exv10w37



 



EXHIBIT 10.37




CIENA CORPORATION

2000 EQUITY INCENTIVE PLAN




As Adopted April 7, 2000 and Amended May 16, 2001 and August 19, 2003




     1.      PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized
terms not defined in the text are defined in Section 23.




     2.      SHARES SUBJECT TO THE PLAN.




               2.1      Number of Shares Available. Subject to Sections 2.2 and 18, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan is 34,459,2491 Shares plus Shares that are subject to: (a) issuance upon
exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option; (b) an Award granted hereunder but are
forfeited or are repurchased by the Company at the original issue price; and
(c) an Award that otherwise terminates without Shares being issued. In
addition, any authorized shares not issued or subject to outstanding grants
under the ONI’s 1999 Equity Incentive Plan, 1998 Equity Incentive Plan and 1997
Stock Option Plan (the “Prior Plans”) on the Effective Date (as defined below)
and any shares issued under the Prior Plans that are forfeited or repurchased
by the Company or that are issuable upon exercise of options granted pursuant
to the Prior Plans that expire or become unexercisable for any reason without
having been exercised in full, will no longer be available for grant and
issuance under the Prior Plans, but will be available for grant and issuance
under this Plan. In addition, on each January 1, the aggregate number of
Shares reserved and available for grant and issuance pursuant to this Plan will
be increased automatically by a number of Shares equal to 5% of the total
outstanding shares of the Company as of the immediately preceding December 31;
provided, that the Board may in its sole discretion reduce the amount of the
increase in any particular year; and, provided further, that no more than
50,000,000 shares shall be issued as ISOs (as defined in Section 5 below). At
all times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards
granted under this Plan.




               2.2      Adjustment of Shares. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then (a) the number
of Shares reserved for issuance under this Plan, (b) the number of Shares that
may be granted pursuant to Sections 3 and 9 below, (c) the Exercise Prices of
and number of Shares subject to outstanding Options, and (d) the number of
Shares subject to other outstanding Awards will be proportionately adjusted,
subject to any required action by the Board or the stockholders of the Company
and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.




     3.      ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company;
provided such consultants, contractors and advisors render bona fide services
not in connection with the offer and sale of securities in a capital-raising
transaction. No person will be eligible to receive more than 1,000,000 Shares
in any calendar year under this Plan pursuant to the grant of Awards hereunder,
other than new employees of the Company or of a Parent or Subsidiary of the
Company (including new employees who are also officers and directors of the
Company or any Parent or Subsidiary of the Company), who are eligible to
receive up to a maximum of 2,000,000 Shares in the calendar year in which they
commence their employment. A person may be granted more than one Award under
this Plan.









	 	 	1 As of August 19, 2003.







 








 



     4.      ADMINISTRATION.




               4.1      Committee Authority. This Plan will be administered by the Committee
or by the Board acting as the Committee. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the
Board, the Committee will have full power to implement and carry out this Plan.
The Committee will have the authority to:




	 	(a)	 	construe and interpret this Plan, any Award
Agreement and any other agreement or document executed
pursuant to this Plan;






	 	(a)	 	prescribe, amend and rescind rules and
regulations relating to this Plan or any Award;






	 	(c)	 	select persons to receive Awards;






	 	(d)	 	determine the form and terms of Awards;






	 	(e)	 	determine the number of Shares or other
consideration subject to Awards;






	 	(f)	 	determine whether Awards will be granted singly,
in combination with, in tandem with, in replacement of, or as
alternatives to, other Awards under this Plan or any other
incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;






	 	(g)	 	grant waivers of Plan or Award conditions;






	 	(h)	 	determine the vesting, exercisability and payment
of Awards;






	 	(i)	 	correct any defect, supply any omission or
reconcile any inconsistency in this Plan, any Award or any
Award Agreement;






	 	(j)	 	determine whether an Award has been earned; and






	 	(k)	 	make all other determinations necessary or
advisable for the administration of this Plan.






               4.2      Committee Discretion. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant
of the Award or, unless in contravention of any express term of this Plan or
Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not
Insiders of the Company.




          5.      OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code (“ISO”) or Nonqualified Stock Options (“NQSOs”), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:




               5.1      Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO (“Stock Option Agreement”) and will be in such form and contain
such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.




               5.2      Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.




               5.3      Exercise Period. Options may be exercisable within the times or upon
the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and





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provided further that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary of
the Company (“Ten Percent Stockholder”) will be exercisable after the
expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.




               5.4      Exercise Price. The Exercise Price of an Option will be determined by
the Committee when the Option is granted and may be not less than 85% of the
Fair Market Value of the Shares on the date of grant; provided that: (i) the
Exercise Price of an ISO will be not less than 100% of the Fair Market Value of
the Shares on the date of grant; and (ii) the Exercise Price of any ISO granted
to a Ten Percent Stockholder will not be less than 110% of the Fair Market
Value of the Shares on the date of grant. Payment for the Shares purchased may
be made in accordance with Section 8 of this Plan.




               5.5      Method of Exercise. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement (the “Exercise
Agreement”) in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant’s investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.




               5.6      Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:




	 	(a)	 	     If the Participant is Terminated for any reason
except death or Disability, then the Participant may exercise
such Participant’s Options only to the extent that such
Options would have been exercisable upon the Termination Date
no later than three (3) months after the Termination Date (or
such shorter or longer time period not exceeding five (5)
years as may be determined by the Committee, with any exercise
beyond three (3) months after the Termination Date deemed to
be an NQSO), but in any event, no later than the expiration
date of the Options.






	 	(b)	 	     If the Participant is Terminated because of
Participant’s death or Disability (or the Participant dies
within three (3) months after a Termination other than for
Cause or because of Participant’s Disability), then
Participant’s Options may be exercised only to the extent that
such Options would have been exercisable by Participant on the
Termination Date and must be exercised by Participant (or
Participant’s legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date (or
such shorter or longer time period not exceeding five (5)
years as may be determined by the Committee, with any such
exercise beyond (a) three (3) months after the Termination
Date when the Termination is for any reason other than the
Participant’s death or Disability, or (b) twelve (12) months
after the Termination Date when the Termination is for
Participant’s death or Disability, deemed to be an NQSO), but
in any event no later than the expiration date of the Options.






	 	(c)	 	     Notwithstanding the provisions in paragraph
5.6(a) above, if a Participant is terminated for Cause,
neither the Participant, the Participant’s estate nor such
other person who may then hold the Option shall be entitled to
exercise any Option with respect to any Shares whatsoever,
after termination of service, whether or not after termination
of service the Participant may receive payment from the
Company or Subsidiary for vacation pay, for services rendered
prior to termination, for services rendered for the day on
which termination occurs, for salary in lieu of notice, or for
any other benefits. In making such determination, the Board
shall give the Participant an opportunity to present to the
Board evidence on his behalf. For the purpose of this
paragraph, termination of service shall be deemed to occur on
the date when the Company dispatches notice or advice to the
Participant that his service is terminated.






          5.7      Limitations on Exercise. The Committee may specify a reasonable
minimum number of





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Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.




               5.8      Limitations on ISO. The aggregate Fair Market Value (determined as of
the date of grant) of Shares with respect to which ISO are exercisable for the first time by a
Participant during any calendar year (under this Plan or under any other
incentive stock option plan of the Company, Parent or Subsidiary of the
Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.




               5.9      Modification, Extension or Renewal. The Committee may modify, extend
or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant’s rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding
Options without the consent of Participants affected by a written notice to
them; provided, however, that the Exercise Price may not be reduced below the
minimum Exercise Price that would be permitted under Section 5.4 of this Plan
for Options granted on the date the action is taken to reduce the Exercise
Price.




               5.10      No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.




     6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company
to sell to an eligible person Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the price to be paid (the “Purchase Price”), the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:




               6.1      Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
(“Restricted Stock Purchase Agreement”) that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of
this Plan. The offer of Restricted Stock will be accepted by the Participant’s
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise determined by the Committee.




               6.2      Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Stockholder, in which case the Purchase Price will be 100% of the Fair
Market Value. Payment of the Purchase Price may be made in accordance with
Section 8 of this Plan.




               6.3      Terms of Restricted Stock Awards. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. These restrictions
may be based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in
the Participant’s individual Restricted Stock Purchase Agreement. Restricted
Stock Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of Shares that may be awarded to the Participant. Prior to the payment
of any Restricted Stock Award, the Committee shall determine the extent to
which such Restricted Stock Award has been earned. Performance Periods may
overlap





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and Participants may participate simultaneously with respect to
Restricted Stock Awards that are subject to different Performance Periods and
having different performance goals and other criteria.




               6.4      Termination During Performance Period. If a Participant is Terminated
during a Performance Period for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Restricted
Stock Award only to the extent earned as of the date of Termination in
accordance with the Restricted Stock Purchase Agreement, unless the Committee
will determine otherwise.




     7.      STOCK BONUSES.




               7.1      Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or any
Parent or Subsidiary of the Company. A Stock Bonus may be awarded for past
services already rendered to the Company, or any Parent or Subsidiary of the
Company pursuant to an Award Agreement (the “Stock Bonus Agreement”) that will
be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject
to the terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant’s individual Award Agreement (the “Performance Stock Bonus
Agreement”) that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses
may vary from Participant to Participant and between groups of Participants,
and may be based upon the achievement of the Company, Parent or Subsidiary
and/or individual performance factors or upon such other criteria as the
Committee may determine.




               7.2      Terms of Stock Bonuses. The Committee will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of performance goals pursuant to a Performance Stock
Bonus Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any;
and (c) determine the number of Shares that may be awarded to the Participant.
Prior to the payment of any Stock Bonus, the Committee shall determine the
extent to which such Stock Bonuses have been earned. Performance Periods may
overlap and Participants may participate simultaneously with respect to Stock
Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be
determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships.




               7.3      Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash
or whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.




     8.      PAYMENT FOR SHARE PURCHASES.




               8.1      Payment. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:




	 	(a)	 	by cancellation of indebtedness of the Company to
the Participant;






	 	(b)	 	by surrender of shares that either: (1) have
been owned by Participant for more than six (6) months and
have been paid for within the meaning of SEC Rule 144 (and, if
such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to
such shares); or (2) were obtained by Participant in the
public market;






	 	(c)	 	by tender of a full recourse promissory note
having such terms as may be approved by the Committee and
bearing interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Code; provided,
however, that Participants who are not







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	 		 	employees or directors
of the Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares;






	 	(d)	 	by waiver of compensation due or accrued to the
Participant for services rendered;






	 	(e)	 	with respect only to purchases upon exercise of
an Option, and provided that a public market for the Company’s
stock exists:






	 	(1)	 	through a “same day sale” commitment
from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers
(an “NASD Dealer”) whereby the Participant irrevocably
elects to exercise the Option and to sell a portion of
the Shares so purchased to pay for the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price
directly to the Company; or

	 
	 	(2)	 	through a “margin” commitment from the Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as security for
a loan from the NASD Dealer in the amount of the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or





	 	(f)	 	by any combination of the foregoing.






               8.2      Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.



     9.      [RESERVED]




     10.      WITHHOLDING TAXES.




               10.1      Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding
tax requirements.




               10.2      Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined. All elections by a Participant to have
Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form
acceptable to the Committee.




     11.      TRANSFERABILITY.




               11.1      Except as otherwise provided in this Section 11, Awards granted under
this Plan, and any interest therein, will not be transferable or assignable by
Participant, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution or
as determined by the Committee and set forth in the Award Agreement with
respect to Awards that are not ISOs.




               11.2      All Awards other than NQSO’s. All Awards other than NQSO’s shall be
exercisable: (i) during the Participant’s lifetime, only by (A) the
Participant, or (B) the Participant’s guardian or legal representative; and
(ii) after Participant’s death, by the legal representative of the
Participant’s heirs or legatees.




               11.3      NQSOs. Unless otherwise restricted by the Committee, an NQSO shall
be exercisable: (i) during the Participant’s lifetime only by (A) the
Participant, (B) the Participant’s guardian or legal representative, (C) a
Family Member of the Participant who has acquired the NQSO by “permitted
transfer;” and (ii) after Participant’s





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death, by the legal representative of
the Participant’s heirs or legatees. “Permitted transfer” means, as authorized
by this Plan and the Committee in an NQSO, any transfer effected by the
Participant during the Participant’s lifetime of an interest in such NQSO but
only such transfers which are by gift or domestic relations order. A permitted
transfer does not include any transfer for value and neither of the following
are transfers for value: (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which
more than fifty percent of
the voting interests are owned by Family Members or the Participant in exchange
for an interest in that entity.




     12.      PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.




               12.1      Voting and Dividends. No Participant will have any of the rights of
a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will
be a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as
the Restricted Stock; provided, further, that the Participant will have no
right to retain such stock dividends or stock distributions with respect to
Shares that are repurchased at the Participant’s Purchase Price or Exercise
Price pursuant to Section 12.




               12.2      Financial Statements. The Company will provide financial statements
to each Participant prior to such Participant’s purchase of Shares under this
Plan, and to each Participant annually during the period such Participant has
Awards outstanding; provided, however, the Company will not be required to
provide such financial statements to Participants whose services in connection
with the Company assure them access to equivalent information.




               12.3      Restrictions on Shares. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Unvested Shares held by a Participant
following such Participant’s Termination at any time within ninety (90) days
after the later of Participant’s Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase
money indebtedness, at the Participant’s Exercise Price or Purchase Price, as
the case may be.




     13.      CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of the
SEC or any stock exchange or automated quotation system upon which the Shares
may be listed or quoted.




     14.      ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant’s Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause
a legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will
be required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant’s obligation to
the Company under the promissory note; provided, however, that the Committee
may require or accept other or additional forms of collateral to secure the
payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any
pledge of the Participant’s Shares or other collateral. In connection with any
pledge of the Shares, Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve. The Shares purchased with the promissory note may be released from
the pledge on a pro rata basis as the promissory note is paid.




          15.      EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time
buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and
conditions as the Committee and the Participant may agree.





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     16.      SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of
exercise or other issuance. Notwithstanding any other provision in this Plan,
the Company will have no obligation to issue or deliver certificates for Shares
under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or (b)
completion of any registration or other qualification of such Shares under any
state or federal law or ruling of any governmental body that the Company
determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have
no liability for any inability or failure to do so.




     17.      NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the
right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause.




     18.      CORPORATE TRANSACTIONS.




               18.1      Assumption or Replacement of Awards by Successor. In the event of
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such
merger (other than any stockholder that merges, or which owns or controls
another corporation that merges, with the Company in such merger) cease to own
their shares or other equity interest in the Company, (d) the sale of
substantially all of the assets of the Company, or (e) the acquisition, sale,
or transfer of more than 50% of the outstanding shares of the Company by tender
offer or similar transaction (each, a “Corporate Transaction”), any or all
outstanding Awards may be assumed, converted or replaced by the successor
corporation (if any), which assumption, conversion or replacement will be
binding on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue,
in place of outstanding Shares of the Company held by the Participants,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation (if any) refuses to assume or substitute Awards, as provided above,
pursuant to a transaction described in this Subsection 18.1, such Awards will
expire on such transaction at such time and on such conditions as the Committee
will determine. Notwithstanding anything in this Plan to the contrary, the
Committee may, in its sole discretion, provide that the vesting of any or all
Awards granted pursuant to this Plan will accelerate upon a transaction
described in this Section 18. If the Committee exercises such discretion with
respect to Options, such Options will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee
determines, and if such Options are not exercised prior to the consummation of
the corporate transaction, they shall terminate at such time as determined by
the Committee.




               18.2      Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 18, in the event of
the occurrence of any Corporate Transaction described in Section 18.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.




               18.3      Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise,
by either; (a) granting an Award under this Plan in substitution of such other
company’s award; or (b) assuming such award as if it had been granted under
this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible
if the holder of the substituted or assumed award would have been eligible to
be granted an Award under this Plan if the





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other company had applied the rules
of this Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award will remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects to
grant a new Option rather than assuming an existing
option, such new Option may be granted with a similarly adjusted Exercise
Price.




     19.      ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date on which the registration statement filed by the Company with the SEC
under the Securities Act registering the initial public offering of the
Company’s Common Stock is declared effective by the SEC (the “Effective Date”).
This Plan shall be approved by the stockholders of the Company (excluding
Shares issued pursuant to this Plan), consistent with applicable laws, within
twelve (12) months before or after the date this Plan is adopted by the Board.
Upon the Effective Date, the Committee may grant Awards pursuant to this Plan;
provided, however, that: (a) no Option may be exercised prior to initial
stockholder approval of this Plan; (b) no Option granted pursuant to an
increase in the number of Shares subject to this Plan approved by the Board
will be exercised prior to the time such increase has been approved by the
stockholders of the Company; (c) in the event that initial stockholder approval
is not obtained within the time period provided herein, all Awards granted
hereunder shall be cancelled, any Shares issued pursuant to any Awards shall be
cancelled and any purchase of Shares issued hereunder shall be rescinded; and
(d) in the event that stockholder approval of such increase is not obtained
within the time period provided herein, all Awards granted pursuant to such
increase will be cancelled, any Shares issued pursuant to any Award granted
pursuant to such increase will be cancelled, and any purchase of Shares
pursuant to such increase will be rescinded.




     20.      TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of stockholder approval. This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California.




     21.      AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of
any form of Award Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval.




     22.      NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.




     23.      DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:




          “Award” means any award under this Plan, including any Option, Restricted
Stock or Stock Bonus.




          “Award Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.




          “Board” means the Board of Directors of the Company.




          “Cause” means the commission of an act of theft, embezzlement, fraud,
dishonesty or a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Committee” means the Compensation Committee of the Board.




          “Company” means CIENA Corporation or any successor corporation.




          “Disability” means a disability, whether temporary or permanent, partial
or total, as determined by the Committee.





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          “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          “Exercise Price” means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.




          “Fair Market Value” means, as of any date, the value of a share of the
Company’s Common Stock determined as follows:




	 	(a)	 	if such Common Stock is then quoted on the Nasdaq
National Market, its closing price on the Nasdaq National
Market on the date of determination as reported in The Wall
Street Journal;






	 	(b)	 	if such Common Stock is publicly traded and is
then listed on a national securities exchange, its closing
price on the date of determination on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;






	 	(c)	 	if such Common Stock is publicly traded but is
not quoted on the Nasdaq National Market nor listed or
admitted to trading on a national securities exchange, the
average of the closing bid and asked prices on the date of
determination as reported in The Wall Street Journal;






	 	(d)	 	in the case of an Award made on the Effective
Date, the price per share at which shares of the Company’s
Common Stock are initially offered for sale to the public by
the Company’s underwriters in the initial public offering of
the Company’s Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act; or






	 	(e)	 	if none of the foregoing is applicable, by the
Committee in good faith.






          “Family Member” includes any of the following:




	 	(a)	 	child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law of the Participant, including
any such person with such relationship to the Participant by
adoption;






	 	(b)	 	any person (other than a tenant or employee)
sharing the Participant’s household;






	 	(c)	 	a trust in which the persons in (a) and (b) have
more than fifty percent of the beneficial interest;






	 	(d)	 	a foundation in which the persons in (a) and (b)
or the Participant control the management of assets; or






	 	(e)	 	any other entity in which the persons in (a) and
(b) or the Participant own more than fifty percent of the
voting interest.






          “Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to Section 16 of
the Exchange Act.




          “Option” means an award of an option to purchase Shares pursuant to
Section 5.




          “Outside Director” means a member of the Board who is not an employee of
the Company or any Parent or Subsidiary.




          “Parent”“e means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.





10








 



          “Participant” means a person who receives an Award under this Plan.




          “Performance Factors” means the factors selected by the Committee from
among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:




	 	(a)	 	     Net revenue and/or net revenue growth;






	 	(b)	 	     Earnings before income taxes and amortization and/or earnings before






	 		 	     income taxes and amortization growth;






	 	(c)	 	     Operating income and/or operating income growth;






	 	(d)	 	     Net income and/or net income growth;






	 	(e)	 	     Earnings per share and/or earnings per share growth;






	 	(f)	 	     Total stockholder return and/or total stockholder return growth;






	 	(g)	 	     Return on equity;






	 	(h)	 	     Operating cash flow return on income;






	 	(i)	 	     Adjusted operating cash flow return on income;






	 	(j)	 	     Economic value added; and






	 	(k)	 	     Individual confidential business objectives.






          “Performance Period” means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.




          “Plan” means this CIENA Corporation 2000 Equity Incentive Plan, as amended
from time to time.




          “Restricted Stock Award” means an award of Shares pursuant to Section 6.




          “SEC” means the Securities and Exchange Commission.




          “Securities Act” means the Securities Act of 1933, as amended.




          “Shares” means shares of the Company’s Common Stock reserved for issuance
under this Plan, as adjusted pursuant to Sections 2 and 18, and any successor
security.




          “Stock Bonus” means an award of Shares, or cash in lieu of Shares,
pursuant to Section 7.




          “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.




          “Termination” or “Terminated” means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the Company.
An employee will not be deemed to have ceased to provide services in the case
of (i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Committee, provided, that such leave is for a period of not
more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of





11








 


any employee on an approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the
Company or a Subsidiary as it may deem appropriate,
except that in no event may an Option be exercised after the expiration of the
term set forth in the Option agreement. The Committee will have sole
discretion to determine whether a Participant has ceased to provide services
and the effective date on which the Participant ceased to provide services (the
“Termination Date”).




          “Unvested Shares” means “Unvested Shares” as defined in the Award
Agreement.




          “Vested Shares” means “Vested Shares” as defined in the Award Agreement.






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