JDS Uniphase and E-TEK Dynamics
Agree to $15 Billion Merger

NEPEAN, ONTARIO, SAN JOSE, CA, & SANTA ROSA, CA., Jan. 17 -- JDS Uniphase Corp., a supplier of products for the fiber-optic communications market, and E-TEK Dynamics Inc., a manufacturer of fiber-optic components, have signed a definitive merger agreement valued at approximately $15 billion based on January 14, 2000, closing stock prices.

JDS Uniphase shares have risen more than tenfold in the past year, giving the company a value of approximately $60 billion. The merger agreement provides for the exchange of 1.1 shares of JDS Uniphase common stock for each common share of E-TEK. Following completion of the transaction, which is subject to customary closing conditions, E-TEK will operate as a wholly-owned subsidiary of JDS Uniphase.

The proposed merger is in response to unprecedented growth in the telecommunications industry. Due to the explosive demand for bandwidth, service providers have accelerated deployment of fiber-optic 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.

“We are very pleased to be joining E-TEK with JDS Uniphase," said Kevin Kalkhoven, JDS Uniphase co-chairman and CEO. "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.”

According to JDS Uniphase and E-TEK Dynamics, the merger combines their complementary strengths and is expected to enable a more rapid scaling of operations, bringing greater volume and a broader range of products to customers faster. An expected benefit 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 Optical Coating Laboratory, Inc. (OCLI).

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.

"By joining together, we believe we will eliminate inefficiencies in the supply chain, allowing us to deliver more products to our customers," said Michael Fitzpatrick, E-TEK chairman, president, and CEO. "In doing so, we hope to catalyze the evolution of optical networking.”

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 more than 8,200 employees and reported sales of $230.1 million in its first quarter ended September 30, 1999.

E-TEK Dynamics, Inc., headquartered in San Jose, CA, designs and manufactures passive components and modules for fiber-optic systems. E-TEK's wavelength division multiplexers (WDMs) are designed to increase the bandwidth capacity of new and existing fiber-optic networks. Other E-TEK components, including isolators, couplers and integrated optics, are important in enabling optical communications systems. Applications include terrestrial and submarine long-haul fiber optic networks as well as in emerging short-haul applications, such as metropolitan area networks.

JDS Uniphase,based in San Jose, CA, and Nepean, Ontario, designs, develops, manufactures and distributes a comprehensive range of products for the growing fiber optic communications market. These products are deployed by system manufacturers to develop advanced optical networks for the telecommunications and cable television industries

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