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                                                                    Exhibit 10.1
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                           RIVERSTONE NETWORKS, INC.
                          2000 EQUITY INCENTIVE PLAN
                            (Amended and Restated)

1.   PURPOSE

     The purpose of this Equity Incentive Plan (the "Plan") is to advance the
interests of Riverstone Networks, Inc. (the "Company") and its subsidiaries and
affiliates by enhancing their ability to attract and retain employees and other
individuals or entities who are in a position to make significant contributions
to the success of the Company and its subsidiaries through awards based on the
Company's common stock, $.01 par value ("Stock"), and cash incentives.

     The Plan is intended to accomplish these goals by enabling the Company to
grant awards ("Awards") in the form of Options, Stock Appreciation Rights,
Restricted Stock or Unrestricted Stock Awards, Deferred Stock Awards,
Performance Awards, Other Stock-Based Awards or loans or supplemental grants, or
combinations thereof, all as more fully described below.

2.   ADMINISTRATION

     Unless otherwise determined by the Board of Directors of the Company (the
"Board"), the Plan will be administered by a committee of the Board designated
for such purpose (the "Committee").   During such period as the Plan is
administered by the Board rather than by a committee of the Board, all
references herein to "Committee" shall be deemed to refer to the Board.

     The Committee shall consist of at least two directors.  A majority of the
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members.  Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members.  During
such times as the Stock is registered under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), at least two members of the Committee shall be
"non-employee directors" within the meaning of Rule 16b-3 promulgated under the
1934 Act and "outside directors" within the meaning of Section 162(m)(4)(C)(i)
of the Internal Revenue Code of 1986, as amended (the "Code") (the "Outside
Directors").  If any member of the Committee is not an Outside Director, a sub-
committee (the "Sub-Committee") consisting solely of the Outside Directors shall
administer the Plan in connection with Awards to "officers" of the Company
within the meaning of Section 16(b) of the 1934 Act or with respect to any Award
intended to be exempt under Section 162(m) of the Code.  Any references to the
Committee in this Plan shall also mean the Sub-Committee.

     The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to:  (a) grant Awards at such time or times as it may choose; (b)
determine the size of each Award, including the number of shares
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of Stock subject to the Award; (c) determine the type or types of each Award;
(d) determine the terms and conditions of each Award; (e) waive compliance by a
holder of an Award with any obligations to be performed by such holder under an
Award and waive any terms or conditions of an Award; (f) amend or cancel an
existing Award in whole or in part (and if an award is canceled, grant another
Award in its place on such terms and conditions as the Committee shall specify),
except that the Committee may not, without the consent of the holder of an
Award, take any action under this clause with respect to such Award if such
action would adversely affect the rights of such holder; (g) prescribe the form
or forms of any instruments to be used under the Plan, including any written
notices and elections required of Participants (as defined in Section 5), and
change such forms from time to time; (h) adopt, amend and rescind rules and
regulations for the administration of the Plan; and (i) interpret the Plan and
decide any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations and actions of the Committee, and
all other determinations and actions of the Committee made or taken under
authority granted by any provision of the Plan, will be conclusive and will bind
all parties. Nothing in this paragraph shall be construed as limiting the power
of the Committee to make adjustments under Sections 7.3 or 8.6.

     The Committee may delegate to one or more senior officers of the Company
who are also directors of the Company its duties under the Plan subject to such
conditions and limitations as the Committee may prescribe, except that only the
Committee may designate and make grants to Participants (i) who are subject to
Section 16 of the 1934 Act or any successor statute, including, without
limitation, decisions on timing, amount and pricing of Awards, or (ii) who at
the time of grant are (or are expected to be) "covered employees" within the
meaning of Section 162(m)(3) of the Code.

     Notwithstanding the foregoing, prior to the earlier of the date on which
the Company becomes a separate public company for purposes of Section 162(m) of
the Code or the date on which the Committee consists of at least two "outside
directors" (within the meaning of Section 162(m)(4)(C)(i) of the Code), a
committee of "outside directors" (as so defined) of Cabletron Systems, Inc.
("Cabletron") shall act upon all Awards intended to qualify for the performance-
based compensation exception under Section 162(m) of the Code.

3.   EFFECTIVE DATE AND TERM OF PLAN

     The Plan has been approved by the Board and by Cabletron as sole
stockholder of the Company.  No Award may be granted under the Plan after May
14, 2010, but Awards previously granted may extend beyond that date.

4.   SHARES SUBJECT TO THE PLAN

     (a)  Number of Shares.  Subject to adjustment as provided in Section 8.6,
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the aggregate number of shares of Stock that may be delivered under the Plan
will be 45,000,000.  If any Award requiring exercise by the Participant for
delivery of Stock terminates without having been exercised in full, or if any
Award payable in Stock or cash is satisfied in cash rather than Stock, the
number of shares of Stock as to which such Award was not exercised or for which
cash was
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substituted will be available for future grants.

     (b)  Shares to be Delivered.  Stock delivered under the Plan may be either
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authorized but unissued Stock or previously issued Stock acquired by the Company
and held in treasury.  No fractional shares of Stock will be delivered under the
Plan.

     (c)  Special Limitations.  No Participant may be granted Options or Stock
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Appreciation Rights in any calendar year with respect to more than (in the case
of each such type of award) 8,500,000 shares of Stock or, if less, the total
number of shares of Stock then available for awards under the Plan.

5.   ELIGIBILITY AND PARTICIPATION

     Each key employee of the Company or any of its subsidiaries or affiliates
(an "Employee") and each other individual or entity (other than employees of the
Company or any of its subsidiaries or affiliates, but including, without
limitation, directors of the Company or any of its subsidiaries or affiliates
and employees of or other providers of services to Cabletron Systems, Inc. or
any of its subsidiaries) who, in the opinion of the Committee, is in a position
to make a significant contribution to the success of the Company or its
subsidiaries will be eligible to receive Awards under the Plan (each such
Employee, other individual or entity receiving an Award, a "Participant").
Without limiting the foregoing, Participants may also include (i) individuals
who have accepted an offer of employment from the Company or its subsidiaries or
affiliates and who the Company or its subsidiaries or affiliates reasonably
believe will be key employees upon commencing such employment (each a "New
Hire"), and (ii) individuals (whether or not described in the first sentence of
this Section) who, at the time of a spin-off of the Company (as described in
Section 9) from Cabletron, are holding options to acquire stock of Cabletron.

6.   TYPES OF AWARDS

     6.1.  Options

     (a)  Nature of Options.  An option ("Option") is an Award giving the
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recipient the right on exercise thereof to purchase Stock.  Both "incentive
stock options" as defined in Section 422(b) of the Code (any Option intended to
qualify as an incentive stock option being hereinafter referred to as an "ISO")
and Options that are not ISOs may be granted under the Plan.  ISOs shall be
awarded only to individuals who are employed by the Company or by a parent or
subsidiary corporation as those terms are defined in Section 424 of the Code.
Each Option awarded under the Plan shall be a non-ISO unless it is expressly
designated as an ISO at time of grant.

     (b)  Exercise Price.  The exercise price of an Option will be determined by
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the Committee subject to the following:

          (1)  The exercise price of an ISO or an Option intended to qualify as
     performance
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     based compensation under Section 162(m) of the Code shall not be less than
     100% of the fair market value of the Stock subject to the Option,
     determined as of the time the Option is granted.

          (2)  In no case may the exercise price paid for Stock which is part of
     an original issue of authorized Stock be less than the par value per share
     of the Stock.

     (c)  Duration of Options.  The latest date on which an Option may be
          -------------------
exercised will be the tenth anniversary of the day immediately preceding the
date the Option was granted, or such earlier date as may have been specified by
the Committee at the time the Option was granted.

     (d)  Exercise of Options.  An Option will become exercisable at such time
          -------------------
or times, and on such conditions, as the Committee may specify.  The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.  Except as otherwise determined by the
Committee, there shall be added to any period taken into account in determining
the vesting or exercisability of an Option periods during which a Participant
who is an Employee is on an unpaid leave of absence (or other unpaid absence)
from the Company.  For example, if a portion of an Option would otherwise vest
and/or become exercisable on the first anniversary of the date of grant assuming
that the Participant continues in employment and if, during the one-year period
immediately following the date of grant, the Participant is given and takes an
unpaid three-month leave of absence, the portion of the Option that would
otherwise have vested and/or become exercisable on the first anniversary of the
date of grant will vest and/or become exercisable on the date which follows such
anniversary by three months, assuming continued employment by the Participant
and except as otherwise determined by the Committee, and subsequent
vesting/exercisability dates will similarly be moved back by three months.  Any
exercise of an Option must be in writing, signed by the proper person and
delivered or mailed to the Company, accompanied by (1) any documents required by
the Committee and (2) payment in full in accordance with paragraph (e) below for
the number of shares for which the Option is exercised.

     (e)  Payment for Stock.  Stock purchased on exercise of an Option must be
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paid for as follows:  (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company; or (2) if so permitted by the
Committee, (i) by delivery of shares of Stock which have been held for at least
six months (unless the Committee approves a shorter period) and which have a
fair market value equal to the exercise price, (ii) by delivery of a full
recourse promissory note of the Participant to the Company containing such terms
as are specified by the Committee, (iii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iv) by any combination of the
foregoing permissible forms of payment.

     6.2.  Stock Appreciation Rights.

     (a)  Nature of Stock Appreciation Rights.  A Stock Appreciation Right
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("Stock Appreciation Right") is an Award entitling the holder on exercise to
receive an amount in cash or
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Stock or a combination thereof (such form to be determined by the Committee)
determined in whole or in part by reference to appreciation, from and after the
date of grant, in the fair market value of a share of Stock. Stock Appreciation
Rights may be based solely on appreciation in the fair market value of Stock or
on a comparison of such appreciation with some other measure of market growth
such as (but not limited to) appreciation in a recognized market index. The date
as of which such appreciation or other measure is determined shall be the
exercise date unless another date is specified by the Committee.

     (b)  Grant of Stock Appreciation Rights.  Stock Appreciation Rights may be
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granted in tandem with, or independently of, Options granted under the Plan.

          (1)  Rules Applicable to Tandem Awards.  When Stock Appreciation
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     Rights are granted in tandem with Options:  (A) the Stock Appreciation
     Right will be exercisable only at such time or times, and to the extent,
     that the related Option is exercisable and will be exercisable in
     accordance with the procedure required for exercise of the related Option;
     (B) the Stock Appreciation Right will terminate and no longer be
     exercisable upon the termination or exercise of the related Option, except
     that a Stock Appreciation Right granted with respect to fewer than the full
     number of shares covered by an Option will not be reduced until the number
     of shares as to which the related Option has been exercised or has
     terminated exceeds the number of shares not covered by the Stock
     Appreciation Right; (C) the Option will terminate and no longer be
     exercisable upon the exercise of the related Stock Appreciation Right; and
     (D) the Stock Appreciation Right will be transferable only with the related
     Option.

          (2)  Exercise of Independent Stock Appreciation Rights.  A Stock
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     Appreciation Right not granted in tandem with an Option will become
     exercisable at such time or times, and on such conditions, as the Committee
     may specify.  Except as otherwise determined by the Committee, there shall
     be added to any period taken into account in determining the vesting or
     exercisability of a Stock Appreciation Right periods during which a
     Participant who is an Employee is on an unpaid leave of absence (or other
     unpaid absence) from the Company.  The Committee may at any time accelerate
     the time at which all or any part of the Stock Appreciation Right may be
     exercised.

     Any exercise of an independent Stock Appreciation Right must be in writing,
signed by the proper person and delivered or mailed to the Company, accompanied
by any other documents required by the Committee.

     6.3.  Restricted and Unrestricted Stock.

     (a)  Grant of Restricted Stock.  Subject to the terms and provisions of the
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Plan, the Committee may grant shares of Stock in such amounts and upon such
terms and conditions as the Committee shall determine subject to the
restrictions described below ("Restricted Stock").

     (b)  Restricted Stock Agreement.  The Committee may require, as a condition
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to an Award, that a recipient of a Restricted Stock Award enter into a
Restricted Stock Award
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Agreement, setting forth the terms and conditions of the Award. In lieu of a
Restricted Stock Award Agreement, the Committee may provide the terms and
conditions of an Award in a notice to the Participant of the Award, in the
resolution approving the Award, or in such other manner as it deems appropriate.
Any stock certificate representing the Restricted Stock shall bear an
appropriate legend to reflect the applicable restrictions.

     (c)  Transferability and Other Restrictions.  Except as otherwise provided
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in this Section 6.3, the shares of Restricted Stock granted herein may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable period or periods established by the Committee
and the satisfaction of any other conditions or restrictions established by the
Committee (such period during which a share of Restricted Stock is subject to
such restrictions and conditions is referred to as the "Restricted Period").
Except as the Committee may otherwise determine under Sections 7.1 or 7.2, if a
Participant dies or suffers a Status Change (as defined in Section 7.2) for any
reason during the Restricted Period, the Company may purchase the shares of
Restricted Stock subject to such restrictions and conditions for the amount of
cash paid by the Participant for such shares; provided, that if no cash was paid
by the Participant such shares of Restricted Stock shall be automatically
forfeited to the Company.

     During the Restricted Period with respect to any shares of Restricted
Stock, the Company shall have the right to retain in the Company's possession
the certificate or certificates representing such shares.

     (d)  Removal of Restrictions.  Except as otherwise provided in this Section
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6.3, a share of Restricted Stock covered by a Restricted Stock Award shall
become free from restrictions under the Plan upon completion of the Restricted
Period, including the passage of any applicable period of time and satisfaction
of any conditions to vesting.  Except as otherwise determined by the Committee,
there shall be added to any Restricted Period required to be satisfied in
determining the vesting or exercisability of an Award of Restricted Stock
periods during which a Participant who is an Employee is on an unpaid leave of
absence (or other unpaid absence) from the Company.  The Committee shall have
the right at any time, in its sole discretion, immediately to waive all or any
part of the restrictions and conditions with regard to all or any part of the
shares held by any Participant.

     (e)  Voting Rights, Dividends and Other Distributions.  During the
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Restricted Period, Participants holding shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such shares.  Except as the Committee shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock, including any dividends
and distributions paid in shares, shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to which they were
paid.

     (f)  Other Awards Settled with Restricted Stock.  The Committee may, at the
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time any Award described in this Section 6 is granted, provide that any or all
of the Stock delivered pursuant to the Award will be Restricted Stock.
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     (g)  Unrestricted Stock.  Subject to the terms and provisions of the Plan,
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the Committee may grant shares of Stock free of restrictions under the Plan
("Unrestricted Stock") in such amounts and upon such terms and conditions as the
Committee shall determine.

     6.4.  Deferred Stock.

     A Deferred Stock Award is an unfunded and unsecured promise by the Company
to deliver shares of Stock in the future ("Deferred Stock").  Delivery of the
Stock will take place at such time or times, and on such conditions, as the
Committee may specify.  The Committee may at any time accelerate the time at
which delivery of all or any part of the Stock will take place.  At the time any
Award described in this Section 6 is granted, the Committee may provide that any
or all of the Stock delivered pursuant to the Award will be Deferred Stock.

     6.5.  Performance Awards.

     The Committee may, at the time an Award described in Sections 6.1, 6.2,
6.3, 6.4 or 6.7 is granted, impose the additional condition that performance
goals must be met prior to the Participant's realization of any vesting, payment
or benefit under the Award.  In addition, the Committee may make awards
entitling the Participant to receive an amount in cash upon attainment of
specified performance goals (a "Cash Incentive").  Any Award or Cash Incentive
made subject to performance goals as described in the preceding two sentences
shall be a "Performance Award" subject to the provisions of this Section 6.5 in
addition to any other applicable provisions of the Plan or the Award.
Performance Awards may consist of Cash Incentives or Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m) of
the Code, other than Options or Stock Appreciation Rights intended to qualify
for such exception by reason of the special rules under Section 162(m) of the
Code applicable to stock options and stock appreciation rights granted at an
exercise price not less than fair market value on the date of grant, ("Qualified
Performance Awards") or Cash Incentives or Awards that either are not intended
so to qualify or are Options or Stock Appreciation Rights intended to qualify
for such exception by reason of the special rules under Section 162(m) of the
Code applicable to stock options and stock appreciation rights granted at an
exercise price not less than fair market value on the date of grant ("Other
Performance Awards").  The Committee will determine the performance measures,
the period or periods during which performance is to be measured and all other
terms and conditions applicable to the Performance Award.  The performance
measures to which a Performance Award is subject may be related to personal
performance, corporate performance, departmental performance or any other
category of performance established by the Committee.  In the case of a
Qualified Performance Award, payment under the Award or of the Cash Incentive
must be conditioned on the satisfaction of one or more "qualified performance
measures" preestablished by the Committee in accordance with the rules under
Section 162(m) of the Code and on certification (within the meaning of the rules
under Section 162(m) of the Code) by the Committee that such measure or measures
have been met or exceeded.  For purposes of the preceding sentence, a qualified
performance measure is an objectively determinable measure of performance based
on any one or more of the following (on a consolidated, divisional, subsidiary,
line of business or
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geographical basis or in combinations thereof): (i) sales; revenues; assets;
expenses; earnings before or after deduction for all or any portion of interest,
taxes, depreciation or amortization, whether or not on a continuing operations
or an aggregate or per share basis; return on equity, investment, capital or
assets; inventory level or turns; one or more operating ratios; borrowing
levels, leverage ratios or credit rating; market share; capital expenditures;
cash flow; stock price; stockholder return; or any combination of the foregoing;
or (ii) acquisitions and divestitures (in whole or in part); joint ventures and
strategic alliances; spin-offs, split-ups and the like; reorganizations;
recapitalizations, restructurings, financings (issuance of debt or equity) and
refinancings; transactions that would constitute a change of control; or any
combination of the foregoing. A qualified performance measure and targets with
respect thereto determined by the Committee need not be based upon an increase,
a positive or improved result or avoidance of loss. The maximum number of shares
of Stock subject to Performance Awards (other than Cash Incentives) awarded to
any Participant in any three-calendar-year period shall be 5,000,000 shares. The
maximum amount payable under Cash Incentives to any Participant for any year
shall be $5,000,000.

     6.6.  Loans and Supplemental Grants.

     (a)  Loans.  The Company may make a full recourse loan to a Participant,
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either at the time of or after the grant to him or her of any Award.  Such a
loan may be made in connection with either the purchase of Stock under the Award
or the payment of any federal income tax in respect of income recognized as a
result of the Award.  The Committee will have full authority to decide whether
to make such a loan and to determine the amount, terms and conditions of the
loan, including the interest rate (which may be zero), whether the loan is to be
secured or unsecured, the terms on which the loan is to be repaid and the
conditions, if any, under which it may be forgiven.  However, no loan may have a
term (including extensions) exceeding ten years in duration.

     (b)  Cash Grants.  In connection with any Award, the Committee may at the
          -----------
time such Award is made or at a later date provide for and make a cash payment
to the Participant not to exceed an amount equal to (a) the amount of any
federal, state and local income tax on ordinary income for which the Participant
will be liable with respect to the Award, plus (b) an additional amount on a
grossed-up basis necessary to make him or her whole after tax, discharging all
the Participant's income tax liabilities arising from all payments under this
Section 6, all based on such reasonable estimates of applicable tax rates as the
Committee may determine.

     6.7.  Other Stock-Based Awards.

     (a)  Nature of Awards.  The Committee may grant other Awards under which
          ----------------
Stock is or may in the future be acquired ("Other Stock-Based Awards").  Such
Awards may include, without limitation, debt securities convertible into or
exchangeable for shares of Stock upon such conditions, including attainment of
performance goals, as the Committee shall determine.  Such convertible or
exchangeable securities may have such terms and conditions as the Committee may
determine at the time of grant.  However, no convertible or exchangeable debt
shall be issued unless the Committee shall have provided (by Company right of
repurchase, right to
<PAGE>

require conversion or exchange, or other means deemed appropriate by the
Committee) a means of avoiding any right of the holders of such debt to prevent
a Company transaction by reason of covenants in such debt.

     (b)  Purchase Price; Form of Payment.  The Committee may determine the
          -------------------------------
consideration, if any, payable upon the issuance or exercise of an Other Stock-
Based Award.  The Committee may permit payment by certified check or bank check
or other instrument acceptable to the Committee or by surrender of other shares
of Stock (excluding shares then subject to restrictions under the Plan).

     (c)  Forfeiture of Awards; Repurchase of Stock; Acceleration or Waiver of
          --------------------------------------------------------------------
Restrictions.  The Committee may determine the conditions under which an Other
------------
Stock-Based Award shall be forfeited or, in the case of an Award involving a
payment by the recipient, the conditions under which the Company may or must
repurchase such Award or related Stock.  At any time the Committee may in its
sole discretion accelerate, waive or amend any or all of the limitations or
conditions imposed under any Other Stock-Based Award.

7.   EVENTS AFFECTING OUTSTANDING AWARDS

     7.1.  Death.

     Except as the Committee may otherwise determine, if a Participant dies the
following will apply:

     (a)  All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, whether or not otherwise exercisable, may be
exercised by the Participant's executor or administrator or the person or
persons to whom the Option or Stock Appreciation Right is transferred by will or
the applicable laws of descent and distribution, at any time within the one year
period ending with the first anniversary of the Participant's death (or such
shorter or longer period as the Committee may determine), and shall thereupon
terminate.  In no event, however, shall an Option or Stock Appreciation Right
(i) be or become exercisable pursuant to this subsection prior to the date (upon
or following a spin-off of the Company), if any, specified with respect to other
exercises of the Option or Stock Appreciation Right pursuant to Section 9(a)(i),
or (ii) remain exercisable beyond the latest date on which it could have been
exercised without regard to this Section 7.

     (b)  All Restricted Stock held by the Participant must be transferred to
the Company (and, in the event the certificates representing such Restricted
Stock are held by the Company, such Restricted Stock will be so transferred
without any further action by the Participant) in accordance with Section
6.3(c).

     (c)  Any payment or benefit under a Deferred Stock Award, Performance Award
or Other Stock-Based Award to which the Participant was not irrevocably entitled
prior to death will be forfeited and the Award canceled as of the time of death.
<PAGE>

     7.2.  Termination of Service (Other Than By Death).

     If (i) a Participant who is an Employee ceases to be an Employee for any
reason other than death, (ii) there is a termination (other than by reason of
death or satisfactory completion of the project or service as determined by the
Committee) of the consulting, service or similar relationship in respect of
which a non-Employee Participant was granted an Award hereunder or (iii) a New
Hire's offer of employment is terminated prior to the New Hire commencing
employment with the Company or the New Hire does not commence his or her
employment with the Company within two months after receipt of an Award
hereunder (such termination of the employment or other relationship being
hereinafter referred to as a "Status Change"), then, except as the Committee may
otherwise determine, the following will apply:

     (a)  All Options and Stock Appreciation Rights held by the Participant that
were not exercisable immediately prior to the Status Change shall terminate at
the time of the Status Change.  Any Options or Stock Appreciation Rights that
were exercisable immediately prior to the Status Change will continue to be
exercisable for a period of ninety (90) days and shall thereupon terminate,
unless the Award provides by its terms for immediate termination in the event of
a Status Change or unless the Status Change results from a discharge for cause
which in the opinion of the Committee casts such discredit on the Participant as
to justify immediate termination of the Award.  In no event, however, shall an
Option or Stock Appreciation Right remain exercisable beyond the latest date on
which it could have been exercised without regard to this Section 7.  For
purposes of this Section, in the case of a Participant who is an Employee, a
Status Change shall not be deemed to have resulted by reason of (i) a sick leave
or other bona fide leave of absence approved for purposes of the Plan by the
Committee, so long as the Employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) a transfer of employment between the Company
and a subsidiary or between subsidiaries, or to the employment of a corporation
(or a parent or subsidiary corporation of such corporation) issuing or assuming
an option in a transaction to which Section 424(a) of the Code applies.

     (b)  All Restricted Stock held by the Participant at the time of the Status
Change must be transferred to the Company (and, in the event the certificates
representing such Restricted Stock are held by the Company, such Restricted
Stock will be so transferred without any further action by the Participant) in
accordance with Section 6.3(c) above.

     (c)  Any payment or benefit under a Deferred Stock Award, Performance Award
or Other Stock-Based Award to which the Participant was not irrevocably entitled
prior to the Status Change will be forfeited and the Award canceled as of the
date of such Status Change.

     7.3.  Certain Corporate Transactions.

     Except as otherwise provided by the Committee, in the event of a
consolidation or merger in which the Company is not the surviving corporation or
which results (or that is part of a series of related transactions that results)
in the acquisition of substantially all the Company's outstanding Stock by a
single person or entity or by a group of persons or entities acting in concert,
or in the event of the sale or transfer of substantially all the Company's
assets or a
<PAGE>

dissolution or liquidation of the Company (a "covered transaction"), the
following rules shall apply:

     (a)  Subject to paragraph (b) below, all outstanding Awards requiring
exercise will cease to be exercisable, and all other Awards to the extent not
fully vested (including Awards subject to conditions not yet satisfied or
determined) will be forfeited, as of the effective time of the covered
transaction; provided, that the Committee may in its sole discretion, on or
prior to the effective date of the covered transaction, (1) make any outstanding
Option and Stock Appreciation Right exercisable in full, (2) remove the
restrictions from any Restricted Stock, (3) cause the Company to make any
payment and provide any benefit under any Deferred Stock Award or Performance
Award or (4) remove any performance or other conditions or restrictions on any
Award; or

     (b)  With respect to an outstanding Award held by a Participant who,
following the covered transaction, will be employed by or otherwise providing
services to an entity which is a surviving or acquiring entity in the covered
transaction or an affiliate of such an entity, the Committee may at or prior to
the effective time of the covered transaction and in lieu of the action
described in paragraph (a) above, arrange to have such surviving or acquiring
entity or affiliate assume any Award held by such Participant outstanding
hereunder or grant a replacement award which, in the judgment of the Committee,
is substantially equivalent to any Award being replaced.

The Committee may also grant Awards under the Plan in substitution for awards
held by directors, employees, consultants or advisors of another company who
concurrently become directors, employees, consultants or advisors of the Company
or a subsidiary of the Company as the result of a merger or consolidation of
that other company with the Company or a subsidiary of the Company, or as the
result of the acquisition by the Company or a subsidiary of the Company of
property or stock of that other company.  Awards granted under the preceding
sentence may be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

8.   GENERAL PROVISIONS

     8.1.  Documentation of Awards.

     Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time.  Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
<PAGE>

     8.2.  Rights as a Stockholder; Dividend Equivalents.

     Except as specifically provided by the Plan, the receipt of an Award will
not give a Participant rights as a stockholder; the Participant will obtain such
rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, only upon the issuance of Stock.  However, the Committee
may, on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Stock subject to the Participant's Award had such Stock been outstanding.
Without limitation, the Committee may provide for payment to the Participant of
amounts representing such dividends, either currently or in the future, or for
the investment of such amounts on behalf of the Participant.

     8.3.  Conditions on Delivery of Stock.

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove restrictions from shares previously delivered under the
Plan (a) until all conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulation have been complied with, (c) if the outstanding Stock is at
the time listed on any stock exchange or The Nasdaq National Market, until the
shares to be delivered have been listed or authorized to be listed on such
exchange or market upon official notice of issuance, and (d) until all other
legal matters in connection with the issuance and delivery of such shares have
been approved by the Company's counsel.  If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.

     If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.

     8.4.  Tax Withholding.

     The Company will withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").

     In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock
or removal of restrictions thereon.  If and to the extent that such withholding
is required, the Committee may permit the Participant or such other person to
elect at such time and in such manner as the Committee provides to have the
Company hold back from the shares to be
<PAGE>

delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement, but not in excess of the minimum required
to satisfy such withholding requirements. The Committee may make such share
withholding mandatory with respect to any Award at the time such Award is made
to a Participant.

     If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to the
exercise or with respect to a disposition of the Stock received upon exercise,
the Committee may require as a condition of exercise that the person exercising
the ISO agree (a) to provide for withholding under the preceding paragraph of
this Section 8.4, if the Committee determines that a withholding responsibility
may arise in connection with the exercise, (b) to inform the Company promptly of
any disposition (within the meaning of Section 424(c) of the Code) of Stock
received upon exercise and (c) to give such security as the Committee deems
adequate to meet the potential liability of the Company for other withholding
requirements and to augment such security from time to time in any amount
reasonably deemed necessary by the Committee to preserve the adequacy of such
security.

     8.5.  Transferability of Awards.

     Unless otherwise permitted by the Committee, no Award (other than an Award
in the form of an outright transfer of cash or Unrestricted Stock) may be
transferred other than by will or by the laws of descent and distribution.

     8.6.  Adjustments in the Event of Certain Transactions.

     (a)  In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to holders of Stock other than normal cash dividends, after
the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the Plan
under Section 4(a) and to the limits described in Sections 4(c) and 6.5.

     (b)  In any event referred to in paragraph (a) above, the Committee will
also make any appropriate adjustments to the number and kind of shares of Stock
or securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change.  The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.

     (c)  In the case of ISOs or Awards intended to qualify for the
"performance-based compensation" exception under Section 162(m)(4)(C) of the
Code, the adjustments described in paragraphs (a) and (b) above will be made
only to the extent consistent with continued qualification of the Option or
other Award under Sections 422 or 162(m) of the Code, as the case may be.
<PAGE>

     (d) For the avoidance of doubt, no adjustment shall be required under this
Section 8.6 to reflect the acquisition of additional shares of Stock by
Cabletron consistent with, or undertaken to effectuate, the capitalization of
the Company assumed in determining the amount, value or exercise price of Awards
made prior to an initial public offering of the Stock.

     8.7.  Employment Rights, Etc.

     Neither the adoption of the Plan nor the grant of Awards will confer upon
any person any right to continued retention by the Company or any of its
subsidiaries as an Employee or otherwise, or affect in any way the right of the
Company or any of its subsidiaries to terminate an employment, service or
similar relationship at any time.  Except as specifically provided by the
Committee in any particular case, the loss of existing or potential profit in
Awards granted under the Plan will not constitute an element of damages in the
event of termination of an employment, service or similar relationship even if
the termination is in violation of an obligation of the Company or any of its
subsidiaries to the Participant.

     8.8.  Deferral of Payments.

     The Committee may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.

     8.9.  Past Services as Consideration.

     Where a Participant purchases Stock under an Award for a price equal to the
par value of the Stock, the Committee may determine that such price has been
satisfied by past services rendered by the Participant.

9.   SPECIAL PROVISIONS RELATING TO THE REORGANIZATION OF CABLETRON SYSTEMS,
     INC. AND CERTAIN OF ITS SUBSIDIARIES

     The provisions of this Section 9 shall apply notwithstanding any other
provision in the Plan to the contrary.

     (a)  It is anticipated that following the effective date of the Plan and a
subsequent initial public offering of shares of Stock, stock of the Company held
by Cabletron, the Company's parent corporation, may be distributed (a "spin-
off") to the shareholders of Cabletron.  Similar transactions may be
accomplished with respect to other subsidiaries of Cabletron.  Without limiting
the generality of its authority under the Plan, the Committee may provide that
(i) Options and Stock Appreciation Rights will not be exercisable prior to the
effectiveness of a spin-off of the Company; and (ii) upon a spin-off of the
Company, Options (the "make-up Options") will be granted under the Plan to
certain persons then holding compensatory options to acquire stock of Cabletron
in recognition of the effect of such spin-off on the value of such Cabletron
options, such make-up Options to have such terms as the Committee shall have
determined in conformity with the program for option adjustments approved by
Cabletron in connection with the spin-offs of its subsidiaries.
<PAGE>

     (b) If a Sale (as hereinafter defined) of the Company occurs, the following
provisions shall apply (I) to every Option granted to an employee of the Company
or its subsidiaries or to an employee of Cabletron or a subsidiary of Cabletron,
notwithstanding any provision of such Award to the contrary, and (II) to every
other Award to the extent provided in such other Award:

               (i) Each Award granted prior to the Sale (an "affected Award")
          shall be vested (and, in the case of an Award requiring exercise,
          exercisable) (vesting and exercisability being referred to for
          purposes of this subsection (b), without distinction, as "vesting"),
          immediately prior to the Sale, for the "applicable number of shares"
          as hereinafter defined.  In the case of an affected Award requiring
          exercise, the Company shall give the holder of the Award adequate
          notice and opportunity to exercise any portion of the affected Award
          that becomes exercisable by reason of this subsection.  For purposes
          of this paragraph (i), the term "applicable number of shares" means,
          in the case of any Award, that number of shares for which the Award,
          but for the operation of any limitation deferring scheduled vesting
          until the date of a spin-off, would have been vested by the end of the
          ten (10)-month period following the Sale had the Participant holding
          the Award immediately prior to the Sale continued in service during
          such ten (10)-month period.

               (ii) Upon consummation of the Sale, if the Sale also constitutes
          a covered transaction as defined in Section 7.3 each affected Award
          requiring exercise will cease to be exercisable, and all other
          affected Awards to the extent not fully vested will be forfeited,
          except as otherwise provided pursuant to Section 7.3. If the acquiror
          entity or an affiliate thereof assumes an affected Award, the assumed
          Award shall be vested from and after the Sale to the extent provided
          under paragraph (i) above and as to any portion that is not vested by
          operation of paragraph (i) above shall become vested from and after
          the Sale in accordance with the vesting schedule (determined without
          regard to any limitation deferring scheduled vesting until the date of
          a spin-off) that would have applied during the period beginning on the
          first day following ten (10) months after the date of the Sale,
          accelerated by ten (10) months. For the avoidance of doubt, in no
          event shall the assumed Award become vested for more than the total
          number of Shares subject thereto. If the acquiror entity or an
          affiliate thereof provides a substitute Award in lieu of assuming an
          affected Award, such substitute Award shall vest in the same manner as
          it would have vested had it been an assumed Award.

               (iii) For purposes of this subsection (b), a "Sale" of the
          Company shall be deemed to have occurred if:
<PAGE>

                    (A) Prior to a spin-off of the Company, Cabletron sells or
               otherwise disposes of (including without limitation by merger)
               all or substantially all of the stock of the Company that
               Cabletron owns, or the Company sells or otherwise disposes of all
               or substantially all of its assets, to an unrelated person or to
               one or more unrelated persons acting as a group.  For the
               avoidance of doubt, none of the following shall constitute a Sale
               under the preceding sentence:  (1) a spin-off; (2) a liquidation
               or merger of the Company into Cabletron or into another
               subsidiary of Cabletron; (3) any other reorganization of the
               Company or other transaction that results in Cabletron's
               continuing to own, directly or indirectly, a majority of the
               combined voting power of all outstanding shares of stock or other
               equity interests of the Company or of the entity resulting from
               such reorganization or other transaction; or (4) a disposition by
               Cabletron of stock of the Company, or by the Company of its
               stock, in a public offering; or

                    (B)  Following a spin-off of the Company:

                         (1)  any Person (defined for the purpose of this
                    Section 9(b)(iii)(B) as any individual, entity or other
                    person, including a group within the meaning of Section
                    13(d) or 14(d)(2) of the 1934 Act) acquires beneficial
                    ownership (within the meaning of Rule 13d-3 promulgated
                    under the 1934 Act) of 30% or more of either (I) the then
                    outstanding shares of common stock of the Company (the
                    "Outstanding Company Common Stock") or (II) the combined
                    voting power of the then outstanding voting securities of
                    the Company entitled to vote generally in the election of
                    directors (the "Outstanding Company Voting Securities");
                    provided, that   for purposes of this subsection (B)(1) the
                    following acquisitions shall not constitute a Sale:  (aa)
                    any acquisition directly from the Company, (bb) any
                    acquisition by the Company, (cc) any acquisition by an
                    employee benefit plan (or related trust) sponsored or
                    maintained by the Company or its direct or indirect
                    subsidiaries, or (dd) any Business Combination as defined at
                    paragraph (3) below (but except as provided in said
                    paragraph (3) a Business Combination may nevertheless
                    constitute a Sale under said paragraph (3)); and provided
                    further, that an acquisition by a Person of 30% or more but
                    less than 50% of the Outstanding Company Common Stock or of
                    the combined voting power of the Outstanding Company Voting
                    Securities shall not constitute a Sale under this subsection
                    (B)(1) if within 15
<PAGE>

                    days of the Board's being advised that such ownership level
                    has been reached, a majority of the "Incumbent Directors"
                    (as hereinafter defined) then in office adopt a resolution
                    approving the acquisition of that level of securities
                    ownership by such Person; or

                         (2)  Individuals who, as of the first date following
                    the spin-off  (the "Spin Date"), constituted the Board (the
                    "Incumbent Directors") cease for any reason to constitute at
                    least a majority of the Board; provided, that any individual
                    who becomes a member of the Board subsequent to the Spin
                    Date and whose election or nomination for election was
                    approved by a vote of at least two-thirds of the Incumbent
                    Directors shall be treated as an Incumbent Director unless
                    he or she assumed office as a result of an actual or
                    threatened election contest with respect to the election or
                    removal of directors; or

                         (3)  There is consummated a reorganization, merger or
                    consolidation involving the Company, or a sale or other
                    disposition of all or substantially all of the assets of the
                    Company (a "Business Combination"), in each case unless,
                    following such Business Combination, (I) the Persons who
                    were the beneficial owners, respectively, of the Outstanding
                    Company Common Stock and of the combined voting power of the
                    Outstanding Company Voting Securities immediately prior to
                    the Business Combination beneficially own, directly or
                    indirectly, more than 50% of, respectively, the then
                    outstanding shares of common stock and the combined voting
                    power of the then outstanding voting securities entitled to
                    vote generally in the election of directors, as the case may
                    be, of the entity resulting from such Business Combination
                    in substantially the same proportions as their ownership
                    immediately prior to such Business Combination of the
                    Outstanding Company Common Stock and of the combined voting
                    power of the Outstanding Company Voting Securities, as the
                    case may be, (II) no Person (excluding any entity resulting
                    from such Business Combination or any employee benefit plan
                    (or related trust) of the Employer or of such corporation
                    resulting from such Business Combination) beneficially owns,
                    directly or indirectly, 30% or more of, respectively, the
                    then outstanding shares of common stock of the corporation
                    resulting from such Business Combination or the combined
                    voting power of the then outstanding voting
<PAGE>

                    securities of such corporation entitled to vote generally in
                    the election of directors, except to the extent that such
                    ownership existed prior to the Business Combination and
                    (III) at least a majority of the members of the Board
                    resulting from such Business Combination were Incumbent
                    Directors at the time of the execution of the initial
                    agreement, or of the action of the Board, providing for such
                    Business Combination; or

                         (4)  The shareholders of the Company approve a complete
                    liquidation or dissolution of the Company."

     (c)  In the event that Cabletron, by action of its board of directors,
determines not to pursue its current intention to cause the Company to undergo
an initial public offering or determines not to pursue its current intention to
cause the Company to undergo a spin-off from Cabletron, it may provide (any such
action to be binding under the Plan) that Options then outstanding under the
Plan ("affected Options") shall be converted into Cabletron options.  In the
event of any such conversion, the converted Cabletron options shall have such
provisions as are determined by Cabletron in its sole and absolute discretion to
be necessary to preserve insofar as is practicable the incentive stock option
status of any affected Options that are incentive stock options and to provide
that (1) the aggregate amount of intrinsic value (that is, the difference
between the exercise price and the value of the underlying stock) in the
Cabletron options immediately following conversion does not exceed the intrinsic
value in the affected Options immediately before the conversion and that (2) the
ratio of the exercise price to the value of the underlying stock is not reduced.
The new Cabletron options shall have the same vesting and exercisability
provisions as the affected Options to which they relate (determined without
regard to any limitation on vesting or exercisability that is dependent upon an
initial public offering or spin-off of the Company), subject to special rules in
the event of a sale or merger of Cabletron.   In the event that the Company is
not a public company at the time of the conversion described above, the
determination of the value of the Company stock shall be made by Cabletron in
its sole and absolute discretion.  In the event that Cabletron, by action of its
board of directors, determines not to pursue its current intention to cause the
Company to undergo an initial public offering or determines not to pursue its
current intention to cause the Company to undergo a spin-off from Cabletron, and
if any Awards other than Options are then outstanding ("affected non-Option
Awards"), Cabletron shall provide with respect to such affected non-Option
Awards such substitute or replacement awards, including cash awards, if any, as
Cabletron in its sole and absolute discretion may determine to be equitable
under the circumstances.  In the event that Cabletron, by action of its board of
directors, determines not to pursue its current intention to cause the Company
to undergo a spin-off from Cabletron, and in connection therewith determines
that the provisions of this sentence shall apply, any vesting provisions of
Options then outstanding under the Plan shall, from and after such date as shall
be specified by the board of directors of Cabletron, be determined without
regard to any limitation deferring scheduled vesting until the date of a spin-
off.
<PAGE>

10.  EFFECT, AMENDMENT AND TERMINATION

     Neither adoption of the Plan nor the grant of Awards to a Participant will
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.

     The Committee may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at any
time terminate the Plan as to any further grants of Awards, provided that
(except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify for the award of ISOs under Section 422 of the Code
or for the award of performance-based compensation under Section 162(m) of the
Code.