<PAGE>

    As filed with the Securities and Exchange Commission on August 6, 1999
                                                     Registration No. 333-

-------------------------------------------------------------------------------
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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                ---------------
                                   FORM S-1
                         REGISTRATION STATEMENT UNDER
                          THE SECURITIES ACT OF 1933
                                ---------------
                            SYCAMORE NETWORKS, INC.
            (Exact name of registrant as specified in its charter)
                                ---------------
        Delaware                  3576                  04-3410558
     (State of other        (Primary Standard        (I.R.S. Employer
     jurisdiction of           Industrial         Identification Number)
    incorporation or       Classification Code
      organization)              Number)

                                ---------------
                              10 Elizabeth Drive
                             Chelmsford, MA 01824
                                (978) 250-2900
    (Address Including Zip Code, and Telephone Number, Including Area Code,
                 of Registrant's Principal Executive Offices)

                                ---------------
                                Daniel E. Smith
                     President and Chief Executive Officer
                            Sycamore Networks, Inc.
                              10 Elizabeth Drive
                             Chelmsford, MA 01824
                                (978) 250-2900
                (Name, Address Including Zip Code and Telephone
              Number, Including Area Code, of Agent for Service)
                                ---------------
                                  Copies to:
  MARK G. BORDEN, ESQ.    MICHAEL D. HOCHBERG,      WILLIAM B. ASHER, JR.,
 JEFFREY A. STEIN, ESQ.           ESQ.                       ESQ.
    HALE AND DORR LLP        GENERAL COUNSEL           TESTA, HURWITZ &
     60 State Street     SYCAMORE NETWORKS, INC.        THIBEAULT, LLP
    Boston, MA 02109       10 Elizabeth Drive           125 High Street
  Telephone: (617) 526-   Chelmsford, MA 01824         Boston, MA 02110
          6000            Telephone: (978) 250-      Telephone: (617) 248-
Telecopy: (617) 526-5000          2900                       7000
                          Telecopy: (978) 256-     Telecopy: (617) 248-7100
                                  3434
                                ---------------
   Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date hereof.
   If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box.  [_]
   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.  [_]
   If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering.  [_]
   If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering.  [_]
   If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [_]

                                ---------------

                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
    Title of each class of          Proposed Maximum            Amount of
 securities to be registered   Aggregate Offering Price(1) Registration Fee(2)
------------------------------------------------------------------------------
<S>                            <C>                         <C>
Common Stock, $.001 par value
 per share....................        $115,000,000               $31,970
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
    registration fee pursuant to Rule 457(o) under the Securities Act of 1933,
    as amended.
(2) Calculated pursuant to Rule 457(a) based on an estimate of the proposed
    maximum aggregate offering price.

   The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we are not soliciting offers to buy these  +
+securities in any state where the offer or sale is not permitted.             +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)
Issued     , 1999

                                       Shares


                                  COMMON STOCK

                                  -----------

Sycamore Networks, Inc. is offering     shares of its common stock. This is our
initial public offering and no public market currently exists for our shares.
We anticipate that the initial public offering price will be between $    and
$    per share.

                                  -----------

We have applied to list our common stock on the Nasdaq National Market under
the symbol "SCMR."

                                  -----------

Investing in our common stock involves risks. See "Risk Factors" beginning on
page 6.

                                  -----------

                               PRICE $    A SHARE

                                  -----------

<TABLE>
<CAPTION>
                                                       Underwriting
                                            Price to   Discounts and Proceeds to
                                             Public     Commissions   Sycamore
                                            --------   ------------- -----------
<S>                                        <C>         <C>           <C>
Per Share.................................    $            $            $
Total..................................... $            $            $
</TABLE>

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Sycamore Networks, Inc. has granted the underwriters the right to purchase up
to an additional      shares of common stock to cover over-allotments. Morgan
Stanley & Co. Incorporated expects to deliver the shares to purchasers on
     , 1999.

                                  -----------

MORGAN STANLEY DEAN WITTER

        LEHMAN BROTHERS

                 J.P. MORGAN & CO.

                                                           DAIN RAUSCHER WESSELS
                              a division of Dain Rauscher Incorporated

      , 1999
<PAGE>

                               [gatefold artwork]
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                      Page
                                      ----
<S>                                   <C>
Prospectus Summary..................    4
Risk Factors........................    6
Special Note Regarding Forward-
 Looking Statements.................   16
Use of Proceeds.....................   17
Dividend Policy.....................   17
Capitalization......................   18
Dilution............................   19
Selected Financial Data.............   20
Management's Discussion and Analysis
 of Financial Condition and Results
 of Operations......................   21
</TABLE>
<TABLE>
<CAPTION>
                                   Page
                                   ----
<S>                                <C>
Business.........................   26
Management.......................   36
Certain Transactions.............   43
Principal Stockholders...........   45
Description of Capital Stock.....   46
Shares Eligible for Future Sale..   49
Underwriters.....................   51
Legal Matters....................   53
Experts..........................   53
Where You Can Find More
 Information.....................   53
Index to Financial Statements....  F-1
</TABLE>

   We are a Delaware corporation. Our principal executive offices are located
at 10 Elizabeth Drive, Chelmsford, Massachusetts 01824 and our telephone
number is (978) 250-2900. Our World Wide Web site address is
www.sycamorenet.com. The information in the Web site is not incorporated by
reference into this prospectus. Sycamore Networks, SN 6000, SN 8000,
SilvxSource, SilvxManager, SN 16000 and SilvxONMS are our trademarks. This
prospectus also contains trademarks of other companies.

   You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell shares of common stock
and seeking offers to buy shares of common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.

   Until       , 1999 (25 days after the date of this prospectus), all dealers
that buy, sell or trade the common stock, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.

   Except as set forth in the financial statements or as otherwise indicated,
all information in this prospectus:

  . assumes no exercise of the underwriters' over-allotment option;

  . reflects the conversion of all outstanding shares of our redeemable
    convertible preferred stock into 15,761,075 shares of common stock upon
    the closing of the offering; and

  . reflects the filing, as of the closing of the offering, of our amended
    and restated certificate of incorporation and the adoption of our amended
    and restated by-laws implementing certain provisions described below
    under "Description of Capital Stock--Delaware Law and Certain Charter and
    By-Law Provisions; Anti-Takeover Effects."

   Sycamore's fiscal year ends on July 31 of the referenced year. For example,
references to the "1999 fiscal year" mean the fiscal year ending on July 31,
1999.

                                       3
<PAGE>

                               PROSPECTUS SUMMARY

   The following summary is qualified by the more detailed information and
financial statements and notes appearing elsewhere in this prospectus.

                            SYCAMORE NETWORKS, INC.

   We develop and market software-based optical networking products that enable
network service providers to quickly and cost effectively provide bandwidth and
create new high speed data services. Our target customers are competitive local
exchange carriers, incumbent local exchange carriers, long distance carriers,
Internet service providers, cable operators, foreign telephone companies and
wholesale carriers, all of which we refer to as "service providers". We believe
that the existing public network is unable to meet the demands of high speed
data applications that are driving network growth. As data traffic on the
public network continues to grow at rates that surpass available network
capacity, we believe that service providers will require new solutions to
relieve network congestion and create new data services.

   We call our products "intelligent optical networking products" because they
are designed to transmit and manage data directly on wave lengths of light,
"wavelengths", for transmission over fiber optic cable. This will improve the
efficiency of the network, because data can be moved across the network and
managed entirely in the optical domain. In contrast, the existing SONET/SDH
architecture requires optical signals travelling across the network to be
converted into electrical signals at each network transit point, and then re-
converted into optical signals for transport to the next transit point. The
multiple conversions required in a SONET/SDH network increase network
complexity and cost. Our products are based on a common software architecture
that we believe has a number of significant benefits, including accelerating
our release of new products and enabling our customers to upgrade their
networks without significant new capital equipment or retraining.

   Our products are designed to address the current and future needs of service
providers by offering an end-to-end optical networking solution that provides
the following benefits:

  . Improves Network Flexibility and Scalability. Our software-based
    equipment is designed to allow service providers to improve the
    flexibility and scalability of their networks without the long lead times
    and large initial capital investment presently required for a network
    buildout.

  . Enables Rapid Service Delivery. Our products are designed to shorten the
    time it takes for service providers to increase bandwidth and provide
    services.

  . Facilitates Introduction of New Data Services and Creation of New Revenue
    Opportunities for Service Providers. The software-based intelligence of
    our products allows us to rapidly introduce new features into our
    products, which can in turn be offered as new services by service
    providers to their customers.

  . Protects Existing Investments. Our products are designed to enable
    service providers to increase the functionality and improve the
    performance of their networks without sacrificing their existing
    infrastructure investments in SONET/SDH equipment.

   We market our products through a direct sales force and intend to establish
relationships with selected original equipment manufacturers and other
marketing partners, both domestically and internationally. In addition, we work
collaboratively with our customers and prospective customers to help them
identify and create new high speed data services that they can offer to their
customers. We believe that this assistance is an integral aspect of our sales
and marketing efforts.


                                       4
<PAGE>

                              RECENT DEVELOPMENTS

   We began shipping our SN 6000 Intelligent Optical Transport product to one
customer in the fourth quarter of fiscal 1999. Our initial customer for this
product is Williams Communications, Inc. We expect to recognize revenue of
approximately $11.3 million in the fourth quarter of fiscal 1999 in connection
with these shipments.

                                  THE OFFERING

<TABLE>
<S>                              <C>
Common stock offered............      shares
Common stock to be outstanding        shares
after this offering.............
Use of proceeds................. We intend to use the net proceeds from
                                 this offering for general corporate purposes,
                                 including working capital and capital
                                 expenditures, and the repayment of certain
                                 indebtedness. See "Use of Proceeds."
Proposed Nasdaq National Market  "SCMR"
symbol..........................
</TABLE>

   The above information is based upon the number of shares of common stock
outstanding as of June 30, 1999 and excludes 1,837,700 shares of common stock
issuable upon exercise of outstanding options at an average exercise price of
$.81 per share and 6,381,300 shares of common stock reserved for issuance under
our stock plan as of June 30, 1999.

                             SUMMARY FINANCIAL DATA
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                         Period from inception
                                          (February 17, 1998)  Nine months ended
                                         through July 31, 1998    May 1, 1999
                                         --------------------- -----------------
Statement of Operations Data:
<S>                                      <C>                   <C>
Revenue................................          $  --             $     --
Total operating expenses...............            793               10,591
Loss from operations...................           (793)             (10,591)
Net loss...............................           (693)             (10,103)
Pro forma basic and diluted net loss
 per share (unaudited).................          $(.11)            $  (1.08)
Weighted average shares used in comput-
 ing pro forma basic and diluted net
 loss per share (unaudited)............          6,252                9,351
</TABLE>

   Weighted average shares used in computing pro forma basic and diluted net
loss per share shown above exclude unvested shares of common stock subject to
repurchase rights, which totalled 1,752,000 and 4,230,000 for the period from
inception (February 17, 1998) through July 31, 1998 and the nine months ended
May 1, 1999, respectively. The pro forma as adjusted column in the balance
sheet data below gives effect to the conversion of our outstanding preferred
stock into common stock upon the closing of this offering and the sale of the
    shares of common stock in this offering at an assumed initial public
offering price of $  , after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us.

<TABLE>
<CAPTION>
                                                            As of May 1, 1999
                                                          ----------------------
                                                                      Pro forma
                                                           Actual    as adjusted
                                                          ---------  -----------
<S>                                                       <C>        <C>
Balance Sheet Data:
Cash, cash equivalents and marketable securities......... $  26,337     $
Working capital..........................................    26,726
Total assets.............................................    37,502
Long-term obligations, less current portion..............       666
Redeemable convertible preferred stock...................    40,771
Total stockholders' equity (deficit)..................... $ (10,113)    $
</TABLE>

                                       5
<PAGE>

                                 RISK FACTORS

   This offering and an investment in our common stock involve a high degree
of risk. You should consider carefully the risks described below before you
decide to buy our common stock. If any of the following risks actually occur,
our business, financial condition or results of operations would likely
suffer. In such case, the trading price of our common stock could fall, and
you may lose all or part of the money you paid to buy our common stock.

Risks Related to Our Business

   We Expect that Substantially All Of Our Revenues Will Be Generated From A
Limited Number Of Customers

   We currently have only one customer, Williams Communications. Williams is
not contractually committed to purchase any minimum quantities of products
from us. We expect that in the foreseeable future substantially all of our
revenues will continue to depend on sales of our intelligent optical
networking products to Williams and a limited number of potential new
customers. Williams is currently using our SN 6000 product in its internal
network and plans in the future to introduce commercial services based on this
product. We cannot assure you that Williams will introduce commercial services
on a timely basis, if at all, and any delay in such introduction or failure to
introduce such services would seriously harm our revenues, results of
operations and financial condition. The rate at which our current and
prospective customers purchase products from us will depend, in part, on their
success in selling communications services based on these products to their
own customers. Any failure of these customers to purchase products from us for
any reason, including any downturn in the business of these customers, would
seriously harm our business, results of operations and financial condition.

   Our Business Is Difficult To Evaluate Because We Have A Limited Operating
History

   We were founded in February 1998 and shipped our first intelligent optical
networking product in May 1999. We have limited meaningful historical
financial data upon which to base projected revenues and planned operating
expenses and upon which investors may evaluate us and our prospects. In
addition, our operating expenses are largely based on anticipated revenue
trends and a high percentage of our expenses are and will continue to be
fixed. You should consider the risks and difficulties frequently encountered
by companies like ours in a new and rapidly evolving market. Our ability to
sell products, and the level of success, if any, we achieve, depends, among
other things, on the level of demand for intelligent optical networking
products, which is a new and rapidly evolving market.

   Our Failure To Increase Our Revenues Would Prevent Us From Achieving And
Maintaining Profitability

   We have incurred significant losses since inception and expect to continue
to incur losses in the future. As of May 1, 1999, we had an accumulated
deficit of $10.8 million. We have not achieved profitability on a quarterly or
annual basis, and anticipate that we will continue to incur net losses. We
cannot be certain that our revenues will grow or that we will generate
sufficient revenues to achieve or sustain profitability. We have large fixed
expenses and we expect to continue to incur significant and increasing sales
and marketing, product development, administrative and other expenses. As a
result, we will need to generate significantly higher revenues to achieve and
maintain profitability.

   We Are Entirely Dependent On Our Line Of Intelligent Optical Networking
Products And Our Future Revenue Depends On Their Commercial Success

   Our future growth depends on the commercial success of our line of
intelligent optical networking products. To date, our SN 6000 Intelligent
Optical Transport product is the only product that has been shipped to a

                                       6
<PAGE>

customer. We intend to develop and introduce new products and enhancements to
existing products in the future. We cannot assure you that we will be
successful in completing the development or introduction of these products.
Failure of our current or planned products to operate as expected could delay
or prevent their adoption. If our target customers do not adopt, purchase and
successfully deploy our current and planned products, our revenues will not
grow significantly and our business, results of operations and financial
condition will be seriously harmed.

   Because Our Products Are Complex And Are Deployed In Complex Environments,
They May Have Errors Or Defects That We Find Only After Full Deployment, Which
Could Seriously Harm Our Business

   Our intelligent optical networking products are complex and are designed to
be deployed in large and complex networks. Because of the nature of the
products, they can only be fully tested when completely deployed in very large
networks with high amounts of traffic. To date, the SN 6000 is the only
product that has been shipped to a customer, and that customer is currently
using our product solely in its internal network. Our customers may discover
errors or defects in the hardware or the software, or the product may not
operate as expected, after it has been fully deployed. If we are unable to fix
errors or other problems that may be identified in full deployment, we could
experience:

  . loss of or delay in revenues and loss of market share;

  . loss of customers;

  . failure to attract new customers or achieve market acceptance;

  . diversion of development resources;

  . increased service and warranty costs;

  . legal actions by our customers; and

  . increased insurance costs.

   The Long And Variable Sales Cycles For Our Products May Cause Revenues And
Operating Results To Vary Significantly From Quarter To Quarter

   A customer's decision to purchase our intelligent optical networking
products involves a significant commitment of its resources and a lengthy
evaluation, testing and product qualification process. As a result, our sales
cycle is likely to be lengthy. Throughout the sales cycle, we spend
considerable time and expense educating and providing information to
prospective customers about the use and features of our products. Even after
making a decision to purchase, we believe that our customers will deploy the
products slowly and deliberately. Timing of deployment can vary widely and
depends on the skills of the customer, the size of the network deployment, the
complexity of the customer's network environment and the degree of hardware
and software configuration necessary. Customers with significant or complex
networks usually expand their networks in large increments on a periodic
basis. Accordingly, we may receive purchase orders for significant dollar
amounts on an irregular and unpredictable basis. Because of our limited
operating history and the nature of our business, we cannot predict these
sales and deployment cycles. The long sales cycles, as well as our expectation
that customers will tend to sporadically place large orders with short lead
times, may cause our revenues and results of operations to vary significantly
and unexpectedly from quarter to quarter.

   We Depend On The Growth Of Our Customer Base

   Our future success will depend on the growth of our customer base. The
growth of our customer base could be adversely affected by:

  . customer unwillingness to implement our new optical networking
    architecture;

                                       7
<PAGE>

  . any delays or difficulties that we may incur in completing the
    development and introduction of our planned products or product
    enhancements;

  . new product introductions by our competitors;

  . any failure of our products to perform as expected; or

  . any difficulty we may incur in meeting customers' delivery requirements.

   The Intelligent Optical Networking Market Is New And Our Business Will
Suffer If It Does Not Develop As We Expect

   The market for intelligent optical networking products is new. We cannot be
certain that a viable market for our products will develop or be sustainable.
If this market does not develop, or develops more slowly than we expect, our
business, results of operations and financial condition would be seriously
harmed.

   Our Business Will Suffer If We Do Not Respond Rapidly To Technological
Changes

   The market for intelligent optical networking products is likely to be
characterized by rapid technological change, frequent new product
introductions and changes in customer requirements. We may be unable to
respond quickly or effectively to these developments. We may experience
design, manufacturing, marketing and other difficulties that could delay or
prevent our development, introduction or marketing of new products and
enhancements. The introduction of new products by competitors, market
acceptance of products based on new or alternative technologies or the
emergence of new industry standards, could render our existing or future
products obsolete, which would materially adversely affect our business,
results of operations and financial condition.

   In developing our products, we have made, and will continue to make,
assumptions about the standards that may be adopted by our customers and
competitors. If the standards adopted are different from those which we have
chosen to support, market acceptance of our products may be significantly
reduced or delayed and our business will be seriously harmed. In addition, the
introduction of products incorporating new technologies and the emergence of
new industry standards could render our existing products obsolete.

   In addition, in order to introduce products incorporating new technologies
and new industry standards, we must be able to gain access to the latest
technologies of our customers, our suppliers and other network vendors. Any
failure to gain access to the latest technologies could seriously harm our
business and operating results.

   Our Business Will Suffer If Our Products Do Not Anticipate And Meet
Specific Customer Requirements

   Our current and prospective customers may require product features and
capabilities that our current products do not have. To achieve market
acceptance for our products, we must effectively and timely anticipate and
adapt to customer requirements and offer products and services that meet
customer demands. Our failure to develop products or offer services that
satisfy customer requirements would seriously harm our business, results of
operations and financial condition.

   We intend to continue to invest in product and technology development. The
development of new or enhanced products is a complex and uncertain process
that requires the accurate anticipation of technological and market trends. We
may experience design, manufacturing, marketing and other difficulties that
could delay or prevent the development, introduction or marketing of new
products and enhancements. The introduction of new or enhanced products also
requires that we manage the transition from older products in order to
minimize disruption in customer ordering patterns and ensure that adequate
supplies of new products can be delivered to meet anticipated customer demand.
Our inability to effectively manage this transition would materially adversely
affect our business, results of operations and financial condition.

                                       8
<PAGE>

   We Face Intense Competition

   Competition in the public network infrastructure market is intense. This
market has historically been dominated by large companies, such as Ciena
Corporation, Lucent Technologies and Nortel Networks. We may face competition
from other large telecommunications companies who may enter our market. In
addition, a number of private companies have announced plans for new products
to address the same network problems which our products address. Many of our
current and potential competitors have significantly greater selling and
marketing, technical, manufacturing, financial, and other resources, including
vendor-sponsored financing programs. Moreover, our competitors may foresee the
course of market developments more accurately than we do and could in the
future develop new technologies that compete with our products or even render
our products obsolete. Due to the rapidly evolving markets in which we
compete, additional competitors with significant market presence and financial
resources may enter those markets, thereby further intensifying competition.

   In order to compete effectively, we must deliver products that:

  . provide extremely high network reliability;

  . scale easily and efficiently with minimum disruption to the network;

  . interoperate with existing network designs and equipment vendors;

  . reduce the complexity of the network by decreasing the need for
    overlapping equipment;

  . provide effective network management; and

  . provide a cost-effective solution for service providers.

   In addition, we believe that a knowledge of the infrastructure requirements
applicable to service providers, experience in working with service providers
to develop new services for their customers, and an ability to provide vendor-
sponsored financing are important competitive factors in our market. We do not
currently have the ability to provide vendor-sponsored financing and this may
influence the purchasing decision of prospective customers, who may decide to
purchase products from one of our competitors who offers such financing.

   If we are unable to compete successfully against our current and future
competitors, we could experience price reductions, order cancellations and
reduced gross margins, any one of which could materially and adversely affect
our business, results of operations and financial condition.

   Our Business Will Suffer If We Do Not Expand Our Sales Organization And Our
Customer Service And Support Operations

   Our products and services require a sophisticated sales effort targeted at
a limited number of key individuals within our prospective customers'
organizations. This effort requires specialized sales personnel and consulting
engineers. We are in the process of building our direct sales force and plan
to hire additional qualified sales personnel and consulting engineers.
Competition for these individuals is intense, and we might not be able to hire
the kind and number of sales personnel and consulting engineers required for
us to be successful. In addition, we believe that our future success is
dependent upon our ability to establish successful relationships with a
variety of distribution partners. If we are unable to expand our direct sales
operations, or establish and expand an indirect sales channel, we may not be
able to increase market awareness or sales of our products, which may prevent
us from achieving and maintaining profitability.

   We currently have a small customer service and support organization and
will need to increase our staff to support new customers. The support of our
products requires highly trained customer service and support personnel.
Hiring customer service and support personnel is very competitive in our
industry because there are a limited number of people available with the
necessary technical skills and understanding of our market. Once we hire them,
they may require extensive training in our intelligent optical networking
products. If we are unable to

                                       9
<PAGE>

expand our customer service and support organization and train them rapidly,
we may not be able to increase sales of our products, which would seriously
harm our business.

   We Depend Upon Contract Manufacturers And Any Disruption In These
Relationships May Cause Us To Fail To Meet The Demands Of Our Customers And
Damage Our Customer Relationships

   We rely on a small number of contract manufacturers to manufacture our
products in accordance with our specifications, and to fill orders on a timely
basis. Celestica, Inc. provides comprehensive manufacturing services,
including assembly, test, control and shipment to our customers, and procures
material on our behalf. We may not be able to effectively manage our
relationship with Celestica, and it may not meet our future requirements for
timely delivery. Each of our contract manufacturers also builds products for
other companies, and we cannot be certain that they will always have
sufficient quantities of inventory available to fill orders placed by our
customers, or that they will allocate their internal resources to fill these
orders on a timely basis. We do not have long-term supply contracts with these
manufacturers. We do not have internal manufacturing capabilities. Qualifying
a new contract manufacturer and commencing volume production is expensive and
time consuming and could result in a significant interruption in the supply of
our products. If we are required or choose to change contract manufacturers,
we may lose revenue and damage our customer relationships.

   We Rely On Single Sources For Supply Of Certain Components And Our Business
May Be Seriously Harmed If Our Supply Of Any Of These Components Is Disrupted

   We currently purchase several key components, including commercial digital
signal processors, RISC processors, field programmable gate arrays, SONET
transceivers and erbium doped fiber amplifiers, from single or limited
sources. We purchase each of these components on a purchase order basis and
have no long-term contracts for these components. Although we believe that
there are alternative sources for each of these components, in the event of a
disruption in supply, we may not be able to develop an alternate source in a
timely manner or at favorable prices. Such a failure could hurt our ability to
deliver our products to our customers and negatively affect our operating
margins. In addition, our reliance on our suppliers exposes us to potential
supplier production difficulties or quality variations. Any such disruption in
supply would seriously impact present and future sales and revenue, which
would, in turn, seriously harm our business.

   The Unpredictability Of Our Quarterly Results May Adversely Affect The
Trading Price Of Our Common Stock

   Our revenues and operating results will vary significantly from quarter to
quarter due to a number of factors, many of which are outside of our control
and any of which may cause our stock price to fluctuate. The primary factors
that may affect us include the following:

  . fluctuation in demand for intelligent optical networking products;

  . the timing and size of sales of our products;

  . the length and variability of the sales cycle for our products;

  . the timing of recognizing revenue and deferred revenue;

  . new product introductions and enhancements by our competitors and
    ourselves;

  . changes in our pricing policies or the pricing policies of our
    competitors;

  . our ability to develop, introduce and ship new products and product
    enhancements that meet customer requirements in a timely manner;

  . our ability to obtain sufficient supplies of sole or limited source
    components;

  . increases in the prices of the components we purchase;

                                      10
<PAGE>

  . our ability to attain and maintain production volumes and quality levels
    for our products;

  . the timing and level of prototype expenses;

  . costs related to acquisitions of technology or businesses; and

  . general economic conditions as well as those specific to the
    telecommunications, Internet and related industries.

   We plan to increase significantly our operating expenses to fund greater
levels of research and development, expand our sales and marketing operations,
broaden our customer support capabilities and develop new distribution
channels. We also plan to expand our general and administrative capabilities
to address the increased reporting and other administrative demands which will
result from this offering and the increasing size of our business. Our
operating expenses are largely based on anticipated organizational growth and
revenue trends and a high percentage of our expenses are, and will continue to
be, fixed. As a result, a delay in generating or recognizing revenue for the
reasons set forth above, or for any other reason, could cause significant
variations in our operating results from quarter to quarter and could result
in substantial operating losses.

   Due to the foregoing factors, we believe that quarter-to-quarter
comparisons of our operating results are not a good indication of our future
performance. You should not rely on our results or growth for one quarter as
any indication of our future performance. It is likely that in some future
quarters, our operating results may be below the expectations of public market
analysts and investors. In this event, the price of our common stock will
probably decrease.

   If Our Products Do Not Interoperate With Our Customers' Networks,
Installations Will Be Delayed Or Cancelled And Could Result In Substantial
Product Returns, Which Could Seriously Harm Our Business

   Many of our customers will require that our products be designed to
interface with their existing networks, each of which may have different
specifications and utilize multiple protocol standards. Our customers'
networks contain multiple generations of products that have been added over
time as these networks have grown and evolved. Our products must interoperate
with all of the products within these networks as well as future products in
order to meet our customers' requirements. The requirement that we modify
product design in order to achieve a sale may result in a longer sales cycle,
increased research and development expense, and reduced margins on our
products. If we find errors in the existing software used in our customers'
networks, we must modify our products to fix or overcome these errors so that
our products will interoperate and scale with the existing software and
hardware. If our products do not interoperate with those of our customers'
networks, installations could be delayed, orders for our products could be
cancelled or our products could be returned. This would also seriously harm
our reputation, all of which could seriously harm our business and prospects.

   Undetected Software Or Hardware Errors And Problems Arising From Use Of Our
Products In Conjunction With Other Vendors' Products Could Have A Material
Adverse Effect On Us

   Networking products frequently contain undetected software or hardware
errors when first introduced or as new versions are released. We expect that
errors will be found from time to time in new or enhanced products after we
begin commercial shipments. In addition, service providers typically use our
products in conjunction with products from other vendors. As a result, when
problems occur, it may be difficult to identify the source of the problem.
These problems may cause us to incur significant warranty, support and repair
costs, divert the attention of our engineering personnel from our product
development efforts and cause significant customer relations problems. The
occurrence of these problems could result in the delay or loss of market
acceptance of our products and would likely have a material adverse effect on
our business, results of operations and financial condition. Defects,
integration issues or other performance problems in our products could result
in financial or other damages to our customers or could damage market
acceptance for our products. Our customers could also seek damages for losses
from us, which, if they were successful, could have a material adverse effect
on our business, results of operations and financial condition. A product
liability claim brought against us, even if unsuccessful, would likely be time
consuming and costly.

                                      11
<PAGE>

   Our Failure To Establish And Maintain Key Customer Relationships May Result
In Delays In Introducing New Products Or Cause Customers To Forego Purchasing
Our Products

   Our future success will also depend upon our ability to develop and manage
key customer relationships in order to introduce a variety of new products and
product enhancements that address the increasingly sophisticated needs of our
customers. Our failure to establish and maintain these customer relationships
may adversely affect our ability to develop new products and product
enhancements. In addition, we may experience delays in releasing new products
and product enhancements in the future. Material delays in introducing new
products and enhancements or our inability to introduce competitive new
products may cause customers to forego purchases of our products and purchase
those of our competitors, which could seriously harm our business.

   Our Business Will Suffer If We Fail To Properly Manage Our Growth

   We have expanded our operations rapidly since our inception. We continue to
increase the scope of our operations and have grown our headcount
substantially. For example, at January 31, 1999, we had a total of 48
employees and at July 31, 1999, we had a total of 148 employees. In addition,
we plan to continue to hire a significant number of employees this year. Our
growth has placed, and our anticipated growth will continue to place, a
significant strain on our management systems and resources. Our ability to
successfully offer our products and implement our business plan in a rapidly
evolving market requires an effective planning and management process. We
expect that we will need to continue to improve our financial, managerial and
manufacturing controls, reporting systems and procedures, and will need to
continue to expand, train and manage our work force worldwide. We may not be
able to implement adequate control systems in an efficient and timely manner.
Competition for highly skilled personnel is intense, especially in the New
England area. We may fail to attract, assimilate or retain qualified personnel
to fulfill our current or future needs. Our planned rapid growth places a
significant demand on management and financial and operational resources. In
order to grow and achieve future success, we must:

  . retain existing personnel;

  . hire, train, manage and retain additional qualified personnel;

  . effectively manage multiple relationships with our customers, suppliers
    and other third parties; and

  . implement adequate operational controls, reporting systems and
    procedures.

   Failure to do so would have a materially adverse effect on our business,
results of operations and financial condition.

   We Depend On Our Key Personnel To Manage Our Business Effectively In A
Rapidly Changing Market And If We Are Unable To Retain Our Key Employees, Our
Ability To Compete Could Be Harmed

   Our future success depends upon the continued services of our executive
officers and other key engineering, sales, marketing and support personnel,
who have critical industry experience and relationships that we rely on to
implement our business plan. None of our officers or key employees is bound by
an employment agreement for any specific term. We do not have "key person"
life insurance policies covering any of our employees. The loss of the
services of any of our key employees could delay the development and
introduction of, and negatively impact our ability to sell, our products.

   If We Become Subject To Unfair Hiring Claims We Could Incur Substantial
Costs In Defending Ourselves

   Companies in our industry whose employees accept positions with competitors
frequently claim that their competitors have engaged in unfair hiring
practices. We cannot assure you that we will not receive claims of this kind
in the future as we seek to hire qualified personnel or that those claims will
not result in material litigation.

                                      12
<PAGE>

We could incur substantial costs in defending ourselves or our employees
against such claims, regardless of their merits. In addition, defending
ourselves from such claims could divert the attention of our management away
from our operations. One of our non-officer sales employees has been sued by a
former employer which has alleged, among other things, that the employee
improperly disclosed confidential information of the former employer regarding
its business dealings with our customer. Although we are not a party to the
lawsuit, we have chosen to assume the costs of defending this lawsuit.

   Our Business Will Be Adversely Affected If We Are Unable To Protect Our
Intellectual Property Rights From Third-Party Challenges

   We rely on a combination of patent, copyright, trademark and trade secret
laws and restrictions on disclosure to protect our intellectual property
rights. We also enter into confidentiality or license agreements with our
employees, consultants and corporate partners, and control access to and
distribution of our software, documentation and other proprietary information.
Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy or otherwise obtain and use our products or technology.
Monitoring unauthorized use of our products is difficult and we cannot be
certain that the steps we have taken will prevent unauthorized use of our
technology, particularly in foreign countries where the laws may not protect
our proprietary rights as fully as in the United States.

   If Necessary Licenses Of Third-Party Technology Are Not Available To Us Or
Are Very Expensive Our Business Will Be Seriously Harmed

   From time to time we may be required to license technology from third
parties to develop new products or product enhancements. We cannot assure you
that third party licenses will be available to us on commercially reasonable
terms, if at all. The inability to obtain any third-party license required to
develop new products and product enhancements could require us to obtain
substitute technology of lower quality or performance standards or at greater
cost, either of which could seriously harm our business, results of operations
and financial condition.

   We Could Become Subject To Litigation Regarding Intellectual Property
Rights Which Could Seriously Harm Our Business

   In recent years, there has been significant litigation in the United States
involving patents and other intellectual property rights. Although we have not
been involved in any intellectual property litigation, we may be a party to
litigation in the future to protect our intellectual property or as a result
of an allegation that we infringe others' intellectual property. Any parties
asserting that our products infringe upon their proprietary rights would force
us to defend ourselves and possibly our customers or manufacturers against the
alleged infringement. These claims and any resulting lawsuit, if successful,
could subject us to significant liability for damages and invalidation of our
proprietary rights. These lawsuits, regardless of their success, would likely
be time-consuming and expensive to resolve and would divert management time
and attention. Any potential intellectual property litigation also could force
us to do one or more of the following:

  . stop selling, incorporating or using our products that use the challenged
    intellectual property;

  . obtain from the owner of the infringed intellectual property right a
    license to sell or use the relevant technology, which license may not be
    available on reasonable terms, or at all; or

  . redesign those products that use such technology.

   If we are forced to take any of the foregoing actions, our business may be
seriously harmed.

   We May Face Risks Associated With Our International Expansion That Could
Seriously Harm Our Financial Condition And Results Of Operations

   We intend to expand into international markets. This expansion will require
significant management attention and financial resources to develop
successfully direct and indirect international sales and support channels. We
may not be able to develop international market demand for our products.

                                      13
<PAGE>

   We have limited experience in marketing and distributing our products
internationally and to do so, we expect that we will need to develop versions
of our products that comply with local standards. In addition, international
operations are subject to other inherent risks, including:

  . greater difficulty in accounts receivable collection and longer
    collection periods;

  . difficulties and costs of staffing and managing foreign operations;

  . the impact of recessions in economies outside the United States;

  . unexpected changes in regulatory requirements;

  . certification requirements;

  . currency fluctuations;

  . reduced protection for intellectual property rights in some countries;

  . potentially adverse tax consequences; and

  . political and economic instability.

   We Face A Number Of Unknown Risks Associated With Year 2000 Problems

   The year 2000 computer issue creates a variety of risks for us. The year
2000 computer problem refers to the potential for system and processing
failures of date-related data as a result of computer-controlled systems using
two digits rather than four to define the applicable year. For example,
computer programs that have time-sensitive software may recognize a date
represented as "00" as the year 1900 rather than the year 2000. This could
result in a system failure or miscalculations causing disruptions of
operations, including among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.
The risks involve:

  . potential warranty or other claims by our customers;

  . errors in systems we use to run our business;

  . errors in systems used by our suppliers;

  . errors in systems used by our customers; and

  . potential reduced spending by other companies on intelligent optical
    network products as a result of significant spending on year 2000
    remediation.

   We have designed our products for use in the year 2000 and beyond and
believe they are year 2000 compliant. However, our products are generally
integrated into larger networks involving sophisticated hardware and software
products supplied by other vendors. Each of our customers' networks involves
different combinations of third party products. We cannot evaluate whether all
of their products are year 2000 compliant. We may face claims based on year
2000 problems in other companies' products or based on issues arising from the
integration of multiple products within the overall network. Although no year
2000 claims have been made against us, we may in the future be required to
defend our products in legal proceedings which could be expensive regardless
of the merits of these claims.

   If our suppliers, vendors, major distributors, partners, customers and
service providers fail to correct their year 2000 problems, these failures
could result in an interruption in, or a failure of, our normal business
activities or operations. If a year 2000 problem occurs, it may be difficult
to determine which party's products have caused the problem. These failures
could interrupt our operations and damage our relationships with our
customers. Due to the general uncertainty inherent in the year 2000 problem
resulting from the readiness of third-party suppliers and vendors, we are
unable to determine at this time whether third party year 2000 failures could
harm our business and our financial results.

                                      14
<PAGE>

   Our current and prospective customers' purchasing plans could be affected
by year 2000 issues if they need to expend significant resources to fix their
existing systems to become year 2000 compliant. This situation may reduce
funds available to purchase our products. In addition, customers may wait to
purchase our products until after the year 2000, which may reduce our revenue.

   Any Acquisitions We Make Could Disrupt Our Business And Seriously Harm Our
Financial Condition

   We intend to consider investments in complementary companies, products or
technologies. While we have no current agreements to do so, we may buy
businesses, products or technologies in the future. In the event of any future
purchases, we could:

  . issue stock that would dilute our current stockholders' percentage
    ownership;

  . incur debt;

  . assume liabilities;

  . incur amortization expenses related to goodwill and other intangible
    assets; or

  . incur large and immediate write-offs.

   Our operation of any acquired business will also involve numerous risks,
including:

  . problems combining the purchased operations, technologies or products;

  . unanticipated costs;

  . diversion of management's attention from our core business;

  . adverse effects on existing business relationships with suppliers and
    customers;

  . risks associated with entering markets in which we have no or limited
    prior experience; and

  . potential loss of key employees, particularly those of the purchased
    organizations.

   We cannot assure you that we will be able to successfully integrate any
businesses, products, technologies or personnel that we might acquire in the
future and any failure to do so could disrupt our business and seriously harm
our financial condition.

Risks Related To The Securities Markets And This Offering

 Our Stock Price May Be Volatile

   Prior to this offering, you could not buy or sell our common stock
publicly. An active public market for our common stock may not develop or be
sustained after this offering. The market for technology stocks has been
extremely volatile. The following factors could cause the market price of our
common stock to fluctuate significantly from the price paid by investors in
this offering:

  . our loss of a major customer;

  . the addition or departure of key personnel;

  . variations in our quarterly operating results;

  . announcements by us or our competitors of significant contracts, new
    products or product enhancements, acquisitions, distribution
    partnerships, joint ventures or capital commitments;

  . changes in financial estimates by securities analysts;

  . our sales of common stock or other securities in the future;

  . changes in market valuations of broadband access technology companies;

  . changes in market valuations of networking and telecommunications
    companies; and

  . fluctuations in stock market prices and volumes.

                                      15
<PAGE>

   In addition, the stock market in general, and the Nasdaq National Market
and technology companies in particular, have experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of such companies. The trading prices of many technology
companies' stocks are at or near historical highs and these trading prices and
multiples are substantially above historical levels. These trading prices and
multiples may not be sustained. These broad market and industry factors may
materially adversely affect the market price of our common stock, regardless
of our actual operating performance. In the past, following periods of
volatility in the market price of a company's securities, securities class-
action litigation has often been instituted against such companies. Such
litigation, if instituted, could result in substantial costs and a diversion
of management's attention and resources, which would materially adversely
affect our business, financial condition and results of operations.

   Management May Apply The Proceeds Of This Offering To Uses That Do Not
Increase Our Profits Or Market Value

   Our management will have considerable discretion in the application of the
net proceeds of this offering, and you will not have the opportunity, as part
of your investment decision, to assess whether the proceeds are being used
appropriately. The net proceeds may be used for corporate purposes that do not
increase our profitability or our market value. Pending application of the
proceeds, they may be placed in investments that do not produce income or that
lose value.

   Insiders Will Continue To Have Substantial Control Over Sycamore After This
Offering And Could Limit Your Ability To Influence The Outcome Of Key
Transactions, Including Changes of Control

   We anticipate that the executive officers, directors and entities
affiliated with them will, in the aggregate, beneficially own approximately
   % of our outstanding common stock following the completion of this
offering. These stockholders, if acting together, would be able to influence
significantly all matters requiring approval by our stockholders, including
the election of directors and the approval of mergers or other business
combination transactions.

   Provisions Of Our Charter Documents And Delaware Law May Have Anti-Takeover
Effects That Could Prevent A Change Of Control

   Provisions of our amended and restated certificate of incorporation,
bylaws, and Delaware law could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our stockholders.

   There May Be Sales Of A Substantial Amount Of Our Common Stock After This
Offering That Could Cause Our Stock Price To Fall

   Our current stockholders hold a substantial number of shares, which they
will be able to sell in the public market in the near future. Sales of a
substantial number of shares of our common stock within a short period of time
after this offering could cause our stock price to fall. In addition, the sale
of these shares could impair our ability to raise capital through the sale of
additional stock.

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

   This prospectus contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by
forward-looking words such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "should," "will" and "would" or similar words. You
should read statements that contain these words carefully because they discuss
our future expectations, contain projections of our future results of
operations or of our financial position or state other "forward-looking"
information. We believe that it is important to communicate our future
expectations to our investors. However, there may be events in the future that
we are not able to accurately predict or control. The factors listed above in
the section captioned "Risk Factors," as well as any cautionary language in
this prospectus, provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the expectations we
describe in our forward-looking statements. Before you invest in our common
stock, you should be aware that the occurrence of the events described in
these risk factors and elsewhere in this prospectus could have a material
adverse effect on our business, results of operations and financial position.

                                      16
<PAGE>

                                USE OF PROCEEDS

   We estimate that our net proceeds from the sale of the     shares of common
stock will be approximately $    assuming an initial public offering price of
$    per share and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. If the over-
allotment option is exercised in full, we estimate that such net proceeds will
be approximately $   .

   The principal purposes of this offering are to establish a public market
for our common stock, to increase our visibility in the marketplace, to
facilitate future access to public capital markets, to provide liquidity to
existing stockholders and to obtain additional working capital.

   We expect to use the net proceeds for general corporate purposes, including
working capital and capital expenditures, and the repayment of outstanding
amounts under our equipment lines of credit. These lines of credit consist of:

  . a $1.0 million equipment line of credit which was converted into a term
    loan as of June 30, 1999 and is required to be repaid in 30 equal monthly
    installments commencing July 1, 1999. This line of credit bears interest
    at the bank's prime rate plus 1.5% per annum and is collateralized by all
    of our assets. At July 31, 1999, an aggregate of $967,000 was outstanding
    under this line of credit; and

  . a $5.0 million equipment line of credit which will be converted into a
    term loan on January 31, 2000 and which will be required to be repaid in
    36 equal monthly installments commencing February 1, 2000. This line of
    credit bears interest at the bank's prime rate plus 1.5% per annum and is
    collateralized by all of our assets. At July 31, 1999, an aggregate of
    $4.2 million was outstanding under this line of credit.

   Although we may use a portion of the net proceeds to acquire businesses,
products or technologies that are complementary to our business, we have no
specific acquisitions planned. Pending such uses, we plan to invest the net
proceeds in investment grade, interest-bearing securities.

                                DIVIDEND POLICY

   We have never paid or declared any cash dividends on our common stock or
other securities and do not anticipate paying cash dividends in the
foreseeable future. Our credit agreement with a commercial bank prohibits the
payment of dividends. Any future determination to pay cash dividends will be
at the discretion of the board of directors and will be dependent upon our
financial condition, results of operations, capital requirements, general
business condition and such other factors as the board of directors may deem
relevant.

                                      17
<PAGE>

                                CAPITALIZATION

   The following table sets forth our capitalization as of May 1, 1999. The
pro forma information gives effect to the conversion of all of our outstanding
redeemable convertible preferred stock. The pro forma as adjusted information
reflects the issuance and sale of the      shares of common stock offered by
us in this offering at an assumed initial public offering price of $   per
share and the application of the estimated net proceeds we expect to receive
from this offering. The outstanding share information excludes: (1) 1,019,000
shares of common stock issuable upon exercise of outstanding options as of May
1, 1999, and (2) 1,487,500 shares of common stock reserved for future issuance
under our 1998 Stock Incentive Plan as of May 1, 1999. This table should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and other financial data included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
                                                      As of May 1, 1999
                                                 ------------------------------
                                                             Pro     Pro forma
                                                  Actual    forma   as adjusted
                                                 --------  -------  -----------
                                                 (in thousands, except share
                                                            data)
                                                         (unaudited)
<S>                                              <C>       <C>      <C>
Long-term debt, less current portion...........  $    666  $   666      $
                                                 --------  -------      ---
Redeemable convertible preferred stock, $.01
 par value; 15,100,000 authorized, 15,068,874
 issued and outstanding, actual; no shares
 issued and outstanding, pro forma and pro
 forma as adjusted.............................    40,771      --
                                                 --------  -------      ---
Stockholders' equity (deficit):
Common stock, $.001 par value; 25,000,000
 shares authorized, 5,444,104 shares issued and
 outstanding, actual; 20,512,978 shares issued
 and outstanding, on a pro forma basis;
                       shares issued and
 outstanding, on a pro forma as adjusted
 basis.........................................         5       20
Additional paid-in capital.....................     5,482   46,238
Accumulated deficit............................   (10,796) (10,796)
Note receivable................................       (17)     (17)
Deferred compensation..........................    (4,787)  (4,787)
                                                 --------  -------      ---
  Total stockholders' equity (deficit).........   (10,113)  30,658
                                                 --------  -------      ---
    Total capitalization.......................  $ 31,324  $31,324      $
                                                 ========  =======      ===
</TABLE>

                                      18
<PAGE>

                                   DILUTION

   Sycamore's pro forma net tangible book value as of May 1, 1999, giving
effect to the conversion of all outstanding shares of redeemable convertible
preferred stock into common stock on the closing of this offering, was
approximately $30.7 million, or $1.49 per share of common stock. Pro forma net
tangible book value per share represents our tangible net worth (tangible
assets less total liabilities) divided by the 20,512,978 shares of common
stock outstanding after giving effect to the conversion of all shares of
redeemable convertible preferred stock into common stock. After giving effect
to the issuance and sale of the shares of common stock offered by Sycamore in
this offering (at an assumed initial public offering price of $    per share)
and the receipt and application of the net proceeds from the sale of these
shares, Sycamore's pro forma net tangible book value at May 1, 1999 would have
been $   , or $    per share. This represents an immediate increase in pro
forma net tangible book value to existing stockholders of $    per share and
an immediate dilution to new investors of $    per share. The following table
illustrates this per share dilution:

<TABLE>
<S>                                                                   <C>  <C>
Assumed initial public offering price per share                            $
  Pro forma net tangible book value per share before this offering... $
  Increase in pro forma net tangible book value per share
   attributable to new investors.....................................
                                                                      ----
Pro forma net tangible book value per share after this offering......
                                                                           ----
Dilution per share to new investors..................................      $
                                                                           ====
</TABLE>

   The following table summarizes on a pro forma basis, giving effect to the
conversion of all outstanding shares of redeemable convertible preferred stock
into common stock on the closing of this offering, as of May 1, 1999, the
difference between the number of shares of common stock purchased from
Sycamore, the total consideration paid to Sycamore, and the average price per
share paid by existing stockholders and by new investors (at an assumed
initial public offering price of $    per share before deduction of estimated
underwriting discounts and commissions and estimated offering expenses payable
by Sycamore):

<TABLE>
<CAPTION>
                                               Shares         Total      Average
                                             Purchased    Consideration   Price
                                           -------------- --------------   Per
                                           Number Percent Amount Percent  Share
                                           ------ ------- ------ ------- -------
<S>                                        <C>    <C>     <C>    <C>     <C>
Existing stockholders.....................              %  $           %  $
New investors.............................
                                            ---    -----   ----   -----
  Total...................................         100.0%  $      100.0%
                                                   =====          =====
</TABLE>

   The table above assumes no exercise of stock options outstanding at May 1,
1999. As of May 1, 1999, there were options outstanding to purchase 1,019,000
shares of common stock at a weighted average exercise price of $.66 per share
and 1,487,500 shares reserved for future grant or award under our 1998 Stock
Incentive Plan. To the extent any of these options are exercised, there will
be further dilution to new investors. To the extent all of such outstanding
options had been exercised as of May 1, 1999, net tangible book value per
share after this offering would be $    and total dilution per share to new
investors would be $   . If the underwriters' over-allotment option is
exercised in full, the number of shares held by new investors will increase to
   shares, or   % of the total number of shares of common stock outstanding
after this offering.

                                      19
<PAGE>

                            SELECTED FINANCIAL DATA

   The following selected financial data should be read in conjunction with
the financial statements and notes thereto and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and other
financial data included elsewhere in this prospectus. The statement of
operations data for the period from inception (February 17, 1998) through July
31, 1998 and the balance sheet data as of July 31, 1998 are derived from the
financial statements of Sycamore audited by PricewaterhouseCoopers LLP,
independent accountants, which are included elsewhere in this prospectus. The
selected financial data as of May 1, 1999 and for the interim period ended May
1, 1999 are unaudited and, in the opinion of management, have been prepared on
the same basis as the audited financials and include all adjustments,
consisting only of normal, recurring adjustments, that Sycamore considers
necessary for a fair presentation of the financial position and the results of
operations for those periods. Operating results for the nine-month period
ended May 1, 1999 are not necessarily indicative of the results that may be
expected for any future period.

<TABLE>
<CAPTION>
                                                      Period from
                                                       inception
                                                     (February 17, Nine months
                                                     1998) through    ended
                                                     July 31, 1998 May 1, 1999
                                                     ------------- -----------
                                                     (in thousands, except per
                                                            share data)
<S>                                                  <C>           <C>
Statement of Operations Data:
Revenue.............................................    $  --       $    --
Operating expenses:
  Manufacturing.....................................       --          1,173
  Research and development..........................       497         6,572
  Sales and marketing...............................        92         1,598
  General and administrative........................       199           752
  Amortization of stock compensation................         5           496
                                                        ------      --------
    Total operating expenses........................       793        10,591
                                                        ------      --------
Loss from operations................................      (793)      (10,591)
Interest income.....................................       100           488
                                                        ------      --------
Net loss............................................    $ (693)     $(10,103)
                                                        ======      ========
Basic and diluted net loss per share(1).............    $(1.66)     $ (15.66)
Weighted average shares used in computing basic and
 diluted net loss per share.........................       417           645
Pro forma basic and diluted net loss per share
 (unaudited)........................................    $ (.11)     $  (1.08)
Weighted average shares used in computing pro forma
 basic and diluted
 net loss per share(2) (unaudited)..................     6,252         9,351

<CAPTION>
                                                         As of        As of
                                                     July 31, 1998 May 1, 1999
                                                     ------------- -----------
                                                          (in thousands)
<S>                                                  <C>           <C>
Balance Sheet Data:
Cash, cash equivalents and marketable securities....    $4,279      $ 26,337
Working capital.....................................     4,341        26,726
Long term debt, less current portion................       --            666
Redeemable convertible preferred stock..............     5,621        40,771
Total stockholders' deficit.........................      (678)      (10,113)
</TABLE>
--------
(1) See note 2 to the notes to the financial statements for a description of
    the computation of basic and diluted net loss per share and the number of
    shares used to compute basic and diluted net loss per share.
(2) Pro forma per share calculations reflect the conversion upon the closing
    of the offering of all outstanding shares of redeemable convertible
    preferred stock into shares of common stock.

                                      20
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

   We develop and market software-based intelligent optical networking
products that allow service providers to address customer requirements for
high-speed data services and bandwidth. From our inception in February 1998
through May 1, 1999, our operating activities consisted primarily of research
and development, product design, development and testing. We also staffed and
trained our administrative, marketing and sales organizations and began sales
and marketing activities. In May 1999, we began shipping our SN 6000 product.
We expect that a significant portion of our future revenue will continue to
come from sales of the SN 6000. While we are developing and plan to introduce
new products and enhancements, we cannot assure you that we will be successful
in these efforts.

   Since our inception, we have incurred significant losses, and as of May 1,
1999, we had an accumulated deficit of $10.8 million. We have not achieved
profitability on a quarterly or an annual basis, and anticipate that we will
continue to incur net losses. We have a lengthy sales cycle for our products
and accordingly we expect to incur sales and other expenses before we realize
the related revenue. We expect to incur significant sales and marketing,
research and development and general and administrative expenses and, as a
result, we will need to generate significant revenues to achieve and maintain
profitability.

   Our policy is to recognize revenue from our product sales upon execution of
a contract and the completion of all delivery obligations provided that there
are no uncertainties regarding customer acceptance and collectibility is
deemed probable. If uncertainties exist, revenue is recognized when such
uncertainties are resolved. Our policy is to recognize revenue from our
technical support and maintenance contracts ratably over the period of the
related agreements. We record a warranty liability for parts and labor on our
products. Warranty periods are generally three years from installation date.
Estimated warranty costs are recorded at the time of revenue recognition.

   Our manufacturing expenses consist of amounts paid to third-party
manufacturers, manufacturing start-up expenses, manufacturing personnel and
related costs and our customer support group. We outsource our manufacturing
and assembly requirements. Accordingly, a significant portion of our
manufacturing expenses consists of payments to a third-party contract
manufacturer. Manufacturing, engineering and documentation controls are
conducted at our facility in Chelmsford, Massachusetts. We believe that our
gross margins will be affected primarily by the following factors:

  . demand for our products;

  . new product introductions both by us and by our competitors;

  . changes in our pricing policies and those of our competitors;

  . the mix of product configurations sold; and

  . the volume of manufacturing and the effect on manufacturing and component
    costs.

   Research and development expenses consist primarily of salaries and related
personnel costs and prototype costs related to the design, development,
testing and enhancement of our products. We have to date expensed our research
and development costs as they were incurred. Several components of our
research and development effort require significant expenditures, the timing
of which can cause significant quarterly variability in our expenses. We incur
significant expenses in connection with the purchase of testing equipment for
our products. We believe that research and development is critical to our
strategic product development objectives and intend to enhance our technology
to meet the changing requirements of our customers. As a result, we expect our
research and development expenses to increase in absolute dollars in the
future.

   Sales and marketing expenses consist primarily of salaries and related
personnel costs of sales and marketing personnel, commissions, promotional and
other marketing expenses and recruiting expenses. We

                                      21
<PAGE>

expect that sales and marketing expenses will increase substantially in
absolute dollars in the future as we increase our direct sales efforts, expand
our operations internationally, hire additional sales and marketing personnel,
initiate additional marketing programs and establish sales offices in new
locations.

   General and administrative expenses consist primarily of salaries and
related expenses for executive, finance, accounting, facilities, human
resources and information technology personnel, recruiting expenses and
professional fees. We expect that general and administrative expenses will
increase in absolute dollars as we add personnel and incur additional costs
related to the growth of our business and our operation as a public company.

   In connection with the granting of certain stock options and the issuance
of certain restricted shares during the period from inception (February 17,
1998) through July 31, 1998 and the nine-month period ended May 1, 1999, we
recorded deferred stock compensation expense of $184,000 and $4.9 million,
respectively. Stock based compensation includes primarily the amortization of
stock compensation charges resulting from the granting of stock options and
restricted shares with exercise or sales prices deemed to be below the fair
value of our common stock on the date of grant. These amounts are being
amortized ratably over the vesting periods of the applicable options or
restricted stock, which are typically five years, with 20% vesting on the
first anniversary of the date of grant and 5% vesting quarterly thereafter. We
amortized $5,000 of deferred stock compensation during the period from
inception (February 17, 1998) through July 31, 1998, and $261,000 of deferred
stock compensation during the nine months ended May 1, 1999.

Results of Operations

Period from inception (February 17, 1998) through July 31, 1998 (fiscal 1998)
and the nine months ended May 1, 1999

   Manufacturing Expenses. Manufacturing expenses were zero for the period
from inception (February 17, 1998) to July 31, 1998 and $1.2 million for the
nine months ended May 1, 1999. Manufacturing expenses represented 11% of total
operating expenses for the nine months ended May 1, 1999. The increase in
manufacturing expenses was due to the commencement of manufacturing.

   Research and Development Expenses. Research and development expenses were
$497,000 for the period from inception (February 17, 1998) to July 31, 1998
and represented 63% of total operating expenses in fiscal 1998. Research and
development expenses for the nine months ended May 1, 1999 were $6.6 million
and represented 62% of total operating expenses for the nine months ended May
1, 1999. The period-to-period increases were primarily due to increased costs
associated with a significant increase in personnel and personnel-related
expenses, an increase in non-recurring engineering costs and an increase in
prototype expenses for the development of the SN 6000, SN 8000 and SN 16000
products. Development is essential to our future success and we expect that
research and development expenses will increase in absolute dollars in future
periods.

   Sales and Marketing Expenses. Sales and marketing expenses were $92,000 for
the period from inception (February 17, 1998) to July 31, 1998 and represented
12% of total operating expenses in fiscal 1998. Sales and marketing expenses
for the nine months ended May 1, 1999 were $1.6 million and represented 15% of
total operating expenses for the period. The period-to-period increases
reflect the hiring of additional sales and marketing personnel and marketing
program costs, including web development, trade shows and product launch
activities.

   General and Administrative Expenses. General and administrative expenses
were $199,000 for the period from inception (February 17, 1998) to July 31,
1998 and represented 25% of total operating expenses in fiscal 1998. General
and administrative expenses for the nine months ended May 1, 1999 were
$752,000 and represented 7% of total operating expenses for the period. The
period-to-period increases reflect the hiring of additional general and
administrative personnel and expenses necessary to support and scale our
operations.

                                      22
<PAGE>

   Amortization of Stock Compensation. Amortization of stock compensation
expense were $5,000 and $496,000 for the period from inception (February 17,
1998) through July 31, 1998 and the nine months ended May 1, 1999,
respectively. Amortization of stock compensation expense for the nine months
ended May 1, 1999 consisted of $261,000 for the amortization of deferred stock
compensation expense resulting from the granting of stock options and
restricted shares with the exercise or sales prices below the deemed fair
value of our common stock on the date of grant, and $235,000 of compensation
expense associated with the grant of options to non-employees. The period to
period increase was due to an increase in the number of options granted to our
employees at exercise prices deemed to be below the fair value of our common
stock and the issuance of options to non-employees.

   Interest Income. Interest income was $100,000 and $488,000 for the period
from inception (February 17, 1998) through July 31, 1998 and the nine months
ended May 1, 1999, respectively. Interest income consists of interest earned
on our cash balances and marketable securities and increased due to higher
invested balances.

   Net Operating Losses and Tax Credit Carryforwards. As of July 31, 1998, we
had approximately $330,000 of state and federal net operating loss
carryforwards for tax reporting purposes available to offset future taxable
income. Such net operating loss carryforwards expire in 2004 and 2019,
respectively, to the extent that they are not utilized. We have not recognized
any benefit from the future use of loss carryforwards for these periods, or
for any other periods, since inception. Management's evaluation of all the
available evidence in assessing realizability of the tax benefits of such loss
carryforwards indicates that the underlying assumptions of future profitable
operations contain risks that do not provide sufficient assurance to recognize
the tax benefits currently. The net operating loss carryforwards could be
limited in future years if there is a significant change in our ownership.

Liquidity and Capital Resources

   Since inception, we have financed our operations primarily through private
sales of our capital stock totaling approximately $40.8 million in net
proceeds through May 1, 1999. We have also financed our operations through
borrowings on long-term debt agreements for the purchase of capital equipment.
At May 1, 1999, cash, cash equivalents and marketable securities totaled $26.3
million.

   Cash used in operating activities was $598,000 for fiscal 1998 and $10.0
million for the nine months ended May 1, 1999. Net cash flows from operating
activities in each period reflect increasing net losses and to a lesser extent
inventory purchases offset in part by increased accounts payable and accrued
expenses.

   Cash used in investing activities was $3.7 million for fiscal 1998 and $3.2
million for the nine months ended May 1, 1999. Net cash used for investing
activities in each period reflect increasing purchases of property and
equipment, primarily computers and test equipment for our development and
manufacturing activities. Cash used for investing activities also reflect
increased purchases of marketable securities.

   Cash provided by financing activities was $5.5 million for fiscal 1998 and
$35.4 million for the nine months ended May 1, 1999. Cash provided by
financing activities for these periods was derived primarily from private
sales of redeemable convertible preferred stock. At July 31, 1998, a $100,000
certificate of deposit was being utilized to collateralize a standby letter of
credit for a facility lease. No claims have been presented against the letter
of credit. At May 1, 1999, a $92,000 United States treasury bill was being
utilized to collateralize a standby letter of credit for a facility lease. We
have two equipment lines of credit aggregating $1.0 million and $5.0 million,
respectively. These lines of credit are collateralized by all of our assets
and bear interest at the bank's prime rate plus 1.5% per annum. At May 1,
1999, an aggregate of approximately $1.0 million was outstanding under these
lines of credit.

   We believe that the net proceeds from this offering, together with our
current cash, cash equivalents and marketable securities and lines of credit,
will be sufficient to meet our anticipated cash needs for working capital and
capital expenditures for at least 12 months. If cash generated from operations
is insufficient to satisfy our liquidity requirements, we may seek to sell
additional equity or debt securities. If additional funds are raised

                                      23
<PAGE>

through the issuance of debt securities, these securities could have rights,
preferences and privileges senior to holders of common stock, and the term of
this debt could impose restrictions on our operations. The sale of additional
equity or convertible debt securities could result in additional dilution to
our stockholders, and we cannot be certain that additional financing will be
available in amounts or on terms acceptable to us, if at all. If we are unable
to obtain this additional financing, we may be required to reduce the scope of
our planned product development and sales and marketing efforts, which could
harm our business, financial condition and operating results.

Year 2000 Compliance

   Impact of the Year 2000 Computer Problem. The year 2000 computer problem
refers to the potential for system and processing failures of date-related
data as a result of computer-controlled systems using two digits rather than
four to define the applicable year. For example, computer programs that have
time-sensitive software may recognize a date represented as "00" as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including among other
things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

   State of Readiness of our Products. We have designed our products,
including the SN 6000, for use in the year 2000 and beyond and believe our
products are year 2000 compliant. However, our products are generally
integrated into larger networks involving sophisticated hardware and software
products supplied by other vendors. Each of our customers' networks involves
different combinations of third party products. We cannot evaluate whether all
of their products are year 2000 compliant. We may face claims based on year
2000 problems in other companies' products or based on issues arising from the
integration of multiple products within the overall network. Although no such
claims have been made against us, we may in the future be required to defend
our products in legal proceedings which could be expensive regardless of the
merits of such claims.

   State of Readiness of our Internal Systems. Our business may be affected by
year 2000 issues related to non-compliant internal systems developed by us or
by third-party vendors. Our material third-party vendors have stated that they
are, or expect to be, year 2000 compliant in a timely manner. We are not
currently aware of any year 2000 problem relating to any of our material
internal systems. We are in the process of testing all such systems for year
2000 compliance and plan to complete such testing before September 30, 1999.
We do not believe that we have any significant systems that contain embedded
chips that are not year 2000 compliant. Our internal operations and business
are also dependent upon the computer-controlled systems of third parties such
as our manufacturers, suppliers, customers and other service providers. We
believe that absent a systemic failure outside our control, such as a
prolonged loss of electrical or telephone service, year 2000 problems at third
parties such as manufacturers, suppliers, customers and service providers will
not have a material impact on our operations. If our manufacturers, suppliers,
vendors, partners, customers and service providers fail to correct their year
2000 problems, these failures could result in an interruption in, or a failure
of, our normal business activities or operations. If a year 2000 problem
occurs, it may be difficult to determine which party's products have caused
the problem. These failures could interrupt our operations and damage our
relationships with our customers. Due to the general uncertainty inherent in
the year 2000 problem resulting from the readiness of third-party
manufacturers, suppliers and vendors, we are unable to determine at this time
whether year 2000 failures could harm our business and our financial results.
Our customers' purchasing plans could be affected by year 2000 issues if they
need to expend significant resources to fix their existing systems to become
year 2000 compliant. This situation may reduce funds available to purchase our
products. In addition, some customers may wait to purchase our products until
after the year 2000, which may negatively impact our revenue.

   Risks. The failure of our internal systems to be year 2000 compliant could
temporarily prevent us from processing orders, issuing invoices and developing
products and could require us to devote significant resources to correct such
problems. Due to the general uncertainty inherent in the year 2000 computer
problem, resulting from the uncertainty of the year 2000 readiness of third-
party suppliers and vendors, we are unable to determine at this time whether
the consequences of year 2000 failures will have a material impact on our
business, results of operations or financial condition.

                                      24
<PAGE>

   To date, we have not incurred material expense associated with our efforts
to become year 2000 compliant and do not anticipate that any future costs
associated with our year 2000 remediation efforts will be material.

Market Risk

   Sycamore does not use derivative financial instruments. We generally place
our marketable security investments in high credit quality instruments,
primarily U.S. Government obligations and corporate obligations with
contractual maturities of less than one year. We do not expect any material
loss from our marketable security investments and therefore believe that our
potential interest rate exposure is not material.

Recent Accounting Pronouncements

   In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5, which is effective for fiscal years beginning after
December 15, 1998, provides guidance on the financial reporting of start-up
costs and organization costs. It requires costs of start up activities and
organization costs to be expensed as incurred. We do not expect the adoption
of this standard to have a material effect on our financial condition or
results of operations.

   In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging Activities", which establishes
accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts, (collectively referred to
as derivatives) and for hedging activities. We will adopt SFAS No. 133 as
required by SFAS No. 137, "Deferral of the effective date of the FASB
Statement No. 133," in fiscal year 2001. The adoption of SFAS No. 133 is not
expected to have an impact on our financial condition or results of
operations.

                                      25
<PAGE>

                                   BUSINESS

Overview

   We develop and market software-based intelligent optical networking
products that enable network service providers to quickly and cost-effectively
provide bandwidth and create new high speed data services. We believe that the
existing public network is unable to meet the demands of high speed data
applications that are driving network growth. As data traffic on the public
network continues to grow at rates that surpass available network capacity, we
believe that service providers require new solutions to relieve network
congestion and create new data services. Our intelligent optical networking
products are designed to allow service providers to deploy, manage and
optimize the performance of their fiber optic networks. Our products are based
on a common software architecture that we believe will accelerate our release
of new products and enable our customers to upgrade with minimal network
impact and operator training. We have designed our products to protect service
providers' existing investment in fiber optic and transmission equipment and
provide a migration path to the next generation optical public network
infrastructure.

Industry Background

Increase in Data Traffic on the Public Network

   Over the past decade, the volume of high speed data traffic across the
public network has grown significantly, reflecting the increasing use of the
network for Internet access, electronic mail communications, electronic
commerce, remote access by telecommuters and other network data transmission
services. According to RHK, a leading market research and consulting firm,
public network bandwidth will have to increase by over 2000% between 1998 and
2002 to satisfy expected Internet and other data traffic requirements.

   To meet the growth in the demand for high speed data services, service
providers are investing significantly to upgrade the public network
infrastructure, which was originally built for voice traffic. Service
providers are laying fiber optic cable and installing transmission equipment
which transforms the fiber from available capacity to usable bandwidth by
"lighting" the fiber. According to RHK, more than $6.9 billion was invested in
the United States alone in 1998 in building and enhancing the transmission
capability of the public network. This investment was spread across fiber
deployment, SONET equipment and dense wave division multiplexing equipment,
known as DWDM.

Existing Public Network Transmission Infrastructure

   Despite these investments, service providers are still unable to quickly
respond to the bandwidth demands of their customers. We believe that this
inability is due in large part to the transmission architecture of the
existing public network. This architecture is based upon telecommunications
standards, referred to as SONET in North America and SDH elsewhere in the
world, which set the hierarchical characteristics for transmitting optical
signals. A SONET/SDH network typically consists of three primary components:

  . fiber optic cable that serves as the physical transmission medium and
    provides the available capacity;

  . DWDM equipment, which multiplies the transmission capacity of a specific
    fiber by dividing a single strand into multiple lightpaths, or
    wavelengths; and

  . SONET/SDH transmission equipment, which converts data traffic from an
    electrical signal to an optical signal for transport over the fiber
    network.

   In the current public network transmission infrastructure, the ability to
manage data resides in the SONET/SDH equipment which converts the data traffic
from an electrical signal to an optical signal which is transmitted over the
fiber. The optical fiber itself is only a physical transmission medium with no
imbedded intelligence. As a result, moving data through the network involves
the following complex processes that add cost and make scaling difficult:

  . Traffic enters the network as an electrical signal and is converted by
    the SONET/SDH equipment into an optical signal for transmission across
    the network;

                                      26
<PAGE>

  . At each network transit point, the optical data traveling across the
    network is terminated at a SONET/SDH network terminal;

  . The optical data is then converted into an electrical signal and examined
    to see which portions of the data are to be extracted from the network at
    that transit point; and

  . The data is then converted back to an optical signal by the SONET/SDH
    equipment for transport to the next network transit point, where the
    process is repeated.

   The technology of a SONET/SDH architecture typically requires a linear or
ring-based network topology. The following diagram illustrates the process of
transmitting data across a typical SONET/SDH architecture:


[Illustration showing a linear SONET/SDH network. The drawing of the network
contains a fiber optic cable with SONET/SDH transmission equipment and DWDM
equipment attached. The network shows the conversion of traffic from the
optical domain to the electrical domain and back to the optical domain as data
travels across the network.]

Limitations of the Existing Public Network Transmission Infrastructure

   The SONET/SDH network architecture was originally designed to transport
voice traffic rather than for today's high speed data services. Unlike voice
traffic, which is generally characterized by slow growth and stable demand,
data traffic is characterized by rapid growth and unpredictable demand. Data
networks must be capable of being deployed cost-effectively and expanded
quickly.

   The SONET/SDH network architecture, however, is not sufficiently flexible to
meet these requirements. Generally, the process of expanding the capacity of a
SONET/SDH network is time-consuming and requires significant capital investment
by the service provider. There are currently only two methods to expand a
SONET/SDH network. The first option is to increase the speed at which the
network operates. Because SONET/SDH equipment is designed to operate at a
specific speed and all devices on a ring must operate at the same speed, this
option requires that all equipment on the SONET/SDH ring be replaced with
higher speed devices on a concurrent basis. In addition, because the rings at
the core of the network must carry the aggregate traffic of all of the rings
feeding them, the upgrading of one SONET/SDH ring frequently requires the
upgrading of some or all of the interconnected SONET/SDH rings. Accordingly,
adding capacity to a SONET/SDH ring network is a complex and time consuming
process. The second option to expand a SONET/SDH ring network is to construct
new rings with new fiber or increase the capacity of each individual fiber on a
ring through the utilization of DWDM technology, which can transform each fiber
strand into as many as 100 parallel optical wavelengths. Under either approach,
network complexity increases since each optical wavelength must be terminated
by SONET/SDH equipment and the interconnection of multiple SONET/SDH rings will
absorb some available network capacity.

   Data traffic will typically transit through multiple SONET/SDH rings when
traversing the public network. In addition, in SONET/SDH networks, up to 50% of
network capacity must be reserved to provide alternative routing for traffic in
the event of a network outage. This redundancy, and the numerous optical-to-
electrical-to-optical conversions within each ring and between rings, create a
costly and complex network architecture.

   As a result of these limitations, the buildout of a SONET/SDH network
generally requires lengthy time commitments and significant initial equipment
investment by service providers. In today's competitive environment, long lead
times for service provisioning and significant purchase commitments are often
not compatible with the need of service providers to rapidly and cost-
effectively deploy new services and be

                                       27
<PAGE>

responsive to their customer demand. To manage the frequently unpredictable
demand of data traffic, service providers need to move toward a "just-in-time"
investment and service delivery model allowing them to introduce and expand
services when and where needed in response to demand. The migration to a
"just-in-time" model will require a public network architecture that is
scalable, flexible and cost-effective and that is capable of supporting the
anticipated growth in high speed data communications services.

The Sycamore Solution

   We develop and market software-based intelligent optical networking
products that enable service providers to quickly and cost-effectively provide
bandwidth and create new high speed data services. Our products are designed
to move data directly onto the fiber without a requirement for intermediary
SONET/SDH equipment. Once on the optical network, data moves through the
network without the need to convert the optical signals to electrical signals
at each network transit point. We believe that adding intelligence to the
optical network enhances the functionality of the network and preserves the
management and restoration benefits of SONET/SDH, while providing the capacity
benefits of DWDM. Our products will provide the tools to enable service
providers to utilize, restore, provision and maintain intelligent optical
networks and optimize the performance of these networks, while providing a
migration path to the next generation optical network.

   Key benefits of our solution include the following:

   Improves Network Flexibility and Scalability. Our software-based products
are designed to allow service providers to improve the flexibility and
scalability of their networks without the long lead times and large, upfront
capital investment presently required for a network buildout. The software-
based capabilities of our products will permit service providers to change and
upgrade their network infrastructure and services without significant hardware
changes or additions. This improved flexibility and scalability will enable
service providers to more easily expand their network architecture, support
new high speed data applications and introduce value-added services for the
benefit of their customers.

   Enables Rapid Service Delivery. The competitive marketplace facing service
providers and the pace of technological change require that the public network
infrastructure be adaptable to accommodate rapid changes in the demand for
service. Our products are designed to shorten the time it takes for service
providers to increase bandwidth and provide services, thereby enabling our
customers to introduce network services on a rapid basis in response to their
customers' demand. We believe that this flexibility will be cost-effective for
service providers because it will enable them to increase capacity based on
current, rather than forecasted, market demand for their services.

   Facilitates Introduction of New Data Services and Creation of New Revenue
Opportunities for Service Providers. Because our products are software-based,
we are able to rapidly introduce new features into our products, which can in
turn be offered by service providers to their customers as new services or
service enhancements. We believe that these added features will provide
revenue opportunities for our customers and will enable them to differentiate
their network services from those of their competitors. We have designed a
comprehensive network management solution, which will enable service providers
to monitor the performance of their network, isolate and manage network
faults, and otherwise manage their network on a real-time basis. With our
network management system, service providers will be able to offer value-added
services such as customer network management (CNM) to their customers.

   Protects Existing Investments. Our products are designed to enable our
customers to increase the functionality and improve the performance of their
networks without sacrificing their infrastructure investments in SONET/SDH
equipment. Our products are designed to facilitate a gradual migration from
existing electro-optical SONET/SDH networks to all-optical networks. Service
providers will be able to introduce our products into an existing optical
network environment, when and where needed, without replacing the current
architecture. For example, over a common fiber infrastructure, a service
provider's existing SONET/SDH network could be used to continue to support low
speed voice and data services, while new higher speed data services could be

                                      28
<PAGE>

supported by our intelligent optical network products. Furthermore, the common
software architecture, which will serve as the basis for our future products,
is intended to ensure the continued interoperability and manageability of our
products as our product line evolves.

Strategy

   Our objective is to be the leading provider of intelligent optical
networking products. Key elements of our strategy include the following:

   Offer End-to-End Optical Network Solutions To Customers. We intend to
develop and offer a full range of intelligent optical networking products to
our customers. Our current products help service providers improve the
utilization of fiber optic capacity that has already been deployed in the
network. We expect that our future products, which will be based on the same
software architecture, will include an optical switch, which is necessary for
the creation of meshed network environments. A meshed-based network provides
greater flexibility than a ring-based network and provides for more direct
routes between network points, enabling more efficient network restoral or
redundancy schemes. In addition, we intend to differentiate ourselves from our
competition by offering other products that will enable customers to utilize,
restore and provide data services over wavelengths and monitor and improve the
performance level of network traffic.

   Collaborate With Customers To Generate Demand For High Speed Data Services.
We work collaboratively with our customers to help them identify and create
new high speed data services. Our professional services team provides
assistance in such areas as network planning, design, implementation and
service launch to facilitate the introduction of these services. By helping
our customers to create new services, we help generate additional revenue
opportunities for our customers and drive additional demand for our products.

   Utilize Software-Based Product Architecture. Our products utilize a common
software-based architecture that permits improved flexibility and
interoperability and expanded network management capabilities. The common
architecture is designed to reduce the complexity of introducing new software
revisions across the network. We believe that this architecture will
accelerate the release of new products and enable our customers to upgrade
with minimal network impact and operator training.

   Incorporate Commercially Available Optical Hardware Components. We use
commercially available optical hardware components in our products wherever
feasible. We believe that by using these third-party components, we benefit
from the research and development of the vendors of these products, as well as
from the efficiencies of scale that these vendors generate by producing the
components in higher volumes. As a result of our use of these components, we
believe that we can more quickly bring to market a broad-based product line at
a lower cost than if we had utilized proprietary components.

   Outsource Manufacturing. We outsource the manufacturing of our products to
reduce our cost structure and to maintain our focus on the development of
value-added software. We believe that most optical networking companies have
manufactured their own products in order to implement specialized
manufacturing techniques historically required for optical componentry.
However, we believe that the quality and consistency of optical manufacturing
techniques have advanced significantly and that, as a result, it is now
possible to engage third party manufacturers to build our products without
sacrificing quality or performance.

   Focus On Just-In-Time Implementation. Our product architecture strategy is
to develop products that will enable service providers to expand and upgrade
their networks in response to demand on a "just-in-time" basis. Our software-
based product architecture is designed to help us achieve this goal. Our
software capabilities support a modular "plug and play" hardware architecture
which is designed to allow new and enhanced modules to be easily and
nondisruptively inserted into the network as optical component technology
advances.

   Capitalize On Extensive Industry Experience. We have significant
management, engineering and sales experience in the networking and optics
industries and long-standing relationships with key personnel in our

                                      29
<PAGE>

target customer base. We believe that our experience and relationships will be
important in enabling us to develop products to meet our customers' needs and
to penetrate our target market.

Products and Technology

 Product Architecture

   Our software-based intelligent optical networking products will enable
service providers to use their existing optical network infrastructure to
deliver high speed end-to-end services to meet the bandwidth intensive needs
of data applications. Our products will enable service providers to offer high
speed services over wavelengths directly from the optical network.

   Our product architecture is designed to provide the following benefits:

  . lowered network infrastructure cost by reducing the number of optical-to-
    electrical-to-optical conversions required to transmit data traffic
    across the network;

  . network simplification by eliminating the need for a separate layer of
    SONET/SDH equipment for new services;

  . more rapid service delivery by enabling automated end-to-end provisioning
    of services;

  . non-disruptive network upgrades through advanced software capabilities;

  . a practical migration path from a SONET/SDH architecture to an all-
    optical network; and

  . provide service providers with new revenue opportunities through advanced
    features that support value-added service offerings.

   We believe that the acceptance and implementation of intelligent optical
networking technology by service providers will be a gradual process driven by
high speed data service demands and network scaling requirements. Our product
strategy will allow service providers to migrate from today's SONET/SDH
network architecture to an intelligent optical network while preserving their
investment in the existing network. As intelligent optical networking
equipment is introduced into an existing SONET/SDH network, the service
provider can increasingly deliver high speed services directly from the
optical network. As the intelligent optical network continues to grow,
switching can be introduced into the optical network to support increased
scaling and efficient traffic routing and to complete the transition to a
meshed-based network architecture. Throughout all of these stages of network
development, we expect to offer the software-based management tools which will
allow the service provider to effectively provision and manage services end-
to-end.

   Sycamore's intelligent optical networking products incorporate the
following features:

   Intelligent Optical Networking Software. Our entire product line shares a
common software base. This software foundation allows us to minimize product
development time by leveraging our software architecture across multiple
product lines. Our software architecture is designed to provide service
providers with tools to continue to evolve their network without requiring the
replacement of existing infrastructure. In addition, the architecture is
designed to enable service providers to rapidly absorb new optical technology
and functionality into the network with minimal effort, training and
incremental investment. Software-based features such as topology discovery,
system self-inventory and dynamic power balancing will allow service providers
to quickly respond to customer needs. Additionally, advances in optical
components, such as new lasers, filters, and amplifiers, can be quickly
integrated within this software-based environment.

   SONET/SDH Functionality. Our products are designed to provide the optical
interfaces and management and restoration capabilities traditionally offered
on SONET/SDH equipment. By supporting these capabilities within the optical
domain, rather than the electrical domain, service providers can directly
offer services without the need for separate SONET/SDH products.

                                      30
<PAGE>

   DWDM Technology. DWDM technology creates capacity by multiplying the number
of wavelengths that a single fiber can support. We integrate commercially
available DWDM optical technology into our products, providing a comprehensive
solution for our customers' multiplexing needs.

   Network Management. Our network management products will provide end-to-end
management and control of the intelligent optical network. Network management
functions include fault management, configuration management, accounting
management, performance management and security management. Comprised of
SilvxManager, a network management platform, and SilvxSource, a system-
resident management application, our network management products constitute a
distributed solution designed to provide end-to-end management of the
intelligent optical network. Our network management products are designed to
manage Sycamore's intelligent optical networking products, provide for the
management of third party products and integrate with other operating support
systems when introduced into an existing network environment.

Sycamore's Intelligent Optical Networking Products

   The following chart describes our current and planned products:

<TABLE>
<CAPTION>
   Product        Application                  Service*                     Status
-------------------------------------------------------------------------------------
  <C>          <S>                <C>                                 <C>
  SN 6000      Intelligent        OC-48/STM-16 Wave Service (Long     Commercially
               Optical            Distance)                           available
               Transport
               Product
-------------------------------------------------------------------------------------
  SN 8000      Intelligent        OC-48/STM-16 Wave Service (Medium   In test stage
               Optical            Distance)
                               ------------------------------------------------------
               Add/Drop Product   OC-48/STM-16 Wave Service (Long     In test stage
                                  Distance)
                               ------------------------------------------------------
                                  OC-12/STM-4 Wave Service            In development
                               ------------------------------------------------------
                                  OC-3/STM-1 Wave Service             In development
                               ------------------------------------------------------
                                  OC-192/STM-64 Wave Service          In development
-------------------------------------------------------------------------------------
  SilvxSource  SN 6000/8000       Provides local management of wave   Field test at
               Management         services                            customer's site
               Software
-------------------------------------------------------------------------------------
  SilvxManager Network            Provides end-to-end management of   In test stage
               Management         wave services
               System
               (Software)
-------------------------------------------------------------------------------------
  SN 16000     Intelligent        Will provide wave-based switching   In development
               Optical Switch     and routing in meshed network
                                  environment
</TABLE>
--------
* References to "OC" services are to data transport services at a speed
  indicated by the number following the "OC" designation. For example, OC-48
  service designates a transmission speed of 2.5 gigabytes per second. Higher
  numbers denote faster transmission speeds.

   SN 6000. The SN 6000 is an intelligent optical transport product designed
specifically to work within an existing SONET/SDH network. The SN 6000 enables
high speed services over fiber optic wavelengths and can be overlaid on top of
the existing network. The SN 6000 will allow a service provider to begin the
migration from a SONET/SDH network to an intelligent optical network.

   SN 8000. The SN 8000 is an intelligent optical add/drop product that will
be used to provide high speed services over fiber optic wavelengths for
access, interoffice, regional, and backbone networks. The SN 8000 will provide
a complete stand-alone optical networking solution and can be configured in
point-to-point linear or ring applications. The SN 8000 can be overlaid on top
of existing SONET/SDH networks, allowing service providers to implement
optical networking technology when and where needed, without replacing an
installed infrastructure.

   SilvxSource and SilvxManager. The SILVX optical network management system
provides end-to-end management of data communications services across a
service provider's optical network. SILVX simplifies network configuration,
network provisioning and network management by implementing many of today's
manual and labor-intensive network management processes within software.
Additionally, SILVX allows service providers to offer network management-based
services to their customers. SilvxSource software runs on the intelligent
optical network elements (SN 6000, SN 8000 and in the future, SN 16000) and
the SilvxManager software runs on a centralized management station.

                                      31
<PAGE>

   SN 16000. We are developing the SN 16000 optical switch for end-to-end
wavelength switching and routing, which is necessary for the creation of a
meshed topology network. The SN 16000 will support incremental network growth
through a modular architecture and is being designed to coexist with the SN
6000 and the SN 8000, as well as other third-party optical networking
products.

Customers

   Our target customer base includes competitive local exchange carriers,
incumbent local exchange carriers, long distance carriers, Internet service
providers, cable operators, PTTs (foreign telephone companies) and wholesale
carriers. At July 31, 1999, we had shipped product to one customer, Williams
Communications, Inc. Williams Communications is a leading US-based wholesale
carrier, providing communications services to other carriers. Williams is
currently using our SN 6000 intelligent optical networking product in its
internal data network to provision OC-48 waves between its ATM switches.

Sales and Marketing

   We sell our products through a direct sales force. In addition, we intend
to establish relationships with selected OEMs and other marketing partners,
both domestically and internationally, in order to serve particular markets
and provide our customers with opportunities to purchase our products in
combination with related services and products. As of July 31, 1999, our sales
and marketing organization consisted of 30 employees, of which:

  . 16 are located in our headquarters in Chelmsford, Massachusetts, and

  . 14 are located in a total of   sales and support offices around the
    United States.

   Our marketing objectives include building market awareness and acceptance
of Sycamore and our products as well as generating qualified customer leads.
We send out direct mail and attend trade shows, and provide information about
our company and our products on our Web site. We also conduct public relations
activities, including interviews and demonstrations for industry analysts. In
addition, our senior executives have significant industry contacts as a result
of their prior experience.

   Our professional services team works collaboratively with our customers and
prospective customers to help them identify and create new high speed data
services that they can offer to their customers. We believe that this
assistance is an integral aspect of our sales and marketing efforts which will
help drive additional demand for our products.

Research and Development

   We have assembled a team of highly skilled engineers with significant
telecommunications industry experience. Our engineers have expertise in
optics, hardware and software. As of July 31, 1999, we had 87 employees
responsible for product development, quality assurance and documentation. Our
development group's priority includes the release of new products which will
facilitate the deployment of optical networks. We are focused on enhancing the
scalability, performance and reliability of our intelligent optical network
products.

   We have made, and will continue to make, a substantial investment in
research and development. Research and development expenses were $497,000 for
the period from inception through July 31, 1998 and $6.6 million for the nine
months ended May 1, 1999. All of our software development costs have been
expensed as incurred.

   While we have developed, and expect to continue to develop, most new
products and enhancements to existing products internally, we have licensed
certain commercially available software technology from third parties. See
"Risk Factors-- If Necessary Licenses Of Third-Party Technology Are Not
Available To Us Or Are Very Expensive Our Business Will Be Seriously Harmed."


                                      32
<PAGE>

Competition

   The market for intelligent optical networking products is intensely
competitive, subject to rapid technological change and significantly affected
by new product introductions and other market activities of industry
participants. We expect competition to persist and intensify in the future.
Our primary sources of competition include vendors of optical network
equipment, such as Ciena Corporation, Lucent Technologies and Nortel Networks,
and private companies that have focused on our target market. Many of our
competitors have significantly greater financial resources than us and are
able to devote greater resources to the development, promotion, sale and
support of their products. In addition, many of our competitors have more
extensive customer bases and broader customer relationships than us, including
relationships with our potential customers.

   In order to compete effectively, we must deliver products that:

  . provide extremely high network reliability;

  . scale easily and efficiently with minimum disruption to the network;

  . interoperate with existing network designs and equipment vendors;

  . reduce the complexity of the network by decreasing the need for
    overlapping equipment;

  . provide effective network management; and

  . provide a cost-effective solution for service providers.

   In addition, we believe that a knowledge of the infrastructure requirements
applicable to service providers, experience in working with service providers
to develop new services for their customers, and an ability to provide vendor-
sponsored financing are important competitive factors in our market. We do not
currently have the ability to provide vendor-sponsored financing and this may
influence the purchasing decision of prospective customers, who may decide to
purchase products from one of our competitors who offers such financing. See
"Risk Factors--We Face Intense Competition."

Proprietary Rights and Licensing

   Our success and ability to compete are dependent on our ability to develop
and maintain the proprietary aspects of our technology and operate without
infringing on the proprietary rights of others. We rely on a combination of
patent, trademark, trade secret and copyright law and contractual restrictions
to protect the proprietary aspects of our technology. These legal protections
afford only limited protection for our technology. We presently have three
patent applications pending in the United States and we cannot be certain that
patents will be granted based on these or any other applications. We seek to
protect our source code for our software, documentation and other written
materials under trade secret and copyright laws. We license our software
pursuant to signed license agreements, which impose certain restrictions on
the licensee's ability to utilize the software. Finally, we seek to limit
disclosure of our intellectual property by requiring employees and consultants
with access to our proprietary information to execute confidentiality
agreements with us and by restricting access to our source code. Due to rapid
technological change, we believe that factors such as the technological and
creative skills of our personnel, new product developments and enhancements to
existing products are more important than the various legal protections of our
technology to establishing and maintaining a technology leadership position.

   Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or to obtain and use information
that we regard as proprietary. Policing unauthorized use of our products is
difficult and while we are unable to determine the extent to which piracy of
our software exists, software piracy can be expected to be a persistent
problem. Litigation may be necessary in the future to enforce our intellectual
property rights, to protect our trade secrets, to determine the validity and
scope of the proprietary rights of others or to defend against claims of
infringement or invalidity. However, the laws of many countries do not protect
our proprietary rights to as great an extent as do the laws of the United
States. Any such resulting

                                      33
<PAGE>

litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on our business, operating results and
financial condition. There can be no assurance that our means of protecting
our proprietary rights will be adequate or that our competitors will not
independently develop similar technology. Any failure by us to meaningfully
protect our property could have a material adverse effect on our business,
operating results and financial condition.

   There can be no assurance that third parties will not claim infringement
with respect to our current or future products. Any such claims, with or
without merit, could be time-consuming to defend, result in costly litigation,
divert management's attention and resources, cause product shipment delays or
require us to enter into royalty or licensing agreements. Such royalty or
licensing agreements, if required, may not be available on terms acceptable to
us or at all. A successful claim of product infringement against us and our
failure or inability to license the infringed technology or develop or license
technology with comparable functionality could have a material adverse effect
on our business, financial condition and operating results. See "Risk
Factors--We Could Become Subject To Litigation Regarding Intellectual Property
Rights Which Could Seriously Harm Our Business."

   We integrate third-party software into our products. This third-party
software may not continue to be available on commercially reasonable terms. If
we cannot maintain licenses to this third-party software, distribution of our
products could be delayed until equivalent software could be developed or
licensed and integrated into our products, which could materially adversely
affect our business, operating results and financial condition.

Manufacturing

   The manufacturing of our products is entirely outsourced. Celestica, Inc.
provides comprehensive manufacturing services, including assembly, test,
control and shipment to our customers, and procures materials on our behalf.
We design, specify and monitor all of the tests that are required to meet our
internal and external quality standards, which are conducted by Celestica with
test equipment owned by us. We believe that the outsourcing of our
manufacturing will enable us to conserve the working capital that would be
required to purchase inventory, will allow us to better adjust manufacturing
volumes to meet changes in demand, and will better enable us to more quickly
deliver products. At present, we purchase products from Celestica and our
other manufacturers on a purchase order basis. We are in the process of
negotiating a long-term contract with Celestica. We cannot assure you that we
will be able to enter into a long-term contract on terms acceptable to us, if
at all.

Employees

   As of July 31, 1999, we had a total of 148 employees of which:

  . 87 were in research and development,

  . 30 were in sales and marketing,

  . 7 were in customer service and support,

  . 9 were in manufacturing, and

  . 15 were in finance and administration.

   Our future success will depend in part on our ability to attract, retain
and motivate highly qualified technical and management personnel, for whom
competition is intense. Our employees are not represented by any collective
bargaining unit. We believe our relations with our employees are good.

Properties

   Our headquarters are currently located in a leased facility in Chelmsford,
Massachusetts, consisting of approximately 35,000 square feet under a lease
that expires in 2002.


                                      34
<PAGE>

Legal Proceedings

   We are not currently a party to any material litigation.

   One of our non-officer sales employees has been sued by a former employer
which has alleged, among other things, that the employee improperly disclosed
confidential information of the former employer regarding its business dealings
with our customer. We have chosen to assume the cost of defending this lawsuit.

                                       35
<PAGE>

                                  MANAGEMENT

Executive Officers, Directors and Key Employees

   The executive officers, directors and key employees of Sycamore, and their
respective ages and positions as of July 31, 1999, are as follows:

<TABLE>
<CAPTION>
Name                      Age                  Position
----                      ---                  --------
<S>                       <C> <C>
Executive Officers and
 Directors:
Gururaj Deshpande.......   48 Chairman of the Board of Directors
Daniel E. Smith.........   49 President, Chief Executive Officer and
                              Director
Frances M. Jewels.......   34 Chief Financial Officer, Vice President,
                              Finance and Administration, Treasurer and
                              Secretary
Chikong Shue............   48 Vice President, Engineering
Ryker Young.............   35 Vice President, Sales
John E. Dowling.........   46 Vice President, Operations
Kurt Trampedach.........   55 Vice President, International Sales
Jeffrey A. Kiel.........   34 Vice President, Product Marketing
Anita Brearton..........   40 Vice President, Corporate Marketing
Timothy Barrows (1)(2)..   42 Director
Paul J. Ferri (1)(2)....   60 Director
Other Key Employees:
Richard A. Barry........   33 Chief Technical Officer
Eric A. Swanson.........   38 Chief Scientist
</TABLE>
--------
(1) Member of Audit Committee
(2) Member of Compensation Committee

   Set forth below is information regarding the professional experience for
each of the above-named persons.

   Gururaj Deshpande has served as Chairman of our board of directors since
our inception in February 1998. He served as our Treasurer and Secretary from
February 1998 to June 1999 and as our President from February 1998 to October
1998. Before founding Sycamore, Mr. Deshpande founded Cascade Communications
Corp., a provider of wide area network switches. From October 1990 to April
1992, Mr. Deshpande served as President of Cascade and from April 1992 to June
1997, he served as Cascade's Executive Vice President of Marketing and
Customer Service. Mr. Deshpande was a member of the board of directors of
Cascade since its inception and was chairman of the board of directors of
Cascade from 1996 to 1997.

   Daniel E. Smith has served as our President, Chief Executive Officer and as
a member of our board of directors since October 1998. From June 1997 to July
1998, Mr. Smith was Executive Vice President and General Manager of the Core
Switching Division of Ascend Communications, Inc., a provider of wide area
network switches and access data networking equipment. Mr. Smith was also a
member of the board of directors of Ascend Communications, Inc. during that
time. From April 1992 to July 1997, Mr. Smith served as President and Chief
Executive Officer and a member of the board of directors of Cascade
Communications Corp.

   Frances M. Jewels has served as our Vice President of Finance and
Administration, Treasurer and Secretary since June 1999 and Chief Financial
Officer since July 1999. From June 1997 to June 1999, Ms. Jewels served as
Vice President and General Counsel of Ascend Communications, Inc. From April
1994 to June 1997, Ms. Jewels served as Corporate Counsel of Cascade
Communications Corp. Prior to April 1994, Ms. Jewels practiced law in private
practice and, prior to that, practiced as a certified public accountant.

   Chikong Shue has served as our Vice President of Engineering since August
1998. From March 1997 to July 1998, Mr. Shue was Vice President of Software
and Systems Engineering of the Core Switching Division

                                      36
<PAGE>

of Ascend Communications, Inc. Mr. Shue was a co-founder of Cascade
Communications Corp. and served as director of software engineering at Cascade
from May 1991 to August 1994 and as a corporate fellow and Vice President of
Cascade's Remote Access Engineering division from September 1994 until March
1997.

   Ryker Young has served as our Vice President of Sales since August 1998.
From July 1997 to August 1998, Mr. Young was Central Region Director of Sales
for Ascend Communications, Inc. From January 1996 to June 1997, Mr. Young was
the South Central Regional District Manager for Cascade Communications Corp.
From October 1994 to December 1995, Mr. Young was Major Account Manager for
Cisco Systems, Inc.

   John E. Dowling has served as our Vice President of Operations since August
1998. From July 1997 to August 1998, Mr. Dowling served as Vice President of
Operations of Aptis Communications, a manufacturer of carrier-class access
switches for network service providers. Mr. Dowling served as Vice President
of Operations of Cascade Communications Corp. from May 1994 to June 1997.

   Kurt Trampedach has served as our Vice President of International Sales
since July 1999. From June 1999 to July 1999, Mr. Trampedach was Vice
President, Carrier Market Development for Lucent Technologies, Inc. From June
1997 to June 1999 he was Vice President, Carrier Market Development for Ascend
Communications, Inc. From September 1996 to June 1997, Mr. Trampedach was Vice
President, International Sales for Cascade Communications Corp. Mr. Trampedach
was Vice President, European Operations for Alcatel USA, Inc. from April 1994
to September 1996.

   Jeffrey A. Kiel has served as our Vice President, Product Marketing since
July 1999 and as Director of Marketing from September 1998 to July 1999. Mr.
Kiel served as Director of Product Marketing at Ascend Communications, Inc.
from June 1997 to September 1998. From August 1996 to June 1997, Mr. Kiel
served as Product Marketing Manager of Cascade Communications Corp. From
October 1993 to August 1996, Mr. Kiel was Senior Manager, Technical Staff at
BellSouth Telecommunications.

   Anita Brearton has served as our Vice President, Corporate Marketing since
July 1999 and as Director of Marketing Programs from September 1998 to July
1999. From September 1997 to August 1998, Ms. Brearton served as Vice
President of Marketing for Artel Video Systems, Inc., a producer of fiber
optic video transmission and routing products. From June 1997 to September
1997, Ms. Brearton was director of marketing programs for the core switching
division of Ascend Communications, Inc. Ms. Brearton served as Director of
Marketing Programs for Cascade Communications Corp. from November 1995 to June
1997. From July 1980 to August 1995, Ms. Brearton held several positions at
General DataCom Industries, Inc., most recently as International Marketing
Programs Manager.

   Timothy Barrows has served as a director since February 1998. Mr. Barrows
has been a general partner of Matrix Partners since September 1985.

   Paul J. Ferri has served as a director since February 1998. Mr. Ferri has
been a general partner of Matrix Partners, a venture capital firm, since
February 1982. Mr. Ferri also serves on the board of directors of VideoServer,
Inc. and Applix, Inc.

   Richard A. Barry has served as our Chief Technical Officer since July 1999
and as our Director of Architecture from our inception in February 1998 to
July 1999. Prior to co-founding Sycamore, from September 1994 to February
1998, Mr. Barry was Chief Network Architect of the Advanced Networks Group at
MIT's Lincoln Laboratory. Mr. Barry was an assistant professor in the
Electrical Engineering and Computer Science Department at George Washington
University from September 1993 to August 1994.

   Eric A. Swanson, a co-founder of Sycamore, has served as Chief Scientist
since our inception in February 1998. From 1982 to February 1998, Mr. Swanson
was Associate Group Leader of the Advanced Networks Group at MIT's Lincoln
Laboratory.

                                      37
<PAGE>

   Each executive officer serves at the discretion of the board of directors
and holds office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. There are no family relationships
among any of the directors or executive officers of Sycamore. Each of the
directors serves on the board of directors pursuant to the terms of an
agreement that will terminate upon the closing of this offering.

Election of Directors

   Following this offering, the board of directors will be divided into three
classes, each of whose members will serve for a staggered three-year term.
Messrs.         and            will serve in the class whose term expires in
             2000; Messrs.          and            will serve in the class
whose term expires in            2001; and Mr.           will serve in the
class whose term expires in           2002. Upon the expiration of the term of
a class of directors, directors in such class will be elected for three-year
terms at the annual meeting of stockholders in the year in which such term
expires.

Compensation of Directors

   We reimburse directors for reasonable out-of-pocket expenses incurred in
attending meetings of the board of directors.

Compensation Committee Interlocks and Insider Participation

   Prior to the appointment of the Compensation Committee, Sycamore's full
board of directors (which includes Messrs. Deshpande and Smith) was
responsible for the functions of a Compensation Committee. No interlocking
relationship exists between any member of our board of directors or our
Compensation Committee and any member of the board of directors or
compensation committee of any other company, and no such interlocking
relationship has existed in the past.

Board Committees

   The board of directors has established a Compensation Committee and an
Audit Committee. The Compensation Committee, which consists of Messrs. Ferri
and Barrows, reviews executive salaries, administers bonuses, incentive
compensation and stock plans, and approves the salaries and other benefits of
our executive officers. In addition, the Compensation Committee consults with
our management regarding our benefit plans and compensation policies and
practices.

   The Audit Committee, which consists of Messrs. Ferri and Barrows, reviews
the professional services provided by our independent accountants, the
independence of such accountants from our management, our annual financial
statements and our system of internal accounting controls. The Audit Committee
also reviews such other matters with respect to our accounting, auditing and
financial reporting practices and procedures as it may find appropriate or may
be brought to its attention.

                                      38
<PAGE>

Executive Compensation

   The table below sets forth, for the fiscal year ended July 31, 1999, the
cash compensation earned by (1) our Chairman of the Board, (2) our Chief
Executive Officer and (3) the other most highly compensated executive officer
who received annual compensation in excess of $100,000, collectively referred
to below as the Named Executive Officers. In accordance with the rules of the
Securities and Exchange Commission, the compensation set forth in the table
below does not include medical, group life or other benefits which are
available to all of our salaried employees, and perquisites and other
benefits, securities or property which do not exceed the lesser of $50,000 or
10% of the person's salary and bonus shown in the table. In the table below,
columns required by the regulations of the Securities and Exchange Commission
have been omitted where no information was required to be disclosed under
those columns.

                          Summary Compensation Table

<TABLE>
<CAPTION>
                                                               Long-Term
                              Annual Compensation             Compensation
                          --------------------------------- ----------------
                                                                 Awards
                                                            ----------------
                                               Other Annual    Securities     All Other
                          Salary     Bonus     Compensation    Underlying    Compensation
                            ($)       ($)          ($)      Options/SARS (#)     ($)
                          -------    ------    ------------ ---------------- ------------
<S>                       <C>        <C>       <C>          <C>              <C>
Gururaj Deshpande
 Chairman and Founder...  100,000        --         --               --            --
Daniel E. Smith
 President and Chief
 Executive Officer .....   73,077(1)     --         --               --            --
Ryker Young
 Vice President, Sales..  117,788    49,998(2)      --           20,000         9,326(3)
</TABLE>
--------
(1) Represents the total amount of compensation Mr. Smith received in fiscal
    1999 for the portion of the year during which he was one of our executive
    officers. Mr. Smith joined us in October 1998.
(2) Represents advance commission income.
(3) Represents reimbursement for relocation expenses.

Stock Options

   The following table contains information concerning the grant of options to
purchase shares of our common stock to each of the Named Executive Officers
during the fiscal year ended July 31, 1999:

                       Option Grants in Last Fiscal Year

<TABLE>
<CAPTION>
                                                                                 Potential
                                                                              Realizable Value
                                                                                 at Assumed
                                      Percent of                              Annual Rates of
                         Number of   Total Options                                 Stock
                         Securities   Granted To                              Appreciation for
                         Underlying  Employees in    Exercise                  Option Term(3)
                          Options       Fiscal        Price      Expiration   -----------------
                          Granted       Year(1)    ($/Share)(2)     Date         5%      10%
                         ----------  ------------- ------------ ------------- -------- --------
<S>                      <C>         <C>           <C>          <C>           <C>      <C>
Gururaj Deshpande.......       --          --            --          --             --      --
Daniel E. Smith.........       --          --            --          --             --      --
Ryker Young.............   20,000(4)      .81%        $1.00     June 16, 2009  12, 578  31,875
</TABLE>
--------
(1) Based on options to purchase an aggregate of 2,484,000 shares granted to
    Sycamore employees in fiscal 1999.
(2) All options were granted at fair market value as determined by the board
    of directors on the date of grant.

                                      39
<PAGE>

(3) Amounts reported in these columns represent amounts that may be realized
    upon exercise of options immediately prior to the expiration of their term
    assuming the specified compounded rates of appreciation (5% and 10%) on
    Sycamore's common stock over the term of the options. The potential
    realizable values set forth above do not take into account applicable tax
    and expense payments that may be associated with such option exercises.
    Actual realizable value, if any, will be dependent on the future price of
    the common stock on the actual date of exercise, which may be earlier than
    the stated expiration date. The 5% and 10% assumed annualized rates of
    stock price appreciation over the exercise period of the options used in
    the table above are mandated by the rules of the Securities and Exchange
    Commission and do not represent Sycamore's estimate or projection of the
    future price of the common stock on any date. There is no representation
    either express or implied that the stock price appreciation rates for the
    common stock assumed for purposes of this table will actually be achieved.
(4) These options are exercisable immediately on the grant date, but unvested
    shares are subject to a repurchase right in favor of Sycamore that
    generally entitles us to repurchase these shares at their original
    exercise price upon termination of Mr. Young's services with Sycamore.
    Approximately one year from the hire date of Mr. Young, the repurchase
    right lapses as to a portion of the shares subject to the option and
    thereafter such right lapses as to an additional 5% of the shares subject
    to the option for each full three months of employment completed by Mr.
    Young.

Fiscal Year-End Option Values

   The following table sets forth information for each of the Named Executive
Officers with respect to the value of options outstanding as of July 31, 1999.

                       Aggregated Year-End Option Table

<TABLE>
<CAPTION>
                          Shares                 Number of Securities      Value of Unexercised
                         Acquired               Underlying Unexercised    In-The-Money Options at
                            on       Value     Options at July 31, 1999      July 31, 1999 ($)
                         Exercise   Realized   ------------------------- -------------------------
          Name             (#)        ($)      Exercisable Unexercisable Exercisable Unexercisable
          ----           --------   --------   ----------- ------------- ----------- -------------
<S>                      <C>        <C>        <C>         <C>           <C>         <C>
Gururaj Deshpande.......      --         --         --           --           --           --
Daniel E. Smith.........      --         --         --           --           --           --
Ryker Young.............  20,000(1)  40,000(2)      --           --           --           --
</TABLE>
--------
(1) These shares are subject to a repurchase right in favor of Sycamore that
    generally entitles us to repurchase these shares at their original
    exercise price upon termination of Mr. Young's services with Sycamore.
    Approximately one year from the hire date of Mr. Young, the repurchase
    right lapses as to a portion of the shares subject to the option and
    thereafter such right lapses as to an additional 5% of the shares subject
    to the option for each full three months of employment completed by Mr.
    Young.
(2) Calculated on the basis of the fair market value of our common stock as of
    the date of exercise, of $3.00 per share, as determined by the board of
    directors on such date, less the aggregate exercise price.

Benefit Plans

   1999 Stock Incentive Plan. Our 1999 Stock Incentive Plan was adopted by our
board of directors in August   , 1999 and approved by our stockholders in
August    , 1999. The 1999 plan authorizes the issuance of up to
                   shares of our common stock.

   The 1999 plan provides for the grant of incentive stock options intended to
qualify under Section 422 of the Internal Revenue Code, nonstatutory stock
options, restricted stock awards and other stock-based awards.

   Our officers, employees, directors, consultants and advisors and those of
our subsidiaries are eligible to receive awards under the 1999 plan. Under
present law, however, incentive stock options may only be granted to
employees. No participant may receive any award for more than 500,000 shares
in any calendar year.

                                      40
<PAGE>

   Optionees receive the right to purchase a specified number of shares of
common stock at a specified option price and subject to such other terms and
conditions as are specified in connection with the option grant. We may grant
options at an exercise price less than, equal to or greater than the fair
market value of our common stock on the date of grant. Under present law,
incentive stock options and options intended to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code may not be
granted at an exercise price less than the fair market value of the common
stock on the date of grant or less than 110% of the fair market value in the
case of incentive stock options granted to optionees holding more than 10% of
the voting power of the company. The 1999 plan permits our board of directors
to determine how optionees may pay the exercise price of their options,
including by cash, check or in connection with a "cashless exercise" through a
broker, by surrender to us of shares of common stock, by delivery to us of a
promissory note, or by any combination of the permitted forms of payment.

   Our board of directors administers the 1999 plan. Our board of directors
has the authority to adopt, amend and repeal the administrative rules,
guidelines and practices relating to the plan and to interpret its provisions.
It may delegate authority under the 1999 plan to one or more committees of the
board of directors and, subject to certain limitations, to one or more of our
executive officers. Our board of directors has authorized the Compensation
Committee to administer the 1999 plan, including the granting of options to
our executive officers. Subject to any applicable limitations contained in the
1999 plan, our board of directors, our Compensation Committee or any other
committee or executive officer to whom our board of directors delegates
authority, as the case may be, selects the recipients of awards and
determines:

  . the number of shares of common stock covered by options and the dates
    upon which such options become exercisable;

  . the exercise price of options;

  . the duration of options; and

  . the number of shares of common stock subject to any restricted stock or
    other stock-based awards and the terms and conditions of such awards,
    including the conditions for repurchase, issue price and repurchase
    price.

   In the event of a merger, liquidation or other acquisition event, our board
of directors is authorized to provide for outstanding options or other stock-
based awards to be assumed or substituted for by the acquiror. If the acquiror
refuses to assume or substitute for outstanding awards, they will accelerate,
becoming fully exercisable and free of restrictions, prior to consummation of
the acquisition event. In addition, following an acquisition event, under
certain circumstances, an assumed or substituted award will accelerate if the
employment of its holder with the acquiror is terminated within one year of
the acquisition event.

   No award may be granted under the 1999 plan after              2009, but
the vesting and effectiveness of Awards previously granted may extend beyond
that date. Our board of directors may at any time amend, suspend or terminate
the 1999 plan, except that no award granted after an amendment of the 1999
plan and designated as subject to Section 162(m) of the Internal Revenue Code
by our board of directors shall become exercisable, realizable or vested, to
the extent such amendment was required to grant such award, unless and until
such amendment is approved by our stockholders.

   1999 Employee Stock Purchase Plan. Our 1999 Employee Stock Purchase Plan
was adopted by our board of directors in August   , 1999 and received
stockholder approval in August    , 1999. The purchase plan authorizes the
issuance of up to a total of         shares of our common stock to
participating employees.

   All of our employees, including directors who are employees, and all
employees of any participating subsidiaries:

  . whose customary employment is more than 20 hours per week for more than
    five months in a calendar year,

  . who have been employed by us for at least three months prior to
    enrolling, and

  . who are employed on the first day of a designated payroll deduction
    offering period

                                      41
<PAGE>

are eligible to participate in the purchase plan. Employees who would
immediately after the grant own five percent or more of the total combined
voting power or value of our stock or any subsidiary are not eligible to
participate. As of July 31, 1999, approximately      of our employees would
have been eligible to participate in the purchase plan.

   On the first day of an offering period, we will grant to each eligible
employee who has elected to participate in the purchase plan an option to
purchase shares of common stock as follows: the employee may authorize an
amount (up to 10%, or such lesser amount as shall be determined by the Board,
of such employee's base pay) to be deducted from such employee's base pay
during the offering period. On the last day of the offering period, the
employee is deemed to have exercised the option, at the option exercise price,
to the extent of accumulated payroll deductions. Under the terms of the
purchase plan, the option exercise price is an amount equal to 85% of the
closing price per share of the common stock on either the first day or the
last day of the offering period, whichever is lower. The first offering period
under the purchase plan will commence on the date on which trading of our
common stock commences on the Nasdaq National Market, with the option price on
the first day of such offering period equivalent to the initial public
offering price. In no event may an employee purchase in any one offering
period a number of shares which exceeds the number of shares determined by
dividing the product of (1) $2,083 and (2) the number of full months in the
offering period by the closing market price of a share of common stock on the
first business day of the offering period or such other number as may be
determined by the Board prior to the commencement date of the offering period.
The Compensation Committee may, in its discretion, choose an offering period
of 12 months or less for each offering and may choose a different offering
period for each offering.

   An employee who is not a participant on the last day of the offering
period, as a result of voluntary withdrawal or termination of employment or
for any other reason, is not entitled to exercise any option, and the
employee's accumulated payroll deductions will be refunded. However, upon
termination of employment because of death, the employee's beneficiary has
certain rights to elect to exercise the option to purchase the shares that the
accumulated payroll deductions in the participant's account would purchase at
the date of death.

   Because participation in the purchase plan is voluntary, we cannot now
determine the number of shares of our common stock to be purchased by any of
our current executive officers, by all of our current executive officers as a
group or by our non-executive employees as a group.

   1999 Non-Employee Director Option Plan. Our 1999 Non-Employee Director
Option Plan was adopted by our board of directors and received stockholder
approval in August   , 1999. The option plan authorizes the issuance of up to
a total of          shares of our common stock to participating directors who
are not also an employee or officer.

   On the day each of our directors who is not also an employee or officer is
elected to our board of directors, we will grant to him a nonqualified stock
option to purchase        shares of common stock. In addition, on the date of
each annual meeting of stockholders, we will grant each such director a
nonqualified stock option to purchase          shares of our common stock
beginning with the 2000 annual meeting of stockholders. The option exercise
price per share for all options granted under the option plan will be equal to
the fair market value of our common stock on the date of grant. Under the
plan, options vest immediately, but may not be exercised until      . The term
of each option is   years from the date of grant. In addition, the
Compensation Committee may grant additional options to non-employee directors
and determine the terms applicable to such options. Our board of directors has
discretion to establish the terms of options granted under the Plan. No
options to purchase shares have been granted to date under the option plan.

   401(k) Plan. On December 9, 1998, we adopted an employee savings and
retirement plan qualified under Section 401 of the Internal Revenue Code and
covering all of our employees. Pursuant to the 401(k) plan, employees may
elect to reduce their current compensation by up to the statutorily prescribed
annual limit and have the amount of such reduction contributed to the 401(k)
plan. We may make matching or additional contributions to the 401(k) plan in
amounts to be determined annually by our board of directors. We have made no
contributions to the 401(k) plan to date.

                                      42
<PAGE>

                             CERTAIN TRANSACTIONS

Preferred Stock Issuances

   Since inception in February 1998, we have issued and sold shares of
redeemable convertible preferred stock to the following persons and entities
who are our executive officers, directors or principal stockholders. For more
detail on shares held by these purchasers, see "Principal Stockholders."

<TABLE>
<CAPTION>
                                                   Series A  Series B  Series C
                                                   Preferred Preferred Preferred
Investor                                             Stock     Stock     Stock
--------                                           --------- --------- ---------
<S>                                                <C>       <C>       <C>
Gururaj Deshpande................................. 2,750,000 1,059,976  385,647
Daniel E. Smith................................... 2,475,000   953,979  347,082
Chikong Shue......................................   300,000   115,634   42,071
John E. Dowling...................................        --    71,429       --
Matrix V Management Co., L.L.C.(1)................ 2,750,000 1,059,976  385,647
</TABLE>
--------
(1) Composed of Matrix Partners V, L.P. and Matrix V Entrepreneurs Fund, L.P.
     Matrix V Management Co., L.L.C. is the general partner of each of Matrix
    Partners V, L.P. and Matrix V Entrepreneurs Fund, L.P. Timothy Barrows and
    Paul J. Ferri, directors of Sycamore, are general partners of Matrix V
    Management Co., L.L.C.

   Series A Financing. On February 19, 1998, April 2, 1998, July 31, 1998 and
October 19, 1998, we issued an aggregate of 8,961,812 shares of Series A
preferred stock to 8 investors, including Gururaj Deshpande, Daniel E. Smith,
Chikong Shue and Matrix Partners V, L.P. The per share purchase price for our
Series A preferred stock was $.91.

   Series B Financing. On December 3, 1998 and February 11, 1999, we issued an
aggregate of 3,607,062 shares of Series B preferred stock to 11 investors,
including Gururaj Deshpande, Daniel E. Smith, Chikong Shue, John E. Dowling
and Matrix Partners V, L.P. The per share purchase price for our Series B
preferred stock was $3.50.

   Series C Financing. On March 2, 1999, we issued an aggregate of 2,500,000
shares of Series C preferred stock to 15 investors, including Gururaj
Deshpande, Daniel E. Smith, Chikong Shue, Matrix Partners V, L.P. and Matrix V
Entrepreneurs Fund, L.P. The per share purchase price for our Series C
preferred stock was $8.00.

Common Stock Issuances

   During fiscal 1999, Frances M. Jewels, our Chief Financial Officer,
purchased an aggregate of 145,000 shares of common stock for $1.00 per share
and Kurt Trampedach, our Vice President of International Sales, purchased an
aggregate of 125,000 shares of common stock for $1.00 per share, each pursuant
to stock restriction agreements that give us the right to repurchase all or a
portion of the shares at their purchase price in the event that the employee
ceases to be employed by us. Other executive officers have purchased shares of
common stock pursuant to similar stock restriction agreements for aggregate
purchase prices which did not exceed $60,000 for any one executive officer.
The repurchase right generally lapses as to 20% of the shares subject to such
option approximately one year from the hire date of the executive officer and
thereafter lapses as to an additional 5% of the shares for each full three
months of employment completed by such person.

                                      43
<PAGE>

   All future transactions, including loans between us and our officers,
directors, principal stockholders and their affiliates will be approved by a
majority of the board of directors, including a majority of the independent
and disinterested directors on the board of directors, and will be on terms no
less favorable to us than could be obtained from unaffiliated third parties.

                                      44
<PAGE>

                            PRINCIPAL STOCKHOLDERS

   The following table sets forth certain information regarding beneficial
ownership of our common stock as of June 30, 1999, by:

  . each person who owns beneficially more than 5% of the outstanding shares
    of our common stock;

  . each of our directors and the Named Executive Officers; and

  . all of our directors and executive officers as a group.

   The number of shares of common stock deemed outstanding prior to this
offering includes 20,820,478 shares of common stock outstanding as of June 30,
1999. The number of shares of common stock deemed outstanding after this
offering includes the              shares that are being offered for sale by
us in this offering. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission, and includes voting and
investment power with respect to shares. Common stock subject to options
exercisable within 60 days of June 30, 1999 are deemed outstanding for
purposes of computing the percentage ownership of the person holding such
option but are not deemed outstanding for purposes of computing the percentage
ownership of any other person. Unless otherwise indicated below, to our
knowledge, all persons named in the table have sole voting and investment
power with respect to their shares of common stock, except to the extent
authority is shared by spouses under applicable law. Unless otherwise
indicated, the address of each person owning more than 5% of the outstanding
shares of common stock is c/o Sycamore Networks, Inc., 10 Elizabeth Drive,
Chelmsford, Massachusetts 01824.
<TABLE>
<CAPTION>
                                                                Percentage of
                                                                Common Stock
                                                Number of      Outstanding(%)
                                                  Shares      -----------------
                                               Beneficially    Before   After
    Name and Address of Beneficial Owner          Owned       Offering Offering
    ------------------------------------       ------------   -------- --------
<S>                                            <C>            <C>      <C>
Gururaj Deshpande(1).........................    5,445,623      26.2
Daniel E. Smith..............................    4,901,061      23.5
Matrix V Management Co., L.L.C.(2)
 1000 Winter Street, Suite 4500
 Waltham, MA 02154...........................    4,195,623      20.2
Ryker Young..................................      340,604(3)    1.6
Timothy Barrows(2)
 c/o Matrix V Management Co., L.L.C.
 1000 Winter Street, Suite 4500
 Waltham, MA 02154...........................    4,195,623      20.2
Paul J. Ferri(2)
 c/o Matrix V Management Co., L.L.C.
 1000 Winter Street, Suite 4500
 Waltham, MA 02154...........................    4,195,623      20.2
Jaishree Deshpande, as Trustee of the Gururaj
 Deshpande Grantor Retained Annuity Trust....    2,000,000       9.6
All executive officers and directors as a
 group (10 persons)..........................   16,557,045(4)   79.0
</TABLE>
--------
 * Less than 1% of the outstanding common stock.
(1) Includes 437,500 shares held by the Deshpande Irrevocable Trust and
    2,000,000 shares held by Jaishree Deshpande, as Trustee of the Gururaj
    Deshpande Grantor Retained Annuity Trust. Jaishree Deshpande is Mr.
    Deshpande's wife. Mr. Deshpande disclaims beneficial ownership of the
    shares held by the Deshpande Irrevocable Trust.
(2) Composed of 3,776,060 shares held by Matrix Partners V, L.P. and 419,563
    shares held by Matrix V Entrepreneurs Fund, L.P.  Matrix V Management Co.,
    L.L.C. is the general partner of each of Matrix Partners V, L.P. and
    Matrix V Entrepreneurs Fund, L.P.  Mr. Barrows and Mr. Ferri, directors of
    Sycamore, are general partners of Matrix V Management Co., L.L.C.  Mr.
    Barrows and Mr. Ferri disclaim beneficial ownership of the shares held by
    Matrix Partners V, L.P. and Matrix V Entrepreneurs Fund, L.P. except to
    the extent of their pecuniary interests therein arising from their general
    partnership interests in Matrix V Management Co., L.L.C.
(3) Includes immediately exercisable options to purchase 20,000 shares.
(4) Includes immediately exercisable options to purchase 265,000 shares.

                                      45
<PAGE>

                         DESCRIPTION OF CAPITAL STOCK

   After this offering, the authorized capital stock of Sycamore will consist
of             shares of common stock, $.001 par value per share, and
5,000,000 shares of preferred stock, $.01 par value per share. As of June 30,
1999, there were outstanding (1) 20,820,478 shares of common stock held by 67
stockholders of record, assuming the conversion into common stock of all
outstanding shares of convertible preferred stock, and (2) options to purchase
an aggregate of 1,837,700 shares of common stock. Based upon the number of
shares outstanding as of that date, and giving effect to the issuance of the
shares of common stock offered by Sycamore in this offering, there will be
           shares of common stock outstanding upon the closing of this
offering.

   The following summary of provisions of our securities, various provisions
of our amended and restated certificate of incorporation and our amended and
restated bylaws and provisions of applicable law is not intended to be
complete and is qualified by reference to the provisions of applicable law and
to our amended and restated certificate of incorporation and amended and
restated bylaws included as exhibits to the Registration Statement of which
this prospectus is a part. See "Where You Can Find More Information."

Common Stock

   Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive
proportionately any such dividends declared by the board of directors, subject
to any preferential dividend rights of outstanding preferred stock. Upon the
liquidation, dissolution or winding up of Sycamore, the holders of common
stock are entitled to receive ratably the net assets of Sycamore available
after the payment of all debts and other liabilities and subject to the prior
rights of any outstanding preferred stock. Holders of common stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of common stock are, and the shares offered by Sycamore in this
offering will be, when issued and paid for, fully paid and nonassessable. The
rights, preferences and privileges of holders of common stock are subject to
the rights of the holders of shares of any series of preferred stock which
Sycamore may designate and issue in the future. Certain holders of common
stock have the right to require Sycamore to register their shares of common
stock under the Securities Act in certain circumstances. See "Shares Eligible
for Future Sale."

Preferred Stock

   Under the terms of our amended and restated certificate of incorporation to
be filed as of the closing of this offering, the board of directors is
authorized to issue shares of preferred stock in one or more series without
stockholder approval. The board has discretion to determine the rights,
preferences, privileges and restrictions, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation preferences
of each series of preferred stock.

   The purpose of authorizing the board of directors to issue preferred stock
and determine its rights and preferences is to eliminate delays associated
with a stockholder vote on specific issuances. The issuance of preferred
stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could make it more difficult for a
third party to acquire, or could discourage a third party from acquiring, a
majority of the outstanding voting stock of Sycamore. Sycamore has no present
plans to issue any shares of preferred stock.

Delaware Law and Certain Charter and By-Law Provisions; Anti-Takeover Effects

   Sycamore is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. In general, the statute prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the

                                      46
<PAGE>

person became an interested stockholder, unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns,
or within three years did own, 15% or more of the corporation's voting stock.

   The amended and restated certificate of incorporation and amended and
restated by-laws to be effective on the closing of this offering provide:

  . that the board of directors be divided into three classes, as nearly
    equal in size as possible, with staggered three-year terms;

  . that directors may be removed only for cause by the affirmative vote of
    the holders of at least 66 2/3% of the shares of our capital stock
    entitled to vote; and

  . that any vacancy on the board of directors, however occurring, including
    a vacancy resulting from an enlargement of the board, may only be filled
    by vote of a majority of the directors then in office.

   The classification of the board of directors and the limitations on the
removal of directors and filling of vacancies could have the effect of making
it more difficult for a third party to acquire, or of discouraging a third
party from acquiring, Sycamore.

   The amended and restated certificate of incorporation and amended and
restated by-laws also provide that, after the closing of this offering:

  . any action required or permitted to be taken by the stockholders at an
    annual meeting or special meeting of stockholders may only be taken if it
    is properly brought before such meeting and may not be taken by written
    action in lieu of a meeting; and

  . special meetings of the stockholders may only be called by the Chairman
    of the board of directors, the President, or by the board of directors.

   Our amended and restated by-laws provide that, in order for any matter to
be considered "properly brought" before a meeting, a stockholder must comply
with requirements regarding advance notice to us. These provisions could delay
until the next stockholders' meeting stockholder actions which are favored by
the holders of a majority of our outstanding voting securities. These
provisions may also discourage another person or entity from making a tender
offer for our common stock, because such person or entity, even if it acquired
a majority of our outstanding voting securities, would be able to take action
as a stockholder (such as electing new directors or approving a merger) only
at a duly called stockholders meeting, and not by written consent.

   Delaware's corporation law provides generally that the affirmative vote of
a majority of the shares entitled to vote on any matter is required to amend a
corporation's certificate of incorporation or by-laws, unless a corporation's
certificate of incorporation or by-laws, as the case may be, requires a
greater percentage. Our amended and restated certificate of incorporation
requires the affirmative vote of the holders of at least 66 2/3% of the shares
of our capital stock entitled to vote to amend or repeal any of the foregoing
provisions of our amended and restated certificate of incorporation. Generally
our amended and restated by-laws may be amended or repealed by a majority vote
of the board of directors or the holders of a majority of the shares of our
capital stock issued and outstanding and entitled to vote. To amend our
amended and restated by-laws regarding special meetings of stockholders,
written actions of stockholders in lieu of a meeting, and the election,
removal and classification of members of the board of directors requires the
affirmative vote of the holders of at least 66 2/3% of the shares of our
capital stock entitled to vote. The stockholder vote would be in addition to
any separate class vote that might in the future be required pursuant to the
terms of any series preferred stock that might be outstanding at the time any
such amendments are submitted to stockholders.

                                      47
<PAGE>

Limitation of Liability and Indemnification

   Our amended and restated certificate of incorporation provides that our
directors and officers shall be indemnified by us to the fullest extent
authorized by Delaware law. This indemnification would cover all expenses and
liabilities reasonably incurred in connection with their services for or on
behalf of us. In addition, our amended and restated certificate of
incorporation provides that our directors will not be personally liable for
monetary damages to us for breaches of their fiduciary duty as directors,
unless they violated their duty of loyalty to us or our stockholders, acted in
bad faith, knowingly or intentionally violated the law, authorized illegal
dividends or redemptions or derived an improper personal benefit from their
action as directors.

Transfer Agent and Registrar

   The transfer agent and registrar for the common stock is     .

                                      48
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

   Upon completion of this offering, we will have             shares of common
stock outstanding (assuming no exercise of outstanding options). Of these
shares, the            shares to be sold in this offering will be freely
tradable without restriction or further registration under the Securities Act
of 1933, as amended, except that any shares purchased by our affiliates, as
that term is defined in Rule 144 under the Securities Act, may generally only
be sold in compliance with the limitations of Rule 144 described below.

Sales of Restricted Shares

<TABLE>
<CAPTION>
 Days After Date of     Approximate Shares
  This Prospectus    Eligible for Future Sale              Comment
 ------------------  ------------------------              -------
<S>                  <C>                      <C>
On effectiveness....                          Freely tradeable sold in offering
90 days after
 effectiveness......                          Shares salable under Rule 144
   days after                                 Shares salable under
 effectiveness......                          Rule 144, 144(k) or 701
</TABLE>

   In general, under Rule 144, a person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for at
least one year is entitled to sell, within any three-month period, a number of
such shares that does not exceed the greater of (1) one percent of the then
outstanding shares of common stock (approximately               shares
immediately after this offering) or (2) the average weekly trading volume in
the common stock in the over-the-counter market during the four calendar weeks
preceding the date on which notice of such sale is filed, provided certain
requirements concerning availability of public information, manner of sale and
notice of sale are satisfied. In addition, our affiliates must comply with the
restrictions and requirements of Rule 144, other than the one-year holding
period requirement, in order to sell shares of common stock which are not
restricted securities.

   Under Rule 144(k), a person who is not an affiliate and has not been an
affiliate for at least three months prior to the sale and who has beneficially
owned shares for at least two years may resell such shares without compliance
with the foregoing requirements. In meeting the one- and two-year holding
periods described above, a holder of shares can include the holding periods of
a prior owner who was not an affiliate. The one-and two-year holding periods
described above do not begin to run until the full purchase price or other
consideration is paid by the person acquiring the shares from the issuer or an
affiliate. Rule 701 provides that currently outstanding shares of common stock
acquired under our employee compensation plans, and shares of common stock
acquired upon exercise of presently outstanding options granted under these
plans, may be resold beginning 90 days after the date of this prospectus (1)
by persons, other than affiliates, subject only to the manner of sale
provisions of Rule 144, and (2) by affiliates under Rule 144 without
compliance with its one-year minimum holding period, subject to certain
limitations.

Stock Options

   At July 31, 1999, approximately         shares of common stock were
issuable pursuant to immediately exercisable options or pursuant to other
rights granted under our 1998 Stock Incentive Plan of which approximately
        shares are not subject to Lock-up Agreements with the Underwriters.

   We intend to file a registration statement on Form S-8 under the Securities
Act as soon as practicable following the date of this prospectus, to register
up to         shares of common stock issuable under our stock plans, including
the      shares of common stock subject to outstanding options as of July 31,
1999. This registration statement is expected to become effective upon filing.

                                      49
<PAGE>

Lock-up Agreements

   Subject to certain exceptions, Sycamore and its executive officers,
directors and other security holders have agreed that, without the prior
written consent of Morgan Stanley & Co. Incorporated, they will not, during
the period ending     days after the date of this prospectus, (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of common stock or any securities convertible into or exercisable
or exchangeable for common stock (regardless of whether such shares or any
such securities are then owned by such person or are thereafter acquired), or
(2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the common
stock, regardless of whether any such transactions described in clauses (1) or
(2) of this paragraph are to be settled by delivery of such common stock or
such other securities, in cash or otherwise. In addition, for a period of
days from the date of this prospectus, except as required by law, we have
agreed that our board of directors will not consent to any offer for sale,
sale or other disposition, or any transaction which is designed or could be
expected, to result in, the disposition by any person, directly or indirectly,
of any shares of common stock without the prior written consent of Morgan
Stanley & Co. Incorporated. See "Underwriters."

Registration Rights

   After this offering, the holders of approximately 19,266,000 shares of
common stock will be entitled to rights with respect to the registration of
such shares under the Securities Act. Under the terms of the agreement between
us and the holders of such registrable securities, if we propose to register
any of our securities under the Securities Act, either for our own account or
for the account of other security holders exercising registration rights, such
holders are entitled to notice of such registration and are entitled to
include shares of such common stock therein. Additionally, such holders are
also entitled to demand registration rights pursuant to which they may require
us on up to two occasions to file a registration statement under the
Securities Act at our expense with respect to shares of our common stock, and
we are required to use our best efforts to effect such registration. Further,
holders may require us on up to three occasions to file additional
registration statements on Form S-3 at our expense. All of these registration
rights are subject to conditions and limitations, among them the right of the
underwriters of an offering to limit the number of shares included in such
registration.

                                      50
<PAGE>

                                 UNDERWRITERS

   Under the terms and subject to the conditions contained in the underwriting
agreement dated the date hereof, the underwriters named below, for whom Morgan
Stanley & Co. Incorporated, Lehman Brothers Inc, J. P. Morgan Securities Inc
and Dain Rauscher Wessels, a division of Dain Rauscher Incorporated, are
acting as representatives, have severally agreed to purchase, and we have
agreed to sell to them, an aggregate of             shares of common stock.
The number of shares of common stock that each underwriter has agreed to
purchase is set forth opposite its name below:

<TABLE>
<CAPTION>
                                                                      Number of
      Name                                                             Shares
      ----                                                           -----------
      <S>                                                            <C>
      Morgan Stanley & Co. Incorporated.............................
      Lehman Brothers Inc...........................................
      J. P. Morgan Securities Inc...................................
      Dain Rauscher Wessels.........................................
                                                                     -----------
        Total.......................................................
                                                                     ===========
</TABLE>

   The underwriters are offering the shares subject to their acceptance of the
shares from us and subject to prior sale. The underwriting agreement provides
that the obligations of the several underwriters to pay for and accept
delivery of the shares of common stock offered hereby are subject to the
approval of certain legal matters by their counsel and to certain other
conditions. The underwriters are obligated to take and pay for all of the
shares of common stock offered hereby, other than those covered by the over-
allotment option described below, if any such shares are taken.

   The underwriters initially propose to offer part of the shares of common
stock directly to the public at the initial public offering price set forth on
the cover page hereof and part to certain dealers at a price that represents a
concession not in excess of $       a share under the initial public offering
price. Any underwriters may allow, and such dealers may reallow, a concession
not in excess of $       a share to other underwriters or to certain other
dealers. After the initial offering of the shares of common stock, the
offering price and other selling terms may from time to time be varied by the
representatives of the underwriters.

   Pursuant to the underwriting agreement, we have granted to the underwriters
an option, exercisable for 30 days from the date of this prospectus, to
purchase up to an aggregate of         additional shares of common stock at
the initial public offering price set forth on the cover page hereof, less
underwriting discounts and commissions. The underwriters may exercise such
option solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the shares of common stock offered hereby. To
the extent such option is exercised, each underwriter will become obligated,
subject to certain conditions, to purchase approximately the same percentage
of such additional shares of common stock as the number set forth next to such
underwriter's name in the preceding table bears to the total number of shares
of common stock set forth next to the names of all underwriters in the
preceding table. If the underwriter's over-allotment option is exercised in
full, the total price to public would be $        , the total underwriters'
discounts and commissions would be $       , and the total proceeds to us
would be $        before deducting estimated offering expenses of $      .

                                      51
<PAGE>

   At our request, the underwriters have reserved up to         shares of
common stock to be sold in the offering and offered hereby for sale, at the
initial public offering price, to our directors, officers, employees and
related persons. The number of shares of common stock available for sale to
the general public will be reduced to the extent these individuals purchase
such reserved shares. Any reserved shares which are not so purchased will be
offered by the underwriters to the general public on the same basis as the
other shares offered hereby.

   Sycamore, our directors, officers and certain other of our stockholders
have each agreed that, without the prior written consent of Morgan Stanley &
Co. Incorporated on behalf of the underwriters, during the period ending
days after the date of this prospectus, we will not, directly or indirectly:

  . offer, pledge, sell, contract to sell, sell any option or contract to
    purchase, purchase any option or contract to sell, grant any option,
    right or warrant to purchase, lend or otherwise transfer or dispose of,
    directly or indirectly, any shares of common stock or any securities
    convertible into or exercisable or exchangeable for common stock (whether
    such shares or any such securities are then owned by such person or are
    thereafter acquired directly from us); or

  . enter into any swap or other arrangement that transfers to another, in
    whole or in part, any of the economic consequences of ownership of common
    stock,

whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise.

   The underwriters have informed us that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
common stock offered by them.

   We have filed an application for our common stock to be quoted on the
Nasdaq National Market under the symbol "SCMR."

   In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position in the common stock
for their own account. In addition, to cover over-allotments or to stabilize
the price of the common stock, the underwriters may bid for, and purchase,
shares of common stock in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an underwriter or a dealer for
distributing the common stock in the offering if the syndicate repurchases
previously distributed shares of common stock in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the common
stock above independent market levels. The underwriters are not required to
engage in these activities and may end any of these activities at any time.

   We and the underwriters have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act.

Pricing of the Offering

   Prior to this offering, there has been no public market for the shares of
common stock. Consequently, the public offering price for the shares of common
stock will be determined by negotiations between Sycamore and the
representatives of the underwriters. Among the factors to be considered in
determining the public offering price will be our record of operations, our
current financial position and future prospects, the experience of our
management, sales, earnings and certain of our other financial and operating
information in recent periods, the

                                      52
<PAGE>

price-earnings ratios, price-sales ratios, market prices of securities and
certain financial and operating information of companies engaged in activities
similar to ours. The estimated public offering price range set forth on the
cover page of this preliminary prospectus is subject to change as a result of
market conditions and other factors.

                                 LEGAL MATTERS

   The validity of the shares of common stock we are offering will be passed
upon for us by Hale and Dorr LLP, Boston, Massachusetts. Certain legal matters
in connection with this offering will be passed upon for the underwriters by
Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.

                                    EXPERTS

   The financial statements as of July 31, 1998 and for the period from
inception (February 17, 1998) through July 31, 1998 included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

                      WHERE YOU CAN FIND MORE INFORMATION

   We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to the common
stock we propose to sell in this offering. This prospectus, which constitutes
part of the registration statement, does not contain all of the information
set forth in the registration statement. For further information about us and
the common stock we propose to sell in this offering, we refer you to the
registration statement and the exhibits and schedules filed as a part of the
registration statement. Statements contained in this prospectus as to the
contents of any contract or other document filed as an exhibit to the
registration statement are not necessarily complete. If a contract or document
has been filed as an exhibit to the registration statement, we refer you to
the copy of the contract or document that has been filed. The registration
statement may be inspected without charge at the principal office of the
Securities and Exchange Commission in Washington, D.C. and copies of all or
any part of which may be inspected and copied at the public reference
facilities maintained by the Securities and Exchange Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the
Securities and Exchange Commission maintains a website (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Securities and
Exchange Commission.

                                      53
<PAGE>

                            SYCAMORE NETWORKS, INC.
                        (A Development Stage Enterprise)

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                         <C>
Report of Independent Accountants.........................................  F-2

Balance Sheets at July 31, 1998 and May 1, 1999 (unaudited)...............  F-3

Statements of Operations for the period from inception (February 17, 1998)
 through July 31, 1998, the nine months ended May 1, 1999 (unaudited) and
 the period from inception (February 17, 1998) through May 1, 1999
 (unaudited)..............................................................  F-4

Statements of Stockholders' Deficit for the period from inception
 (February 17, 1998) through July 31, 1998, the nine months ended May 1,
 1999 (unaudited) and the period from inception (February 17, 1998)
 through May 1, 1999 (unaudited)..........................................  F-5

Statements of Cash Flows the period from inception (February 17, 1998)
 through July 31, 1998, the nine months ended May 1, 1999 (unaudited) and
 the period from inception (February 17, 1998) through May 1, 1999
 (unaudited)..............................................................  F-6

</TABLE>

<TABLE>
<S>                                                                          <C>
Notes to Financial Statements............................................... F-7
</TABLE>

                                      F-1
<PAGE>

                       Report of Independent Accountants

To the Stockholders and the Board of Directors of Sycamore Networks, Inc.:

   In our opinion, the accompanying balance sheet and the related statements
of operations, stockholders' deficit and cash flows present fairly, in all
material respects, the financial position of Sycamore Networks, Inc. (a
development stage enterprise) at July 31, 1998 and the results of its
operations and its cash flows for the period from inception (February 17,
1998) to July 31, 1998 in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with generally accepted auditing standards, which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP
Boston, Massachusetts
July 29, 1999

                                      F-2
<PAGE>

                            SYCAMORE NETWORKS, INC.
                        (A Development Stage Enterprise)

                                 BALANCE SHEETS
                       (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                     Pro Forma
                                               July 31, May 1, 1999 May 1, 1999
                                                 1998   (Unaudited) (Unaudited)
                                               -------- ----------- -----------
<S>                                            <C>      <C>         <C>
                   Assets
Current assets:
 Cash and cash equivalents...................   $1,197   $ 23,406    $ 23,406
 Marketable securities.......................    3,082      2,931       2,931
 Inventories.................................       --      6,220       6,220
 Prepaids and other current assets...........      200        347         347
                                                ------   --------    --------
Total current assets.........................    4,479     32,904      32,904
Property and equipment, net..................      500      4,391       4,391
Other assets.................................      102        207         207
                                                ------   --------    --------
Total assets.................................   $5,081   $ 37,502    $ 37,502
                                                ======   ========    ========

Liabilities, Redeemable Convertible Preferred
   Stock and Stockholders' Equity (Deficit)

Current liabilities:
 Current portion of note payable.............   $   --   $    334    $    334
 Accounts payable............................       42      5,521       5,521
 Accrued expenses............................       96        323         323
                                                ------   --------    --------
Total current liabilities....................      138      6,178       6,178

Note payable.................................       --        666         666

Commitments and contingencies (Note 4)

Series A Redeemable Convertible Preferred
 Stock $.01 par value; 6,380,000 and
 8,975,000 shares authorized at July 31, 1998
 and May 1, 1999, respectively; 6,186,812 and
 8,961,812 shares issued and outstanding at
 July 31, 1998 and May 1, 1999, respectively;
 0 shares issued and outstanding on a pro
 forma basis; liquidation value of $5,630 and
 $8,155 at July 31, 1998 and May 1, 1999,
 respectively................................    5,621      8,146          --

Series B Redeemable Convertible Preferred
 Stock $.01 par value; 3,625,000 shares
 authorized at May 1, 1999; 3,607,062 shares
 issued and outstanding at May 1, 1999; 0
 shares issued and outstanding on a pro forma
 basis; liquidation value of $12,625 at May
 1, 1999.....................................       --     12,625          --

Series C Redeemable Convertible Preferred
 Stock $.01 par value; 2,500,000 shares
 authorized at May 1, 1999; 2,500,000 shares
 issued and outstanding at May 1, 1999; 0
 shares issued and outstanding on a pro forma
 basis; liquidation value of $20,000 at May
 1, 1999.....................................       --     20,000          --
Stockholders' equity (deficit):
 Common stock, $.001 par value; 15,000,000
  and 25,000,000 shares authorized at July
  31, 1998 and May 1, 1999, respectively;
  2,345,000 and 5,444,104 shares issued and
  outstanding at July 31, 1998 and May 1,
  1999, respectively: 20,512,978 shares
  issued and outstanding on a pro forma
  basis......................................        2          5          20
 Additional paid-in capital..................      192      5,482      46,238
 Accumulated deficit.........................     (693)   (10,796)    (10,796)
 Note receivable.............................       --        (17)        (17)
 Deferred compensation.......................     (179)    (4,787)     (4,787)
                                                ------   --------    --------
Total stockholders' equity (deficit).........     (678)   (10,113)     30,658
                                                ------   --------    --------
Total liabilities, redeemable convertible
 preferred stock and stockholders' equity
 (deficit)...................................   $5,081   $ 37,502    $ 37,502
                                                ======   ========    ========
</TABLE>


    The accompanying notes are an integral part of the financial statements.

                                      F-3
<PAGE>

                            SYCAMORE NETWORKS, INC.
                        (A Development Stage Enterprise)

                            STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                          Period from inception                   Period from inception
                           (February 17, 1998)     Nine months     (February 17, 1998)
                          through July 31, 1998 ended May 1, 1999  through May 1, 1999
                          --------------------- ----------------- ---------------------
                                                   (unaudited)         (unaudited)
<S>                       <C>                   <C>               <C>
Operating expenses:
 Manufacturing..........         $   --             $  1,173            $  1,173
 Research and
  development...........            497                6,572               7,069
 Sales and marketing....             92                1,598               1,690
 General and
  administrative........            199                  752                 951
 Amortization of stock
  compensation..........              5                  496                 501
                                 ------             --------            --------
 Total operating
  expenses..............            793               10,591              11,384
                                 ------             --------            --------
Loss from operations....           (793)             (10,591)            (11,384)
Interest income.........            100                  488                 588
                                 ------             --------            --------
Net loss................           (693)             (10,103)            (10,796)
                                 ======             ========            ========
Basic and diluted net
 loss per share.........         $(1.66)            $ (15.66)           $ (19.31)
Weighted average shares
 used in computing basic
 and diluted net loss
 per share..............            417                  645                 559
Pro forma basic and
 diluted net loss per
 share (unaudited)......         $ (.11)            $  (1.08)           $  (1.38)
Weighted average shares
 used in computing pro
 forma basic and diluted
 net loss per share
 (unaudited)............          6,252                9,351               7,829
</TABLE>


    The accompanying notes are an integral part of the financial statements.

                                      F-4
<PAGE>

                            SYCAMORE NETWORKS, INC.
                        (A Development Stage Enterprise)

                      STATEMENTS OF STOCKHOLDERS' DEFICIT
                                 (in thousands)

<TABLE>
<CAPTION>
                          Common Stock  Additional                                         Total
                          -------------  Paid-in   Accumulated    Note      Deferred   Stockholders'
                          Shares Amount  Capital     Deficit   Receivable Compensation    Deficit
                          ------ ------ ---------- ----------- ---------- ------------ -------------
<S>                       <C>    <C>    <C>        <C>         <C>        <C>          <C>
Issuance of common
 stock..................  2,345   $ 2     $    8    $     --      $ --      $    --      $     10
Deferred compensation
 expense associated with
 equity awards..........     --    --        184          --        --         (184)           --
Amortization of deferred
 compensation...........     --    --         --          --        --            5             5
Net loss................     --    --         --        (693)       --           --          (693)
                          -----   ---     ------    --------      ----      -------      --------
Balance, July 31 1998...  2,345     2        192        (693)       --         (179)         (678)
                          -----   ---     ------    --------      ----      -------      --------
Issuance of common
 stock..................  3,099     3        186          --        --           --           189
Deferred compensation
 expense associated with
 equity awards..........     --    --      4,869          --        --       (4,869)           --
Issuance of equity
 awards in exchange for
 services...............     --    --        235          --        --           --           235
Amortization of deferred
 compensation ..........     --    --         --          --        --          261           261
Issuance of common stock
 in exchange for note
 receivable.............     --    --         --          --       (17)          --           (17)
Net loss................     --    --         --     (10,103)       --           --       (10,103)
                          -----   ---     ------    --------      ----      -------      --------
Balance, May 1, 1999
 (unaudited)............  5,444   $ 5     $5,482    $(10,796)     $(17)     $(4,787)     $(10,113)
                          =====   ===     ======    ========      ====      =======      ========
</TABLE>


    The accompanying notes are an integral part of the financial statements.

                                      F-5
<PAGE>

                            SYCAMORE NETWORKS, INC.
                        (A Development Stage Enterprise)

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                 Period from                     Period from
                                  inception                       inception
                             (February 17, 1998) Nine months (February 17, 1998)
                                   through          ended          through
                                July 31, 1998    May 1, 1999     May 1, 1999
                             ------------------- ----------- -------------------
                                                 (unaudited)     (unaudited)
<S>                          <C>                 <C>         <C>
Cash flows from operating
 activities:
 Net loss..................        $ (693)        $(10,103)       $(10,796)
 Adjustments to reconcile
  net income to net cash
  used in operating
  activities:
  Depreciation and
   amortization............            27              404             431
  Amortization of stock
   compensation............             5              496             501
Changes in operating assets
 and liabilities:
  Inventories..............            --           (6,220)         (6,220)
  Prepaids and other
   current assets..........           (75)            (272)           (347)
  Accounts payable.........            42            5,479           5,521
  Accrued expenses.........            96              227             323
                                   ------         --------        --------
Net cash used in operating
 activities................          (598)          (9,989)        (10,587)
                                   ------         --------        --------
Cash flows from investing
 activities:
  Purchases of property and
   equipment...............          (528)          (3,294)         (3,822)
  Purchases of marketable
   securities..............        (3,082)          (6,026)         (9,108)
  Maturities of marketable
   securities..............            --            6,177           6,177
  Increase in other
   assets..................          (102)            (105)           (207)
                                   ------         --------        --------
Net cash used in investing
 activities................        (3,712)          (3,248)         (6,960)
                                   ------         --------        --------
Cash flows from financing
 activities:
  Proceeds from issuance of
   redeemable convertible
   preferred stock, net....         5,496           35,275          40,771
  Proceeds from issuance of
   common stock............            11              171             182
                                   ------         --------        --------
Net cash provided by
 financing activities......         5,507           35,446          40,953
                                   ------         --------        --------
Net increase in cash and
 cash equivalents..........         1,197           22,209          23,406
Cash and cash equivalents,
 beginning of period.......            --            1,197              --
                                   ------         --------        --------
Cash and cash equivalents,
 end of period.............        $1,197         $ 23,406        $ 23,406
                                   ======         ========        ========
Supplementary information:
  Equipment acquired under
   term note...............        $   --         $  1,000        $  1,000
  Preferred stock note
   receivable..............           125               --              --
  Issuance of common stock
   in exchange for note
   receivable..............            --               17              17
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                      F-6
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                         NOTES TO FINANCIAL STATEMENTS

1. Nature of the Business:

   Sycamore Networks (the "Company") was incorporated in Delaware on February
17, 1998. The Company develops and markets software-based intelligent optical
networking products that enable service providers to quickly and cost
effectively provide bandwidth and create new high speed data services. To
date, the Company has principally marketed its products in the United States.
Through May 1, 1999, the Company was considered to be in the development stage
and was principally engaged in research and development, raising capital and
building its management team. The Company shipped its first product in May
1999.

   The Company is subject to risks common to technology-based companies
including, but not limited to, the development of new technology, development
of markets and distribution channels, dependence on key personnel, and the
ability to obtain additional capital as needed to meet its product plans. The
Company has a limited operating history and has never achieved profitability.
To date the Company has been funded principally by private equity financings.
The Company's ultimate success is dependent upon its ability to raise
additional capital and to successfully develop and market its products.

2. Significant Accounting Policies:

   The accompanying financial statements of the Company reflect the
application of certain significant accounting policies as described below:

Unaudited Interim Financial Data

   The accompanying balance sheet as of May 1, 1999, the statements of
operations, cash flows and stockholders' deficit for the nine months ended May
1, 1999, and the statements of operations, cash flows and stockholders'
deficit for the period from inception (February 17, 1998) through May 1, 1999
are unaudited. In the opinion of management, these statements have been
prepared on the same basis as the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, necessary for
the fair statement of the results of these periods. The data disclosed in
notes to the financial statements for these periods are unaudited. The results
for the nine months ended May 1, 1999 are not necessarily indicative of
results to be expected for the entire year, although the Company expects to
incur a significant loss for the year ending July 31, 1999.

Cash Equivalents and Marketable Securities

   The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents, and
investments with original maturity dates greater than three months but less
than 12 months to be short-term investments. The Company classifies all
marketable securities as available-for-sale. The securities are stated at
their fair market value. At July 31, 1998, the fair value of marketable
securities, which were comprised of commercial paper, approximated amortized
cost and, as such, unrealized holding gains and losses were not material. The
fair value of marketable securities was determined based on quoted market
prices at the reporting date for those instruments.

Inventory

   Inventories are stated at the lower of cost (first-in, first-out basis) or
market (net realizable value).

                                      F-7
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


Revenue Recognition

   Revenue from product sales is recognized upon execution of a contract and
the completion of all delivery obligations provided that there are no
uncertainties regarding customer acceptance and collectibility is deemed
probable. If uncertainties exist, revenue is recognized when such
uncertainties are resolved. Revenue from technical support and maintenance
contracts is recognized ratably over the period of the related agreements. The
Company records a warranty liability for parts and labor on its products.
Warranty periods are generally three years from installation date. Estimated
warranty costs are recorded at the time of revenue recognition.

Property and Equipment

   Property and equipment is stated at cost and depreciated over the estimated
useful lives of the assets using the straight-line method, based upon the
following asset lives:

<TABLE>
   <S>                          <C>
   Computer and
    telecommunications
    equipment.................. 2 to 3 years
   Computer software........... 2 to 3 years
   Furniture and office
    equipment.................. 5 years
   Leasehold improvements...... Shorter of lease term or useful life of asset
</TABLE>

   The cost of significant additions and improvements is capitalized and
depreciated while expenditures for maintenance and repairs are charged to
expense as incurred. Upon retirement or sale, the cost and related accumulated
depreciation of the assets are removed from the accounts and any resulting
gain or loss is reflected in the determination of net income or loss.

Research and Development and Software Development Costs

   The Company's products are highly technical in nature and require a large
and continuing research and development effort. All research and development
costs are expensed as incurred. Software development costs incurred prior to
the establishment of technological feasibility are charged to expense.
Software development costs incurred subsequent to the establishment of
technological feasibility are capitalized until the product is available for
general release to customers. Amortization is based on the straight-line
method over the remaining estimated life of the product. To date, the period
between achieving technological feasibility and the general availability of
the related products has been short and software development costs qualifying
for capitalization have not been material. Accordingly, the Company has not
capitalized any software development costs.

Income Taxes

   Income taxes are accounted for under the liability method. Under this
method, deferred tax assets and liabilities are recorded based on temporary
differences between the financial statement amounts and the tax bases of
assets and liabilities measured using enacted tax rates in effect for the year
in which the differences are expected to reverse. The Company periodically
evaluates the realizability of its net deferred tax assets and records a
valuation allowance if, based on the weight of available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized.

Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
dates of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.

                                      F-8
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


Concentrations of Credit Risk

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash equivalents. The
Company invests its excess cash primarily in deposits with commercial banks
and high-quality corporate securities. Certain components and parts used in
the Company's products are procured from a single source. The Company obtains
some of its parts from one vendor only, even where multiple sources are
available, to maintain quality control and enhance working relationships with
suppliers. These purchases are made on a purchase order basis. The failure of
a supplier, including subcontractor, to deliver on schedule could delay or
interrupt the Company's delivery of products and thereby adversely affect the
Company's revenues and profits.

Other Comprehensive Income

   The Company has adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" for the period from inception (February
17, 1998) through July 31, 1998. This statement requires that changes in
comprehensive income be shown in a financial statement that is displayed with
the same prominence as other financial statements. To date, comprehensive loss
and net loss are the same.

Net Loss Per Share

   Basic net loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for
the period by the weighted average number of common and common equivalent
shares outstanding during the period, if dilutive. Common equivalent shares
are composed of incremental common shares issuable upon the exercise of stock
options and unvested restricted common shares. There were no dilutive common
equivalent shares for the period.

                                      F-9
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   The following table sets forth the computation of basic and diluted net
loss per share:

<TABLE>
<CAPTION>
                          Period from inception                   Period from inception
                           (February 17, 1998)     Nine months     (February 17, 1998)
                          through July 31, 1998 ended May 1, 1999  through May 1, 1999
                          --------------------- ----------------- ---------------------
                                                   (unaudited)         (unaudited)
                                      (in thousands, except per share data)
<S>                       <C>                   <C>               <C>
Numerator:
Net loss................         $  (693)           $(10,103)           $(10,796)
Denominator:

Historical:
Weighted average common
 shares outstanding.....           2,169               4,875               3,522
Weighted average common
 shares outstanding
 subject to repurchase..          (1,752)             (4,230)             (2,963)
                                 -------            --------            --------
Denominator for basic
 and diluted
 calculation............             417                 645                 559
                                 -------            --------            --------
Basic and diluted net
 loss per share.........         $ (1.66)            $(15.66)            $(19.31)
                                 =======            ========            ========
Pro forma:
Net loss................         $  (693)           $(10,103)           $(10,796)
                                 =======            ========            ========
Historical weighted
 average common shares
 outstanding............             417                 645                 559
Weighted average number
 of shares assumed upon
 conversion of
 redeemable convertible
 preferred stock........           5,835               8,706               7,270
                                 -------            --------            --------
Shares used in computing
 pro forma basic and
 diluted net loss per
 share (unaudited)......           6,252               9,351               7,829
                                 =======            ========            ========
Pro forma basic and
 diluted net loss per
 share (unaudited)......         $  (.11)           $  (1.08)           $  (1.38)
                                 =======            ========            ========
</TABLE>

   Options to purchase 1,019,000 shares of common stock at an average exercise
price of $.66 per share have not been included in the computation of diluted
net loss per share for the nine months ended May 1, 1999 and for the period
from inception (February 17, 1998) through May 1, 1999, as their effect would
have been anti-dilutive.

                                     F-10
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


Pro Forma Net Loss Per Share (Unaudited)

   Pro forma net loss per share for the period from inception (February 17,
1998) through July 31, 1998 and the nine months ended May 1, 1999 is computed
using the weighted average number of common shares outstanding, including the
pro forma effects of the automatic conversion of the Company's Series A, B,
and C redeemable convertible preferred stock into shares of the Company's
common stock effective upon the closing of the Company's initial public
offering as if such conversion occurred at the date of original issuance.

Pro Forma Balance Sheet (Unaudited)

   Upon the closing of the Company's initial public offering, all of the
outstanding shares of Series A, B and C redeemable convertible preferred stock
will automatically convert into 15,068,874 shares of the Company's common
stock. The unaudited pro forma presentation of the balance sheet has been
prepared assuming the conversion of the preferred stock into common stock as
of May 1, 1999.

Stock Based Compensation

   The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," ("APB No. 25") and complies with
the disclosure provisions of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS No. 123").

Segment Information

   The Company has adopted Statement of Financial Accounting Standards No.
131, "Disclosure about Segments of an Enterprise and Related Information,"
which requires companies to report selected information about operating
segments, as well as enterprise-wide disclosures about products, services,
geographic areas, and major customers. Operating segments are determined based
on the way management organizes its business for making operating decisions
and assessing performance. The Company has determined that it conducts its
operations in one business segment.

Recent Accounting Pronouncements

   In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5, which is effective for fiscal years beginning after
December 15, 1998, provides guidance on the financial reporting of start-up
costs and organization costs. It requires costs of start up activities and
organization costs to be expensed as incurred. We do not expect the adoption
of this standard to have a material effect on our financial condition or
results of operations.

   In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging Activities", which establishes
accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts, (collectively referred to
as derivatives) and for hedging activities. The Company will adopt SFAS No.
133 as required by SFAS No. 137, "Deferral of the effective date of the FASB
Statement No. 133," in fiscal year 2001. The adoption of SFAS No. 133 is not
expected to have an impact on our financial condition or results of
operations.

                                     F-11
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


3. Property and Equipment:

   Property and equipment consisted of the following at July 31, 1998:

<TABLE>
<S>                                                                        <C>
Computer software and equipment........................................... $500
Furniture and office equipment............................................   27
                                                                           ----
                                                                            527
Less accumulated depreciation and amortization............................  (27)
                                                                           ----
                                                                           $500
                                                                           ====
</TABLE>

   Depreciation and amortization expense was $27,000 for the period from
inception (February 17, 1998) through July 31, 1998.

4. Commitments and Contingencies:

Capital and Operating Leases

   The Company's primary office facility is leased under a noncancelable lease
that expires in 1999. Rent expense under operating leases was $27,500 for the
period from inception (February 17, 1998) through July 31, 1998. At July 31,
1998 future minimum lease payments under all non-cancelable operating leases
are as follows, in thousands:

<TABLE>
<S>                                                                       <C>
1999..................................................................... $ 158
2000.....................................................................    42
                                                                          -----
Total future minimum lease payments...................................... $ 200
                                                                          =====
</TABLE>

   At July 31, 1998, as collateral for the primary office facility lease, the
Company issued a stand-by letter of credit for $100,000 which is collaterlized
by commercial paper. The letter of credit is irrevocable and expires in July
1999.

5. Common Stock

   The Company has authorized 15,000,000 shares of common stock, $.001 par
value. The voting, dividend and liquidation rights of the holders of the
common stock are subject to, and qualified by, the rights of the holders of
preferred stock. The holders of the common stock are entitled to one vote for
each share held. Dividends may be declared by the board of directors from
lawfully available funds, subject to any preferential dividend rights of any
outstanding preferred stock. Holders of the common stock are entitled to
receive all assets available for distribution on the dissolution or
liquidation of the Company, subject to any preferential rights of any
outstanding preferred stock.

6. Restricted Stock

   Restricted stock may be issued to employees, officers, directors,
consultants, and other advisors. The Company has the right to repurchase the
common stock at the issuance price (which shall be at least equal to the par
value per share for each share of common stock subject to such award) or other
stated or formula price in the event that conditions specified by the board of
directors in the award agreement are not satisfied prior to the end of the
applicable restriction period or periods established for such award. The
vesting period is generally five years. The number of shares of restricted
stock outstanding at July 31, 1998 was 2,345,000 of which 1,876,250 were
subject to repurchase at their original issuance prices ranging from $.001 to
$.05.

                                     F-12
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


   The weighted average grant date fair value of restricted stock awards for
the period from inception (February 17, 1998) through July 31, 1998 was $.49.
Had compensation cost for the Company's stock-based compensation plans been
determined based on the fair value at the grant dates in accordance with SFAS
123, the Company's net loss for the period from inception (February 17, 1998)
through July 31, 1998 would have been increased to $807,000 or $1.94 per basic
and diluted share. The effects of applying SFAS 123 in this pro forma
disclosure are not indicative of future amounts and additional awards in
future years are anticipated.

   For this pro forma calculation, the fair value of each restricted stock
award was estimated on the date of grant using the minimum value option
pricing model with the following weighted average assumptions: no volatility,
a weighted average risk free interest rate of 5.4%, a weighted average
expected option life of 4 years and no dividend yield.

7. Redeemable Convertible Preferred Stock

   The Company's board of directors has authorized 6,380,000 shares of Series
A redeemable convertible preferred stock ("Series A"), $.01 par value. In
February 1998, the Company sold 6,049,450 shares of Series A at a price of
$.91 per share and received proceeds of approximately $5,505,000. In July
1998, the Company issued 137,362 shares of Series A and received proceeds of
approximately $125,000 in October 1998. The terms of the Series A are as
follows:

  Conversion

  Each share of Series A may be converted into one share of common stock at
  any time at the option of the holder, subject to adjustment for certain
  events such as a stock split, stock dividend, or stock issuance. Upon the
  earlier of the closing of an initial public offering of the Company's
  common stock at a price which equals or exceeds $5 per share and results in
  proceeds of a least $10,000,000, or the date on which at least 10,000,000
  shares of preferred stock have been converted to common stock, all
  outstanding shares of preferred stock automatically convert into shares of
  common stock.

  Dividend and Voting Rights

  When and if declared by the Company's board of directors, dividends on
  Series A are payable in cash in preference and prior to any payment of any
  dividend on common shares. The holders of Series A are entitled to the per
  share amount of dividends or distributions declared for common stock,
  multiplied by the number of shares of common stock into which the preferred
  stock is convertible. The holders of Series A are entitled to vote on all
  matters and are entitled to the number of votes equal to the number of
  common shares into which the Series A are convertible as of the date of
  record.

  Liquidation Preference

  In the event of any liquidation, dissolution, or winding up of the Company,
  the holders of Series A are entitled to receive, prior and in preference to
  any payment or distribution of any assets or surplus funds of the Company
  to holders of the common shares, an amount for each share of Series A held,
  equal to $.91, plus any declared and unpaid dividends. The liquidation
  preferences are subject to adjustment in the event of any stock dividend,
  stock split, combination or other similar recapitalization.

  Redemption

  If the holders of at least a majority of Series A, at any time after
  February 26, 2004, so demand, the Company will be required to redeem 33% of
  the shares outstanding, an additional 50% on February 26, 2005 and all
  shares remaining on February 26, 2006. The redemption price of each share
  of Series A is $.91 plus all declared and unpaid dividends, if any.

                                     F-13
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


8. Income Taxes:

   No provision for taxes has been recorded since the Company has incurred
losses since inception.

   The components of the net deferred tax asset as of July 31, 1998 are as
follows (in thousands):

<TABLE>
<S>                                                                       <C>
Net operating loss carryforwards......................................... $ 122
Capitalized start up costs...............................................   124
Other....................................................................    21
                                                                          -----
                                                                            267
                                                                          -----
Valuation allowance......................................................  (267)
                                                                          -----
Net deferred tax asset................................................... $  --
                                                                          =====
</TABLE>

   At July 31, 1998, the Company had available net operating loss
carryforwards for federal and state tax income purposes of approximately
$330,000. The state and federal carryforwards expire in 2004 and 2019,
respectively. As required by statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes," the management of the Company has
evaluated the positive and negative evidence bearing upon the realizability of
its deferred tax assets and has established a full valuation allowance for
such assets which are comprised principally of net operating loss
carryforwards. Management reevaluates the positive and negative evidence
periodically. The net operating loss carryforwards could be limited in future
years if there is a significant change in our ownership.

9. Employee Benefit Plan:

   The Company sponsors a defined contribution plan covering substantially all
of its employees which is designed to be qualified under Section 401(k) of the
Internal Revenue Code. Eligible employees are permitted to contribute to the
401(k) plan through payroll deductions within statutory and plan limits. The
Company has made no contributions to the plan to date.

10. Subsequent Events

Redeemable Convertible Preferred Stock

   In October 1998, the Company sold 2,775,000 shares of Series A at a price
of $.91 per share and received proceeds of approximately $2,525,250.

   In December 1998, the Company authorized 3,625,000 shares of Series B
redeemable convertible preferred stock ("Series B"), $.01 par value. In
December 1998 and February 1999, the Company sold 3,607,062 shares of Series B
at a price of $3.50 per share and received proceeds of approximately
$12,625,000. The terms of the Series B are similar to the terms of Series A.

   In February 1999, the Company authorized 2,500,000 shares of Series C
redeemable convertible preferred stock ("Series C"), $.01 par value. In
February 1999, the Company sold 2,500,000 shares of Series C at a price of
$8.00 per share and received proceeds of approximately $20,000,000. The terms
of the Series C are similar to the terms of Series A.

   In July 1999, the Company authorized 692,201 shares of Series D redeemable
convertible preferred stock ("Series D"), $.01 par value. In July 1999, the
Company sold 692,201 shares of Series D at a price of $21.67 per share and
received proceeds of approximately $15,000,000. The terms of the Series D are
similar to the terms of Series A.

                                     F-14
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)


Note Payable

   On August 5, 1998, the Company entered into an equipment loan agreement
with a bank. Under this loan agreement, the Company may borrow up to
$1,000,000, for the purpose of acquisition of equipment, for a period of ten
months. At June 30, 1999, the outstanding balance will be converted into a
term loan, to be repaid in thirty equal monthly installments commencing July
1, 1999. The interest on the outstanding balance is calculated daily at the
bank's prime rate, plus 1.5%. The loan is collateralized by all the Company's
assets, including accounts receivable, inventory and fixed assets. The Company
is required to maintain certain financial covenants and tangible net worth
calculations. At May 1, 1999, a total of $1,000,000 is outstanding under this
equipment loan agreement.

   On April 22, 1999, the Company entered into an equipment loan agreement
with the same bank. Under this loan agreement, the Company may borrow up to
$5,000,000, for the purpose of acquisition of equipment, for a period of six
months. At January 31, 2000, the outstanding balance will be converted into a
term loan, to be repaid in thirty-six equal monthly installments commencing
February 1, 2000. The interest on the outstanding balance is calculated daily
at the bank's prime rate, plus 1.5%. This loan is also collateralized by all
the Company's assets, including accounts receivable, inventory and fixed
assets. The Company is required to maintain certain financial covenants and
tangible net worth calculations.

Letters of Credit

   In December 1998, as collateral for an office facility lease, the Company
has issued a stand-by letter of credit for $92,000 which is collateralized by
United States Treasury Bills. The letter of credit is irrevocable and is
reduced by 25% after 13 months and 25% after 25 months.

   In July 1999, as collateral for inventory purchases made by a third party
manufacturer on behalf of the Company, the Company has issued a stand-by
letter of credit for $4,000,000 which is collateralized by a United States
Government Security. The letter of credit is irrevocable and expires in
October 1999.

1998 Stock Incentive Plan

   In August 1998, the 1998 Stock Incentive Plan (the "Plan") was adopted by
the board of directors (the "Board") and received stockholder approval on
October 19, 1998. Up to 8,855,000 shares of common stock, subject to
adjustment in the event of stock splits and other similar events, may be
issued pursuant to awards granted under the Plan. The Plan provides for the
grant of incentive stock options intended to qualify under Section 422 of the
Internal Revenue Code, nonstatutory stock options, restricted stock awards and
other stock-based awards.

   Officers, employees, directors, consultants and advisors and those of our
subsidiaries are eligible to receive awards under the Plan. Under present law,
however, incentive stock options may only be granted to employees. No
participant may receive any award for more than 500,000 shares in any calendar
year.

   Optionees receive the right to purchase a specified number of shares of our
common stock at a specified option price, subject to the terms and conditions
of the option grant. We may grant options at an exercise price less than,
equal to or greater than the fair market value of our common stock on the date
of grant. Under present law, incentive stock options and options intended to
qualify as performance-based compensation under Section 162(m) of the Internal
Revenue Code may not be granted at an exercise price less than the fair market
value of the common stock on the date of grant, or less than 110% of the fair
market value in the case of incentive stock options granted to optionees
holding more than 10% of the voting power of the Company. The Board determines

                                     F-15
<PAGE>

                            SYCAMORE NETWORKS, INC
                       (A Development Stage Enterprise)

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

the term of each option, the option exercise price, and the vesting terms.
Stock options generally expire ten years from the date of grant. The Plan
permits the Board to determine how optionees may pay the exercise price of
their options, including by cash, check or in connection with a "cashless
exercise" through a broker, by surrender to us of shares of common stock, by
delivery to us of a promissory note, or by any combination of the permitted
forms of payment.

   All employees who have been granted options by the Company under the 1998
Stock Incentive Plan are eligible to elect immediate exercise of all such
options. However, shares obtained by employees who elect immediate exercise
prior to the original option vesting schedule are subject to the Company's
right of repurchase, at the option exercise price, in the event of
termination. The Company's repurchase rights lapse at the same rate as the
shares would have become exercisable under the original vesting schedule.

Deferred Stock Compensation

   During the period from August 1, 1998 to May 1, 1999, the Company granted
stock awards to purchase 3,964,604 shares of its common stock with exercise
prices ranging from $.05 to $1.00. The Company recorded deferred compensation
and compensation expense relating to these awards totaling $4,869,000 and
$261,000, respectively, representing the difference between the deemed fair
market value of the common stock on the date of grant and the exercise price.
Compensation relating to options which vested immediately upon grant was
expensed in full at the date of grant, while compensation related to options
which vest over time was recorded as a component of stockholders' deficit and
is being amortized over the vesting periods of the related options.

Non-Employee Stock Compensation

   During the nine months ended May 1, 1999, the Company granted 63,500 stock
awards to non-employees with an estimated fair value of $322,000. The fair
value of each stock option was estimated using the Black-Scholes option
pricing model with the following weighted-average assumptions: a weighted-
average risk free interest rates of 4.5%, a weighted-average expected option
life of 3 years, no dividend yield and a 60% volatility. For the nine months
ended May 1, 1999, the Company recognized compensation expense of $235,000
related to these options.

Stockholder Note Receivable

   At May 1, 1999, the Company held a note receivable in the amount of $17,500
from a stockholder in consideration for the purchase of common stock. The note
is due in February 2004 and is collateralized by the underlying common stock
and, consequently, is reflected as a component of stockholders' deficit.

Common Stock Purchase Option

   In March 1999, the Company signed a Purchase and License Agreement (the
"Agreement') with a customer to provide certain Company products. Under the
terms of the Agreement, the customer also has the right to purchase shares of
the Company in the Company's initial public offering ("IPO") of shares on a
national exchange to an upper limit equal to the number of shares, which when
multiplied by the initial public offering price, equals 5% of the dollar value
of the customer's accumulated purchases of the Company's products and services
as of the date of the initial public offering, but in no event more than 5% of
the shares offered in the IPO.

                                     F-16
<PAGE>

                                    PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

   The following table sets forth the costs and expenses, other than the
underwriting discount, payable by the Registrant in connection with the sale
of common stock being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fee and the Nasdaq National Market listing
fee.

<TABLE>
   <S>                                                                  <C>
   SEC registration fee................................................ $31,970
   NASD filing fee.....................................................  12,000
   Nasdaq National Market listing fee..................................    *
   Printing and engraving expenses.....................................    *
   Legal fees and expenses.............................................    *
   Accounting fees and expenses........................................    *
   Blue Sky fees and expenses (including legal fees)...................    *
   Transfer agent and registrar fees and expenses......................    *
   Miscellaneous.......................................................    *
                                                                        -------
       Total...........................................................    *
                                                                        =======
</TABLE>
--------
   * To be filed by amendment

Item 14. Indemnification of Directors and Officers.

   Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation (the "Restated Certificate") provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach
of fiduciary duty as a director, except to the extent that the Delaware
General Corporation Law prohibits the elimination or limitation of liability
of directors for breach of fiduciary duty.

   Article NINTH of the Restated Certificate provides that a director or
officer of the Registrant (a) shall be indemnified by the Registrant against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal
proceeding (other than an action by or in the right of the Registrant) brought
against him by virtue of his position as a director or officer of the
Registrant if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Registrant, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful and (b) shall be indemnified by the
Registrant against all expenses (including attorneys' fees) and amounts paid
in settlement incurred in connection with any action by or in the right of the
Registrant brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless the Court of Chancery of Delaware determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice,
he is required to be indemnified by the Registrant against all expenses
(including attorneys' fees) incurred in connection therewith. Expenses shall
be advanced to a director or officer at his request, unless it is determined
that he did not act in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Registrant, and, with respect
to any criminal action or proceeding had reasonable cause to believe that his
conduct was unlawful, provided that he undertakes to repay the amount advanced
if it is ultimately determined that he is not entitled to indemnification for
such expenses.

                                     II-1
<PAGE>

   Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director
or officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent
to the right of indemnification, the director or officer must give the
Registrant notice of the action for which indemnity is sought and the
Registrant has the right to participate in such action or assume the defense
thereof.

   Article NINTH of the Restated Certificate further provides that the
indemnification provided therein is not exclusive, and provides that in the
event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers, the Registrant must
indemnify those persons to the fullest extent permitted by such law as so
amended.

   Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent
of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred
in connection with an action or proceeding to which he is or is threatened to
be made a party by reason of such position, if such person shall have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, in any criminal proceeding, if
such person had no reasonable cause to believe his conduct was unlawful;
provided that, in the case of actions brought by or in the right of the
corporation, no indemnification shall be made with respect to any matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.

   The Underwriting Agreement provides that the Underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of the Company against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the "Act"). Reference is made to
the form of Underwriting Agreement to be filed as Exhibit 1.1 hereto.

   The Registrant expects to obtain liability insurance for its officers and
directors.

Item 15. Recent Sales of Unregistered Securities.

   Since inception, the Registrant has issued the following securities that
were not registered under the Securities Act as summarized below.

     (a) Issuances of Capital Stock.

      1. Between February 18, 1998 and October 28, 1998, the Registrant
        issued and sold pursuant to stock restriction agreements outside
        of the 1998 Stock Incentive Plan an aggregate of 5,115,604 shares
        of its common stock for an aggregate purchase price of
        approximately $158,005.

      2. Between February 19, 1998 and October 29, 1998, the Registrant
        issued and sold an aggregate of 8,961,812 shares of its Series A
        redeemable convertible preferred stock for an aggregate purchase
        price of approximately $8,155,249.

      3. Between October 26, 1998 and July 31, 1999, the Registrant issued
        and sold pursuant to stock restriction agreements under the 1998
        Stock Incentive Plan an aggregate of 617,500 shares of its common
        stock for an aggregate purchase price of $353,250.

      4. Between December 3, 1998 and February 11, 1999, the Registrant
        issued and sold an aggregate of 3,607,062 shares of its Series B
        redeemable convertible preferred stock for an aggregate purchase
        price of $12,624,717.

                                     II-2
<PAGE>

      5. On March 2, 1999, the Registrant issued and sold an aggregate of
        2,500,000 shares of its Series C redeemable convertible preferred
        stock for an aggregate purchase price of $20,000,000.

      6. On July 23, 1999, the Registrant issued and sold an aggregate of
        692,201 shares of its Series D redeemable convertible preferred
        stock for an aggregate price of $14,999,996.

     (b) Certain Grants and Exercises of Stock Options.

      1. From inception through June 30, 1999, the Registrant granted
        stock options to purchase 1,856,200 shares of common stock at
        exercise prices ranging from $.05 to $1.00 per share to employees,
        consultants and directors pursuant to its 1998 Stock Incentive
        Plan, as amended.

      2. From inception through June 30, 1999, the Registrant issued and
        sold an aggregate of 18,500 shares of its common stock to
        employees, consultants and directors for aggregate consideration
        of approximately $6,025 pursuant to exercises of options granted
        under its 1998 Stock Incentive Plan.

   No underwriters were involved in any of the foregoing sales of securities.
Such sales were made in reliance upon an exemption from the registration
provisions of the Securities Act set forth in Section 4(2) thereof relative to
sales by an issuer not involving any public offering or the rules and
regulations thereunder, or, in the case of options to purchase common stock
and sales of restricted common stock, Rule 701 of the Securities Act. All of
the foregoing securities are deemed restricted securities for the purposes of
the Securities Act.

                                     II-3
<PAGE>

Item 16. Exhibits and Financial Statement Schedules.

   (a) Exhibits:

<TABLE>
<CAPTION>
 Exhibit
   No.                                Description
 ------- ---------------------------------------------------------------------
 <C>     <S>
   *1.1  Form of Underwriting Agreement
    3.1  Certificate of Incorporation of the Registrant, as amended
   *3.2  Form of Amended and Restated Certificate of Incorporation of the
         Registrant, to be filed prior to the closing of this offering
    3.3  By-Laws of the Registrant
   *3.4  Form of Amended and Restated By-Laws of the Registrant, to be
         effective upon the closing of this offering
   *4.1  Specimen common stock certificate
    4.2  See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate
         of Incorporation and By-Laws of the Registrant defining the rights of
         holders of common stock of the Registrant
    4.3  Second Amended and Restated Investor Rights Agreement dated February
         26, 1999, as amended by Amendment No. 1 dated July 23, 1999
   *5.1  Opinion of Hale and Dorr LLP
   10.1  1998 Stock Incentive Plan, as amended
  *10.2  1999 Non-Employee Directors' Option Plan
  +10.3  Purchase and License Agreement between Sycamore and Williams
         Communications, Inc.
   10.4  Letter Agreement between Sycamore and Fleet National Bank dated April
         22, 1999
   10.5  Inventory and Accounts Receivable Security Agreement between Sycamore
         and Fleet National Bank dated April 22, 1999
   10.6  Supplementary Security Agreement between Sycamore and Fleet National
         Bank dated April 22, 1999
   10.7  Lease dated as of December 21, 1998 between BerCar II LLC, a
         Massachusetts limited liability company and the Company regarding 10
         Elizabeth Drive, Chelmsford, MA
  *10.8  1999 Stock Incentive Plan
   23.1  Consent of PricewaterhouseCoopers LLP
  *23.2  Consent of Hale and Dorr LLP (included in Exhibit 5.1)
   24.1  Powers of Attorney (see page II-5)
   27.1  Financial Data Schedule
</TABLE>
--------
*  To be filed by amendment.
+  Confidential treatment requested for certain portions of this Exhibit
   pursuant to Rule 406 promulgated under the Securities Act, which portions
   are omitted and filed separately with the Securities and Exchange
   Commission.

   (b) Financial Statement Schedules:

   All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.

Item 17. Undertakings.

   The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

                                     II-4
<PAGE>

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the registrant pursuant to the Delaware General
Corporation Law, the Restated Certificate of the registrant, the Underwriting
Agreement, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered
hereunder, the registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.

   The undersigned registrant hereby undertakes that:

    (1) For purpose of determining any liability under the Act, the
      information omitted from the form of prospectus filed as part of this
      Registration Statement in reliance upon Rule 430A and contained in a
      form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
      or (4), or 497(h) under the Act shall be deemed to be part of this
      Registration Statement as of the time it was declared effective.

    (2) For purpose of determining any liability under the Act, each post-
      effective amendment that contains a form of prospectus shall be
      deemed to be a new Registration Statement relating to the securities
      offered therein, and the offering of such securities at that time
      shall be deemed to be the initial bona fide offering thereof.

                                     II-5
<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Chelmsford, Massachusetts, on this
6th day of August, 1999.

                                          SYCAMORE NETWORKS, INC.

                                          By: /s/ Daniel E. Smith
                                             ----------------------------------
                                             Daniel E. Smith
                                             President and Chief Executive
                                              Officer

                       POWER OF ATTORNEY AND SIGNATURES

   We, the undersigned officers, directors and authorized representatives of
Sycamore Networks, Inc. hereby severally constitute and appoint Gururaj
Deshpande, Daniel E. Smith and Frances M. Jewels, and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly,
with full powers of substitution and resubstitution, to sign for us and in our
names in the capacities indicated below, the Registration Statement on Form S-
1 filed herewith and any and all pre-effective and post-effective amendments
to said Registration Statement, and any subsequent Registration Statement for
the same offering which may be filed under Rule 462(b), and generally to do
all such things in our names and on our behalf in our capacities as officers
and directors to enable Sycamore Networks, Inc. to comply with the provisions
of the Securities Act of 1933, as amended, and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, or
their substitute or substitutes, to said Registration Statement and any and
all amendments thereto or to any subsequent Registration Statement for the
same offering which may be filed under Rule 462(b).

   Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities set forth below on August 6, 1999.

<TABLE>
<S>  <C>
              Signature                        Title

       /s/ Gururaj Deshpande         Chairman of the Board of Directors
-----------------------------------
         Gururaj Deshpande

        /s/ Daniel E. Smith          President, Chief Executive Officer and
-----------------------------------  Director
          Daniel E. Smith

       /s/ Fances M. Jewels          Chief Financial Officer, Vice President,
-----------------------------------  Finance and Administration, Secretary and
         Frances M. Jewels           Treasurer

        /s/ Timothy Barrows          Director
-----------------------------------
          Timothy Barrows

          /s/ Paul Ferri             Director
-----------------------------------
           Paul J. Ferri
</TABLE>

                                     II-6
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
   No.                                Description
 ------- ---------------------------------------------------------------------
 <C>     <S>
   *1.1  Form of Underwriting Agreement
    3.1  Certificate of Incorporation of the Registrant, as amended
   *3.2  Form of Amended and Restated Certificate of Incorporation of the
         Registrant, to be filed prior to the closing of this offering
    3.3  By-Laws of the Registrant
   *3.4  Form of Amended and Restated By-Laws of the Registrant, to be
         effective upon the closing of this offering
   *4.1  Specimen common stock certificate
    4.2  See Exhibits 3.1, 3.2, 3.3 and 3.4 for provisions of the Certificate
         of Incorporation and By-Laws of the Registrant defining the rights of
         holders of common stock of the Registrant
    4.3  Second Amended and Restated Investor Rights Agreement dated February
         26, 1999, as amended by Amendment No. 1 dated July 23, 1999
   *5.1  Opinion of Hale and Dorr LLP
   10.1  1998 Stock Incentive Plan, as amended
  *10.2  1999 Non-Employee Directors' Option Plan
  +10.3  Purchase and License Agreement between Sycamore and Williams
         Communications, Inc.
   10.4  Letter Agreement between Sycamore and Fleet National Bank dated April
         22, 1999
   10.5  Inventory and Accounts Receivable Security Agreement between Sycamore
         and Fleet National Bank dated April 22, 1999
   10.6  Supplementary Security Agreement between Sycamore and Fleet National
         Bank dated April 22, 1999
   10.7  Lease dated as of December 21, 1998 between BerCar II LLC, a
         Massachusetts limited liability company and the Company regarding 10
         Elizabeth Drive, Chelmsford, MA
  *10.8  1999 Stock Incentive Plan
   23.1  Consent of PricewaterhouseCoopers LLP
  *23.2  Consent of Hale and Dorr LLP (included in Exhibit 5.1)
   24.1  Powers of Attorney (see page II-5)
   27.1  Financial Data Schedule
</TABLE>
--------
*  To be filed by amendment.
+  Confidential treatment requested for certain portions of this Exhibit
   pursuant to Rule 406 promulgated under the Securities Act, which portions
   are omitted and filed separately with the Securities and Exchange
   Commission.