<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CIENA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 23-2725311
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
G. ERIC GEORGATOS
1201 WINTERSON ROAD SENIOR VICE PRESIDENT, GENERAL COUNSEL
LINTHICUM, MARYLAND 21090 AND SECRETARY
(410) 865-8500 1201 WINTERSON ROAD
(ADDRESS, INCLUDING ZIP CODE, LINTHICUM, MARYLAND 21090
AND TELEPHONE NUMBER, INCLUDING (410) 865-8500
AREA CODE, OF REGISTRANT'S (NAME, ADDRESS, INCLUDING ZIP CODE,
PRINCIPAL EXECUTIVE OFFICES) AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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Copies to:
MICHAEL J. SILVER
AMY BOWERMAN FREED
HOGAN & HARTSON L.L.P.
111 S. CALVERT STREET, SUITE 1600
BALTIMORE, MARYLAND 21202
(410) 659-2700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
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17,849,665
Common Stock, $.01 par value (2)........ shares $28.25 $504,253,036.25 $140,183
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</TABLE>
(1) We estimated this amount only to calculate the registration fee. We based
this amount on the average of the high and low sale prices of our common
stock on June 15, 1999 as reported on the Nasdaq Stock Market of $28.25 per
share.
(2) We are also registering Series A Junior Participating Preferred Stock
Purchase Rights attached to the common stock. We are paying no separate fee
under Rule 457(i).
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
PROSPECTUS SUBJECT TO COMPLETION
JUNE 18, 1999
CIENA CORPORATION
17,849,665 Shares of Common Stock
We have prepared this prospectus to allow some of our stockholders,
warrantholders and optionholders to sell up to 17,849,665 shares of our common
stock.
Our common stock trades on the Nasdaq Stock Market under the symbol "CIEN."
On June 17, 1999, the last reported sale price of our common stock on Nasdaq was
$30 3/8 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED NOR DISAPPROVED OF THE COMMON STOCK, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference rooms at 450 Fifth Street,
N.W., Washington, D.C., and in New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-732-0330 for further information on the public reference
rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under the Securities Exchange Act of 1934:
- Our Annual Report on Form 10-K for the year ended October 31, 1998
amended on April 5, 1999;
- Our Quarterly Reports on Form 10-Q for the quarters ended January 31,
1999 and April 30, 1999;
- Our Current Reports on Form 8-K filed April 1, 1999 (and amended on April
5, 1999) and filed on April 5, 1999; and
- Our description of our common stock in our Form 8-A filed on January 13,
1997, as amended.
To obtain a copy of these filings at no cost, you may write or telephone us
at the following address:
Director, Investor Relations
CIENA CORPORATION
1201 Winterson Road
Linthicum, Maryland 21090
(410) 865-8500
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. Neither we nor the
selling stockholders have authorized anyone else to provide you with different
information. Neither we nor the selling stockholders are making an offer of
these securities in any state where the state does not permit an offer. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of the prospectus.
FORWARD-LOOKING STATEMENTS
Some of the statements contained, or incorporated by reference, in this
prospectus discuss future expectations, contain projections of results of
operations or financial condition or state other "forward-looking" information.
Those statements are subject to known and unknown risks, uncertainties and other
factors that could cause the actual results to differ materially from those
contemplated by the statements. The "forward-looking" information is based on
various factors and was derived using numerous assumptions. In some cases, you
can identify these so-called "forward-looking statements"
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<PAGE> 4
by words like "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue" or the negative
of those words and other comparable words. You should be aware that those
statements only reflect our predictions. Actual events or results may differ
substantially. Important factors that could cause our actual results to be
materially different from the forward-looking statements are disclosed under the
heading "Risk Factors" and throughout this prospectus.
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<PAGE> 5
RISK FACTORS
You should carefully consider the following risk factors before deciding to
invest in CIENA's common stock. You should also consider the other information
in this prospectus and the additional information in CIENA's other reports on
file with the SEC and in the other documents incorporated by reference in this
prospectus. See "Where You Can Find More Information" on page 2.
OUR RESULTS CAN BE UNPREDICTABLE
Our near term results may be break-even or may involve losses. In general,
sequential revenue and operating results over the next 12 months are likely to
fluctuate and may continue to fluctuate in the future due to factors including:
- timing and size of orders
- satisfaction of contractual customer acceptance criteria
- shipment delays and deferrals
We budget expense levels partially on our expectations of long term future
revenue. These levels reflect our substantial investment in financial,
engineering, manufacturing and logistics support resources we think we may need
for large potential customers, even though we do not know the volume, duration
or timing of any purchases from them. As a result, we may continue to experience
increased inventory levels, operating expenses and general overhead.
Additionally, Lightera Networks, Inc. and Omnia Communications, Inc.,
companies we have acquired or are about to acquire, have ongoing development and
operating expenses but are not expected to contribute materially to revenues
until calendar 2000.
WE FACE INTENSE COMPETITION WHICH COULD HURT OUR SALES AND PROFITABILITY
A small number of very large companies have historically dominated our
industry including Lucent, Alcatel, Nortel, NEC, Pirelli, Siemens, Ericsson,
Fujitsu, and Hitachi. These companies have substantial financial, marketing and
intellectual property resources. We sell systems which displace their legacy
equipment, which represents a specific threat to these companies. Our
acquisitions of Lightera and Omnia may increase this perceived threat. We expect
continued aggressive tactics from many of these competitors such as:
- Substantial price discounting
- Early announcements of competing products
- "One-stop shopping" appeals
- Customer financing assistance
- Intellectual property disputes
These tactics can be particularly effective in a highly concentrated
customer base such as ours.
Sprint, a significant customer of ours, has long indicated that it intends
to establish a second vendor for DWDM products. We do not know when Sprint will
select a second
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<PAGE> 6
vendor or what impact the selection might have on Sprint's purchases from us.
Sprint could reduce its purchases from us, which could in turn have a material
adverse effect on us.
New competitors may also emerge to compete with our existing products as
well as our future products.
DELAYS IN THE DEPLOYMENT OF NEW PRODUCTS COULD HURT OUR NEAR TERM PROSPECTS
If we fail to deploy new and improved products, our competitive position
and financial condition would be materially and adversely affected.
The certification process for new telecommunications equipment used in RBOC
networks, which is a process traditionally conducted by Telcordia Technologies,
has in the past resulted in and may continue to result in unanticipated delays
which may affect the deployment of our products for the RBOC market.
In order to meet our delivery commitments for our newest products, we will
need to finalize component sourcing, which we have not yet completed. Any delays
in deployment could result in delays in recognizing revenues and, ultimately,
could adversely affect our customer relationships.
SMALLER CUSTOMERS MAY INCREASE FLUCTUATION IN OUR RESULTS
We have recently shifted our sales focus to smaller emerging carriers.
Timing and volume of purchasing from these smaller carriers can also be more
unpredictable due to factors such as their need to build a customer base,
acquire rights of way and interconnections necessary to sell network service,
and build out new capacity, all while working within capital budget constraints.
This increases the unpredictability of our financial results because even
smaller carriers purchase our products in multi-million dollar increments.
Unanticipated changes in customer purchasing plans also create
unpredictability in our results. Most of our anticipated revenue over the next
several quarters is comprised of orders of less than $25 million each from
several customers, some of which involve extended payment terms or other
financing assistance. Our ability to recognize revenue from financed sales to
these carriers will be impacted by their financial condition at the time of
product acceptance. Purchasing delays or changes in the amount of purchases by
any of these customers, could have a material adverse effect on us.
OUR PROSPECTS DEPEND ON DEMAND FOR BANDWIDTH WHICH WE CANNOT PREDICT OR CONTROL
We may not anticipate changes in direction or magnitude of demand for
bandwidth. Unanticipated reductions in bandwidth demand would adversely affect
us.
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Our products enable high capacity transmission over long distance, and
certain short-haul portions, of optical communications networks. Our Core
Director switching products are targeted to high capacity applications.
Customers, however, determine:
- the quantity of bandwidth needed
- the timing of its deployment, and
- the equipment configurations and network architectures they want.
Customer determinations are subject to abrupt change in response to their
own competitive pressures, pressures to raise capital and financial performance
expectations.
OUR SUCCESS LARGELY DEPENDS ON OUR ABILITY TO RETAIN KEY PERSONNEL
Our success has always depended in large part on our ability to attract and
retain highly-skilled technical, managerial, sales and marketing personnel,
particularly those skilled and experienced with optical communications
equipment. As CIENA has grown and matured, competitors' efforts to entice our
employees to leave have intensified, particularly among competitive startups and
other early stage companies seeking to replicate CIENA's experience. CIENA and
its employees are parties to agreements that limit the employee's ability to
work for a competitor following termination of employment. We expect our
competitors will respect these agreements and not interfere with them. But we
can make no assurances of that, or that we will be able to retain all of our key
contributors or attract new personnel to add to or replace them. The loss of key
personnel would likely have a material adverse effect on our business, financial
condition and results of operations.
WE MAY EXPERIENCE DELAYS FROM OUR SUPPLIERS AND FOR SOME ITEMS WE DO NOT HAVE
SUBSTITUTE SUPPLIERS
We depend on a small number of suppliers for key components of our
products, as well as equipment used to manufacture our products. Our highest
capacity product currently being shipped, the MultiWave Sentry which is capable
of 96-channel configurations, includes several higher performance components for
which reliable, high volume suppliers are particularly limited. On occasion, we
have experienced delays in receipt of key components. Any future difficulty in
obtaining sufficient and timely delivery of them could result in delays or
reductions in product shipments which, in turn, could have a material adverse
effect on our business, financial condition and results of operations. Uniphase
Corporation and JDS FITEL, Inc., both of which are significant suppliers to
CIENA, recently announced a planned merger. If the merger with Omnia and related
integration activities result in delayed deliveries of key components from
either of these sources, those delays could have a material adverse effect on
CIENA's near-term results of operations.
PRODUCT PERFORMANCE PROBLEMS COULD LIMIT OUR SALES PROSPECTS
The production of new fiberoptic systems with high technology content
involves occasional problems as the technology and manufacturing methods mature.
We are aware of instances domestically and internationally of delayed
installation and activation of some
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<PAGE> 8
of our products due to faulty components. If significant reliability, quality or
network monitoring problems develop, a number of material adverse effects could
result, including:
- manufacturing rework costs
- high service and warranty expense
- high levels of product returns
- delays in collecting accounts receivable
- reduced orders from existing customers, and
- declining interest from potential customers
Although we maintain accruals for product warranties, actual costs could
exceed these amounts.
From time to time, there will be interruptions or delays in the activation
of our products and the addition of channels, particularly because we do not
control all aspects of the installation and activation activities. If we
experience significant interruptions or delays that we can not promptly resolve,
confidence in our products could be undermined, which could have a material
adverse effect on us.
INVESTMENT IN NEW COMPANIES AND CHANGES IN TECHNOLOGY COULD RESULT IN MORE
COMPETITION
We may not be able to successfully anticipate changes in technology,
industry standards, customer requirements and product offerings, yet our ability
to develop and introduce new and enhanced products will impact our position as a
leader in the deployment of high-capacity solutions. The accelerating pace of
deregulation in the telecommunications industry will likely intensify the
competition for improved technology. Many of our competitors have substantially
greater financial, technical and marketing resources and manufacturing capacity
with which to develop or acquire new technologies. There has been an increase in
the funding of new companies intending to develop new products for the rapidly
evolving telecom industry. These companies have time-to-market advantages due to
the narrow and exclusive focus of their efforts. New companies may provide
additional competition for our existing product lines as well as potential
future products. The introduction of new products embodying new technologies or
the emergence of new industry standards could render our existing products
uncompetitive from a pricing standpoint, obsolete or unmarketable. Any of these
outcomes would have a material adverse effect on our business, financial
condition and results of operations.
OUR STOCK PRICE MAY EXHIBIT VOLATILITY
Our common stock price has experienced substantial volatility in the past,
and is likely to remain volatile in the future. Volatility can arise as a result
of the activities of short sellers and risk arbitrageurs, and may have little
relationship to our financial results or prospects. Volatility can also result
from any divergence between our actual or anticipated financial results and
published expectations of analysts, and announcements we may make. This occurred
in 1998. We attempt to address this possible divergence through our public
announcements and reports; however, the degree of specificity we can offer in
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such announcements, and the likelihood that any forward-looking statements we
make will prove correct in actual results, can and will vary. This is due
primarily to:
- the uncertainties associated with our dependence on a small number of
existing and potential customers
- the impact of changes in the customer mix
- the actions of competitors
- long and unpredictable sales cycles and customer purchasing programs
- the absence of unconditional minimum purchase commitments from any
customer
- a lack of visibility into our customers' deployment plans over the course
of the capital equipment procurement year, and
- the lack of reliable data on which to anticipate core demand for high
bandwidth transmission capacity
Divergence will likely occur from time to time in the future, with
resulting stock price volatility, irrespective of our overall year-to-year
performance or long-term prospects. As long as we continue to depend on
relatively few customers, and particularly when a substantial majority of their
purchases consist of newly-introduced products such as the 96-channel MultiWave
Sentry and MultiWave Metro, there is substantial risk of widely varying
quarterly results, including the so-called "missed quarter" relative to investor
expectations.
LEGAL PROCEEDINGS COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS
In August 1998, shareholder class action lawsuits were filed against us and
certain of our officers and directors. We believe the lawsuits, now consolidated
into one, are without merit and are defending vigorously against them. However,
because the consolidated lawsuit is at an early stage, it is not possible to
predict the outcome at this time. If decided adversely to CIENA, however, it
could have a material adverse effect on our financial condition and results of
operations.
SOME OF OUR SUPPLIERS ARE ALSO OUR COMPETITORS
Some of our component suppliers are both primary sources for components and
major competitors in the market for system equipment. For example, we buy
certain key components from:
- Lucent
- Alcatel
- Nortel
- NEC, and
- Siemens
Each of these companies offers optical communications systems and equipment
which are competitive with our products. Also, Lucent is the sole source of two
components and is one of two suppliers of two others. Alcatel and Nortel are
suppliers of lasers used in our
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products and NEC is a supplier of an important piece of testing equipment. A
decline in reliability or other adverse change in these supply relationships
could materially and adversely affect our business, financial condition and
results of operations.
WE MAY NOT BE ABLE TO SUCCESSFULLY COMPLETE DEVELOPMENT AND ACHIEVE COMMERCIAL
ACCEPTANCE OF LIGHTERA AND OMNIA PRODUCTS
Both Lightera and Omnia's products are in the laboratory testing phase but
the products have not matured into commercially manufacturable units suitable
for field deployment. We expect that field deployable units of Omnia's products
will be available in the second half of calendar 1999, and Lightera's products
by the end of the first quarter of calendar 2000. The maturing process from
laboratory prototype to commercial acceptance involves a number of steps,
including:
- successful completion of product development
- the qualification and multiple sourcing of critical components, including
application-specific integrated circuits ("ASIC's") which are not yet
finalized
- validation of manufacturing methods
- extensive quality assurance and reliability testing, and staffing of
testing infrastructure
- software validation
- establishment of systems integration and burn in requirements, and
- identification and qualification of component suppliers
Each of these steps in turn presents serious risks of failure, rework or
delay, any one of which could materially and adversely affect the speed and
scope of product introduction and marketplace acceptance of the products.
Specialized ASIC's, in particular, are key to the timely introduction of
Lightera's and Omnia's products, and schedule delays are common in the final
testing and manufacture of such components. In addition, unexpected intellectual
property disputes, failure of critical design elements, and a host of other
execution risks may delay or even prevent the introduction of these products.
Commercial acceptance of the products is also not established and there is no
assurance that the substantial sales and marketing efforts necessary to achieve
commercial acceptance in traditionally long sales cycles will be successful.
WE MAY NOT BE ABLE TO RETAIN KEY EMPLOYEES OF LIGHTERA AND OMNIA
Because of the high valuation we placed on Lightera and Omnia, their key
founders and employees have received or will receive a substantial number of
CIENA shares and can sell these shares at substantial gains. In many cases,
these individuals could become financially independent through these sales,
before the products of either company have fully matured into commercially
deliverable products commanding reasonable market share. Additionally, startup
and other companies will seek out these individuals due to the financial result
they have achieved for their investors. Under the circumstances, we face a
difficult and significant task of retaining and motivating the key personnel of
both companies to stay committed to us. We do not have employment contracts with
these personnel. We may not be successful in retaining them.
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WE EXPECT THAT OUR ACQUISITIONS OF LIGHTERA AND OMNIA WILL MAKE OUR STOCK PRICE
MORE VOLATILE
Both Lightera and Omnia are still completing their respective development
stages, and we do not expect either of them to generate any revenue or earnings
for at least several months. As a result, we expect to report approximately
breakeven results of operations, and may report operating losses, for the
balance of the fiscal year. Under these circumstances, we can expect significant
volatility over the next several quarters as investors make judgments as to our
relative progress in:
- bringing the Lightera and Omnia products to market
- integrating the two companies
- managing retention issues, and
- generally executing on the strategic vision.
Additionally, the shares being offered by former Lightera shareholders
through this prospectus, and the shares issued to former Omnia shareholders,
together account for approximately 25% of the outstanding shares of CIENA. If a
large portion of these shares are sold immediately or soon after they are
eligible for sale, the stock price may experience further volatility and may
decline.
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THE COMPANY
CIENA designs, makes and sells open architecture, dense wavelength division
multiplexing systems for fiberoptic communications networks, including
long-distance and local exchange carriers. Our systems enable these carriers to
carry greater volumes of communications traffic over existing fiber, by using
multiple optical signals, or wavelengths, where prior equipment used only a
single optical signal. CIENA also provides a range of engineering, furnishing
and installation services for our customers.
We designed all of our MultiWave systems with open architecture that allows
them to work with our customers' existing fiber optic transmission systems that
have a broad range of transmission speeds and signal formats. We target our
research and development efforts to broaden the product applications of our
technology and to integrate the technology as part of a more comprehensive
approach to optical communications solutions.
In March 1999, we acquired Lightera Networks, Inc., which is developing
optical core switches for fiberoptic communications networks. In addition, we
expect to complete the acquisition of Omnia Communications, Inc. in July 1999.
Omnia is a telecommunications equipment supplier.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholders. We may receive a small amount of proceeds when the one
optionholder and two warrantholders exercise the warrants that they hold and we
will use those proceeds for general corporate purposes.
SELLING STOCKHOLDERS
This Prospectus relates to the offering by the stockholders named in the
Prospectus for resale of up to 17,849,665 shares of common stock. Throughout
this Prospectus, we may refer to these stockholders, warrantholders,
optionholders, and their pledgees, donees, transferees or other successors in
interest who receive shares in non-sale transactions, as the "selling
stockholders." If they sell all of these shares in this offering, the selling
stockholders will beneficially own no shares of CIENA common stock. The selling
stockholders who are currently stockholders acquired their common stock on March
31, 1999 from us in exchange for their shares of Lightera Networks, Inc. The
warrantholders and optionholder may acquire their shares when they exercise
warrants or options which they acquired from us on March 31, 1999 in exchange
for their Lightera warrants and options.
The following table sets forth the following information with respect to
each selling stockholder as of June 17, 1999: (i) name and nature of any
position or other relationship with CIENA within the past three years; (ii) the
number and percentage of total outstanding shares of CIENA common stock each
selling stockholder beneficially owns before this offering; (iii) the number of
shares of common stock the selling stockholder is offering; and (iv) the number
and percentage of total outstanding shares of CIENA common stock that the
selling stockholder will own after the selling stockholder sells all of the
shares in this offering. The number of shares beneficially owned by each selling
stockholder includes shares held in escrow until April 1, 2000 to allow the
settlement of contingencies in connection with the merger of Lightera into
CIENA. The
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total number of shares held in escrow on behalf of all of the selling
stockholders is 1,448,806 shares.
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL CIENA
OUTSTANDING
NUMBER OF SHARES SHARES NUMBER AND
BENEFICIALLY BENEFICIALLY PERCENTAGE OF SHARES
OWNED BEFORE OWNED BEFORE NUMBER OF BENEFICIALLY OWNED
SELLING STOCKHOLDERS THE OFFERING THE OFFERING SHARES OFFERED AFTER OFFERING
-------------------- ---------------- ------------- -------------- --------------------
<S> <C> <C> <C> <C>
InterWest Partners VI, L.P. and
affiliates (1)............... 2,735,071 2.25% 2,735,071 0
Venrock Associates II, L.P. and
affiliates (2)............... 2,714,969 2.24% 2,714,969 0
Brentwood Associates VIII, L.P.
and affiliates (3)........... 2,714,968 2.24% 2,714,968 0
Kleiner Perkins Caufield &
Byers VIII, L.P. and
affiliates (4)............... 2,297,576 1.89% 2,297,576 0
Drew Perkins (5)(6)............ 1,665,540 1.37% 1,665,540 0
Jagdeep Singh (6)(7)........... 1,577,889 1.30% 1,577,889 0
Charles Chi (6)................ 785,639 * 785,639 0
Daniel E. Klausmeier (6)....... 784,031 * 784,031 0
Dave Chambers (6).............. 482,491 * 482,491 0
Howard Lukens (6).............. 281,453 * 281,453 0
Storm Ventures Fund I, L.P. ... 201,037 * 201,037 0
Comdisco, Inc. (8)............. 151,975 * 151,975 0
Venture Lending & Leasing II,
Inc. (8)..................... 143,599 * 143,599 0
Lonny J. Orona (6)............. 120,622 * 120,622 0
Forty-nine other former
stockholders of Lightera and
one former optionholder of
Lightera, none of whom
beneficially owns more than
.07% of the shares........... 1,192,771 * 1,192,771 0
</TABLE>
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"*" means less than 1%
(1) Includes 82,534 shares owned by InterWest Investors VI, L.P., and 20,103
shares owned by W. Scott Hedrick.
(2) Includes 1,175,096 shares owned by Venrock Associates.
(3) Includes 102,377 shares owned by Brentwood Affiliates Fund II, L.P. and
155,535 shares owned by James Mongiello.
(4) Includes 122,690 shares owned by KPCB VIII Founders Fund, L.P. and 57,439
shares owned by KPCB Information Sciences Zaibatsu Fund II, L.P.
(5) Includes 40,207 shares owned by each of the Todd Ian Perkins Trust and the
Cody Erin Perkins Trust.
(6) These selling stockholders became employees of CIENA on March 31, 1999, the
date on which the acquisition of Lightera was completed. Howard Lukens was
previously employed by CIENA prior to October, 1998.
(7) Mr. Singh is a member of the Board of Directors of CIENA.
(8) These selling stockholders hold warrants to purchase CIENA shares; the
numbers shown in the table assume that the warrants are exercised in full
for cash.
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PLAN OF DISTRIBUTION
The common stock being offered by the selling stockholders may be sold in
transactions on the Nasdaq Stock Market, on another market on which the common
stock may be trading, or in privately-negotiated transactions. The sale price to
the public may be the market price prevailing at the time of sale, a price
related to the prevailing market price or any other price the selling
stockholders may determine. The common stock may also be sold under SEC Rule 144
and not under this prospectus. No sales under Rule 144 can be made until April
1, 2000, which is one year after the earliest date the selling stockholders
acquired their shares from us. The selling stockholders have the discretion not
to accept any purchase offer or make any sale of common stock if they deem the
purchase price to be unsatisfactory at any particular time, or for any reason.
The selling stockholders may also sell the common stock directly to
broker-dealers acting as principals and/or to broker-dealers acting as agents
for themselves or their customers. Brokers acting as agents for the selling
stockholders will receive usual and customary commissions for brokerage
transactions, and broker-dealers acting as principals will do so for their own
account at negotiated prices and at their own risk. It is possible that the
selling stockholders will sell shares of common stock to broker-dealers or other
purchasers at a price per share which may be below the then market price. In
addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales of common stock in the course of
hedging the positions they assume with a selling stockholder. The selling
stockholders also may sell shares short and deliver the shares to close out
their positions, and may loan or pledge their shares to a broker-dealer who may
have the right to sell the loaned or pledged shares on default or otherwise. The
selling stockholders and any brokers, dealers or agents, upon effecting the sale
of any of the common stock offered hereby, may be deemed "underwriters" as that
term is defined under the Securities Act or the Exchange Act, or the rules and
regulations thereunder.
The selling stockholders and any other persons participating in the sale or
distribution of the common stock will be subject to applicable provisions of the
Exchange Act and its rules and regulations, which may limit the timing of
purchases and sales of any of the common stock by the selling stockholders or
other distribution participants. Furthermore, under Regulation M, persons
engaged in a distribution of securities are prohibited from simultaneously
engaging in market making and other activities with respect to such securities
for a specified period of time before the commencement of distributions subject
to specified exceptions or exemptions. This may affect the marketability of the
common stock.
CIENA has agreed to indemnify the selling stockholders against some
important liabilities, including liabilities under the Securities Act, or to
contribute to any payments these selling stockholders may be required to make in
respect of these liabilities. CIENA is paying the costs of this registration for
the selling stockholders.
LEGAL MATTERS
The legal validity of the CIENA common stock offered by this prospectus was
passed upon for CIENA by Hogan & Hartson L.L.P., counsel to CIENA.
13
<PAGE> 15
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of CIENA Corporation for the year
ended October 31, 1998 and the Current Report on Form 8-K of CIENA Corporation
filed on April 1, 1999 and amended on April 5, 1999, have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
14
<PAGE> 16
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More
Information....................... 2
Risk Factors........................ 4
The Company......................... 11
Use of Proceeds..................... 11
Selling Stockholders................ 11
Plan of Distribution................ 13
Legal Matters....................... 13
Experts............................. 14
</TABLE>
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CIENA CORPORATION
Common Stock
------------------------
PROSPECTUS
------------------------
June , 1999
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<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered. Except for the SEC
registration fee, all amounts are estimates.
<TABLE>
<S> <C>
SEC registration fee........................................ $140,183
Accounting fees and expenses................................ 10,000
Legal fees and expenses..................................... 20,000
Blue Sky fees and expenses (including counsel fees)......... 1,000
Printing and engraving expenses............................. 10,000
Transfer agent's and registrar's fees and expenses.......... 15,000
Miscellaneous expenses, including Listing Fees.............. 53,817
--------
Total..................................................... $250,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") authorizes a
court to award, or a corporation's board of directors to grant indemnity to
directors and officers under some circumstances for liabilities incurred in
connection with their activities in such capacities (including reimbursement for
expenses incurred). The Registrant's Amended and Restated Certificate of
Incorporation provides that no director of the Registrant will be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Registrant or to its stockholders, (ii) for
acts or omissions not made in good faith or which involved intentional
misconduct or a knowing violation of the law, (iii) under Section 174 of the
DGCL, or (iv) for any transactions from which the director derives an improper
personal benefit. In addition, the Registrant's Amended and Restated Bylaws
provide that any director or officer who was or is a party or is threatened to
be made a party to any action or proceeding by reason of his or her services to
the Registrant will be indemnified to the fullest extent permitted by the DGCL.
The Registrant has entered into agreements with each of its executive
officers and directors under which the Registrant has agreed to indemnify each
of them against expenses and losses incurred for claims brought against them by
reason of their being an officer or director of the Registrant. There is no
pending litigation or proceeding involving a director or officer of the
Registrant as to which indemnification is being sought, nor is the Registrant
aware of any pending or threatened litigation that may result in claims for
indemnification by any director or executive officer.
II-1
<PAGE> 18
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
4.1(1) Specimen Stock Certificate
4.2(2) Rights Agreement dated December 29, 1997
4.3(3) Amendment to Rights Agreement
5.1 Hogan & Hartson L.L.P. Opinion
23.1 Consent of Independent Accountants
23.3 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.1)
24 Power of Attorney (included in signature page)
</TABLE>
- -------------------------
(1) Incorporated by reference to CIENA's Registration Statement on Form S-1 (SEC
File No. 333-17729).
(2) Incorporated by reference to CIENA's Form 8-K dated December 29, 1997.
(3) Incorporated by reference to CIENA's Form 8-K dated October 14, 1998.
(b) Financial Statement Schedules.
CIENA acquired Lightera on March 31, 1999, in a transaction accounted for
as a pooling-of-interests. Accordingly, all financial statements and pro forma
financial information prescribed by Rule 3-05 of Regulation S-X and Article 11
of Regulation S-X, respectively, are incorporated herein by reference to CIENA's
Current Report on Form 8-K as filed on April 1, 1999 and amended as of April 5,
1999.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment to the registration statement) which,
individually or when viewed together, represent a fundamental change in
the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
II-2
<PAGE> 19
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to the information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities and
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each of these post-effective amendments shall be deemed to
be a new registration statement relating to the securities being offered,
and the offering of those securities at that time shall be deemed to be
their initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities being offered, and the offering of those securities
at that time shall be deemed to be their initial bona fide offering.
(c) Insofar as directors, officers and controlling persons of the
Registrant are permitted to seek indemnification for liabilities arising under
the Securities Act, under the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
this indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a director, officer or
controlling person asserts a claim for indemnification against these types of
liabilities in connection with the securities being registered, other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it under these
circumstances is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of the issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Linthicum, State of Maryland, on June 18, 1999.
CIENA CORPORATION
By: /s/ PATRICK H. NETTLES, PH.D.
-----------------------------------
Patrick H. Nettles, Ph.D.
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Patrick
H. Nettles, Ph.D., Joseph R. Chinnici and G. Eric Georgatos, and each of them,
with full power of substitution and resubstitution and each with full power to
act without the other, his or her true and lawful attorney-in-fact and agent,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission or any state, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their, his or her substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: June 18, 1999 /s/ PATRICK H. NETTLES, PH.D.
---------------------------------------------------
Patrick H. Nettles, Ph.D.
President and Chief Executive Officer
Date: June 18, 1999 /s/ JOSEPH R. CHINNICI
---------------------------------------------------
Joseph R. Chinnici
Sr. Vice President, Chief Financial Officer
Principal Financial Officer
Date: June 18, 1999 /s/ ANDREW C. PETRIK
---------------------------------------------------
Andrew C. Petrik
Vice President, Controller and Treasurer
Principal Accounting Officer
</TABLE>
II-4
<PAGE> 21
<TABLE>
<S> <C>
Date: June 18, 1999 /s/ HARVEY B. CASH
---------------------------------------------------
Harvey B. Cash
Director
Date: June 18, 1999 /s/ BILLY B. OLIVER
---------------------------------------------------
Billy B. Oliver
Director
Date: June 18, 1999 /s/ JAGDEEP SINGH
---------------------------------------------------
Jagdeep Singh
Director
Date: June 18, 1999 /s/ MICHAEL J. ZAK
---------------------------------------------------
Michael J. Zak
Director
Date: June 18, 1999 /s/ STEPHEN P. BRADLEY
---------------------------------------------------
Stephen P. Bradley
Director
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5.1
HOGAN & HARTSON L.L.P.
111 South Calvert Street
Baltimore, Maryland 21202
June 18, 1999
Board of Directors
CIENA Corporation
1201 Winterson Road
Linthicum, MD 21090
Ladies and Gentlemen:
We are acting as counsel to CIENA Corporation, a Delaware
corporation (the "COMPANY"), in connection with its registration statement on
Form S-3, as amended (the "REGISTRATION STATEMENT") filed with the Securities
and Exchange Commission relating to the proposed public offering of up to
17,849,665 shares of the Company's common stock, par value $.01 per share, all
of which shares (the "SHARES") are to be sold by the Selling Stockholders named
therein including certain holders of Warrants and one holder of Options to
acquire certain of the Shares. This opinion letter is furnished to you at your
request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. Section 229.601(b)(5), in connection with the
Registration Statement.
For purposes of this opinion letter, we have examined copies of
the following documents:
1. An executed copy of the Registration Statement.
2. The Third Restated Certificate of Incorporation of the
Company, as certified by the Secretary of the State of the
State of Delaware on April 19, 1999 and by the Secretary
of the Company on the date hereof as then being complete,
accurate and in effect.
3. The Bylaws of the Company, as certified by the Secretary
of the Company on the date hereof as then being complete,
accurate and in effect.
4. Resolutions of the Board of Directors of Lightera adopted
at a meeting held on May 11, 1998 and September 25, 1998,
as certified by the Secretary of the Company on the date
hereof as then being complete, accurate and in effect,
relating to the issuance and sale of the Warrants and
Options.
5. Resolutions of the Board of Directors of the Company
adopted at a meeting held on March 14, 1999, as certified
by the Secretary of the Company on the date hereof as then
being complete, accurate and in effect, relating to the
issuance and
<PAGE> 2
sale of the Shares, the exchange of the Warrants and
Options and arrangements in connection therewith.
6. Executed copies of the Agreement and Plan of Merger, dated
March 15, 1999, by and among the Company, Lightera
Networks, Inc. and certain of the Selling Stockholders
(the "Merger Agreement"), relating to, among other things,
the issuance of the Shares.
7. Executed copies of the Warrants and the Stock Option
Agreement.
In our examination of the aforesaid documents, we have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity, accuracy and completeness of all documents submitted to us,
the authenticity of all original documents and the conformity to authentic
original documents of all documents submitted to us as copies (including
telecopies). This opinion letter is given, and all statements herein are made,
in the context of the foregoing.
This opinion letter is based as to matters of law solely on
Delaware corporate law. We express no opinion herein as to any other laws,
statutes, ordinances, rules, or regulations.
Based upon, subject to and limited by the foregoing, we are of
the opinion that (i) the Shares are validly issued, fully paid and
nonassessable, and (ii) following issuance of the Warrant and Option Shares
pursuant to the terms of the Option Agreement and the Warrant Agreements, and
receipt by the Company of the consideration for the Warrant and Option Shares
specified in the resolutions of the Board of Directors referred to in paragraph
4 above and in the Option Agreement and Warrant Agreements, the Warrant and
Option Shares will be validly issued, fully paid and nonassessable.
This opinion letter has been prepared for your use in connection
with the Registration Statement and speaks as of the date hereof. We assume no
obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion letter.
We hereby consent to the filing of this opinion letter as Exhibit
5.1 to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of CIENA Corporation of our report dated November 25, 1998
relating to the consolidated financial statements appearing in CIENA
Corporation's Annual Report on Form 10-K for the year ended October 31, 1998. We
also consent to the incorporation by reference of our report dated November 25,
1998, except as to Note 2 "Lightera" which is as of March 31, 1999 which appears
in the Current Report on Form 8-K of CIENA Corporation dated April 5, 1999 and
amended on April 5, 1999. We also consent to the reference to us under heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
McLean, Virginia
June 18, 1999
