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                                                                   EXHIBIT 4.21

                             BOOKHAM TECHNOLOGY PLC

                        1995 EMPLOYEE SHARE OPTION SCHEME

                               RULES OF THE SCHEME

1.       INITIALISATION AND REGULATION

         The scheme is established under a Board Resolution dated 10th July
         1995, and is subject to the restrictions in the Articles of Association
         and Subscription Agreements with CHIP and others, A D Fisher and the
         First Welsh Investment Trust, and others.

2.       COMMENCEMENT AND DURATION

         The Scheme will commence on 10th July 1995 and continue until
         terminated by resolution of the Board or the Members in General
         Meeting.

3.       ELIGIBILITY

         All employees, officers and consultants(1) are eligible to participate
         in the Scheme from the completion of their probationary period in
         their Contract of Employment. They should continue to be eligible
         until the date of issue of notice of termination of employment by the
         employee or the Company.

         On termination of employment, options not exercised shall lapse subject
         to Clause 9.

4.       GRANTING OF OPTIONS

         Options are granted at the sole discretion of the Board, which shall
         decide the participants and the number of options to be granted in each
         tranche. The Board resolution shall be signed by the Chairman of the
         Board to be valid under the rules.

5.       OPTION PRICE

         The option price for each tranche of grants shall be the price of the
         last previous allotment of transfer in excess of 50,000 2p shares
         recorded in the Register of Members prior to the date of grant.

6.       EXERCISE FUND

         The option shall be exercisable during the period commencing 18 months
         from the date of commencement of employment, and ending six years and
         eleven months after the date of grant.

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(1) As amended by a resolution of the Board on 20th January 1999

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         Options may be exercised in whole or part, subject to the following
         restriction:

          (i)  options may not be exercised earlier, or in higher proportion to
               the total holding, than as follows:

<TABLE>
<S>                                            <C>
               Period Employed                 Max Cumulative Fraction
                                               Exercisable

               18 months                       1/3
               30 months                       2/3
               42 months                       3/3
</TABLE>

         The cumulative fraction shall increment only at each designated time
         interval, and shall not accrue evenly within time periods save under
         Clause 9 below.

7.       OPTION CERTIFICATES

         Certificates will be issued to participants for each tranche of options
         granted. These are important documents required to be produced at the
         time the option is exercised. Lost or damaged certificates may be
         replaced at the Company's discretion subject to the holder signing an
         appropriate indemnity.

8.       EXERCISE PROCEDURE

         Options are exercised by completing the prescribed Exercise Form (annex
         A) and forwarding to the Secretary at the Registered Office, together
         with a cheque for the option purchase price, on or after the appointed
         date.

9.       TERMINATION OF EMPLOYMENT(2)

         9.1      All of an Option-holder's Options shall immediately lapse if
                  he is given notice by the Company to terminate his employment
                  with the Company. They will lapse even if the Company is in
                  repudiatory breach of the option-holder's contract of
                  employment.

         9.2      If an Option-holder gives notice to terminate his employment
                  with the Company, or that employment ceases where Rules 9.1,
                  9.3, 9.4 or 9.5 do not apply, all his Options shall
                  immediately lapse. However, the Board may (subject to Rule 6,
                  1998 scheme rules), consent to the exercise of any Option by
                  the Option-holder within 6 months after the later of:-

                  9.2.1    the notice; or

                  9.2.2    cessation of employment

         9.3      If an option-holder ceases to be employed by the Company by
                  reason of:

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(2) As amended by a resolution of the Board on 13th March 2000

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            9.3.1  injury or disability (and the Board has received
                   satisfactory evidence of this);

            9.3.2  redundancy within the meaning of the Employment Rights
                   Act 1996; or

            9.3.3  retirement on reaching retirement age under his contract
                   of employment

he may, subject to Rule 6 (1998 scheme rules) exercise all or any of his Options
in whole or in part within six months after that cessation.

       9.4  If any Option-holder ceases being employed by the Company solely
            because the undertaking or part of the undertaking in which the
            Option-holder is employed is transferred to a transferee which is
            not a subsidiary of the Company then he may, subject to Rule 6
            (Termination of Employment 1998 scheme rules), exercise all or any
            of his Options in whole or in part six months after that cessation
            or transfer (as the case may be).

       9.5  If an Option-holder dies, his legal personal representative may
            exercise all or any of his options (subject to Rule 6 - Termination
            of Employment 1998 scheme rules) in whole or in part within twelve
            months of his death.

       9.6  If an Option-holder ceases being employed in the Company, his
            rights and benefits under this Scheme or any loss of those rights
            and benefits shall not entitle him to claim for compensation
            against the Company, notwithstanding that he may have been
            dismissed wrongfully or unfairly (within the meaning of the
            Employment Rights Act 1996).

       9.7  The Options held by an Option-holder will lapse if one of Rules
            9.2, 9.3, 9.4 or 9.5 apply and the period referred to in the
            relevant Rule has expired.

       9.8  Where an Option is exercised under Rules 9.2, 9.3, 9.4 or 9.5 the
            Board may permit the fraction of the Option exercisable under
            Rule 6 (1998 scheme rules) to accrue evenly between the time
            intervals referred to in that Rule. However, no Option may be
            exercised less than 18 months from the date of grant of the Option.

10.    TAKEOVERS

       In the event of an offer for the whole of the issued share capital of the
       Company, the options may be replaced by options of shares in the
       acquiring company on the same terms as those under which the issued
       shares are being acquired. Otherwise, the options will continue or become
       exercisable under such terms as the acquiring company shall direct.

11.    FLOTATION

       Upon flotation, exercising options shall continue to be valid and operate
       under these Rules. The scheme will be closed forthwith to new
       participants, and no further grants may be made to existing participants.

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12.    VARIATION OF CAPITAL

       Adjustment

       In the event of any increase or variation of the share capital of the
       Company by way of capitalisation, rights issue, sub-division,
       consolidation or reduction of share capital, the Board may make such
       adjustments as shall be fair and reasonable in all the circumstances to:-

       (a) the number or nominal value of shares comprised in any option, and/or

       (b) the acquisition price payable for shares subject to any option.

       Provided always that the acquisition price payable on subscription for
       new shares shall never be less than the nominal value of the share to
       which it relates, the aggregate amount payable on the exercise of an
       option in full shall not thereby be increased.

       Notice of adjustment

       As soon as reasonably practical after making any adjustment under
       sub-clause 12.1 the Board shall give notice in writing to every option
       holder there by affected specifying the adjustments made insofar as they
       affect him and such notice shall be binding upon the option holder in the
       absence of manifest error provided that where pursuant to paragraphs
       12.1(a) or 12.1(b) an adjustment is made to the terms of an option prior
       to the issue of an option certificate pursuant to clause 4, the
       certificate shall set out details of the option as so adjusted and shall
       be deemed to be sufficient notice of the adjustment for the purposes of
       this sub-clause.

13.    NON TRANSFERABILITY

       An option is personal to the grantee and an option obtained by any person
       under the scheme shall not be capable of being transferred by him/her,
       but may be exercised by a grantee's legal personal representative in the
       event of the death of the grantee, within 12 months of the date of
       his/her death.

       No grantee may in any way sell, transfer, charge, mortgage, encumber or
       create any interest in favour of a third party over any option.

14.    VOTING UNDERTAKING*
       [DELETED]

15.    VARIATION TO RULES

       These rules may be varied at any time by the Board at its discretion, but
       such variations shall not have retrospective effect on options already
       granted at date of variation.

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* Amended by a resolution of the Board on 13th March 2000

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16.    CHANGES IN WHO CONTROLS THE COMPANY(3)

       16.1   Subject to the provisions of Rules 16.2 and 16.3 below, if an
              Acquiring Company obtains Control of the Company it shall assume
              all outstanding Options in an Option roll-over in accordance with
              the terms hereof. For purposes of an Option Roll-over, the new
              rights shall only be regarded as equivalent to the old rights if:

              16.1.1 the new rights are exercisable in the same manner as the
                     old rights and subject to the provisions of this Scheme
                     as if it had been effected immediately before an Option
                     Roll-over; and

              16.1.2 the total Market Value of the Scheme Shares subject to
                     the Option which is being rolled over is equal immediately
                     before the Option Roll-over to the total Market Value
                     (determined in accordance with Part VIII of the Taxation
                     of Chargeable Gains Act 1992) of the Shares in respect of
                     which an Option-holder's new rights are being granted
                     immediately after an Option Roll-over; and

              16.1.3 the total amount payable in respect of an Option following
                     an Option Roll-over is equal to the total Acquisition Price
                     immediately before the Option Roll-over.

       16.2   Notwithstanding the foregoing Rule 16.1, if the Acquiring Company
              shall for any reason not agree to an Option Roll-over within 28
              days of obtaining Control of the Company, or in the event of a
              Hostile Takeover, then without any further action on the part of
              the Acquiring Company or the Board, all outstanding Options shall
              become exercisable in full and the Company shall provide notice
              to the Employees of such exercisability within 10 days of the
              relevant triggering event.

       16.3   Any Option not Rolled-over pursuant to Rule 16.1 or exercised
              pursuant to 16.2 within 90 days of the Acquiring Company
              obtaining Control of the Company shall lapse.

       16.4   For the purposes of any application of the provisions of this
              Scheme following an Option Rollover:

              16.4.1 any new rights granted under Rule 16 shall be regarded as
                     having been granted at the time the corresponding old
                     rights were granted;

              16.4.2 Rules 8, (changes in company's share capital 1998 rules) 9,
                     (how to exercise options 1998 rules) 11.1, (administration
                     1998 rules) 11.2 (administration 1998 rules), 11.3
                     (administration 1998 rules) and 16 shall, in relation to
                     the new rights, have the meanings assigned to them in this
                     Rule 16.4 and not the meanings assigned to them in Rule 1.

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(3) Added by a resolution of the Board on 20th January 1999

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                     "COMPANY" means the new company in respect of whose shares
                     new rights have been granted;

                     "THE BOARD" means the Board of Directors for the time being
                     of the company in respect of whose shares new rights have
                     been granted, the directors present at a duly convened
                     meeting of that Board of Directors or a duly appointed
                     committee of that Board of Directors;

              16.4.3 for the purposes of Rules 4.2 (1998 rules), 8 (changes in
                     the company's share capital 1998 rules), 9 (how to exercise
                     options 1998 rules), 11.1 (1998 rules), 11.2 (1998 rules)
                     and 11.3 (1998 rules) the following terms shall, in
                     relation to the new rights, have the following meanings and
                     not the meanings assigned to them in Rule 1:

                     "SCHEME SHARES" means fully paid ordinary shares in the
                     capital of the company over whose shares new rights have
                     been granted.

                     "SHARES SUBJECT TO THIS SCHEME" means Scheme Shares.

       16.5   If notice is duly given of a General Meeting at which a
              resolution will be proposed for the voluntary winding-up of the
              Company (other than for the purposes of reconstruction or
              amalgamation) an Option shall, subject to Rule 5 (1998 rules),
              be exercisable in whole or part. Any exercise of an Option under
              this Rule 16.5 shall be conditional on the passing of that
              resolution. An Option may be exercised under this Rule 16.5 at
              any time after the notice is given until the resolution is duly
              passed, defeated or the Meeting is concluded or adjourned,
              whichever happens first. If the resolution is passed, any Options
              which have not been exercised shall lapse.

17.    TAX INDEMNITY(4)

       17.1   Each Option-holder must indemnify the Company against any
              Option-holder's tax liability on the grant or exercise of an
              option where the Company must account for the tax to any tax
              authority. This includes without limitation the Company's
              obligation to account to the Inland Revenue for PAYE on the
              exercise of any Option.

       17.2   Where the Company must account for any tax under Rule 9.1 (how to
              exercise options 1998 scheme rules) the Company may:-

              17.2.1 require the Option-holder to pay the amount of the tax to
                     the Company before the Option may be exercised;

              17.2.2 deduct the amount of the tax from the Option-holder's
                     salary; or

              17.2.3 withhold any shares and sell them on behalf of the
                     Option-holder up to the amount necessary to pay the tax
                     (and any other taxes or duties arising on the sale) and
                     any costs of sale.

       17.3   The secretary for the time being of the Company (or any other
              person that the Board nominates) is appointed the Option-holder's
              attorney to sell shares pursuant to Rule 17.2.3. and to execute
              all necessary forms or other documents in connection with the
              sale.

       17.4   For the purpose of this Rule 17 "tax" includes income tax, capital
              gains tax, national insurance, stamp duty and any other taxes or
              duties of any kind in any country.

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(4) As amended by a resolution of the Board on 13th March 2000