Declaration of compliance

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations. The Management Board and the Supervisory Board of Adtran Networks SE ("Adtran SE") last issued an annual declaration of compliance with regard to the Code on 30 October 2023. This was partially updated on February 29, 2024.

Adtran SE’s Management Board and Supervisory Board declare that Adtran SE has complied with the recommendations of the Code in the version dated April 28, 2022 – published in the Federal Gazette on June 27, 2022 – (“Code 2022”) since the last update of the declaration of compliance dated 29 February 2024, with the exception of the deviations listed below. The Management Board and the Supervisory Board also declare that Adtran SE will continue to comply with the recommendations of the Code 2022 with the following exceptions:

Recommendation C.2 

Adtran SE specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board. In Adtran SE's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age. 

Recommendation F2

The Code 2022 stipulates that the consolidated financial statements and the group management report shall be made publicly accessible within 90 days from the end of the financial year, while mandatory interim financial information shall be made publicly accessible within 45 days from the end of the reporting period. According to statutory provisions, the consolidated financial statements and the group management report must be available to the public no later than four months after the end of each financial year and the half-yearly financial report must be available to the public no later than two months after the end of the relevant reporting period. The preparation of the consolidated financial statements of the company requires information from the US parent company, which is only available from a certain point in time after the end of the previous financial year. For example the company needs valuations of and other information regarding share-based variable remuneration instruments which are issued by the parent company and which must be described in connection with the report on the remuneration of the members of the management board. For these reasons, the company declared in the past that it would not follow recommendation F.2 of the Code 2022. In the meantime, the internal processes allow the consolidated financial statements and the group management report as well as the mandatory interim financial information to be published in accordance with recommendation F.2. The declared deviation from recommendation F.2 therefore no longer applies. 

Recommendation F.3

Adtran SE fulfilled in the past only the statutory reporting obligations. Following the conclusion of the domination agreement with Adtran Holdings, Inc. (“Parent Company”), the Company applied for a segment change to reduce post-admission reporting obligations and thereby complexity and costs. Due to the reporting obligations of the Parent Company, the shareholders get additional information indirectly via the quarterly statements of the Parent Company. From now on, the company will also inform its shareholders about business developments during the year in accordance with recommendation F.3. The declared deviation from recommendation F.3 therefore no longer applies.

Recommendation G.6 

Recommendation G.6 of the Code 2022 stipulates that the variable remuneration resulting from the achievement of long-term goals should exceed the one which is based on the achievement of short-term goals. When defining the target total compensation, the Supervisory Board ensures that the variable compensation resulting from the achievement of long-term goals exceeds the proportion from short-term goals. In individual cases, however, there may be deviations in the Management Board remuneration system approved at the Annual General Meeting on June 28, 2024 (“Remuneration System 2024”) (e.g., due to the availability of restricted stock units and performance stock units in a specific financial year). However, this should be balanced out over the length of time the board is in office. Nevertheless, for the reasons mentioned above, a deviation from this recommendation is still being declared as a precautionary measure.

Recommendation G.1

Recommendation G.10 of the Code 2022 stipulates that the variable remuneration amounts granted to the members of the Management Board should be invested primarily in shares in the company or be granted on a share-based basis, and the members of the Management Board should only be able to dispose of the long-term variable amounts granted after four years. According to the remuneration system 2024, the members of the Management Board will be granted share-based or share price-based variable remuneration in the form of restricted stock units or performance stock units, which is based on the Parent Company's share price. Due to the validity of the domination and profit and loss transfer agreement concluded with the Parent Company, positive/negative business development of Adtran SE is only partially reflected in the development of Adtran SE's share price. In this respect, the development of the Parent Company is particularly important. In order to achieve an incentive effect of the variable remuneration components, the company therefore considers it necessary to base the share-based or share price-based remuneration both on the Parent Company's share price and to align the share-based remuneration with the Parent Company.

In addition, Management Board members should be able to dispose of both market-related and company-related performance stock units as well as restricted stock units before the end of four years. The allocated restricted stock units can generally be converted into shares in the Parent Company in equal installments (25% per year) over a period of four years (the respective anniversary of the allocation). The market-related performance stock units have a term of three years, at the end of which the respective board member receives a corresponding number of shares in the Parent Company based on the performance stock units earned. In the case of company-related performance stock units, the Management Board members annually receive performance stock units as part of a three-year plan, which can be exchanged for shares in the Parent Company after the end of the three-year period. The further remuneration component in the form of a one-off integration bonus is due at the end of 2024 if the target is achieved. Adtran SE considers it appropriate to encourage the member of the Management Board to operate sustainably through waiting periods that correspond to the Parent Company's remuneration system. Shorter waiting periods of less than four years also appear appropriate for the long-term variable grant amounts, simply because Adtran SE’s Management Board contracts are typically concluded for no more than two years. The one-off integration bonus is due to the current special situation following the recently founded contract group. Adtran SE has a great interest in quick and efficient integration, so it seems appropriate not to subject the bonus offered for this to the four-year waiting period.

Recommendations G.17 

Recommendation G.17 of the 2022 Code stipulates that the remuneration of Supervisory Board members should take appropriate account of the greater time commitment of the Chairman and Deputy Chairman of the Supervisory Board as well as the Chairman and members of committees. The 2024 remuneration system for the members of the Supervisory Board provides for the higher time commitment for the Chair of the Supervisory Board and the Chair of the Audit Committee to be taken into account. As all members of the Supervisory Board are also members of the committees, the remuneration for their work on the Supervisory Board also includes their work on the committees. In the opinion of Adtran SE, it is not necessary to include the time spent as Deputy Chair of the Supervisory Board and Chair of the Nomination and Compensation Committee separately in the remuneration. 

Martinsried/Munich, 28 October 2024

Thomas R. Stanton  
Chief Executive Officer 

Dr. Eduard Scheiterer 
Chairman of the Supervisory Board

Update of the Declaration of Compliance in accordance with Section 161 of the German Stock Corporation Act of October 30, 2023

The Management Board and the Supervisory Board of Adtran Networks SE most recently issued a declaration of compliance in accordance with Section 161 AktG on October 30, 2023. This referred to the recommendations of the German Corporate Governance Code in its version of April 28, 2022 which was published in the Federal Gazette on June 27, 2022 (DCGC 2022). 

With respect to the following point, the declaration of compliance must be updated: 

Recommendation F.2 stipulates that the consolidated financial statements and the group management report shall be made publicly accessible within 90 days from the end of the financial year, while mandatory interim financial information shall be made publicly accessible within 45 days from the end of the reporting period. According to statutory provisions, the consolidated financial statements and the group management report must be available to the public no later than four months after the end of each financial year and the half-yearly financial report must be available to the public no later than two months after the end of the relevant reporting period. The company holds the view that the statutory deadlines are appropriate. In addition, the preparation of the consolidated financial statements of the company requires information from the US parent company, which is only available from a certain point in time after the end of the previous financial year. For example the company needs valuations of and other information regarding share-based variable remuneration instruments which are issued by the parent company and which must be described in connection with the report on the remuneration of the members of the management board. Therefore, the company declares that from now on it will not follow the recommendation F.2 DCGC. If internal processes permit, the company will publish the reports earlier. 

Otherwise, the declaration of compliance of October 30, 2023 remains unaffected. 

Martinsried/Meiningen, February 29, 2024

For the Supervisory Board 
Dr. Eduard Scheiterer 
Chairman of the Supervisory Board

For the Management Board
Thomas R. Stanton 
Chief Executive Officer

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations. The Management Board and the Supervisory Board of Adtran Networks SE ("Adtran SE") last issued an annual declaration of compliance with regard to the Code on 7 November 2022. This was partially updated on March 15, 2023.

Adtran SE’s Management Board and Supervisory Board declare that Adtran SE has complied with the recommendations of the Code in the version dated April 28, 2022 – published in the Federal Gazette on June 27, 2022 – (“Code 2022”) since the last update of the declaration of compliance dated 15 March 2023, with the exception of the deviations listed below. The Management Board and the Supervisory Board also declare that Adtran SE will continue to comply with the recommendations of the Code 2022 with the following exceptions:

Recommendation C.2

Adtran SE specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board. In Adtran SE's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Recommendation F.3

Adtran SE only fulfils the statutory reporting obligations. Following the conclusion of the domination agreement with Adtran Holdings, Inc. (“Parent Company”), the Company applied for a segment change to reduce post-admission reporting obligations and thereby complexity and costs. Due to the reporting obligations of the Parent Company, the shareholders get additional information indirectly via the quarterly statements of the Parent Company.

Recommendation G.6

Recommendation G.6 of the Code 2022 stipulates that the variable remuneration resulting from the achievement of long-term goals should exceed the one which is based on the achievement of short-term goals. When defining the target total compensation, the Supervisory Board ensures that the variable compensation resulting from the achievement of long-term goals exceeds the proportion from short-term goals. In individual cases, however, there may be deviations in the Management Board remuneration system approved at the Annual General Meeting on May 24, 2023 (“Remuneration System 2023”) (e.g., due to the availability of restricted stock units and performance stock units in a specific financial year). However, this should be balanced out over the length of time the board is in office. Nevertheless, for the reasons mentioned above, a deviation from this recommendation is still being declared as a precautionary measure.

Recommendation G.9

Recommendation G.9 sentence 1 of the Code 2022 stipulates that after the end of the financial year, the Supervisory Board should determine the amount of the individual remuneration components to be granted for this year, depending on the achievement of targets. Under the remuneration system 2023, the members of the Management Board receive short-term variable compensation in the form of a so-called Annual Target Incentive Cash Bonus, which is based on the Adtran Group's Variable Incentive Compensation Plan. The relevant performance criteria for the short-term compensation component are the Adjusted EBIT of the Adtran Group and the sales volume of the Adtran Group. The relevant performance criteria are determined at the beginning of the respective financial year. During the year 2023 at the beginning of each quarter, minimum, target and maximum amounts for each performance criterion were set for the respective quarter. The determination of target achievement for the respective previous quarter and the determination of the bonus payments due from target achievement for the respective previous quarter for this short-term compensation component took place in the respective following quarter. Due to the existing domination and profit and loss transfer agreement with the Parent Company, the company considers it meaningful and necessary to align the performance criteria with the development of the Parent Company in order to incentivize members of the Management Board adequately. It is however, intended that the setting of the individual minimum, target and maximum amounts for each performance criterion and the determination of target achievement will no longer be carried out quarterly in the future, but only once a year.

Recommendation G.10

Recommendation G.10 of the Code 2022 stipulates that the variable remuneration amounts granted to the members of the Management Board should be invested primarily in shares in the company or be granted on a share-based basis, and the members of the Management Board should only be able to dispose of the long- term variable amounts granted after four years. According to the remuneration system 2023, the members of the Management Board will be granted share-based or share price-based variable remuneration in the form of restricted stock units or performance stock units, which is based on the Parent Company's share price. Due to the validity of the domination and profit and loss transfer agreement concluded with the Parent Company, positive/negative business development of Adtran SE is only partially reflected in the development of Adtran SE's share price. In this respect, the development of the Parent Company is particularly important. In order to achieve an incentive effect of the variable remuneration components, the company therefore considers it necessary to base the share-based or share price-based remuneration both on the Parent Company's share price and to align the share-based remuneration with the Parent Company.

In addition, Management Board members should be able to dispose of both market-related and company- related performance stock units as well as restricted stock units before the end of four years. The allocated restricted stock units can generally be converted into shares in the Parent Company in equal installments (25% per year) over a period of four years (the respective anniversary of the allocation). The market-related performance stock units have a term of three years, at the end of which the respective board member receives a corresponding number of shares in the Parent Company based on the performance stock units earned. In the case of company-related performance stock units, the Management Board members annually receive performance stock units as part of a three-year plan, which can be exchanged for shares in the Parent Company after the end of the three-year period. The further remuneration component in the form of a one- off integration bonus is due at the end of 2024 if the target is achieved. Adtran SE considers it appropriate to encourage the member of the Management Board to operate sustainably through waiting periods that correspond to the Parent Company's remuneration system. Shorter waiting periods of less than four years also appear appropriate for the long-term variable grant amounts, simply because Adtran SE’s Management Board contracts are typically concluded for no more than two years. The one-off integration bonus is due to the current special situation following the recently founded contract group. Adtran SE has a great interest in quick and efficient integration, so it seems appropriate not to subject the bonus offered for this to the four- year waiting period.

Recommendations G.17

Finally, the remuneration of the Supervisory Board members does not consider in all cases the chairmanship and the membership in committees. Adtran SE will review, if only the chair of the Audit Committee should receive an additional remuneration due to its significantly higher workload, or if an additional remuneration for other committee chairmanships and committee memberships is appropriate as well.

Martinsried/Munich, 30 October 2023

Thomas R. Stanton 
Chief Executive Officer

Dr. Eduard Scheiterer
Chairman of the Supervisory Board

Update of the Declaration of Compliance in accordance with Section 161 AktG of November 7, 2022

The Management Board and Supervisory Board of ADVA Optical Networking SE most recently issued a declaration of compliance in accordance with Section 161 AktG on November 7, 2022. This referred to the recommendations of the German Corporate Governance Code, e.g. in its version of April 28, 2022 (DCGK).

On March 15, the Supervisory Board decided on a new Management Board remuneration system based on the preparatory work of its remuneration and nomination committee. This newly adopted system will in future correspond to the recommendations of the DCGK, with the exception of the deviations listed and justified below.

Recommendation G.6 of the DCGK stipulates that the variable compensation resulting from the achievement of long-term goals should exceed that based on the achievement of short-term goals. When defining the total target remuneration, the Supervisory Board ensures that the variable remuneration resulting from the achievement of long-term targets exceeds the proportion of short-term targets. In individual cases, however, there may also be deviations in the new Management Board remuneration system (e.g. due to the availability of Restricted Stock Units and Performance Stock Units in a specific financial year), but this should be balanced out over the Management Board’s length of service. Nevertheless, as a precautionary measure, a deviation from this recommendation will continue to be declared for the reasons given above.

Recommendation G.10 of the DCGK stipulates that the variable remuneration amounts grant-ed to the members of the Management Board should be invested primarily in shares in the company or be granted on a share-based basis, and the members of the Management Board should only be able to dispose of the long-term variable amounts granted after four years. According to the new remuneration system, which is based on the share price of the parent company in the case of variable compensation based on or taking into account the share price, Management Board members should be able to dispose of both market-related and company-related performance stock units as well as restricted stock units before the end of four years. And the one-time integration bonus is due by the end of 2024 if the target is reached. The company considers it necessary to encourage the members of the Board of Management to act sustainably by means of waiting periods that correspond to the remunera-tion system of the parent company. Waiting periods of less than four years also appear ap-propriate for the long-term variable amounts granted, if only because the Management Board contracts with the company are typically concluded for no longer than two years. The one-off integration bonus is due to the current special situation following the recently established con-tract group. The company has a great interest in rapid and efficient integration, so it also seems appropriate here not to subject the bonus awarded to the four-year waiting period.

Otherwise, the declaration of compliance from November 7, 2022 remains unaffected.

Martinsried/Meiningen, March 15, 2023

For the Supervisory Board
Prof. Dr. Johanna Hey 
Chairwoman of the Supervisory Board

For the Management Board
Dr. Christoph Glingener  
Chief Executive Officer

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations. The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA") last issued an annual declaration of compliance with regard to the Code on 9 November 2021. Since then, two different versions of the Code were applicable. The Code in the version dated 16 December 2019 – published in the Official Federal Gazette on 20 March 2020 – (“Code 2020”) was replaced with effect from 27 June 2022 by the Code in the version dated 28 April 2022 – published in the Official Federal Gazette on 27 June 2022 – (“Code 2022”).

ADVA's Management Board and Supervisory Board declare that ADVA has complied with the recommendations of the Code 2020 since the last declaration of compliance dated 9 November 2021, with the exception of the deviations listed below, and with the Code 2022 since its publication. The Management Board and the Supervisory Board also declare that ADVA will continue to comply with the recommendations of the Code 2022 with the following exceptions:

Recommendation C.2 

ADVA specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board. In ADVA's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Recommendation G.6 

Recommendation G.6 of the Code provides that the variable remuneration resulting from the achievement of long-term goals should exceed that which is based on the achievement of short-term goals. When defining the total target remuneration, the Supervisory Board ensures that the variable remuneration resulting from the achievement of long-term goals exceeds the share of short-term goals. In individual cases, however, there may be deviations (e.g. due to the availability of options in a certain financial year, due to the value of stock options at the time of issue or for other reasons). This should be compensated over the duration the Management Board has been active. Nevertheless, for the reasons mentioned above, a deviation from this recommendation is declared as a precaution.

Recommendations G.17 

Finally, the remuneration of the Supervisory Board members does not consider in all cases the chairmanship and the membership in committees (Recommendation G.17 of the Code). In ADVA’s view, only chairmanship in the Audit Committee entails such significantly higher workload that an additional remuneration is appropriate. 
 
Martinsried/Munich, 7 November 2022

Dr. Christoph Glingener  
Chief Executive Officer 

Prof. Dr. Johanna Hey 
Chairwoman of the Supervisory Board

Update of the Declaration of Compliance in accordance with Section 161 AktG of November 9, 2021

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code and to give details of any deviations from these recommendations. The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking" or the “Company”) last issued an annual declaration of compliance with regard to the Code on 10 November 2020. This was partially updated voluntarily on 9 April 2021 and on 11 August 2021.

1. Since 11 August 2021

The Management Board and the Supervisory Board of the Company declare that since the last updated declaration of compliance on 11 August 2021 ADVA Optical Networking has complied with all recommendations of the German Corporate Governance Code in the version adopted by the Government Commission on 16 December 2019 – published in the Official Federal Gazette on 20 March 2020 – (“Code”), with the exception of the deviations mentioned and justified below and will also comply with them in the future:

Recommendation C.2 of the Code

ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board. In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Recommendation G.6 of the Code

Recommendation G.6 of the Code provides that the variable remuneration resulting from the achievement of long-term goals should exceed that which is based on the achievement of short-term goals. When defining the total target remuneration, the Supervisory Board ensures that the variable remuneration resulting from the achievement of long-term goals exceeds the share of short-term goals. In individual cases, however, there may be deviations (e.g. due to the availability of options in a certain financial year, due to the value of stock options at the time of issue or for other reasons), but this should be compensated over the duration the Management Board has been active. Nevertheless, for the reasons mentioned above, a deviation from this recommendation is declared as a precaution.

Recommendation G.17 of the Code

Finally, the remuneration of the Supervisory Board members does not consider in all cases the chairmanship and the membership in committees of Recommendation G.17. In ADVA Optical Networking's view, only the chairmanship in the Audit Committee entails such significantly higher workload that an additional remuneration is appropriate.

2. Before 11 August 2021 other existing deviations

In the period between the last annual declaration of compliance issued on 10 November 2020 and its update on 11 August 2021, ADVA Optical Networking did not comply with Recommendation D.3 of the Code for the reasons described below. This stipulates that the Audit Commitee, among other things, should also deal with compliance issues. During the period mentioned, the Company's Supervisory Board dealt with all compliance issues directly in plenary. Due to the high priority given to compliance matters, the Company was of the opinion that all members of the Supervisory Board should be involved in dealing with relevant issues. Due to a change in the rules of procedure that has now been made, which from now on assigns compliance issues to the Audit Committee, the deviation no longer applies.

3. Existing deviations before April 9, 2021

In the period between the last annual declaration of compliance issued on 10 November 2020 and its first update on 9 April 2021, ADVA Optical Networking did not comply with various recommendations under G of the Code in addition to the deviations explained above.

Recommendation G. of the Code contains several recommendations on the remuneration of the Management Board. These recommendations were not or not fully considered in the previously agreed compensation system and the contracts concluded with the Management Board members. The Management Board and the Supervisory Board had stated that the remuneration of the Management Board at that time did not or not fully correspond to the following recommendations: G.1 (Determining the remuneration system), G.2 (Determination total remuneration), G.3 (peer group or other third-party entities), G.4 (internal relative comparison with senior management and workforce), G.10–11 (predominantly share-based variable remuneration and reclaim), G.12–14 (benefits granted upon contract termination). The Supervisory Board and the Management Board had announced that they would propose to the Annual General Meeting in 2021 a change and adjustment of the Management Board compensation taking into account the new recommendations of the Code. This has happened. With the exception of the precautionary deviation from Recommendation G.6 of the Code, the Management Board remuneration system resolved by the Annual General Meeting in 2021 corresponds to the recommendations of the Code and the deviations that have been declared no longer apply.

Martinsried/Munich, 9 November 2021

For the Supervisory Board
Nikos Theodosopoulos
Chairman of the Supervisory Board

For the Management Board
Brian Protiva
CEO

Update of the Declaration of Compliance in accordance with Section 161 AktG of November 10, 2020

The Management Board and the Supervisory Board of ADVA Optical Networking SE last issued a declaration of compliance in accordance with Section 161 of the German Stock Corporation Act on November 10, 2020, that was updated on April 9, 2021. The original declaration referred to the recommendations of the German Corporate Governance Code, among others, in its version of March 20, 2020 (“GCGC 2020”).

In it, inter alia, a deviation from recommendation D.3 of the GCGC 2020 has been declared as a precautionary measure, since the Supervisory Board dealt with all compliance issues in plenary session. The Supervisory Board has revised its rules of procedure and stipulated that the Audit Committee also deal with monitoring compliance. This change is taken as an opportunity to selectively update the declaration of compliance.

As of now and for the time being, ADVA also fully complies with recommendation D.3 of the GCGC 2020. In all other respects, the declaration of compliance of November 10, 2020, as updated on April 9, 2021, remains unaffected.

Martinsried/Meiningen, den 11. August 2021

For the Supervisory Board
Nikos Theodosopoulos
Chairman of the Supervisory Board

For the Management Board
Brian Protiva
CEO

Update of the Declaration of Compliance in accordance with Section 161 AktG of November 10, 2020

The Management Board and the Supervisory Board of ADVA Optical Networking SE last issued a declaration of compliance in accordance with Section 161 of the German Stock Corporation Act on November 10, 2020. This referred to the recommendations of the German Corporate Governance Code, among others, in its version of March 20, 2020 (“GCGC 2020”).

This included, among other things, the intention to propose a Management Board remuneration to the Annual General Meeting 2021, taking into account the new recommendations of the GCGC 2020. The remuneration system, which shall be presented to the Annual General Meeting, basically corresponds to the recommendations of the GCGC 2020. There is only one point of uncertainty that is used as an opportunity to update the last declaration of compliance

Recommendation G.6 of the GCGC 2020 provides that the variable remuneration resulting from the achievement of long-term goals should exceed that which is based on the achievement of short-term goals. When defining the total target remuneration, the Supervisory Board ensures that the variable remuneration resulting from the achievement of long-term goals exceeds the share of short-term goals. In individual cases, however, there may be deviations (e.g. due to the availability of options in a certain financial year, due to the value of stock options at the time of issue or for other reasons), but this should be compensated over the duration the Management Board has been active. Nevertheless, for the reasons mentioned above, a deviation from this recommendation is declared as a precaution.

Otherwise, the declaration of conformity of November 10, 2020 remains unaffected.

Martinsried/Meiningen, April 9, 2021

For the Supervisory Board
Nikos Theodosopoulos
Chairman of the Supervisory Board

For the Management Board
Brian Protiva
CEO

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 12 November 2019. The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied with all recommendations of the Code in the version dated 7 February, 2017, published in the Official Federal Gazette (Bundesanzeiger) on 24 April, 2017 (“Code 2017”) since the last declaration of compliance of 12 November 2019, and presently complies and will comply in the future with the recommendations of the Code in the version adopted by the Government Commission on 16 December 2019 – published in the Official Federal Gazette on 20 March 2020 – (“Code 2020”), subject to certain derogations indicated below:

In the period from the submission of the last declaration of compliance on 12 November 2019 until the Code 2020 came into force the following recommendations of Code 2017 were not complied with:

Deductible for D&O Insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (section 3.8 paragraph 3 of the Code 2017). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to further "demanding, relevant comparison parameters" (section 4.2.3 paragraph 2, sentence 7 of the Code 2017). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code 2017 in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (section 5.3.2 paragraph 1 of the Code 2017). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (section 5.4.1 paragraph 2, sentence 2 of the Code 2017). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of duration of membership for the members of the Supervisory Board (section 5.4.1 paragraph 2, sentence 2 of the Code 2017). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer term of office does not inevitably lead to conflicts of interest or interferences with the independence.

Finally, the remuneration of the Supervisory Board members (section 5.4.6 paragraph 1, sentence 2 of the Code 2017) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee entails such significantly higher workload that an additional remuneration is appropriate.

In the period from the entry into force of the Code 2020 on 20 March 2020 until the date of this declaration, ADVA Optical Networking has not complied or will comply with the following recommendations of the Code 2020:

Recommendation C.2 of the Code 2020

ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board. In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Recommendation D.1 of the Code 2020

The rules of procedure resolved on 18 October 2012 were made available on the company's website on 10 November 2020 to ensure Compliance with the new recommendation in Section D.1 to disclose this document on the company’s website.

Recommendation D.3 of the Code 2020

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee. It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Recommendations G of the Code 2020

Section G. of the Code 2020 contains several recommendations on the remuneration of the Management Board that were not or not fully considered in previously agreed compensation system and contracts. ADVA declares that the recent Management Board compensation does not or does not fully comply with the following recommendations: G. 1 (Determining the remuneration system), G.2 (Determining total remuneration), G.3 (Peer group or other third-party entities), G.4 (internal relative comparison with senior management and workforce), G.6 (Exceedence of share for long-term targets over short-term targets), G.10-11 (Predominantly share-based variable remuneration and right to reclaim), G.12-14 (Benefits granted at contract termination). The Supervisory Board and Management Board will therefore propose an amendment and adjustment of the Management Board compensation considering the new recommendations of the Code 2020 to the Annual General Meeting in 2021.

Finally, the remuneration of the Supervisory Board members does not consider in all cases the chairmanship and the membership in committees of Recommendation G.17. In ADVA Optical Networking's view, only chairmanship in the Audit Committee entails such significantly higher workload that an additional remuneration is appropriate.

Martinsried/Munich, 10 November 2020

Brian Protiva
Chief Executive Officer

Nikos Theodosopoulos
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 14 November 2018. 

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code in the version dated 7 February, 2017, published in the Official Federal Gazette (Bundesanzeiger) on 24 April, 2017: 

Deductible for D&O Insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to further "demanding, relevant comparison parameters" (see section 4.2.3 paragraph 2, sentence 7 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency. 

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda). 

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 paragraph 1 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues. 

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age. 

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of duration of membership for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer term of office does not inevitably lead to conflicts of interest or interferences with the independence. 

Finally, the remuneration of the Supervisory Board members (see section 5.4.6 paragraph 1, sentence 2 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee entails such significantly higher workload that an additional remuneration is appropriate. 

Martinsried/Munich, November 12, 2019 

Brian Protiva 
Chief Executive Officer 

Nikos Theodosopoulos 
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 15 November 2017 and published an update on 24 April 2018. 

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code in the version dated 7 February, 2017, published in the Official Federal Gazette (Bundesanzeiger) on 24 April, 2017: 

Deductible for D&O Insurance

 ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

 The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2, sentence 7 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency. 

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda). 

Supervisory Board

 The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 paragraph 1 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues. 

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age. 

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of length of membership for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer length of membership does not inevitably lead to conflicts of interest or interferences with the independence. 

Finally, the remuneration of the Supervisory Board (see section 5.4.6 paragraph 1, sentence 2 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significantly higher workload that an additional remuneration is appropriate. 

Martinsried/Munich, November 14, 2018 

Brian Protiva 
Chief Executive Officer 

Nikos Theodosopoulos 
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 15 November 2016.

For the period from 17 November 2016 (publication of Declaration of Compliance 2016) to 24 April 2017, the publication date of the current version of the Code dated 7 February 2017 in the Official Federal Gazette (Bundesanzeiger), this declaration is based on the Code’s version dated 5 May 2015. For the period since publication of the Code in the current version dated 7 February 2017, this declaration refers to the Code in its version dated 7 February 2017.

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code:

Deductible for D&O Insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2, sentence 7 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Within the context of the implementation of the requirements regarding the variable compensation components, the Supervisory Board resolved on a general cap for the compensation component annual bonus, and no additional caps for the four individual targets relevant for the annual bonus since this decreases the complexity of the arrangement significantly and prevents the danger of unfair results. Since it is not yet clear whether compliance with the recommendation of section 4.2.3 paragraph 2, sentence 6 of the Code also requires caps for individual targets of an annual bonus, as a matter of precaution a deviation this recommendation shall be declared.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 paragraph 1 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of length of membership for the members of the Supervisory Board (see section 5.4.1 paragraph 2, sentence 2 of the Code). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer length of membership does not inevitably lead to conflicts of interest or interferences with the independence.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 paragraph 1, sentence 2 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significantly higher workload that an additional remuneration is appropriate.

Martinsried/Munich, November 15, 2017
Brian Protiva
Chief Executive Officer

Nikos Theodosopoulos
Chairman of the Supervisory Board

CHANGED DECLARATION OF COMPLIANCE 2017

Intra-year Change to the Declaration made by the Management Board and Supervisory Board of ADVA Optical Networking SE pursuant to § 161 German Stock Corporation Act (Aktiengesetz – AktG) on the German Corporate Governance Code

The Management Board and Supervisory Board of ADVA Optical Networking SE („ADVA“) issued their last Declaration of Compliance pursuant to § 161 AktG on November 15, 2017. In an amendment to the Declaration of Compliance of November 15, 2017, they declare that the following deviation, which has been made precautionary, has been abolished:

Pursuant to section 4.2.3 subsection 2 sentence 6, the amount of remuneration of Management Board members shall be capped with maximum levels, both as regards variable components and in the aggregate.

ADVA has stated in the declaration of November 15, 2017:

“Within the context of the implementation of the requirements regarding the variable compensation components, the Supervisory Board resolved on a general cap for the compensation component annual bonus, and no additional caps for the four individual targets relevant for the annual bonus since this decreases the complexity of the arrangement significantly and prevents the danger of unfair results. Since it is not yet clear whether compliance with the recommendation of section 4.2.3 paragraph 2, sentence 6 of the Code also requires caps for individual targets of an annual bonus, as a matter of precaution a deviation this recommendation shall be declared.”

For the annual bonus for the financial year 2018, the Supervisory Board has set upper and lower limits for the four individual targets and intends to do so in subsequent financial years.

Martinsried/Munich, April 24, 2018
Brian Protiva
Chief Executive Officer

Nikos Theodosopoulos
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 17 November 2015.

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code as amended on May 5, 2015:

Deductible for D&O Insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Within the context of the implementation of the requirements regarding the variable compensation components, the Supervisory Board resolved on a general cap for the compensation component annual bonus, and no additional caps for the four individual targets relevant for the annual bonus since this decreases the complexity of the arrangement significantly and prevents the danger of unfair results. Since it is not yet clear whether compliance with the recommendation of section 4.2.3 paragraph 2 sentence 6 of the Code also requires caps for individual targets of an annual bonus, as a matter of precaution a deviation this recommendation shall be declared.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2, 1st sentence of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of length of membership for the members of the Supervisory Board (see section 5.4.1 paragraph 2, 1st sentence of the Code). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer length of membership does not inevitably lead to conflicts of interest or interferences of the independence.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significantly higher workload that an additional remuneration is appropriate.

Martinsried/Munich, November 15, 2016

Brian Protiva 
Chief Executive Officer

Nikos Theodosopoulos 
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on 17 November 2015.

For the period from 18 November 2014 (publication of Declaration of Compliance 2014) to 12 June 2015, the publication date of the current version of the Code dated 5 May 2015 in the Official Federal Gazette (Bundesanzeiger), this declaration is based on the Code’s version dated 24 June 2014. For the period since publication of the Code in the current version dated 5 May 2015, this declaration refers to the Code in its version dated 5 May 2015.

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code:

Deductible for D&O Insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board Compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Within the context of the implementation of the requirements regarding the variable compensation components, the Supervisory Board resolved on a general cap for the compensation component annual bonus, and no additional caps for the four individual targets relevant for the annual bonus since this decreases the complexity of the arrangement significantly and prevents the danger of unfair results. Since it is not yet clear whether compliance with the recommendation of section 4.2.3 paragraph 2 sentence 6 of the Code also requires caps for individual targets of an annual bonus, as a matter of precaution a deviation this recommendation shall be declared.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2, 1st sentence of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

The concrete objectives defined by the Supervisory Board of ADVA Optical Networking regarding its composition do not take into account a regular limit of length of membership for the members of the Supervisory Board (see section 5.4.1 paragraph 2, 1st sentence of the Code, current version dated 05 May 2015). The Company shall be allowed to retain the expertise of members experienced with the company. In addition, a longer length of membership does not inevitably lead to conflicts of interest or interferences of the independence.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significantly higher workload that an additional remuneration is appropriate.

Martinsried/Munich, November 17, 2015

Brian Protiva 
Chief Executive Officer

Nikos Theodosopoulos 
Chairman of the Supervisory Board

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to annually disclose their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on November 18, 2014.

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the German Corporate Governance Code as amended on June 24 2014:

Deductible for D&O insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the accountability of the members of the Supervisory Board in carrying out their duties.

Management Board compensation

The value of stock options issued to members of the Management Board as part of their compensation is only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The Supervisory Board of ADVA Optical Networking took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus. The maximum amount of compensation for the members of the Management Board was capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap on a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Within the context of the implementation of the requirements regarding the variable compensation components, the Supervisory Board resolved on a general cap for the compensation component annual bonus, and no additional caps for the four individual targets relevant for the annual bonus since this decreases the complexity of the arrangement significantly and prevents the danger of unfair results. Since it is not yet clear whether compliance with the recommendation of section 4.2.3 paragraph 2 sentence 6 of the Code also requires caps for individual targets of an annual bonus, as a matter of precaution a deviation from this recommendation shall be declared. Further adjustments are not intended.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 of the Code) does not consider in all cases the chairmanship and the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significantly higher workload that an additional remuneration is appropriate.

Martinsried/Munich, November 18, 2014

Brian Protiva
Chief Executive Officer

Anthony Maher
Chairman of the Supervisory Board

2013 - Updated version dated April 22, 2014

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Man-agement Board and the Supervisory Board of all listed German stock corporations are obliged to disclose annually their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

The Management Board and the Supervisory Board of ADVA Optical Networking SE ("ADVA Optical Networking") last issued an annual declaration of compliance with regard to the Code on December 2, 2013.

According to section 4.2.3 paragraph 2, sentence 6 of the Code as amended on May 13, 2013, the maximum amount of compensation of the members of the Management Board shall be capped, both overall and for variable compensation components. Within the context of the implementation of these requirements there was one adjustment of the stipulation on the cap for the compensation component annual bonus which had previously been fixed. Since this adjustment could be considered as a deviation from the recommendations of section 4.2.3 paragraph 2, sentence 6 and 8 of the Code, as a matter of precaution a deviation from these recommendations shall be declared. In order to render its current version completely, the declaration of compliance will be fully revised as presented below.

For the period from December 13, 2012 (publication date of the 2012 declaration of compliance) to the publication date of the Code as amended on May 13, 2013 in the Federal Gazette which took place on June 10, 2013 this updated declaration relates to the Code as amended on May 15, 2012. For the period from the publication of the Code as amended on May 13, 2013 in the Federal Gazette this updated declaration relates to the Code as amended on May 13, 2013.

The Management Board and the Supervisory Board of ADVA Optical Networking declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the Code:

Sending of documents for the invitation and convening of the Annual General Meeting

According to section 2.3.2 of the Code as amended on May 15, 2012, the recommendation to send notification of the convening of the Annual General Meeting together with supporting documents to all domestic and foreign financial services providers, shareholders and shareholders' associations by electronic means, provided that respective approval requirements are fulfilled, applies to ADVA Optical Networking. As the Company has issued bearer shares, ADVA Optical Networking is not able to communicate with its shareholders directly, but only via depository banks. In order to comply with all legal requirements, in cases where the Company is not able to clarify the above-mentioned approval requirements, for notifications in accordance with section 125 of the German Stock Corporation Act (Aktiengesetz) the Company continues to distribute via physical mail. In addition, the Company publishes the invitation and convening documents on its website. Since the Code as amended on 13 May 2013 has become applicable such recommendation does not exist anymore; therefore a deviation from the Code does no longer exist.

Deductible for D&O insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the sense of responsibility of the members of the Supervisory Board in carrying out their duties.

Management Board compensation

The stock options issued to members of the Management Board as part of their compensation are only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

According to section 4.2.3 paragraph 2 of the Code as amended on May 13, 2013, the maximum amount of compensation of the members of the Management Board shall be capped, both overall and for variable compensation components. Until now some components of the variable compensation of the members of the Management Board have not been capped by a maximum amount. No maximum amount has been agreed for the annual bonus which is orientated on the achievement of certain key figures. Also some older stock option agreements do not provide for a cap by a maximum amount. An agreement on a maximum amount did not seem necessary since demanding performance targets were agreed upon which limit the variable compensation factually.

In its meeting dated of February 18, 2014, the Supervisory Board of ADVA Optical Net-working took note of the requirements of section 4.2.3 paragraph 2 of the Code in taking its decision on the annual bonus for the financial year 2014. The maximum amount of compensation for the members of the Management Board is now capped, both overall and for its variable compensation components (annual bonus, long term bonus, newly issued options). Only some older stock option agreements do not provide for a cap by a maximum amount, since amendments of existing agreements cannot be enforced unilaterally by ADVA Optical Networking and would contravene the principle of being bound by agreements (pacta sunt servanda).

Within the context of the implementation of the requirements regarding the variable compensation components, in its meeting on February 18, 2014, the supervisory board did not only resolve on a general cap for the compensation component annual bonus, but also for the individual targets relevant for the annual bonus. Since this increased the complexity of the arrangement significantly and involved the danger of unfair results, the supervisory board resolved in its meeting on April 22, 2014 on a general cap for the compensation component annual bonus. Since it is not yet clear, whether compliance with the recom-mendation of section 4.2.3 paragraph 2 sentence 6 also requires caps for individual targets of an annual bonus and the adjustment could also be considered as a retroactive change of the performance targets according to section 4.2.3 paragraph 2, sentence 8 of the Code, as a matter of precaution a deviation from both recommendations shall be declared. Further adjustments are not intended.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 of the Code) does not consider in all cases the chair in committees and generally not the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significant higher workload that an additional remuneration is appropriate.

Martinsried/Munich, April 22, 2014

Brian Protiva
Chief Executive Officer

Anthony Maher
Chairman of the Supervisory Board
____________________________________________________________________________________

2013 - Original version dated December 2, 2013

According to section 161 of the German Stock Corporation Act (Aktiengesetz), the Management Board and the Supervisory Board of all listed German stock corporations are obliged to disclose annually their compliance with the recommendations of the German Corporate Governance Code ("Code") and to give details of any deviations from these recommendations.

For the period from December 13, 2012 (publication date of the 2012 declaration of compliance) to the June 10, 2013 Federal Gazette (“Bundesanzeiger”) publication of the Code as amended on May 13, 2013, this declaration relates to the Code as amended on May 15, 2012. For the period from the Federal Gazette publication of the Code as amended on May 13, 2013, this declaration relates to the Code as amended on May 13, 2013. The Management Board and the Supervisory Board of ADVA Optical Networking SE (“ADVA Optical Networking”) declare that, except for the deviations listed below, ADVA Optical Networking has complied, and will continue to comply, with all recommendations of the Code:

Sending of documents for the invitation and convening of the Annual General Meeting

Section 2.3.2 of the Code as amended on May 15, 2012 recommended to ADVA Optical Networking to send notification of the convening of the Annual General Meeting together with supporting documents to all domestic and foreign financial services providers, shareholders and shareholders' associations by electronic means, provided that respective approval requirements are fulfilled. As the Company has issued bearer shares, ADVA Optical Networking is not able to communicate with its shareholders directly, but only via depository banks. In order to comply with all legal requirements, in cases where the Company is not able to clarify the above-mentioned approval requirements, for notifications in accordance with section 125 of the German Stock Corporation Act (Aktiengesetz) the Company continues to distribute via physical mail. In addition, the Company publishes the invitation and convening documents on its website. Since the Code as amended on May 13, 2013 has become applicable, such recommendation does not exist anymore. Hence there is no deviation from the Code anymore.

Deductible for D&O insurance

ADVA Optical Networking has taken out a D&O (directors' and officers' liability insurance) policy for the members of the Management Board and the Supervisory Board. This policy contains a deductible for members of the Management Board, but not for members of the Supervisory Board (see section 3.8 paragraph 3 of the Code). The Company does not believe that such a deductible enhances the motivation and the sense of responsibility of the members of the Supervisory Board in carrying out their duties.

Management Board compensation

The stock options issued to members of the Management Board as part of their compensation are only related to the share price, not to demanding, relevant comparison parameters (see section 4.2.3 paragraph 2 of the Code). In ADVA Optical Networking's opinion, basing share-based variable compensation on such comparison parameters may result in reduced transparency.

The amount of compensation of the members of the Management Board shall be capped, both overall and for variable compensation components (see section 4.2.3. paragraph 2 of the Code as amended on May 15, 2013). At current, some components of the variable compensation of the members of the Management Board are not capped by a maximum amount. No maximum amount is agreed for the annual bonus, which is based on the achievement of certain key figures. This is also true for several legacy stock option agreements. Agreements on maximum amounts did not seem necessary, because demanding performance targets had been agreed upon, factually capping variable compensation. However, the Supervisory Board of ADVA Optical Networking intends to comply with the Code’s recommendation when deciding on the compensation for members of the Management Board next.

Supervisory Board

The Company's Supervisory Board handles any issues of compliance directly and has not delegated this task to a committee (see section 5.3.2 sentence 1 of the Code). It is ADVA Optical Networking's view that due to the importance of compliance matters, all members of the Supervisory Board should be involved in handling respective issues.

Moreover, ADVA Optical Networking specifies an age limit for the members of the Management Board, but not for the members of the Supervisory Board (see section 5.4.1 paragraph 2 of the Code). In ADVA Optical Networking's opinion, suitability to serve as a member of the Supervisory Board should not depend on the candidate's age.

Finally, the remuneration of the Supervisory Board (see section 5.4.6 of the Code) does not consider in all cases the chair in committees and generally not the membership in committees. In ADVA Optical Networking's view, only chairmanship in the Audit Committee drives such significant higher workload that an additional remuneration is appropriate.

Martinsried/Munich, December 2, 2013

Brian Protiva
Chief Executive Officer

Anthony Maher
Chairman of the Supervisory Board