Lumentum (LITE) DEF 14ADefinitive proxy

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Lumentum Holdings Inc.

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LUMENTUM HOLDINGS INC.

1001 RIDDER PARK DRIVE
SAN JOSE, CALIFORNIA 95131
October 3, 2024

Dear Lumentum Stockholders:

We are pleased to invite you to attend the Annual Meeting of stockholders of Lumentum Holdings Inc. on November 20, 2024, at 8:00 a.m. (Pacific Time), which will be a “virtual meeting” of stockholders, conducted via the Internet.

Fiscal 2024 marked the most challenging year for Lumentum since it first became a stand-alone public company nine years ago. Our markets experienced unprecedented declines, the largest in decades for our industry, as customers and their end-users substantially reduced purchases from suppliers to address the excess inventory built up during the COVID-19 pandemic in response to supply chain disruptions. 

Despite the demand challenges, fiscal 2024 was a pivotal year in the execution of our longer-term growth strategy. We believe our accomplishments in entering and establishing ourselves in attractive and rapidly growing markets have positioned us for multi-year accelerated growth beginning in fiscal 2025. 

Lumentum is committed to providing differentiated laser and photonics technologies that enable end-customers in the cloud, networking, and industrial technology markets to continue scaling and growing their applications. Each of these markets has long-term growth catalysts that expand our opportunities, as increasing demand for higher-performance photonic solutions used in infrastructure equipment continues to rise. This is particularly evident in the artificial intelligence and cloud infrastructure sectors, where the need for photonic solutions is accelerating. Within data centers, photonic-based solutions are increasingly employed to interconnect servers and compute accelerator chips, addressing the exponential growth in computational demands driven by artificial intelligence and machine learning. As data centers expand, they also require more networking infrastructure to connect different data centers together, in turn boosting demand for our optical networking products. Additionally, the expansion of data center infrastructure increases demand for higher volumes of more advanced semiconductor chips, which increasingly leverage laser-based fabrication, metrology, and packaging techniques. Over the years, we have built a highly differentiated and unique portfolio of foundational photonic technologies and manufacturing capabilities, positioning us well to meet the evolving needs of customers in each of these rapidly-growing markets.

In fiscal 2024, through our acquisition of Cloud Light, production capacity expansion in our indium phosphide semiconductor wafer fabs, and the launch of cutting-edge new products leveraging our core photonic technologies, we strengthened our presence in the rapidly growing cloud and artificial intelligence infrastructure markets. We realized synergies from prior acquisitions, including consolidating manufacturing operations into Lumentum factories, notably closing a major factory in China to reduce our fixed costs and increase utilization of our state-of-the-art manufacturing campus in Thailand. Additionally, we developed and introduced new products and solutions leveraging our core photonic technologies to capitalize on rapidly growing opportunities in the industrial markets, including in the manufacturing and packaging of advanced semiconductor chips utilized in the cloud, artificial intelligence, and electric energy production and storage markets. Sustainability is a priority for our business, our market-leading customers, as well as other stakeholders. As we execute our strategy, we remain committed to upholding the highest standards of social, ethical, and environmental responsibility. In fiscal 2024, we expanded our use of renewable energy sources across our global operations, which was well received by our customers who continuously evaluate their suppliers.

As we look to fiscal 2025 and beyond, we are optimistic. We believe the market headwinds that we faced this past fiscal year are beginning to subside and will transform into tailwinds during fiscal 2025. The broader networking and industrial technology markets we serve are stabilizing, and some customers are now providing more positive, forward-looking demand forecasts. 

We are confident in our ability to outpace market growth. We will achieve this by further expanding our presence in the rapidly growing Cloud and AI infrastructure markets, capitalizing on new customer opportunities as they transition to next-generation architectures that leverage our differentiated products and manufacturing capabilities. After a challenging fiscal 2024, I believe this is an exciting time for Lumentum stakeholders.

Our virtual Annual Meeting will be accessible at www.virtualshareholdermeeting.com/LITE2024. You will be able to listen live, submit questions, and vote online. Details on attending the online meeting and the business to be conducted are available in the accompanying Notice of Annual Meeting and Proxy Statement.

We are pleased to provide access to our proxy materials online under the U.S. Securities and Exchange Commission’s “notice and access” rules. 

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	Penelope A. Herscher
President and Chief Executive Officer	Chair

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LUMENTUM HOLDINGS INC.
1001 RIDDER PARK DRIVE
SAN JOSE, CALIFORNIA 95131

NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS

To Be Held at 8:00 a.m. Pacific Time on Wednesday, November 20, 2024

Dear Stockholders of Lumentum Holdings Inc.:
The 2024 Annual Meeting of stockholders (the “Annual Meeting”) of Lumentum Holdings Inc., a Delaware corporation, will be held virtually on Wednesday, November 20, 2024, at 8:00 a.m. Pacific Time. The virtual Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LITE2024, 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:

1.	the election of eight directors, to serve until our 2025 Annual Meeting of stockholders and until their successors are duly elected and qualified;
2.	the approval, on a non-binding, advisory basis, of the compensation of our named executive officers;
3.	the approval of the Amended and Restated 2015 Equity Incentive Plan; and
4.	the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending June 28, 2025.

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 26, 2024 as the record date for the Annual Meeting. Only stockholders of record on September 26, 2024 are entitled to notice of and to vote at the virtual Annual Meeting and any adjournments thereof. The Notice of Internet Availability of Proxy Materials, this proxy statement for the Annual Meeting (“Proxy Statement”) and the accompanying form of proxy were first distributed and made available on the Internet to stockholders on or about October 3, 2024.

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 Internet, phone or mail 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
San Jose, California
October 3, 2024

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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 eight directors. Each of the director nominees is standing for election for a one-year term ending at the next annual meeting of stockholders in 2025.	✓	Your board of directors recommends that you vote “FOR” the election of each of the eight nominees.

See page 21

Director Nominees

Committees

Other Current Public Company Boards

Name and Primary

Independent

Age

Director Since

Audit

Compensation

Governance

Harold L. Covert CFO, Carbice Corporation

✓

77

2015

None

Pamela F. Fletcher CEO, Sion Power Corporation

✓

58

2023

Chemours

Isaac H. Harris Founder and CEO, DATKI Partners

✓

58

2021

None

Penelope A. Herscher (Chair) Advisor to Entrepreneurs; Former CEO

✓

64

2015

ForviaSMART Global Holdings

Julia S. Johnson Vice President, GM, Mobile Computing Zebra Technologies

✓

58

2017

None

Brian J. Lillie President, Private Cloud Business Unit Rackspace Technology

✓

60

2015

None

Alan S. Lowe President and CEO, Lumentum

62

2015

None

Ian S. Small Advisor to Technology Companies; Former CEO

✓

60

2018

None

Member

Chair

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PROXY SUMMARY

Director Nominee Snapshot

Independence		Directors’ Age		Directors’ Diversity

Corporate Governance Highlights

The board of directors believes that good corporate governance is an important component in enhancing investor confidence in the Company and increasing stockholder value. The imperative to continue to develop and implement best practices throughout our corporate governance structure is fundamental to our strategy to enhance performance by creating an environment that increases operational efficiency and ensures long-term productivity growth. Solid corporate governance practices also ensure alignment with stockholder interests by promoting fairness, transparency and accountability in business activities among employees, management and the board.

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PROXY SUMMARY

Proposal No. 2 Non-binding Advisory Vote to Approve Executive Compensation
The board of directors is asking stockholders to approve, on a non-binding advisory basis, the compensation of the named executive officers as disclosed in this Proxy Statement.	✓	Your board of directors recommends that you vote “FOR” this proposal.

See page 28

Executive Compensation Key Points

Executive Compensation Structure

Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we believe executives with higher levels of responsibility and a greater ability to influence Lumentum’s results should receive a greater percentage of their compensation as performance-based compensation. In fiscal 2024, we compensated our named executive officers using the following elements for total target direct compensation:

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Proposal No. 3 Approval of the Amended and Restated 2015 Equity Incentive Plan
The board of directors is asking stockholders to approve the Amended and Restated 2015 Equity Incentive Plan to extend the expiration date of the plan for one year until June 23, 2026.	✓	Your board of directors recommends that you vote “FOR” this proposal.

See page 29

Proposal No. 4 Ratification of the Audit Committee’s Appointment of the Independent Registered Public Accounting Firm
The board of directors is asking stockholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending June 28, 2025.	✓	Your board of directors recommends that you vote “FOR” this proposal.

See page 36

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LUMENTUM HOLDINGS INC.
PROXY STATEMENT FOR 2024 ANNUAL MEETING OF STOCKHOLDERS

To Be Held Virtually at 8:00 a.m. Pacific Time on Wednesday, November 20, 2024

The accompanying proxy is solicited on behalf of the board of directors of Lumentum Holdings Inc. (“Lumentum”, “we”, “us” or the “Company”) for use at the Lumentum 2024 Annual Meeting of Stockholders (“Annual Meeting”) to be held virtually on Wednesday, November 20, 2024 at 8:00 a.m. Pacific Time, and any adjournment or postponement of the Annual Meeting. The virtual Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/LITE2024, where you will be able to listen to the meeting live, submit questions, and vote online. The Notice of Internet Availability of Proxy Materials and this proxy statement (“Proxy Statement”) for the Annual Meeting and the accompanying form of proxy were first distributed and made available on the Internet to stockholders on or about October 3, 2024. 

Internet Availability of Proxy Materials

In accordance with SEC rules, we are using the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and our annual report on Form 10-K for the fiscal year ended June 29, 2024 (“Annual Report”), and voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper or email copies of our proxy materials if they so choose. We believe this process makes the proxy distribution process more efficient and less costly and helps conserve natural resources.

Lumentum’s Annual Report, will be available with this Proxy Statement by following the instructions in the Notice of Internet Availability of Proxy Materials.

General Information about the Annual Meeting

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this Proxy Statement. You should read this entire Proxy Statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement and references to our website address in this Proxy Statement are inactive textual references only.

You will be voting on:

How does the board of directors recommend I vote on these proposals?
Our board of directors recommends a vote:

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PROXY STATEMENT FOR 2024 ANNUAL MEETING OF STOCKHOLDERS

Who is entitled to vote?
Holders of our common stock as of the close of business on September 26, 2024, the record date, may vote at the Annual Meeting. As of the record date, there were 68,626,033 shares of our common stock outstanding. In deciding all matters at the Annual Meeting, each stockholder will be entitled to one vote for each share of our common stock held by them on the record date. We do not have cumulative voting rights for the election of directors.

Stockholder of Record: Shares Registered in Your Name. If, on the record date, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A., then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you may vote at the Annual Meeting or vote by telephone, by Internet, or by filling out and returning the proxy card.

Beneficial Owner: Shares Registered in the Name of a Broker or Nominee. If, on the record date, your shares were held on your behalf in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares held in street name. Accordingly, the Notice of Internet Availability, Proxy Statement and any accompanying documents have been provided to your broker or nominee, who in turn provided the materials to you. As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares by using the voting instruction card or by following their instructions for voting on the Internet or by telephone.

How many votes are needed for approval of each proposal?

What is a quorum?
A quorum is the minimum number of shares required to be present at the Annual Meeting for the Annual Meeting to be properly held under our amended and restated bylaws and Delaware law. The presence, in person or by proxy, of a majority of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.

How do I vote?
If you are a stockholder of record, there are four ways to vote:

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Proxy cards submitted by mail must be received by November 19, 2024 to be voted at the Annual Meeting. Please note that the Internet and telephone voting facilities will close at 11:59 p.m. Eastern Time on November 19, 2024. Submitting your proxy, whether via Internet, by telephone or by mail, will not affect your right to vote at the Annual Meeting via the virtual meeting website should you decide to attend the Annual Meeting. If you are not the stockholder of record, please refer to the voting instructions provided by your nominee to direct your nominee on how to vote your shares. Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure that your vote is counted including how to attend and vote at the Annual Meeting.

All proxies will be voted in accordance with the instructions specified on the proxy. If you sign a physical proxy card and return it without instructions as to how your shares should be voted on a particular proposal at the Annual Meeting, your shares will be voted in accordance with the recommendations of our board of directors stated in this proxy.

Can I change my vote?
Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

Additionally, you can change your vote or revoke your proxy by attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not, by itself, revoke a proxy).

If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.

How can I attend the Annual Meeting?
You are entitled to participate in the Annual Meeting if you were a holder of Lumentum shares as of the record date of September 26, 2024. You will be able to attend online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/LITE2024. You also will be able to vote your shares electronically at the Annual Meeting. To participate, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied the proxy materials, or follow your broker’s instructions.

Beginning 30 minutes prior to the start of and during the online Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the audio webcast of the meeting. If you encounter technical difficulties accessing the audio webcast, please call our support team at 800-586-1548 (US) or 303-562-9288 (International).

What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our board of directors. Alan Lowe, Wajid Ali, and Jae Kim have been designated as proxy holders by our board of directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our board of directors as described above. If any matters not described in this Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
In accordance with the rules of the SEC, we have elected to furnish our proxy materials, including this Proxy Statement and our Annual Report, primarily via the Internet. As a result, we are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and request to receive a paper copy of the proxy materials by mail or e-mail. Instructions on how to access the proxy materials over the Internet or to request a paper or e-mail copy may be found in the Notice of Internet Availability of Proxy Materials. In addition, the notice contains instructions on how you may request access to proxy materials in printed form by mail or electronically on an ongoing basis.

How are proxies solicited for the Annual Meeting?
Our board of directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker or other nominee holds shares of our common stock on your behalf. In addition to using the Internet, our directors, officers and employees may solicit proxies in person and by mailings, telephone, facsimile, or electronic transmission, for which they will not receive any additional compensation.

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How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?
Brokerage firms and other intermediaries holding shares of our common stock in street name for customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of Deloitte & Touche LLP. Your broker will not have discretion to vote on the election of directors, the approval of the non-binding, advisory vote on the compensation of our named executive officers, or the approval of our Amended and Restated 2015 Equity Incentive Plan, each of which are “non-routine” matters, absent direction from you.

Where can I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we will file a Current Report on Form 8-K to publish preliminary results and will provide the final results in an amendment to such Current Report on Form 8-K as soon as they become available.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice of Internet Availability of Proxy Materials and, if applicable, our proxy materials, to multiple stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice of Internet Availability of Proxy Materials and, if applicable, our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice of Internet Availability of Proxy Materials and, if applicable, our proxy materials, such stockholder may contact our Investor Relations at 1 (408) 546-5483 or by mail at the following address:

Lumentum Holdings Inc.
Attention: Investor Relations
1001 Ridder Park Dr.
San Jose, California 95131

Stockholders who beneficially own shares of our common stock held in street name may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.

What is the deadline to propose actions for consideration at next year’s Annual Meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals
Stockholders may present proper proposals for inclusion in our Proxy Statement and for consideration at the next Annual Meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2025 Annual Meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices no later than June 5, 2025. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:

Lumentum Holdings Inc.
Attention: Secretary
1001 Ridder Park Dr.
San Jose, California 95131

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Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before the annual meeting by or at the direction of our board of directors, or (iii) properly brought before the annual meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for our 2025 Annual Meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:

In the event that we hold our 2025 Annual Meeting of stockholders more than 30 days before or more than 60 days after (other than as a result of adjournment) the one-year anniversary of the 2024 Annual Meeting, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no later than the close of business on the later of the following two dates:

If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.

Recommendation and Nomination of Director Candidates
You may propose director candidates for consideration by our Governance Committee. Any such recommendations should include the candidate’s name and qualifications for membership on our board of directors and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see “Corporate Governance—Governance Committee.”

In addition, our amended and restated bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Secretary within the time period described above under “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement. In addition, to comply with Rule 14a-19 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), stockholders must provide notice of the intent to solicit proxies in support of director nominees (other than our nominees) for the 2025 Annual Meeting of stockholders by notifying our Secretary no later than the dates set forth above with respect to nominations. Please note that the notice requirement under Rule 14a-19 is in addition to the applicable notice requirements under our amended and restated bylaws.  

Availability of Bylaws
A copy of our amended and restated bylaws may be obtained by accessing our public filings on the SEC’s website at www.sec.gov. You may also contact our Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

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CORPORATE GOVERNANCE

Our business affairs are managed under the direction of our board of directors. As of September 26, 2024, our board of directors consisted of nine (9) members, eight of whom qualified as “independent” under the Nasdaq listing standards. Janet Wong, a current member of our board of directors will not be standing for reelection at the Annual Meeting, Accordingly, the size of our board of directors will be decreased from nine to eight directors following the election of directors at the Annual Meeting.

Director Independence

Our board of directors has determined that the following directors are independent under the Nasdaq listing standards: Harold L. Covert, Pamela F. Fletcher, Penelope A. Herscher, Isaac H. Harris, Julia S. Johnson, Brian J. Lillie, Ian S. Small and Janet S. Wong.

Board Leadership Structure

Our board of directors has determined that it is in the best interests of the Company to maintain the board chair and chief executive officer positions separately. Ms. Herscher, an outside, independent director, serves as our board chair. The board of directors believes that having an outside, independent director serve as chair is the most appropriate leadership structure, as this enhances its independent oversight of management and the Company’s strategic planning, reinforces the board of directors’ ability to exercise its independent judgment to represent stockholder interests, and strengthens the objectivity and integrity of the board of directors. Moreover, we believe an independent chair can more effectively lead the board of directors in objectively evaluating the performance of management, including the chief executive officer, and guide it through appropriate board governance processes.

Ms. Herscher assists in developing the agenda for the board meetings, is the primary liaison between the board of directors and management, chairs meetings of the board of directors and executive sessions and assists with stockholder communications as requested. Ms. Herscher’s strong leadership skills, independent thinking and professional experience assist the board of directors in providing effective oversight of management, Company strategy and board effectiveness.

Board Committees and Meetings

During fiscal 2024, the board of directors held 10 meetings. The board of directors has three committees: an Audit Committee, a Compensation Committee, and a Governance Committee. The members of the committees during fiscal 2024 are identified below.

Each director attended at least 94% of the aggregate of all meetings of the board of directors and any committees on which he or she served during fiscal 2024 after becoming a member of the board of directors or after being appointed to a particular committee. The Company encourages, but does not require, the members of its board of directors to attend the Annual Meeting. All members of our board of directors who were directors at the time attended our 2023 Annual Meeting.

Audit Committee

The board of directors has determined that all members of the Audit Committee are “independent” as defined in the applicable rules and regulations of the SEC and the Nasdaq listing rules. The board of directors has further determined that Harold L. Covert and Janet S. Wong are each an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K of the Exchange Act. A copy of the Audit Committee charter can be viewed at the Company’s website at www.lumentum.com.

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CORPORATE GOVERNANCE

Compensation Committee

The board of directors has determined that all members of the Compensation Committee are “independent” as that term is defined in the applicable rules and regulations of the SEC and the Nasdaq listing rules. Each member of the Compensation Committee is a non-employee director under Rule 16b-3 promulgated under the Exchange Act. A copy of the Compensation Committee charter can be viewed at the Company’s website at www.lumentum.com.

During fiscal 2024, the Compensation Committee engaged Semler Brossy to assist the Compensation Committee with its analysis and review of the compensation of our executive officers, as well as a risk analysis of our compensation programs. Semler Brossy provides advice relating to our compensation peer group selection as well as support and specific analysis with regard to compensation data and formulation of recommendations for executive compensation. In addition, in 2024, Semler Brossy provided compensation data and assisted in formulation of recommendations for outside director compensation. Semler Brossy reports directly to our Compensation Committee, and the Compensation Committee has determined that Semler Brossy is independent from management and that the work of Semler Brossy has not raised any conflicts of interest. Semler Brossy attends most Compensation Committee meetings, works directly with the Compensation Committee Chair and Compensation Committee members, and sends all invoices, including descriptions of services rendered, to the Compensation Committee Chair for review and payment approval. All work performed for the Company by Semler Brossy in fiscal 2024 was in support of the Compensation Committee and authorized by the Compensation Committee. Additional information on the Compensation Committee’s processes and procedures for consideration of executive compensation are addressed in the section entitled “Compensation Discussion and Analysis – Compensation Decision Processes.”

Governance Committee

The board of directors has determined that all members of the Governance Committee are “independent” as that term is defined in the applicable Nasdaq listing rules. A copy of the charter can be viewed at the Company’s website at www.lumentum.com.  

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CORPORATE GOVERNANCE

Considerations in Evaluating Director Nominees

The Governance Committee selects nominees from a broad base of potential candidates and seeks qualified candidates with diverse backgrounds and experience who possess the highest ethical and professional character and will exercise sound business judgment. In identifying and reviewing potential candidates for the board of directors, the Governance Committee considers the individual’s experience in the Company’s industry, the general business or other experience of the candidate, the needs of the Company for an additional or replacement director, the personality of the candidate, diversity, the candidate’s interest in the business of the Company, as well as numerous other subjective criteria. Of greatest importance is the individual’s integrity, willingness to be involved and ability to bring to the Company experience and knowledge in areas that are most beneficial to the Company. It is the Governance Committee’s goal to nominate candidates with diverse backgrounds and capabilities, to reflect the diverse nature of the Company’s stakeholders (security holders, employees, customers and suppliers), while emphasizing core excellence in areas pertinent to the Company’s long-term business and strategic objectives. A candidate must have an employment and professional record which demonstrates, in the Governance Committee’s judgement, that the candidate has sufficient and relevant experience and background, taking into account positions held, and industries, markets and geographical locations served. A detailed description of the criteria used by the Governance Committee in evaluating potential candidates may be found in the charter of the Governance Committee.

From time to time the Governance Committee has engaged a third-party search firm to assist in identifying and reviewing candidates for membership on our board of directors.

Stockholder Recommendations and Nominations to the Board of Directors

As provided in the charter of the Governance Committee, Stockholders may recommend candidates to the Governance Committee for potential nomination. The Governance Committee will consider and make recommendations to the board of directors regarding any stockholder recommendations for candidates to serve on the board of directors. Stockholders wishing to recommend candidates for consideration by the Governance Committee may do so by writing to the Company’s Corporate Secretary at Lumentum Holdings Inc., 1001 Ridder Park Drive, San Jose, California 95131. Such writing must provide the candidate’s name, biographical data and qualifications, a document indicating the candidate’s willingness to act if elected, and evidence of the recommending stockholder’s ownership of Company stock not less than 90 days prior to the first anniversary of the date of the preceding year’s annual meeting to assure time for meaningful consideration by the Governance Committee. There are no differences in the manner in which the Governance Committee evaluates candidates for director based on whether the candidate is recommended by a stockholder. In addition, pursuant to our amended and restated bylaws, stockholders may nominate candidates for the board of directors. Our amended and restated bylaws specify in greater detail the requirements as to the timing, form and content of the stockholder’s notice of nomination. Such nominations must be delivered to or mailed and received at the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the first anniversary of the date of the preceding year’s annual meeting as first specified in the notice for such meeting. The nominating stockholder must also provide the information specified in our amended and restated bylaws. We recommend that any stockholder wishing to nominate a director review a copy of our amended and restated bylaws, which may be obtained by accessing our public filings on the SEC’s website at www.sec.gov.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is or has been an officer or employee of our Company or has had any relationship requiring disclosure under Item 404 of Regulation S-K during the last fiscal year. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or Compensation Committee.

Communications with the Board of Directors

Interested parties wishing to communicate with our board of directors or with an individual member or members of our board of directors may do so by writing to our board of directors or to the particular member or members of our board of directors and mailing the correspondence to our General Counsel at Lumentum Holdings Inc., 1001 Ridder Park Drive, San Jose, California 95131. Each communication should set forth (i) the name and address of the stockholder as it appears on our books, and if the shares of our common stock are held by a nominee, the name and address of the beneficial owner of such shares, and (ii) the number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.

Our General Counsel, in consultation with appropriate members of our board of directors as necessary, will review all incoming communications and, if appropriate, all such communications will be forwarded to the appropriate member or members of our board of directors, or if none is specified, to the chair of our board of directors.

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Corporate Governance Guidelines and Code of Business Conduct

Our board of directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Business Conduct that applies to all of our employees, officers and directors, including our chief executive officer, chief financial officer, and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct is posted on the Investors page under the Corporate Governance portion of our website at www.lumentum.com. We will post amendments to our Code of Business Conduct and waivers of our Code of Business Conduct for directors and executive officers on the same website.

Insider Trading Policy

Our board of directors has adopted an insider trading policy governing the purchase, sale, and/or other disposition of our securities by directors, officers, employees, and other covered persons. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of our insider trading policy was filed as an exhibit to our Annual Report on Form 10-K for fiscal 2024.

Risk Management

Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day management of risks the Company faces, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. In its risk oversight role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management, including the processes for the identification and assessment of risks, are appropriate and functioning as designed.

Our board of directors believes that open communication between management and our board of directors is essential for effective risk management and oversight. Our board of directors meets with our chief executive officer and other members of the senior management team at quarterly meetings of our board of directors, where, among other topics, they discuss strategy and risks facing the Company, as well as such other items as they deem appropriate. Management and the board of directors periodically assess the material risks of the Company to ensure that changes in the risk environment and related risk management is proactive.  As part of this approach, our board of directors also assesses both the materiality of a risk and its immediacy in making strategic decisions and helping management prioritize resources.

While our board of directors is ultimately responsible for risk oversight, our board committees assist our board of directors in fulfilling its oversight responsibilities in certain areas of risk. Our Audit Committee assists our board of directors in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, and legal and regulatory compliance, and discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our Audit Committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Our Audit Committee also monitors certain key risks on a regular basis throughout the fiscal year, such as regulatory risk, liquidity risk and cybersecurity risk. Our Governance Committee assists our board of directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board organization, membership and structure, and corporate governance, as well as oversight of our corporate social responsibility efforts. Our Compensation Committee assesses risks created by the incentives inherent in our compensation policies. Finally, our board of directors reviews strategic and operational risk in the context of reports from the management team, receives reports on all significant committee activities at each regular meeting, and evaluates the risks inherent in significant transactions.

Our board of directors and its committees engage outside advisors and experts from time to time to assist in understanding threats, trends, and our risk environment in general.  Our board of directors believes its current leadership structure supports the risk oversight function of the board.

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Compensation Program Risk Assessment

Consistent with SEC disclosure requirements, in fiscal 2024, a team composed of senior members of our human resources, finance and legal departments and our compensation consultant, Semler Brossy, inventoried and reviewed elements of our compensation policies and practices. This team then reviewed these policies and practices with our management team in an effort to assess whether any of our policies or practices have design elements that encourage excessive risk taking that is reasonably likely to have a material adverse effect on the Company. This assessment included a review of the various compensation programs and policies that are intended to mitigate excessive risk taking. Management reviewed and discussed the results of this assessment with the Compensation Committee, which consulted with Semler Brossy. Based on this review, we believe that our compensation policies and practices, individually and in the aggregate, do not create risks that are reasonably likely to have a material adverse effect on the Company.

Sustainability

Lumentum's Sustainability Council develops our sustainability strategy and drives performance. Led by the Sustainability Council Chair (currently our Director of Product Compliance and Corporate Social Responsibility) and the Executive Sponsor (currently our SVP Global Operations), the team is composed of representatives from a majority of our business departments. Sustainability Council activities are reported quarterly to the CEO and the Governance Committee. The Governance Committee is responsible for oversight of policies and programs that support our sustainability strategy. The Sustainability Liaison, a member of the board of directors, works closely with the Sustainability Council to guide efforts and provide a feedback loop between recommendations of the board of directors and implementation by the Sustainability Council.

We aim to illuminate the path forward to a more sustainable future. We recognize that our actions affect the people and communities where we live and work. We take our responsibility to the global community seriously, and to live up to that responsibility, we have built our sustainability program upon three pillars:

Planet: Lighter Impact

People: Positive Impact

Innovation: Breakthrough Impact

Our annual Corporate Sustainability Report covering fiscal year activities aligned to these pillars can be viewed at the Company’s website at www.lumentum.com.

Impact on Climate and Environment

As global citizens, we are impacted by climate change and are committed to addressing climate risks posed to our business. Since 2017, we annually complete the CDP Climate Change Questionnaire, which aligns to the Task Force for Climate-related Financial Disclosures ("TCFD") recommendations, to disclose our efforts. In fiscal 2024, we received a B rating for our 2023 CDP Climate Change disclosure for the second time. The B score indicates that Lumentum has addressed its environmental impacts and ensures good environmental management. The score is above average for the North American region and the electrical and electronic equipment sector, reflecting progress in our approach and dedication to transparency.

We are proud of our commitment to achieve net-zero GHG emissions (Scope 1 and 2) by 2030. To further this effort, in fiscal 2024, we sourced 79% renewable electricity for our global operations, up from 61% the year prior. Even with the expansion of our company through the acquisition of Cloud Light Technology, our Scope 1 and Scope 2 emissions decreased by 38% over the fiscal year, primarily due to the purchase of renewable electricity and site consolidations.

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We completed solar panel installations at our San Jose, California corporate headquarters and our largest manufacturing facility in Navanakorn, Thailand. We now have three solar installations including our Škoflijica, Slovenia site. Together, these sites are projected to avoid 4,700 metric tons of CO2e annually and account for 6% of Lumentum’s current electricity use. In fiscal 2024, we reduced our GHG intensity by 30% compared to our fiscal 2021 baseline, exceeding our goal of 25% GHG intensity reduction. In fiscal 2022,  we committed to setting a science-based emissions reduction target, in line with the Science Based Targets initiative ("SBTi"). This year, we submitted our Science Based Targets for validation by the SBTi and will report on the new goals in fiscal 2025.

As part of our commitment to a sustainable future, our goals regarding climate change include:

Our environmental goals also address water withdrawal and waste reduction as follows:

Human Rights

Lumentum is committed to upholding the human rights of all workers and to treat each person with dignity and respect. Lumentum enforces several policies to protect the rights of its workers. We acknowledge our primary human rights risk exists in our supply chain and we expect all suppliers to apply the same level of protection to workers’ rights as we do.  We prohibit the use or support of any form of child labor, forced labor or human trafficking at Lumentum and at our suppliers. This requirement is embedded in our Corporate Social Responsibility Policy, Code of Business Conduct, Supplier Code of Conduct and through our membership in the Responsible Business Alliance.  In addition, we ensure there is transparency in our own business and in our approach to tackling modern slavery throughout our supply chain, consistent with obligations under the UK Modern Slavery Act, the California Transparency in Supply Chains Act, and Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act. 

All our manufacturing sites conduct annual self-assessments to identify human rights risks and complete an internal or external audit that includes human rights issues. Additionally, in fiscal 2024, we introduced a new labor and ethics risk assessment process to identify and mitigate potential risks of adverse labor or ethics impacts. After an initial pilot at two of our sites in Asia, the labor and ethics risk assessment is now being rolled out to our sites globally. Furthermore, we conduct a supplier risk assessment annually and audit selected high-risk suppliers.

Lumentum understands the risks of forced labor. We have implemented practices designed to ensure forced labor does not exist in our operations nor in our supply chain. Lumentum pays all fees associated with recruitment and ongoing employment, and prohibits suppliers, including subcontractors and recruitment agencies, from charging workers any fees or deposits for employment. This applies to all types of workers, including migrant, temporary or subcontracted. All Lumentum sites require official government identity documents to verify age and right to work. Identity documents are used for verification purposes only and retained by the employee. Employment is at-will, and each employee is provided an employment agreement with clearly defined terms and conditions. Suppliers are required to follow these same requirements. 

Lumentum does not tolerate harassment, intimidation, or discrimination of any kind, which is clearly stated in our Code of Business Conduct and Supplier Code of Conduct. As an equal opportunity employer, Lumentum is committed to providing a workplace free of harassment, discrimination, and retaliation, as well as disrespectful, abusive, or unprofessional conduct.

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Talent Management

The performance of Lumentum relies upon the strength of our team. Consequently, our ability to recruit and retain the services of executive, engineering, sales and marketing, and support personnel is of critical importance. Highly qualified individuals – in particular, engineers in specialized technical areas and salespeople in specialized markets are in high demand, and competition for such individuals is intense. Therefore, we understand the importance of creating an attractive and rewarding work environment for our employees, including managing our brand in the job market.

At Lumentum, our strategic focus on leadership development is a cornerstone of our talent management initiatives, essential for fostering internal talent and maintaining a robust pipeline of future leaders. In fiscal year 2024, we reaffirmed this commitment by providing advanced leadership programs designed to address business challenges and enhance the professional and personal growth of our employees. These programs not only reflect our dedication to developing internal talent but also emphasize the critical role of leadership in sustaining an engaged and motivated workforce.

Aligned with our company’s growth and talent retention goals, our talent management and training programs are pivotal in identifying and cultivating high-potential employees for key future roles. Recognizing the importance of succession planning, we ensure the seamless transfer of institutional knowledge and smooth leadership transitions, whether due to retirements or new opportunities. By nurturing our internal talent pool for leadership positions, we proactively mitigate disruptions and reinforce our growth trajectory.

Several additional strategic initiatives align to fortify our workforce progression:

Our commitment to employee development fosters loyalty and engagement, resulting in reduced turnover rates. This fortifies Lumentum's capacity for resilience, positioning us to attain significant growth milestones while safeguarding our internal talent. 

Diversity, Inclusion and Belonging

In pursuing our goal to illuminate the path forward to a more sustainable future, our commitment to building a diverse and inclusive culture for employees is paramount. We aspire for our people to feel valued and included regardless of background, and for our community to be energized, engaged, and enabled. As such, we strive to be a guiding light that leads the charge for diversity, inclusion, and belonging (“DIB”). We value our differences and recognize the role that they play in bringing success to our customers, people, families, and communities. 

We strive to maintain a culture in which all employees feel empowered to bring their authentic selves to work —which, in turn, supports them in delivering their best work. Leadership spearheads these efforts by example. Our CEO, Alan Lowe, remains active on the Board of Directors for the Silicon Valley Leadership Group and on our internal DIB Council. He works jointly with our Chief Human Resources & Diversity Officer to hold the organization to our CEO Action for Diversity & Inclusion pledge, as well as our DIB charter and goals. Our DIB goals are taken into consideration in performance evaluations, including for executives and management. See our fiscal 2024 DIB goals below:

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As a global organization with a diverse workforce, we recognize the importance of driving meaningful change that enhances the employee experience. To better represent the various levels, business platforms, functions, and geographies across Lumentum, we expanded the DIB Council, thereby broadening its diversity of thought. This expansion has strengthened the council’s ability to deliver comprehensive outcomes that resonate with employees worldwide.

A key result of the Council’s enhancement was the refinement of our DIB purpose, vision, and mission. We remain committed to embedding DIB into our culture, policies, practices, and procedures, ultimately creating an environment where employees can authentically embody our core values of CARE, TRUST, OWN, DISCOVER, and DELIVER. At Lumentum, our dedication to prioritizing access, opportunities, and resources fosters an organization deeply invested in advancing the company’s mission and success—affirming that these efforts are not only ethically imperative but also a strategic approach to achieving our business objectives.

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PROPOSAL NO. 1
ELECTION OF DIRECTORS

Eight (8) directors have been nominated by our board of directors for election at the Annual Meeting, each to serve a one-year term until the 2025 Annual Meeting of Stockholders and until their successors are elected and qualified. The size of our board of directors will be decreased from nine to eight directors immediately following the election of directors at the Annual Meeting. All of the nominees are currently members of the board of directors and are standing for reelection. All of the director nominees are independent under the Nasdaq listing rules except for Mr. Lowe.

Each director nominee has consented to being named in this proxy statement and we have no reason to believe that the nominees named below will be unable or unwilling to serve as a director if elected.

Director Nominees

Our Governance Committee and our board of directors have evaluated each of the director nominees. Based on this evaluation, the Governance Committee and the board of directors have concluded that it is in the best interest of Lumentum and its stockholders for each of the proposed director nominees listed below to continue to serve as a director of Lumentum. The nominee’s individual biographies below contain information about their experience, qualifications and skills that led our board of directors to nominate them.

EXPERIENCE:
Mr. Covert currently serves as the chief financial officer of Carbice Corporation, a company developing thermal management technology. He previously served as the chief financial officer of Imagine Communications, an enterprise software company, from August 2019 to July 2022. Mr. Covert served as the chief financial officer of Harmonic Inc., a provider of video delivery infrastructure solutions, from October 2015 to June 2017. From 2014 to 2015, Mr. Covert was an independent business consultant, and from 2011 to 2014, he served as executive vice president and chief financial officer of Lumos Networks Corporation, a fiber-based service provider. From 2010 to 2011, Mr. Covert was an independent business consultant. From 2007 to 2010, Mr. Covert was president, chief financial officer, and chief operating officer of Silicon Image, Inc., a provider of semiconductors for storage, distribution and presentation of high-definition content. Mr. Covert holds a Bachelor of Science degree in Business Administration from Lake Erie College and a Master's of Business Administration degree from Cleveland State University and is also a Certified Public Accountant and Chartered Global Management Accountant.

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EXPERIENCE:
Ms. Fletcher is an experienced transportation and sustainability executive with over three decades of experience across the automotive and transportation industries. Ms. Fletcher currently serves as the Chief Executive Officer of Sion Power Corporation, a next generation battery company. Ms. Fletcher previously served as Senior Vice President, Chief Sustainability Officer and Corporate Innovation at Delta Air Lines, Inc. from February 2022 to August 2023, where she led Delta’s Sustainability and Innovation organizations in service of the company’s net-zero future. Prior to Delta Air Lines, Ms. Fletcher enjoyed a fifteen-year career at General Motors Company, where she held senior leadership positions such as Vice President of Global Innovation from October 2018 to February 2022 and Vice President of Electric Vehicles from October 2017 to September 2018. Ms. Fletcher is a well-known innovator in the transportation sector, having been named in Motor Trend’s 2018 and 2019 “Power List;” on Automotive News’s 2020 list of “100 Leading Women in the North American Auto Industry;” and on Crain’s 2021 list of “100 Most Influential Women.”  In addition to the Lumentum Board, she serves on the board of directors of The Chemours Company, a chemical company, and the Board of Advisors for the College of Engineering at the University of North Carolina Charlotte. Ms. Fletcher holds a Bachelor of Engineering degree from Kettering University and a Master of Engineering degree from Wayne State University. She has also completed Executive Education programs at Northwestern University’s Kellogg School of Management, Harvard Business School, and Stanford University's Graduate School of Business.

EXPERIENCE:
Mr. Harris is a senior operating executive with over 30 years of experience in the technology industry. He currently serves as Founder and President at DATKI Partners, a supply chain strategy consulting firm. Mr. Harris previously served as Advisor to the CEO at ZT Systems, a leading provider of innovative compute and storage solutions for hyperscale data centers, from January 2023 to January 2024. He previously served as Corporate Vice President of Global Supply Chain Operations at ZT Systems from April 2020 to January 2023. Mr. Harris also currently serves as a board director for Trajectory Foundation, a non-profit organization he joined in April 2022. Trajectory Foundation helps Black students attend Historically Black Colleges and Universities through scholarship awards. From October 2011 to March 2020, he held several senior leadership positions at Cisco Systems, a provider of technologies that power the internet, most recently as Vice President, Supply Chain Operations. Previously, Mr. Harris held several senior leadership roles at HP Inc., a provider of technology hardware, including as Vice President, Supply Chain for Notebook Global Business Unit. As a passionate advocate for diversity, inclusion, and equality in the workplace, Mr. Harris has made a career of creating opportunities and making positive change. He is an active member of the Executive Leadership Council and has previously served on Howard University’s Business School Advisory Board. Additionally, he was recognized by Savoy Magazine as one of the Most Influential Black Executives in Corporate America in 2020. Mr. Harris holds a Master of Business Administration degree from the University of Chicago Booth School of Business, a Master of Business Administration degree from the Katholieke Universiteit Leuven (Belgium) School of Applied Economic Sciences, and a Bachelor of Business Administration degree in Finance from Loyola University Chicago.

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EXPERIENCE:
Ms. Herscher is a seasoned technology public company board director, executive, and entrepreneur, with more than 15 years of experience as a high-tech CEO in Silicon Valley and more than 15 years of experience serving on public company boards of directors. She also currently serves as a member of the board of directors of Forvia SE, an automotive parts manufacturer, publicly traded in France, and SMART Global Holdings, a technology solutions company. She also serves on the board of Modern Health, a private health benefits company. Ms. Herscher previously served as a member of the board of directors of Delphix Corp., a data analytics company, from 2018 to 2024, Embark Technologies, a transportation technology company, from 2022 to 2023, Verint Systems Inc., a software analytics company, from 2017 to 2021, PROS Holdings Inc., a SaaS company, from  2018 to  2021, and Rambus, Inc. from 2006 to 2018 and Viavi from 2008 until Lumentum’s separation from Viavi in 2015. From 2004 to 2015, Ms. Herscher held the position of president and chief executive officer at FirstRain, an enterprise software company, and from 2002 to 2003, she held the position of executive vice president and chief marketing officer of Cadence Design Systems, Inc. an electronic design automation software company. From 1996 to 2002, Ms. Herscher was president and chief executive officer of Simplex Solutions, taking the company public in 2001, prior to its acquisition by Cadence in 2002. Ms. Herscher holds a BA Hons, MA in Mathematics from Cambridge University in England.

EXPERIENCE:
With 30 years of product management, product development, operations, and technology experience, Ms. Johnson is currently the senior vice president and general manager for Mobile Computing at Zebra Technologies, a global leader in enterprise-level data capture and automatic identification solutions providing businesses with operational visibility, a position she has held since April 2023. Before moving into her current role, Ms. Johnson was the vice president and general manager of Mobile Computing from January 2022 to April 2023 and previously the vice president of Product Management, Portfolio & Strategy, Mobile Computing Business from August 2019 to January 2022 at Zebra Technologies. Previously, Ms. Johnson served as senior vice president of product management and marketing at Verifone, a global provider of technology that enables electronic payment transactions, a position she held from March 2017 to October 2018. Prior to Verifone, Ms. Johnson was corporate vice president of product management at Lenovo, a Chinese multinational technology company selling personal computers, tablet computers, smartphones, and other hardware, from 2014 to 2016. Before Lenovo, Ms. Johnson was corporate vice president of product management at Google from 2012 to 2014, and prior to Google was vice president of product management at Motorola, a global telecommunications company. She served on the board of Superconductor Technologies, Inc., a developer of superconducting materials and manufacturing processes from October 2018 until September 2021. Ms. Johnson earned an M.S. in Business Management at M.I.T.’s Sloan School, an M.S. in Materials Science and Engineering from M.I.T., and an A.B. in Math/Physics from Albion College.

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EXPERIENCE:
Mr. Lillie is a technology industry veteran with 30 years of executive and board experience in high-growth companies. He is currently President of the Private Cloud Business Unit at Rackspace Technology, a leading, end-to-end multi-cloud technology services company, a position he has held since January 2023. Prior to Rackspace, he served as Chief Product and Technology Officer at Zayo Group Holdings, Inc., a provider of communication infrastructure services, a position he held from April 2021 until May 2022, and was an Executive in Residence from November 2020 until April 2021. Before Zayo, Mr. Lillie served as the chief product officer for Equinix, Inc., a global provider of data center and internet exchange services, from October 2017 to April 2019, driving the products and services strategy and development of next-generation products for the company. Prior to that, from August 2016 to October 2017, Mr. Lillie served as chief customer officer and executive vice president of global technology services, responsible for the vision and execution for customer experience globally at Equinix, while also responsible for all technology and engineering services for the company. He also served as global chief information officer for Equinix from August 2008 to August 2016. Previous to Equinix, Mr. Lillie held several executive-level roles at Verisign, a provider of intelligent infrastructure services, including vice president of global sales operations and vice president of information systems. Mr. Lillie previously served as a member of the board of directors of Talend, S.A., from May 2018 until February 2021. Mr. Lillie holds a Master of Science degree in Management from Stanford University’s Graduate School of Business, a Master of Science degree in Telecommunications Management from Golden Gate University, and a Bachelor of Science degree in Mathematics from Montana State University.

EXPERIENCE:
Mr. Lowe has served as Lumentum’s president and chief executive officer since July 2015. Prior to Lumentum’s separation from Viavi in 2015, Mr. Lowe was employed by Viavi. Mr. Lowe joined Viavi in September 2007 as senior vice president of the Lasers business and became executive vice president and president of Viavi’s communications and commercial optical products business in October 2008. Prior to joining Viavi, Mr. Lowe was senior vice president, customer solutions group at Asyst Technologies, Inc., a leader in automating semiconductor and flat panel display fabs. From 2000 to 2003, he was president and chief executive officer of Read-Rite Corporation, a manufacturer of thin-film recording heads for disk and tape drives. From 1989 to 2000, Mr. Lowe served in roles of increasing responsibility at Read-Rite, including president and chief operating officer, and senior vice president of customer business units. Mr. Lowe holds Bachelor of Arts degrees in computer science and business economics from the University of California, Santa Barbara, and completed the Stanford Executive Program in 1994.

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ELECTION OF DIRECTORS

EXPERIENCE:
Mr. Small is an experienced technology leader. He served as the chief executive officer of Evernote Corporation, a mobile and desktop personal productivity application provider, from October 2018 until its acquisition by Bending Spoons S.p.A. in January 2023. From 2009 to 2014, he served as the chief executive officer of TokBox, Inc., a platform-as-a-service provider of embedded video communications, which was acquired by Telefonica S.A. in 2012, and from 2014 until 2018, he was chairman of the board of TokBox. From 2013 to 2016, he held a variety of positions at Telefonica S.A., a global broadband and telecommunications provider, most recently as its chief data officer. Mr. Small currently serves on the board of directors at Snapdocs, Inc., a venture-backed company in the mortgage automation space and, since July 2024, as an Advisor to Squint, providers of an AR/AI manufacturing intelligence platform. He previously served on the board of directors of Oclaro, Inc. from September 2017 until the acquisition by Lumentum in December 2018. Mr. Small earned a Master’s degree in Computer Science and a Bachelor of Science degree in Engineering Science from the University of Toronto.

Vote Required
Each director will be elected by the affirmative vote of a majority of the votes cast, meaning that the number of votes cast “FOR” a director nominee exceeds the number of votes cast “AGAINST” that nominee. Abstentions and broker non-votes are not counted as votes cast for or against such director’s election and therefore will have no impact on the outcome of the vote.

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Director Compensation

The compensation program for our non-employee directors (“Outside Directors”) is designed to attract and retain high quality directors and to align director interests with those of our stockholders. The compensation program was amended in February 2022 upon recommendation by the Compensation Committee and approval by the board of directors, with input from Semler Brossy regarding competitive practices.  In June 2023, the board of directors approved a temporary reduction in cash compensation of 10% beginning July 2, 2023 which was extended through the end of fiscal year 2024 as part of company-wide cost reduction efforts. The compensation of our Outside Directors is reviewed regularly by the Compensation Committee, which review includes a market assessment and an analysis by Semler Brossy. As part of this analysis, Semler Brossy reviews non-employee director compensation trends and data from peer companies. Following such review, the Compensation Committee makes a recommendation to the board of directors. Our Outside Directors receive compensation in the form of equity granted under the terms of our Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”) and cash, as described below:

Equity Compensation

Initial Award. On the date of the first meeting of our board of directors or Compensation Committee occurring on or after the date on which the individual first became an Outside Director, such Outside Director is granted an initial award of restricted stock units (“RSUs”) with a value equal to $100,000 (the “Initial RSU Award”). The Initial RSU Award vests in three annual installments from the commencement of the individual’s service as an Outside Director, subject to continued service as a director through the applicable vesting date. If a director’s status changes from an employee director to an Outside Director, he or she does not receive an Initial RSU Award.

Annual Awards. On the date of each annual meeting of our stockholders, upon election, each Outside Director is granted an award of RSUs with a value equal to $220,000 (the “Annual RSU Award”). For Outside Directors that are elected other than at the annual meeting, the Outside Director is granted the Annual RSU Award, pro-rated for the time to be served prior to the next annual meeting. The Annual RSU Award vests upon the earlier of the day prior to the next annual meeting or one year from the grant date, subject to continued service as a director through the applicable vesting date.

The number of shares subject to equity awards is calculated by dividing the value by the average of the volume weighted average trading price of our common stock during the calendar month preceding the grant date.

Under the terms of the 2015 Plan, no Outside Director may be granted equity awards within any fiscal year which exceeds, in the aggregate, that number of shares equal to the quotient of $500,000 divided by the closing price on the last trading day immediately preceding the date on which the applicable equity award is granted to the Outside Director.

Upon retirement of an Outside Director, all unvested RSUs automatically vest in full. The treatment of unvested RSUs held by an Outside Director upon a change in control is determined by the terms of the 2015 Plan.

Cash Compensation

Annual Fee. Each Outside Director receives an annual cash retainer of $85,000 for serving on our board of directors (the “Annual Fee”), paid quarterly. In addition to the Annual Fee, the non-employee board chair receives an additional cash retainer of $100,000.

Meeting Fees. Each Outside Director will receive $3,000 for each Board meeting attended in excess of eighteen (18) meetings per year.

Committee Service. The chairs of the three standing committees of our board of directors receive the following annual cash retainers, paid quarterly. There are no meeting fees for committee service.

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Outside Director Compensation for Fiscal 2024

The following table provides information regarding the total compensation that was paid to each of our Outside Directors in fiscal 2024. As noted above, in fiscal year 2024, the cash compensation of directors was reduced by 10% as part of company-wide cost-reduction efforts.

Directors who are also our employees receive no additional compensation for their service as directors. See “Executive Compensation” for information about Mr. Lowe’s compensation.

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PROPOSAL NO. 2
ADVISORY VOTE TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and SEC rules, we are seeking the approval of the Company’s stockholders, on a non-binding, advisory basis, of the compensation of our NEOs as disclosed in this Proxy Statement.

Our executive compensation program is designed to attract, retain and motivate employees and to serve the long-term interests of our stockholders. Our executive compensation program promotes performance-based compensation and has evolved to be more aligned with recognized best practices and to address market realities.

The items below contain a few key points regarding our compensation program:

The Compensation Discussion and Analysis section of this Proxy Statement contains a detailed discussion of our compensation philosophy, changes made to our 2024 and 2025 executive compensation programs, and the alignment of our NEOs' compensation with our performance. We are asking our stockholders to vote, on a non-binding, advisory basis, to approve the compensation paid to our NEOs, as described in the Compensation Discussion and Analysis and the compensation table sections of this Proxy Statement. We currently hold our advisory vote to approve the compensation paid to our NEOs on an annual basis, and our next such vote will be at our 2025 Annual Meeting.

Accordingly, we ask stockholders to vote “FOR” the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in this Proxy Statement for the 2024 Annual Meeting of stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table, and other related tables and disclosures.”

Vote Required
The approval of the non-binding advisory vote on the compensation of the Company’s named executive officers requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. As a result, abstentions will have the same effect as votes against the proposal. Broker non-votes will have no effect on the outcome of this vote.

This “say on pay” vote is advisory and therefore not binding on the Company, the board of directors or the Compensation Committee. However, the board of directors and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements.

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PROPOSAL NO. 3
APPROVAL OF THE AMENDED AND RESTATED 2015 EQUITY INCENTIVE PLAN

We are seeking stockholder approval to amend our Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”) solely to extend the expiration date of the 2015 Plan by one year until June 23, 2026, unless earlier terminated in accordance with its provisions. No other changes to the 2015 Plan are being made.

Our board of directors approved the amended and restated 2015 Plan in September 2024, subject to stockholder approval at the 2024 Annual Meeting. Our board of directors has determined that it is in our best interests and the best interests of our stockholders to approve this proposal. Our board of directors recommends that stockholders vote for this proposal at the 2024 Annual Meeting.

If stockholders approve this proposal, the amended and restated 2015 Plan will become effective as of the date of stockholder approval. If stockholders do not approve this proposal, the term extension will not become effective and our 2015 Plan will terminate no later than June 23, 2025. Following any such termination, we would not be able to issue equity awards under the 2015 Plan to meet our incentive, recruiting and retention objectives. This will restrict our ability to attract and retain the individuals necessary to drive our performance and increase long term stockholder value.

Our executive officers and directors are eligible to receive equity awards under the 2015 Plan and therefore have an interest in this proposal. The remainder of this discussion, when referring to the 2015 Plan, refers to the amended and restated 2015 Plan as if this proposal is approved by our stockholders, unless otherwise specified or the context otherwise references the 2015 Plan prior to amendment and restatement.

Reasons for Voting for this Proposal

Equity awards are a key element of our compensation program. The Company believes a compensation policy that includes a balanced mix of cash and equity is the most effective way to attract and retain talented employees whose interests are aligned with stockholders. Without approval of the term extension, we may be constrained to pay competitively and at a serious competitive disadvantage going forward. The key reasons for approving this proposal are as set forth below.

1. The Extension of the Expiration Date is the Only Proposed Change. The Company is not Seeking Additional Shares or Making Any Other Changes to the 2015 Plan

When the 2015 Plan was established on June 23, 2015, it had a ten-year term. We seek to extend that initial term at this time in order to avoid termination of the 2015 Plan on June 23, 2025. An extension of one year to June 23, 2026 would allow us to continue to grant equity awards under the 2015 Plan during that extended term consistent with our compensation program and objectives. 

2. Long-Term Equity is a Key Component of Achieving our Compensation Objective and Failure to Extend the Expiration of the 2015 Plan Will Impair our Ability to Attract and Retain Employees

Our overall compensation objective is to compensate our personnel in a manner that attracts and retains the highly talented employees necessary to manage and staff a high-growth business in an innovative and competitive industry. Our employees are our most valuable asset, and we strive to provide them with compensation packages that are competitive, that reward personal and company performance, and help meet our retention needs. Equity awards, whose value depends on our stock performance, and which require continued service over time before any value can be realized, help achieve this objective and are a key element of our compensation program. Equity awards also reinforce employees’ incentives to manage our business as owners, aligning employees’ interests with those of our stockholders.

We believe we must continue to use equity compensation on a broad basis to help attract, retain and motivate employees to continue to grow our business, develop new products and ultimately increase stockholder value. As of August 31, 2024, approximately 3,136 of our regular, full-time employees held outstanding equity awards. If the 2015 Plan expires on June 23, 2025, we will no longer be able to grant equity awards under the 2015 Plan after such date.  

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APPROVAL OF THE AMENDED AND RESTATED 2O15 EQUITY INCENTIVE PLAN

3. The 2015 Plan Includes Compensation and Governance Best Practices

The 2015 Plan includes provisions that are considered best practice for compensation and corporate governance purposes. These provisions protect our stockholders’ interests, as follows:

Our executive officers and directors have an interest in the approval of the 2015 Plan because they are eligible to receive equity awards under the 2015 Plan.

Summary of the 2015 Equity Incentive Plan, as Amended and Restated

The following is a summary of the operation and principal features of the 2015 Plan. However, this summary is not a complete description of all of the provisions of the 2015 Plan and is qualified in its entirety by the specific language of the 2015 Plan. A copy of the 2015 Plan is provided as Appendix A to this Proxy Statement.

Purpose

The purpose of the 2015 Plan is to provide incentives to attract, retain, and motivate eligible persons whose present and potential contributions are important to our success by offering them an opportunity to participate in our future performance. These incentives may be provided through the granting of stock options, stock appreciation rights, dividend equivalent rights, restricted stock awards, restricted stock units, performance units, and performance shares.

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APPROVAL OF THE AMENDED AND RESTATED 2O15 EQUITY INCENTIVE PLAN

Authorized Shares

There are currently 18,400,000 shares of Common Stock reserved under the 2015 Plan. As of August 31, 2024, approximately 381,665 shares remained available for grant under the 2015 Plan. This number would not change if the proposal is approved. Each share subject to an award under the 2015 Plan counts against the numerical limits of the 2015 Plan as one share for every one share subject thereto. Shares that actually are issued under the 2015 Plan will not be returned to the 2015 Plan and will not be available for future issuance under the 2015 Plan, except that if unvested shares are forfeited or repurchased by us for an amount not greater than their original purchase price, such shares will become available for future grant under the 2015 Plan. For stock options and stock appreciation rights that are exercised, the gross number of shares subject to the award will cease to be available under the 2015 Plan, whether or not the award is net settled for a lesser number of shares, or if the shares are utilized to exercise an award. If shares are withheld to pay any tax withholding obligations applicable to an award, then the gross number of shares subject to the award will cease to be available under the 2015 Plan.

Administration of the 2015 Plan

Our board of directors, or a committee appointed by the board of directors, administers our 2015 Plan. The administrator has the power to select the employees, directors, and consultants to whom awards may be granted, to determine whether and to what extent awards are granted, to determine performance-based equity awards and the applicable performance criteria, performance period, and performance award formula, to approve forms of award agreements for use under the 2015 Plan, to determine the terms and conditions of awards granted under the 2015 Plan, to amend the terms of any outstanding awards granted under the 2015 Plan (provided that any amendment that would have a materially adverse effect on the grantee’s rights under an outstanding award will not be made without the grantee’s written consent), to construe and interpret the terms of the 2015 Plan and awards, to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions, and to take other action, not inconsistent with the terms of the 2015 Plan, as the administrator deems appropriate. The administrator may only institute an exchange program whereby the exercise prices of outstanding awards may be reduced or outstanding options or stock appreciation rights may be surrendered or canceled in exchange for awards with a lower exercise price, full value awards, or payments in cash if we obtain an affirmative vote of holders of the majority of its stockholders.

Eligibility

All types of awards may be granted to our employees, non-employee directors, and consultants of our parent or subsidiary corporations. Incentive stock options may be granted only to employees who, as of the time of grant, are employees of ours or any parent or subsidiary corporation of ours. As of August 31, 2024, we had approximately 7,560 employees (including five executive officers), eight non-employee directors and 23 consultants. Except with respect to 5% of the maximum number of shares issuable under the Plan, no award will vest earlier than one year following the date of grant; provided, however, that vesting of an award may be accelerated upon the death, disability, or involuntary termination of the service of the grantee, or in connection with a corporate transaction, as defined in the 2025 Plan.

Stock Options
Stock options may be granted under our 2015 Plan. Each option is evidenced by an award agreement that specifies the exercise price, the term of the option, forms of consideration for exercise, and such other terms and conditions as the administrator determines, subject to the terms of the 2015 Plan. The exercise price of options granted under our 2015 Plan must be at least equal to the fair market value of our common stock on the date of grant, except in special, limited circumstances as set forth in the 2015 Plan. The maximum term of an option will be specified in an award agreement, provided the term of an option will be no more than 8 years. However, with respect to any incentive stock option granted to a participant who owns more than 10% of the voting power of all classes of our outstanding stock, the term must not exceed five years and the per share exercise price must equal at least 110% of the fair market value of a Share on the grant date. Generally, the fair market value of our common stock is the closing sales price on the relevant date as quoted on the Nasdaq stock market.

Options will be exercisable at such times and under such conditions as determined by the administrator and as set forth in the applicable award agreement. An option is deemed exercised when we receive notice of exercise and full payment of the Shares to be exercised, together with applicable tax withholdings. No option granted to an employee who is a non-exempt employee for the purposes of the Fair Labor Standards Act of 1938, as amended (the “FLSA”) will be first exercisable until at least 6 months following the date of grant of such option.

After termination of an employee, director or consultant, he or she may exercise his or her option for the period of time stated in the option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for twelve months. In all other cases, the option will generally remain exercisable for 90 days. However, an option may not be exercised later than the expiration of its term.

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Stock Appreciation Rights
Stock appreciation rights may be granted under our 2015 Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the exercise date and the date of grant. Each stock appreciation right is evidenced by an award agreement that specifies the exercise price, the term of the award (which may not exceed eight years), and other terms and conditions as determined by the administrator, subject to the terms of the 2015 Plan and provided that no stock appreciation right granted to an employee who is a non-exempt employee for the purposes of the FLSA will be first exercisable until at least six months following the date of grant of such SAR. The per share exercise price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant. Stock appreciation rights will be exercisable at such times and under such conditions as determined by the administrator and set forth in the applicable award agreement. At the discretion of the administrator, the payment upon exercise of stock appreciation right may be paid in cash or with Shares, or a combination of both.

Dividend Equivalent Rights
Dividend equivalent rights may be granted under our 2015 Plan. Dividend equivalent rights allow the recipient to receive compensation or a credit to the recipient’s account measured by cash dividends paid with respect to shares of Common Stock. Each dividend equivalent right is evidenced by an award agreement that specifies terms and conditions as determined by the administrator, subject to the terms of the 2015 Plan. All dividend equivalents will be subject to the same terms and conditions, including vesting conditions, as the awards to which they relate and shall not be paid or settled prior to the time that the underlying award vests. No Dividend Equivalents shall be paid with respect to any shares underlying any unvested portion of a 2015 Plan award.

Restricted Stock Awards
Restricted stock may be granted under our 2015 Plan. Restricted stock awards are grants of shares that are subject to various restrictions, including restrictions on transferability and forfeiture provisions. Each restricted stock award granted will be evidenced by an award agreement specifying the number of shares subject to the award, any period of restriction, and other terms and conditions of the award, as determined by the administrator, subject to the terms of the 2015 Plan. Restricted stock awards may (but are not required to) be subject to vesting conditions, as the administrator specifies, and the shares acquired may not be transferred by the participant until the vesting conditions (if any) are satisfied. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted stock awards generally will have voting rights and rights to dividends and other distributions with respect to such shares upon grant without regard to vesting, subject to the limitations set forth in the 2015 Plan with respect to no receipt of dividends, distributions or dividend equivalents prior to vesting. See “Limitations on Awards” section below.

Restricted Stock Units
Restricted stock units may be granted under our 2015 Plan. Each restricted stock unit granted is a bookkeeping entry representing an amount equal to the fair market value of one share. Each restricted stock unit award will be evidenced by an award agreement that specifies the number of restricted stock units subject to the award, any vesting criteria (which may include accomplishing specified performance criteria or continued service to us), form of payout, and other terms and conditions of the award, as determined by the administrator, subject to the terms of the 2015 Plan. Restricted stock units result in a payment to a participant if any performance goals or other vesting criteria are achieved or the awards otherwise vest. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. The administrator determines in its sole discretion whether an award will be settled in stock, cash, or a combination of both.

Performance Units and Performance Shares
Performance units and performance shares may be granted under our 2015 Plan. Performance units and performance shares are awards that will result in a payment to a participant if performance criteria established by the administrator are achieved or the awards otherwise vest. Each award of performance units or performance shares will be evidenced by an award agreement specifying the number of units or shares (as applicable), any vesting conditions, the performance period, and other terms and conditions of the award, as determined by the administrator, subject to the terms and conditions of the 2015 Plan. The administrator will establish any performance criteria or other vesting criteria (which may include continued service) in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out. After the grant of performance units or performance shares, the administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance units or performance shares. The administrator, in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares, or in some combination of both.

Limitations on Awards
The maximum number of shares with respect to which awards may be granted to any individual in any fiscal year is 1,000,000 shares. The maximum dollar amount that may become payable to any individual in any fiscal year under awards denominated in U.S. dollars (including performance unit awards) is $20,000,000. However, in connection with an individual’s commencement of service or first promotion in any fiscal year, an individual may be granted awards for an additional 1,000,000 shares or U.S. dollar denominated awards providing for payment in any fiscal year of up to an additional $20,000,000. The limitations in this paragraph do not apply to non-employee directors, who are instead subject to much lower requirements described in the “Non-Employee Director Compensation Limits” below.

No dividends, Dividend Equivalents, or other distributions shall be paid with respect to any shares underlying any unvested portion of a 2015 Plan award.

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APPROVAL OF THE AMENDED AND RESTATED 2O15 EQUITY INCENTIVE PLAN

Non-Employee Director Compensation Limits
Our 2015 Plan provides that all non-employee directors will be eligible to receive all types of awards (except for incentive stock options) under the 2015 Plan. However, in any fiscal year, a non-employee director may not be granted equity awards (the value of which will be based on the fair market value determined on the last trading day immediately preceding the date on which the applicable Award is granted to such director) and be provided any other compensation (including without limitation any cash retainers or fees) with an aggregate value of more than $500,000.

Non-Transferability of Awards
Unless the administrator provides otherwise, our 2015 Plan generally does not allow for the transfer of awards, and only the recipient of an award may exercise an award during his or her lifetime.

Certain Adjustments

In the event of any change in the shares effected without receipt of consideration by us, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in our capital structure, or in the event of payment of a dividend or distribution to our stockholders in a form other than our Common Stock (excepting regular, periodic cash dividends) that has a material effect on the fair market value of shares, appropriate and proportionate adjustments will be made in the number and kind of shares subject to the 2015 Plan and to any outstanding awards, the maximum number of shares with respect to which awards may be granted individual in any fiscal year of ours, and in the exercise or purchase price per share under any outstanding award in order to prevent dilution or enlargement of rights under the 2015 Plan.

Corporate Transactions

Our 2015 Plan provides that in the event of a corporate transaction, as defined in the 2015 Plan, all outstanding awards will terminate unless they are assumed in connection with the corporate transaction. If a portion of an award is neither assumed nor replaced by the successor entity, such portion of the award will become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value), immediately prior to the effective date of such corporate transaction.

Forfeiture Events

Our 2015 Plan provides the flexibility for the administrator to subject awards to reduction, cancellation, forfeiture or recoupment provisions, including upon any accounting restatement due to our material noncompliance with any financial reporting requirements of securities laws as a result of which, and to the extent that, such reduction, cancellation, forfeiture, or recoupment is required by applicable securities laws, including, without limitation, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It also requires any participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, along with any participant who knowingly or through gross negligence engages in the misconduct, or who knowingly or through gross negligence failed to prevent the misconduct, to reimburse us if we are required to prepare an accounting restatement due to the material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, for (i) the amount of any payment in settlement of an award received by such participant during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document embodying such financial reporting requirement, and (ii) any profits realized by such participant from the sale of securities of our during such 12-month period.

Plan Amendment; Termination

Our board of directors may amend, suspend, or terminate the 2015 Plan at any time, provided that no suspension or termination of the 2015 Plan will adversely affect any rights under awards already granted under the Plan and no amendment will be made without the approval of our stockholders if such approval is required by applicable laws or would change the powers of the 2015 Plan’s administrator. Unless sooner terminated by our board of directors, the 2015 Plan will terminate on June 23, 2026.

U.S. Federal Income Tax Consequences

The following paragraphs are a summary of the general federal income tax consequences to U.S. taxpayers and us of awards granted under the 2015 Plan. Tax consequences for any particular individual may be different.

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APPROVAL OF THE AMENDED AND RESTATED 2O15 EQUITY INCENTIVE PLAN

Incentive Stock Options
A participant recognizes no taxable income as the result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Internal Revenue Code (unless the participant is subject to the alternative minimum tax). If the participant exercises the option and then later sells or otherwise disposes of the shares more than two years after the grant date and more than one year after the exercise date, the difference between the sale price and the exercise price will be taxed as capital gain or loss. If the participant exercises the option and then later sells or otherwise disposes of the shares before the end of the two-or one-year holding periods described above (a “disqualifying disposition”), he or she generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the option.

Nonstatutory Stock Options
A participant generally recognizes no taxable income on the date of grant of a nonstatutory stock option with an exercise price equal to the fair market value of the underlying stock on the date of grant. Upon the exercise of a nonstatutory stock option, the participant generally will recognize ordinary income equal to the excess of the fair market value of the shares on the exercise date over the exercise price of the option. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any subsequent gain or loss, generally based on the difference between the sale price and the fair market value on the exercise date, will be taxed as capital gain or loss.

Stock Appreciation Rights
A participant generally recognizes no taxable income on the date of grant of a stock appreciation right with an exercise price equal to the fair market value of the underlying stock on the date of grant. Upon exercise of the stock appreciation right, the participant generally will be required to include as ordinary income an amount equal to the sum of the amount of any cash received and the fair market value of any shares received upon the exercise. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Any additional gain or loss recognized upon any later disposition of the shares would be treated as long-term or short-term capital gain or loss, depending on the holding period.

Dividend Equivalents
Dividend equivalents will generally be subject to tax as dividends as if they were paid on the vesting date of the underlying award.

Restricted Stock, Restricted Stock Units, Performance Awards and Performance Shares
A participant generally will not have taxable income at the time an award of restricted stock, restricted stock units, performance shares, or performance units is granted. Instead, he or she will recognize ordinary income in the first taxable year in which his or her interest in the shares underlying the award becomes either (i) freely transferable, or (ii) no longer subject to substantial risk of forfeiture. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. However, the recipient of a restricted stock award may elect to recognize income at the time he or she receives the award in an amount equal to the fair market value of the shares underlying the award (less any cash paid for the shares) on the date the award is granted.

Section 409A

Section 409A of the Code (“Section 409A”) provides certain new requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the Plan with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.

Tax Effects for the Company

We generally will be entitled to a tax deduction in connection with an award under the 2015 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a non-qualified stock option). However, special rules limit the deductibility of compensation paid to certain current or former executive officers. Under Section 162(m), the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000.

THE FOREGOING IS ONLY A SUMMARY OF THE TAX EFFECT OF FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF AWARDS UNDER THE 2015 PLAN AS OF THE DATE OF THIS FILING. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF A SERVICE PROVIDER’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR NON-U.S. COUNTRY IN WHICH THE SERVICE PROVIDER MAY RESIDE.

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APPROVAL OF THE AMENDED AND RESTATED 2O15 EQUITY INCENTIVE PLAN

Summary

Our board of directors believes that it is in the best interests of us and our stockholders to continue to provide employees, consultants, and directors with the opportunity to acquire an ownership interest in us through the grant of equity awards under the amended and restated 2015 Plan and thereby encourage them to remain in our service and more closely align their interests with those of our stockholders.

Number of Awards Granted to Employees and Non-Employee Directors

No awards have been made under the Amended and Restated 2015 Plan, and no awards have been granted that are contingent on the approval of the Amended and Restated 2015 Plan. Awards under the Amended and Restated 2015 Plan would be made at the discretion of the Compensation Committee or the Board. The number of awards that an employee, or non-employee director may receive under the 2015 Plan is not determinable at this time. The following table sets forth the aggregate number of RSUs and PSUs (at target) granted under the 2015 Plan during fiscal year 2024 to each of our named executive officers other than our former executive officers who are no longer eligible to receive awards; executive officers, as a group; directors who are not executive officers, as a group; and all employees who are not executive officers, as a group.

Vote Required

The approval of the 2015 Plan requires the affirmative vote of a majority of the shares of our common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon. As a result, abstentions will have the same effect as a vote against the proposal. Broker non-votes will have no effect on the outcome of this proposal. This vote will also constitute approval of the 2015 Plan under the Nasdaq Listing Rules.

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PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our independent registered public accounting firm for the fiscal year ended June 29, 2024 was Deloitte & Touche LLP (“Deloitte”). Our Audit Committee has re-appointed Deloitte to audit our consolidated financial statements for our fiscal year ending June 28, 2025. At the Annual Meeting, we are asking our stockholders to ratify the appointment of Deloitte as our independent registered accounting firm for fiscal 2025. Although ratification by stockholders is not required by law, our Audit Committee is submitting the appointment of Deloitte to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. In the event that the appointment of Deloitte is not ratified by our stockholders, the Audit Committee will review its future selection of Deloitte as our independent registered public accounting firm. Representatives of Deloitte are expected to be present at the Annual Meeting, in which case they will be given an opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions. Notwithstanding the appointment of Deloitte, and even if our stockholders ratify the appointment, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our Audit Committee believes that such a change would be in the best interests of our company and our stockholders.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our Company by Deloitte, our independent registered public accounting firm, for the fiscal years ended June 29, 2024, and July 1, 2023.

Auditor Independence

In our fiscal year ended June 29, 2024, there were no other professional services provided by Deloitte, other than those listed above, that would have required our Audit Committee to consider their compatibility with maintaining the independence of Deloitte.

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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All fees paid to Deloitte for our fiscal year ended June 29, 2024 were pre-approved by our Audit Committee.

Vote Required
The ratification of the appointment of Deloitte requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote AGAINST the proposal and broker non-votes will have no effect.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee is a committee of the board of directors comprised solely of independent directors as required by the Nasdaq listing rules and rules and regulations of the SEC. The Audit Committee operates under a written charter approved by the board of directors, which is available on our website at www.lumentum.com. The composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis.

With respect to the Company’s financial reporting process, the management of the Company is responsible for (1) establishing and maintaining internal controls and (2) preparing the Company’s consolidated financial statements. Our independent registered public accounting firm, Deloitte, is responsible for auditing these financial statements. It is the responsibility of the Audit Committee to oversee these activities. It is not the responsibility of the Audit Committee to prepare our financial statements, which are the fundamental responsibilities of management. In the performance of its oversight function, the Audit Committee has:

Based on the Audit Committee’s review and discussions with management and Deloitte, the Audit Committee recommended to the board of directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2024 for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the Audit Committee of the board of directors:

Harold L. Covert (Chair)
Pamela F. Fletcher
Julia S. Johnson
Janet S. Wong

This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Securities Exchange Act of 1934, as amended (“Exchange Act”), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

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EXECUTIVE OFFICERS

The following table sets forth information regarding individuals who serve as our executive officers. The position titles refer to each executive officer’s title at Lumentum as of October 3, 2024. Our executive officers are elected by our board of directors to hold office until their successors are elected and qualified. There are no family relationships among any of our directors or executive officers.

For Mr. Lowe’s biography, see “Director Nominees.”

Wajid Ali is Lumentum’s executive vice president and chief financial officer. Mr. Ali manages and drives all aspects of Lumentum’s finance organization. Mr. Ali joined Lumentum in February 2019. Before joining Lumentum, Mr. Ali was the senior vice president and chief financial officer at Synaptics Incorporated, a developer and supplier of semiconductor product solutions, from May 2015 to February 2019. Before Synaptics, Mr. Ali was vice president and controller at Teledyne Technologies Inc., an instrumentation, software and engineered systems company. Prior to Teledyne, he served as chief financial officer at DALSA Corp., a semiconductor company that was acquired by Teledyne in 2011. Mr. Ali also held key financial management positions at Advanced Micro Devices, Inc. and ATI Technologies Inc., overseeing the finance functions for large business groups. Mr. Ali holds Bachelor of Arts and Master of Arts degrees in Economics from York University; a Master of Business Administration degree from the Schulich School of Business, York University; and CPA, CMA designations from the Chartered Professional Accountants of Ontario, Canada.

Vincent Retort is Lumentum’s president of industrial tech platform and chief business officer. Mr. Retort has been an instrumental leader running R&D, operations, the Transmission business unit, and the 3D sensing business unit at various times since Lumentum’s spinoff from JDSU. He was previously our chief operations officer and executive vice president from February 2016 through September 2023, senior vice president, research and development from July 2015 through February 2016 and our general manager of the 3D Sensing business unit from December 2018 through April 2020. Prior to joining Lumentum in connection with Lumentum’s separation from Viavi in 2015, Mr. Retort was employed by Viavi. Mr. Retort joined Viavi in 2008 as vice president of research & development, communication and commercial optical products (“CCOP”), and became senior vice president of research & development of CCOP in 2011. From 2004 to 2008, Mr. Retort was vice president of product engineering, reliability and quality at NeoPhotonics Corporation, a designer and manufacturer of photonic integrated circuit-based modules and subsystems. From 2002 to 2004, Mr. Retort served as senior director of development engineering, magnetic recording performance at Seagate Technology Holdings plc, an international manufacturer and distributor of computer disk drives. From 2000 to 2002, Mr. Retort served as vice president of product engineering at Lightwave Microsystems Corporation, a communications equipment company. Mr. Retort holds a Master of Science degree in Biological Sciences from Stanford University and a Bachelor of Arts degree in Biology from West Virginia University.

Jae Kim has served as Lumentum’s senior vice president, general counsel and secretary since March 2024. Prior to joining Lumentum, Mr. Kim served at GlobalLogic Inc., a Hitachi Group Company providing software development services, as chief administrative and legal officer from June 2022 to March 2024 and as chief legal officer from February 2021 to June 2022. Before GlobalLogic, Mr. Kim was SVP and general counsel at Rambus, Inc., a provider of chips and silicon IP, from 2013 to February 2021. Earlier in his career, Mr. Kim held senior legal roles at Altran/Aricent and Electronics for Imaging, Inc. He also served as an attorney for Wilson Sonsini Goodrich & Rosati and United States Securities and Exchange Commission. Mr. Kim holds a Bachelor of Arts degree in Economics from Boston University and a Juris Doctor degree from the Washington College of Law at American University. 

Wupen Yuen is Lumentum’s president of cloud and networking platform. Prior to this role, Mr. Yuen served as senior vice president and general manager for Lumentum’s telecom transmission and datacom business units from December 2022 to October 2023 and August 2022 to December 2022, respectively. Mr. Yuen joined the company through Lumentum’s acquisition in August 2022 of NeoPhotonics, where he had been chief product officer since 2018, and senior vice president and general manager since 2014. From 2005 to 2014, Mr. Yuen held numerous leadership roles within NeoPhotonics, including senior vice president of product and technology development, vice president of product development and engineering, and director of business development. From 2002 to 2004, Mr. Yuen served as chief technology officer of Bandwidth9, a telecommunications tunable laser company. Mr. Yuen holds a PhD and a Master’s degree in Electrical Engineering from Stanford University, and a Bachelor of Science degree in Electrical Engineering from National Taiwan University. He has completed various executive education programs at Harvard Business School and the University of Chicago’s Booth School of Business in innovation, general management, finance, and leadership.

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COMPENSATION DISCUSSION AND ANALYSIS

This discussion of our executive compensation program is designed to provide our stockholders with an understanding of the compensation program in effect in fiscal 2024 for our NEOs, who were the following individuals:

Executive officers at fiscal 2024 year end

Executive officers for portions of fiscal 2024, but not at year end

This CD&A summarizes our executive compensation philosophy, principles and approach, provides a detailed description of our various compensation programs, explains how these programs are aligned with our business objectives and our operating and financial performance, and describes our focus on pay for performance to ensure alignment of compensation with stockholder value creation.

The CD&A also describes how we approach stockholder engagement to foster a regular and constructive dialogue on our compensation program philosophy and program design and explains in depth the extensive off-cycle stockholder engagement conducted in fiscal 2024 following our failure to obtain stockholder approval on the “Say-on-Pay” advisory vote on executive compensation at our 2023 Annual Meeting of Stockholders. The CD&A describes these stockholder engagement efforts, the stockholder feedback received, and our responsiveness to that feedback through enhanced disclosures and changes in our fiscal 2024 and fiscal 2025 compensation programs.

Executive Summary

At the highest level, following are nine key takeaways from this CD&A:

Fiscal 2023 Say-on-Pay Vote and Response

Following years of strong stockholder support for the Company’s executive compensation programs, the Board of Directors and the Compensation Committee were disappointed that our Say-on-Pay advisory vote received only 48.5% support from our stockholders in November 2023, a significant decrease in support from 82% in November 2022, and we have taken this message from stockholders very seriously.

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In response to stockholder feedback gathered throughout fiscal 2024 since receiving the Say-on-Pay advisory results at our 2023 Annual meeting, we made substantial improvements to this CD&A and changes to our compensation programs that will take effect in for 2025. We highlight the following changes for consideration at this 2024 Annual Meeting of Stockholders:

Stockholder Outreach

We believe there is great value in regularly engaging with our stockholders to understand their priorities and seek their feedback on key issues, including executive compensation. In our normal course of business, our Board, including the Compensation Committee, reviews the feedback we hear from stockholders throughout the year. In fiscal 2024 we conducted two rounds of extensive stockholder outreach:

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Stockholder Engagement Cycle

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Stockholder Feedback and Actions Taken

Common themes of feedback that emerged across the two cycles of stockholder engagement highlighted the following areas for potential improvement with respect to executive compensation:

Feedback gathered throughout 2024 with respect to enhanced compensation disclosure has led to changes in the content and presentation of this CD&A. However, given the timing of our 2023 Annual Meeting and our in-depth stockholder engagement efforts in fiscal 2024, much of the stockholder feedback about compensation program design could not be considered for fiscal 2024 executive compensation, but is addressed in the fiscal 2025 program and design. 

The tables below outline stockholder feedback received with respect to compensation disclosure and our executive compensation programs, and summarizes corresponding actions taken for fiscal 2024 and for fiscal 2025:

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While the complete description of changes to our fiscal 2025 executive compensation programs will be contained in our fiscal 2025 CD&A, we preview the PSU elements of our 2025 Long-Term Incentive Plan below, for ease of comparison to our fiscal 2024 LTIP PSUs, which are detailed later in this CD&A. The Compensation Committee has approved several significant design changes for the fiscal 2025-2027 PSU awards granted in August 2024, based on stockholder feedback and a desire to increase long-term focus and increase alignment with stockholder experience. 

Fiscal 2025-2027 PSU Changes 1.Introduction of relative Total Shareholder Return metric 2.Reduction in weighting of Total Revenue metric and Strategic Objectives metric 3.Elimination of annual banking for Total Revenue metric

2024 PSU Design

2025 PSU Design

The Company values and seeks ongoing feedback from stockholders on all elements of our business and takes stockholder feedback seriously, as demonstrated by the breadth and depth of changes outlined above for both fiscal 2024 and fiscal 2025. The Compensation Committee will continue to engage with and consider feedback from stockholders to ensure that the executive compensation program remains effective and aligned with stockholder interests.

Fiscal 2024 Business Performance

This section summarizes our fiscal 2024 financial performance in several of our key business metrics, along with year-over-year and 5-year relative performance. As described in our Annual Report, fiscal 2024 continued to present a number of challenges to our industry and the markets that we serve. 

In particular, our business continued to experience the negative impacts of the worldwide logistics and supply chain issues despite some improvement in the latter half of fiscal 2023. Our key operating metrics over a 1-year and 5-year period directly reflect the impact of these challenges as noted in the table below.

Adjusted Earnings per Share, Adjusted Gross Margin and Adjusted Operating Margin are non-GAAP measures that Lumentum discloses to provide additional information about the operating results of the Company. Please see Appendix B for a reconciliation of Adjusted Earnings per Share, Adjusted Gross Margin and Adjusted Operating Margin to their nearest GAAP equivalents.

While we expect some of the challenges posed to our industry and the markets we serve to have a lingering impact, we made significant progress in the last fiscal quarter of 2024 in executing our strategy to grow our cloud business and broaden our customer base, including investing in new and substantial cloud and AI module and component opportunities. During the fiscal first quarter of 2024, we changed our organizational structure to better align with our markets and our customer base. This new alignment into our operating segments of Cloud and Networking and Industrial Tech, the improvement of conditions in certain market segments, and our focus on the execution of our strategy give us confidence in our growth prospects for fiscal 2025 and beyond. 

Considering these near-term trends and our perspective on growth opportunities, we have realigned our areas of strategic focus to successfully position the company to achieve our short-term and long-term operating targets and goals. We have embedded certain elements of our operating metrics and strategic goals into our executive compensation programs as more fully described in this CD&A.

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Executive Compensation Approach

Philosophy

Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. We believe that:

Building on this foundation, our executive compensation program is designed to spur the achievement of Lumentum’s key long-term strategic and business goals:

There are direct links between these three goals and the structure and detail of our executive compensation program.

Strong Compensation Governance

The Compensation Committee regularly considers good governance practices in executive compensation and corporate governance when overseeing our executive compensation program and evaluates these practices against our business and compensation needs, legal and regulatory developments, and corporate governance changes. The following good governance practices are incorporated into our executive compensation program:

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Compensation Decision Processes

Overview

Our Board has delegated to the Compensation Committee the responsibility for administering and determining the parameters of our executive compensation program. The Compensation Committee is composed entirely of individuals who are independent directors under the independence standards of the SEC and Nasdaq. Our compensation setting process for our executive officers includes the following (with tracking of projected incentive plan results occurring throughout the entire cycle):

During the June through August time frame, our CEO and Chief Human Resources Officer provide the Compensation Committee with performance reviews and compensation recommendations for our NEOs (other than our CEO), taking into account input from Semler Brossy (the Compensation Committee’s independent compensation consultant) and referencing materials and data prepared by Semler Brossy for the Compensation Committee to assist in the analysis and decision-making process. 

In August during this cycle, the Compensation Committee approves all compensation for our NEOs (other than our CEO). The Compensation Committee reviews and recommends our CEO’s compensation to the board of directors, which makes the final decisions regarding our CEO’s compensation.

No member of the management team is present for the discussion or approval of his or her individual compensation and our Compensation Committee meets in executive session with Semler Brossy with no members of management present as part of its process in considering the data and recommendations.

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Peer Group

The Compensation Committee, with input from Semler Brossy, annually reviews the compensation practices of a peer group of similar companies. The Compensation Committee carefully considered and selected an appropriate group of companies to use for executive compensation review and analysis purposes to provide data that assisted it in making decisions on the Company’s executive compensation program.

The Compensation Committee considers multiple factors in selecting appropriate peer companies. 

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Fiscal 2024 Peer Group

Characteristics of Peer Group Companies similar in revenue, size, and business operations to Lumentum Primary Uses We reference peer group compensation practices when assessing and approving executive compensation in the following areas: ●Performance and pay relationship ●Executive compensation levels ●Realized pay for the CEO ●Annual and long-term incentive plan design ●Independent director compensation ●Equity plan and share usage ●Change in control and severance ●Benefits and perquisites

Fiscal 2024 Peer Group Ciena Coherent Entegris F5 IPG Photonics Juniper Networks Marvell Technology MKS Instruments Monolithic Power Systems National Instruments OSI Systems Qorvo Semtech Skyworks Solutions Synaptics Trimble Viasat Viavi Solutions Wolfspeed

Peer Group Financial Positioning FY24 financial positioning relative to peers as of February 2023 Note: Revenue is on a trailing 12-month basis. Market capitalization is a 60-day average ending February 1.

The only change to this peer group from the list of companies used for executive compensation market review in fiscal 2023 was the removal of Plantronics due to its acquisition by HP Inc. in August 2022.

In addition to the peer group, the Compensation Committee also reviews market data from the US Radford Survey for information technology companies with comparable revenue size to assess the competitiveness of our executive compensation programs. The Compensation Committee considers input from our management team, Company performance, individual performance and experience, and each NEO’s role and/or retention and incentive objectives when making its compensation decisions.

Changes to Peer Group for Fiscal 2025

The Compensation Committee approved significant changes to the peer group during fiscal 2024 to reflect our go-forward strategy and to re-baseline the peer group from a revenue and market capitalization standpoint. The Compensation Committee generally prefers to keep the group stable and limit change over time, and while the group had initially been constructed to position Lumentum near the median from both revenue and market capitalization standpoints, Lumentum’s positioning versus the group eroded over time and required a more substantial rebalancing for fiscal 2025 to ensure the Company’s pay and performance outcomes were aligned versus the appropriate market on a relative basis. The Compensation Committee continues to use the peer group for the same purposes as noted above, and used the reconstituted peer group beginning with fiscal 2025 compensation decisions.

The Compensation Committee stated two primary objectives for consideration of Lumentum’s initial positioning against a revised peer group:

The Compensation Committee believes that the resulting fiscal 2025 peer group is representative of appropriately sized companies in the industries in which we compete for customers and for talent.

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Fiscal 2024 Peer Group Removed for Fiscal 2025 Ciena Coherent Entegris IPG Photonics MKS Instruments OSI Systems Semtech Skyworks Solutions Synaptics Viasat Viavi Solutions Wolfspeed F5 Juniper Networks Marvell Technology Monolithic Power Systems National Instruments Qorvo Trimble

Fiscal 2025 Peer Group Added for Fiscal 2025 Ciena Coherent Entegris IPG Photonics MKS Instruments OSI Systems Semtech Skyworks Solutions Synaptics Viasat Viavi Solutions Wolfspeed ADTRAN Advanced Energy Calix Cirrus Diodes Extreme Networks MaxLinear Universal Display

FY25 financial positioning relative to peers as of February 2024 Note: Revenue is on a trailing 12-month basis. Market capitalization is a 60-day average ending February 1.

Fiscal 2024 Executive Compensation Program Elements

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Mix of Pay Elements

A significant portion of our CEO and NEO compensation is variable and based on multi-year performance.

	(1)The charts exclude Mr. Kim, who was not an employee at the time of the fiscal 2024 incentive decisions and include the impact of the temporary salary reduction that was in place for fiscal 2024.

Performance Metrics and Target Setting

The Compensation Committee reviews and selects the performance metrics used in Lumentum’s compensation programs for both the Annual Incentive Plan and the Long-Term Incentive Plan with the following key principles in mind:

Our AIP program has a one-year performance period, whereas our LTIP program has a three-year performance period. Some metrics are more appropriate to a shorter measurement window, others to a longer window. Lumentum’s AIP is a company-wide program, used to focus and incentivize performance across our entire employee base, from the factory floor to the executive team. Our performance-based LTIP is a program designed specifically for our executive level employees. Some metrics are more relevant to a broad employee population; others are more appropriate and controllable by the executive population. The Compensation Committee considers all these factors in deciding which metrics to use in which program.

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The following performance metrics have been selected for use in Lumentum’s fiscal 2024 AIP and fiscal 2024 LTIP programs:

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The Compensation Committee recognizes the importance of establishing both realistic and rigorous goals that continue to motivate and retain executives. As such, the committee approves the range of goals for payout at various levels for each selected metric after thorough review, analysis and discussion with the committee’s compensation consultants and executive management. In this process the Compensation Committee considers the following:

As we noted above, fiscal 2024 was another challenging year for the Company due to many factors outside of our control, including the prolonged industry-wide inventory corrections in the network equipment market that began in 2023, a continuing decline in sales to a key customer of a highly profitable product line as new competitors entered the market, and certain export control restrictions that banned sales of all products to a key customer. After extensive review and analysis of the macroeconomic conditions in the markets we serve, the external factors noted above, the Company’s annual operating plan and future projections, the Compensation Committee, with input from the executive management team, determined the appropriate performance metrics and target levels for the fiscal 2024 Annual Incentive Plan and Long-Term Incentive Plan awards.

Fiscal 2024 Base Salary

Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time of hire taking into account his or her position, qualifications, experience, prior salary level, and the base salaries of our other executive officers. Thereafter, the Compensation Committee reviews the base salary of each NEO annually in light of base salary information for similar positions at companies in our compensation Peer Group and the survey data, and also considers the input from our management team as described above.

In fiscal 2024, we made no changes to base salary for our continuing named executive officers other than in connection with Mr. Yuen’s promotion as described below.

On September 1, 2023, Mr. Yuen was promoted from senior vice president and general manager, telecom transmission to his current office of president, cloud and networking. In connection with this promotion, the Compensation Committee approved an increase in Mr. Yuen’s base salary from $403,000 per year to $504,000 per year, a 25% increase, a change made to reflect the significant increase in Mr. Yuen’s duties and responsibilities in connection with this promotion (an increase of 93% in number of employees and a significant increase in responsibility to include both the Cloud and Networking businesses, including R&D, technology office, product line management, sales, business operations).

On March 4, 2024, Jae Kim was appointed Lumentum’s senior vice president, general counsel and secretary. In connection with this appointment and based on arm’s length negotiations, the Compensation Committee approved an initial base salary of $450,000 for Mr. Kim.

In June 2023, the Compensation Committee approved a management-recommended six-month temporary reduction in cash compensation as part of company-wide cost reduction efforts as a reaction to the decline in our operating performance. The reduction was 10% for Mr. Lowe, a reduction of 7.5% for Messrs. Ali, Retort and Reinhardt, as well as other employees at the EVP level, a reduction of 5% for Ms. Hamel and all other employees at the SVP level, and a reduction of 2.5% for employees at the GVP and VP level. This temporary six-month reduction was extended twice more, also at management’s recommendation, so that it ultimately lasted a year from July 2, 2023 through June 30, 2024. Mr. Yuen’s reduction was 5% from his $403,000 salary from June 2, 2023 through September 1, 2023 and when he was promoted the reduction was increased to 7.5%, aligned with Messrs. Ali, Retort, and Reinhardt.

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Fiscal 2024 Annual Incentive Plan

We maintain an annual incentive plan (“AIP”) that is intended to incent both our NEOs and our broader employee population to deliver superior financial performance and create stockholder value over a one-year period. Our AIP is an example of a compensation program shared between executives and other employees and in fiscal 2024, approximately 80% of Lumentum employees around the world participated in our AIP.

AIP Structure

As discussed above under the heading “Performance Metrics,” the Compensation Committee approved consolidated organic revenue and adjusted organic operating income as the primary performance measures under the AIP for determining incentive amounts for our NEOs in fiscal 2024. When discussing consolidated organic revenue, the term consolidated refers to consolidation across all segments of the Company’s business; when setting the goal, we considered scenarios with and without the impact of projected acquisitions to understand how our organic revenue goals related to overall revenue goals for the year, including the positive boost from the mid-year addition of inorganic revenue.

For fiscal 2024, the bonus pool under the AIP was measured

Our rationale for having more emphasis on operating income than revenue is to ensure that growth is achieved profitably. We also continued to use a strategic measure in the AIP for fiscal 2024 that acts as a modifier to the AIP payout. The Compensation Committee believes that focusing on specific operational objectives incentivizes achievement of key milestones that are not directly tied to near-term financial performance but are critical to potential future growth. While the Compensation Committee may adjust payouts by up to 20% in either direction for achievement of the strategic measures, we have structured these objectives to minimize any subjectivity or discretion when considering any adjustment.

AIP Financial Goals

Due to the significant impact of market conditions on the Company’s performance in 2023, and the expected continuation of these challenges in the near-term, the Compensation Committee determined that fiscal 2024 targets for both adjusted organic operating income and consolidated organic revenue metrics would need to be lower than actual results for those metrics in fiscal 2023 in order for them to be motivational. Furthermore, our outlook for adjusted organic operating income for fiscal 2024 varied dramatically across the first half and second half of the year, based on when we expected overall demand to recover for certain market sectors we supply.

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The decline in business performance in fiscal 2024 was anticipated to be severe, and we did not think our business outlook merited paying 100% of target bonus for achieving our expectations based on our business outlook. Instead, the Compensation Committee:

Based on the analysis of the factors noted above, the Compensation Committee was confident that metrics and targets established for fiscal 2024 were “stretch” goals that would be difficult to attain but properly incentivize the NEOs and the full employee base throughout the year to maximize Company performance and stockholder value creation. The Compensation Committee carefully evaluated the full incentive payout scales to ensure that even though the targets reflected an anticipated down year, the achievement scales would require substantial overperformance to achieve payouts at target level and above.

In retrospect, the fiscal 2024 goals proved difficult to attain, even though they were set at levels reduced from fiscal 2023, and the result was that there was limited achievement under the performance objectives for our AIP, clearly demonstrating the alignment and commitment to the philosophy and design elements of pay and performance.

The bonus pool created under the AIP with respect to any performance measure is based on a linear interpolation between threshold performance (25% payout for adjusted organic operating income; 50% payout for consolidated organic revenue) and each performance point in the table below, up to maximum performance (200% payout).

AIP PSU Award

70% of the fiscal 2024 AIP, comprising the 30% based on second half organic operating income and 40% based on full year organic revenue was granted as a PSU award. The number of PSUs earned would be determined when performance was certified after year-end performance. The use of shares for this portion of the award in 2024 was done to further underscore alignment with stockholders.

To determine the number of shares subject to the share-based portion of each award, the dollar value at target was divided by the volume-weighted average price for the month of July 2023.

AIP Strategic Modifier

In fiscal 2024, we also continued to use a strategic measure for the AIP that acts as a modifier to the AIP payout. The Compensation Committee believes that focusing on specific operational objectives incentivizes achievement of key milestones that are not directly tied to near-term financial performance but are critical to potential future revenue growth or operating income. While the Compensation Committee may adjust payouts by up to 20% in either direction for achievement of the strategic measures, we have structured these objectives to minimize any subjectivity or discretion when considering any adjustment.

Historically, our Compensation Committee has applied this AIP modifier conservatively. Since 2016, we applied a decrease of 10% three times (in the first and second halves of fiscal 2017, and in the first half of fiscal 2018), a decrease of 7.5% once in the first half of fiscal 2022, and an increase of 10% once (in the second half of fiscal 2020).

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The strategic measures for the AIP modifier for fiscal 2024 compensation for our NEOs included the following metrics:

Each of these strategic measures was designed to be quantitative and/or objectively measurable and was selected due to its direct connection to the delivery of future revenue and operating income. Having considered the Company’s achievement of each strategic measure, as well as the Company’s overall financial performance, the Compensation Committee did not apply an AIP modifier for fiscal 2024. 

AIP Target Incentive Opportunities

We have designated an AIP target incentive opportunity for each of our executive officers as a percentage of the executive’s annual base salary. This target incentive opportunity for a given fiscal year is multiplied by the payout percentage for that year, as determined by our Compensation Committee, to determine the amount of any AIP payment to the executive for that period.

Generally, we establish the initial AIP target incentive opportunities of our executive officers through arm’s-length negotiation at the time of hire taking into account his or her position, qualifications, experience, prior salary level, and the AIP target incentive opportunities of our other executive officers at similar levels. Thereafter, our Compensation Committee reviews the AIP target incentive opportunity of each NEO annually together with the NEO’s base salary in light of total target cash compensation information for similar positions and titles at companies in our compensation peer group and the survey data, and also considers the input from our management team as described above. 

In fiscal 2024, we made no changes to target incentive opportunities for our continuing named executive officers other than in connection with the promotions described below. The target dollar opportunities under the fiscal 2024 AIP were determined based on the salaries of the relevant NEO without regard to the one-year reduction in base salary.

On September 1, 2023, the Compensation Committee approved compensation changes for two officers in connection with promotions. In connection with Vincent Retort’s promotion to president, industrial tech and chief business officer in the Company’s reorganization, the Compensation Committee approved an increase in Mr. Retort’s target incentive opportunity under the AIP from 90% of annual base salary to 100% of annual base salary. 

In connection with Wupen Yuen’s promotion to his current office of president, cloud and networking, the Compensation Committee approved an increase in Mr. Yuen’s target incentive opportunity under the AIP from 75% of annual base salary to 100% of annual base salary, a change made to reflect Mr. Yuen’s significantly increased duties and responsibilities. Taken together with the 25% increase to Mr. Yuen’s base salary in connection with that promotion, this resulted in a 67% increase in the dollar value of Mr. Yuen’s AIP target incentive opportunity. 

On March 4, 2024, Jae Kim was appointed Lumentum’s senior vice president, general counsel and secretary. In connection with this appointment and based on arm’s length negotiation, the Compensation Committee approved an initial AIP target incentive opportunity of 75% of annual base salary and a $300,000 sign-on incentive bonus for Mr. Kim. The sign-on incentive bonus was designed to compensate for the annual incentive opportunity that Mr. Kim forfeited by leaving his prior employer to join the Company. As negotiated at the time of his hiring, Mr. Kim’s fiscal 2024 bonus was paid in cash at target for fiscal 2024 with the amount pro-rated based on his service during fiscal 2024.

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AIP Achievement

Following the end of fiscal 2024, the Compensation Committee reviewed the achievement of the performance measures under the AIP and determined that: (i) our first half adjusted organic operating income performance was at 38.3% of target, (ii) our second half adjusted organic operating income performance and our consolidated organic revenue performance were under the threshold, so no portion of the target incentive was earned for either of these metrics. As discussed previously, no AIP modifier was applied and the total fiscal 2024 AIP payouts for our NEOs were 13% as shown in the table below, all of which was paid in cash because it related to the 30% of the total target incentive that would be payable in cash.

Fiscal 2024 Long-Term Incentive Plan

We use annual equity awards to deliver long-term incentive compensation opportunities to our NEOs and periodically make additional equity awards to address special situations as they may arise from time to time, such as in connection with new hires, promotions or to provide an additional retention incentive. Our long-term incentives are intended to align the interests of our NEOs with those of our stockholders. Equity awards are subject to time or performance vesting requirements to drive performance and encourage retention.

Fiscal 2024 Long-Term Incentive Structure

		Performance Stock Units (PSUs)		●70% of PSUs vesting at the end of three years based on the achievement of annual revenue growth goals from fiscal 2024 through fiscal 2026 ●30% of PSUs vesting at the end of three years based on the achievement of strategic and sustainability goals by the end of fiscal 2026
		Restricted Stock Units (RSUs)		●RSUs vesting over three years based on continued service

In fiscal 2024, 50% of each NEO’s long-term incentive award was in the form of PSUs with a three-year performance period, with the remaining 50% of each NEO’s annual equity awards in the form of time-based RSUs. PSU awards related to the AIP are described above under Annual Incentive Plan and not included in this section.

Time-based RSUs are granted to our NEOs in fiscal 2024 vest 1/3 after one year and quarterly for the next two years thereafter subject to the NEO’s continued service through each vesting date. The rationale for time-based RSUs is primarily retention with an alignment to stockholder interests based on equity valuation, and the vesting schedule is consistent with common industry practice in the space in which we compete.

2024 PSUs have a 3-year performance period, covering fiscal 2024-2026. The Compensation Committee believes that multi-year performance requirements are important to further enhance the link between the interests of our stockholders and our NEOs. The PSUs are designed to reward our NEOs for creation of long-term Company performance through aggressive financial and strategic progress objectives that we believe will create long-term stockholder value.

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Fiscal 2024 PSU Structure

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Fiscal 2024 Long-Term Incentive Award Target Opportunities

The size of annual equity awards for our NEOs is determined by the Compensation Committee, taking into account each executive’s role, performance, and data from our compensation peer group and compensation surveys.  

Achievement and Vesting of Fiscal 2022 PSUs

In fiscal 2022, each NEO’s annual equity awards included PSUs with a three-year performance period, evaluated and potentially vesting after the end of fiscal 2024. Like the fiscal 2024 PSUs, these grants are subject to attainment of goals relating to 3-year Total Revenue weighted 70% of the target opportunity, and goals relating to Strategic Progress Objectives measured over a three-year period, weighted 30% of the target opportunity. The performance period for these fiscal 2022 PSUs runs from the beginning of our fiscal 2022 to the end of our fiscal 2024. Total maximum payout for these fiscal 2022 PSUs (including both Total Revenue PSUs and Strategic Progress Objective PSUs) is 250%. Achievement on the fiscal 2022 PSUs is as follows:

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Detail on Fiscal 2022 PSU Total Revenue Goal and Achievement (70% weighting)
The Compensation Committee determined that the Company’s fiscal 2024 total revenue did not meet the threshold performance level for vesting of these PSUs. 

FY2022-24 PSU Revenue Goal and Achievement
$ US millions

These PSUs also provided the opportunity for interim “banking” of a portion of the award based on total revenue performance in fiscal 2022 and fiscal 2023. In each year, the threshold level of performance for such year’s interim total revenue goal was not met, and as a result no shares were banked. The resulting payout on the revenue element for the entire 3-year vesting period is 0%.