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TABLE OF CONTENTS
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. )
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ý | Definitive Proxy Statement | |
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Table of Contents
1389 Moffett Park Drive
Sunnyvale, California 94089
October 18, 2011
Dear Stockholder:
You are cordially invited to attend this year’syear's annual meeting of stockholders of Finisar Corporation on Thursday, OctoberMonday, November 28, 20102011, at 10:00 a.m., local time. The meeting will be held at the offices of DLA Piper LLP (US), located at 2000 University Avenue, East Palo Alto, California.
We are pleased to again take advantage of the U.S. Securities and Exchange Commission rule that allows companies to furnish proxy materials to stockholders primarily over the Internet. We used this delivery process last year and found that it expedited stockholders’stockholders' receipt of proxy materials and lowered the costs and reduced the environmental impact of distributing proxy materials for our annual meeting. On September 17, 2010,October 18, 2011, we mailed to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials (the “Notice”"Notice") containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report onForm 10-K for the fiscal year ended April 30, 2010.2011, over the Internet. The Notice also provides instructions on how to vote online or by telephone and includes instructions on how to receive a paper copy of the proxy materials by mail. If you receivedreceive your annual meeting materials by mail, the Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report to Stockholderson Form 10-K and proxy card werewill be enclosed.
The matters to be acted upon are described in the Notice of Annual Meeting of Stockholders and Proxy Statement. Following the formal business of the meeting, we will report on our company’scompany's operations and respond to questions from stockholders.
Whether or not you plan to attend the meeting, your vote is very important and we encourage you to vote promptly and submit yourpromptly. You may vote by proxy over the Internet or by Internet, telephone, or, mail, as described inif you received paper copies of the proxy materials.materials by mail, you can also vote by mail by following the instructions on the proxy card. If you attend the meeting you will, of course, have the right to revoke the proxy and vote your shares in person. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from themyour brokerage firm, bank or other nominee to vote your shares. For the election of directors, if you do not provide voting instructions via the Internet, by telephone, or by returning a proxy card or providing instructions to your broker, your shares will not be voted.
We look forward to seeing you at the annual meeting.
| Very truly yours, | ||
 JERRY S. RAWLS Chairman of the Board  | ||
 EITAN GERTEL Chief Executive Officer |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MONDAY, NOVEMBER 28, 2011
The Annual Meeting of Stockholders of Finisar Corporation, a Delaware corporation, will be held on Monday, November 28, 2011, at 10:00 a.m. local time, at the offices of DLA Piper LLP (US), 2000 University Avenue, East Palo Alto, California 94303, for the following purposes:
- 1.
- To elect two Class III directors to hold office for a three-year term and until their respective successors are elected and qualified.
- 2.
- To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 30, 2012.
- 3.
- To hold an advisory vote on the compensation of our Named Executive Officers (as defined in the proxy statement).
- 4.
- To hold an advisory vote on the frequency of future advisory stockholder votes on the compensation of our Named Executive Officers.
- 5.
- To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
Stockholders of record at the close of business on October 4, 2011 are entitled to notice of, and to vote at, the meeting and any adjournment or postponement thereof. For ten days prior to the meeting, a complete list of stockholders entitled to vote at the meeting will be available for examination by any stockholder, for any purpose relating to the meeting, during ordinary business hours at our principal offices located at 1389 Moffett Park Drive, Sunnyvale, California 94089.
Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting of Stockholders, we urge you to vote and submit your proxy as promptly as possible in order to assure the presence of a quorum. You may vote by telephone, Internet or mail. If you vote by telephone or Internet, you do not have to mail in your proxy card. Voting in advance will not prevent you from voting in person at the meeting.
|   Secretary |
Sunnyvale, California
October 18, 2011
SOLICITATION AND VOTING
PROPOSAL NO. 1
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CORPORATE GOVERNANCE
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Independence of Incorporation provides that the authorized numberDirectors
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Board of membersDirectors Leadership Structure
Board of the board of directors shall be fixed from time to time by the board of directors and that the terms of office of the members of the board of directors will be divided into three classes. At each annual meeting of stockholders, directors from one of the three classes are elected for a term of three years to succeed those directors whose terms expire at the annual meeting. The authorized number of directors is currently set at nine, consisting of three classes of three members each.2
Name | Position with Finisar | Age | Director Since | |||||||
| Michael C. Child | Director | 55 | 2010 | |||||||
| Christopher J. Crespi | Director | 47 | 2008 | |||||||
| Roger C. Ferguson | Director | 67 | 1999 | |||||||
| David C. Fries | Director | 65 | 2005 | |||||||
| Eitan Gertel | Chief Executive Officer and Director | 48 | 2008 | |||||||
| Thomas E. Pardun | Director | 66 | 2009 | |||||||
| Jerry S. Rawls | Chairman of the Board | 66 | 1989 | |||||||
| Robert N. Stephens | Director | 64 | 2005 | |||||||
| Dominique Trempont | Director | 56 | 2005 | |||||||
Nominees for Election for a Three Year Term Expiring at the 2013 Annual Meeting of StockholdersExecutive Sessions
Meetings of the Board since January 2006. Mr. Rawls served as our Chief Executive Officer from August 1999 until the completionof Directors and Committees
Director Nominations
Communications by Stockholders with Directors
Director Attendance at Annual Meetings
Committee Charters and Other Corporate Governance Materials
Compensation Committee Interlocks and Insider Participation
DIRECTOR COMPENSATION
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PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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REPORT OF THE AUDIT COMMITTEE
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PROPOSAL NO. 3 ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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PROPOSAL NO. 4 ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY STOCKHOLDER VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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EXECUTIVE COMPENSATION AND RELATED MATTERS
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Compensation Discussion and Analysis
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Report of the Optium mergerCompensation Committee
Summary Compensation Information
Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-End
Option Exercises and Stock Vested
Potential Payments Upon Termination or Change in August 2008. Mr. Rawls also served as our President from April 2003 until the completionControl
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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EQUITY COMPENSATION PLAN INFORMATION
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Material Features of the Optium merger and previously held that title from April 1989 to September 2002. From September 1968 to February 1989, Mr. Rawls was employed by Raychem Corporation, a materials science and engineering company, where he held various management positions including Division General Manager of the Aerospace Products Division and Interconnection Systems Division. Mr. Rawls holds a B.S. in Mechanical Engineering from Texas Tech University and an M.S. in Industrial Administration from Purdue University. Mr. Rawls’ tenure with Finisar since 1989, including 19 years as President2001 Nonstatutory Stock Option Plan
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and/orSTOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING Chief Executive Officer, provides him personal knowledge of the Company’s history since shortly after its founding. This experience, together with his management and industry experience, enables him to provide the board with a unique perspective on the Company’s business and operations and strategic issues.
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OTHER MATTERS
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i
1389 Moffett Park Drive
Sunnyvale, California 94089
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
The board of directors of Finisar Corporation is soliciting your proxy for the 2011 Annual Meeting of Stockholders to be held on Monday, November 28, 2011, at 10:00 a.m. local time, or at any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This proxy statement and related materials are first being made available to stockholders of the Company on or about October 18, 2011. References in this proxy statement to the "Company," "we," "our," "us" and "Finisar" are to Finisar Corporation, and references to the "annual meeting" are to the 2011 Annual Meeting of Stockholders. When we refer to the Company's fiscal year, we mean the annual period ending on April 30. This proxy statement covers our 2011 fiscal year, which was from May 1, 2010 through April 30, 2011 ("fiscal 2011").
Record Date. Our board of directors has fixed the close of business on October 4, 2011 as the record date for determination of stockholders entitled to notice of and to vote at the meeting and any adjournment thereof. As of the record date, 90,793,525 shares of common stock were outstanding and entitled to vote.
Internet Availability of Annual Meeting Materials. We are pleased to again take advantage of the rules adopted by the U.S. Securities and Exchange Commission ("SEC") allowing companies to furnish proxy materials over the Internet to their stockholders rather than mailing paper copies of those materials to each stockholder. On October 18, 2011, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials directing stockholders to a web site where they can access our proxy statement for the annual meeting and our Annual Report for the fiscal year ended April 30, 2011 and view instructions on how to vote via the Internet or by phone. If you would prefer to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials.
Quorum. A majority of the shares of common stock issued and outstanding as of the record date must be represented at the meeting, either in person or by proxy, to constitute a quorum for the transaction of business at the annual meeting. Your shares will be counted toward the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker or bank) or if you vote in person at the meeting. Abstentions and "broker non-votes" (shares held by a broker or nominee that does not have the authority, either express or discretionary, to vote on a particular matter) will each be counted as present for purposes of determining the presence of a quorum.
Vote Required to Adopt Proposals. Each share of our common stock outstanding on the record date is entitled to one vote on each of the two director nominees and one vote on each other matter. For the election of directors, the two director nominees receiving the highest number of "FOR" votes will be elected as Class III directors. With respect to each of the other proposals, approval of the proposal requires the affirmative vote of a majority of the shares present and entitled to vote either in person or by proxy.
Effect of Abstentions and Broker Non-Votes. Shares not present at the meeting and shares voted "Abstain" will have no effect on the election of directors. With respect to Proposal No. 4, the advisory vote on the frequency of holding future advisory votes on executive compensation, an abstention will have the same effect as a vote against all of the time periods presented. For each of the other proposals, abstentions will have the same effect as negative votes. If you are a beneficial owner and
hold your shares in "street name," it is critical that you cast your vote if you want it to count in the election of directors and the executive compensation proposals. Under the rules governing banks and brokers who are voting with respect to shares held in street name, such banks and brokers have the discretion to vote on routine matters, but not on non-routine matters. Routine matters include the ratification of auditors. Non-routine matters include the election of directors and the executive compensation advisory proposals. Banks and brokers may not vote on these proposals if you do not provide specific voting instructions. Accordingly, we encourage you to vote promptly, even if you plan to attend the annual meeting. Proxies and ballots will be received and tabulated by the inspector of election for the annual meeting.
Voting Instructions. If you complete and submit your proxy card or voting instructions, the persons named as proxies will follow your instructions. If you are a stockholder of record and you submit a proxy card or voting instructions but do not direct how to vote on each item, the persons named as proxies will vote as the board recommends on each proposal.
Depending on how you hold your shares, you may vote in one of the following ways:
Stockholders of Record: You may vote by proxy or over the Internet or by telephone. Please follow the instructions provided in the Notice, or, if you requested printed copies of the proxy materials, on the proxy card you received, then sign and return it in the prepaid envelope. You may also vote in person at the annual meeting.
Beneficial Stockholders: Your bank, broker or other holder of record will provide you with a voting instruction card for you to use to instruct them on how to vote your shares. Check the instructions provided by your bank, broker or other holder of record to see which options are available to you. However, since you are not the stockholder of record, you may not vote your shares in person at the annual meeting unless you request and obtain a valid proxy from your bank, broker or other agent.
Votes submitted by telephone or via the Internet must be received by 11:59 p.m., Eastern Time, on November 25, 2011. Submitting your proxy by telephone or via the Internet will not affect your right to vote in person should you decide to attend the annual meeting.
If you are a stockholder of record, you may revoke your proxy and change your vote at any time before the polls close by returning a later-dated proxy card, by voting again by Internet or telephone as more fully detailed in your Notice or proxy card, or by delivering written instructions to the Corporate Secretary before the annual meeting. Attendance at the annual meeting will not in and of itself cause your previously voted proxy to be revoked unless you specifically so request or vote again at the annual meeting. If your shares are held by a bank, broker or other agent, you may change your vote by submitting new voting instructions to your bank, broker or other agent, or, if you have obtained a legal proxy from your bank, broker or other agent giving you the right to vote your shares, by attending the annual meeting and voting in person.
Solicitation of Proxies. We will bear the entire cost of soliciting proxies. In addition to soliciting stockholders by mail, we will request banks, brokers and other intermediaries holding shares of our common stock beneficially owned by others to obtain proxies from the beneficial owners and will reimburse them for their reasonable expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone, by electronic communications and personal solicitation by our directors, officers and employees. No additional compensation will be paid to our directors, officers or employees for such solicitation.
Voting Results. We will announce preliminary voting results at the annual meeting. We will report final results in a Form 8-K report filed with the SEC.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Certificate of Incorporation provides that the authorized number of members of the board of directors shall be fixed from time to time by the board of directors and that the terms of office of the members of the board of directors will be divided into three classes. At each annual meeting of stockholders, directors from one of the three classes are elected for a term of three years to succeed those directors whose terms expire at the annual meeting. The authorized number of directors is currently set at seven, consisting of two classes of two members each and one class of three members.
The terms of the Class III directors will expire on the date of the upcoming annual meeting. The current Class III members of the board of directors are Eitan Gertel and Dominique Trempont. Mr. Trempont has advised the Nominating and Governance Committee and the board that he will be retiring from service on the board as of the date of the annual meeting and will not stand for re-election at the annual meeting. The Nominating and Governance Committee is conducting a search to identify candidates for one or more additional positions on the board, but it has not identified a candidate to nominate for election at the annual meeting to fill Mr. Trempont's seat. Accordingly, the board has determined to reduce the size of the board from seven to six members, effective immediately upon the election of Class III directors at the annual meeting. In connection with the reduction in the size of the board, the board has also determined to reconfigure the composition of the classes of the board in order to make the size of the three classes equal. In order to accomplish the reconfiguration of the board, the Nominating and Governance Committee recommended to the board that Thomas E. Pardun, currently a Class I director whose term expires at the 2012 annual meeting of stockholders, stand for re-election as a Class III director at the annual meeting. Mr. Pardun has tendered his resignation as a Class I director to be effective immediately upon the election of Class III directors at the annual meeting.
Accordingly, two persons are to be elected to serve as Class III directors at the meeting. Management's nominees for election by the stockholders to those two positions are Mr. Pardun and Mr. Gertel, who currently serves as a Class III member of the board. If elected, each nominee will serve as a director until our annual meeting of stockholders in 2014 and until their respective successors are elected and qualified. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as we may designate. The proxies cannot vote for more than two persons. If a quorum is present and voting, the two nominees for Class III director receiving the highest number of votes will be elected as Class III directors.
The board of directors recommends a vote "FOR" the nominees named above.
The following table sets forth information regarding our current directors, including the nominees for Class III directors to be elected at the annual meeting, as of August 15, 2011.
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Name | Position with Finisar | Age | Director Since | ||||||
|---|---|---|---|---|---|---|---|---|---|
Michael C. Child | Director | 56 | 2010 | ||||||
Roger C. Ferguson | Director | 68 | 1999 | ||||||
Eitan Gertel | Chief Executive Officer and Director | 49 | 2008 | ||||||
Thomas E. Pardun | Director | 67 | 2009 | ||||||
Jerry S. Rawls | Chairman of the Board | 67 | 1989 | ||||||
Robert N. Stephens | Director | 66 | 2005 | ||||||
Dominique Trempont | Director | 57 | 2005 | ||||||
Nominees for Election for a Three Year Term Expiring at the 2011 Annual Meeting of Stockholders
Eitan Gertelhas served as our Chief Executive Officer and as a director since the completion of the Optium Corporation merger in August 2008. Mr. Gertel served as Optium’sOptium's President and as a director from March 2001 and as Chief Executive Officer and Chairman of the Board of Optium from February 2004 through the completion of the merger. Mr. Gertel served as President and General Manager of the former transmission systems division of JDS Uniphase Corporation from 1995 to 2001. JDSU is a provider of broadband test and management solutions and optical products. Mr. Gertel holds a B.S.E.E. from Drexel University. As our Chief Executive Officer, Mr. Gertel brings to the board significant senior leadership, industry and technical experience. As Chief Executive Officer, Mr. Gertel is in a position to provide the board with insight and information related to the Company’sCompany's business and operations and to participate in the ongoing review of strategic issues.
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DavidMichael C. FriesChildhas served as a member of our board of directors since June 2010 and previously served on our board from November 1998 until October 2005. Dr. FriesMr. Child has been employed by VantagePoint Venture Partners,TA Associates, Inc., a venture capital investmentprivate equity firm, since August 20011982 where he currently serves as a Managing Director. Prior to joining VantagePoint, he was the Chief Executive Officer of Productivity Solutions, Inc., a Florida-based developer of automated checkout technologies for food and discount retailers, from 1995 to
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Roger C. Ferguson has served as a member of our board of directors since August 1999. From June 1999 to December 2001, Mr. Ferguson served as Chief Executive Officer of Semio Corp., an early stage software company. Mr. Ferguson served as a principal in VenCraft, LLC, a venture capital partnership,
from July 1997 to August 2002. From August 1993 to July 1997, Mr. Ferguson was Chief Executive Officer of DataTools, Inc., a database software company. From 1987 to 1993, Mr. Ferguson served as Chief Operating Officer of Network General Inc., a network analysis company. Mr. Ferguson holds a B.A. in Psychology from Dartmouth College and an M.B.A. from the Amos Tuck School at Dartmouth. Mr. Ferguson brings senior leadership experience and strategic and financial expertise to the board from his prior work as a senior executive of a public company and several private companies and as chief financial officer of a public company. Mr. Ferguson has extensive experience in both the hardware and software segments of the computer and telecommunications industries.
Directors Continuing in Office until the 2013 Annual Meeting of Stockholders
Jerry S. Rawls has served as a member of our board of directors since March 1989 and as our Chairman of the Board since January 2006. Mr. Rawls served as our Chief Executive Officer from August 1999 until the completion of the Optium merger in August 2008. Mr. Rawls also served as our President from April 2003 until the completion of the Optium merger and previously held that title from April 1989 to September 2002. From September 1968 to February 1989, Mr. Rawls was employed by Raychem Corporation, a materials science and engineering company, where he held various management positions including Division General Manager of the Aerospace Products Division and Interconnection Systems Division. Mr. Rawls holds a B.S. in Mechanical Engineering from Texas Tech University and an M.S. in Industrial Administration from Purdue University. Mr. Rawls' tenure with Finisar since 1989, including 19 years as President and/or Chief Executive Officer, provides him personal knowledge of the Company's history since shortly after its founding. This experience, together with his management and industry experience, enables him to provide the board with a Ph.D.unique perspective on the Company's business and operations and strategic issues.
Robert N. Stephens has served as a member of our board of directors since August 2005 and as our Lead Director since March 2010. Mr. Stephens served as the Chief Executive Officer since April 1999 and President since October 1998 of Adaptec, Inc., a storage solutions provider, until his retirement in Physical ChemistryMay 2005. Mr. Stephens joined Adaptec in November 1995 as Chief Operating Officer. Before joining Adaptec, Mr. Stephens was the founder and chief executive officer of Power I/O, a company that developed serial interface solutions and silicon expertise for high-speed data networking, that was acquired by Adaptec in 1995. Prior to founding Power I/O, Mr. Stephens was President and CEO of Emulex Corporation, which designs, develops and supplies Fibre Channel host bus adapters. Before joining Emulex, Mr. Stephens was Senior Vice President, General Manager, and founder of the Microcomputer Products Group at Western Digital Corporation. He began his career at IBM, where he served over 15 years in a variety of management positions. Mr. Stephens holds a B.A. in Philosophy and Psychology and an M.S. in Industrial Psychology from Case Western ReserveSan Jose State University. Dr. FriesMr. Stephens brings to the board extensive managementexecutive and financeindustry experience in several industrya number of strategic and operational areas through his service as Chief Executive Officer of Adaptec, Power I/O and Emulex and in executive roles at Western Digital.
Dominique Trempont has served as a member of our board of directors since August 2005. Mr. Trempont is also a member of the board of directors of Energy Recovery, Inc., a manufacturer of efficient energy recovery devices utilized in the water desalination industry, RealNetworks, Inc., which provides products and services to enable consumers to save, store and access digital media on many different devices, the Daily Mail and General Trust, plc, a producer of content, information analytics and events for business and consumers, and on24, Inc., a leader in webcast and virtual events. Mr. Trempont served as a director of 3Com Corporation from 2006 until April 2010 when it was acquired by Hewlett-Packard Company. Mr. Trempont was CEO in residence at Battery Ventures from August 2003 until June 2004. Prior to joining Battery Ventures, Mr. Trempont was Chairman, President
and Chief Executive Officer of Kanisa, Inc., a software company focused on enterprise self-service applications, from November 1999 to November 2002. Mr. Trempont was President and Chief Executive Officer of Gemplus Corporation, a smart card company, from May 1997 to June 1999. Prior to his prioremployment at Gemplus, Mr. Trempont served as Chief Financial Officer and head of Operations at NeXT Software. Mr. Trempont began his career at Raychem Corporation. Mr. Trempont received an undergraduate degree in Economics from College Saint Louis (Belgium), a B.A., with high honors, in Business Administration and Software Engineering from the University of Louvain (Belgium), and a Master in Business Administration from INSEAD (France/Singapore). Mr. Trempont brings to the board broad executive and financial experience, including expertise in accounting and financial reporting, through his service as an executiveChief Executive Officer of severalKanisa and Gemplus, as Chief Financial Officer of NeXT, his service on the boards of other publicly-held technology companies and a venture capital investor.
There are no family relationships between any of our directors or executive officers.
The board of directors has determined that, other than Jerry S. Rawls, our Chairman of the Board, and Eitan Gertel, our Chief Executive Officer, each of the current members of the board is an “independent director”"independent director" for purposes of the Nasdaq Listing Rules andRule 10A-3(b)(1) under the Securities Exchange Act of 1934, as the term applies to membership on the board of directors and the various committees of the board of directors.
Jerry S. Rawls serves as Chairman of our board of directors, Eitan Gertel serves as our Chief Executive Officer and Messrs. Rawls and Gertel constitute our co-principal executive officers. The board believes that it is appropriate for Mr. Rawls to serve as Chairman given his long tenure with the Company and familiarity with our business strategy and our industry. The board also believes that having an executive officer serve as Chairman facilitates the flow of information between the board and management, thereby improving the board’sboard's ability to focus on key policy and operational issues and the long-term interests of our stockholders. In August 2008, on the recommendation of the Nominating and Governance Committee, the board established the position of lead director.Lead Director. Mr. Stephens currently serves in that position. The lead directorLead Director serves as the principal liaison between the independent directors and the Chairman. In that capacity, the lead directorLead Director presides over executive sessions of the independent directors, chairs board meetings in the Chairman’sChairman's absence, and collaborates with the Chairman on agendas, schedules and materials for board meetings. The board believes that this leadership structure provides the appropriate balance of management and non-management oversight.
We face a number of risks, including general economic risks, operational risks, financial risks, competitive risks and reputational risks. Management is responsible for theday-to-day management of the risks that we face, while the board of directors, as a whole and through its committees, has responsibility for the oversight of risk management. While the full board of directors is charged with ultimate oversight responsibility for risk management, committees of the board also have responsibilities with respect to various aspects of our risk oversight. In particular, the Audit Committee plays a significant role in monitoring and assessing our financial and operational risks. The Audit Committee reviews and discusses with management areas of financial risk exposure and steps management has taken to monitor and control such exposure. The Audit Committee also is responsible for establishing and administering our code of ethics and reviewing and approving transactions between Finisar and any related parties. The Compensation Committee monitors and assesses risks associated with our compensation policies, and oversees the development of incentives that encourage a level of risk-taking consistent with our overall strategy. The Nominating and Governance Committee has oversight responsibility for corporate governance risks, including risks associated with director independence.6
Non-management directors generally meet in executive session without management present at each regularly scheduled meeting of the board.
The board of directors held Audit Committee The members of the Audit Committee during fiscal The members of the Compensation Committee during fiscal Nominating and Governance Committee The members of the Nominating and Governance Committee during fiscal eightten meetings during the fiscal year ended April 30, 2010.2011. The board of directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. During the last fiscal year, no director attended fewer than 75% of the total number of meetings of the board and all of the committees of the board on which such director served during that period.20102011 were Messrs. Crespi,Child (beginning in August 2010), Ferguson, Pardun, (beginning in March 2010), Trempont and, until his deaththe annual meeting of stockholders in JanuaryOctober 2010, Larry D. Mitchell. Mr. Child was appointedChristopher J. Crespi, a former director who declined to the Audit Committee in August 2010.stand for re-election. Messrs. Ferguson and Trempont have been designated as audit committee financial experts, as defined in the applicable rules of the Securities and Exchange Commission. The functions of the Audit Committee include oversight, review and evaluation of our financial statements, accounting and financial reporting processes, internal control functions and the audits of our financial statements. The Audit Committee is responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm, and establishing and observing complaint procedures regarding accounting, internal auditing controls and auditing matters. Additional information concerning the Audit Committee is set forth in the Report of the Audit Committee immediately following Proposal No. 2. The Audit Committee held eightten meetings during the fiscal year ended April 30, 2010.2011.20102011 were Messrs. Fries,Child (beginning in June 2010), Stephens, Trempont and, until the annual meeting of stockholders in November 2009, Morgan Jones,October 2010, David C. Fries, a former director who declined to stand for re-election. Mr. Child was appointed to the Compensation Committee in June 2010. The Compensation Committee reviews and approves the compensation and benefits of our executive officers, reviews and approves equity awards to our employees and establishes and reviews general policies relating to compensation and benefits of our employees. Additional information regarding the Compensation Committee is set forth in “Executive"Executive Compensation and Related Matters — Matters—Compensation Discussion and Analysis”Analysis" below. The Compensation Committee held sixseven meetings during the fiscal year ended April 30, 2010.20102011 were Messrs. Ferguson, Fries, Pardun, (beginning in March 2010), Stephens and, until his deaththe annual meeting of stockholders in JanuaryOctober 2010, Mr. Mitchell.David C. Fries, a former director who declined to stand for re-election. The Nominating and Governance Committee identifies prospective candidates for appointment and nomination for election to the board of directors and makes recommendations to the board concerning such candidates, develops corporate governance principles for recommendation to the board of directors and oversees the evaluation of our directors. The Nominating and Governance Committee held four meetings during the fiscal year ended April 30, 2010.7
The Nominating and Governance Committee is responsible for, among other things, the selection and recommendation to the board of directors of nominees for election as directors. When considering the nomination of directors for election at an annual meeting, the Nominating and Governance Committee reviews the needs of the board of directors for various skills, background, experience and expected contributions and the qualification standards established from time to time by the Nominating and Governance Committee. When reviewing potential nominees, including incumbents, the Nominating and Governance Committee considers the perceived needs of the board of directors, the candidate’scandidate's relevant background, experience and skills and expected contributions to the board of directors. The Nominating and Governance Committee also seeks appropriate input from the Chairman of the Board, the Chief Executive Officer and other executive officers in assessing the needs of the board of directors for relevant background, experience and skills of its members.
The Nominating and Governance Committee’sCommittee's goal is to assemble a board of directors that brings to Finisar a diversity of experience at policy-making levels in business and technology, and in areas that are relevant to Finisar’sFinisar's global activities. Directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of our stockholders. They must have an inquisitive and objective outlook and mature judgment. They must also have experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are or have been affiliated. Director candidates must have sufficient time available in the judgment of the Nominating and Governance Committee to perform all board and committee responsibilities that will be expected of them. Members of the board of directors are expected to rigorously prepare for, attend and participate in all meetings of the board of directors and applicable committees. While we do not have a specific policy regarding diversity, when considering the nomination of directors, the Nominating and Governance Committee does consider the diversity of its directors and nominees in terms of knowledge, experience, background, skills, expertise and other demographic factors. Other than the foregoing, there are no specific minimum criteria for director nominees, although the Nominating and Governance Committee believes that it is preferable that a majority of the board of directors meet the definition of “independent director”"independent director" set forth in Nasdaq and SEC rules. The Nominating and Governance Committee also believes it appropriate for one or
more key members of the Company’sCompany's management, including the Chief Executive Officer, to serve on the board of directors.
The Nominating and Governance Committee will consider candidates for directors proposed by directors or management, and will evaluate any such candidates against the criteria and pursuant to the policies and procedures set forth above. If the Nominating and Governance Committee believes that the board of directors requires additional candidates for nomination, the Nominating and Governance Committee may engage, as appropriate, a third party search firm to assist in identifying qualified candidates. All incumbent directors and nominees will be required to submit a completed directors’directors' and officers’officers' questionnaire as part of the nominating process. The process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the Nominating and Governance Committee.
The Nominating and Governance Committee will also consider candidates for directors recommended by a stockholder, provided that any such recommendation is sent in writing to the board of directors,c/o Corporate Secretary, 1389 Moffett Park Drive, Sunnyvale, California94089-1113; Fax:(408) 745-6097; Email address: corporate.secretary@finisar.com, at least 120 days prior to the anniversary of the date definitive proxy materials were mailed to stockholders in connection with the prior year’syear's annual meeting of stockholders and contains the following information:
- •
- the candidate's name, age, contact information and present principal occupation or employment; and
- •
- a description of the candidate's qualifications, skills, background and business experience during at least the last five years, including his or her principal occupation and employment and the name and principal business of any company or other organization where the candidate has been employed or has served as a director.
8
In addition, stockholders may make direct nominations of directors for election at an annual meeting, provided the advance notice requirements set forth in our bylaws have been met. Under our bylaws, written notice of such nomination, including certain information and representations specified in the bylaws, must be delivered to our principal executive offices, addressed to the Corporate Secretary, at least 120 days prior to the anniversary of the date definitive proxy materials were mailed to stockholders in connection with the prior year’syear's annual meeting of stockholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been advanced by more than 30 days from the date contemplated at the time of the previous year’syear's proxy statement, such notice must be received not later than the close of business on the 10th day following the day on which the public announcement of the date of such meeting is first made.
Stockholders may communicate with the board of directors, or any individual director, by transmitting correspondence by mail, facsimile or email, addressed as follows: Board of Directors or individual director,c/o Corporate Secretary, 1389 Moffett Park Drive, Sunnyvale, California94089-1113; Fax:(408) 745-6097; Email Address: corporate.secretary@finisar.com. The Corporate Secretary will maintain a log of such communications and will transmit as soon as practicable such communications to the board of directors or to the identified director(s), although communications that are abusive, in bad taste or that present safety or security concerns may be handled differently, as determined by the Corporate Secretary. We attempt to schedule our annual meeting of stockholders at a time and date to accommodate attendance by directors, taking into account the We have a Code of Ethics, or the Code, that applies to all of our employees, officers and directors. The Code is available athttp://investor.finisar.com/governance.cfm. If we make any substantive amendments to the Code or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website, as well as via any other means then required by Nasdaq listing standards or applicable law. Our board of directors has adopted a written charter for each of the Audit Committee, Compensation Committee and Nominating and Governance Committee. Each charter is available on our website athttp://investor.finisar.com/documents.cfm. None of the members of the Compensation Committee are or have been an officer or employee of Finisar. During fiscal Under our current policy for the compensation of non-employee directors, Audit Compensation Nominating and Governance We also reimburse directors for their reasonable expenses incurred in attending meetings of the board and its committees. In addition, Director Compensation Table Michael C. Child Christopher J. Crespi Roger C. Ferguson David C. Fries Thomas E. Pardun Robert N. Stephens Dominique Trempont Michael C. Child Christopher J. Crespi Roger C. Ferguson David C. Fries Thomas E. Pardun Robert N. Stephens Dominique Trempont Michael C. Child Roger C. Ferguson Thomas E. Pardun Robert N. Stephens Dominique Trempont The Audit Committee of our board of directors has selected Ernst & Young LLP to serve as the independent The following table sets forth the aggregate fees billed to The Audit Committee has determined that all services performed by Ernst & Young LLP are compatible with maintaining the independence of Ernst & Young LLP. The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax and other services provided by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The Audit Committee has delegated to the chair of the Audit Committee the authority to approve permitted services, provided that the chair reports any decisions to the Audit Committee at its next scheduled meeting. The The affirmative vote of a majority of the shares present in person or by proxy and entitled to vote at the annual meeting is required for approval of this proposal. The board of directors unanimously recommends that you vote The Audit Committee currently consists of The Audit Committee oversees The Audit Committee has reviewed and discussed The Audit Committee has received Based on the review and discussions referred to above, the Audit Committee recommended to The foregoing Audit Committee Report shall not be deemed to be incorporated by reference into any filing of Finisar under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Finisar specifically incorporates such information by reference. The As described in "RESOLVED, that the compensation of the Company's named executive officers, as disclosed in the Company's definitive proxy statement for the 2011 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion, is hereby approved." The Dodd-Frank Act also requires that we conduct a separate advisory non-binding stockholder vote on whether future Say-on-Pay votes should occur every one, two or three years. You have the option to vote for any one of the three options, or to abstain from voting on the matter. Our board of directors believes that the Company's current executive compensation programs directly link executive compensation to our financial performance and align the interests of our executive officers with those of our stockholders. Our board of directors has determined that an advisory vote on executive compensation every year is the most appropriate option based on a number of considerations, including the following: Stockholders are not voting to approve or disapprove the board's recommendation. Rather, stockholders are being provided with the opportunity to cast a non-binding, advisory vote on whether the stockholder advisory vote on the compensation of our named executive officers should occur once every (a) one year, (b) two years or (c) three years, or to abstain from voting on the matter. The vote on the frequency of an advisory vote on the compensation of our named executive officers is advisory, and therefore is not binding on the Company, our board of directors or our Compensation Committee in any way. Our board of directors and our Compensation Committee value the opinions of our stockholders and will take into account the outcome of the vote in considering the frequency of future advisory votes on the compensation of our named executive officers. The affirmative vote of a majority of the shares present in person or by proxy and entitled to vote on the matter is required to approve the frequency of future Say-on-Pay votes. If a majority of the shares present in person or by proxy and entitled to vote on the matter do not vote in favor of one of the three frequencies, the frequency which receives the highest number of votes will be considered to be the frequency favored by stockholders. The board of directors unanimously recommends that you vote for the option of every "One Year" as the frequency with which the compensation of our named executive officers will be submitted for an advisory non-binding stockholder vote. Overview The following discussion explains our compensation philosophy, objectives and procedures and describes the forms of compensation awarded to our Chairman of the Board, our Chief Executive Officer, Philosophy, Objectives and Procedures Our fundamental compensation philosophy is to align the compensation of our senior management with our annual and long-term business objectives and performance and to offer compensation that will enable us to attract, retain and appropriately reward executive officers whose contributions are necessary for our long-term success. We seek to reward our executive The Compensation Committee of our board of directors oversees the design and administration of our executive compensation program. The principal elements of the program are base salary, annual cash bonuses and equity-based incentives which, to date, have been in the form of stock options and restricted stock units, or RSUs. In general, the Compensation Generally, the Compensation Committee reviews the compensation of our executive officers in the early part of each fiscal year and takes action at that time to award cash bonuses for the preceding fiscal year, to set base salaries and target bonuses for the current fiscal year and to consider long-term incentives in the form of equity-based awards. In setting our executive In its annual review of compensation for our executive officers, the Compensation Committee considers compensation data and analyses assembled and prepared by our Human Resources staff. In reviewing the performance of our Chairman of the Board and our Chief Executive Officer, the Committee solicits input from the other non-employee members of the board of directors. For the other executive officers, the Chairman and the Chief Executive Officer provide the Compensation Committee with a review of each In some years, the Compensation Committee retains compensation consultants to assist it in its review of executive officer compensation. The Compensation Committee engaged Unlimited, Inc., a compensation consulting firm, in connection with its In order to align executive compensation with our compensation philosophy, our executive officer compensation package contains three primary elements: base salary, annual cash bonuses and long-term equity incentives. In addition, we provide to our executive officers a variety of benefits that are available generally to other salaried employees. The basic elements of our executive compensation package are generally the same among all of our named executive officers. Fiscal 2011 Base Salaries Base salaries for our executive officers are initially set based on negotiation with the individual executive officer at the time of his or her recruitment and with reference to salaries for comparable positions in the fiber optics industry for individuals of similar education and background to those of the executive officer being recruited. We also give consideration to the The Compensation Committee engaged Assets Unlimited, Inc., a compensation consulting firm, to assist in its review of executive compensation for fiscal 2011. Assets Unlimited, Inc. prepared a report including a summary of compensation data for the following companies, including our industry peers and similarly-sized companies in our broader industry group (the In considering executive compensation levels for fiscal 2011, the Compensation Committee took into account its general compensation philosophy, as described above, and various other considerations, including the following: actual responsibilities of the Finisar officers and those typical for the generic categories listed in the On the basis of its review, in June 2010, the Compensation Committee set new base salaries for our executive officers for fiscal 2011, with increases of between 4% and 5% over the levels in effect during fiscal 2009 and 2010 (excluding the period in fiscal 2010 during which the temporary salary reduction was in force). The fiscal 2011 base salaries of the named executive officers and data on base salaries of officers of comparable companies Fiscal 2011 Cash Bonuses Under our compensation policy, a substantial component of each executive into account our operating results for the fourth quarter of fiscal 2011, the Compensation Committee determined that no portion of the discretionary component of the 2011 Plan would be awarded. Original target bonuses for each of the named executive officers under the 2011 Plan, bonuses actually paid under the plan Jerry S. Rawls Eitan Gertel Joseph A. Young Kurt Adzema Mark Colyar Todd Swanson Equity-based Incentives Longer term incentives are provided through equity-based awards granted under All stock option awards to our employees, including executive officers, are granted at fair market value on the date of grant, and will provide value to the executive officers only when the price of our common stock increases over the exercise price. We have established a policy whereby stock options and other equity awards to our employees, including executive officers, are generally granted by the Compensation Committee at regular quarterly meetings with an effective date that is the later of the third trading day following the public announcement of The vesting of stock options and RSUs held by our named executive officers is subject to acceleration pursuant to the terms of the Finisar Executive Retention and Severance Plan described below and, with respect to one stock option held by each of Eitan Gertel, our Chief Executive Officer, and Mark Colyar, our Senior Vice President, Operations and Engineering, pursuant to the applicable stock option agreement as described The size of the stock option and RSU awards granted to each executive officer during fiscal In fiscal Jerry S. Rawls Eitan Gertel Joseph A. Young Kurt Adzema Mark Colyar Todd Swanson Other Benefits and Perquisites Our named executive officers and other executives are generally eligible to receive the same health and welfare benefits offered to all employees in the geographic area in which they are based. We also offer participation in our During fiscal Changes in Executive Compensation for Fiscal 2012; Fiscal 2012 Executive Bonus Plan For fiscal 2012, the Compensation Committee conducted its annual review of executive compensation. The Compensation Committee again engaged Assets Unlimited, Inc. to assist in its review. Assets Unlimited, Inc. prepared a report including a summary of compensation data for the following companies, including our industry peers and similarly-sized companies in our broader industry group: In considering executive compensation levels for fiscal 2012 the Compensation Committee took into account its general compensation philosophy, as described above and various other considerations, including the following: On the basis of its review, in June 2011, the Compensation Committee set new base salaries for our executive officers for fiscal 2012, with increases of between 3% and 12% over the levels in effect during fiscal 2011. The fiscal 2012 base salaries of the named executive officers and data on base salaries of officers of comparable companies reviewed by the Compensation Committee in June 2011 are as follows: Jerry S. Rawls Eitan Gertel Joseph A. Young Todd Swanson Kurt Adzema Mark Colyar In June 2011, the Compensation Committee also adopted an executive bonus plan for the fiscal year ending April 30, 2012 (the "2012 Plan"). Under the 2012 Plan, the aggregate target bonuses for Messrs. Rawls and Gertel are 100% of their annual base salary, and the aggregate target bonus for each of the other named executive officers is 60% of their annual base salary. The aggregate bonus for each executive officer under the 2012 Plan will be based 50% on Finisar's achievement of pre-bonus non-GAAP operating income targets and 50% on a discretionary determination by the Compensation Committee taking into account the Company's overall financial performance, the applicable executive officer's performance for the fiscal year and such other factors as the Compensation Committee deems appropriate. The maximum total bonus payable to each officer under the formula and discretionary components of the 2012 Plan is two times the officer's target bonus. Any bonus amounts earned under the 2012 Plan are expected to be paid in cash. The Compensation Committee believes that achieving the formula-based portion of the target bonuses will be difficult. Achieving or exceeding the pre-bonus non-GAAP operating income targets will be dependent upon realizing revenue and operating income growth in the face of operational challenges and an environment of economic uncertainty. It will also be dependent on increased sales of our customers' products over which we have no control. Finisar has achieved or exceeded the non-GAAP operating income called for in its original annual operating plan in two of its last five fiscal years. In connection with its review of executive officer compensation in June 2011, the Compensation Committee also granted RSUs to each of our executive officers. The RSUs vest in annual installments over a four-year period, subject to the officers' continued service. The number of shares of our common stock underlying the RSUs granted to the named executive officers were calculated by dividing the following dollar values by the greater of (i) the closing sale price of our common stock on the date of grant and (ii) $15.00, with such amount rounded to the nearest whole share: Jerry S. Rawls Eitan Gertel Joseph A. Young Kurt Adzema Mark Colyar Todd Swanson Executive Retention and Severance Plan Our executive officers and certain other key executives designated by the Compensation Committee are eligible to participate in the Finisar Executive Retention and Severance Plan adopted by the Compensation Committee in February 2003. The Compensation Committee determined to provide change in control arrangements in order to mitigate some of the risk that exists for executives working in an environment where there is a meaningful possibility that Finisar could be acquired or the subject of another transaction that would result in a change in its control. Participants in this plan who are executive officers are entitled to receive cash severance payments equal to two years base salary and health and medical benefits for two years in the event their employment is terminated in connection with a change in control of Finisar. In addition, in the event of a change in control, vesting of stock options held by participants in the plan will be accelerated by one year, if the options are assumed by the acquiring company. If the options are not assumed by the acquirer, or if the Our executive officers who were former officers of Optium are parties to employment agreements and equity incentive agreements that they entered into with Optium and that were assumed by Finisar in connection with the Optium merger. See Accounting for Executive Compensation We account for equity compensation paid to our employees under measure and record an expense over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is incurred. Tax Considerations The Compensation Committee intends to consider the impact of Section 162(m) of the Internal Revenue Code in determining the mix of elements of future executive compensation. This section limits the deductibility of non-performance based compensation paid to each of We have reviewed The following table presents certain summary information concerning compensation paid or accrued by us for services rendered in all capacities during the fiscal year ended April 30, Jerry S. Rawls(2) Chairman of the Board Eitan Gertel(3) Chief Executive Officer Kurt Adzema(4) Executive Vice President, Finance and Chief Financial Officer Mark Colyar(5) Senior Vice President, Operations and Engineering Todd Swanson(6) Executive Vice President, Sales and Marketing Joseph A. Young Executive Vice President, Global Operations The following table sets forth certain information with respect to options and RSUs granted during or for the year ended April 30, The following table summarizes the number of securities underlying outstanding equity awards for each of our named executive officers as of the end of our fiscal year on April 30, Outstanding Equity Awards at Fiscal Year-End Jerry S. Rawls Eitan Gertel Kurt Adzema Mark Colyar Todd Swanson Joseph A. Young The following table provides information on stock option exercises by our named executive officers and vesting of RSUs held by them during the fiscal year ended April 30, Cash Payments and/or Acceleration of Vesting Following Certain Termination Events We have employment agreements with Eitan Gertel and Mark Colyar The tables below set forth the cash payments Eitan Gertel. Mr. Gertel, our Chief Executive Officer, executed an employment agreement with Optium on April 14, 2006, which was assumed by us at the time of the Optium merger and was amended and restated effective December 31, 2008. The initial term of the agreement was three years, provided that the term of the agreement is automatically extended for an additional term of one year on the third anniversary and each subsequent anniversary of the commencement date unless either party gives not less than 90 days notice prior to the expiration of the term that it does not wish to extend the agreement. The agreement entitles Mr. Gertel to a base salary of Cash severance Health care benefits Total Mark Colyar. Mr. Colyar, our Senior Vice President, Operations and Engineering, executed an employment agreement with Optium on April 14, 2006, which was assumed by us at the time of the Optium merger and was amended and restated effective December 31, 2008. The initial term of the agreement was two years, provided that the term of the agreement is automatically extended for an additional term of one year on the second anniversary and each subsequent anniversary of the commencement date unless either party gives not less than 90 days notice prior to the expiration of the term that it does not wish to extend the agreement. The agreement entitles Mr. Colyar to a base salary of Cash severance Health care benefits Total Executive Retention and Severance Plan Our executive officers, including our named executive officers, are eligible to participate in the Finisar Executive Retention and Severance Plan. This plan provides that in the event of a qualifying termination each of the participating executives will be entitled to receive (i) a lump sum payment equal to two Jerry S. Rawls Eitan Gertel Kurt Adzema Mark Colyar Todd Swanson Joseph A. Young Benefits to Messrs. Gertel and Colyar under the Executive Retention and Severance Plan will be reduced by the amount of comparable benefits to which they are entitled under the employment agreements described above. We are not obligated to make any cash payments to these executives if their employment is terminated by us for cause or by the executive other than for good reason. No severance or benefits are provided for any of the executive officers in the event of death or disability. A change in control does not affect the amount or timing of these cash severance payments. April 30, Pursuant to our Code of Ethics, our executive officers, directors and employees are to avoid conflicts of interest, except with the approval of the board of directors. A related party transaction would be a conflict of interest. The board has delegated to the Audit Committee the authority to review and approve related party transactions. In approving or rejecting a proposed transaction, the Audit Committee will consider the relevant facts and circumstances and, if applicable, the impact of the proposed transaction on the Other than as described below and the compensation arrangements and other arrangements described in Guy Gertel, the brother of Eitan Gertel, our Chief Executive Officer, provided sales and marketing services to Optium through GHG Technologies, a company he owns. Subsequent to the Optium merger in August 2008, GHG Technologies has continued to provide such services to Finisar. For services rendered during fiscal The following table sets forth information known to us regarding the beneficial ownership of our common stock as of September 30, 2011 by: To our knowledge, there are no stockholders who beneficially own more than 5% of our common stock. Directors Jerry S. Rawls(2) Eitan Gertel(3) Michael C. Child(4) Roger C. Ferguson(5) Thomas E. Pardun(6) Robert N. Stephens(7) Dominique Trempont(8) Named Executive Officers : Kurt Adzema(9) Mark Colyar(10) Todd Swanson(11) Joseph A. Young(12) All executive officers and directors as a group (13 persons)(13) Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us copies of all Section 16(a) forms filed by such person. Based solely on our review of such forms furnished to us, and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and more than 10% stockholders during the fiscal year ended April 30, We currently maintain As of April 30, Stockholder proposals may be included in our proxy materials for an annual meeting so long as they are provided to us on a timely basis and satisfy the other conditions set forth in applicable SEC rules. For a stockholder proposal to be included in our proxy materials for the At the date of this proxy statement, the board of directors knows of no other business that will be conducted at the annual meeting of stockholders of Finisar other than as described in this proxy statement. If any other matter or matters are properly brought before the meeting, or any adjournment or postponement of the meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment. October 18, 2011 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0 0 0 0 0 0 0 0 0 0 0 0 0 0000116129_1 R1.0.0.11699 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees 01 Eitan Gertel 02 Thomas E. Pardun FINISAR CORPORATION 1389 MOFFETT PARK DRIVE SUNNYVALE, CA 94089-1133 VOTE BY INTERNET - www.proxyvote.com 0000116129_2 R1.0.0.11699 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report is/ are available at www.proxyvote.com . FINISAR CORPORATION Annual Meeting of Stockholders November 28, 2011 10:00 AM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Jerry S. Rawls and Kurt Adzema, or either of them, as proxies and attorneys-in-fact, each with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Finisar Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., local time, on November 28, 2011, at the offices of DLA Piper LLP (US), 2000 University Avenue, East Palo Alto, CA 94303, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side directors’directors' schedules. Directors are encouraged to attend our annual meeting of stockholders, but the board has not adopted a formal policy with respect to such attendance. Three directors attended our last annual meeting of stockholders.2010,2011, no member of the Compensation Committee had any relationship with Finisar requiring disclosure under Item 404 ofRegulation S-K. During fiscal 2010,2011, none of Finisar’sFinisar's executive officers served on the compensation committee (or its equivalent) or board of directors of another entity any of whose executive officers served on Finisar’sFinisar's Compensation Committee or board of directors.9
Table of Contentsthatwhich was in effect during fiscal 2010,2011, non-employee directors (other than Morgan Jones, who declined compensation) wereare entitled to receive an annual retainer of $30,000 and $2,000 for attendance in person ($1,000 for attendance by telephone) at each meeting of the board of directors or its committees (with regular quarterly meetings of the board of directors and committee meetings held on the day of such regular board meetings considered to be a single meeting). The Lead Director was entitled to receive an additional amount of $20,000 per year for serving in$50,000 that capacity. In addition, members of the standing committees of the board were entitled to receive annual retainers,is payable quarterly, in the following amounts: Other Chair Members Audit $ 20,000 $ 10,000 Compensation 15,000 7,500 Nominating and Governance 12,500 6,000 In February 2009, in connection with the broad-based 10% reduction in base salaries of our employees, all cash compensation payable to non-employee directors was temporarily reduced by 10% from the amounts described above. On September 9, 2009, the board of directors determined to reverse the 10% reduction in non-employee director compensation, effective November 2, 2009, concurrently with the reversal of the broad-based 10% salary reductions affecting most of ourU.S.-based employees.Under the policy in effect during fiscal 2010, all new, non-employee directors were granted an option to purchase 8,750 shares of our common stock upon their initial election to the board and an option to purchase 3,750 shares of our common stock and an RSU for 1,250 shares on an annual basis thereafter. The grant of the annual options and RSUs to non-employee directors was generally made at the first meeting of the board of directors in each fiscal year. The initial options vest over a period of three years from the date of grant, and the annual options and RSUs vest on the first anniversary of the date of grant. As with all options, the per-share exercise price of each such option equals the fair market value of a share of common stock on the date of grant. In addition to the annual grants made during fiscal 2010, in September 2009, to partially address the diminished incentive value of their outstanding options, the board approved a special award of options and RSUs to the non-employee directors based on the number of shares of underlying outstanding stock options having exercise prices greater than the 52-week high trading price of Finisar common stock as of the grant date.In June 2010, the board of directors approved a revised policy for the compensation of non-employee directors. Under the revised policy, effective May 1, 2010 non-employee directors receive an increased annual retainer of $50,000 but no longer receive additional per-meeting fees for attendance at board and committee meetings.quarterly. The Lead Director receives an additional amount of $10,000 per year for serving in that capacity. In addition, members of the standing committees of the board are entitled to receive annual retainers, payable quarterly, in the following amounts.amounts: Chair Other
Members $ 16,000 $ 8,000 10,000 5,000 10,000 5,000 Other Chair Members Audit $ 16,000 $ 8,000 Compensation 10,000 5,000 Nominating and Governance 10,000 5,000 Under both the former and current policy, we under the revised policy all new non-employee directors willare entitled to receive an RSUa restricted stock unit ("RSU") award with a value of $100,000 upon their initial election to the board and an additional RSU award with a value of $50,000 on an annual basis thereafter. The grant of the annual RSU awards willis generally be made at the first meeting of the board in each fiscal year. The initial RSU awards vest over a period of three years from the date of grant, and the annual RSU awards vest on the first anniversary of the date of grant. The number of shares subject to each RSU award will beis determined based on the per share value of our common stock on the date of grant.102010: Fees Earned or
Paid in Cash Stock
Awards(1)(2) Option
Awards(1)(2) All Other
Compensation Total
Compensation $ 58,625 $ 99,997 $ — $ — $ 158,622 39,000 49,990 — — 88,990 86,000 49,990 — — 135,990 49,250 49,990 — — 99,240 76,000 49,990 — — 125,990 96,500 49,990 — — 146,490 77,875 49,990 — — 127,865 Fees Earned or Stock Option All Other Total Paid in Cash Awards(1) Awards(1)(2) Compensation Compensation Christopher J. Crespi $ 60,600 $ 9,100 $ 17,986 $ — $ 87,686 Roger C. Ferguson 82,200 27,300 29,977 — 139,477 David C. Fries 62,750 21,840 26,380 — 110,970 Morgan Jones — — — — — Larry D. Mitchell 62,651 43,680 40,769 — 147,100 Thomas E. Pardun 17,500 16,625 78,688 — 112,813 Robert N. Stephens 62,251 21,840 26,380 — 110,471 Dominique Trempont 68,026 21,840 26,380 — 116,246 Grant Date Number of
Shares of
Common Stock
Underlying
Options and
Stock Awards Exercise
Price of
Options and
Stock Awards
($/Share) Grant Date
Fair Value of
Option and
Stock Awards 6/15/10 6,353 (1) $ — $ 99,997 6/15/10 3,176 (2) — 49,990 6/15/10 3,176 (2) — 49,990 6/15/10 3,176 (2) — 49,990 6/15/10 3,176 (2) — 49,990 6/15/10 3,176 (2) — 49,990 6/15/10 3,176 (2) — 49,990 (1)Valuation based on the grant date fair value of the equity awards computed in accordance with FASB ASC Topic 718. The assumptions used by us with respect to the valuation of option grants are set forth in “Finisar Corporation Consolidated Financial Statements — Notes to Financial Statements — Note 17 — Stockholders’ Equity” included in our annual report onForm 10-K for fiscal 2010.(2)The following table sets forth certain information with respect to the stock options and RSUs granted during the fiscal year ended April 30, 2010 to each non-employee member of our board of directors: Number of Shares of Exercise Common Stock Price of Grant Date Underlying Options and Fair Value of Options and Stock Awards Option and Grant Date Stock Awards ($/Share) Stock Awards Christopher J. Crespi 9/15/2009 3,750 (1) $ 7.28 $ 17,986 9/15/2009 1,250 (2) — 9,100 Roger C. Ferguson 9/15/2009 6,250 (1) 7.28 29,977 9/15/2009 3,750 (2) — 27,300 David C. Fries 9/15/2009 5,500 (1) 7.28 26,380 9/15/2009 3,000 (2) — 21,840 Morgan Jones — — — — Larry D. Mitchell 9/15/2009 8,500 (1) 7.28 40,769 9/15/2009 6,000 (2) — 43,680 Thomas E. Pardun 3/8/2010 8,750 (3) 13.30 78,688 3/8/2010 1,250 (2) — 16,625 Robert N. Stephens 9/15/2009 5,500 (1) 7.28 26,380 9/15/2009 3,000 (2) — 21,840 Dominique Trempont 9/15/2009 5,500 (1) 7.28 26,380 9/15/2009 3,000 (2) — 21,840 (1)Stock option awards; includes both annual awards and the special award, if any, described above.(2)RSU awards; includes both annual awards and the special award, if any, described above.(3)Initial stock option award granted upon Mr. Pardun’s election to the board.11The Our non-employee directors held the following numbers of stock options and unvested RSUs as of April 30, 2010.2011. Stock Options
Outstanding Unvested Restricted
Stock Units
Outstanding — 6,353 22,709 4,426 8,750 3,176 7,469 4,051 23,833 4,051 Unvested Restricted Stock Options Stock Units Outstanding Outstanding Christopher J. Crespi 32,939 1,250 Roger C. Ferguson 25,209 3,333 David C. Fries 19,247 3,000 Thomas E. Pardun 8,750 1,250 Robert N. Stephens 22,166 3,000 Dominique Trempont 23,833 2,708
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSREGISTERED PUBLIC
ACCOUNTING FIRMauditorsregistered public accounting firm to audit the consolidated financial statements of Finisar for the fiscal year ending April 30, 2011.2012. Ernst & Young LLP has acted in such capacity since its initial appointment in fiscal 1999. A representative of Ernst & Young LLP is expected to be present at the annual meeting, with the opportunity to make a statement if the representative desires to do so, and is expected to be available to respond to appropriate questions.usFinisar for the fiscal years ended April 30, 20102011 and April 30, 20092010 by our principal independent registered public accounting firm, Ernst & Young LLP: Year Ended Year Ended April 30, April 30, 2010 2009 Year Ended
April 30, 2011 Year Ended
April 30, 2010 Audit fees(1) $ 2,452,000 $ 2,650,000 $ 1,836,552 $ 2,452,000 Audit-related fees(2) — 26,000 26,208 — Tax fees(3) 18,200 100,000 11,159 18,200 Total Fees $ 2,470,200 $ 2,776,000 $ 1,873,919 $ 2,470,200 (1)Audit fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements, internal control over financial reporting and the review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements, consultations in connection with acquisitions and concerning financial reporting, and attest services.(2)Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” This category includes fees related to employee benefit plan audits and financial due diligence.(3)Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning.12 If the stockholders do not approve the ratification of the appointment of Ernst & Young LLP as our auditors, the Audit Committee will re-consider its selection.“FOR”"FOR" the ratification of the appointment of Ernst & Young LLP as our independent auditorsregistered public accounting firm for the fiscal year ending April 30, 2011.2012.13fivefour directors, each of whom, in the judgment of the board of directors, is an “independent director”"independent director" as defined in the listing standards for the Nasdaq Stock Market. The Audit Committee acts pursuant to a written charter that has been adopted by the board of directors. A copy of the charter is available on Finisar’sFinisar's website athttp://investor.finisar.com/documents.cfm.Finisar’sFinisar's financial reporting process on behalf of the board of directors. The Audit Committee is responsible for retaining Finisar’sFinisar's independent registered public accounting firm, evaluating theirits independence, qualifications and performance and approving in advance the engagement of the independent registered public accounting firm for all audit and non-audit services. Management has the primary responsibility for the financial statements and the financial reporting process, including internal control systems, and procedures designed to insure compliance with applicable laws and regulations. Finisar’sFinisar's independent registered public accounting firm, Ernst & Young LLP, is responsible for expressing an opinion as to the conformity of our audited financial statements with generally accepted accounting principles.Finisar’sFinisar's audited financial statements with management. The Audit Committee has discussed with Ernst & Young LLPthe independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA,Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has met with Ernst & Young LLP,the independent registered public accounting firm, with and without management present, to discuss the overall scope of Ernst & Young LLP’sthe independent registered public accounting firm's audit, the results of its examinations, its auditevaluations of Finisar’sFinisar's internal controls and the overall quality of Finisar’sFinisar's financial reporting. from Ernst & Young LLP the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’sfirm's communications with the Audit Committee concerning independence and has discussed with Ernst & Young LLP any relationship that may impact their objectivity and independence, and has satisfied itself as to the auditors’independent registered public accounting firm its independence.Finisar’sFinisar's board of directors that Finisar’sFinisar's audited financial statements be included in Finisar’sFinisar's Annual Report onForm 10-K for the fiscal year ended April 30, 2010.2011.AUDIT COMMITTEE
Roger C. Ferguson (Chair)
Michael C. Child
Thomas E. Pardun
Dominique TrempontAUDIT COMMITTEERoger C. Ferguson (Chair)Michael C. ChildChristopher J. CrespiThomas E. PardunDominique Trempont14
Table of Contents
PROPOSAL NO. 3
ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERSfollowing table sets forth information knownDodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, requires that our stockholders have the opportunity to us regardingvote to approve, on a non-binding or advisory basis, the beneficial ownershipcompensation of our common stocknamed executive officers as disclosed in the "Executive Compensation" section of July 31, 2010 by:• each of our directors;• each of our executive officers namedthis proxy statement in accordance with SEC rules, commonly referred to as a "Say-on-Pay" vote. the Summary Compensation Table for Fiscal 2010 in “Executive Compensation and Related Matters” below; and• all of our executive officers and directors as a group.To our knowledge, there are no stockholders who beneficially own more than 5%Compensation Discussion and Analysis included elsewhere in this proxy statement, we seek to closely align the interests of our common stock. Shares of Common Stock Beneficially Owned(1) Number Percentage Jerry S. Rawls(2) 1,153,473 1.50 % Eitan Gertel(3) 932,316 1.21 % Michael C. Child(4) 5,979 * Christopher J. Crespi(5) 34,478 * Roger C. Ferguson(6) 32,474 * David C. Fries(7) 18,611 * Thomas E. Pardun — * Robert N. Stephens(8) 22,780 * Dominique Trempont(9) 24,317 * Kurt Adzema(10) 79,366 * Mark Colyar(11) 272,435 * Todd Swanson(12) 60,066 * Stephen K. Workman(13) 175,758 * Joseph A. Young(14) 166,436 * All executive officers and directors as a group (15 persons)(15) 3,109,354 3.97 % *Less than 1%.(1)The address of each of the named individuals is:c/o Finisar Corporation, 1389 Moffett Park Drive, Sunnyvale, CA 94089. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. All shares of common stock subject to options exercisable within 60 days following July 31, 2010 and restricted stock units (RSUs) that vest within that period are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the number of shares beneficially owned and the percentage of ownership of that person. They are not, however, deemed to be outstanding and beneficially owned for the purpose of computing the percentage ownership of any other person. Accordingly, percent ownership is based on 76,483,100 shares of common stock outstanding as of July 31, 2010 plus any shares issuable pursuant to options held by the person or group in question which may be exercised within 60 days following July 31, 2010 and RSUs that vest within that period. Except as indicated in the other footnotes to the table and subject to applicable community property laws, based on information provided by the persons named in the table, these persons have sole voting and investment power with respect to all shares of the common stock shown as beneficially owned by them.(2)Includes 346,648 shares held by The Rawls Family, L.P. Mr. Rawls is the president of the Rawls Management Corporation, the general partner of The Rawls Family, L.P. Includes (a) 435,344 shares issuable upon exercise15
This advisory vote on executive compensation is not intended to address any specific item of compensation, but rather the overall compensation of our Chairman of the Board, our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers, who are collectively referred to as our named executive officers, which is disclosed elsewhere in this proxy statement. The vote is advisory, and therefore is not binding on the Company, our board of directors or our Compensation Committee in any way. Furthermore, because this non-binding, advisory resolution primarily relates to the compensation of our named executive officers that has already been paid or contractually committed, there is generally no opportunity for us to revisit these decisions. However, our board of directors and our Compensation Committee value the opinions of our stockholders and will take into account the outcome of the vote when considering future executive compensation policies and decisions.
Stockholders will be asked at the annual meeting to approve the following resolution pursuant to this Proposal No. 3:of options exercisable within 60 days following July 31, 2010 and (b) 7,813 RSUs that vest within 60 days following July 31, 2010.(3)Includes (a) 565,064 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010, (b) 7,813 RSUs that vest within 60 days following July 31, 2010 and (c) 31,907 shares issuable upon exercise of a warrant that is currently exercisable.(4)Includes 5,061 shares held by the Child Family Trust.(5)Includes (a) 30,221 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 1,250 RSUs that vest within 60 days following July 31, 2010.(6)Includes (a) 21,849 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 1,458 RSUs that vest within 60 days following July 31, 2010.(7)Includes (a) 16,778 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 1,395 RSUs that vest within 60 days following July 31, 2010.(8)Includes (a) 19,697 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 1,395 RSUs that vest within 60 days following July 31, 2010.(9)Includes (a) 21,234 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 1,395 RSUs that vest within 60 days following July 31, 2010.(10)Includes (a) 72,912 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 3,344 RSUs that vest within 60 days following July 31, 2010.(11)Includes (a) 219,785 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010, (b) 3,750 RSUs that vest within 60 days following July 31, 2010 and (c) 5,676 shares issuable upon exercise of a warrant that is currently exercisable.(12)Includes (a) 51,847 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 3,802 RSUs that vest within 60 days following July 31, 2010.(13)Includes (a) 132,554 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010 and (b) 3,125 RSUs that vest within 60 days following July 31, 2010.(14)Includes (a) 161,748 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010, (b) 4,688 RSUs that vest within 60 days following July 31, 2010.(15)Includes (a) 1,871,117 shares issuable upon exercise of options exercisable within 60 days following July 31, 2010, (b) 44,353 RSUs that vest within 60 days following July 31, 2010 and (c) 37,583 shares issuable upon exercise of warrants that are currently exercisable.
The affirmative vote of a majority of the shares present in person or by proxy and entitled to vote on the matter is required for approval of this resolution.The board of directors unanimously recommends that you vote "FOR" approval of the foregoing resolution.
PROPOSAL NO. 4
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY STOCKHOLDER VOTES
ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Vote Required and Recommendation of the Board of Directorseach of the executives who served as our Chief Financial Officer, during the fiscal year ended April 30, 2010, and each of our three other most highly-compensated executives (determined as of April 30, 2010)2011). We refer to these individuals as our “named"named executive officers.”" This discussion focuses on the information contained in the tables and related footnotes and narrative included below, primarily for our 20102011 fiscal year, but also contains information regarding compensation actions taken before and after fiscal 20102011 to the extent we believe such information enhances our executive compensation disclosure.officers’officers' contributions to achieving revenue growth, increasing operating profitsincome and controlling costs. We operate in a very competitive environment for executive talent, and we believe that our compensation packages must be competitive when compared to our peers and should also be aligned with our stockholders’stockholders' short and long-term interests.Committee’sCommittee's policy is that the base salary component oftotal compensation paid to our executive officer compensation packageofficers should be comparable to thefair and competitive, taking into account, among other factors, compensation paid by peer companies to officers with comparable responsibilities while incentive compensation,and our success in achieving our revenue and operating income goals. However, it is not the formCompensation Committee's policy to adhere to a rigid formula or benchmark system and, for a variety of annual cash bonuses and equity awards, should provide an opportunity forreasons, including our comparatively rapid recent growth, various elements of our executive officers to earn total compensation exceedingpackage may lag behind the median total compensation of their counterparts atamounts paid by our peer companies based on their individual performance and Finisar’s operating results exceeding targeted objectives.officers’officers' total compensation, the Compensation Committee considers individual and company performance, as well as compensation surveys, including the Radford Executive Survey, and other market information regarding compensation paid by comparable companies, including our industry peers.individual’sindividual's performance and contributions over the past year and make recommendations regarding their compensation that the Compensation Committee considers.J. Richard & Co.Assetsannual review of executive officer compensationreviews at the beginning of fiscal 2009. In part because of temporary,across-the-board salary reductions that were in effect at the beginning of2011 and fiscal 2010, the Compensation Committee did not engage a compensation consultant in connection with its review of executive officer compensation for fiscal 2010. The Compensation Committee engaged Assets Unlimited, Inc., a17compensation consulting firm, in connection with its review at the beginning of fiscal 2011.2012. The Compensation Committee reviewed cash and equity compensation analyses prepared by Assets Unlimited, Inc. and met with a representative of that firm.FormsComponents of Compensationindividual’sindividual's experience, track record of contribution in his or her industry and expected contributions to Finisar. Salaries are reviewed annually by the Compensation Committee, typically at the beginning of the fiscal year, and adjustments are made based on (i) salary recommendations of our Chairman of the Board and our Chief Executive Officer, (ii) the Compensation Committee’sCommittee's assessment of the individual performance of the executive officers during the previous fiscal year, (iii) Finisar’sFinisar's financial results for the previous fiscal year and (iv) changes in competitive pay levels, based on compensation data and analyses assembled and prepared by our Human Relations staff and, in years when a compensation consultant is engaged to assist the Compensation Committee, reports by such consultant.In February 2009, in light of deteriorating global market conditions and their effect on our then current and prospective operating results and financial condition, the Compensation Committee determined to temporarily reduce the base salaries of our Chairman, Chief Executive Officer and all other executive officers by 10%. This determination was not based on individual performance, but was made as part of a broad-based 10% reduction in base salary that affected all of ourU.S.-based employees (provided that no base salary was reduced below $50,000). Thisacross-the-board salary reduction remained in effect throughout the first half of fiscal 2010. In September 2009, the Compensation Committee approved the reversal of the 10% reduction in officer salaries, effective November 2, 2009, concurrently with the reversal of the broad-based salary reduction affecting other employees. During the second half of fiscal 2010, our executive officers received base salaries at the levels in effect at the beginning of fiscal 2009.“Peer Companies”"Peer Companies"):Applied Micro Circuits Netgear QLogic Atheros Communications Novellus Quantum Corp. Cadence Design Oclaro Smart Modular Coherent Omnivision Triquint Equinix Opnext Varian Intersil Plantronics MRV Communications PMC Sierra • the officers’across-the-board salary reduction that had been in effect during the first half of fiscal 2010;18• specific contributions of individual officers during fiscal 2010, changes in their duties and responsibilities and their expected contributions during fiscal 2011; and• the Company’s financial performance during fiscal 2010 and the then-current outlook for fiscal 2011.The Committee also considered companies. In reviewing that data, the Committee tookcompanies, taking into account differences between thereportsreports; andrecent change in Finisar’s peer group status as a result of increased revenues resulting from the Optium merger.thatreviewed by the Compensation Committee consideredin June 2010 are as follows: Median Median Fiscal 2011 Peer Company Radford Base Salary Base Salary(1) Base Salary(2) Fiscal 2011
Base Salary Median
Peer Company
Base Salary(1) Median
Radford
Base Salary(2) Jerry S. Rawls $ 461,760 $ 531,692 $ 603,000 $ 461,760 $ 531,692 $ 603,000 Eitan Gertel $ 461,760 $ 531,692 $ 603,000 $ 461,760 $ 531,692 $ 603,000 Joseph A. Young $ 369,200 $ 304,750 $ 334,400 $ 369,200 $ 304,750 $ 334,400 Kurt Adzema $ 294,000 $ 318,327 $ 330,000 $ 294,000 $ 318,327 $ 330,000 Mark Colyar $ 293,436 $ 304,750 $ 334,400 $ 293,436 $ 304,750 $ 334,400 Todd Swanson $ 285,600 $ 306,923 $ 350,000 $ 284,031 $ 306,923 $ 350,000 Stephen K. Workman $ 282,880 $ 224,662 $ 208,613 (1)Based on data compiled by Assets Unlimited, Inc. for base salaries of officers with comparable duties at the Peer Companies.(2)Based on data from the Radford Executive Survey for base salaries of officers with comparable duties at companies with annual revenues of between $500 million and $1 billion.officer’sofficer's potential annual compensation takes the form of a performance-based cash bonus. The amounts of cash bonuses paid to our executive officers, other than the Chairman and the Chief Executive Officer, are determined by the Compensation Committee, in consultation with the Chairman and Chief Executive Officer, based on Finisar’sFinisar's financial performance and the achievement of the officer’sofficer's individual performance objectives. The amount of cash bonuses paid to the Chairman and the Chief Executive Officer are determined by the Compensation Committee, without participation by the Chairman or the Chief Executive Officer, based on the same factors.In September 2009, the Compensation Committee adopted an executive officer bonus plan for the fiscal year ended April 30, 2010 (the “Fiscal 2010 Bonus Plan”). Under the Fiscal 2010 Bonus Plan, like previous plans, each executive officer was eligible to receive a target cash bonus of up to 100% of the executive officer’s annual base salary. The amount, if any, of an executive officer’s annual bonus under the Fiscal 2010 Bonus Plan was to be based 70% on the percentage increase of Finisar’s operating cash flow in fiscal 2010 over the previous fiscal year and 30% on a discretionary determination by the Compensation Committee of the applicable executive officer’s performance and achievement of individual goals for the fiscal year. In addition, notwithstanding the achievement of increased operating cash flowand/or individual performance goals, no executive officer was entitled to receive a bonus under the Fiscal 2010 Bonus Plan unless cash bonuses were granted generally to non-executive officer employees with respect to the fiscal year ended April 30, 2010.We did not achieve an increase in operating cash flow in fiscal 2010 over the previous year, due principally to the significant investment in accounts payable and working capital that had been required to support our growth in19the second half of the fiscal year. Accordingly, no bonuses became payable under the formula-based portion of the Fiscal 2010 Bonus Plan. However, the Compensation Committee took note of Finisar’s improved financial performance in the second half of the fiscal year as well as management’s success in completing several significant transactions that substantially improved its balance sheet. After considering these factors and the individual performance of the executive officers, the Committee granted the maximum discretionary bonus, of 30% of each executive officer’s base salary, payable under the Fiscal 2010 Bonus Plan. Original target bonuses for each of the named executive officers under the Fiscal 2010 Bonus Plan, bonuses actually paid under the plan for their services during fiscal 2010 and data on bonuses and non-equity compensation paid by comparable companies were as follows: Median Peer Group Median Non-Equity Radford Non-Equity Fiscal 2010 Fiscal 2010 Incentive Incentive Target Bonus Bonus Paid Compensation(1) Compensation(2) Jerry S. Rawls $ 440,000 $ 133,200 $ 271,531 $ 483,000 Eitan Gertel $ 440,000 $ 133,200 $ 271,531 $ 483,000 Joseph A. Young $ 335,000 $ 106,500 $ 73,959 $ 167,000 Mark Colyar $ 282,150 $ 84,645 $ 73,959 $ 167,000 Kurt Adzema $ 280,000 $ 84,000 $ 10,000 $ 62,773 Todd Swanson $ 272,000 $ 81,600 $ 264,201 $ 213,200 Stephen K. Workman $ 272,000 $ 81,600 $ 99,631 $ 239,920 (1)Based on data compiled by Assets Unlimited, Inc. for bonuses and other non-equity incentive payments to officers with comparable duties at the Peer Companies.(2)Based on data from the Radford Executive Survey for bonuses and other non-equity incentive payments to officers with comparable duties at companies with annual revenues of between $500 million and $1 billion.endingended April 30, 2011 (the “Fiscal 2011 Bonus Plan”"2011 Plan"). Under the Fiscal 2011 Bonus Plan, the aggregate target bonuses for Messrs. Rawls and Gertel arewere 100% of their annual base salary, and the aggregate target bonus for each of the other named executive officers iswas 60% of their annual base salary. The aggregate bonus for each executive officer under the Fiscal 2011 Bonus Plan willwas to be based 70% on Finisar’sFinisar's achievement of the pre-bonus non-GAAP operating income called for by its fiscal 2011 operating plan and 30% on a discretionary determination by the Compensation Committee of the applicable executive officer’sofficer's performance and achievement of individual goals for the fiscal year. Finisar mustwas required to achieve at least 58% of its pre-bonus non-GAAP operating income target before a portion of the quantitative bonus canwould be earned; the amount of the bonus willwould increase on a linear basis thereafter, with no limit on the amount of the quantitative bonus that maycould be earned. If Finisar achieves itsOur pre-bonus non-GAAP operating income target,during fiscal 2011 increased by approximately 308% over the amount of the quantitative portion of the bonus for each executive officer will equal 70% of the aggregate target bonus for each named executive officer. If Finisar exceeds its pre-bonus non-GAAP operating income target, the amount of the quantitative bonus for each executive officer will exceed 70% of the aggregate target bonus. Any bonus amounts earned under the Fiscal 2011 Bonus Plan are expected to be paid in cash. The Compensation Committee believes that achieving the formula-based portion of the target bonuses will be difficult. Achieving or exceeding the pre-bonus non-GAAP operating income called for inprevious fiscal year and substantially exceeded our fiscal 2011 operating plan. Accordingly, bonuses earned by our executive officers under the quantitative component of the 2011 Plan substantially exceeded target levels. In light of these results, and takingwill be dependent upon realizing significant revenuefor their services during fiscal 2011 and operating income growthdata on bonuses and non-equity compensation paid by comparable companies reviewed by the Compensation Committee in June 2010 are as follows: Fiscal 2011
Target Bonus Fiscal 2011
Bonus Paid(1) Median
Peer Group Non-
Equity Incentive
Compensation(2) Median
Radford Non-
Equity Incentive
Compensation(3) $ 461,760 $ 538,505 $ 271,531 $ 483,000 $ 461,760 $ 538,505 $ 271,531 $ 483,000 $ 221,520 $ 258,329 $ 73,959 $ 167,000 $ 176,400 $ 205,712 $ 99,631 $ 239,920 $ 176,002 $ 205,317 $ 73,959 $ 167,000 $ 170,419 $ 199,834 $ 264,201 $ 213,200 facegrant of operational challengesRSUs with a value of $99,834 on the date of grant. All other bonuses were paid in cash.an environmentother non-equity payments to officers with comparable duties at the Peer Companies.economic uncertainty. It will also be dependent on increased sales of our customers’ products over which we have no control. Finisar has achieved or exceeded the non-GAAP operating income called for in its original annual operating plan in two of its last five fiscal years.between $500 million and $1 billion.Finisar’sFinisar's 2005 Stock Incentive Plan, which reward executives and other employees through the growth in value of our stock. To date, these awards have been in the form of stock options and RSUs. The Compensation Committee believes that employee equity ownership is highly motivating, provides an important incentive for employees to build20Finisar’sFinisar's financial results for the preceding quarter or the date of the meeting at which the grant is approved.belowbelow.20102011 was set by the Compensation Committee at levels that were intended to create a meaningful opportunity for stock ownership based upon the individual’sindividual's current position, the individual’sindividual's personal performance in recent periods, the individual’sindividual's potential for future responsibility and promotion over the option term, comparison of award levels in prior years and comparison of award levels earned by executives at our peer companies and similarly-sized companies in our broader industry group. The Compensation Committee also took into account the number of unvested options and RSUs held by the executive officer in order to maintain an appropriate level of retention value for that individual. The relative weight given to each of these factors variedvaries from individual to individual.2010,2011, our executive officers received two separate equity awards: (i) a regularan annual grant of stock options and RSUs in December 2009June 2010 based on the factors described above, with the relative weight given to each of these factors varying from individual to individual, and (ii) a special grant of stock options and RSUs in December 2009 in light of concerns of the Compensation Committee with respect to the diminished incentive value of outstanding stock options held by our employees, including our executive officers, with exercise prices greater than the 52-week high trading price of Finisar common stock as of the grant date, based on the employee’s holdings of such stock options.During fiscal 2010, equity-based incentives accounted for approximately 66% of the total compensation of our Chairman, approximately 53% of the total compensation of our Chief Executive Officer and an average of approximately 52% of the total compensation of our other named executive officers.In connection with its review of executive officer compensation in June 2011, the Compensation Committee took into account the same general criteria considered in fiscal 2010 as well as the report of Assets Unlimited, Inc. and equity compensation data for the Peer Companies that it had compiled. Based on its review, the Compensation Committee granted RSUs to each of our executive officers.individual. The RSUs vest in annual installments over a four-year period, subject to the officers’officers' continued service. The numbers of shares of our common stock underlying the RSUs granted to the named executive officers were as follows:RSU Shares 114,140 114,140 42,872 32,000 32,000 32,000Stephen K. Workman 32,000 212010,2011, personal benefits accounted for less than 2% of the total compensation of our Chairman, our Chief Executive Officer and our other named executive officers.Brocade Communications JDS Uniphase PMC Sierra Cadence Design Netgear QLogic Coherent Novellus Quantum Corp. Cypress Semiconductor Oclaro Smart Modular Equinix Omnivision Triquint Fairchild Semiconductor Opnext Trimble Navigation Intersil Plantronics Fiscal 2012
Base Salary Median
Peer Company
Base Salary(1) Median
Radford
Base Salary(2) $ 500,000 $ 599,383 $ 685,000 $ 500,000 $ 599,383 $ 685,000 $ 380,300 $ 308,014 $ 293,558 $ 320,000 $ 324,244 $ 338,475 $ 310,000 $ 340,000 $ 397,560 $ 303,000 $ 296,436 $ 355,000 Value of RSU Shares $ 1,800,000 $ 1,800,000 $ 643,000 $ 480,000 $ 480,000 $ 480,000 Finisar’sFinisar's change in control and severance arrangements are intended to attract and retain qualified executives who may have attractive alternatives absent these arrangements. The change in control arrangements are also intended to mitigate potential disincentives to the consideration and execution of an acquisition or similar transaction, particularly where the services of these executive officers may not be required by the acquirer. We believe that our change in control benefits are comparable to the provisions and benefit levels of other companies in our industry which disclose similar plans in their public filings.participant’sparticipant's employment is terminated in connection with the change in control, vesting of the options will be accelerated in full. Upon any other termination of employment, participants are entitled only to accrued salary and any other vested benefits through the date of termination.“Potential"Potential Payments Upon Termination or Change of Control”Control" below. Benefits to these officers under the Executive Retention and Severance Plan will be reduced by the amount of comparable benefits to which they are entitled under such agreements.FASB ASCthe rules of the Financial Accounting Standards Board's Accounting Standards Codification Topic 718, which requiresrequire us toFinisar’sFinisar's named executive officers to $1 million annually. The equity awards granted to our executive officers are intended to be treated as performance-based compensation, which is exempt from the limitation on deductibility under current federal tax law. The Compensation Committee reserves the right to provide for compensation to executive officers that may not be fully deductible.22 and discussed with management the foregoing Compensation Discussion and Analysis.Analysis and discussed it with management. Based on such reviewsreview and discussions, we have recommended to the board of directors that the Compensation Discussion and Analysis be included in this annual report.COMPENSATION COMMITTEE
Michael C. Child (Chair)
Robert N. Stephens
Dominique TrempontCOMPENSATION COMMITTEEDavid C. Fries (Chair)Michael C. ChildRobert N. StephensDominique Trempont23
Table of Contents20102011 for (i) our Chairman of the Board, our Chief Executive Officer and each of the executives who served as our Chief Financial Officer during the year and (ii) our three other most highly compensated executives (determined as of April 30, 2010)2011) (collectively, the “named"named executive officers”officers"):
Summary Compensation Table for Fiscal 20102011 Non-Equity Fiscal Incentive Plan Equity Year Salary Bonus Compensation Awards(1) Total(1) 2010 $ 420,092 — $ 133,200 $ 1,063,108 $ 1,616,400 Chairman of the Board 2009 438,881 — — 367,950 806,831 2008 418,269 $ 100,000 — 779,520 1,297,789 2010 420,092 — 133,200 621,496 1,174,789 Chief Executive Officer 2009 293,516 — — 263,052 556,568 2010 264,923 — 84,000 247,589 596,512 Senior Vice President, Finance and Chief
Financial Officer 2010 257,354 — 81,600 380,795 719,749 Senior Vice President, 2009 263,892 — — 83,558 347,450 Corporate Development and
Investor Relations 2008 257,310 40,000 — 146,160 443,470 2010 266,957 — 84,645 410,757 762,359 Senior Vice President, 2009 185,062 — — 135,703 320,765 Operations and
Engineering 2010 257,354 — 81,600 470,624 809,578 Senior Vice President,
Sales and Marketing 2010 335,885 — 106,500 471,978 914,363 Senior Vice President, 2009 344,548 — — 173,938 518,486 Operations and Engineering 2008 335,961 75,000 — 389,760 800,721 Fiscal
Year Salary Bonus Non-Equity
Incentive Plan
Compensation Equity
Awards(1) Total(1) 2011 $ 459,711 $ — $ 538,505 $ 1,796,564 $ 2,794,780 2010 420,092 — 133,200 1,063,108 1,616,400 2009 438,881 — — 367,950 806,831
2011
459,711
—
538,505
1,796,564
2,794,780 2010 420,092 — 133,200 621,496 1,174,789 2009 293,516 — — 263,052 556,568
2011
292,385
—
205,712
503,680
1,001,777 2010 264,923 — 84,000 247,589 596,512
2011
292,134
—
205,317
503,680
1,001,131 2010 266,957 — 84,645 410,757 762,359 2009 185,062 — — 135,703 320,765
2011
284,031
—
199,834
503,680
987,545 2010 257,354 — 81,600 470,624 809,578
2011
367,562
—
258,329
674,805
1,300,696 2010 335,885 — 106,500 471,978 914,363 2009 344,548 ��� — 173,938 518,486 (1)Includes stock option and RSU awards. Valuation based on the grant date fair value of the equity awards computed in accordance with FASB ASC Topic 718. The assumptions used by us with respect to the valuation of option grants are set forth in “Finisar Corporation Consolidated Financial Statements — Notes to Financial Statements — Note 17 — Stockholders’ Equity” included in our annual report onForm 10-K for fiscal 2010. As a result of recent changes in SEC disclosure rules, amounts reported in the table for equity awards in fiscal 2008 and 2009 differ from amounts previously reported in the Summary Compensation Tables for the same person in those years.(2)Mr. Rawls also served as our President and Chief Executive officer until the completion of the Optium merger in August 2008.(3)Mr. Gertel became our Chief Executive Officer upon the completion of the Optium merger in August 2008.(4)Mr. Adzema became our Senior Vice President, Finance and Chief Financial Officer in March 2010.(5)Mr. Workman served as our Senior Vice President, Finance and Chief Financial Officer until March 2010, when he was appointed Senior Vice President, Corporate Development and Investor Relations. Mr. Workman has announced his resignation from the Company to be effective on or about September 24, 2010.(6)Mr. Colyar became our Senior Vice President, Operations and Engineering upon the completion of the Optium merger in August 2008.2420102011 to each of our named executive officers.
Grants of Plan-Based Awards in or for Fiscal 20102011 All Other All Other Option Exercise Grant Stock Awards: or Base Date Fair Estimated Future Payouts Awards: Number of Price of Value of Under Non-Equity Incentive Number of Securities Option Stock and All Other
Stock
Awards:
Number of
Shares of
Stock or
Units All Other
Option
Awards:
Number of
Securities
Underlying
Options Exercise
or Base
Price of
Option
Awards
($/Share) Grant Plan Awards(1) Shares of Underlying Awards Option Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) Grant Date
Fair Value
of Stock
and Option
Awards ($) Date Threshold Target Maximum Stock or Units Options ($/Share) Awards ($) Grant Date Threshold Target Maximum Jerry S. Rawls — — $ 444,000 $ 444,000 — — — — — — $ 461,760 — — — — — 12/8/2009 — — — — 76,250 8.29 430,996 12/8/2009 — — — 76,250 — — 632,113 6/15/2010 — — — 114,140 — — $ 1,796,564 Eitan Gertel — — 444,000 444,000 — — — —
—
—
461,760
—
—
—
—
— 12/8/2009 — — — — 44,576 8.29 251,961 6/15/2010 — — — 114,140 — — 1,796,564 12/8/2009 — — — 44,576 — — 369,535 Kurt Adzema — — 280,000 280,000 — — — —
—
—
176,400
—
—
—
—
— 12/8/2009 — — — — 17,758 8.29 100,375 12/8/2009 — — — 17,758 — — 147,214 Stephen K. Workman — — 272,000 272,000 — — — — 12/8/2009 — — — — 27,312 8.29 154,378 12/8/2009 — — — 27,312 — — 226,416 6/15/2010 — — — 32,000 — — 503,680 Mark Colyar — — 282,150 282,150 — — — —
—
—
176,062
—
—
—
—
— 12/8/2009 — — — — 29,461 8.29 166,525 6/15/2010 — — — 32,000 — — 503,680 12/8/2009 — — — 29,461 — — 244,232 Todd Swanson — — 272,000 272,000 — — — —
170,419 12/8/2009 — — — — 56,052 8.29 316,828 12/8/2009 — — — 18,552 — — 153,796 6/15/2010 32,000 503,680 Joseph A. Young — — 355,000 355,000 — — — —
—
—
221,520
—
—
—
—
— 12/8/2009 — — — — 33,852 8.29 191,345 6/15/2010 — — — 42,872 — — 674,805 12/8/2009 — — — 33,852 — — 280,633 (1)Represents the dollar value of the applicable range (threshold, target and maximum amounts) of potential cash bonuses payable to each named executive officer for fiscal 2010 under the executive officer bonus plan for fiscal 2010 (the “Fiscal 2010 Bonus Plan”). Additional information regarding the Fiscal 2010 Bonus Plan is set forth above under “Compensation Discussion and Analysis.” The actual amount paid to each executive officer for fiscal 2010 is set forth in the Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation.”25
Table of Contents2010.2011. Unless otherwise specified, options vest at a rate of 20% over five years from the date of grant. Market value for RSUs is determined by multiplying the number of shares by the closing price of Finisar common stock on the Nasdaq Global Select Market on the last trading day of the fiscal year ($14.9628.09 on April 30, 2010)29, 2011).20102011 Option Awards Stock Awards Number of
Securities
Underlying
Options (#) Number of
Securities
Underlying
Options (#)
Unexercisable Exercise
Price per
Share Expiration
Date Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested Equity Incentive
Plan Awards:
Market Value or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested 124,999 — $ 13.84 6/7/2012 25,000 — 15.60 8/27/2013 50,000 — 15.36 6/2/2014 62,499 — (1) 9.76 6/8/2015 40,000 9,999 (2) 37.04 6/6/2016 30,000 20,000 (3) 21.68 9/7/2017 118,909 40,199 (4) 3.36 12/12/2018 14,063 30,937 (5) 8.29 12/8/2019 11,719 19,531 (6) 8.29 12/8/2019 30,937 (7) $ 869,020 19,531 (8) 548,626 114,140 (16) 3,206,193
205,308
—
(9)
$
0.64
4/30/2013 47,768 — (9) 1.36 6/22/2015 97,843 — (9) 6.88 2/13/2016 32,614 — (9) 7.36 3/13/2016 88,841 — (10) 26.64 2/28/2017 80,124 31,250 (4) 3.36 12/12/2018 4,164 9,162 (5) 8.29 12/8/2019 11,719 20,404 (6) 8.29 12/8/2019 9,162 (7) $ 257,361 19,531 (8) 548,626 114,140 (16) 3,206,193
12,499
—
14.08
11/23/2015 9,374 — (11) 24.80 9/8/2016 543 135 (12) 25.68 3/8/2017 7,500 5,000 (3) 21.68 9/7/2017 1 1,406 (13) 10.08 9/11/2018 1 4,710 (4) 3.36 12/12/2018 1 3,615 (5) 8.29 12/8/2019 — 7,813 (6) 8.29 12/8/2019 1,314 (14) $ 36,910 3,615 (7) 101,545 7,812 (8) 219,439 32,000 (16) 898,880 Stock Awards Equity Incentive Plan Awards: Equity Incentive Market Value Plan Awards: or Payout Number of Value of Option Awards Unearned Shares, Unearned Shares, Number of Securities Units or Units or Number of Securities Underlying Other Rights Other Rights Underlying Options (#) Exercise Price Expiration That Have That Have Options (#) Unexercisable per Share Date Not Vested Not Vested Jerry S. Rawls 124,999 — $ 13.84 6/7/2012 25,000 — 15.60 8/27/2013 50,000 — 15.36 6/2/2014 50,000 12,499 (1) 9.76 6/8/2015 30,000 19,999 (2) 37.04 6/6/2016 20,000 30,000 (3) 21.68 9/7/2017 77,536 81,572 (4) 3.36 12/12/2018 — 45,000 (5) 8.29 12/8/2019 — 31,250 (6) 8.29 12/8/2019 45,000 (7) $ 673,200 31,250 (8) 467,500 Eitan Gertel 205,308 — (9) $ 0.64 4/30/2013 81,536 — (9) 1.36 6/22/2015 97,843 — (9) 6.88 2/13/2016 32,614 — (9) 7.36 3/13/2016 68,482 20,359 (10) 26.64 2/28/2017 50,685 60,689 (4) 3.36 12/12/2018 — 13,326 (5) 8.29 12/8/2019 — 31,250 (6) 8.29 12/8/2019 13,326 (7) $ 199,357 31,250 (8) 467,500 Kurt Adzema 36,562 — $ 10.16 4/18/2015 12,499 — 14.08 11/23/2015 7,499 1,875 (11) 24.80 9/8/2016 407 271 (12) 25.68 3/8/2017 5,000 7,500 (3) 21.68 9/7/2017 1,406 2,344 (13) 10.08 9/11/2018 8,469 10,991 (4) 3.36 12/12/2018 — 5,258 (5) 8.29 12/8/2019 — 12,500 (6) 8.29 12/8/2019 2,1890 (14) $ 32,747 5,258 (7) 78,660 12,500 (8) 187,000 Stephen K. Workman 12,499 — $ 14.40 6/19/2013 8,124 — 14.40 6/19/2013 24,999 — 14.40 6/19/2013 9,374 — 15.60 8/27/2013 25,000 — 15.36 6/2/2014 5,625 3,750 (2) 37.04 6/6/2016 3,752 5,622 (3) 21.68 9/7/2017 28,285 28,079 (4) 3.36 12/12/2018 — 14,812 (5) 8.29 12/8/2019 — 12,500 (6) 8.29 12/8/2019 14,812 (7) $ 221,588 12,500 (8) 187,000 Mark Colyar 44,029 — (9) $ 0.64 4/30/2013 13,046 — (9) 1.04 2/28/2014 29,352 — (9) 1.20 4/4/2015 71,752 — (9) 11.84 4/13/2016 19,007 5,649 (15) 26.64 2/28/2017 28,210 28,248 (4) 3.36 12/12/2018 — 14,461 (5) 8.29 12/8/2019 — 15,000 (6) 8.29 12/8/2019 14,461 (7) $ 216,337 15,000 (8) 224,400 Stock Awards Equity Incentive Plan Awards: Equity Incentive Market Value Plan Awards: or Payout Number of Value of Option Awards Unearned Shares, Unearned Shares, Number of Securities Units or Units or Number of Securities Underlying Other Rights Other Rights Underlying Options (#) Exercise Price Expiration That Have That Have Options (#) Unexercisable per Share Date Not Vested Not Vested Todd Swanson 6,250 — $ 14.32 8/25/2013 3,750 — 9.60 8/16/2014 — 2,500 (16) 8.32 8/10/2015 6,249 — 14.08 11/23/2015 3,000 750 (11) 24.80 9/8/2016 408 271 (12) 25.68 3/8/2017 1,201 1,798 (3) 21.68 9/7/2017 300 450 (17) 14.88 12/10/2017 338 562 (13) 10.08 9/11/2018 7,655 19,633 (4) 3.36 12/12/2018 — 3,552 (5) 8.29 12/8/2019 — 52,500 (6) 8.29 12/8/2019 526 (14) $ 7,869 3,552 (7) 53,138 15,000 (8) 224,400 Joseph A. Young 49,999 — $ 11.76 10/29/2014 20,000 5,000 (1) 9.76 6/8/2015 15,001 9,999 (2) 37.04 6/6/2016 408 270 (12) 25.68 3/8/2017 10,001 14,999 (3) 21.68 9/7/2017 36,315 36,180 (4) 3.36 12/12/2018 — 15,102 (5) 8.29 12/8/2019 — 18,750 (6) 8.29 12/8/2019 15,102 (7) $ 225,926 18,750 (8) 280,500 Option Awards Stock Awards Number of
Securities
Underlying
Options (#) Number of
Securities
Underlying
Options (#)
Unexercisable Exercise
Price per
Share Expiration
Date Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested Equity Incentive
Plan Awards:
Market Value or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested 4,622 — (10) 26.64 2/28/2017 12,107 12,106 (4) 3.36 12/12/2018 4,519 9,942 (5) 8.29 12/8/2019 5,626 9,374 (6) 8.29 12/8/2019 9,942 (7) $ 279,271 9,375 (8) 263,344 32,000 (16) 898,880
6,250
—
$
14.32
8/25/2013 6,249 — 14.08 11/23/2015 3,750 — (11) 24.80 9/8/2016 544 135 (12) 25.68 3/8/2017 1,801 1,198 (3) 21.68 9/7/2017 450 300 (15) 14.88 12/10/2017 563 337 (13) 10.08 9/11/2018 15,877 8,414 (4) 3.36 12/12/2018 1,110 2,442 (5) 8.29 12/8/2019 19,687 32,813 (6) 8.29 12/8/2019 318 (14) $ 8,933 2,442 (7) 68,596 9,375 (8) 263,344 32,000 (16) 898,880
49,999
—
$
11.76
10/29/2014 25,000 — (1) 9.76 6/8/2015 20,001 4,999 (2) 37.04 6/6/2016 543 135 (12) 25.68 3/8/2017 15,001 9,999 (3) 21.68 9/7/2017 56,989 15,506 (4) 3.36 12/12/2018 4,719 10,383 (5) 8.29 12/8/2019 7,032 11,718 (6) 8.29 12/8/2019 10,383 (7) $ 291,658 11,718 (8) 329,159 42,872 (16) 1,204,274 (1)The option was granted on June 8, 2005 and became fully vested on June 8, 2010.(2)The option was granted on June 2, 2006 and will become fully vested on June 2, 2011, assuming continued employment with Finisar.(3)The option was granted on September 7, 2007 and will become fully vested on September 7, 2012, assuming continued employment with Finisar.(4)The option was granted on December 12, 2008. The option became exercisable as to 25% of the shares on August 12, 2009 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on August 12, 2012, assuming continued employment with Finisar.(5)The option was granted on December 8, 2009. The option will become exercisable as to 25% of the shares on December 8, 2010 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on December 8, 2013, assuming continued employment with Finisar.(6)The option was granted on December 8, 2009. The option will become exercisable as to 25% of the shares on September 1, 2010 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on September 1, 2013, assuming continued employment with Finisar.(7)The RSU was granted on December 8, 2009. The RSU will vest as to 25% of the shares on December 8, 2010 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on December 8, 2013, assuming continued employment with Finisar.(8)The RSU was granted on December 8, 2009. The RSU will vest as to 25% of the shares on September 1, 2010 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on September 1, 2013, assuming continued employment with Finisar.(9)The option was granted by Optium and was assumed by us upon the closing of the Optium merger.(10)The option was granted by Optium and was assumed by us upon the closing of the Optium merger. The option became exercisable as to 25% of the shares on March 1, 2008 and vests monthly thereafter, to be fully vested27on March 1, 2011, assuming continued employment with Finisar. The terms of this stock option award also provide for the acceleration of vesting of (a) 25% of the shares subject to the original grant (or 100% of the remaining unvested portion if less) following termination without Cause or for Constructive Termination prior to an Acquisition (each term as defined in the optionee’s employment agreement) and (b) 100% of the remaining unvested portion following termination of employment without Cause or for Constructive Termination within one year of an Acquisition (each term as defined in the optionee’s employment agreement).(11)The option was granted on September 8, 2006. The option became exercisable as to 20% of the shares on September 8, 2006 and vests annually with respect to an additional 20% of the shares, to be fully vested on September 8, 2010, assuming continued employment with Finisar.(12)The option was granted on March 8, 2007 and will become fully vested on March 8, 2012, assuming continued employment with Finisar.(13)The option was granted on September 11, 2008. The option become exercisable as to 25% of the shares on September 11, 2009 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on September 11, 2012, assuming continued employment with Finisar.(14)The RSU was granted on September 11, 2008. The RSU vested as to 25% of the shares on September 11, 2009 and vests with respect to an additional 6.25% of the shares on each of the next 12 quarterly anniversaries thereafter, to be fully vested on September 11, 2012, assuming continued employment with Finisar.(15)The option was granted by Optium and was assumed by us upon the closing of the Optium merger. The option became exercisable as to 25% of the shares on March 1, 2008 and vests monthly thereafter, to be fully vested on March 1, 2011, assuming continued employment with Finisar. The terms of this stock option award also provide for the acceleration of vesting of 25% of the shares subject to the original grant (or 100% of the remaining unvested portion if less) following termination of employment without Cause or for Constructive Termination within one year of an Acquisition (each term as defined in the Optium option plan or any superseding employment agreement).(16)The option was granted on August 10, 2005 and became fully vested on June 27, 2010.(17)The option was granted on December 10, 2007 and will become fully vested on December 10, 2012, assuming continued employment with Finisar.2010.
Option Exercises and Stock Vested in Fiscal 20102011 Option Awards Restricted Stock Unit Awards Number of Number of Shares Value Shares Value Acquired Realized Acquired Realized Option Awards Restricted Stock Unit Awards on Exercise (#) on Exercise(1) on Vesting (#) on Vesting(2) Number of
Shares
Acquired
on Exercise (#) Value
Realized
on Exercise(1) Number of
Shares
Acquired
on Vesting (#) Value
Realized
on Vesting(2) Jerry S. Rawls — — 6,725 $ 85,744 — — 25,782 $ 602,304 Eitan Gertel — — 21,892 189,863 33,678 $ 866,825 15,883 333,048 Kurt Adzema 5,662 $ 76,097 5,548 45,902 59,983 725,178 7,206 149,886 Stephen K. Workman — — 4,125 52,594 Mark Colyar — — 11,124 101,522 210,458 3,481,382 10,144 228,407 Todd Swanson 22,769 292,575 4,439 55,384 9,247 184,789 6,943 139,779 Joseph A. Young — — 5,375 68,531 — — 11,751 260,245 (1)Based on the difference between the closing sale price of Finisar’s common stock on the date of exercise and the exercise price.(2)Based on the closing sale price of Finisar’s common stock on the vesting date.28as well as a stock option agreement with each of them, that provide for cash paymentsand/or acceleration of vesting following certain termination events. Except as described below and in “— "—Executive Retention and Severance Plan,”" no named executive officer is entitled to any cash paymentsand/or acceleration of vesting following a change in control of Finisar unless a termination event also occurs. and the intrinsic value (that is, the value based upon our stock price on April 30, 2010, minus any exercise price) of any equity incentives subject to acceleration of vesting that Messrs. Gertel and Colyar would be entitled to receive in the event that such executive officer (i) had been terminated by us without cause on April 30, 2010,2011, (ii) had resigned following a demotion, reduction in base salary or involuntary relocation, referred to as a resignation for good reason, on April 30, 20102011 or (iii) had been terminated as the result of death or disability. The value of the acceleration of vesting of equity incentives as of April 30, 2010 utilizes a per share value of our common stock of $14.96, the closing price of our common stock on the Nasdaq Global Select Market on April 30, 2010. In each case, the amounts set forth in the tables below are subject to any deferrals required under Section 409A of the Internal Revenue Code of 1986, as amended (the “Internal"Internal Revenue Code”Code"), and do not include any life insurance proceeds in the event of death or disability benefits in the event of disability.$444,000,$461,760, subject to adjustment as provided in the agreement, and other incentive compensation as determined by the board of directors. In the event that Mr. Gertel is terminated without cause or if we give notice that we do not intend to extend the employment agreement, we will be obligated to pay him one year severance, which in all cases includes base salary, bonus as calculated in the agreement and accrued paid time off. In addition, if he resigns for good reason, we will be obligated to pay him one year severance. A partially vested stock option held by Mr. Gertel that was also assumed in connection with the Optium merger provides for the acceleration of vesting of all or a portion of the unvested options upon any of the termination events described above. Involuntary
termination
without cause Voluntary
termination
for
good reason Termination
upon death Termination
upon
disability $ 807,772 $ 807,772 $ — $ — 20,229 20,229 20,229 20,229 $ 828,001 $ 828,001 $ 20,229 $ 20,229 Involuntary Voluntary Termination Termination Termination for Termination upon without Cause Good Reason upon Death Disability Cash severance $ 690,340 $ 690,340 $ — $ — Health care benefits 19,808 19,808 19,808 19,808 Acceleration of options 0 (1) 0 (1) — — Total $ 710,148 $ 710,148 $ 19,808 $ 19,808 (1)The exercise price of the option subject to acceleration was greater than the closing sales price of Finisar common stock on April 30, 2010, which was $14.96 per share.$281,500,$293,436, subject to adjustment as provided in the agreement, and other incentive compensation as determined by the board of directors. In the event that Mr. Colyar is terminated without cause or if we give notice29 A partially vested stock option held by Mr. Colyar that was also assumed in connection with the Optium merger provides for the acceleration Involuntary
termination
without cause Voluntary
termination
for
good reason Termination
upon death Termination
upon
disability $ 424,516 $ 424,516 $ — $ — 20,229 20,229 20,229 20,229 $ 444,745 $ 444,745 $ 20,229 $ 20,229 Involuntary Voluntary Termination Termination Termination for Termination upon without Cause Good Reason upon Death Disability Cash severance $ 360,126 $ — $ — $ — Health care benefits 19,808 19,808 19,808 19,808 Acceleration of options 0 (1) 0 (1) — — Total $ 379,934 $ 19,808 $ 19,808 $ 19,808 (1)The exercise price of the option subject to acceleration was greater than the closing sales price of Finisar common stock on April 30, 2010, which was $14.96 per share.years’years' base salary (excluding bonus) and (ii) medical, dental and insurance coverage for two years, or reimbursement of premiums for COBRA continuation coverage during such period. A qualifying termination is defined as an involuntary termination other than for cause or a voluntary termination for good reason upon or within 18 months following a change in control, as such terms are defined in the plan. In addition, the plan provides that the vesting of stock options and RSUs held by eligible officers will be accelerated as follows: (i) one year of accelerated vesting upon a change of control, if the options are assumed by a successor corporation, (ii) 100% accelerated vesting if the options are not assumed by a successor corporation, and (iii) 100% accelerated vesting upon a qualifying termination. In the event the employment of any of our named executive officers were to be terminated without cause or for good reason, within 18 months following a change in control of Finisar, each as of April 30, 2010,2011, the named executive officers would be entitled to payments in the amounts set forth opposite their name in the following table:Cash Severance $ 37,71739,476 per month for 24 months $ 38,93540,166 per month for 24 months $ 24,93325,961 per month for 24 monthsStephen K. Workman $ 23,87726,139 per month for 24 monthsMark Colyar $ 25,44824,992 per month for 24 monthsTodd Swanson $ 24,14532,227 per month for 24 monthsJoseph A. Young$31,183 per month for 24 months302010,2011, the named executives would be entitled to accelerated vesting of their outstanding stock options and RSUs as described in the following table:Value of Equity Awards:(1) Jerry S. Rawls Accelerated vesting of 220,320120,666 options with a value of $1,519,818$2,121,588 and 76,250164,608 RSUs with a value of $1,140,700.$4,623,839.
Eitan Gertel
Accelerated vesting of 125,62459,943 options with a value of $1,001,314$1,340,934 and 44,576142,833 RSUs with a value of $666,857.$4,012,179.
Kurt Adzema
Accelerated vesting of 40,73922,679 options with a value of $252,531$400,450 and 19,94744,741 RSUs with a value of $298,407.$1,256,775.Stephen K. Workman
Mark Colyar
Accelerated vesting of 64,76331,422 options with a value of $507,887$681,838 and 27,31251,317 RSUs with a value of $408,588.$1,441,495.Mark Colyar
Todd Swanson
Accelerated vesting of 63,35845,639 options with a value of $524,182$924,164 and 29,46144,135 RSUs with a value of $440,737.$1,239,752.Todd Swanson
Joseph A. Young
Accelerated vesting of 82,01664,973 options with a value of $620,988$885,482 and 19,07864,973 RSUs with a value of $285,407.Joseph A. YoungAccelerated vesting of 100,300 options with a value of $671,481 and 33,852 RSUs with a value of $506,426.$1,825,092.(1)Potential incremental gains are net values based on (i) the aggregate difference between the respective exercise prices of options and the closing sale price of Finisar common stock on April 30, 2010 ($14.96 per share) and (ii) the number of shares underlying RSUs multiplied by the closing sale price of Finisar common stock on April 30, 2010.31director’sdirector's independence. The Audit Committee will approve only those transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as the Audit Committee determines in the good faith exercise of its discretion.“Director Compensation”"Director Compensation" and “Executive"Executive Compensation and Related Matters”Matters" above, in our fiscal year ended April 30, 20102011 there were no transactions, and there is not currently proposed any transaction or series of similar transactions to which we were or will be a party, in which the amount involved exceeded or will exceed $120,000 in which any director, any executive officer, any holder of 5% or more of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.2010,2011, we paid GHG Technologies $160,000$181,528 in cash compensation. In addition, the CompanyFinisar granted to Guy Gertel, for no additional consideration, 1,1602,150 restricted stock units with a fair market value of $9,616,$33,841, which vest as follows: with respect to 456 of the shares, 25% on September 1, 2010June 23, 2011 and an additional 6.25%25% on each of the next 12 quarterlythree anniversaries thereafter, to be fully vested on September 1, 2013; and with respect to the remaining 704 shares, 25% on December 8, 2010 and an additional 6.25% on each of the next 12 quarterly anniversaries thereafter, to be fully vested on December 8, 2013, in each caseJune 23, 2014, subject to Mr. Gertel’sGertel's continuing to provide services to Finisar. We believe that the cash payments to GHG were fair and reasonable and were comparable to amounts that which would have been paid to an unaffiliated party in an arms’arms' length transaction. The restricted stock unit awards to GuyMr. Gertel were consistent with the type and size of grants made to our other sales professionals.
PRINCIPAL STOCKHOLDERS AND SHARE OWNERSHIP
BY MANAGEMENT Shares of Common Stock
Beneficially Owned(1) Number Percentage 1,285,674 1.39 % 824,105 * 8,097 * 33,463 * 7,343 * 10,386 * 29,807 * 45,775 * 89,649 * 76,036 * 217,139 * 2,727,335 2.95 % 20102011 were satisfied, with the exception of one Form 4 report for each of Christopher J. Crespi, Roger C. Ferguson, David C. Fries, Larry D. Mitchell, Robert N. Stephens and Dominique Trempont, each reporting one transaction, and one Form 4 report for each of Todd Swanson and Joseph A. Young, each reporting two transactions, that were filed late.32fourthree compensation plans that provide for the issuance of our common stock to officers, directors, other employees or consultants. These consist of the 2005 Stock Incentive Plan, the 2009 Employee Stock Purchase Plan and the 2009 International Employee Stock Purchase Plan, each of which havehas been approved by our stockholders, andstockholders. We previously maintained the 2001 Nonstatutory Stock Option Plan, or the 2001 Plan, which haswas adopted in February 2001 and was not been approved by our stockholders. No additional options will be granted under the 2001 Plan. The following table sets forth information regarding outstanding options and shares reserved for future issuance under the foregoing plans as of April 30, 2010:2011: Number of Shares Remaining Number of Shares Weighted- Available for to be Issued upon Average Future Issuance Exercise of Exercise Price Under Equity Outstanding of Outstanding Compensation Options, Options, Plans (Excluding Warrants and Warrants and Shares Reflected Rights Rights in Column (a)) (a) (b) (c) Number of
Shares to be Issued
upon Exercise of
Outstanding Options,
Warrants and Rights
(a) Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b) Number of Shares
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Shares
Reflected in Column
(a)) (c) Equity compensation plans approved by stockholders 8,183,136 $ 11.91 8,062,686 (1) 6,822,071 $ 12.70 10,186,474 (1) Equity compensation plan not approved by stockholders(2)(3) 133,404 $ 22.50 394,581
38,818
$
21.07
— (1)Consists of shares available for future issuance under the plans. In accordance with the terms of the 2009 Employee Stock Purchase Plan, the number of shares available for issuance under the 2009 Employee Stock Purchase Plan and the 2009 International Employee Stock Purchase Plan will increase by 125,000 shares on May 1 of each calendar year until and including May 1, 2015. In accordance with the terms of the 2005 Stock Incentive Plan, the number of shares of our common stock available for issuance under the 2005 Stock Incentive Plan will increase on May 1 of each calendar year until and including May 1, 2015 by an amount equal to five percent (5%) of the number of shares of our common stock outstanding as of the preceding April 30.(2)Excludes options assumed by us in connection with acquisitions of other companies. As of April 30, 2010, 1,423,378 shares of our common stock were issuable upon exercise of these assumed options, at a weighted average exercise price of $10.89 per share. No additional options may be granted under the plans pursuant to which these assumed equity rights were granted.(3)A total of 731,250 shares of our common stock have been reserved for issuance under the 2001 Plan. As of April 30, 2010, a total of 203,265 shares of common stock had been issued upon the exercise of options granted under the 2001 Plan.2010, 394,5812011, 38,818 shares of our common stock were reserved for issuance under the 2001 Plan. The 2001 Plan was adopted by our board on February 16, 2001 and providesprovided for the grantinggrant of nonstatutory stock options to employees and consultants with an exercise price per share not less than 85% of the fair market value of our common stock on the date of grant. However, no person iswas eligible to be granted an option under the 2001 Plan whose eligibility would requirehave required approval of the 2001 Plan by our stockholders. Options granted under the 2001 Plan generally have a ten-year term and vest at the rate of 20% of the shares on the first anniversary of the date of grant and 20% of the shares each additional year thereafter until fully vested. Some of the options that have been granted under the 2001 Plan are subject to full acceleration of vesting in the event of a change in control of Finisar. The term of the 2001 Plan expired in February 2011 and no additional options will be granted under the 2001 Plan.20112012 annual meeting, the proposal (in addition to compliance with applicable SEC rules) must be received at our principal executive offices, addressed to the Secretary, not later33MayJune 20, 2011.2012. The advance notice provision in our bylaws states that in order for stockholder business to be properly brought before a meeting by a stockholder, such stockholder must have given timely notice thereof in writing to our Secretary. To be timely, a stockholder proposal must be received at our principal executive offices not less than 120 calendar days in advance of the one year anniversary of the date our proxy statement was released to stockholders in connection with the previous year’syear's annual meeting of stockholders; except that (i) if no annual meeting was held in the previous year, (ii) if the date of the annual meeting has been changed by more than 30 calendar days from the date contemplated at the time of the previous year’syear's proxy statement, or (iii) in the event of a special meeting, then notice must be received not later than the close of business on the tenth day following the day on which notice of the date of the meeting was mailed or public disclosure of the meeting date was made. Stockholder business that is not intended for inclusion in our proxy materials may be brought before the annual meeting so long as we receive notice of the proposal as specified by our bylaws, addressed to the Secretary at our principal executive offices, not later than the above date. All stockholder proposals should be marked for the attention of the Secretary of Finisar Corporation at 1389 Moffett Park Drive, Sunnyvale, California 94089.Christopher E. BrownSecretarySeptember 17, 201034
1389 MOFFETT PARK DRIVESUNNYVALE, CA 94089-1133
CHRISTOPHER E. BROWN
Secretary
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSDETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.ForAllWithholdAllFor AllExceptTo withhold authority to vote for any individualnominee(s), mark “For All Except” and write thenumber(s) of the nominee(s) on the line below.The Board of Directors recommends a
you vote FOR the following:ooo1.Election of DirectorsNominees01 Jerry S. Rawls02 Robert N. StephensThe Board of Directors recommends a vote FOR the following proposal:proposals 2 and 3. For Against Abstain 2. To ratify the appointment of Ernst & Young LLP as Finisar’sFinisar's independent auditorsregistered public accounting firm for the fiscal year ending April 30, 2011.ooo2012. 3. To approve, by a non-binding advisory vote, the compensation of Finisar's named executive officers. The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 year 2 years 3 years Abstain 4. To recommend, by a non-binding advisory vote, the frequency of future votes on the compensation of Finisar's named executive officers. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. 
Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)DateImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report is/are available at www.proxyvote.com.
FINISAR CORPORATIONAnnual Meeting of StockholdersOctober 28, 2010 10:00 AMThis proxy is solicited by the Board of DirectorsThe stockholder(s) hereby appoint(s) Jerry S. Rawls and Kurt Adzema, or either of them, as proxies and attorneys-in-fact, each with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Finisar Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., local time, on October 28, 2010, at the offices of DLA Piper LLP (US), 2000 University Avenue, East Palo Alto, CA 94303, and any adjournment or postponement thereof.This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.Continued and to be signed on reverse side