exv10w35



 



EXHIBIT 10.35



CIENA CORPORATION



NONQUALIFIED



MANAGEMENT DEFERRED COMPENSATION PLAN



EFFECTIVE AS OF JANUARY 1, 1998

TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLES	 	PAGE
	
	 	

	1. DEFINITIONS
	 	 	3	 
	1.01 Base Salary
	 	 	3	 
	1.02 Beneficiary
	 	 	3	 
	1.03 Board
	 	 	3	 
	1.04 Bonus
	 	 	3	 
	1.05 Committee
	 	 	3	 
	1.06 Company
	 	 	3	 
	1.07 Company Discretionary Contributions
	 	 	3	 
	1.08 Deferral Account
	 	 	3	 
	1.09 Deferrals
	 	 	3	 
	1.10 Deferral Election Form
	 	 	3	 
	1.11 Effective Date
	 	 	4	 
	1.12 Fiscal Year
	 	 	4	 
	1.13 Forfeiture
	 	 	4	 
	1.14 Involuntary Termination of Employment
	 	 	4	 
	1.15 Participant
	 	 	4	 
	1.16 Plan
	 	 	4	 
	1.17 Plan Year
	 	 	4	 
	1.18 Quarter
	 	 	4	 
	1.19 Rabbi Trust
	 	 	4	 
	1.20 Trustee
	 	 	4	 
	1.21 Valuation Date
	 	 	4	 
	1.22 Vested
	 	 	4	 
	1.23 Voluntary Termination of Employment
	 	 	4	 
	2. ELIGIBILITY AND PARTICIPATION
	 	 	4	 
	2.01 Eligible Persons
	 	 	4	 
	2.02 Participation
	 	 	4	 
	2.03 Date of Entry
	 	 	4	 
	2.04 Application for Participation
	 	 	4	 
	2.05 Limitation on Participants
	 	 	5	 
	2.06 Removal from Participation
	 	 	5	 
	3. PARTICIPANT DEFERRALS & COMPANY CONTRIBUTIONS
	 	 	5	 
	3.01 Participant Deferrals
	 	 	5	 
	3.02 Company Contributions
	 	 	6	 
	4. INVESTMENT OF DEFERRAL ACCOUNT
	 	 	6	 
	4.01 Participant Election
	 	 	6	 
	4.02 Change of Investment Election
	 	 	6	 



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	ARTICLES	 	PAGE
	
	 	

	4.03 Investment Options
	 	 	6	 
	5. VESTING AND FORFEITURE OF BENEFITS
	 	 	6	 
	5.01 Participant Deferral
	 	 	6	 
	5.02 Company Contributions
	 	 	6	 
	6. DEFERRAL ACCOUNTS
	 	 	6	 
	6.01 Deferral Accounts
	 	 	6	 
	6.02 Quarterly Reports
	 	 	7	 
	6.03 Title to Assets
	 	 	7	 
	6.04 Unfunded Arrangement
	 	 	7	 
	6.05 Notice of Insolvency
	 	 	7	 
	6.06 Return or Diversion of Assets
	 	 	7	 
	6.07 Annual Expenses
	 	 	7	 
	7. BENEFIT DISTRIBUTIONS
	 	 	8	 
	7.01 In General
	 	 	8	 
	7.02 Commencement of Benefits
	 	 	8	 
	7.03 Involuntary Termination of Employment
	 	 	8	 
	7.04 Scheduled In-Service Withdrawals
	 	 	8	 
	7.05 Nonscheduled In-Service Withdrawals
	 	 	8	 
	7.06 Hardship Distributions — Withdrawal of Deferrals
	 	 	9	 
	7.07 Death Benefits
	 	 	9	 
	7.08 Tax Liability
	 	 	9	 
	8. ADMINISTRATION
	 	 	9	 
	8.01 Responsibilities and Powers of Committee
	 	 	9	 
	8.02 Interpretation of Plan
	 	 	10	 
	9. APPLICATION FOR BENEFITS AND CLAIMS PROCEDURE
	 	 	10	 
	9.01 Notice of Denial of Benefit
	 	 	10	 
	9.02 Appeals Procedure
	 	 	10	 
	10. GENERAL PROVISIONS
	 	 	10	 
	10.01 No Alienation or Assignment of Benefits
	 	 	10	 
	10.02 No Contract of Employment
	 	 	10	 
	10.03 Other Retirement Plans
	 	 	10	 
	10.04 Heirs, Assigns and Successors
	 	 	10	 
	10.05 Amendment or Termination
	 	 	10	 
	10.06 Severability of Provisions
	 	 	11	 
	10.07 Controlling Law
	 	 	11	 
	10.08 Grammatical Construction
	 	 	11	 
	10.09 Unauthorized Representations
	 	 	11	 
	10.10 Designation of Death Benefit Beneficiary
	 	 	11	 
	10.11 Effect of Change of Control
	 	 	11	 



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NONQUALIFIED



MANAGEMENT DEFERRED COMPENSATION PLAN



OF



CIENA CORPORATION



EFFECTIVE: JANUARY 1, 1998



          WHEREAS, CIENA Corporation (“CIENA”) has decided to establish a deferred
compensation plan for a select group of its key management and highly
compensated employees;



          WHEREAS, the purpose of this Plan is to provide eligible executives with a
tax-deferred savings program through their voluntary deferrals of Base Salary
and Bonus and the allocation of Company Discretionary Contributions.



          NOW, THEREFORE, the Nonqualified Management Deferred Compensation Plan of
CIENA Corporation is hereby adopted in accordance with the following terms and
conditions:



ARTICLE 1 — Definitions



          Unless the context or subject matter otherwise requires, the following
definitions shall govern the Plan:




	 	 	Section 1.01 Base Salary — the salary established by the Company
which is to be earned by a Participant during a calendar year.
	 
	 	 	Section 1.02 Beneficiary — a person (other than a Participant) who
is entitled to receive benefits under the Plan because of his
designation for such benefits by a Participant under the provisions
of this Plan.
	 
	 	 	Section 1.03 Board — the Board of Directors of CIENA Corporation.
	 
	 	 	Section 1.04 Bonus — incentive compensation provided to a
Participant by the Company each Quarter.
	 
	 	 	Section 1.05 Committee — the Management Committee appointed by the
Board to administer the Plan.
	 
	 	 	Section 1.06 Company — CIENA Corporation and its successors.
	 
	 	 	Section 1.07 Company Discretionary Contributions — the
contributions made by the Company to the Rabbi Trust pursuant to
the provisions of Section 3.02 of the Plan.
	 
	 	 	Section 1.08 Deferral Account — the separate account established
for each Participant pursuant to the provisions of Article 6 of the
Plan, which is credited with Company Discretionary Contributions
and Deferrals made on the Participant’s behalf. To the extent
necessary to reflect different vesting schedules and/or
distribution dates, a Participant’s Deferral Account can include
multiple sub-accounts.
	 
	 	 	Section 1.09 Deferrals — the portion of a Participant’s Base Salary
and Bonus which is deferred and contributed to the Rabbi Trust by
the Company on behalf of a Participant pursuant to the provisions
of Article 3 of the Plan.
	 
	 	 	Section 1.10 Deferral
Election Form — the form designated by the Company for use by



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	 	 	Participants to contribute Deferrals to the
Plan, designate the investment of the Deferral Account, and select the timing and form of the distribution subject to
Sections 3.01, 7.01 and 7.02. The execution and filing of this
Form with the Committee is subject to Board approval. The Form may
be changed at any time by the Board.
	 
	 	 	Section 1.11 Effective Date — January 1, 1998.
	 
	 	 	Section 1.12 Fiscal Year
— November 1 – October 31.
	 
	 	 	Section 1.13 Forfeiture — that portion of a Participant’s Deferral
Account which is not Vested.
	 
	 	 	Section 1.14 Involuntary Termination of Employment — events which
result in a separation from service with the Company and which are
generally not initiated by a Participant, including but not limited
to a layoff, disability, or discharge by the Company for any
reason.
	 
	 	 	Section 1.15 Participant — an employee of the Company who has been
designated by the Committee for participation in the Plan.
	 
	 	 	Section 1.16 Plan— this Nonqualified Management Deferred
Compensation Plan and any modification, amendment, extension or
renewal thereof.
	 
	 	 	Section 1.17 Plan Year — the calendar year ending each December 31.
	 
	 	 	Section 1.18 Quarter — every three months of the Fiscal Year.
	 
	 	 	Section 1.19 Rabbi Trust — the grantor trust within the meaning of
Section 671 of the Internal Revenue Code established pursuant to
the Trust Agreement, as amended and restated, effective as of
January 1, 1998, between the Company and Crestar Bank.
	 
	 	 	Section 1.20 Trustee — means Crestar Bank unless the Company
delegates another person or entity to act as the trustee pursuant
to the Trust Agreement.
	 
	 	 	Section 1.21 Valuation Date — the last day of each month.
	 
	 	 	Section 1.22 Vested — a Participant’s nonforfeitable interest in a
portion of his Deferral Account. A Participant’s Vested interest
shall be determined in accordance with the provisions of Article 5
of the Plan.
	 
	 	 	Section 1.23 Voluntary Termination of Employment — events, other
than those classified as an Involuntary Termination of Employment,
which are initiated by the Participant and which result in a
separation from service with the Company. For purposes of this
Plan, a Participant’s death will constitute a Voluntary Termination
of Employment.



ARTICLE 2 — Eligibility and Participation



          Section 2.01 Eligible Persons. As of the Effective Date, eligibility to
participate in the Plan is limited to the individuals listed on Attachment A.



          Section 2.02 Participation. The Committee may designate additional
persons who may participate in the Plan. The Committee must notify in writing
the person of his designation to participate in the Plan.



          Section 2.03 Date of Entry. A person listed on Attachment A shall become
a Participant on the Effective Date of this Plan. Those persons who are
designated to participate in the Plan on or after the Effective Date shall
become a Participant on the date they are notified in writing of their
designation to participate in the Plan.



          Section 2.04 Application for Participation. A person who is eligible to
participate in this Plan must initially complete a Deferral Election Form and a
life insurance application. If a Participant fails to submit either form in a
timely manner, he will be deemed to have elected not to participate
in the Plan and will be ineligible to make


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Deferrals and receive an allocation of the
Company Discretionary Contributions.


          Section 2.05 Limitation on Participants. The Committee, in its sole
discretion, may determine who qualifies as a Participant and may change the
criteria at any time. The effective date of any such change shall be determined
by the Committee.



          Section 2.06 Removal from Participation. The Committee may terminate a
Participant’s participation for any reason. A Participant who is prospectively
terminated from participating in this Plan is ineligible to make Deferrals or
receive an allocation of Company Discretionary Contributions.



ARTICLE 3 — Participant Deferrals and Company Contributions



          Section 3.01 Participant Deferrals. As set forth more fully below, a
Participant may defer a portion of his annual Base Salary which would otherwise
be earned and payable for the Plan Year, and/or Bonus, which would otherwise be
earned and payable for the first Quarter of the Fiscal Year after the
Effective Date of this Plan and each subsequent 12-month period, respectively,
by executing a Deferral Election Form pursuant to this Section. Subject to the
rules set forth by the Committee, the minimum Deferral is five thousand dollars
($5,000) and, subject to the limitations set forth below, the maximum Deferral
is one hundred percent (100%) of the Participant’s annual Base Salary and
Bonus. No deferral election shall reduce a Participant’s compensation below
the amount necessary to satisfy the following obligations: applicable
employment taxes (e.g., FICA/Medicare) on amounts deferred; withholding
requirements of an employer-sponsored benefit plan; or income tax withholding
for compensation that cannot be deferred.



          (a) Salary Deferral Contribution.



               (i) Submission of Deferral Election Form. Each Participant who wishes to
participate in the Plan and defer a portion of his Base Salary must submit a
Deferral Election Form to the Committee no later than December 15 of the Plan
Year preceding the Plan Year with respect to which the election is to be
initially effective. The Deferral Election Form, once properly completed and
submitted to the Committee, shall be effective as of the first pay period of
the following Plan Year. In the case of a person who becomes a Participant for
the first time (including all Participants listed on Attachment A) after the
Effective Date, the Deferral Election Form must be filed with the Committee no
later than thirty (30) days after he becomes eligible to participate in the
Plan. However, such election shall be prospective and shall apply only to Base
Salary earned after the election is made. Unless a Participant files a new
Deferral Election Form by December 15th of any subsequent Plan Year, the
existing Deferral Election Form shall remain effective for subsequent Plan
Years.



               (ii) Modification of Salary Deferral Contribution. An election under
Section 3.01(a) may only be increased, decreased, or terminated by filing a new
Deferral Election Form by December 15th of the Plan Year (or First Plan Year,
if applicable) prior to the effective date of the change. Any such
modification will become effective as of the first pay period of the following
Plan Year. If a Participant has terminated his deferral election with respect
to Base Salary, no further deferrals of Base Salary shall be permitted until
the next Plan Year.



               (iii) Deferral Period. The Deferral Election Form will establish the
deferral period for the Base Salary. The deferral period shall begin on the
first day of the Plan Year with respect to which the Deferral Election Form is
filed (or, in the case of Participants becoming eligible mid-year, on the first
day of a pay period following the filing of a Deferral Election Form). The
deferral period shall end as determined under Article 7. The Participant may
designate different deferral periods for the Base Salary contributed in each
Plan Year by filing a separate Deferral Election Form in accordance with
Section 3.01(a)(i).



          (b) Bonus Deferral Contribution.



               (i) Submission of Deferral Election Form. Each Participant who wishes to
participate in the Plan must submit a Deferral Election Form to the Committee
no later than December 15 of each Plan Year. The Deferral Election Form, once
properly completed and submitted to the Committee, shall be effective for the
Bonus earned between February 1, 1998 and January 31, 1999. In the case of a
person who becomes a Participant after the Effective Date, the Deferral
Election Form must be filed with the Committee no later than thirty (30) days
after he becomes eligible to participate in the Plan. The Deferral Election
Form with respect to the Bonus is effective for one 12-moth period only. A
Participant must file a new Deferral Election Form by
December 15th of each Plan


5






 



Year in order to defer the Bonus which is earned during the subsequent
12-month period commencing each February 1.


               (ii) Deferral Period. The Deferral Election Form will establish the
deferral period for the Bonus. The deferral period shall begin each February 1
(or, in the case of Participants becoming eligible mid-year, the first day of a
pay period following the filing of a Deferral Election Form). The deferral
period shall end as determined under Article 7. The Participant may designate
different deferral periods by filing a separate Deferral Election Form for each
Bonus in accordance with Section 3.01(b)(i).



          Section 3.02 Company Contributions. The Company, in its sole and
absolute discretion, may make a Company Discretionary Contribution to the Rabbi
Trust. The Contribution may be made on an annual basis commencing with and
including the Company’s current Fiscal Year. The Company shall determine the
amount of the discretionary contribution, which Participants are eligible to
share in the allocation of the Company contribution, and how the contribution
will be allocated among the Participants’ Deferral Accounts, and the timing and
form in which amounts attributable to the contribution will be distributed
under Section 7.01 and 7.02.



ARTICLE 4 — Investment of Deferral Account



          Section 4.01 Participant Election. The Committee may (but is not required
to) invest the funds reflected in the Deferral Account of a Participant in
accordance with the Participant’s direction. The Participant may elect to have
a specified percentage invested in one or more investment fund(s) as set forth
on Attachment B provided that the specified percentage is in whole numbers, the
minimum designation is ten percent (10%) and the sum of the percentages
allocated does not exceed one hundred percent (100%). The Participant agrees on
behalf of himself and his Beneficiary to assume all risks in connection with
any decrease in the value of funds which are invested or which continue to be
invested in accordance with the provisions of the Plan.



          Section 4.02 Change of Investment Election. Subject to any restrictions
imposed by the underlying investment, a Participant may transfer all or a
portion of his Deferral Account among the investments then allowed by the Plan
not more frequently than once every thirty (30) days by providing the Committee
with such completed forms as the Committee may require. Any such election
shall be effective within thirty (30) days after receipt of such completed
forms by the Committee or as soon as administratively feasible thereafter. Any
change in the investment of a Participant’s Deferral Account is applicable to
both future elective Deferrals and existing assets in the Deferral Account.



          Section 4.03 Investment Options. In addition to those investment funds
listed on Attachment B, any funds credited to the Deferral Account may be kept
in cash or invested and reinvested in mutual funds, stocks, bonds, securities,
insurance contracts, or any other assets as may be selected by the Committee.
The Company may add, delete or otherwise alter the investments allowed under
this Plan at any time without the necessity of a Plan amendment.



ARTICLE 5  — Vesting and Forfeiture of Benefits



          Section 5.01 Participant Deferral. Each Participant will be Vested in the
amounts in his Deferral Account attributable to Deferrals at all times.



          Section 5.02 Company Contributions. Each Participant will be Vested in
the amounts in his Deferral Account attributable to Company Discretionary
Contributions upon the earlier of: (i) the date the Participant satisfies the
vesting schedule established by the Company at the time the Company’s
Discretionary Contribution is allocated to the Participant’s Deferral Account;
(ii) the date the Participant reaches age sixty (60) provided the Participant
is still employed by the Company; or (iii) December 31st of the tenth Plan
Year in which the Participant has maintained a balance at all times in his
Deferral Account in the Plan. Notwithstanding the above, if a Participant
dies while in the employ of the Company, all amounts credited to the
Participant’s Deferral Account will be Vested.



ARTICLE 6 — Deferral Accounts



          Section 6.01 Deferral Accounts. The Committee shall establish and
maintain a Deferral Account for each Participant under the Plan. Each
Participant’s Deferral Account shall be further divided into separate
subaccounts (“investment fund subaccounts”), each of which corresponds to an
investment fund elected by the Participant pursuant to Section 4.01. A
Participant’s Deferral Account shall be credited as follows:



6






 




          (a) As of each Valuation Date, the Committee shall
credit the investment fund sub-accounts of the Participant’s
Deferral Account with an amount equal to the Deferrals
contributed by the
Participant during each pay period ending in that month in
accordance with the Participant’s elections under Section 4.01;
that is, the portion of the Participant’s Deferrals that the
Participant has elected to be deemed to be invested in a certain
type of investment fund shall be credited to the investment fund
sub-account corresponding to that investment fund.



          In addition, the Committee shall credit the investment fund sub-accounts
of the Participant’s Deferral Account with an amount equal to any Company
Discretionary Contributions made during that month in accordance with the
Participant’s elections under Section 4.01.



          (b) As of each Valuation Date, each investment fund sub-account of a
Participant’s Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
investment fund subaccount as of the prior Valuation Date by the interest rate
for the corresponding fund selected by the Company.



          (c) In the event that a Participant elects for a given Plan Year’s
Deferral to have a scheduled withdrawal date pursuant to Section 7.04, all
amounts attributed to the Deferrals for such Plan Year shall be accounted for
in a manner which allows separate accounting for the Deferrals and investment
gains and losses associated with such Plan Year’s Deferrals.



          Section 6.02 Quarterly Reports. The Committee shall advise each
Participant of his Deferral Account at least quarterly.



          Section 6.03 Title to Assets. Title to and beneficial ownership of any
assets which the Company has designated to pay the deferred compensation
benefits hereunder shall at all times be subject to the general creditors of
the Company, and a Participant shall have no property rights in those assets.



          Section 6.04 Unfunded Arrangement. In conjunction with the establishment
of this Plan, the Company has established a Rabbi Trust in respect of its
obligations under the Plan. To the extent that any person acquires a right to
receive benefits under this Plan, such right shall be no greater than the right
of any unsecured general creditor of the Company. It is the intention of the
Company that this Rabbi Trust shall not affect the status of the Plan as an
unfunded plan maintained for the purpose of providing deferred compensation for
a select group of management or highly compensated employees for purposes of
Title I of the Employee Retirement Income Security Act of 1974.



          Section 6.05 Notice of Insolvency. The Committee must inform the Trustee
in writing of the Company’s insolvency, as defined in the Trust Agreement. Upon
receipt of this information regarding the Company’s insolvency, the Trustee
must discontinue payments of deferred obligations and must hold assets for the
benefit of the Company’s general creditors. If the Trustee receives other
written notice of the Company’s insolvency, the Trustee must notify the
Committee in writing which shall confirm or refute such determination within 30
calendar days. If the Trustee does not receive a response from the Committee
within said period, the Trustee must suspend all Participant or Beneficiary
related payments and deliver trust assets to satisfy the claims of the
Company’s general creditors as directed by a court of competent jurisdiction.



          Section 6.06 Return or Diversion of Assets. Except as permitted by the
terms of the Trust Agreement, the Company has no right to direct the Trustee to
return or divert trust assets before payment of all Plan benefits to the
Participant or Beneficiary except (i) if necessary to discharge the claims of
creditors, or (ii) if benefits have been forfeited.



          Section 6.07 Annual Expenses. The Company will be responsible for paying
the annual expenses of operating this Plan which will include, but not be
limited to, funding the Plan benefits, the administrative fees, separately
stated fees for investment allocations and fees based on the amount of assets
in the Plan. The annual expenses of the Plan will not be deducted from the
assets of the Plan.



7






 



ARTICLE 7 — Benefit Distributions



          Section 7.01 In General. A Participant who is eligible to receive
benefits under the Plan, unless they are forfeited in accordance with Article
5, shall have the obligation satisfied by the assets of the Rabbi Trust. The
terms and conditions of such benefit payments are set forth in this Article.
Distributions pursuant to Section 7.04 (other than paragraph 7.04(b)), 7.05,
and 7.06 shall be made as soon as administratively feasible after the
requested distribution is approved by the Committee. All other
distributions will commence as soon as administratively feasible after the
first day of the month following the end of the quarter containing the
separation from service date.


          Section 7.02 Commencement of Benefits. The amount in a Participant’s
Deferral Account shall be paid to the Participant at the time elected on the
Deferral Election Form when Deferrals are initially made or, in the case of
amounts attributable to Company discretionary contributions, at the time
prescribed by the Company under Section 3.02.



          (a) In General. The Deferral Election Form shall
permit Participants to direct payments to commence upon the
earlier of a Voluntary Termination of Employment or on a
scheduled withdrawal date pursuant to Section 7.04.



          (b) Involuntary Termination of Employment.
Notwithstanding any other provision of this Article 7, upon a
Participant’s Involuntary Termination of Employment, the
Participant will receive an immediate distribution of benefits
from his Deferral Account in one (1) lump sum payment.



          Section 7.03 Distribution Form. The distribution form is elected on the
Deferral Election Form when Deferrals are initially contributed or, in the case
of amounts attributable to Company discretionary contributions, in the form
prescribed by the Company under Section 3.02. The distribution form can be
changed by giving the Committee written notice at least one year in advance of
the distribution date, on a form supplied by the Committee.



          (a) Normal Form of Distribution. The normal form of distribution is forty
(40) Quarterly installments.



          (b) Optional Forms of Distribution. Participants who properly complete
and submit a Deferral Election Form in accordance with Article 3 may elect to
receive their distribution of benefits in one (1) lump sum payment or in twenty
(20) or sixty (60) Quarterly installments.



          (c) Distribution of Small Benefits. If the Participant’s Deferral Account
is twenty-five thousand dollars ($25,000) or less, a distribution for any
reason shall be made in the form of a lump-sum payment.



          Section 7.04 Scheduled In-Service Withdrawals. In order to select a
scheduled withdrawal date, a Participant must complete a Deferral Election Form
and elect a distribution date which is at least four (4) years from the date
the deferral period commenced. A Participant can make separate elections with
regard to the Deferrals contributed in each Plan Year.



          (a) Election to Extend Scheduled Withdrawal. Subject to the consent of
the Committee, a Participant may elect to postpone the scheduled withdrawal
date specified on a Deferral Election Form (or the date specified by the
Company under Section 3.02) by filing with the Committee a subsequent Deferral
Election Form specifying a later scheduled withdrawal date. Such an election
to postpone the scheduled withdrawal date must be made at least one year prior
to the scheduled withdrawal date. The extension of the scheduled withdrawal
date may be made in one-year increments.



          (b) Termination of Employment Prior to Scheduled Withdrawal Date. In the
event of a Voluntary Termination of Employment prior to distribution of a
scheduled withdrawal, benefit payments shall commence as soon as
administratively feasible after the first day of the month following the end of
the quarter containing the separation from service date. A Participant can
make a separate election on the Deferral Election Form as to the form of
payment upon Voluntary Termination of Employment prior to a scheduled
withdrawal. The distribution form can be changed by giving the Committee
written notice at least one year in advance of the distribution date, on a form
supplied by the Committee.



          Section 7.05 Nonscheduled In-Service Withdrawals. A Participant may
request to receive the benefits in his Deferral Account in the form of a lump
sum payment at any time. Subject to the approval of the


8






 



Committee, a
Participant who elects this type of benefit distribution will receive ninety
percent (90%) of the Vested benefits in his Deferral Account and will forfeit
the remaining ten-percent (10%). As a result of such non-scheduled in-service
withdrawal, the Participant will be ineligible to participate in the Plan for
purposes of making Deferrals or
receiving Company Discretionary Contributions for the duration of the Plan
Year in which he received the lump sum payment and for the following Plan Year.


          Section 7.06 Hardship Distributions — Withdrawal of Deferrals. Upon
application, the Committee may, when in its sole discretion, it determines that
a Participant has incurred a hardship, permit such Participant to withdraw all
or part of the amounts in his Deferral Account. While such a determination
shall be within the discretion of the Committee, a hardship withdrawal request
shall only be considered upon satisfactory demonstration that the Participant
has incurred an immediate financial need arising out of events beyond the
control of the Participant.



          Section 7.07 Death Benefits.



          (a) Death Before Separation from Service. In the event that a Participant
incurs a Voluntary Termination of Employment because of death, his Beneficiary
shall be entitled to receive a death benefit which shall equal the value of the
Participant’s Deferrals and Company Discretionary Contributions in the
Participant’s Deferral Account, as of the Valuation Date immediately preceding
the distribution date, plus the proceeds of any insurance policy held on the
life of the deceased Participant, but subject to the terms of any Split Dollar
Life Insurance Agreement then in effect.



               (i) The portion of the death benefit attributable to the Participant’s
Deferrals and the Company Discretionary Contributions in the Participant’s
Deferral Account shall be paid in accordance with the distribution form
selected by the Participant (but subject to 7.03(c)).



               (ii) The portion of the death benefit attributable to any life insurance
policy shall only be paid if the insurance company agrees that the Participant
is insurable and shall be subject to all conditions and exceptions set forth in
the applicable insurance policy. Notwithstanding the provision of this Plan or
any other document to the contrary, the Company shall not have any obligation
to pay the Participant or his or her Beneficiary any death benefit except the
Participant’s Deferrals and Company Discretionary Contributions in the
Participant’s Account; the portion of the death benefit attributable to life
insurance shall be payable solely from the proceeds of the life insurance
policy, if any. Furthermore, the Company is not obligated to maintain the
policy; no death benefit attributable to life insurance shall be payable
hereunder if the Company has discontinued the policy for the Participant. In
addition, no policy shall be allocated to any Account. In the event a
Participant dies while the life insurance policy is in effect but before the
Split Dollar Life Insurance Agreement has been executed, the proceeds of the
life insurance policy will be paid into the Rabbi Trust. The Company shall pay
to the Participant’s Beneficiary the death benefit set forth in Section 3(a) of
the Split-Dollar Life Insurance Agreement as if the agreement had been
effective at death.



          (b) Death After Separation from Service. In the event that a Participant
who is in pay status after incurring a Voluntary Termination of Employment
dies, his Beneficiary shall be entitled to receive the remaining installment
payments, if any, from the Participant’s Deferral Account as they become due.
Payment of benefits under this Section shall be made in the form of payment
selected by the Participant.



          Section 7.08 Tax Liability. In the event the Plan is required to
distribute benefits to any Participant in compliance with a change in the law,
the Participant shall bear all tax consequences associated with the premature
payment of his Deferral Account. Notwithstanding the above, the Participant
will be responsible for all taxes in conjunction with the deferral or
distribution of his benefits.



ARTICLE 8 — Administration



          Section 8.01 Responsibilities and Powers of Committee. The Committee
shall be the agent for service of legal process regarding any litigation
arising out of the operation and administration of the Plan. The Committee may
act in one or more fiduciary capacities with respect to the Plan and may
allocate to others certain aspects of the responsibilities for the operation
and administration of the Plan, including the employment of advisors and the
delegation of any fiduciary or ministerial duties or functions to appropriate
individuals. The Committee shall also have the power to manage and control the
investment of plan assets, and to establish and revise rules and procedures
relating to the administration of the Plan.



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          Section 8.02 Interpretation of Plan. The Committee shall, subject to the
requirements of the law, be the sole judge of the standard of proof required in
any case and the application and interpretation of this Plan, and decisions of
the Committee shall be final and binding on all parties. The Committee shall
have the exclusive right
and discretionary authority to construe the terms of the Plan, to resolve
any ambiguities, and to determine any questions which may arise with the Plan’s
application or administration, including but not limited to, determination of
eligibility for benefits. Whenever in the Plan the Committee is given
discretionary powers, the Committee shall exercise such powers in a uniform and
non-discriminatory manner. The Committee shall process a claim for benefits as
speedily as is feasible, consistent with the need for adequate information and
proof necessary to establish the Participant’s benefit rights and to commence
payment of benefits.



ARTICLE 9 — Application for Benefits and Claims Procedure



          Section 9.01 Notice of Denial of Benefit. In the event that a request for
distribution of benefits is denied in whole or in part, a Participant whose
request for benefits has been denied shall be notified of such denial in
writing by the Committee. The denial notice shall specify the reason or
reasons for the denial, make specific references to pertinent Plan provisions,
describe any additional material or information necessary for the Participant
to perfect the claim, and shall advise the Participant of the procedure for the
appeal of such denial.



          Section 9.02 Appeals Procedure. All appeals shall be made in accordance
with the following procedure:



          (a) The Participant or his duly authorized representative shall file with
the Committee a request to appeal the denial within sixty (60) days of
notification by the Committee of the claim denial. The request shall be made
in writing, and shall set forth all of the facts upon which the appeal is
based. Appeals not timely filed shall be barred.



          (b) The Committee shall consider the merits of the Participant’s written
presentations, the merits of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as it shall deem relevant.



          (c) Within one hundred and twenty (120) days after a request for review
has been received, the Committee shall render a decision upon the appealed
claim which shall be in writing and shall include specific reasons for the
decision and specific references to the pertinent Plan provisions on which the
decision was based. The decision rendered by the Committee shall be binding on
all parties.



ARTICLE 10 — General Provisions



          Section 10.01 No Alienation or Assignment of Benefits. Payments of
benefits under this Plan to any Participant shall not be subject to any claim
of any creditor of such Participant, and, in particular, to the fullest extent
permitted by law, all such payments shall be free from attachment,
garnishments, trustee’s process, or any other legal or equitable process
available to any creditor of such Participant. No Participant shall have the
right to alienate, anticipate, commute, pledge, encumber, assign, sell, or
transfer any potential payment of benefits hereunder.



          Section 10.02 No Contract of Employment. Nothing contained herein shall
be construed as conferring upon a Participant the right to continue in the
employ of the Company.



          Section 10.03 Other Retirement Plans. Any compensation deferred under
this Plan shall not be deemed salary or other compensation to a Participant for
the purpose of computing benefits to which he may be entitled under any benefit
plan of the Company, provided it is permissible to do so under the plan.



          Section 10.04 Heirs, Assigns and Successors. This agreement is binding
upon and inures to the benefit of the Company, its successors and assigns and
the Participant and his heirs, executors, administrators and legal
representatives.



          Section 10.05 Amendment or Termination. The Board retains the right to
amend this Plan, with retroactive effect if necessary, or terminate this Plan,
at any time, as determined by the Board.



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          Section 10.06 Severability of Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and this Plan shall be construed
and enforced as if such provisions had not been included.



           Section 10.07 Controlling Law. This Plan shall be construed in
accordance with and governed by the laws of the State of Maryland.



          Section 10.08 Grammatical Construction. Pronouns or other words
indicating the masculine gender shall be deemed to include the feminine gender,
and singular words shall include the plural in all cases where such meaning
would be appropriate.



          Section 10.9 Unauthorized Representations. The Company shall not be
bound by the representations of any person, other than the Committee, regarding
eligibility for benefits under the Plan or any other matter relating to the
Plan.



          Section 10.10 Designation of Death Benefit Beneficiary. Each Participant
may designate any person or persons (primarily or contingently) as his
Beneficiary to whom his Plan benefits shall be paid if he dies prior to receipt
of all such benefits. Such Beneficiary designation shall be effective only if
in writing on forms provided by the Committee and if such form is delivered to
the Committee during the lifetime of the Participant. If a Participant has a
spouse, an election to name a primary designated Beneficiary other than or in
addition to the spouse shall be ineffective unless the Participant’s spouse
consents in writing on form provided by the Committee to such designation.



          Section 10.11 Effect of Change of Control. Notwithstanding the
provisions of Section 6.04 above, following a Change in Control (as defined in
the 1994 Ciena Corporation Incentive Stock Option Plan, as amended), in no
event may the Company amend the Plan in any manner that adversely affects the
benefits under the Plan or to remove the trustee of the trust established
pursuant to Section 1.19 above.



          IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officers who have set their hands and affixed the corporate
seal hereto as of this 20th day of April, 1998 effective the day first above
written.




	 	 	 	 	 	 	 
	
ATTEST:
	 	CIENA CORPORATION
	 	 	 	 	 	 	 
	By:	 	
/s/ Eric Georgatos (Seal)
	 	By:
	 	/s/ Patrick H. Nettles (Seal)
	 	 	


	 	 	 	

	 	 	
Eric Georgatos, Secretary
	 	 	 	Patrick H. Nettles, President



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          Each of the undersigned acknowledges receipt of a copy of this Plan,
recognizes and agrees to his participation herein, and agrees to be bound by
the terms hereof.



Witness as to all



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