Ciena Announces One-For-Seven Reverse Stock Split
Linthicum, MD – 08/31/2006 - Ciena® Corporation (NASDAQ: CIEN), the network specialist, today announced that its Board of Directors has approved a one-for-seven reverse split of its common stock. The reverse split will become effective as of 5:00 p.m. Eastern Time on September 22, 2006.
At Ciena’s annual meeting on March 15, 2006, shareholders approved a proposal to authorize the Board, in its discretion, to effect a reverse split of Ciena’s outstanding common stock at one of three approved ratios, at any time prior to the 2007 annual meeting, without further action by shareholders.
The purposes of the reverse split are to increase the per share trading price of Ciena’s common stock, thereby appealing to a broader range of investors; and to provide investors with more useful information in making period-to-period comparisons of Ciena’s earnings per share. To the extent that the reverse split does succeed in attracting more investor interest in the stock, shareholders may also benefit from improved trading liquidity of the stock.
Upon the effectiveness of the reverse stock split, Ciena shareholders will receive one new share of Ciena common stock for every seven shares they hold. Ciena’s common stock will begin trading on a split-adjusted basis when the market opens on September 25, 2006. For a period of approximately 20 trading days after the stock split becomes effective, NASDAQ will append a “D” to Ciena’s stock symbol in order to inform the investment community of the reverse stock split.
In connection with the reverse split, the total number of common shares authorized under Ciena’s Third Restated Certificate of Incorporation will be reduced from 980 million to 140 million shares. As of the end of Ciena’s fiscal third quarter 2006, there were approximately 590.9 million shares of Ciena’s common stock outstanding. Effecting the 1-for-7 reverse split will reduce that total to approximately 84.4 million shares. The reverse split will not change the number of shares of Ciena preferred stock authorized, which will remain at 20 million.
Treatment of Stock Options, Warrants and Convertible Notes
The number of common shares into which Ciena’s outstanding stock options, warrants and both issues of convertible notes are convertible, as well as the relevant exercise or conversion price per share, will be proportionately adjusted to reflect the reverse split. The number of shares authorized for issuance under Ciena’s equity compensation plans will also be reduced to reflect the reverse split.
Ciena will not issue any fractional shares of its common stock as a result of the reverse split. Instead, Ciena’s transfer agent, Computershare Shareholder Services, will aggregate all fractional shares held by Ciena shareholders into whole shares and arrange for them to be sold on the open market. In lieu of the fractional share, shareholders will receive a cash payment equal to their pro rata share of the total net proceeds of these sales. Shareholders will not be entitled to receive interest for the period of time between the effective date of the reverse split and the date the shareholder receives his or her cash payment.
Shareholders holding fewer than seven shares of Ciena common stock will receive only cash in lieu of fractional shares and will no longer hold any shares of Ciena common stock as of the effective time of the split.
Obtaining New Stock Certificates
Ciena will adopt a new stock certificate in connection with the implementation of the reverse split.
Computershare Shareholder Services has been retained to manage the exchange of stock certificates. Shareholders of record will receive a letter of transmittal providing instructions for the exchange of their certificates as soon as practicable following the effectiveness of the reverse split. Shareholders who hold their shares in “street name,” will be contacted by their banks or brokers with any instructions. For further information, shareholders and securities brokers should contact Computershare at 877-282-1168.
Ciena Corporation is the network specialist, focused on expanding the possibilities for its customers’ networks while reducing their cost of ownership. The company’s systems, software and services target and cure specific network pain points so that telcos, cable operators, governments and enterprises can best exploit the new applications that are driving their businesses forward.
NOTE TO INVESTORS
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date hereof; and Ciena’s actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q filed with the Securities and Exchange Commission on June 1, 2006. Forward-looking statements include statements regarding Ciena’s expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or similar words. Forward looking statements in this release include: the purposes of the reverse split are to increase the per share trading price of Ciena’s common stock, thereby appealing to a broader range of investors; and to provide investors with more useful information in making period-to-period comparisons of Ciena’s earnings per share; and, to the extent that the reverse split does succeed in attracting more investor interest in the stock, shareholders may also benefit from improved trading liquidity of the stock. Ciena assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Reverse Stock Split Questions & Answers: www.ciena.com/news/news_6136.htm
- Contact Information
- Nicole Anderson
- Ciena Corporation
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