SUNNYVALE, Calif., Oct. 12 -- Finisar Corp., a maker of fiber optic subsystems and network performance test systems, and chip maker Infineon Technologies AG, of Munich, Germany, announced they have agreed to modify the agreement under which Finisar will acquire Infineon's Fiber Optics Business Unit, based in Berlin. Under the terms of the modified agreement, Finisar will issue approximately 110 million shares of Finisar common stock to Infineon, compared to approximately 135 million shares that would have been issuable under the original agreement. Following the transaction, Infineon will hold a 33 percent equity interest in Finisar. In addition, Infineon has agreed to provide assistance with the costs of restructuring the operations of the unit and integrating those operations with Finisar after the closing. The companies said the terms were modified in part due to the operating results for the unit in the past six months. The acquisition will involve the transfer of Infineon's fiber optic development, manufacturing and certain marketing activities and approximately 1200 employees. The Infineon Fiber Optics Business Unit makes a variety of fiber optic datacom and telecom modules supporting the common MSA standards, BIDI components that allow bi-directional transmission on a single fiber for fiber-to-the-home applications and plastic optical fiber components that are used in automotive applications, specifically for entertainment and safety systems. The transaction is subject to approval by Finisar's shareholders, applicable regulatory approvals and other customary closing conditions. Jerry Rawls, president and CEO of Finisar, and Frank Levinson, chairman and CTO, who own an aggregate of approximately 16 percent of the outstanding Finisar shares, have entered into agreements with Infineon to vote their shares in favor of the transaction. The companies said they have already received the required antitrust clearances in the US and Europe. Pending the approval of Finisar's shareholders, the transaction is now expected to close in the fourth calendar quarter of this year. At closing, Thomas Seifert, CEO of Infineon's Memory Products Group, is expected to join the Finisar board of directors. For more information, visit: www.finisar.com