LUMENTUM HOLDINGS INC.
400 NORTH MCCARTHY BOULEVARD MILPITAS, CALIFORNIA 95035
September 27, 2019
Dear Lumentum Stockholders:
We are pleased and excited to invite you to attend the Annual Meeting of stockholders of Lumentum Holdings Inc. on November 14, 2019 at 8:00 am (Pacific Time), which will be a "virtual meeting" of stockholders, conducted via the Internet.
During fiscal 2019 we made significant progress towards our long-term strategic and financial goals. Fiscal 2019 net revenue was at a new high, exceeding $1.5 billion, and was up 25% relative to the prior year. For the first time, full year non-GAAP operating margin expanded to more than 20%.
During the past year, we believe we have added to, or extended, our market and technology leadership positions in each of our markets by introducing many highly differentiated new products and winning new design-ins with market leading customers. We believe we are well positioned in global markets that increasingly rely on our photonics products and technologies and benefit from durable long-term growth drivers. Continued strong growth in the amount of data flowing through the world's optical networks and data centers drives increasing need for our communications products. We believe the market for our products used in 3D sensing will continue to expand in the coming years as 3D sensing enables computer vision applications which improve security and safety, as well as other new functionality, including virtual and augmented reality, in next-generation consumer electronic devices and automobiles. Higher required levels of precision, new materials, and factory and energy efficiency needs are causing manufacturers around the world to increasingly turn to laser-based approaches and the types of industrial lasers we supply.
In December 2018, we closed the acquisition of Oclaro, Inc., which has given us a first mover advantage in a transforming industry. We attained a leading position in telecom transmission, based on fundamental Indium Phosphide photonic integrated circuit technology. We believe this highly differentiated technology will be critical to our customers' ability to scale to higher network bandwidths in the future. The acquisition has enabled us to transform our datacom business to a significantly more profitable model that is also based on highly differentiated photonic chip capabilities. Our datacom market focus has expanded to include 5G wireless and other high-volume applications. And finally, the acquisition has helped us improve our business model through the attainment of significant cost synergies on a more accelerated timeline than originally estimated and we are now increasing our annual synergy target to $100 million from our initial $60 million target, which we have already exceeded.
I believe these results and accomplishments both underscore the significant progress we made towards our strategic goals during fiscal 2019, and position us well for further revenue growth and margin in the future. These accomplishments, along with the growth catalysts we see across each of our major product lines, makes it is a very exciting time at Lumentum for all stakeholders. At Lumentum, we are releasing the power of light to create a brighter future.
In August 2019, we shared the news with great sadness that our Chairman, Marty Kaplan, passed away. Marty served as our Chairman since the inception of Lumentum with great passion and commitment. We will greatly miss his presence in the boardroom and as a friend and colleague.
Our virtual Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LITE2019, where you will be able to listen to the meeting live, submit questions and vote online. We believe that a virtual stockholder meeting provides greater access to those who may want to attend and therefore have chosen this method for our Annual Meeting over an in-person meeting.
We are pleased to provide access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission's "notice and access" rules.
Details regarding how to attend the Annual Meeting online and the business to be conducted at the Annual Meeting are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.
Your vote is important and we hope you will vote as soon as possible, regardless of whether you plan to attend the meeting. You may vote by proxy over the Internet or by telephone, or, if you received paper copies of the proxy materials by mail, you may also vote by mail by following the instructions on the proxy card or voting instruction card.
Thank you for your ongoing support of and interest in Lumentum.
Sincerely,
Alan S. Lowe
President and Chief Executive Officer
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LUMENTUM HOLDINGS INC.
400 NORTH MCCARTHY BLVD. MILPITAS, CALIFORNIA 95035
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
How to Vote
Via Internet
http://www.proxyvote.com
Via Phone
1-800-690-6903
Via Mail
In Person
To Be Held at 8:00 am Pacific Time on Thursday, November 14, 2019
Dear Stockholders of Lumentum Holdings Inc.:
The 2019 Annual Meeting of stockholders (the "Annual Meeting") of Lumentum Holdings Inc., a Delaware corporation, will be held virtually on Thursday, November 14, 2019, at 8:00 am Pacific Time. The virtual Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LITE2019, where you will be able to listen to the meeting live, submit questions and vote online. We are holding the meeting for the following purposes, as more fully described in the accompanying proxy statement:
- The election of seven directors, all of whom are currently serving on our board of directors, to serve until our 2020 Annual Meeting of stockholders and until their successors are duly elected and qualified;
- The approval, on a non-binding, advisory basis, of the compensation of our named executive officers; and
- The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending June 27, 2020.
In addition, stockholders may be asked to consider and vote upon such other business as may properly come before the meeting or any adjournments or postponements thereof.
Our board of directors has fixed the close of business on September 20, 2019 as the record date for the Annual Meeting. Only stockholders of record on September 20, 2019 are entitled to notice of and to vote at the virtual Annual Meeting and any adjournments thereof.
YOUR VOTE IS IMPORTANT. Whether or not you plan to virtually attend the Annual Meeting, please cast your vote as soon as possible by Internet or telephone. If you received a paper copy of the proxy materials by mail, you may submit your proxy card in the postage-prepaid envelope provided. Your vote by written proxy will ensure your representation at the Annual Meeting regardless of whether you attend the virtual meeting or not. If you attend the virtual Annual Meeting, you may revoke your proxy and vote via the virtual meeting website. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from your account manager to vote your shares.
We thank you for your support and we hope you are able to attend our virtual Annual Meeting.
By order of the Board of Directors,
Alan S. Lowe
President and Chief Executive Officer
Milpitas, California
September 27, 2019
- 2019 Proxy Statement
TABLE OF CONTENTS
-
Notice of Annual Meeting of Stockholders
4 Proxy Summary
- Proxy Statement for 2019 Annual Meeting of Stockholders
- Internet Availability of Proxy Materials
- General Information about the Annual Meeting
12 Corporate Governance
12 Director Independence
- Board Leadership Structure
- Board Oversight of Risk
- Compensation Program Risk Assessment
- Board Committees and Meetings
16 Proposal No. 1 Election of Directors
16 Director Nominees
19 Director Compensation
21 Proposal No. 2 Advisory Vote to Approve Compensation of Our Named Executive Officers
23 Proposal No. 3 Ratification of Appointment of Independent Registered Public Accounting Firm
23 Fees Paid to the Independent Registered Public Accounting Firm
- Auditor Independence
- Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
- Report of the Audit Committee
- Executive Officers
27 Compensation Discussion and Analysis
- Fiscal 2019 Business Performance
- Executive Compensation Highlights
- Compensation Philosophy
- Elements of Our Fiscal 2019 Compensation Program
- Compensation Decision Processes
- Peer Group
- Annual Cash Incentive Plan
- Equity Incentive Awards
- Employment Agreement with Mr. Lowe
- Stock Ownership Guidelines
- Summary Compensation Table
- 2019 Grants of Plan-Based Awards Table
- Outstanding Equity Awards at Fiscal Year-End Table
- Stock Vested in 2019
39 CEO Pay Ratio
42 Potential Payments upon a Termination or Change in Control
- Security Ownership of Certain Beneficial Owners and Management
- Related Person Transactions
45 Other Relationships and Related Persons Transactions
45 Policies and Procedures for Related Party Transactions
46 Other Matters
46 Section 16(a) Beneficial Ownership Reporting Compliance
46 Fiscal 2019 Annual Report and SEC Filings
47 Appendix A
47 Reconciliation of GAAP and Non-GAAP Financial Measures
3
PROXY SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.
PROPOSAL NO. 1 Election of Directors
You are being asked to elect seven directors. Each of the director nominees is standing for election for a one-year term ending at the next annual meeting of stockholders in 2020.
Your Board of Directors recommends that you vote "FOR" the election of each of the seven nominees.
See page 16
Director Nominees
Committees | Other Current | ||||||
Director | Public Company | ||||||
Name and Position | Independent | Age | Since | Audit | Compensation | Governance | Boards |
Harold L. Covert | |||||||
Director | ✓ | 72 | 2015 | C | None | ||
Chief Financial Officer | |||||||
Imagine Communications | |||||||
Penelope A. Herscher | Verint Systems, | ||||||
Director and Chair | ✓ | 59 | 2015 | C | Inc., PROS Inc. | ||
and Faurecia SA | |||||||
Julia S. Johnson | Superconductor | ||||||
Director | ✓ | 53 | 2017 | M | M | Technologies | |
Vice President Product Management | |||||||
Zebra Technologies | |||||||
Brian J. Lillie | ✓ | 55 | 2015 | M | M | Talend S.A. | |
Director | |||||||
Alan S. Lowe | |||||||
Director | 57 | 2015 | None | ||||
President and CEO | |||||||
Lumentum | |||||||
Ian S. Small | |||||||
Director | ✓ | 55 | 2018 | M | None | ||
Chief Executive Officer | |||||||
Evernote Corporation | |||||||
Samuel F. Thomas | ✓ | 68 | 2015 | M | C | None | |
Director | |||||||
M Member | C Chair |
- 2019 Proxy Statement
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Lumentum Holdings Inc. published this content on 27 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 September 2019 20:42:03 UTC