8-KLeadership Changes

CIENA CORP 8-K Report, Executive Changes (Feb 5, 2010)

Filed February 5, 2010For Securities:CIEN

Summary

This Form 8-K filing from Ciena Corporation, dated February 5, 2010, primarily details a compensatory arrangement with Dr. Arthur D. Smith, Senior Vice President and Chief Integration Officer. The agreement is tied to his role in integrating the Nortel Metro Ethernet Networks (MEN) business, which Ciena was in the process of acquiring. The arrangement outlines specific compensation and benefits Dr. Smith would receive if he resigns between July 31, 2010, and December 31, 2010, after his role in the integration is complete. This filing provides investors with insight into how Ciena is managing key personnel during a significant acquisition. The agreement aims to ensure Dr. Smith's continued dedication to the successful integration of the Nortel assets by providing him with a financial incentive and continued benefits through a specified period, contingent on his compliance with non-compete and non-solicitation clauses and the release of claims. This structure is common for retaining critical employees during transformative business events.

Key Highlights

  • 1Ciena Corporation entered into a compensatory arrangement with Dr. Arthur D. Smith, Senior Vice President and Chief Integration Officer, effective February 2, 2010.
  • 2The agreement is linked to Dr. Smith's role in the integration of Ciena's pending acquisition of Nortel's Metro Ethernet Networks (MEN) business.
  • 3Dr. Smith is entitled to specific compensation and benefits if he resigns between July 31, 2010, and December 31, 2010.
  • 4These benefits include continued salary and benefits, participation in the incentive bonus plan, and vesting of equity awards during a potential post-resignation period until his separation date.
  • 5A lump sum severance payment is stipulated, equal to his annual salary ($350,000) plus a potential annualized bonus (75% of base salary), subject to reductions for salary/bonus received between resignation and separation.
  • 6Medical, dental, vision benefits, and D&O insurance coverage will be extended until the separation date.
  • 7The arrangement is contingent upon Dr. Smith providing a general release of claims and adhering to a one-year non-competition and non-solicitation covenant.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose a compensatory arrangement made by Ciena Corporation with one of its key officers, Dr. Arthur D. Smith, who is leading the integration of the Nortel MEN business acquisition.

If Dr. Smith resigns within the specified timeframe, he will continue to receive his salary and benefits, participate in the bonus plan, and his equity awards will vest according to existing terms. He is also entitled to a lump sum severance payment, continued benefits until his separation from Ciena, and reimbursement for tax/financial planning services, subject to certain conditions.

Dr. Smith must provide a general release of claims against Ciena and comply with a one-year non-competition and non-solicitation covenant. The lump sum severance payment will also be reduced by any salary and bonus received between his resignation and separation dates.

Dr. Smith is responsible for integrating the Nortel MEN business assets. This agreement is designed to incentivize his continued focus and successful completion of this critical integration task during the transition period, ensuring stability and retention of key personnel during a significant corporate event.