Share-Based Compensation Expense

6 Months Ended

May 01, 2021

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION EXPENSEAmended and Restated ESPP

Ciena makes shares of its common stock available for purchase under its Amended and Restated Ciena Corporation Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, eligible employees may enroll in a twelve-month offer period that begins in December and June of each year. Each offer period includes two six-month purchase periods. Employees may purchase a limited number of shares of Ciena common stock at 85% of the fair market value on either the day immediately preceding the offer date or the purchase date, whichever is lower. The ESPP is considered compensatory for purposes of share-based compensation expense. On January 29, 2021, Ciena’s Board of Directors adopted an amendment and restatement of the ESPP to increase the number of shares available for issuance thereunder by 8.7 million and eliminate the evergreen mechanism thereunder, which became effective upon its approval by Ciena’s stockholders on April 1, 2021. Unless earlier terminated, the ESPP will terminate on April 1, 2031.

The following table summarizes share-based compensation expense for the periods indicated (in thousands):


	Quarter Ended				Six Months Ended
	May 1,		May 2,		May 1,		May 2,
	2021		2020		2021		2020
Product	$	498	$	827	$	1,451	$	1,498
Service	1,421		1,036		2,626		1,878
Share-based compensation expense included in cost of goods sold	1,919		1,863		4,077		3,376
Research and development	5,844		4,822		10,638		8,671
Sales and marketing	6,610		5,264		12,426		9,877
General and administrative	6,743		5,975		13,101		11,502

Share-based compensation expense included in operating expense	19,197		16,061		36,165		30,050
Share-based compensation expense capitalized in inventory, net	419		53		257		153
Total share-based compensation	$	21,535	$	17,977	$	40,499	$	33,579

As of May 1, 2021, total unrecognized share-based compensation expense was approximately $155.6 million, which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.57 years.