CIEN » Topics » Payments Upon Death or Disability

This excerpt taken from the CIEN DEF 14A filed Feb 2, 2009.
Payments Upon Death or Disability
 
Certain RSU awards granted to employees, including our NEOs, prior to fiscal 2007 provided for acceleration of vesting upon the death or disability of the holder. While these acceleration provisions were not unique to our NEOs, we had only recently started granting RSU awards and these awards were predominately granted to our executive officers at that time. As a result, we have reflected in the table below the value of this acceleration. For each NEO, the amount in the table below reflects the value of their RSUs that are subject to acceleration of vesting


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upon death or disability multiplied by $9.61 per share, the closing price per share of our common stock on The NASDAQ Stock Market on October 31, 2008, the last trading day of our fiscal 2008.
 
Acceleration of Vesting of Equity Awards Upon Termination Due to Death or Disability
 
         
    Value of
    RSU Acceleration
Name
  ($)
 
Gary B. Smith
  $ 111,553  
James E. Moylan, Jr. 
     
Stephen B. Alexander
  $ 51,510  
Michael G. Aquino
  $ 38,632  
Arthur D. Smith
  $ 51,510  
 
The amounts in the table above relate to stock awards under legacy equity compensation plans. Our standard form of employee equity award agreement under our new 2008 Plan provides for an additional 12 months of vesting following a termination of service resulting from the award holder’s death or disability. Under the 2008 Plan, a disability is defined as inability to perform each of the essential duties of that person’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months. Prior to the end of fiscal 2008, however, we had not granted any equity awards to our NEOs under our 2008 Plan. We expect that equity awards to our executive and non-executive employees under the 2008 Plan will include this standard acceleration provision provided to grantees on a going forward basis.
 
This excerpt taken from the CIEN DEF 14A filed Feb 8, 2008.
Payments upon Death or Disability
 
Supplemental Insurance Benefits.  As part of our standard compensation program, full-time U.S. employees receive short-term and long-term disability insurance coverage. Generally, our long-term disability coverage provides that upon a qualifying disability, employees are eligible to receive monthly payments of 60% of base salary for the duration of the disability, with payment ceasing at age 65. We pay the full cost of the premiums for disability insurance coverage provided to our employees, including the NEOs. As of the end of fiscal 2007, we also paid for executive long-term disability insurance coverage on behalf of Mr. Chinnici that provided him an additional monthly payment until age 65 of $10,375 should he become disabled. Assuming that the triggering event took place on the last day of our fiscal 2007, Mr. Chinnici would have been entitled to receive, in absolute dollars, approximately $1.5 million in the aggregate, paid in monthly amounts up to age 65. Because Mr. Chinnici resigned as an employee of Ciena effective December 31, 2007, no payments will be made to him under this policy.


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Acceleration of Equity Awards.  Prior to fiscal 2007, certain RSU awards granted to employees, including our NEOs, provided for acceleration of vesting upon the death or disability of the holder. While these acceleration provisions were not unique to our NEOs, RSU awards were predominately granted to our executive officers at that time. As a result, we have reflected the value of this acceleration in the table below. We do not currently grant RSU awards that provide for acceleration of vesting upon death or disability. For purposes of calculating the estimated payments associated with the acceleration of these awards, we have assumed that the triggering event took place on the last day of our fiscal 2007. For each NEO, the amount in the table below reflects the value of their RSUs that are subject to acceleration of vesting upon death or disability, based on our fiscal year-end closing stock price of $46.88 per share.
 
         
    Value of
 
    RSU Acceleration
 
    Upon Death or
 
    Disability
 
Name
  ($)  
 
Gary B. Smith
  $ 1,222,302  
Joseph R. Chinnici
  $ 366,180  
Stephen B. Alexander
  $ 533,635  
Michael G. Aquino
  $ 314,096  
Arthur D. Smith
  $ 526,931  
 
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