DEF 14A of Calix, Inc, Mar 28, 2024

DEF 14A of Calix, Inc

Filed Mar 28, 2024 · FY20230001406666-24-000013

Open on EDGAR

  1. Board Composition and Qualifications

    Board Composition and Qualifications The Board assesses Board composition and qualifications at least annually. In assessing Board composition and qualifications, as well as in evaluating candidates for nomination or to fill vacancies on the Board, the Board seeks to maximize effectiveness of the Board and its committees to perpetuate the success of the Company, to best represent stockholder interests through the exercise of sound judgment and to assure continuity in the Board’s oversight over the Company and management. The Board places significant emphasis on ensuring an appropriate mix of characteristics, skills and experience for the Board as a whole and as to each individual director. The Board has delegated the evaluation of the skills and attributes of the Board as a whole and each individual director against the Company’s needs and strategic direction to the Nominating and Corporate Governance Committee pursuant to the committee’s charter. Among other considerations, the Board seeks to ensure an appropriate mix of expertise in executive and corporate leadership, diversity of background, perspective and experience (including diversity of gender, age and race/ethnicity), personal and professional integrity, ethics and values, financial and operational experience, depth of knowledge related to our business, business risks and operations, as well as expertise and insights in technologies, industries and markets relevant to our strategic plans, as set forth in our Corporate Governance Guidelines. Our Board believes the current mix of skills, backgrounds, service period and attributes of our Board maximizes the effectiveness of our Board in its oversight responsibilities. In 2017, Mses. Makagon and Crusco joined our Board, with Ms. Makagon bringing substantial expertise in global platform strategy, technology, cybersecurity, operations and high-technology executive leadership and Ms. Crusco adding deep financial, accounting and operational expertise, public company leadership and governance experience. In 2022, Mr. Mukherjee joined our Board, bringing expertise in cloud software products, top-tier talent acquisition and small business solutions. More recently, in 2023, Ms. Fields joined our Board, bringing expertise in cloud software product and ecosystem development. The Board values the added diversity of gender, age, ethnicity, experience and perspective with the additions to the Board of Mses. Crusco, Fields and Makagon and Mr. Mukherjee and continues to include diversity in its assessment of Board composition and qualifications. Our Board also considers board tenure and mix of shorter, medium and longer tenure of board service in its review of Board composition. The average tenure of our independent directors is approximately seven years. A depiction of the mix of key skills and attributes representative of our current Board is as follows:

  2. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Amended and Restated Certificate of Incorporation provides that our Board shall be divided into three classes, with the directors in each class having a three-year term. Unless the Board determines that vacancies (including vacancies created by increases in the number of directors) shall be filled by the stockholders, and except as otherwise provided by law, vacancies on the Board may be filled only by the affirmative vote of a majority of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the number of directors) shall hold office until the next election of the class for which such director shall have been chosen. As of March 28, 2024, the date this Proxy Statement is made available, the Board consists of nine directors, divided into the following three classes: •Class I directors: Kathy Crusco, Carl Russo and Michael Weening, whose current terms will expire at the 2026 Annual Meeting; •Class II directors: Don Listwin, Rajatish Mukherjee and Kevin Peters, whose current terms will expire at the 2024 Annual Meeting; and •Class III directors: Christopher Bowick, Eleanor Fields and Kira Makagon, whose current terms will expire at the 2025 Annual Meeting. We received notice on March 22, 2024, that one of our independent directors, Mr. Listwin, had decided not to stand for re-election upon the expiration of his term on May 9, 2024, the date of our 2024 Annual Meeting. Mr. Listwin indicated that this decision not to stand for re-election was not due to any disagreement with the Company nor any matter relating to the Company’s operations, policies or practices. Our Board unanimously voted on March 22, 2024, to reduce the size of our Board from nine members to eight, effective upon the expiration or earlier termination of Mr. Listwin's term on the Board. Mr. Listwin is a Class II director, whose current term expires at the 2024 Annual Meeting. Our Board plans to reevaluate membership on, and leadership of, each of the Board committees in light of the expiration of Mr. Listwin's term, including considering the appointment of a successor as lead independent director. Our Nominating and Corporate Governance Committee has recommended, and our Board has approved, Rajatish Mukherjee and Kevin Peters as nominees for reelection as Class II directors at the 2024 Annual Meeting. Mr. Mukherjee and Mr. Peters have each agreed to stand for reelection as Class II directors. Each director to be elected will hold office from the date of such director’s election by the stockholders until the third subsequent annual meeting of stockholders or until his successor is elected and has been qualified, or until such director’s earlier death, resignation or removal. Shares of common stock represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two Class II director nominees named above. The Board expects each of the nominees to be available for election to the Board at the 2024 Annual Meeting. In the event that any nominee should be unable to serve or for good cause will not serve, such shares will be voted for the election of such substitute nominee as the Board may propose. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve. Directors are elected by a plurality of the votes cast at the meeting.

  3. Our Director Nominees and Board of Directors

    Our Director Nominees and Board of Directors At least annually our Nominating and Corporate Governance Committee reviews the skills and characteristics of directors and the mix of skills and experience and diversity of the Board in the context of our business strategy, growth initiatives and our customers and target market, our business and operating requirements and the long-term interests of our stockholders. In doing so, the Nominating and Corporate Governance Committee seeks a board composition that can best perpetuate the success of the business and represent stockholder interests. The Committee also considers the tenure of our directors and seeks to maintain a balance of longer tenured directors with deep institutional knowledge and newer directors who bring new perspectives to the Board. See “Board Meetings and Committees — Nominating and Corporate Governance Committee” above regarding the Nominating and Corporate Governance Committee’s evaluation and selection of director nominees. The Board believes that all the nominees for election are highly qualified and have the skills and experience required for effective service on the Board. Mr. Mukherjee serves on our Compensation Committee and Cybersecurity Committee, and brings substantial expertise and knowledge regarding compensation, cybersecurity, privacy and software platform technologies. Mr. Peters chairs our Cybersecurity Committee and serves on our Audit Committee as our audit committee financial expert, and brings substantial expertise and knowledge in cybersecurity, financial matters and the leadership of complex organizations. We believe the skills and attributes of these nominees complement the expertise, background and experience of our other continuing directors. Biographical information describing the qualifications and relevant experience, skills and attributes of our Class II nominees and our other current directors who will continue in office after the 2024 Annual Meeting as of March 28, 2024, is set forth below.

  4. Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

    Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

  5. Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

    | Rajatish Mukherjee | | | Independent director Age: 47 Director since 2022 Calix Board committees: •Compensation •Cybersecurity Other current public company directorships: none | Mr. Mukherjee brings to our Board more than 20 years of experience in global platform and software companies focused on the small and midsize business (“SMB”) market. Mr. Mukherjee has served as an Executive Vice President and General Manager for Employer at Indeed since February 2023, where he is responsible for shaping product and go-to-market priorities for millions of employers, from small business customers to enterprise organizations, around the world to help them match and connect with talent to hire with speed and simplicity. Mr. Mukherjee previously served as General Manager of SMB at Indeed, where he oversaw product growth in the SMB segment and international markets from February 2023 to February 2022, and prior to that as Senior Vice President of Product at Indeed from June 2016 to February 2022. Prior to joining Indeed, Mr. Mukherjee was Senior Vice President of Product at GoDaddy from 2013-2016 where he was responsible for helping their customers build successful businesses online. He has significant experience with SMB customers and led multiple successful acquisitions for the company. Previously, Mr. Mukherjee worked on the Enterprise Platform team at Google from 2011-2012 where he led Product Management for Domains for Google Apps and Google Drive for enterprises. From 2008-2011 he was a Senior Product Manager for the Online Services division at Microsoft with responsibility for product and business strategy for Office 365. Mr. Mukherjee holds a joint Master of Business Administration from the Haas School of Business at the University of California at Berkeley & the Columbia Business School. He also has a Bachelor’s degree in Computer Science & Engineering from India. |

  6. Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

    | Kevin Peters | Cybersecurity Committee Chair | | Independent director Age: 59 Director since 2014 Calix Board committees: •Audit (Audit Committee financial expert) •Cybersecurity (Chair) •Nominating and Corporate Governance Other current public company directorships: none | Mr. Peters brings to our Board a wealth of leadership as well as business and industry experience gained over the course of a 28-year career with AT&T, one of world’s largest communications companies. Mr. Peters last served as president, chief executive officer and board member of Titanium Software, a privately-held technology company, from June 2022 through his retirement in March 2023. Mr. Peters formerly served as president and chief executive officer of NetNumber Inc., from February 2018 to July 2022, and has served as a board member since April 2015. Previously, Mr. Peters served as executive vice president, global customer service for AT&T, Inc., from 2012 until his retirement in 2014. Mr. Peters joined AT&T in 1986, and held various functional roles, including in information technology, sales, engineering and finance until 2000. Mr. Peters then served as vice president, local network planning and project management in 2001. During his subsequent career at AT&T, Mr. Peters served in the following capacities: senior vice president, network engineering from 2003 until 2004; senior vice president, global network technology program management, AT&T Labs in 2005; senior vice president-enterprise systems and software engineering in 2006; executive vice president, global network operations from 2006 until 2009; and chief marketing officer, business from 2010 until 2011. Since retiring, Mr. Peters has provided advisory services to a number of companies, including Accenture, a global management consulting and professional services firm, J&L Group, a privately-held telecommunications company and the Howe School of Business, Stevens Institute of Technology. In addition to the other current directorships described, Mr. Peters also currently volunteers and serves on the board of directors of the Crandon Lakes Country Club and the Yogi Berra Museum and Learning Center. Mr. Peters holds a Master of Business Administration with honors (Beta Gamma Sigma) from Columbia University, a Master of Science in Telecommunications Engineering from Stevens Institute of Technology and a Bachelor of Science in Psychology from Fairfield University, and attended the Harvard University Advanced Management Program. Mr. Peters also holds a Certificate in Cybersecurity Oversight from the Software Engineering Institute at Carnegie Mellon University. |

  7. Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH CLASS II DIRECTOR NOMINEE NAMED ABOVE.

  8. Current Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    Current Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

  9. Current Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    | Christopher Bowick | Compensation Committee Chair | | Independent director Age: 68 Director since 2014 Calix Board committees: •Compensation (Chair) •Nominating and Corporate Governance Other current public company directorships: none | Mr. Bowick brings to our Board extensive experience in advising and managing companies in the technology and telecommunications industries. Mr. Bowick is principal of The Bowick Group, LLC, where he provides technology, product, business and executive-development advice and counsel to clients in the cable television and telecommunications industries. From 1998 until his retirement in 2009, Mr. Bowick held various positions at Cox Communications. Mr. Bowick joined Cox in 1998 as vice president, technology development, and was named senior vice president of engineering and chief technical officer in 2000. Mr. Bowick retired as chief technology officer of Cox in June of 2009. At Cox, Mr. Bowick was responsible for strategic technology planning, day-to-day technical operations and the development and deployment of technology solutions for the company’s video, voice, high speed data and wireless products, including the development and deployment of telecommunications services, such as circuit-switched telephone, voice over IP, high-speed data, digital video, HDTV, video-on-demand and interactive television. Mr. Bowick was also responsible for network engineering and network operations for Cox’s nation-wide network infrastructure including its national backbone, Metropolitan Area Networks and HFC networks. Prior to joining Cox, Mr. Bowick served as group vice president of technology and chief technical officer for Jones Intercable, Inc., while simultaneously serving as president of Jones Futurex, a designer and manufacturer of triple DES, PC-based hardware encryption devices and provider of contract manufacturing services. Prior to Jones, Mr. Bowick served as vice president of engineering for Scientific Atlanta’s Transmission Systems Business Division, and as a design engineer for Rockwell International, Collins Avionics Division. Mr. Bowick also formerly served on the board of directors of VIXS Systems Inc., a publicly-held company. Mr. Bowick holds a Master of Business Administration from the University of Colorado and a Bachelor of Science in Electrical Engineering from the Georgia Institute of Technology. |

  10. Current Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    | Eleanor Fields | | | Independent director Age: 48 Director since 2023 Calix Board committees: • Audit •Strategic Other current public company directorships: none | Ms. Fields brings to our Board extensive experience in cloud software product and ecosystem development. Ms. Fields currently serves as the Chief Product and Engineering Officer at Salesloft, the world’s leading Sales Engagement platform, and has served in this capacity since March 2021. Together with the team at Salesloft she builds products to help sellers connect with buyers, get insight from data when they need it, and align across the team. Prior to Salesloft, she was part of Tableau Software for more than 12 years, from November 2008 to March 2021, where she led product strategy and engineering for mobile apps, collaboration, search and Tableau Public. Ms. Fields was part of the core team that envisioned, built and launched Tableau Public and Tableau Online, and led Tableau’s insanely vibrant customer community. Ms. Fields holds a Master of Business Administration from Stanford University and a B.S. in Engineering and a B.A. in Policy from Rice University. |

  11. Current Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    | Kira Makagon | | | Independent director Age: 60 Director since 2017 Calix Board committees: •Compensation •Cybersecurity Other current public company directorships: none | Ms. Makagon brings to the Board extensive experience in global platform strategy, technology, cybersecurity, operations and high technology executive leadership. Since July 2019, Ms. Makagon has served as executive vice president and chief innovation officer at RingCentral, Inc., a publicly-held provider of cloud-based global collaborative communications solutions, and previously served as RingCentral’s executive vice president of innovation from August 2012 to July 2019. From January 2012 to July 2012, Ms. Makagon served as the senior vice president of products of iCrossing, a global digital marketing agency owned by Hearst Corporation. From June 2009 to December 2011, she held various executive leadership roles at Red Aril, Inc., an online media technology company, serving as founder, chief executive officer and member of the board of directors from June 2009 to April 2010, and president from April 2010 to December 2011. Prior to joining Red Aril, Ms. Makagon held various executive leadership roles at NebuAd, Inc., an online data and media company, serving as co-founder and president from September 2006 to July 2008, chief executive officer from August 2008 to December 2008, and consultant and board member from January 2009 to May 2009. Ms. Makagon has also served in various roles at Exigen Group, a provider of SaaS workflow platforms and call center solutions, including president, ventures and alliances, and executive vice president, marketing and business development, as well as serving on the board of directors. Prior to that, Ms. Makagon co-founded and held key executive positions in flagship online marketing and CRM companies, including Octane Software, which was acquired by E.Epiphany, and Scopus Technology, where she brought multiple generations of CRM products to market. Ms. Makagon holds a Bachelor of Science in computer science and a Master of Business Administration from the University of California, Berkeley. |

  12. Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

  13. Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    | Kathy Crusco | Audit Committee Chair | | Independent director Age: 59 Director since 2017 Calix Board committees: •Audit (Chair and Audit Committee financial expert) • Strategic Other current public company directorships: •TD Synnex Corporation (member of audit committee) | Ms. Crusco brings to our Board a wealth of experience instilling operational rigor at leading technology companies. From December 2017 until January 2020, Ms. Crusco served as executive vice president and chief financial officer at Kony, Inc., a privately-held mobile applications solutions provider, which was acquired by Temenos, a banking software company. From August 2016 until November 2017, Ms. Crusco served as executive vice president, chief operating officer and chief financial officer at Epicor Software Corporation, a privately-held software company. Ms. Crusco joined Epicor in May 2011 when the company merged with Activant Solutions Inc., a business management software company where she served as senior vice president and chief financial officer from May 2007 to November 2010, then as executive vice president and chief financial officer. Before joining Activant, she worked for Polycom from 2002 to 2007, rising to the role of vice president of worldwide finance during her tenure. Ms. Crusco has also held a variety of financial roles at Documentum, Inc., Adaptec, Inc. and Price Waterhouse LLP. Ms. Crusco holds a Bachelor of Science in Business Administration with an emphasis in accounting from California State University, Chico. |

  14. Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    | Carl Russo | Chairman of the Board | | Chairman of the Board Age: 67 Director since 1999 Calix Board committees: none Other current public company directorships: none | Mr. Russo has served as Calix’s Chairman of the Board since July 2021. Previously, he served as chief executive officer from December 2002 until September 2022, and has also served as president from December 2002 to January 2021. Mr. Russo brings substantial expertise and knowledge regarding our business strategy, markets and operations to Calix’s board of directors. He also brings to the Board an extensive background in the telecommunications and networking technology industries. From November 1999 to May 2002, Mr. Russo served as vice president of optical strategy and group vice president of optical networking of Cisco Systems, Inc. From April 1998 to October 1999, Mr. Russo served as president and chief executive officer of Cerent Corporation, which was acquired by Cisco. From April 1995 to April 1998, Mr. Russo served in various capacities, including as chief operating officer, at Xircom, Inc., which was acquired by Intel Corporation. Previously, Mr. Russo served as senior vice president and general manager for the hyperchannel networking group of Network Systems Corporation and as vice president and general manager of the data networking products division of AT&T Paradyne Corporation. Mr. Russo served on the board of directors of Vital Network Services, Inc., a privately-held company delivering network lifecycle services, and Xirrus, Inc., a privately-held company providing products that enable high-performance wireless networks. Mr. Russo attended Swarthmore College and previously served on its board of managers. |

  15. Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    | Michael Weening | President and Chief Executive Officer | | Director Age: 55 Director since 2023 Calix Board committees: none Other current public company directorships: none | Mr. Weening has served as Calix’s president and chief executive officer since October 2022. As Calix's president and chief executive officer, Mr. Weening brings substantial experience and knowledge regarding our business strategy, markets and operations to Calix's board of directors. He also brings to the Board an extensive background in the telecommunications and networking technology industries. From January 2021 until September 2022, Mr. Weening served as president and chief operating officer at Calix; as executive vice president and chief operating officer from August 2020 until January 2021; as executive vice president, global operations from January 2019 until August 2020; and as executive vice president in various capacities over our field operations and sales and marketing organizations from June 2016 until January 2019. Prior to joining Calix, Mr. Weening held various sales executive leadership roles at salesforce.com, inc., a customer relationship management company. From August 2014 until June 2016, Mr. Weening served as senior vice president of global customer success and services at salesforce.com, and from May 2012 until August 2014 as senior vice president of customer and sales growth in Japan and Asia Pacific at salesforce.com. From May 2009 until May 2012, Mr. Weening served as vice president of business sales at Bell Mobility in Canada. Prior to joining Bell Mobility, Mr. Weening also held various sales leadership roles at Microsoft Corporation in Canada and the United Kingdom. Mr. Weening holds a Bachelor of Arts in Business Administration from Brock University. |

  16. Current Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    There are no family relationships among any directors, director nominees or executive officers of Calix.

  17. Competitive Market Review

    Competitive Market Review Our Compensation Committee determines pay for our NEOs in large part based upon its assessment of competitive market data and individual executive roles and responsibilities to pursue our short and long-term strategy. In setting executive pay for 2023, our Compensation Committee reviewed our NEOs’ compensation, as well as the mix of elements used, and compared that information with data provided by CAP. Based on its review, the Compensation Committee concluded that our programs support our objectives while considering market practice.

  18. Peer Group

    Peer Group We operate in a highly competitive market for talent. We strive to attract and retain highly qualified executives to effectively lead each of our business functions to achieve our business strategy. In doing so, we draw upon a pool of talent that is highly sought after by large and established technology and telecommunications companies and by other competitive companies in development or growth phases. We also compete for key talent on the basis of our vision of future success, our culture and values, the cohesiveness and productivity of our teams and the excellence of our technical and leadership teams. To gain perspective on market practices as well as competitive pay levels, the Committee utilizes compensation data from a peer group. Our peer group criteria consisted of companies within the technology industry, with an increasing shift toward software and platform companies, and reflective of our size. Each year, we review our peer group to ensure that the companies continue to be relevant from an industry and size perspective. In 2022, we made changes to our peer group to reflect our continued transition to a platform and managed services company as well as our revenue growth in the past three years. Below is the peer group approved by our Compensation Committee in 2022 that was used to establish and evaluate the 2023 compensation program for our NEOs:

  19. Peer Group

    | • 8x8, Inc. | •Infinera Corp. | | •ADTRAN | • InterDigital | | •Arista Networks, Inc.* | • LiveRamp Holdings | | • Blackbaud | • NETGEAR | | •Box, Inc.* | •NetScout Systems, Inc. | | •Casa Systems, Inc. | •Nutanix | | •Commvault Systems, Inc.* | •Rapid7, Inc,* | | •Extreme Networks, Inc. | •Ribbon Communications US LLC | | •Five9, Inc.* | •Varonis Systems | | • Harmonic | •Viavi Solutions |

  20. Peer Group

    * Reflects additions to our peer group for determining 2023 compensation. At the time our peer group companies were determined, revenue for the peer companies ranged from $360 million to $3.2 billion and market capitalization ranged from approximately $370 million to $29 billion; our annual revenue and market capitalization were positioned at the 55th percentile and 50th percentile, respectively. The Compensation Committee reviews peer group information when making its compensation decisions, including target annual cash compensation, which includes base salary and target annual incentive opportunity; and total direct compensation ("TDC"), which includes target annual cash compensation and equity compensation. Our Compensation Committee does not target a specific percentile for pay; however, the Compensation Committee uses the median of the peer group as a key reference point for target annual cash compensation, while considering a wider range for long-term incentives recognizing our core long-term incentive is comprised entirely of performance-contingent stock options which are completely at risk.

  21. 2023 Total Direct Compensation

    2023 Total Direct Compensation We provide annual compensation to our NEOs that is intended to be market competitive, support our compensation philosophy, focus on long-term profitable growth and align the interests of our executives with the interests of our stockholders. To that end, we provide our executives with base salary, cash incentive bonus and performance-contingent stock options and in select cases service-based stock options. A significant amount of the total potential annual compensation of our other NEOs in 2023 is comprised of “at-risk” variable compensation based on our achievements of corporate financial targets aligned with our business strategy and creating value for our stockholders. Consistent with the compensation philosophy, total pay for our NEOs is heavily weighted towards long-term equity awards which, other than limited service-based options described below, are comprised 100% of performance-contingent stock options which only deliver value if the stock price increases and our NEOs have achieved additional financial performance goals. The weighting of compensation elements for Mr. Weening, our CEO, and our other NEOs, in 2023, as a group, is as follows: For the purposes of the graphs above, base salary and bonus reflect values disclosed in the Summary Compensation Table and long-term equity is based on grant date fair value of the annual performance-contingent stock option awards granted. The graphs do not include service-based options granted to Messrs. Sindelar and Weening in November 2023, pursuant to letter agreements entered into with them, since the options granted under those letter agreements are not part of their on-going compensation. From time to time, we grant our executives, including our NEOs, service-based stock options. These awards are granted at time of hire, in connection with a promotion and, in limited circumstances, to retain key talent. Due to their potential as future leaders of the Company and the desire to retain them, in 2019 the Compensation Committee approved, and we entered into, five-year letter agreements with each of Mr. Weening (“Weening Letter Agreement”) and Mr. Sindelar ("Sindelar Letter Agreement") that provided for yearly grants of service-based stock options over the length of the agreement. The Compensation Committee believed it was in the best interest of the Company to retain these executives to deliver on the future of Calix as well as align their interests with that of our stockholders. In 2023, we granted each of Mr. Weening and Mr. Sindelar an option to purchase 120,000 and 100,000 shares of our common stock pursuant to their letter agreements. These were the final grants to Messrs. Weening and Sindelar under their letter agreements. We do not anticipate entering into a similar agreement going forward that guarantees specific long-term incentive grants over a multi-year period.

  22. Cash Incentive Compensation

    Cash Incentive Compensation 2023 Executive Cash Incentive Plan Design Our executives, including our NEOs, participate in two separate cash bonus programs under the executive cash incentive plan. We believe these programs focus our executives on our long-term profitable growth strategy while recognizing the challenges with predicting performance in this high-growth environment. A portion of the executive cash incentive plan payout for our executives is based on the Company’s achievement against preset quarterly revenue and non-GAAP operating income targets. For 2023, we added an annual component that would provide a payout if we met certain revenue targets and exceeded operating income targets. The other portion of the executive cash incentive plan payout is based on non-GAAP gross margin which provides an incremental opportunity that is based on our achievement above a minimum non-GAAP gross margin target, measured quarterly. The combined cash bonus programs include an assessment of the NEO's individual performance for the year. Our executive cash incentive plan does not provide for any guaranteed payments and there is no payout if we do not achieve a pre-established level of threshold performance. In setting the performance measures and targets for our executive cash incentive plan, our Compensation Committee seeks to align the performance targets to our key financial objectives and business strategy, which we believe furthers the long-term interests of our stockholders. The performance targets are designed to incentivize financial growth and performance over the year as we continue to drive adoption of our cloud and software platforms. In 2023, our Compensation Committee established our quarterly and annual corporate financial targets based on the annual operating plan approved by our Board at the beginning of the year and based on quarterly financial information prepared by management. As discussed in more details under "2023 Executive Cash Incentive Plan Achievement", our Compensation Committee approved a reduction in our annual performance goals to align with the lower budgets in our annual operating plan and to reflect the challenges in setting annual goals in a high-growth environment. The following chart summarizes key features of our 2023 executive cash incentive plan.

  23. Cash Incentive Compensation

    | Bonus Component | Description | | Revenue / Non-GAAP Operating Income (1) | •Component has a quarterly metric and, for 2023, an annual metric; •Quarterly metric is capped at target (i.e., no upside) and based on pre-established revenue (50%) and non-GAAP operating income (50%) goals; •Annual metric allows participants to earn up to an additional 50% of target payout if the revenue target is met and non-GAAP operating income is exceeded; •Both revenue and non-GAAP operating income thresholds must be achieved for any quarterly metric to be funded; and • The plan is intended to drive focus on delivering on the business plan which aligns with long-term value creation. | | Non-GAAP Gross Margin (2) | •Participants can earn incremental compensation as gross margin improves, which we believe focuses our NEOs on profitable growth, which is critical; • Specifically, the plan is funded based on 25% of the gross margin dollars that exceed target (on a quarterly basis). If our non-GAAP gross margin is at or below the quarterly target, the bonus is not funded; and •The resulting pool is allocated to participants based on base salary. |

  24. Cash Incentive Compensation

    (1)Non-GAAP operating income for the purposes of the executive cash incentive plan is calculated as operating income on a GAAP basis less certain items that are not considered indicative of our performance, consisting of: stock-based compensation, intangible asset amortization and inventory and component liability charges. Reconciliation is provided in Appendix A. (2)Non-GAAP gross margin for the purposes of the executive cash incentive plan is calculated as gross margin on a GAAP basis less certain items that are not considered indicative of our performance, consisting of: stock-based compensation, intangible asset amortization and inventory and component liability charges. Reconciliation is provided in Appendix A.

  25. Total Executive Cash Incentive Plan Opportunity

    Total Executive Cash Incentive Plan Opportunity The 2023 executive cash incentive plan opportunity as a percentage of base salary for the quarterly and annual revenue and non-GAAP operating income as set by our Compensation Committee for each of our NEOs is listed in the table below. The payout for our second cash bonus component (the non-GAAP gross margin component) is allocated to participants, including our NEOs, based on a proportional amount of the funded pool once performance has been determined. Therefore, participants do not have a target opportunity similar to our other component.

  26. Total Executive Cash Incentive Plan Opportunity

    | | Aggregate Quarterly Target Opportunity | | Annual Opportunity | | Total Potential Opportunity | | | Named Executive Officer | Dollar Value | As a Percentage of Base Salary | Dollar Value | As a Percentage of Base Salary | Dollar Value | As a Percentage of Base Salary | | Michael Weening | $840,000 | 150% | $420,000 | 75% | $1,260,000 | 225% | | Cory Sindelar | $355,836 | 75% | $177,918 | 37.5% | $533,755 | 112.5% | | J. Matthew Collins | $310,399 | 75% | $155,199 | 37.5% | $465,598 | 112.5% | | Shane Eleniak | $310,399 | 75% | $155,199 | 37.5% | $465,598 | 112.5% |

  27. Total Executive Cash Incentive Plan Opportunity

    Once the cash incentive pool is funded, our Compensation Committee retains discretion to adjust cash incentive compensation paid to each individual up or down, ranging from 50% to 200% of the funded amounts for each individual’s executive cash incentive plan opportunity for the year, based upon assessment of individual performance. Our CEO provides his assessment of individual NEO performance for our Compensation Committee’s determination of actual cash incentive payout of amounts funded under the plan. Our CEO’s performance is evaluated and determined solely by our Compensation Committee. 2023 Executive Cash Incentive Plan Achievement The table below sets forth the quarterly financial targets and achievement applicable to the two separately funded cash bonus opportunities under our cash incentive plan for each fiscal quarter of 2023. For the first bonus opportunity, full 100% funding of target bonuses was achieved in each of the four quarters as quarterly revenue and non-GAAP operating income was at or above target for such quarters. For the second bonus opportunity, our non-GAAP gross margin exceeded the target in the second, third and fourth quarters. However, non-GAAP gross margin was below target in the first quarter which resulted in no funding for this quarter.

  28. Total Executive Cash Incentive Plan Opportunity

    | | Quarterly Revenue/Non-GAAP Operating Income | | | | | | | Quarterly Non-GAAP Gross Margin (1) | | | | | Revenue (in millions) | | | Non-GAAP Operating Income (in millions) (1) | | | | | | | | Fiscal Quarter | Threshold | Target | Actual | Threshold | Target | Actual | Funding | Target | Actual | Funding (in millions) | | First quarter | $225.0 | $250.0 | $250.0 | $23.0 | $25.5 | $26.7 | 100% | >52.3% | 51.8% | $— | | Second quarter | $234.0 | $260.0 | $261.0 | $25.7 | $28.5 | $28.5 | 100% | >52.3% | 52.8% | $0.4 | | Third quarter | $236.7 | $263.0 | $263.8 | $27.9 | $31.0 | $32.7 | 100% | >53.0% | 53.8% | $0.5 | | Fourth quarter | $237.6 | $264.0 | $264.7 | $27.9 | $31.0 | $33.3 | 100% | >54.0% | 54.1% | $0.1 |

  29. Total Executive Cash Incentive Plan Opportunity

    (1)Reconciliation of these non-GAAP amounts to GAAP is provided in Appendix A. The annual portion of our executive cash incentive plan funds if we met our annual revenue goal and exceeded our non-GAAP operating income. In February, our Compensation Committee approved revenue and non-GAAP operating income goals that were based on our annual operating plan. At that time, the target revenue goal was $1,100 million and the non-GAAP operating income goal was $135 million. In June 2023, the Company lowered financial targets on the annual operating plan, which was approved by the Board, and the Compensation Committee approved a reduction in the annual goals to align with the Company’s revised annual budget. The revenue target was reduced to $1,050 million and the non-GAAP operating income was reduced to $115 million. Given the challenges of setting annual goals in a post-pandemic environment with supply-chain normalization and the aggressiveness of the targets that were set, the Compensation Committee reviewed the revenue goal and decided to further reduce the annual revenue goal to $1,042 million in August 2023. The table below outlines the financial targets and achievement for the annual incentive component:

  30. Total Executive Cash Incentive Plan Opportunity

    | | Annual Revenue/Non-GAAP Operating Income Goals | | | Performance Level | Revenue (in millions) | Non-GAAP Operating Income (in millions) | | Target | $1,042.0 | $115.0 | | Actual | $1,039.6 | $123.0 |

  31. Total Executive Cash Incentive Plan Opportunity

    Management exceeded the non-GAAP operating income target, but was below the annual revenue target. The Compensation Committee reviewed Calix’s overall financial performance in 2023 and recognizing the record level of operating income (24% growth) and revenue (26% growth), decided to waive the revenue requirement and funded the incentive plan based on the operating income achievement. As a result, our executives, including the NEOs, earned 34.5% of the payout opportunity for exceeding the non-GAAP operating income goal. The committee believes these payouts were appropriate given the current environment and the challenges with predicting performance. As we discuss in further detail in “Say on Pay” section, for 2024 and beyond, we are incorporating a mechanism such that the Compensation Committee can adjust payouts up or down by up to 20% to mitigate the need to adjust goals in the future. The payout awards of funded cash incentive amounts are determined by our Compensation Committee following assessment of performance and in consultation with the chief executive officer as to each NEO other than himself. For 2023, each NEO was awarded 100% of his funded opportunity under the executive cash incentive plan.

  32. 2023 Executive Cash Incentive Plan Payouts

    2023 Executive Cash Incentive Plan Payouts The table below summarizes the cash incentive payout amounts awarded to each NEO under the executive cash incentive plan for 2023:

  33. 2023 Executive Cash Incentive Plan Payouts

    | | Revenue/Non-GAAP Operating Income | | Non-GAAP Gross Margin | Total Award | | Named Executive Officer | Aggregate Quarterly | Annual | | | | Michael Weening | $840,000 | $292,740 | $155,785 | $1,288,525 | | Cory Sindelar | $355,836 | $124,009 | $133,595 | $613,440 | | J. Matthew Collins | $310,399 | $108,174 | $117,512 | $536,085 | | Shane Eleniak | $310,399 | $108,174 | $117,512 | $536,085 |

  34. Equity-Based Incentives

    Equity-Based Incentives Our 2019 Plan provides our key employees, including our NEOs, with stock-based incentives to align their interests with the interests of our stockholders. We grant 100% of our equity compensation in the form of stock options because we believe they provide the greatest alignment with stockholders since executives only realize value when the stock price increases. Our core long-term incentive is comprised solely of performance-contingent stock options. We grant service-based stock options periodically to executives upon hire or promotion, to recognize exceptional performance or for retention. All of our stock option awards are subject to a minimum one-year vesting period from the date of grant for partial vesting. We grant performance-contingent stock options to our NEOs on an annual basis as determined by our Compensation Committee. Our Compensation Committee also reviews the equity plan “burn” rate and related information, including reference data for peer companies and overall industry practices annually.

  35. Equity-Based Incentives

    | Vehicle | Structure | Rationale | | Performance-contingent stock options ("PSOs") | •Target number of options are granted at the beginning of each year; •Options are earned based on non-GAAP operating income and bookings goals, each weighted 50%; •No options are earned for the performance metric if threshold level of performance is not achieved; •Opportunity to earn above target on each performance measure although the total number of options earned is capped at target (i.e., no upside); and • Any earned options vest 25% immediately (i.e., one year after date of grant) and the remaining vests in equal quarterly installments over the subsequent 36 months. | • Highly performance-oriented program that focuses on driving financial performance that leads to increased long-term shareholder value. • Entire core annual long-term incentive is at risk which creates very strong alignment with stockholders. • On the date of grant, these awards have zero intrinsic value and executives only realize value if they achieve financial goals and the stock price increases. | | Service-based stock options | •Granted in limited circumstances (i.e., at hire or promotion, to recognize truly exceptional performance or retention of an executive). •In general, vests 25% on the first anniversary date and the remaining vests in equal quarterly installments over the subsequent 36 months. | •Recognizing the PSOs are fully at risk, the service-based stock options are intended to provide alignment with stockholders at time of grant. •This type of award is also critical in helping to recruit top talent as we are often competing with companies that are delivering long-term incentives with less risk (e.g., service-based full value shares which we do not provide). |

  36. Equity-Based Incentives

    We provide grants of stock options to our NEOs under our 2019 Plan on an annual basis as determined by our Compensation Committee. Our stock option grants have either performance-contingent and/or service-based vesting as described above, with all awards subject to a minimum one-year vesting period from the date of grant. Our Compensation Committee also reviews the equity plan “burn” rate and related information, including reference data for peer companies and overall industry practices annually. Our Compensation Committee approves equity grants at regularly scheduled Committee meetings. Our annual PSO grant is made in February. Initial awards at the time of hire or promotion and retention awards generally vest solely based on the continued service of the NEO. The size and terms of the initial equity grant made to each new NEO is primarily based on competitive conditions applicable to the NEO’s specific position and, in the case of a new hire executive leaving his or her prior company, the value of unvested equity. In addition, we consider the number of shares of our common stock underlying stock options granted to other executives in comparable positions within the Company. 2023 Stock Option Awards On February 9, 2023, the Compensation Committee approved an annual grant of performance-contingent stock options for our NEOs based on specific financial targets for 2023 (the “2023 Performance-Contingent Stock Option”) to our NEOs. The actual number of shares earned is contingent upon achievement of annual corporate financial targets for bookings and non-GAAP operating income for fiscal year 2023 (collectively, the “2023 Performance Metrics”), each weighted 50%. As discussed above, in June 2023, management lowered the financial targets in the annual operating plan, which was approved by the Board, and the Compensation Committee approved lowering the target goals for the adjusted 2023 Performance Metrics. The 2023 Performance-Contingent Stock Options were earned based on achievement on our 2023 Performance Metrics. If non-GAAP operating income and bookings are below 80% of target, no options would be earned, and the 2023 Performance-Contingent Stock Options would be forfeited in full. For each metric, if the threshold of 80% of target is achieved, then the options are earned at 50%, with an increasing percentage of options earned above threshold up to 100% earned for target performance. Executives have an opportunity to earn above target for each metric (up to 125% of options earned) although the total number of PSOs earned is capped at 100% of target (i.e., no upside). The table below outlines the performance achievement opportunity for the 2023 Performance-Contingent Stock Options.

  37. 2023 Performance-Contingent Stock Options Performance Schedule

    2023 Performance-Contingent Stock Options Performance Schedule

  38. 2023 Performance-Contingent Stock Options Performance Schedule

    | | Non-GAAP Operating Income | | Bookings | | Total PSOs Earned | | Performance Level | Achievement % | Earned % | Achievement % | Earned % | | | Maximum | 120% | 125% | 120% | 125% | 100% | | Target | 100% | 100% | 100% | 100% | 100% | | Threshold | 80% | 50% | 80% | 50% | 50% | | Below Threshold | <80% | 0% | <80% | 0% | 0% |

  39. 2023 Performance-Contingent Stock Options Performance Schedule

    In February 2024, the Compensation Committee certified the achievement of the 2023 Performance Metrics for non-GAAP operating income and bookings. Non-GAAP operating income performance exceeded the adjusted target, and bookings performance was below the adjusted target. Based on these results, executives earned 54.5% of target PSOs. As discussed above, Messrs. Weening and Sindelar received service-based stock options in addition to performance-contingent stock options. The Compensation Committee approved the following 2023 Performance-Contingent Stock Options and service-based stock options for the NEOs as shown in the table below.

  40. 2023 Performance-Contingent Stock Options Performance Schedule

    | Named Executive Officer | 2023 Performance Equity Earned (# Shares Underlying of Options) | 2023 Service-Based Stock Options (# Shares Underlying of Options) | | Michael Weening | 54,500 | 120,000 | | Cory Sindelar | 54,500 | 100,000 | | J. Matthew Collins | 109,000 | — | | Shane Eleniak | 109,000 | — |

  41. 2023 Performance-Contingent Stock Options Performance Schedule

    For more information on all outstanding equity awards held by our NEOs as of December 31, 2023, see below table under “Outstanding Equity Awards at December 31, 2023.”

  42. Mr. Weening - Promotion to Chief Executive Officer

    Mr. Weening - Promotion to Chief Executive Officer In connection with Mr. Weening’s promotion from president and chief operating officer to chief executive officer on September 30, 2022, the Compensation Committee approved an annual salary of $560,000 with a cash incentive opportunity set at 150% of base salary. The Compensation Committee also approved a one-time promotion grant of an option to purchase 300,000 shares of common stock with an exercise price of $73.12 which was the closing trading price of the Company’s common stock on October 28, 2022, the date of grant of the option. The option vests as to 25% of the shares underlying the option on the first anniversary of the grant date, and the remaining shares underlying the option vesting in equal quarterly installments over the subsequent 36 months. The promotion stock option grant only delivers value if the stock price increases above the exercise price. In evaluating the promotion stock option grant, the Compensation Committee considered Calix’s historical practice of making promotional stock option grants, competitive practice of initial equity grants in the recruitment of new CEO hires, the remaining grants under the Weening Letter Agreement (see below) and the earned portion of the performance-contingent option to purchase 100,000 shares of the Company’s common stock granted to Mr. Weening in 2022.

  43. Weening Letter Agreement

    Weening Letter Agreement In November 2019, the Compensation Committee approved, and we entered into the Weening Letter Agreement as an incentive for Weening to continue his employment with the Company. Among other considerations, the Compensation Committee placed significant importance on the focus areas for the next stage of the Company’s execution against its long-term strategy and growth and improve our long-term financial performance as a cloud and software platform company. Pursuant to the Weening Letter Agreement, Mr. Weening was provided an initial and subsequent annual option grants to purchase shares of the Company’s common stock subject to Mr. Weening’s continued employment with the Company. Under the Weening Letter Agreement, Mr. Weening was automatically granted an option to purchase 120,000 shares of the Company’s common stock in November 2023 (the final tranche under the letter agreement). The option grant vests and becomes exercisable over four years, with 25% of the shares underlying the option vesting on the first anniversary of the grant, and the remainder vesting in equal quarterly installments over the next 36 months. Under the Weening Letter Agreement, Mr. Weening will hold and may not transfer any shares issued upon exercise of the option until two years have lapsed from the vest date of such shares.

  44. Sindelar Letter Agreement

    Sindelar Letter Agreement In November 2019, the Compensation Committee approved, and we entered into the Sindelar Letter Agreement, pursuant to which Mr. Sindelar was granted an initial and subsequent annual option grants over five years to purchase shares of the Company’s common stock subject to Mr. Sindelar’s continued employment with the Company. Under this letter agreement, Mr. Sindelar was automatically granted an option to purchase 100,000 shares of the Company’s common stock in November 2023 (this is the final tranche under the letter agreement). The option has an exercise price per share equal to the closing trading price of the Company’s common stock on the date of grant, and vests and becomes exercisable over four years, with 25% of the shares underlying the option vesting on the first anniversary of the grant date of the option, and the remainder vesting in equal quarterly installments over the next 36 months. Under Mr. Sindelar’s letter agreement, Mr. Sindelar will hold and may not transfer any shares issued upon exercise of the foregoing option until two years have lapsed from the vest date of such shares.

  45. Change in Control and Severance Benefits

    Change in Control and Severance Benefits We provide our NEOs with certain change in control and severance benefits under our Amended and Restated Executive Change in Control and Severance Plan (“CICSP”). Our Compensation Committee provides change in control and severance benefits to our NEOs to, among other things, provide security to our NEOs including in the event of a change in control of the Company. Under the CICSP, in the event an eligible NEO’s employment with us is involuntarily terminated by us other than for Cause (as defined in the CICSP), death or disability and such involuntary termination during a Change in Control Period (as defined below), the NEO is eligible to receive (i) a cash severance payment in an amount equal to 12 months of base salary and pro-rated target bonus (ii) accelerated vesting of equity awards for the 12 month severance period, and (iii) health insurance benefit continuation for the 12 month severance period. In the event an eligible NEO’s employment with us is involuntarily terminated by us other than for Cause, death or disability, or the eligible NEO voluntarily terminates the NEO's employment for Good Reason (as defined in the CICSP), during a period of time commencing 60 days prior to a change in control and ending 12 months following the change in control (the “Change in Control Period”), the NEO is eligible to receive (i) a cash severance payment in an amount equal to: 24 months of base salary (in the case of Mr. Weening) and 12 months of base salary (in the case of Messrs. Sindelar, Collins and Eleniak); 200% of the annual bonus opportunity at target (in the case of Mr. Weening) and 100% of the annual bonus opportunity at target (in the case of Messrs. Sindelar, Collins and Eleniak); and a pro-rata portion the eligible NEO’s annual bonus opportunity at target, (ii) 100% accelerated vesting of all equity awards and (iii) 24 months of health insurance benefit continuation (in the case of Mr. Weening) and 12 months of health insurance benefit continuation (in the case of Messrs. Sindelar, Collins and Eleniak), in each case subject to certain exceptions. The post-termination exercise period for vested options is 12 months in the event of a qualifying termination during a Change in Control Period. Under the CICSP, an executive must execute, and not revoke during any applicable revocation period, a general release of claims against us in order to be eligible for any severance benefits. We do not provide for any tax gross-up payments under our CICSP or otherwise in connection with executive severance benefits.

  46. Annual Stockholder Advisory Vote on Executive Compensation ("Say on Pay")

    Annual Stockholder Advisory Vote on Executive Compensation ("Say on Pay") We hold an advisory, non-binding stockholder vote on executive compensation every year. At our 2023 Annual Meeting of Stockholders, our stockholders voted to approve, on an advisory basis, the compensation of our NEOs, with approval of 72.6% of the votes cast. The Compensation Committee intends to continue to take into consideration the outcome of our stockholders’ advisory “say-on-pay” votes along with market practices and the recommendations of its executive compensation advisor when making future compensation decisions for the NEOs. We also regularly engage in discussions with our largest institutional stockholders and solicit feedback on executive compensation as well as other areas. We take shareholder feedback seriously and believe our “go forward” compensation practices should address concerns raised, including: •Not renewing the letter agreements with Messrs. Weening or Sindelar that provided for guaranteed annual grants of service-based options, which were in addition to their core grant of performance-contingent stock options; •Recognizing the challenges in predicting annual performance as we transition from a hardware company to a platform provider, for 2024’s cash incentive we have incorporated an approach for allowing the Compensation Committee to exercise judgement within a defined range (+/- 20%) to mitigate the need for the Compensation Committee to adjust goals or payouts outside the plan structure; and •Continued the use of performance-contingent stock options that are tied to rigorous goals, as demonstrated by the 2023 payout of only 54.5% of target.

  47. Clawback Policies

    Clawback Policies In May 2019, we adopted a clawback policy that applies to our executive officers and covers all compensation under our cash incentive programs as well as all equity awards granted or awarded after the date the policy was adopted. The policy applies in the event our financial statements are restated as a result of material non-compliance with financial reporting rules as defined in the policy and provides our Board with broad discretion as to the actions that may be taken based on circumstances leading to the restatement, including recovery of incentive-based compensation received by an executive officer in excess of what the executive officer would have been paid under the restatement. In November 2023, we adopted a second clawback policy that applies to our executive officers and covers all compensation under our cash incentive programs as well as all equity awards granted or awarded after the date the policy was adopted, in compliance with the SEC’s adoption of new rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as implemented by NYSE. The policy applies in the event our financial statements are restated as a result of material non-compliance with financial reporting rules as defined in the policy and provides our Board with broad discretion as to the actions that may be taken based on circumstances leading to the restatement, including recovery of incentive-based compensation received by an executive officer in excess of what the executive officer would have been paid under the restatement.

  48. Section 280G of the Internal Revenue Code

    Section 280G of the Internal Revenue Code Section 280G of the Internal Revenue Code disallows a tax deduction for “excess parachute payments” and Section 4999 of the Code imposes a 20% excise tax on any person who receives excess parachute payments. Our executives, including our NEOs, are not eligible to receive any tax gross-up payments in the event any payments made or that may be made to them become subject to this excise tax. The Compensation Committee may take into account the implications of Section 280G in determining potential payments to be made to our executives in connection with a change in control. Nevertheless, to the extent that certain payments upon a change in control are classified as excess parachute payments, such payments may not be deductible following a change in control under Section 280G.

  49. Accounting for Stock-Based Compensation

    Accounting for Stock-Based Compensation We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of stock options and other stock-based awards under our equity incentive award plans will be accounted for under ASC Topic 718. Our Compensation Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

  50. Summary Compensation Table

    Summary Compensation Table The following table sets forth all of the compensation awarded to, earned by or paid to our NEOs during 2023, 2022 and 2021.

  51. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (2) | Total ($) | | Michael Weening | 2023 | 560,000 | — | 5,299,670 | 1,288,525 | 7,600 | 7,155,795 | | President and Chief Executive Officer | 2022 | 515,227 | 675,000 | 20,450,550 | 629,082 | 8,171 | 22,278,030 | | | 2021 | 483,179 | 900,000 | 6,276,344 | 490,708 | 7,393 | 8,157,624 | | Cory Sindelar | 2023 | 478,112 | — | 4,893,830 | 613,440 | 9,900 | 5,995,283 | | Chief Financial Officer | 2022 | 421,875 | — | 6,381,678 | 336,823 | 8,975 | 7,149,351 | | | 2021 | 394,552 | — | 5,168,384 | 288,381 | 8,693 | 5,860,010 | | J. Matthew Collins | 2023 | 420,025 | — | 5,729,260 | 536,085 | 9,900 | 6,695,270 | | Chief Commercial Operations Officer | 2022 | 358,750 | — | 5,876,529 | 265,722 | 9,150 | 6,510,151 | | | 2021 | 348,297 | — | 2,228,496 | 232,391 | 8,693 | 2,817,877 | | Shane Eleniak | 2023 | 420,025 | — | 5,729,260 | 536,085 | 9,900 | 6,695,270 | | Chief Product Officer | 2022 | 358,750 | 3,821 | 5,876,529 | 265,722 | 9,150 | 6,513,972 | | | 2021 | 347,162 | — | 2,228,496 | 237,138 | 8,693 | 2,821,489 |

  52. Summary Compensation Table

    (1)Amounts reported in 2023 represent (i) the grant date fair value of the 2023 Performance-Contingent Stock Option grants to each of Messrs. Weening, Sindelar, Collins and Eleniak, calculated assuming maximum achievement of performance goals, and (ii) the grant date fair value of the November 2023 service-based stock option grants to each of Messrs. Weening and Sindelar. The amounts as reported were calculated in accordance with ASC Topic 718, excludes the impact of estimated forfeitures related to service-based vesting conditions, and are not adjusted for subsequent changes in our stock performance or the level of ultimate vesting. For a further discussion of the 2023 stock option grants, see above under “2023 Stock Option Awards.” For a discussion of the assumptions used in the valuations of the stock options, see Note 7 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. (2)Amounts reported for 2023 represent (i) employer matching contributions of $9,900 we made for Mr. Sindelar, and $9,900 for Messrs. Collins and Eleniak pursuant to our U.S. 401(k) Plan and (ii) employer matching contributions of $7,600 we made for Mr. Weening to the Canadian Registered Retirement Savings Plan (“RRSP”), a tax-deferred capital accumulation plan in which our Canadian employees can participate. Payments under the RRSP are set in Canadian dollars and were converted to U.S. dollars using an average exchange rate of CAD1.00 to US$0.74073.

  53. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023 The following table provides information regarding the grants of plan-based awards to our NEOs in 2023.

  54. Grants of Plan-Based Awards in 2023

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | Threshold ($) (1) | Target ($) (2) | Maximum ($) (3) | Threshold (#) (4) | Target (#) (5) | All Other Option Awards: Number of Securities Underlying Options (6) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Option and Stock Awards ($) (7) | | Michael Weening | Cash Incentive | 105,000 | 840,000 | 1,260,000 | | | | | | | | 02/09/2023 | | | | 50,000 | 100,000 | | 51.55 | 2,864,630 | | | 11/27/2023 | | | | | | 120,000 | 37.80 | 2,435,040 | | Cory Sindelar | Cash Incentive | 44,480 | 355,836 | 537,974 | | | | | | | | 02/09/2023 | | | | 50,000 | 100,000 | | 51.55 | 2,864,630 | | | 11/27/2023 | | | | | | 100,000 | 37.80 | 2,029,200 | | J. Matthew Collins | Cash Incentive | 38,800 | 310,399 | 471,124 | | | | | | | | 02/09/2023 | | | | 100,000 | 200,000 | | 51.55 | 5,729,260 | | Shane Eleniak | Cash Incentive | 38,800 | 310,399 | 471,124 | | | | | | | | 02/09/2023 | | | | 100,000 | 200,000 | | 51.55 | 5,729,260 |

  55. Grants of Plan-Based Awards in 2023

    (1)These amounts represent the minimum annual possible payout (12.5%) at threshold for our executive cash incentive plan opportunity assuming achievement of a single quarterly revenue and non-GAAP operating income performance goal as threshold under the 2023 Executive Cash Incentive Plan. See discussion under “Cash Incentive Compensation.” (2)These amounts represent estimated payout at target for our executive cash incentive plan opportunity based on achievement of quarterly revenue and non-GAAP operating income performance goals at target under the 2023 Executive Cash Incentive Plan. See discussion under "Cash Incentive Compensation." (3)These amounts represent the maximum possible payout under our executive cash incentive plan opportunity assuming all goals were achieved at maximum under the 2023 Executive Cash Incentive Plan. See discussion under “Cash Incentive Compensation.” (4)These amounts represent the minimum possible number of underlying shares that would be earned at threshold (50%) performance under 2023 Performance-Contingent Stock Options. See discussion under “2023 Stock Option Awards.” (5)These amounts represent the number of shares of common stock underlying 2023 Performance-Contingent Stock Options that would be earned at target performance as described in “2023 Stock Option Awards.” Shares underlying the 2023 Performance-Contingent Stock Options cannot be earned in excess of target. Upon achievement, earned shares underlying the 2023 Performance-Contingent Stock Options vest immediately as to 25% of the earned shares and the remaining earned shares vest in substantially equal quarterly installments over 36 months. (6)Each stock option vests over four years, with 25% of the common stock subject to the option vesting and becoming exercisable on the first anniversary of the grant date, and the remainder vesting and becoming exercisable quarterly thereafter in substantially equal installments over the next 36 months. No shares issued upon exercise of the grant to Messrs. Weening and Sindelar may be transferred in any manner prior to the second anniversary of the date such shares vested. For a further discussion of these 2023 stock option grants, see above under “2023 Stock Option Awards.” (7)Amounts reported represent the aggregate grant date fair value, calculated in accordance with ASC Topic 718, and exclude the impact of estimated forfeitures related to service-based vesting conditions.

  56. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table lists all outstanding equity awards held by our NEOs as of December 31, 2023.

  57. Outstanding Equity Awards as of December 31, 2023

    | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | | Michael Weening | 11/27/2023(1) | — | 120,000 | — | 37.80 | 11/27/2033 | | | 02/09/2023(2) | — | — | 54,500 | 51.55 | 02/09/2033 | | | 11/27/2022(1) | 30,000 | 90,000 | — | 68.40 | 11/27/2032 | | | 10/28/2022(3) | 75,000 | 225,000 | — | 73.12 | 10/28/2032 | | | 02/10/2022(3) | 43,750 | 56,250 | — | 55.96 | 02/10/2032 | | | 11/27/2021(1) | 60,000 | 60,000 | — | 68.04 | 11/27/2031 | | | 02/11/2021(3) | 66,756 | 30,344 | — | 36.74 | 02/11/2031 | | | 11/27/2020(1) | 225,000 | 75,000 | — | 23.95 | 11/27/2030 | | | 11/27/2019(1) | 600,000 | — | — | 7.84 | 11/27/2029 | | | 02/14/2019 | 90,000 | — | — | 8.03 | 02/14/2029 | | | 12/29/2017 | 204,000 | — | — | 5.95 | 12/29/2027 | | | 06/27/2016 | 80,000 | — | — | 6.38 | 06/27/2026 | | Cory Sindelar | 11/27/2023(1) | — | 100,000 | — | 37.80 | 11/27/2033 | | | 02/09/2023(2) | — | — | 54,500 | 51.55 | 02/09/2033 | | | 11/27/2022(1) | 25,000 | 75,000 | — | 68.40 | 11/27/2032 | | | 02/10/2022(3) | 35,000 | 45,000 | — | 55.96 | 02/10/2032 | | | 11/27/2021(1) | 50,000 | 50,000 | — | 68.04 | 11/27/2031 | | | 02/11/2021(3) | 53,405 | 24,275 | — | 36.74 | 02/11/2031 | | | 11/27/2020(1) | 112,500 | 37,500 | — | 23.95 | 11/27/2030 | | | 11/27/2019(1) | 200,000 | — | — | 7.84 | 11/27/2029 | | | 02/14/2019 | 72,000 | — | — | 8.03 | 02/14/2029 | | | 12/29/2017 | 108,000 | — | — | 5.95 | 12/29/2027 | | | 10/01/2017 | 275,000 | — | — | 5.05 | 10/01/2027 | | J. Matthew Collins | 02/09/2023(2) | — | — | 109,000 | 51.55 | 02/09/2033 | | | 02/10/2022(3) | 83,124 | 106,876 | — | 55.96 | 02/10/2032 | | | 02/11/2021(3) | 80,107 | 36,413 | — | 36.74 | 02/11/2031 | | | 01/31/2020(3) | 152,500 | 12,500 | — | 9.16 | 01/31/2030 | | | 02/14/2019 | 25,000 | — | — | 8.03 | 02/14/2029 | | | 08/01/2017 | 20,171 | — | — | 6.95 | 08/01/2027 | | Shane Eleniak | 02/09/2023(2) | — | — | 109,000 | 51.55 | 02/09/2033 | | | 02/10/2022(3) | 83,124 | 106,876 | — | 55.96 | 02/10/2032 | | | 02/11/2021(3) | 80,107 | 36,413 | — | 36.74 | 02/11/2031 | | | 01/31/2020(3) | 234,375 | 15,625 | — | 9.16 | 01/31/2030 | | | 02/14/2019 | 48,000 | — | — | 8.03 | 02/14/2029 | | | 08/01/2018 | 50,000 | — | — | 7.00 | 08/01/2028 | | | 08/01/2017 | 90,000 | — | — | 6.95 | 08/01/2027 |

  58. Outstanding Equity Awards as of December 31, 2023

    (1)Stock option vests over four years, with 25% of the common stock subject to the option vesting and becoming exercisable on the first anniversary of the grant date, and the remainder vesting and becoming exercisable quarterly thereafter in substantially equal installments over the next 36 months. No shares issued upon exercise of the grant may be transferred in any manner prior to the second anniversary of the date such shares vested. (2)2023 Performance-Contingent Stock Options that were earned based on the achievement of the 2023 Performance Metrics. Each option vests and becomes exercisable as to 25% of the underlying shares on the first anniversary of the date of grant, and as to the remaining 75% of the underlying shares of common stock earned, in substantially equal quarterly installments over the subsequent 36 months. (3)Stock option vests over four years, with 25% of the common stock subject to the option vesting and becoming exercisable on the first anniversary of the grant date, and the remainder vesting and becoming exercisable quarterly thereafter in substantially equal installments over the next 36 months.

  59. Option Exercises and Stock Vested During 2023

    Option Exercises and Stock Vested During 2023 The following table provides information on options exercised during 2023. There are no stock awards outstanding. Consequently, no stock awards vested during 2023.

  60. Option Exercises and Stock Vested During 2023

    | Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Michael Weening | — | — | — | — | | Cory Sindelar | 2,000 | 105,800 | — | — | | J. Matthew Collins | 80,000 | 2,308,395 | — | — | | Shane Eleniak | — | — | — | — |

  61. Option Exercises and Stock Vested During 2023

    (1) Value calculated by multiplying the closing trading price of our common stock on the date of exercise by the number of shares exercised.

  62. Potential Payments Upon Termination or Change of Control

    Potential Payments Upon Termination or Change of Control Under our CICSP, each of our NEOs may be entitled to severance upon an involuntary termination for reasons other than Cause, death or disability or, only during a Change in Control Period, a resignation for Good Reason (all as defined in the CICSP) under our CICSP (subject to certain conditions in the CICSP, with each such termination event, a “Covered Termination”). See the section above entitled “Change in Control and Severance Benefits” for more information regarding the benefits provided under our CICSP. The table below sets forth the estimated payments and benefits that would be provided to each of our NEOs under our CICSP in the event of a Covered Termination if our NEO’s employment had terminated on December 31, 2023, with and without a change in control, taking into account the NEO’s compensation as of that date.

  63. Potential Payments Upon Termination or Change of Control

    | Executive Benefits and Payments Upon Termination | Not in Connection with a Change in Control ($) (1) | 60 Days Prior to or 12 Months Following a Change in Control ($) (2) | | Michael Weening | | | | Cash severance | $1,400,000 | $3,640,000 | | Value of accelerated vesting of equity awards | 1,825,911 | 2,398,191 | | Health insurance benefit continuation (3) | 5,603 | 11,207 | | Total | $3,231,514 | $6,049,398 | | Cory Sindelar | | | | Cash severance | $849,975 | $1,214,250 | | Value of accelerated vesting of equity awards | 1,022,469 | 1,497,961 | | Health insurance benefit continuation | 25,445 | 25,445 | | Total | $1,897,889 | $2,737,656 | | J. Matthew Collins | | | | Cash severance | $750,050 | $1,071,500 | | Value of accelerated vesting of equity awards | 634,079 | 684,695 | | Health insurance benefit continuation | 39,673 | 39,673 | | Total | $1,423,802 | $1,795,868 | | Shane Eleniak | | | | Cash severance | $750,050 | $1,071,500 | | Value of accelerated vesting of equity awards | 741,985 | 792,602 | | Health insurance benefit continuation | 25,445 | 25,445 | | Total | $1,517,480 | $1,889,547 |

  64. Potential Payments Upon Termination or Change of Control

    (1)In the event of a Covered Termination not in connection with a change in control, each NEO is eligible to receive: (i) a cash severance payment in an amount equal to 12 months of base salary and pro-rated target bonus, (ii) 12 months accelerated vesting of equity awards, and (iii) 12 months health insurance benefit continuation. (2)In the event of a Covered Termination in connection with a change in control, the NEO is eligible to receive: (i) a cash severance payment in an amount equal to: 24 months of base salary (in the case of Mr. Weening) and 12 months of base salary (in the case of Messrs. Sindelar, Collins and Eleniak); 200% of the annual bonus opportunity at target (in the case of Mr. Weening) and 100% of the annual bonus opportunity at target (in the case of Messrs. Sindelar, Collins and Eleniak); and a pro-rata portion the eligible NEO’s annual bonus opportunity at target, subject to attainment of the performance criteria with respect to the eligible NEO’s bonus opportunity, (ii) 100% acceleration of all equity awards, with the value of such accelerated vesting of equity awards calculated based on a closing trading price of $43.69 per share at December 31, 2023; and (iii) 24 months of health insurance benefit continuation (in the case of Mr. Weening) and 12 months of health insurance benefit continuation (in the case of Messrs. Sindelar, Collins and Eleniak), in each case subject to certain exceptions. (3)Michael Weening is not eligible for COBRA (U.S. only), therefore, the Health insurance benefit continuation reflects the full Canada Life health insurance premium paid in CAD and converted to USD using the exchange rate of CAD1.00 to USD$0.74073.

  65. CEO PAY RATIO

    CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the ratio of our principal executive officer’s annual total compensation to the annual total compensation of our median employee. On December 31, 2023, when we determined the median employee, Mr. Weening was the principal executive officer of Calix. For 2023, the annual total compensation for Mr. Weening was $7,155,795, as disclosed under the Summary Compensation Table above, and the annual total compensation for our median employee was $125,913, calculated using the same methodology as applied for Mr. Weening in the Summary Compensation Table above, resulting in a pay ratio of approximately 56.8:1. Annual total compensation includes compensation awarded, earned or paid during 2023. In accordance with Item 402(u) of Regulation S-K, we identified the employee with compensation at the median of the annual total compensation of all of our employees by examining the calendar year total cash compensation between January 1, 2023 and December 31, 2023 (using December 31, 2023 as the “median employee determination date”), including salary or wages plus overtime paid, and any earned cash incentive compensation for 2023, for all individuals, excluding Mr. Weening, who were employed by us on the median employee determination date, whether employed on a full-time, part-time, seasonal or temporary basis, subject to the application of the “de minimis” exemption as described below. For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using FX rates in effect on the median employee determination date. For employees on a leave of absence, we calculated compensation on an annualized basis. However, we did not include employees absent on an unpaid leave of absence for the entire measurement period (i.e., all of 2023). For employees hired between January 2, 2023 and the median employee determination date, we calculated their salary or wages as if they had been employed for the entire measurement period. The de minimis exemption allows us to exclude up to 5% of our total employees who are non-U.S. employees. Our total number of employees, including U.S. and non-U.S. employees, as of the median employee determination date was 1,741 and we used this number to calculate the maximum number of employees excludable under the de minimis exemption. Accordingly, in identifying the median employee, we used the de minimis exemption to exclude approximately 19 employees (1% of our total employees) who were employed in countries outside of the United States, Canada, China and India. We believe the pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules. Because the SEC rules allow companies to utilize different methodologies and companies have different employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.

  66. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Our Compensation Committee reviews compensation for our non-employee directors on an annual basis, taking into consideration market data for our peer group, recommendations from its compensation advisor based on market data analysis and governance considerations issued by proxy advisory firms. Compensation for our non-employee directors consists of cash retainers for service on the Board and Board committees, with an initial equity award granted upon joining the Board and an annual equity award granted on the date of each annual meeting of stockholders. Director compensation has generally been assessed and compared to peer companies at approximately the 50th percentile of peer company compensation and practices. We do not provide for any per meeting fees for attendance at meetings. Members of the Board who are employees of Calix do not receive any compensation for their service as directors.

  67. Director Compensation Table

    Director Compensation Table The following table sets forth information regarding compensation earned by our non-employee directors during the year ended December 31, 2023.

  68. Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($) (1) | All Other Compensation ($) | Total ($) | | Carl Russo | 116,071 | 178,353 | | 294,424 | | Don Listwin | 100,206 | 178,353 | | 278,559 | | Christopher Bowick | 75,000 | 178,353 | | 253,353 | | Kathy Crusco | 90,000 | 178,353 | | 268,353 | | Eleanor Fields | 48,411 | 242,876 | | 291,287 | | Kira Makagon | 64,107 | 178,353 | | 242,460 | | Rajatish Mukherjee | 58,901 | 178,353 | | 237,254 | | Kevin Peters | 69,876 | 178,353 | | 248,229 | | Michael Everett (2) | 21,315 | — | 53,769 | 75,084 |

  69. Director Compensation Table

    (1)Amounts reflect the grant date fair value of stock options granted in 2023 and were calculated in accordance with ASC Topic 718 and are not adjusted for subsequent changes in our stock performance or the level of ultimate vesting. For a discussion of the assumptions used in the valuations of the stock options, see Note 7 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As of December 31, 2023, none of our non-employee directors held stock awards, and our non-employee directors held the following stock options:

  70. Director Compensation Table

    | Name | Shares Underlying Stock Options (#) | | Carl Russo | 1,328,183 | | Don Listwin | 8,183 | | Christopher Bowick | 27,216 | | Kathy Crusco | 27,216 | | Eleanor Fields | 9,889 | | Kira Makagon | 27,216 | | Rajatish Mukherjee | 12,939 | | Kevin Peters | 27,216 |

  71. Director Compensation Table

    (2)Mr. Everett’s service on the Board ended on May 11, 2023. The amount reported in the Fees Earned or Paid in Cash column reflects the prorated cash retainer and fees for Mr. Everett's service as chairman of the Audit Committee and member of the Strategic Committee until the expiration of his term. The amount reported in the All Other Compensation column reflects fees for Mr. Everett's services under a Consulting Agreement with the Company. Pursuant to its charter, the Audit Committee reviews and approves all related party transactions on an ongoing basis. On March 30, 2023, the Audit Committee and then the Board approved the Consulting Agreement with Mr. Everett, pursuant to which following the expiration of his directorship Mr. Everett provides certain strategic consulting services for the Company for $7,000 per month.

  72. Indemnification of Directors and Officers

    Indemnification of Directors and Officers Calix’s amended and restated certificate of incorporation and amended and restated bylaws provide that Calix is required to indemnify its directors and officers, in each case to the fullest extent permitted by Delaware law. Calix has entered into and expects to continue to enter into agreements to indemnify its directors, executive officers and other employees as determined by the Board.