UNITED STATES SECURITIES AND EXCHANGE COMMISSION

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Ciena Corporation

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Patrick H. Nettles, Ph.D. Executive Chairman of the Board of Directors   “The challenges brought on by the COVID-19 pandemic provided us with opportunities to show perseverance, strength and kindness.”   - Patrick H. Nettles, Ph.D.				Message from our Board of Directors   Dear Fellow Stockholders:   Fiscal 2020 was a year that brought unprecedented challenges, testing us as individuals, companies and entire industries, and highlighting the essential nature of the global networks that connect us together. The COVID-19 pandemic also provided us with opportunities to show perseverance, strength and kindness. Our 2020 performance, across multiple dimensions, illustrated our market leadership, core values and resiliency. We were able to deliver solid performance in spite of these challenges through consistent execution of our strategy and our ability to leverage our competitive strengths – innovation leadership, diversification and global scale. These strengths serve as the foundation of a uniquely resilient business, differentiating us in the market and giving us confidence about our future.   Our management and our Board believe strongly that our success is ultimately rooted in our people. Through our team’s collective efforts, we achieve exceptional engineering feats, impactful social programs, progressive human capital initiatives and upstanding governance practices. Similarly, good corporate governance and a commitment to high ethical standards and sustainability remain essential to Ciena’s success in our markets. In 2020, we took several meaningful steps, including:   ●   Promoting Employee Safety & Wellbeing. Prioritizing the health and safety of our employees, we temporarily closed our offices around the world, shifted the vast majority of our employees to work from home, and instituted travel bans and restrictions. We also adopted new employee benefits and wellbeing initiatives, including physical, emotional, mental, and social programming, global pandemic leave, work from home reimbursements, regular mental wellbeing sessions, morale initiatives, and new wellbeing platforms.   ●   Supporting our Communities. In the face of the pandemic, we enhanced our Ciena Cares program, which provides corporate matching for employee charitable donations and volunteer service, to increase our corporate match three-fold. Our employees’ support for neighbors, communities and front-line health care workers has been truly inspiring. We’ve contributed in innovative ways, using 3-D printers and engineering know-how to make and design face shields and components for health care workers. We also created a new community initiative focused on promoting digital inclusion, providing greater opportunities for underserved students through access, technology and digital skills, and have collaborated on community projects with business partners as part of this program.   ●   Commitment to Board Refreshment, Diversity and Governance. Refreshment and diversity are important to Ciena’s success. In 2020, we appointed a new independent director and a new executive officer, adding further gender and ethnic diversity to our leadership. We also created and resourced new, dedicated functions focused on Diversity, Inclusion & Belonging initiatives as well as Corporate Compliance & Ethics, and we’re excited to see the output of these new levels of focus.   I encourage you to read more about our Board of Directors, corporate governance practices and executive compensation in the attached proxy statement. I am confident that you will recognize our commitment to best practices in these areas. Thank you for your continued support of Ciena and your participation in this year’s Annual Meeting.   On behalf of the Board of Directors,     Patrick H. Nettles, Ph.D.

Ciena Corporation

7035 Ridge Road

Hanover, Maryland 21076

Notice of Annual Meeting of Stockholders

 

Date:		April 1, 2021		Record Date:		February 4, 2021
Time:		3:00 p.m. Eastern Time		Attendance:		www.virtualshareholdermeeting.com/CIEN2021

To the Stockholders of Ciena Corporation:

The 2021 Annual Meeting of Stockholders of Ciena Corporation will be held on April 1, 2021 at 3:00 p.m. Eastern Time. Our Annual Meeting will be a virtual meeting held over the Internet. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/CIEN2021 and entering your 16-digit control number included in the notice containing instructions on how to access Annual Meeting materials, your proxy card, or the voting instructions that accompanied your proxy materials.

 

These matters are more fully described in the proxy statement accompanying this notice. You are entitled to notice of, and are eligible to vote at, this year’s Annual Meeting if you were a stockholder of record as of the close of business on February 4, 2021.

In accordance with Securities and Exchange Commission rules, we are furnishing these proxy materials and our Annual Report to Stockholders for fiscal 2020 via the Internet. On February 18, 2021, we mailed to stockholders as of the record date a notice with instructions on how to access our Annual Meeting materials and vote via the Internet, or by mail or telephone.

We believe that your vote, and the vote of every Ciena stockholder, is important. Whether or not you plan to participate in the Annual Meeting, we encourage you to review the accompanying proxy statement for information relating to each of the proposals and to cast your vote promptly.

 

Hanover, Maryland

February 18, 2021

Table of Contents

 

 

Proxy Statement Summary

This summary highlights information that is contained elsewhere in this proxy statement. It does not include all information necessary to make a voting decision, and you should read this proxy statement in its entirety before casting your vote.

 

		Our COVID-19 Response
		Employee Safety and Wellbeing   •  Prioritized employee health and safety, following Centers for Disease Control and Prevention and other relevant guidelines   •  Temporarily closed offices globally   •  Required vast majority of employees to work from home   •  Instituted business travel bans and restrictions   •  Adopted new pandemic leave and work from home benefits   •  Launched wellbeing initiatives focusing on mental health		Business Continuity   •  Established COVID-19 business continuity planning team   •  Implemented business continuity plans to minimize business disruption   •  Mitigated supply chain disruption, including through multi-sourcing   •  Met customer fulfillment needs despite disruptions in ability to provide services and access sites   •  Invested significantly in digital platforms and virtual collaboration, enabling a smooth transition to remote working
		Financial Resiliency   •  Increased profitability despite slowdowns in customer spending and business velocity that negatively impacted annual revenue   •  Demonstrated resilient operating model and ability to continue to invest in innovation leadership   •  Strengthened balance sheet and generated cash flow   •  After a temporary pause, reinstated stock repurchase plan in first quarter of fiscal 2021		Community Outreach and Support   •  Tripled corporate matching for employee charitable donations and volunteering through Ciena Cares program   •  Donated personal protective equipment   •  Designed and 3-D printed face shields and components for healthcare workers   •  Launched digital inclusion commitment to provide greater opportunities for underserved students through access, technology, and digital skills   •  Participated in joint digital inclusion community projects with business partners

 

2021 Proxy Statement		1

Ciena at a Glance

Industry-leading, global networking systems, services and software company

 

$3.5B FY20 Annual Revenue		$1.3B Cash Position at FYE 20		#1 or #2 Market Position in the markets in which we operate*
80+ Countries in which we sell products		7,000+ Employees		1,800+ Customers

* As cited by Omdia, Dell’Oro Group and Cignal AI for different markets

 

Foundational Strengths						Strategic Initiatives
		Leading Technology & Innovation   we own the key enabling technologies for our solutions and use our significant investment capacity to push the pace of innovation in our industry						Grow   grow our core networking platforms and services businesses and extend innovation leadership through offerings that leverage our Adaptive NetworkTM vision
		Diversification   we have a broad-based business that spans a diverse set of customer segments, a wide range of solutions and applications, and multiple geographies						Develop   embrace multiple consumption models and offer a range of networking solutions across these models to drive the evolution of next-generation network infrastructures and promote choice
		Global Scale   we have significant talent and deep resources in engineering, sales, services and customer support that advance our global business						Expand   promote broader adoption of our Blue Planet software and services portfolio to transform network operations and management

 

2		2021 Proxy Statement

Business Highlights

Our fiscal 2020 performance highlights the strength and durability of our business model, which allowed us to deliver solid performance despite the impact of the COVID-19 pandemic.

 

 

Contained above, and elsewhere in this proxy statement, are certain non-GAAP measures of Ciena’s financial performance for fiscal 2019 and 2020. These measures, along with their corresponding GAAP measures and reconciliations thereto, have been previously disclosed in exhibits to Ciena’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on December 10, 2020. Also see “Non-GAAP Measures” below for more information about these measures and how they are used.

Fiscal 2020 Business Performance

 

❖   Delivered solid financial results, with a significant increase in profitability measures, in spite of the global pandemic   ❖   Generated $411 million in free cash flow   ❖   Ended fiscal 2020 with $1.3 billion in cash and investments   ❖   Grew by more than 300% the number of customers adopting MCP, our domain control software		❖   Pushed the pace of innovation with our Adaptive Network approach, including general availability of the industry’s first single-wavelength 800G product and several deployments of our Adaptive IP solutions   ❖   Developed footprint-optimized WaveLogic 5 Nano 100G-400G coherent pluggable transceivers   ❖   Completed acquisition of Centina Systems to strengthen Blue Planet’s closed-loop automation portfolio   ❖   Added new customers and expanded relationships for our Blue Planet software automation portfolio

 

2021 Proxy Statement		3

Fiscal 2020 Compensation Highlights

 

COVID-19 Compensation Considerations
•   Compensation decisions for fiscal 2020 were made by the Compensation Committee in December 2019, following Ciena’s outstanding business and financial performance in fiscal 2019 and prior to the onset of the global COVID-19 pandemic   •   Although our sales orders and annual revenue were negatively impacted by COVID-19, our profitability and TSR increased meaningfully in fiscal 2020		•   The Compensation Committee determined not to make any adjustments to the fiscal 2020 objectives or payouts under incentive compensation programs due to the COVID-19 pandemic   •   In light of ongoing macro and industry conditions, at the end of 2020, the Compensation Committee determined not to increase any element of compensation for the NEOs for fiscal 2021

 

Base Salaries				Equity Award Values
Increased the base salary of the CEO and the other NEOs in order to better align with the market median for their positions and to reflect their and Ciena’s strong performance				Delivered annual equity awards for the CEO and the other NEOs that represented meaningful year-over-year increases in target value in order to keep pace and ensure alignment with the market and to reflect their and Ciena’s strong performance
Target Cash Incentives				Equity Award Structure
Increased the target cash incentive opportunity for the NEOs other than the CEO to better align with the market median and to reflect their and Ciena’s strong performance   Made no adjustments to objectives or payouts for fiscal 2020 cash incentives, despite slowdowns in customer spending and business velocity due to the COVID-19 pandemic				Structured equity awards so that 60% of the target award value for the CEO, and 50% of the target award value for the other NEOs, was allocated to at-risk, performance-based equity in the form of PSUs and MSUs   Made no adjustments to objectives or payments for fiscal 2020 equity awards, despite slowdowns in customer spending and business velocity due to the COVID-19 pandemic

Pay-for-Performance Alignment

 

CEO Fiscal 2020 Target Total Direct Compensation Mix				NEO Fiscal 2020 Target Total Direct Compensation Mix

 

4		2021 Proxy Statement

Corporate Governance and Stockholder Outreach

Stockholder Outreach and Engagement

We believe that strong corporate governance practices should include regular outreach and conversations with our stockholders, with whom we regularly discuss our business, financial performance, industry dynamics, governance, compensation, and ESG matters. These regular engagements allow us to obtain feedback on stockholders’ perception and understanding of our markets, business and industry. They have also influenced our communications, which include detail on key elements of our corporate strategy and an articulation of our capital allocation priorities. In addition, in connection with our proposal at last year’s annual meeting to increase the number of shares available under our 2017 Omnibus Incentive Plan, we reached out to a number of our largest stockholders to discuss our current equity practices and receive feedback. Since the 2020 annual meeting, we have also provided updates with respect to our environmental, social and governance practices through an investor presentation available on the “Investors” section of our website at www.ciena.com. Information contained on or available through our website is not incorporated by reference in or made part of this proxy statement.

Fiscal 2020 Governance Changes

 

Board Composition				Policies and Charters
Continued our commitment to refreshment and diversity:   •  Appointed a new independent director •  50% of directors bring gender or ethnic diversity to the Board •  Reduced average tenure of non-employee directors from 12.1 to 9.7 years from end of fiscal 2016 to end of fiscal 2020				Updated to ensure alignment with governance best practices:   •  Principles of Corporate Governance •  Code of Ethics for Directors •  Charters of standing Board committees

Existing Strong Governance Structure

 

❖   Eight of ten directors are independent ❖   Lead Independent Director ❖   Separate Chairman and CEO roles ❖   Code of Ethics for Directors ❖   Standing committees are comprised solely of independent directors		❖   Annual Board and committee self-assessments ❖   Proxy access bylaw ❖   Majority voting in uncontested director elections ❖   Limits on annual director compensation ❖   Independent directors regularly meet without management present

 

2021 Proxy Statement		5

Voting Roadmap

This section highlights selected information about the items to be voted on at the annual meeting. It does not contain all information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.

 

Proposal
		Elect 4 Class III Director Nominees
see page 7		The Board recommends a vote FOR each nominee

 

				Independent		Director Since		Committees and Board Leadership
		Hassan M. Ahmed, Ph.D. Former Chairman of the Board and Chief Executive Officer of Affirmed Networks, Inc.				June 2020		•   Compensation •   Governance and Nominations
		Bruce L. Claflin Former President and Chief Executive Officer of 3Com Corporation				August 2006		•   Audit •   Compensation
		T. Michael Nevens Senior adviser to Permira Advisers, LLC				February 2014		•   Audit
		Patrick T. Gallagher Chairman of Harmonic Inc.				May 2009		•   Lead Independent Director •   Compensation •   Governance and Nominations (Chair)

 

Proposal
		Approve the amendment and restatement of our Employee Stock Purchase Plan
see page 30		The Board recommends a vote FOR this proposal
		❖   Promotes stock ownership culture and alignment of interest between our employees and stockholders ❖   Represents important compensation element for employee recruitment, retention and motivation ❖   Aligns with best practices and promotes broad-based, cross-border participation
Proposal
		Ratify PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2021
see page 33		The Board recommends a vote FOR this proposal
		❖   Independent firm with reasonable fees and significant financial reporting expertise ❖   PwC has audited our consolidated financial statements annually since our incorporation in 1992 ❖   Audit Committee annually evaluates PwC and has determined that its appointment continues to be in the best interests of our stockholders
Proposal
		Say-on-Pay: Advisory vote on named executive officer compensation
see page 72		The Board recommends a vote FOR this proposal
		❖   At last year’s annual meeting, approximately 94% of stockholder votes cast were in favor of our executive compensation program ❖   The key elements of our executive compensation program remain essentially unchanged ❖   We employ core compensation principles and practices to promote pay for performance and alignment of executive and stockholder interests ❖   Our overall fiscal 2020 executive compensation was reasonable and appropriate in light of our business and financial performance

 

6		2021 Proxy Statement

Proposal No. 1

Election of Class III Directors

Overview

Our Board of Directors currently consists of ten directors divided into three classes. Each class of our Board of Directors serves a staggered three-year term. At the Annual Meeting, four directors will be elected to fill positions in Class III, whose term expires at the Annual Meeting. Hassan M. Ahmed, Ph.D., Bruce L. Claflin, Patrick T. Gallagher, and T. Michael Nevens, our current Class III directors, are nominees for election at the Annual Meeting. Each of the nominees for Class III, if elected, will serve for a three-year term expiring at the 2024 Annual Meeting, or until his successor is elected and qualified, or until such director’s earlier death, resignation or removal from the Board.

Effective June 30, 2020, the Board of Directors increased the size of the Board from nine to ten directors and appointed Dr. Ahmed to fill the newly created vacancy in Class III of the Board. Dr. Ahmed was initially identified as a possible candidate for Board service by our CEO and was subsequently recommended to the Board following a vetting process conducted by a third-party search firm engaged by the Board and the Governance and Nominations Committee In accordance with our bylaws, Dr. Ahmed’s term of office continues until this year’s Annual Meeting, the first annual meeting following his appointment.

The nomination of these directors to stand for election at the Annual Meeting has been recommended by the Governance and Nominations Committee and approved by the Board of Directors.

Director Qualifications

The Governance and Nominations Committee reviews candidates for service on the Board and recommends nominees for election to fill vacancies on the Board of Directors, including nomination for re-election of directors whose terms are due to expire. The Governance and Nominations Committee endeavors to identify, recruit and nominate candidates who possess a combination of wisdom, sound judgment, excellent business skills, maturity and high integrity. In particular, the Governance and Nominations Committee seeks individuals with a record of accomplishment and senior leadership experience in their chosen fields who display the independence of mind and strength of character to be committed to representing the long-term interests of various stakeholders, including our stockholders, customers, partners, employees and community.

The Governance and Nominations Committee also seeks to ensure that the Board of Directors is composed of individuals of diverse backgrounds, including with respect to gender, ethnicity, race, nationality and age, who have a variety of complementary experience, skills and relationships relevant to Ciena’s business and industry. This diversity of background and experience includes ensuring that the Board includes individuals with experience or skills sufficient to meet the requirements of the various rules and regulations of The New York Stock Exchange (the “NYSE”) and the SEC, such as the requirements to have a majority of independent directors and an audit committee financial expert. As required by the Governance and Nominations Committee Charter, the Committee has developed and uses criteria for maintaining a balanced board of directors representing a diversity of characteristics and recommends criteria, establishes procedures for, and conducts an annual review of the Board and the diversity and other characteristics of individual directors and reports to the Board on the results of the review.

In nominating candidates to fill vacancies created by the expiration of the term of a director, the Governance and Nominations Committee determines whether the incumbent director is willing to stand for re-election. If so, the Governance and Nominations Committee evaluates his or her performance to determine suitability for continued service, taking into consideration, among other things, each director’s contributions to the Board, the value of the continuity of his or her service, and the individual’s familiarity with Ciena’s markets, business and operations.

 

2021 Proxy Statement		7

Board Composition and Diversity

 

Skills and Experience				Board Tenure Non-Executive Directors
				0 to 3 Years
				4 to 12 Years
				13+ Years

Independence and Diversity

 

 

The above charts reflect information for all nominees and continuing directors. Each of the nominees has consented to serve if elected. However, if any of the persons nominated by the Board of Directors fails to stand for election, or declines to accept election, or is otherwise unavailable for election prior to our Annual Meeting, proxies solicited by our Board of Directors will be voted by the proxy holders for the election of any other person or persons as the Board of Directors may recommend, or our Board of Directors, at its option, may reduce the number of directors that constitute the entire Board of Directors.

 

8		2021 Proxy Statement

Information Regarding Nominees and Continuing Directors

Director Nominees

Class III Director Nominees with Terms Expiring in 2024

 

Hassan M. Ahmed, Ph.D.
		Director Since June 2020   •  Compensation Committee •  Governance and Nominations Committee   Age 62   Other Public Boards: 0		Skills and Qualifications   •   Prior service as a Chief Executive Officer of a technology company in an adjacent space provides the Board with a high level of expertise and experience in our industry •   Provides the Board with strategic insights across a range of corporate functions •   Previous management and oversight experience within the industry •   Significant industry knowledge and expertise in NFV solutions   Other Current Board Experience   •   Oxefit, Inc. (private) •   Vesper Technologies, Inc. (private)   Previous Board Experience   •   Affirmed Networks, Inc., Chairman		Professional Highlights   Dr. Ahmed most recently served as Chairman of the Board and Chief Executive Officer of Affirmed Networks, Inc., which was acquired by Microsoft in April 2020. Before founding Affirmed Networks, Inc. in 2010, he was a senior advisor at Charles River Ventures. From 1998 to 2008, Dr. Ahmed served as Chairman and Chief Executive Officer of Sonus Networks, Inc. Prior to that time, he served in various executive roles at Ascend Communications, Inc., Cascade Communications Corporation and Analog Devices, Inc.. He also served as President and founder of WaveAccess, Inc. and founded and served as director of the VLSI Systems Group of Motorola Codex. Dr. Ahmed previously served as Associate Professor of Electrical, Computer and Systems Engineering and Associate Professor of Finance at Boston University.

 

2021 Proxy Statement		9

Bruce L. Claflin
		Director Since August 2006   •  Audit Committee •  Compensation Committee   Age 69   Other Public Boards: 1		Skills and Qualifications   •   Prior service as a Chief Executive Officer of a technology company in an adjacent industry provides the Board with a high level of expertise and experience in the operations of a global, high technology company •   Provides the Board with strategic insights across a range of corporate functions •   Previous management and oversight experience relating to sales, marketing, research and development, supply chain management and manufacturing •   Experience in international business transactions, risk management, executive compensation and a business-oriented approach to resolving operational challenges •   Service as a fellow on the National Association of Corporate Directors and as a director of a public technology company   Other Current Board Experience   •   IDEXX Laboratories, Inc., Chair of the Nominating and Governance Committee (public)		Previous Board Experience   •   Advanced Micro Devices, Inc. (AMD)   Professional Highlights   Mr. Claflin served as President and Chief Executive Officer of 3Com Corporation from January 2001 until his retirement in February 2006. Mr. Claflin joined 3Com as President and Chief Operating Officer in August 1998. Prior to 3Com, Mr. Claflin served as Senior Vice President and General Manager, Sales and Marketing, for Digital Equipment Corporation. Mr. Claflin also worked for 22 years at IBM Corporation, where he held various sales, marketing and management positions, including general manager of IBM PC Company’s worldwide research and development, product and brand management, as well as president of IBM PC Company Americas.

 

T. Michael Nevens
		Director Since February 2014   •  Audit Committee   Age 71   Other Public Boards: 1		Skills and Qualifications   •   Substantial experience with and exposure to a wide variety of companies and their corporate strategies, both as a private equity adviser and management consultant, provides the Board with expertise in the areas of strategic and long-term business planning and competitive strategy •   Provides the Board with insight on corporate governance changes affecting public companies •   Experience as a director of other global, high technology companies   Other Current Board Experience   •   NetApp, Inc., Chairman (public)   Previous Board Experience   •   Altera Corporation		Professional Highlights   Since 2006, Mr. Nevens has served as senior adviser to Permira Advisers, LLC, an international private equity fund. From 1980 to 2002, Mr. Nevens held various leadership positions at McKinsey & Co., most recently as a director (senior partner) and as managing partner of the firm’s Global Technology Practice. He also served on the board of the McKinsey Global Institute, which conducts research on economic and policy issues. Mr. Nevens has been an adjunct professor of Corporate Governance and Strategy at the Mendoza College of Business at the University of Notre Dame.

 

10		2021 Proxy Statement

Patrick T. Gallagher
		Director Since May 2009   •  Lead Independent Director •  Compensation Committee •  Governance and Nominations Committee (Chair)   Age 66   Other Public Boards: 1		Skills and Qualifications   •   Extensive international business experience provides the Board with expertise and an important perspective regarding international transactions and markets •   Experience as a senior executive of major European telecommunications service providers offers the Board insight into carrier customer perspectives as well as industry opportunities, marketing and sales strategies and operational challenges outside of the United States •   Industry knowledge and prior management expertise provide the Board with significant industry knowledge and expertise in submarine and wireless network applications and strategic growth market opportunities for Ciena •   Experience as a public company director in both the U.S. and Europe provides strong background as lead independent director and Chair of the Governance and Nominations Committee		Other Current Board Experience   •   Harmonic, Inc., Chairman (public) •   Intercloud SAS, Chairman (private) •   Mirabeau SAS, Chairman (private)   Previous Board Experience   •   Sollers JSC   Professional Highlights   Since October 2007, Mr. Gallagher has served as Chairman of Harmonic Inc., a global provider of high-performance video solutions to the broadcast, cable, telecommunications and managed service provider sectors. From March 2008 until April 2012, Mr. Gallagher was Chairman of Ubiquisys Ltd. From January 2008 until February 2009, Mr. Gallagher was Chairman of Macro 4 plc, and from May 2006 until March 2008, served as Vice Chairman of Golden Telecom Inc. From 2003 until 2006, Mr. Gallagher was Executive Vice Chairman and served as Chief Executive Officer of FLAG Telecom Group Ltd. and, prior to that role, held various senior management positions at British Telecom.

Continuing Directors

Class I Directors with Terms Expiring in 2022

 

Lawton W. Fitt
		Director Since November 2000   •  Audit Committee (Chair)   Age 67   Other Public Boards: 3		Skills and Qualifications   •   Substantial investment banking experience and expertise in structuring and negotiating acquisition and financing transactions •   Understanding of the capital markets •   Brings a strong financial background to her service as Chair of the Audit Committee •   Significant experience in the areas of raising capital, financial oversight and enterprise risk analysis •   Executive management experience •   Service as a director and member of the audit committee of other companies   Other Current Board Experience   •   The Carlyle Group Inc. (public) •   Micro Focus International PLC (public) •   The Progressive Corporation, Chairperson (public)		Previous Board Experience   •   ARM Holdings PLC •   Thomson Reuters Corporation   Professional Highlights   From October 2002 to March 2005, Ms. Fitt served as Director of the Royal Academy of Arts in London. From 1979 to October 2002, Ms. Fitt was an investment banker with Goldman Sachs & Co., where she was a partner from 1994 to October 2002.

 

2021 Proxy Statement		11

Devinder Kumar
		Director Since August 2019   •  Audit Committee   Age 64   Other Public Boards: 0		Skills and Qualifications   •   Strong financial background including as Chief Financial Officer of a public company •   Senior leadership experience managing a global finance organization, global corporate services and facilities •   International and global experience with a multinational organization, including time spent in Asia •   More than 35 years in the technology industry		Professional Highlights   Mr. Kumar currently serves as Senior Vice President, Chief Financial Officer and Treasurer of Advanced Micro Devices, Inc., in which capacity he is responsible for Advanced Micro Devices, Inc.’s global finance organization as well as global corporate services and facilities. He was appointed Chief Financial Officer in January 2013 and Treasurer in April 2015.

 

Patrick H. Nettles, Ph.D.
		Director Since April 1994   •  Executive Chairman   Age 77   Other Public Boards: 1		Skills and Qualifications   •   Founder and former Chief Executive Officer of Ciena •   Significant institutional and industry knowledge •   Provides key insight and advice in the Board’s consideration and oversight of corporate strategy and management development •   Experience as a public company director •   Executive management experience with Ciena, along with operational management experience and technical expertise, provide the Board a unique perspective and enable him to make significant contributions to the Board   Other Current Board Experience   •   The Progressive Corporation (public) •   Trustee for the California Institute of Technology		Previous Board Experience   •   Axcelis Technologies, Inc., Independent Chairman of the board •   Apptrigger, Inc. •   Optiwind Corp. •   Trustee for the Georgia Tech Foundation, Inc.   Professional Highlights   Dr. Nettles has served as Executive Chairman of the Board of Directors since May 2001. From October 2000 to May 2001, Dr. Nettles was Chairman of the Board of Directors and Chief Executive Officer of Ciena, and he was President and Chief Executive Officer from April 1994 to October 2000.

 

12		2021 Proxy Statement

Class II Directors with Terms Expiring in 2023

 

Judith M. O’Brien
		Director Since July 2000   •  Compensation Committee (Chair) •  Governance and Nominations Committee   Age 70   Other Public Boards: 0		Skills and Qualifications   •   Experience working in a private law firm focused on technology companies •   Service as a venture capital professional and as in-house general counsel •   Important perspective with respect to the overall technology sector and in identifying and assessing legal and regulatory risks •   Expertise in assessing and structuring strategic transactions, including capital raising opportunities, intellectual property matters, acquisitions, joint ventures and strategic alliances •   Brings extensive knowledge and experience in the areas of executive compensation and corporate governance to her service as Chair of the Compensation Committee and her membership on the Governance and Nominations Committee   Other Current Board Experience   •   MagicCube, Inc., Chairman (private) •   Theatro Labs, Inc. (private) •   LightDeck Diagnostics, Inc. (private)		Previous Board Experience   •   Adaptec, Inc. •   Inform, Inc.   Professional Highlights   From November 2012 until her retirement in December 2019, Ms. O’Brien served as a partner and head or co-head of the Emerging Company Practice Group at the law firm of King & Spalding LLP. Ms. O’Brien served as Executive Vice President and General Counsel of Obopay, Inc., a provider of mobile payment services, from November 2006 through December 2010. From February 2001 until October 2006, Ms. O’Brien served as a Managing Director at Incubic Venture Fund, a venture capital firm. From August 1980 until February 2001, Ms. O’Brien was a lawyer with Wilson Sonsini Goodrich & Rosati, where, from February 1984 to February 2001, she was a partner specializing in corporate finance, mergers and acquisitions, and general corporate matters.

 

Joanne B. Olsen
		Director Since October 2018   •  Compensation Committee •  Governance and Nominations Committee   Age 62   Other Public Boards: 2		Skills and Qualifications   •   Significant industry experience and knowledge of cloud infrastructure applications •   Senior leadership experience with large, multinational technology companies •   International business experience and insight into doing business in key international markets •   Executive management experience across a range of sales, services and alliances •   Experience as a public company director   Other Current Board Experience   •   Teradata Corporation (public) •   Keysight Technologies, Inc. (public)		Professional Highlights   Ms. Olsen previously served as Executive Vice President of Global Cloud Services and Support at Oracle Corporation from 2016 until her retirement in August 2017. In that role, she drove Oracle’s cloud transformation services and support strategy, partnering with leaders across all business units. Ms. Olsen previously served as Senior Vice President and leader of Oracle’s applications sales, alliances, and consulting organizations in North America from 2012 through 2016, and from 2010 through 2012 served in various general management positions at Oracle. Ms. Olsen began her career with IBM, where, between 1979 and 2010, she held a variety of executive management positions across sales, global financing and hardware.

 

2021 Proxy Statement		13

Gary B. Smith
		Director Since October 2000   Age 60   Other Public Boards: 1		Skills and Qualifications   •   As Chief Executive Officer of Ciena for over 19 years, provides the Board with leadership skills, industry experience and comprehensive knowledge of Ciena’s business, strategy, operations and financial position •   Unique perspective on the strategic and operational challenges and opportunities faced by Ciena •   Almost 30 years of experience in the telecommunications industry, during which time he has lived and worked on four continents •   Global industry sales and marketing experience provide the Board an important perspective into Ciena’s markets and business and selling strategies   Other Current Board Experience   •   CommVault Systems, Inc. (public)   Previous Board Experience   •   Avaya, Inc.		Professional Highlights   Mr. Smith joined Ciena in 1997 and has served as President and Chief Executive Officer since May 2001. Prior to his current role, his positions with Ciena included Chief Operating Officer and Senior Vice President, Worldwide Sales. Mr. Smith previously served as Vice President of Sales and Marketing for INTELSAT and Cray Communications, Inc.   Mr. Smith is a member of the President’s National Security Telecommunications Advisory Committee; serves on the Wake Forest University Advisory Council for the Center for Innovation, Creativity and Entrepreneurship; and participates in initiatives with the Center for Corporate Innovation.

 

Proposal No. 1 — Recommendation of the Board of Directors

 

The Board of Directors recommends that you vote FOR the election of the four Class III nominees listed above

 

14		2021 Proxy Statement

Corporate Governance and the Board of Directors

Ciena has adopted a number of policies and practices that highlight our commitment to sound corporate governance principles and sustainability. We maintain a corporate governance page on our website that includes additional related information, as well as governance documents such as our bylaws, codes of conduct, principles of corporate governance, and the charters for each of the standing committees of the Board of Directors. This information and documentation can be found on the “Governance” page of the “Investors” section of our website at www.ciena.com.

Independent Directors

In accordance with the current NYSE listing standards, the Board of Directors, on an annual basis, affirmatively determines the independence of each director or nominee for election as a director. The Board of Directors has determined that, with the exception of Dr. Nettles and Mr. Smith, both of whom are employees and executive officers of Ciena, all of its members during fiscal 2020 are or during their tenure were “independent directors,” using the definition of that term in the NYSE listed company manual. Also, as more fully described below, all members of the Board’s standing Audit, Compensation and Governance and Nominations Committees are independent directors, and all members of the Board’s standing Audit and Compensation Committees are independent directors in accordance with the additional listing standards applicable to those committees.

Communicating with the Board of Directors

The Board of Directors has adopted a procedure for receiving and addressing communications from all interested parties, including Ciena’s stockholders. Interested parties may send written communications to the entire Board of Directors (or any committee thereof), Ciena’s Lead Independent Director, or all of the independent directors serving on the Board, by addressing communications to:

Ciena Corporation

7035 Ridge Road

Hanover, Maryland 21076

Attention: Corporate Secretary

Please address any communication by e-mail to ir@ciena.com with “Attention: Corporate Secretary” in the subject line.

Our General Counsel serves as Corporate Secretary and determines, in his discretion, whether the nature of the communication is such that it should be brought to the attention of the Board of Directors or a committee thereof, the Lead Independent Director, or all of the independent directors. As a general matter, the Corporate Secretary does not forward spam, junk mail, mass mailings, job inquiries, surveys, business solicitations or advertisements, or offensive or inappropriate material.

Environmental, Social and Governance Practices

Our corporate social responsibility practices are designed to help position Ciena as a supplier of choice to our customers, an employer of choice to our existing and prospective employees, and a neighbor of choice in our communities around the globe. Though our practices are broad and evolve over time, we continue to focus on our people and culture, environmental stewardship, community outreach and support, and strong corporate governance. Highlights of our current practices in these areas are described below.

 

People & Culture		Environmental &   Sustainability		Community Outreach &     Support		Corporate Governance

 

2021 Proxy Statement		15

		People & Culture   Our “People Promise,” launched in fiscal 2020, focuses on fostering a workplace environment where our employees are empowered, feel included and have an opportunity to make a difference through their work at Ciena. In so doing, we seek to cultivate for employees a culture of vibrancy, belonging and happiness, while enabling us to be an attractive employer of choice within our markets. Our “people strategy” is annually reviewed by and discussed with our Board.

Employee Wellbeing and Engagement   We prioritize supporting the overall wellbeing of our employees from a physical, emotional, financial and social perspective.   •   regular broad employee satisfaction surveys (ESAT) •   pulse surveys on specific issues •   promote environment where employees are engaged, satisfied, productive, and possess a strong understanding of business goals •   long-standing practice of remote and flexible working arrangements •   flexible paid time off in the U.S. and Canada •   life planning and retirement readiness programming •   wellness platforms and expense reimbursement benefits •   fitness challenges and rewards •   24x7 crisis support and employee assistance program •   mental health coaching   Diversity and Inclusion   We promote an inclusive and diverse workplace, where all individuals are respected and feel they belong regardless of their age, race, national origin, gender, religion, disability, sexual orientation or gender identity.   •   recruiting outreach to extend diverse representation •   internal networking and resource groups include our Women@Ciena group, Black & African Heritage group, and Pride@Ciena LGBT+ group •   new dedicated function focused on Diversity, Inclusion & Belonging initiatives •   inclusivity networks •   mentoring programs   Growth and Development   We focus on creating opportunities for employee growth, development, training and education.   •   “Inside First” initiatives look at opportunities to cultivate talent for new roles from within •   “Ciena Next” program for early in career employees and new graduate hiring •   management and leadership development programs •   mentoring programs •   employee learning and training initiatives •   support for continuing education through tuition reimbursement		Competitive Compensation and Pay Equity   We strive to ensure that our employees receive competitive, fair and transparent compensation and innovative benefits offerings.   •   gender pay fairness assessments •   incentives tied to business and individual performance •   competitive parental, caregiver, and adoption leave •   meaningful retirement benefits •   employee stock purchase plan •   equity compensation pushed deeper into the organization in fiscal 2019 and 2020   Employee Recognition   We believe that providing rewards and recognition programs helps drive strong employee performance.   •   annual “Spirit of Ciena” awards to recognize employees who best exemplify Ciena’s core values •   “bravo” and “applause” programs for spot awards and recognition of employee contributions throughout the year •   patent incentive and distinguished engineer awards •   “Ciena Cares” awards recognizing employees and teams who exemplify our commitment to communities and volunteerism
		COVID-19 Response   We have been prioritizing the safety and wellbeing of our employees during this unprecedented period, including:   •   temporary office closures around the world, with limited exceptions for employees in certain roles •   large-scale employee work from home arrangements on a regular basis •   instituted travel bans and restrictions •   meaningful precautions in accordance with CDC and relevant guidelines •   new employee benefits and wellbeing initiatives •   physical, emotional, mental, and social programming •   global pandemic leave •   work from home reimbursement benefit •   new wellbeing platforms, including regular mental wellbeing sessions and morale initiatives •   comprehensive set of global site reopening guidelines
Recognition
•   “Great Place to Work” certified in the U.S., India, and Canada		•   Recognized as one of Fortune’s “Most Admired Companies” in each year, 2017 through 2021

 

16		2021 Proxy Statement

		Environmental & Sustainability   We believe sustainability is more than a corporate responsibility – it is a fundamental part of our strategy and key to achieving our goals and success in our markets.

Sustainability in Our Products and Suppliers   Our technology innovation reduces the environmental impact of network infrastructures in a time of significant traffic and service expansion.   •   our WaveLogic coherent modem solutions have yielded immense contributions to sustainability for over 10 years: •   through the end of fiscal 2019, energy efficient product innovation related to our first four generations of this technology has helped network operators avoid over three million metric tons of CO2 emissions •   WaveLogic 5 extreme, launched in fiscal 2020, yields a 50 percent improvement in power and floorspace per bit as compared to our fourth generation WaveLogic Ai solution •   member of the Responsible Business Alliance (“RBA”) •   we have adopted, and seek to ensure that our key direct suppliers adopt, the standards and principles set forth in the RBA Code of Conduct •   TL9000 certified product lifecycle management process •   sustainability assessments with suppliers representing significant spend •   supplier diversity program •   engagement with key customers on sustainability opportunities in products and fulfillment		Climate Change   Addressing climate change is a priority at Ciena. Mitigating climate risks and reducing our greenhouse gas (GHG) emissions are integrated into our long-term strategic planning and operations management.   •   committed to be carbon neutral across our global operations by 2023 •   participate in CDP climate change and water disclosures •   partnered with Tree-Nation to offset certain operational emissions by planting a tree for each employee at Ciena •   rapid adoption of flexible and remote working and collaborative tools •   pursuing opportunities to reduce water, light and power consumption in our offices worldwide •   5 locations LEED certified or certifiable
Reporting and Recognition
•   RBA / Responsible Minerals Initiative / TIA sustainability membership •   Published initial Corporate Social Responsibility (“CSR”) Report in December 2018		•   AT&T Diversity Supplier Award •   Completed global Environment, Health and Safety Management System Certification •   Platinum rating by EcoVadis

 

2021 Proxy Statement		17

		Community Outreach & Support   We believe it is important to give back and promote community outreach and support through corporate giving, charitable matching, and robust employee volunteerism in the communities in which we live and work.

Encourage Opportunities to Volunteer Time   We support and encourage our employees’ passion for giving back to the community through Ciena Cares, our comprehensive, best-in-class community program.   •   local “Ciena Cares Champions” across the globe promote engagement in our communities •   volunteering time off and flexible volunteering during work time •   matching rewards for volunteer hours served provide further charity benefits that can be directed by employees •   joint community projects with customers and business partners •   opportunities for employees to volunteer in person or virtually   Charitable Donation Matching   We believe it is important to invest resources to positively impact the communities in which we live and work.   •   online charitable giving portal to promote employee donation and corporate matching program •   new employee stipend to donate to their favorite charities •   up to $5,000 annual matching for employee donations		Support for Employees   We offer support to employees through:   •   disaster relief programs for employees, customers and natural disaster response •   support for STEM education
		COVID-19 Response   We and our global workforce have undertaken a range of volunteering and charitable actions to support our neighbors, communities and front-line health care workers during this challenging time.   •   enhanced by three times our corporate charitable matching program for employee donations and volunteering •   donated personal protective equipment •   3-D printed and designed face shields and components for health care workers •   created new community initiative focused on promoting digital inclusion and providing greater opportunities for underserved students through access, technology and digital skills •   have undertaken joint community projects with business partners as part of the digital inclusion program

We maintain a Corporate Social Responsibility Policy and an Environmental, Health and Safety Policy which, along with our CSR Report, can be found on the “Corporate social responsibility” page of the “About us” section of our website, and additional information about our people promise can be found on the “CienaLife” page of the “About us” section of our website at www.ciena.com.

 

18		2021 Proxy Statement

		Corporate Governance We believe that good corporate governance and high ethical standards are a duty that we owe to our investors, customers and employees, and are essential to Ciena’s success.

Board of Directors   Refreshment   •  appointed new independent director in each of the past four years •  appointed new Lead Independent Director and Chair of Governance and Nominations Committee in 2017 •  reduced average tenure of non-employee directors from 12.1 to 9.7 years from end of fiscal 2016 to end of fiscal 2020   Gender and Diversity   •  three female directors •  two ethnically diverse directors •  two of three Board committee chairs are female   Compensation   •  maintain limits on annual compensation for non-employee directors		Commitment to Investors   Outreach and Engagement   •  regular outreach to stockholders on business and financial performance and industry dynamics •  outreach to stockholders on our environmental, social and governance practices, including executive compensation, in fiscal 2019   Return of Capital and Dilution   •  $500 million share repurchase program (temporarily paused in March 2020 due to COVID-19 related considerations and resumed in December 2020) •  repurchase and retire shares to satisfy tax withholding on vesting of employee equity awards   Adopted Proxy Access and Majority Vote in Uncontested Elections		Strong Governance   Stock Ownership Guidelines   •  strong minimum ownership requirements for directors and officers, including 5x base salary for CEO and 5x cash retainer for non-employee directors •  50% holding requirement until relevant minimum ownership level is achieved   Corporate Governance Vehicles   •  annually update Code of Ethics for Directors •  annually update Principles of Corporate Governance •  annually refresh all Board Committee Charters   Created new dedicated Corporate Compliance & Ethics function in 2020

Principles of Corporate Governance, Bylaws and Other Governance Documents

The Board of Directors has adopted Principles of Corporate Governance and other corporate governance policies that supplement certain provisions of our bylaws and relate to the composition, structure, interaction and operation of the Board of Directors. Copies of our Principles of Corporate Governance, bylaws, stock ownership guidelines and other governance documents can be found on the “Governance” page of the “Investors” section of our website at www.ciena.com. You should review these documents for a complete understanding of these corporate governance practices, but some of the key elements of our strong governance policies and practices are summarized below:

 

 

2021 Proxy Statement		19

Codes of Ethics

Code of Business Conduct and Ethics

We maintain a Code of Business Conduct and Ethics that sets standards of conduct for all of Ciena’s directors, officers and employees. The Code of Business Conduct and Ethics reflects Ciena’s policy of dealing with all persons, including our customers, employees, investors, and suppliers, with honesty and integrity. All new employees are required to complete training on our Code of Business Conduct and Ethics, and we conduct recurring employee affirmations with respect to our Code of Business Conduct and Ethics and periodic training and communication related to specific topics contained therein.

Code of Ethics for Directors

We maintain a Code of Ethics for Directors, which supplements the obligations of directors under the Code of Business Conduct and Ethics and sets additional standards of conduct for our directors. The Code of Ethics for Directors outlines responsibilities of our directors with respect to their fiduciary duties, conflicts of interest, treatment of confidential Ciena information, communications and other compliance matters.

Code of Ethics for Senior Financial Officers

In accordance with the Sarbanes-Oxley Act of 2002, we maintain a Code of Ethics for Senior Financial Officers that specifically applies to Ciena’s Chief Executive Officer, Chief Financial Officer and Controller. Its purpose is to deter wrongdoing and to promote honest and ethical conduct, and compliance with the law, particularly as it relates to the maintenance of Ciena’s financial records and the preparation of financial statements filed with the SEC.

Each of these documents can be found on the “Governance” page of the “Investors” section of our website at www.ciena.com. Copies of these documents may also be obtained without charge by writing to: Ciena Corporation, 7035 Ridge Road, Hanover, Maryland 21076, Attention: Corporate Secretary.

Board Leadership Structure

Lead Independent Director

Mr. Gallagher serves as Ciena’s Lead Independent Director. The Lead Independent Director is responsible for coordinating the activities of the other independent directors and has the authority to preside at all meetings of the Board of Directors at which the Executive Chairman is not present, including executive sessions of the independent directors. The Lead Independent Director serves as principal liaison on Board-wide issues between the independent directors and the Executive Chairman, approves meeting schedules and agendas and monitors the quality of information sent to the Board. The Lead Independent Director may also recommend the retention of outside advisors and consultants who report directly to the Board of Directors. If requested by stockholders and as appropriate, the Lead Independent Director will also be available, as the Board’s liaison, for consultation and direct communication. The Lead Independent Director also assists the Governance and Nominations Committee in guiding both the Board’s annual self-assessment and the CEO succession planning process.

Separation of Chairman and CEO Roles

Although the Board of Directors does not have a formal policy on separation of the roles of Chief Executive Officer and Chairman, Ciena has kept these positions separate since 2001. Separating the Executive Chairman and Chief Executive Officer roles allows us efficiently to develop and implement corporate strategy that is consistent with the Board’s oversight role, while facilitating strong day-to-day executive leadership. Mr. Smith currently serves as Chief Executive Officer and Dr. Nettles, who served as Chief Executive Officer until Mr. Smith assumed that role in 2001, serves as Executive Chairman.

The Board believes that its leadership structure is appropriate for Ciena. Through the role of the Lead Independent Director, the independence of the Board’s committees, and the regular use of executive sessions of the independent directors, the Board is able to maintain independent oversight of our business strategies, annual operating plan and other corporate activities. These features, together with the role and responsibilities of the Lead Independent Director described above, ensure a full and free discussion of issues that are important to Ciena and its stockholders. At the same time, the Board is able to take advantage of the unique blend of leadership, experience and knowledge of our industry and business that Dr. Nettles brings to the role of Executive Chairman.

 

20		2021 Proxy Statement

Board Oversight of Strategy

The Board of Directors believes that it is important to be deeply involved in overseeing and reviewing Ciena’s short- and long-term strategy. The Board oversees and reviews Ciena’s long-term strategic plan, annual operating plan, and strategy and approach toward environmental, social and governance matters. Because employee engagement, development and retention are critical elements of our strategy, the Board annually reviews our “people strategy,” a comprehensive overview of compensation, benefits, support for employees, growth and development opportunities, inclusion and diversity. Strategy-related matters are discussed regularly at Board meetings, as well as at the Committee level when appropriate. Such matters include:

 

❖

Long-term financial targets

❖

Three-year strategic plan

❖

Annual financial and operating plan

❖

Key functional strategic initiatives

❖

Corporate development and strategic transactions

❖

Alignment of executive compensation with strategic and operating goals

❖

Human capital, talent management strategy and succession planning

Board Oversight of Risk

The Board of Directors believes that risk management is an important part of establishing, updating and executing Ciena’s business strategy. The Board, as a whole and at the committee level, has oversight responsibility relating to risks that could affect the corporate strategy, business objectives, compliance, operations and the financial condition and performance of the company. The Board focuses its oversight on the most significant risks facing Ciena and on its processes to identify, prioritize, assess, manage and mitigate those risks.

With respect to fiscal 2020, the Board played an important oversight role in Ciena’s business continuity planning and execution in the face of the COVID-19 pandemic, including overseeing the management by our executive team of risks relating to employees and benefits, health and safety, research and development, supply chain, services and fulfillment, IT operations and financial controls.

The Board also annually reviews and considers Ciena’s long-term strategic plan, its annual financial and operating plan, and its enterprise risk management program. The Board and its committees also receive regular reports from members of senior management on areas of material risk to the company, including strategic, operational, financial, legal and regulatory risks. While the Board has an oversight role, management is principally tasked with direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate their effects on the company.

The Board’s leadership structure, with a Lead Independent Director, separate Executive Chairman and CEO, independent Board committees with strong Chairs, the active participation of committees in the oversight of risk, and open communication with management, supports the risk oversight function of the Board. Each standing committee of the Board has risk oversight responsibilities and provides regular reports to the Board on at least a quarterly basis, as more fully described below under “Composition and Meetings of the Board of Directors and its Committees.”

 

2021 Proxy Statement		21

Composition and Meetings of the Board of Directors and its Committees

The table below details the composition of Ciena’s standing Board committees as of the end of fiscal 2020 and the number of Board and committee meetings held during fiscal 2020. Mr. Smith and Dr. Nettles do not serve on standing committees of the Board of Directors.

 

Name

Class

Principal Occupation

Independent

Committee Memberships

Other   Current   Public Boards

AC

CC

GNC

Hassan M. Ahmed, Ph.D.

III (2021)

Former CEO, Affirmed Networks, Inc.

❖

❖

0

Bruce L. Claflin

III (2021)

Former CEO, 3Com Corporation

❖

❖

1

Lawton W. Fitt

I (2022)

Chairperson, The Progressive Corporation

❖

3

Patrick T. Gallagher

III (2021)

Chairman, Harmonic, Inc.

❖

❖

1

Devinder Kumar

I (2022)

SVP, CFO and Treasurer, Advanced Micro Devices, Inc.

❖

0

Patrick H. Nettles, Ph.D.

I (2022)

Executive Chairman, Ciena Corporation

1

T. Michael Nevens

III (2021)

Senior Advisor, Permira Advisors, LLC

❖

1

Judith M. O’Brien

II (2023)

Former Partner, King & Spalding LLP

❖

❖

0

Joanne B. Olsen

II (2023)

Former EVP Global Cloud Services & Support, Oracle Corporation

❖

❖

2

Gary B. Smith

II (2023)

CEO, Ciena Corporation

1

Fiscal 2020 Meetings

Board: 8

8

8

7

❖ Chairperson

Each of our directors attended 100% of the total number of meetings of the Board of Directors and the committees on which he or she served during fiscal 2020. Ciena encourages, but does not require, members of the Board of Directors to attend the Annual Meeting, and all of Ciena’s then nine directors participated in the virtual Annual Meeting last year.

The Board of Directors has three standing committees: the Audit Committee, the Compensation Committee and the Governance and Nominations Committee. Each committee meets regularly and has a written charter that can be found on the “Governance” page of the “Investors” section of our website at www.ciena.com. At each regularly scheduled Board meeting, the Chair or a member of each committee reports on any significant matters addressed by the committee.

Partly as a result of COVID-19’s impact on in-person meetings in fiscal 2020, the Board of Directors recently collaborated with management to develop and approve a revised approach to its annual meeting calendar and engagement framework for fiscal 2021 and beyond, including an increased number of meetings of shorter duration. The revised calendar is designed to operate in either a hybrid (virtual and physical) model or a fully virtual and remote environment, and is intended to enable more frequent engagement between the Board and management, optimize the productivity and efficiency of Board operations, and space out work for the Board and management throughout the year

 

22		2021 Proxy Statement

Audit Committee
Chair		Members
Lawton W. Fitt		Devinder Kumar Bruce L. Claflin T. Michael Nevens
Qualifications, as determined by the Board:   •   “Is a separately designated standing audit committee” in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) •   Each member meets both the independence criteria established by the SEC under Rule 10A-3 under the Exchange Act and qualifies under the general independence standards of the NYSE •   Each member is financially literate •   Each of Mr. Claflin, Ms. Fitt and Mr. Kumar is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K of the Exchange Act and each member qualifies as an independent director under the NYSE listing standards for purposes of audit committee service   Among its responsibilities, the committee:   •   Appoints and establishes the compensation for Ciena’s independent registered public accounting firm •   Approves in advance all engagements with Ciena’s independent registered public accounting firm to perform audit and non-audit services •   Reviews and approves the procedures used by Ciena to prepare its periodic reports •   Reviews and approves Ciena’s critical accounting policies and matters •   Discusses audit plans and reviews results of audit engagements with Ciena’s independent registered public accounting firm •   Obtains and reviews a report of Ciena’s independent registered public accounting firm describing certain matters required by the NYSE listing standards •   Reviews the independence of Ciena’s independent registered public accounting firm •   Oversees Ciena’s internal audit function and Ciena’s accounting processes, including the adequacy of its internal controls over financial reporting •   Where it determines to do so, makes recommendations to the Board of Directors with respect to rotation of the lead partner of the independent registered public accounting firm •   Reviews and considers any related person transactions in accordance with our Policy on Related Person Transactions and applicable NYSE rules   Ciena’s independent registered public accounting firm and internal audit department report directly to the Audit Committee
Risk Oversight   Oversee management of financial risks associated with:   •   accounting matters •   liquidity and credit risks •   corporate tax positions •   insurance coverage •   cash investment strategy •   financial results   Oversee financial and business process systems   Oversee management of risks relating to the performance of the company’s internal audit function and its independent registered public accounting firm   Oversee whistleblower complaints and internal investigations   Oversee the company’s systems of internal controls and disclosure controls and procedures   Oversee IT risk management, cybersecurity matters and data privacy

 

2021 Proxy Statement		23

Governance and Nominations Committee
Chair		Members
Patrick T. Gallagher		Hassan M. Ahmed, Ph.D. Judith M. O’Brien Joanne B. Olsen
Qualifications, as determined by the Board:   •   The members of the Governance and Nominations Committee are all independent directors under applicable rules of the NYSE   Among its responsibilities, the committee:   •   Reviews, develops and makes recommendations regarding various governance matters related to the Board of Directors, including its size, composition, standing committees and practices •   Reviews and implements corporate governance policies, practices and procedures •   Conducts an annual review of the performance and effectiveness of the Board of Directors, its standing committees, and its individual members •   Makes recommendations to the Board of Directors regarding the composition and independence of its non-employee members •   Provides oversight and direction for our compliance and ethics program and sustainability practices   The committee considers recommendations for nomination from other sources and interested parties, including Ciena’s officers, directors and stockholders. When appropriate, the Governance and Nominations Committee may retain executive recruitment firms to assist in identifying suitable candidates. In considering these recommendations, the committee:   •   Applies the same standards described in “Director Qualifications” above •   Considers the current size and composition of the Board •   Considers the needs of the Board and its committees
Risk Oversight   Oversee management of risks associated with:   •   corporate governance practices and sustainability •   compliance and ethics program •   director independence •   Board composition •   Board performance •   annual assessment of Board effectiveness   Review and assess allocation of responsibility for risk oversight among the Board and its standing committees

 

24		2021 Proxy Statement

Compensation Committee
Chair		Members
Judith M. O’Brien		Hassan M. Ahmed, Ph.D. Bruce L. Claflin Patrick T. Gallagher Joanne B. Olsen
Qualifications, as determined by the Board:   •   The members of the Compensation Committee qualify as “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act •   The members are independent directors under the NYSE listing standards for purposes of compensation committee service   Among its responsibilities, the committee:   •   Has authority and oversight relating to the development of Ciena’s overall compensation strategy and compensation programs •   Establishes our compensation philosophy and policies •   Oversees compensation plans for our executive officers and non-executive employees •   Has oversight responsibility for the compensation program for Ciena’s non-employee directors •   Receives information and advice from its compensation consultant, as described below •   Reviews and has final authority to approve and make decisions with respect to the compensation of our executive officers   In determining compensation of our executive officers, the committee:   •   Annually evaluates the performance of our CEO and our Executive Chairman •   Considers evaluations by or recommendations from our CEO regarding our other executive officers   The Board has delegated limited authority to our CEO to make equity awards to employees who are not part of the executive leadership team, within certain parameters and guidelines related to the size, terms and conditions of such awards. The Compensation Committee regularly reviews quarterly and year-to-date grant activity pursuant to this delegated authority.
Risk Oversight   Oversee management of risks associated with:   •   executive compensation •   overall compensation and benefit strategies •   compensation and benefit plans and arrangements •   compensation practices and policies •   Board of Directors’ compensation

 

2021 Proxy Statement		25

Compensation Philosophy & Objectives

The Compensation Committee seeks to ensure that our compensation policies and practices promote stockholder interests and support our compensation objectives and philosophy. Ciena’s compensation program for our executive officers focuses on addressing the following principal objectives:

 

•

attract and retain talented executives by offering competitive compensation packages;

•

motivate our executive officers to achieve strategic and tactical objectives, including the profitable growth of Ciena’s business;

•

align executive compensation with stockholder interests;

•

reward our executive officers for individual, functional and corporate performance; and

•

promote a pay-for-performance culture.

In making compensation decisions, the Compensation Committee also seeks to promote teamwork among and high morale within our executive team.

Compensation Consultant

To assist in carrying out its responsibilities, the Compensation Committee is authorized to retain the services of independent advisors. For purposes of advice and consultation with respect to the compensation of our executive officers during fiscal 2020, the Committee engaged Compensia, Inc., a national compensation consulting firm. Prior to engaging Compensia, the Committee considered and assessed Compensia’s independence. To ensure Compensia’s continued independence and to avoid any actual or apparent conflict of interest, the Committee does not permit Compensia to be engaged to perform any services for Ciena beyond those services provided to the Committee. The Committee has sole authority to retain or terminate Compensia as its executive compensation consultant and to approve its fees and other terms of engagement. The Committee regularly, but not less than annually, considers the independence of its compensation consultant and determines whether any related conflicts of interest require disclosure.

In establishing executive compensation for fiscal 2020, the Compensation Committee relied upon Compensia to:

 

•

assist in the selection of a group of peer companies;

•

provide information on compensation paid by such peer companies to their executive officers;

•

analyze compensation survey data to supplement publicly available information on compensation paid by peer companies;

•

advise on alternative structures or forms of compensation and allocation considerations;

•

advise on appropriate levels of compensation for the NEOs and the other members of the executive team; and

•

prepare “tally sheets” showing, for each executive officer, all elements of compensation received in previous fiscal years, equity grant detail, the projected value of vested and unvested equity awards outstanding, and a comparative analysis of compensation relative to the peer group.

In addition to its advisory work regarding executive compensation during fiscal 2020, Compensia was engaged by the Compensation Committee to provide assistance in evaluating the compensation of the non-employee directors as set forth below, to participate in and provide assistance with respect to the Committee’s annual compensation risk assessment, to review Ciena’s methodology for calculating its CEO pay ratio measure, and to review the “Compensation Discussion and Analysis” included in this proxy statement.

Compensation Committee Interlocks and Insider Participation

Dr. Ahmed, Mses. O’Brien and Olsen, and Messrs. Claflin and Gallagher, who comprised the Compensation Committee as of the end of fiscal 2020, are independent directors and were not, at any time during fiscal 2020, or at any other time, officers or employees of Ciena. During fiscal 2020, no member of the Compensation Committee was an executive officer of another entity on whose compensation committee or board of directors an executive officer of Ciena served.

 

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Director Compensation

Our director compensation program is designed both to attract and to fairly compensate highly qualified, non-employee directors to represent our stockholders on the Board of Directors and to act in the stockholders’ best interests. The director compensation program for fiscal 2020 was recommended by the Compensation Committee and approved by our Board of Directors. Our executive officers do not play any role in determining or recommending the amount of non-employee director compensation, except that Mr. Smith and Dr. Nettles vote on the recommendations of the Compensation Committee in their capacities as members of the Board of Directors.

Our Board of Directors includes two Ciena executive officers: Dr. Nettles, who serves as our Executive Chairman of the Board, and Mr. Smith, who serves as our Chief Executive Officer. Dr. Nettles does not receive cash compensation for his service as a director, and Mr. Smith does not receive any compensation for his service as a director. Information regarding equity compensation to Dr. Nettles during fiscal 2020 can be found in the tabular disclosure below. Information regarding the determination of Mr. Smith’s compensation can be found in the “Compensation Discussion and Analysis” and “Executive Compensation Tables” below.

Fiscal 2020 Board Compensation

For the purpose of determining non-employee director compensation for fiscal 2020, the Compensation Committee engaged Compensia to assist in evaluating the competitiveness of our director compensation program. The Compensation Committee considered an overview of the corporate governance environment, as well as recent trends and developments relating to director compensation. The Compensation Committee also specifically considered the amounts payable under and the various components of our director compensation program, as well as the aggregate director compensation cost, in comparison to the boards of directors of the same group of peer companies that the Compensation Committee used in determining executive compensation. After considering those factors and based on the recommendation of the Compensation Committee, in order to better align with the market median for certain compensation elements, for fiscal 2020 the Board of Directors increased the annual retainer for the non-employee directors from $60,000 to $70,000 and increased the target delivered value of initial and annual director equity awards from $210,000 to $220,000.

Cash Compensation

Our cash compensation program for non-employee directors for fiscal 2020 was as follows:

 

Cash Compensation		Amount
Annual Retainer — Non-Employee Director		$  70,000
Additional Annual Retainer — Lead Independent Director		$  30,000
Additional Annual Retainer — Audit Committee		$  35,000 (Chair) $  15,000 (other members)
Additional Annual Retainer — Compensation Committee		$  25,000 (Chair) $  10,000 (other members)
Additional Annual Retainer — Governance and Nominations Committee		$  15,000 (Chair) $    6,000 (other members)

Under this program, our non-employee directors are not entitled to receive meeting attendance fees unless the Board, or any standing Board committee, is required to hold an unusually high number of meetings. In the event that the Board or a standing Board committee holds more than ten meetings in a fiscal year, each non-employee director (as applicable) will be entitled to receive an additional $1,500 per meeting for the Chair, or an additional $1,000 per meeting for other members. In the event that the Board, or a standing Board committee, creates a special committee or subcommittee that holds more than three meetings in a fiscal year, each non-employee director serving on that committee or subcommittee will be entitled to receive an additional $1,000 per meeting. Directors are also reimbursed for reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings.

The retainer fees set forth above are paid in quarterly installments. Meeting attendance fees, when applicable, generally are paid promptly following the end of the fiscal year.

 

2021 Proxy Statement		27

Equity Compensation

Our equity compensation program for non-employee directors and Dr. Nettles for fiscal 2020 was as follows:

 

Equity Compensation		Target Delivered Value ($)
Initial RSU Award — Upon Director Election or Appointment			$	220,000
Annual RSU Award — Non-Employee Directors and Executive Chairman			$	220,000

In order to control for possible volatility in our stock price on any one particular trading day, the actual number of shares underlying restricted stock unit (“RSU”) awards granted to directors is determined based on the average closing price of Ciena’s common stock over the 30-day period immediately prior to the date of grant. Initial equity awards are made in connection with initial election or appointment to the Board of Directors, with the target delivered value prorated for the fiscal year based on the date of election or appointment. Initial equity awards vest on or about the one-year anniversary of the grant date. Annual equity awards are made on the date of each Annual Meeting of Stockholders and vest on or about the one-year anniversary of the grant date. Vesting of the RSU awards is subject to acceleration upon the director’s death, disability, retirement, or upon or in connection with a change in control of Ciena. Delivery of the shares upon vesting is subject to any applicable instruction provided by the director under the Deferred Compensation Plan described below.

Director Compensation Limits

Our 2017 Omnibus Incentive Plan (the “2017 Plan”) imposes a $500,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (i) cash compensation and (ii) the grant date fair value of equity compensation under the 2017 Plan. This limitation, however, would not apply to the extent a non-employee director has been or becomes an employee of Ciena during such fiscal year. In addition, the Board retains discretion to provide further exceptions for one or more individual non-employee directors in extraordinary circumstances, such as service on a special transaction or litigation committee of the Board, provided that the director that is the subject of such exception may not participate in any decision with respect thereto.

Director Compensation Table

The following table and the accompanying footnotes describe the “total compensation” earned by our non-employee directors and Dr. Nettles during fiscal 2020:

Fiscal 2020 Director Compensation Table

 

Name		Fees Earned or Paid in Cash ($) (1)					Stock Awards ($) (2)					All Other Compensation ($) (3)					Total ($)
Patrick H. Nettles, Ph.D.				—				$	230,640				$	162,377				$	393,017
Hassan M. Ahmed, Ph.D.			$	43,000				$	164,789					—				$	207,789
Bruce L. Claflin			$	95,000				$	230,640					—				$	325,640
Lawton W. Fitt			$	105,000				$	230,640					—				$	335,640
Patrick T. Gallagher			$	125,000				$	230,640					—				$	355,640
Devinder Kumar			$	85,000				$	230,640									$	315,640
T. Michael Nevens			$	85,000				$	230,640					—				$	315,640
Judith M. O’Brien			$	101,000				$	230,640					—				$	331,640
Joanne B. Olsen			$	86,000				$	230,640					—				$	316,640

 

(1)

Reflects the aggregate dollar amount of all cash compensation earned for service as a director, including the retainers and meeting attendance fees described in “Cash Compensation” above.

 

(2)

The amounts set forth in the “Stock Awards” column represent the aggregate grant date fair value of RSU awards granted during fiscal 2020, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The aggregate grant date fair value is calculated using the closing price of Ciena common stock on the grant date as if all of the shares underlying these awards were vested and delivered on the grant date. For each director other than Dr. Ahmed, the aggregate grant date fair value in the above table was calculated using the closing price of Ciena common stock on April 2, 2020, the grant date for each such director’s annual award. Each of these awards was granted under the 2017 Plan and vests on the one-year anniversary of the grant date. For Dr. Ahmed, the aggregate grant date fair value in the above table was calculated using the closing price of Ciena common stock on July 1, 2020, the grant date for his initial

 

28		2021 Proxy Statement

equity award. This award was granted under the 2017 Plan and vests on September 20, 2021. The aggregate grant date fair values will likely vary from the actual amount ultimately realized by any director based on a number of factors, including the number of shares that ultimately vest, the effect of any deferral elections, the timing of any sale of shares, and the market price of Ciena common stock at the time of disposition.

 

(3)

Non-employee directors do not receive any perquisites or other personal benefits or property as part of their compensation. Dr. Nettles does not receive cash compensation for his service as a director; the amount reported as “All Other Compensation” for Dr. Nettles reflects (a) his annual base salary for service as an executive officer of Ciena during fiscal 2020, (b) Section 401(k) plan matching contributions paid by Ciena and available to all full-time U.S. employees on the same terms, and (c) reimbursement of costs associated with financial planning and tax preparation services generally made available to all executive officers.

Outstanding Equity Awards for Directors at Fiscal Year-End

The following table sets forth, on an aggregate basis, information related to the outstanding unvested RSU awards held by each of the non-employee directors and Dr. Nettles as of the end of fiscal 2020.

Outstanding Equity Awards at Fiscal Year-End

 

		Stock  Awards
Name		Aggregate                   Number of                   Unvested                   Shares                   or Units                   (#)
Patrick H. Nettles, Ph.D.				5,678
Hassan M. Ahmed, Ph.D.				3,075
Bruce L. Claflin				5,678
Lawton W. Fitt				5,678
Patrick T. Gallagher				5,678
Devinder Kumar				5,678
T. Michael Nevens				5,678
Judith M. O’Brien				5,678
Joanne B. Olsen				5,678

Deferral of Director Compensation

We maintain the Ciena Corporation Deferred Compensation Plan, which allows our U.S.-based directors (as well as certain U.S.-based senior management employees) to defer elements of their annual compensation. Directors may defer up to 100% of their annual cash retainer and annual equity compensation.

Generally, deferral elections may only be made for awards to be granted in a subsequent calendar year. Directors can elect the amount deferred, the deferral period, and the form of distribution of their compensation. If a director elects to defer any portion of an RSU award, upon the vesting of that award, we credit a stock account with the amount deferred. All such accounts are distributed in shares of Ciena common stock. Distributions may be made in a lump sum or installments, as designated by the participating director, subject to early distribution of vested awards in a lump sum in the event of the participant’s death or termination of service, a change in control of Ciena or termination of the plan.

 

2021 Proxy Statement		29

Proposal No. 2

Amendment and Restatement of Ciena’s Employee Stock Purchase Plan

Executive Summary

 

Purpose of Proposal				Why You Should Vote for the Proposal
❖  Extend term of expiring ESPP to April 1, 2031   ❖  Increase shares available for issuance under ESPP by 8,700,000 shares   ❖  Eliminate evergreen feature   ❖  Make other clarifying and administrative changes to the ESPP, as described below				❖  Promotes stock ownership culture and alignment of interest between our employees and stockholders   ❖  Important compensation element for employee recruitment, retention and motivation   ❖  Aligns with best practices and promotes broad-based, cross-border participation

Overview

We are asking our stockholders to approve the amendment and restatement of our Employee Stock Purchase Plan (the “ESPP”), which will (a) extend the term thereof to ten years from the date of stockholder approval; (b) increase the number of shares of Ciena common stock available for issuance thereunder by 8,700,000 shares; (c) eliminate the evergreen mechanism under which the shares available under the ESPP are automatically refreshed each year; and (d) make such other changes described below. A copy of the ESPP, as proposed to be modified by the amendment and restatement, is attached to this Proxy Statement as Annex A.

The ESPP allows all full-time and certain part-time employees of Ciena and of designated parents and subsidiaries (as defined in the ESPP) to purchase shares of Ciena common stock at a discount to fair market value. However, the Compensation Committee has restricted executive officers from participating. Employees purchase shares in June and December of each year using funds deducted from paychecks during the preceding six months. The ESPP is an important component of the benefits package that Ciena offers to its employees and of our employee recruitment, retention and motivation efforts. Our ESPP promotes broad employee participation and we believe that it plays an important role in aligning the interests of our employees and stockholders in the long-term success of Ciena.

The Board of Directors believes it is in the best interest of Ciena and its stockholders that the proposed amendment and restatement be approved. The amended and restated ESPP was approved by the Board of Directors on January 29, 2021, and will not be effective unless and until it is approved by Ciena’s stockholders.

Without stockholder approval of the amendment and restatement of the ESPP, the ESPP will expire pursuant to its terms on January 20, 2022, prior to the anticipated date of next year’s annual meeting. The Board of Directors believes that the amendment and restatement of the ESPP as proposed is necessary to avoid the premature termination of the ESPP and to ensure that the ESPP will continue to have a positive impact on employee recruitment, retention and motivation. As of January 1, 2021, 4,535,200 shares remained available for issuance under the ESPP. Assuming approval of the amendment and restatement, the number of shares available for issuance under the ESPP will be immediately increased by 8,700,000 shares following the Annual Meeting. In addition, the term of the ESPP will be extended to April 1, 2031.

In addition to the proposed increase in shares available for issuance under the ESPP, the extension of the term thereof, and the removal of the evergreen feature, the proposed amendment and restatement includes certain additional, and generally administrative, changes as set forth on Annex A. Among other things, as amended and restated, the ESPP clarifies that (a) qualifying employees of both designated parents and subsidiaries may participate in the ESPP, (b) employees who customarily work no more than 20 hours per week are ineligible to participate, and (c) that participants generally may not purchase shares following a termination of employment.

A copy of the ESPP, as proposed to be amended and restated, is attached hereto as Annex A. A summary of the principal features of the ESPP follows.

Summary of the ESPP

Administration. The ESPP is administered under the direction of the Compensation Committee of the Board of Directors. The Committee has authority to interpret the ESPP and to make all other determinations necessary or advisable in administering it.

 

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Eligibility. All full-time, and certain part-time, employees with at least three months of continuous service are eligible to participate in the ESPP, although the Compensation Committee currently restricts the participation to non-executive employees. Part-time employees whose customary employment is for less than five months in any calendar year, or whose customary employment is not more than 20 hours per week, are ineligible to participate. Employees who, after exercising their rights to purchase shares under the ESPP, would own shares representing 5% or more of the voting power of Ciena’s common stock, are also ineligible to participate. As of January 1, 2021, approximately 6,600 employees were eligible to participate in the ESPP.

Participation in the ESPP is at the election of each eligible employee and the amounts received by a participant under the ESPP depend on the fair market value of Ciena’s common stock on future dates; therefore, the benefits or amounts that will be received by any participant if the ESPP is approved are not currently determinable. Moreover, in recent years, the Compensation Committee has restricted executive officers from participating.

Shares Available for Issuance. As of January 1, 2021, 4,535,200 shares remained available for issuance under the ESPP. Assuming the amendment and restatement is approved by stockholders at the Annual Meeting, 8,700,000 shares would be added and there would be 13,235,200 shares available for issuance under the ESPP (approximately 8.53% of Ciena’s outstanding shares as of the record date). Stockholders previously approved an evergreen mechanism under which the shares available under the ESPP were automatically refreshed each year. The amendment and restatement would remove this evergreen mechanism in its entirety.

Participation. To participate in the ESPP, an eligible employee authorizes payroll deductions in an amount not less than 1% nor greater than 10%, or a flat dollar amount, of his or her “eligible earnings” (i.e., regular base pay, not including overtime pay, bonuses, employee benefit plans or other additional payments) for each full payroll period in the offering period. To ensure that IRS share limitations are not exceeded, we do not accept contributions from an individual participant in excess of $21,250 per year.

Purchases. Eligible employees currently enroll in a 12-month offering period during the open enrollment period prior to the start of that offering period. A new offering period begins approximately every June 16 and December 16. Each offering period consists of two six-month purchase periods, during which payroll deductions are accumulated and used to purchase shares of Ciena’s common stock from Ciena.

Shares are purchased at a price equal to 85% of the fair market value (the “FMV”) of Ciena’s common stock with the actual purchase price 15% less than the FMV on either the trading day immediately preceding the “Offer Date,” which is the first day of an offering period, or on the “purchase date,” which is the last day of a purchase period, whichever is lower. If the FMV on a purchase date is lower than the FMV on the trading day immediately preceding the applicable Offer Date, continuing participants are enrolled automatically in a new offering period on the next Offer Date. The closing price of Ciena’s common stock on December 31, 2020, as quoted on the NYSE under the symbol “CIEN,” was $52.85 per share.

Termination of Employment. If a participating employee voluntarily resigns or is terminated by Ciena prior to the last day of the purchase period, the employee’s option to purchase terminates and the amount in the employee’s account is returned to the employee.

Adjustments Upon Change in Capitalization. In the event of a recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend, or similar event, the number and kind of shares that may be purchased under the ESPP is adjusted proportionately such that the proportionate interest of participating employees remains the same, to the extent practicable.

Participation Adjustment. If the number of unsold shares that remains available for purchase under the ESPP is insufficient to permit exercise of all rights deemed exercised by all participating employees, a participation adjustment will be made, and the number of shares purchasable by all participating employees is reduced proportionately. Any funds remaining in a participating employee’s account after such exercise are refunded to the employee.

Effect of Change of Control. In the event of a dissolution or liquidation of Ciena, or a merger or other similar transaction in which Ciena is not the surviving entity (or which results in a person or entity owning more than 80 percent of the combined voting power of all classes of stock of Ciena), or upon a sale of all or substantially all of Ciena’s assets, the ESPP and all outstanding rights thereunder terminate unless provision is made in writing in connection with the transaction for the continuation of the ESPP and/or the assumption of the rights granted under it, or for the substitution for those rights of new rights covering the stock of a successor corporation, with appropriate adjustments as to the number and kind of shares and exercise prices. In that event, the ESPP continues in the manner and under the terms provided. In the event of any such termination of the ESPP, all current purchase periods and offering periods shall be deemed to have ended on the last trading day prior to such termination, and the rights of each participating employee then outstanding shall be deemed to be automatically exercised on such last trading day.

Amendment. The Board of Directors may amend the ESPP at any time and in any respect. An amendment to the ESPP shall be contingent on approval of the stockholders only to the extent required by applicable law, regulations or rules or as provided by the Board of Directors.

Termination. The Board of Directors may terminate the ESPP at any time and for any reason or for no reason, provided that no termination shall impair any rights of participating employees that have vested at the time of termination. Without approval of the

 

2021 Proxy Statement		31

proposed amendment and restatement, the ESPP shall terminate on January 20, 2022. As amended, the ESPP would terminate on April 1, 2031, provided the ESPP would terminate earlier, at such time as all shares of common stock that may be made available for purchase under the ESPP have been issued.

Rule 16b-3. Transactions under the ESPP are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act or any successor provision.

Material U.S. Federal Income Tax Consequences. The ESPP, and the rights of participant employees to make purchases thereunder, are designed to qualify for treatment under the provisions of Sections 421 and 423 of the Internal Revenue Code. The Compensation Committee may also establish purchase rights under the ESPP that are not intended to so qualify.

Under the qualification provisions, no income will be taxable to a participant until the shares purchased under the ESPP are sold or otherwise disposed of.

Upon sale or other disposition of the shares, the participant will generally be subject to tax and the amount of the tax will depend upon the holding period. If the shares are sold or otherwise disposed of more than two years from the first day of the relevant offering period (and more than one year from the date the shares are purchased), then the participant generally will recognize ordinary income measured as the lesser of:

(i)    the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or

(ii)    an amount equal to 15% of the fair market value of the shares as of the first day of the applicable offering period.

Any additional gain would be treated as long-term capital gain.

If the shares are sold or otherwise disposed of before the expiration of this holding period, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the holding period.

Under nonqualified offerings, a participant will generally recognize ordinary income on the difference between the fair market value of the shares at purchase and the purchase price, subject to withholding. Upon the sale or disposition of shares purchased under a nonqualified offering, the participant will generally recognize a capital gain or loss on any increase or decrease in the value of the shares from the fair market value at purchase. This gain or loss will be long-term or short-term, depending on the holding period.

Ciena generally is entitled to a deduction for amounts taxed as ordinary income to a participant, subject to the limits of Code section 162(m). In all other cases, no deduction is allowed to Ciena.

The foregoing tax discussion is a general description of certain expected U.S. federal income tax results under current law. No attempt has been made to address any state, local, foreign or estate and gift tax consequences that may arise in connection with participation in the ESPP.

New Awards

The amounts that may be received under the ESPP in the future are not determinable because participation in the ESPP is voluntary and the number of shares that may be purchased depends in part on the market value of Ciena common stock.

Registration with the SEC

If the amendment and restatement of the ESPP is approved by our stockholders, we intend to file a Registration Statement on Form S-8 relating to the amended and restated ESPP with the SEC pursuant to the Securities Act of 1933, as amended.

 

Proposal No. 2 — Recommendation of the Board of Directors

 

The Board of Directors recommends that you vote FOR the amendment and restatement of our Employee Stock Purchase Plan

 

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Proposal No. 3

Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit Ciena’s consolidated financial statements for fiscal 2021, and is asking stockholders to ratify this appointment at the Annual Meeting.

PwC has audited our consolidated financial statements annually since Ciena’s incorporation in 1992. A representative of PwC is expected to attend this year’s Annual Meeting. He or she will have the opportunity to make a statement, if desired, and will be available to respond to appropriate questions. In making its recommendation to the Board of Directors to select PwC as Ciena’s independent registered public accounting firm for fiscal 2021, the Audit Committee considered whether the non-audit services provided by PwC are compatible with maintaining the independence of PwC, and determined that retention of PwC is in the best interests of Ciena and its stockholders. Information regarding fees billed by PwC for our 2019 and 2020 fiscal years is set forth under “Relationship with Independent Registered Public Accounting Firm” below.

Our bylaws do not require that stockholders ratify the appointment of our independent registered public accounting firm. We are seeking ratification because we believe it is a matter of good corporate governance. In the event that stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain PwC, but may ultimately determine to retain PwC as our independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that it is advisable to do so.

 

Proposal No. 3 — Recommendation of the Board of Directors

 

The Board of Directors recommends that you vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for fiscal 2021

 

2021 Proxy Statement		33

Relationship with Independent Registered Public Accounting Firm

The following table shows the fees that PwC billed to Ciena for professional services rendered for fiscal years 2019 and 2020.

 

Fee Category		Fiscal 2019				Fiscal 2020
Audit Fees		$	3,800,000			$	3,975,000
Audit-Related Fees			200,000				—
Tax Fees			121,650				87,500
All Other Fees			—				—
Total Fees		$	4,121,650			$	4,062,500

Audit Fees. This category of the table above includes fees for the integrated audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q, and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements, and services that generally only PwC as the independent registered public accounting firm can provide, such as services for comfort letters and consents. The preparation of Ciena’s audited financial statements includes compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the preparation by PwC of a report expressing its opinion regarding the effectiveness of our internal control over financial reporting. Audit fees reflect PwC’s integrated audits of financial statements for Ciena.

Audit-Related Fees. This category of the table above includes fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included above under “Audit Fees.” The audit-related fees in fiscal 2019 reflect fees related to our compliance with the new Accounting Standards Codification 842 - Leases.

Tax Fees. This category of the table above includes fees for tax compliance, tax advice, tax planning, and other general tax consulting fees.

All Other Fees. This category of the table above includes fees for services provided by PwC that are not included in the other fee categories reported above. There were no other fees in fiscal 2019 or fiscal 2020.

Pre-Approval of Services

The Audit Committee pre-approves all services provided by our independent registered public accounting firm, including audit services (such as statutory audit engagements as required under local law of foreign jurisdictions) and non-audit services. For audit services with respect to Ciena, each year our independent registered public accounting firm provides the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be performed during the year, which must be accepted by the Audit Committee before the audit commences. Our independent registered public accounting firm also submits an audit services fee proposal, which must be approved by the Audit Committee before the audit commences.

Each year, management also submits to the Audit Committee certain non-audit services for which it recommends the independent registered public accounting firm be engaged to provide, and an estimate of the fees to be paid for each. Management and the independent registered public accounting firm must each confirm to the Audit Committee that the performance of the non-audit services on the list would not compromise the independence of our registered public accounting firm and would be permissible under applicable legal requirements. The Audit Committee must approve both the list of non-audit services and the budget for each such service before commencement of the work. Our management and our independent registered public accounting firm report to the Audit Committee at each of its regular meetings as to the non-audit services actually provided by the independent registered public accounting firm and the approximate fees incurred by Ciena for those services.

To ensure prompt handling of unexpected matters, the Audit Committee has authorized its Chair to amend or modify the list of approved permissible non-audit services and fees. If the Chair exercises this delegation of authority, she reports the action taken to the Audit Committee at its next regular meeting.

In compliance with the Audit Committee’s internal policy and auditor independence rules of the SEC, all audit and permissible non-audit services provided by PwC to Ciena for the fiscal years 2019 and 2020 were pre-approved by the Audit Committee.

 

34		2021 Proxy Statement

Audit Committee Report

The Audit Committee is composed entirely of non-management directors. The members of the Audit Committee meet the independence and financial literacy requirements of the NYSE and additional, heightened independence criteria applicable to members of the Audit Committee under SEC and NYSE rules. The Audit Committee assists the Board in fulfilling its oversight responsibilities, including by assessing and monitoring the quality and integrity of Ciena’s accounting systems and practices, financial information and financial reporting practices, potential financial, legal and regulatory exposures, systems of internal controls, internal audit function and the independent audit process. Ciena’s management is responsible for Ciena’s financial statements, and its independent registered public accounting firm is responsible for planning and conducting an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Audit Committee operates under a written charter that describes the scope of its responsibilities, and which is available on the “Governance” page of the “Investors” section at www.ciena.com.   During fiscal 2020, the Audit Committee discussed with PricewaterhouseCoopers LLP (“PwC”), Ciena’s independent registered public accounting firm, the overall scope and plans for the audit. The Audit Committee met regularly with PwC, with and, at times, without management present, to discuss the results of PwC’s examinations, evaluations of Ciena’s internal control over financial reporting and the overall quality of Ciena’s financial reporting practices. The Audit Committee also met with Ciena’s management during fiscal 2020 to consider Ciena’s internal control over financial reporting and Ciena’s disclosure controls and procedures.   In this context, the Audit Committee hereby reports as follows:   1. The Audit Committee has reviewed and discussed Ciena’s audited financial statements for fiscal 2020 with management and with PwC.   2. The Audit Committee has discussed with PwC the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.   3. The Audit Committee has received from PwC the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence.   4. Based on its review and discussions described in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements for fiscal 2020 be included in Ciena’s Annual Report on Form 10-K for fiscal 2020, for filing with the SEC.   Submitted by the members of the Audit Committee:   Lawton W. Fitt (Chair) Bruce L. Claflin Devinder Kumar T. Michael Nevens

 

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Ownership of Securities

The following table sets forth, as of February 4, 2021, the beneficial ownership of Ciena’s common stock for the following persons:

 

•

each stockholder (including any group as such term is used in Section 13(d)(3) of the Exchange Act) known by us to beneficially own more than 5% of our common stock;

•

our Chief Executive Officer and each other Named Executive Officer (as that term is defined in the “Executive Compensation Tables” below);

•

each of our directors and director nominees; and

•

all of our directors and executive officers as a group.

Certain information in the table concerning beneficial owners other than our directors and executive officers is based on information contained in filings made by such beneficial owners with the SEC.

Under SEC rules, beneficial ownership of a class of capital stock includes any shares of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also any shares as to which a person has the right to acquire such voting or investment power within 60 days through the exercise or conversion of any stock option, stock award, or other similar right. If two or more persons share voting power or investment power with respect to specific securities, each such person is deemed to be the beneficial owner of such securities. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the percentage of outstanding shares held by any person in the table below does not necessarily reflect the person’s actual voting power. As of February 4, 2021, there were 155,158,402 shares of Ciena common stock outstanding.

 

Name of Beneficial Owner		Number of Shares Owned (1)					Right to Acquire (2)					Beneficial Ownership Total (3)					Percent of Outstanding Shares (%)
More than 5% Stockholders
BlackRock, Inc. (4)				14,792,049					—					14,792,049					9.53	%
The Vanguard Group, Inc. (5)				14,561,776					—					14,561,776					9.39	%
Directors & Named Executive Officers
Patrick H. Nettles, Ph.D. (6)				238,523					12,178					250,701						*
Gary B. Smith				225,926					22,946					248,872						*
James E. Moylan, Jr.				235,462					1,237					236,699						*
Scott A. McFeely				48,655					5,891					54,546						*
Jason M. Phipps				26,846					6,340					33,186						*
David M. Rothenstein				224,908					5,433					230,341						*
Hassan M. Ahmed, Ph.D.				—					—					—						*
Bruce L. Claflin				40,895					29,893					70,788						*
Lawton W. Fitt				3,928					103,308					107,236						*
Patrick T. Gallagher				35,779					5,678					41,457						*
Devinder Kumar				—					5,678					5,678						*
T. Michael Nevens				24,675					5,678					30,353						*
Judith M. O’Brien (6)				1					59,314					59,315						*
Joanne B. Olsen				—					378					378						*
All executive officers and directors (18 persons)				1,211,407					275,572					1,486,979						*

 

*	Represents less than 1% of outstanding shares.

 

(1)	Excludes shares that may be acquired through the exercise of stock options, the vesting of restricted stock units or other convertible equity incentive awards.

 

(2)	Except as otherwise set forth in the footnotes below, for our executive officers, represents shares of common stock that can be acquired upon the vesting of restricted stock units within 60 days of the date of this table. For our executive officers and

 

36		2021 Proxy Statement

directors, amounts reported also include shares underlying vested restricted stock units deferred pursuant to our Deferred Compensation Plan.

 

(3)

Except as indicated in the footnotes to this table or as set forth in the SEC reports identified below, we believe the persons named in this table, based on information they have furnished to us or the SEC, have sole voting and investment power with respect to all shares of common stock reported as beneficially owned by them, subject to community property laws where applicable.

 

(4)

Stockholder’s address is 55 East 52nd Street, New York, NY 10055. Ownership information is based solely on a Schedule 13G/A filed by stockholder with the SEC on January 1, 2021 and reflects beneficial ownership by stockholder in its capacity as a parent holding company and with respect to certain of its subsidiaries. Stockholder has sole voting power with respect to 14,032,610 shares and sole dispositive power with respect to 14,792,049 shares.

 

(5)

Stockholder’s address is 100 Vanguard Blvd, Malvern, PA 19355. Ownership information is based solely on a Schedule 13G/A filed by stockholder with the SEC on February 12, 2020 and reflects beneficial ownership by stockholder in its capacity as investment advisor and with respect to certain of its subsidiaries. Stockholder has sole voting power with respect to 79,660 shares, shared voting power with respect to 31,271 shares, sole dispositive power with respect to 14,470,982 shares and shared dispositive power with respect to 90,794 shares.

 

(6)	Voting and investment power is shared with spouse.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires Ciena’s directors, executive officers, and beneficial owners of more than 10% of our common stock to file reports with the SEC indicating their holdings of, and transactions in, Ciena’s equity securities. Based solely on a review of copies of these reports, we believe that all of our executive officers, directors, and 10% owners timely complied with all Section 16(a) filing requirements for fiscal 2020 except for one late Form 4 reporting one transaction for Andrew C. Petrik with respect to a sale of Ciena’s common stock on March 25, 2020, which was filed with the SEC on March 30, 2020.

 

2021 Proxy Statement		37

Compensation Discussion and Analysis

 

 

38		2021 Proxy Statement