1)(b) do not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
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(5) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(6) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to provisions described in Item 20 or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(7) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report, to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(8) That prior to any public reoffering of the securities registered
hereunder through us of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(9) That every prospectus (i) that is filed pursuant to paragraph (8)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offering therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(10) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(11) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Somerset, State of New Jersey, on January 23,
2002.
EMCORE CORPORATION
By: /s/ Reuben F. Richards, Jr.
-------------------------------------
Reuben F. Richards, Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated, on January 23, 2002.
* indicates signed by Reuben F. Richards, Jr. as attorney-in-fact
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EXHIBIT INDEX
* Filed herewith.
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