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Exhibit 4.3  

 
 

2001 McDATA EQUITY INCENTIVE PLAN, AS AMENDED    
    
    Adopted October 1, 1997
  Amended May 11, 2001, May 22, 2003, May 25, 2004 and January 14, 2005    
    

1.     PURPOSES  

        (a)    Amendment and Restatement of 1997 Stock Option Plan.    The Plan initially was established as the 1997 Stock
Option Plan adopted October 1, 1997 and amended on July 13, 2000 (the "Initial Plan"). The Initial Plan was amended and restated in its entirety as the 2001 McDATA Equity Incentive Plan,
effective as of May 11, 2001. The terms of the Plan as in effect at the time a Stock Award was granted shall remain in effect and apply to such Stock Award, notwithstanding subsequent
amendments, except to the extent such amendments (i) do not impair the holder's rights under such Stock Award, and (ii) would not result in adverse financial accounting consequences to
the Company (as determined by the Board or Committee, in its sole discretion) if applied to a previously granted Stock Award. 

        (b)    Eligible Stock Award Recipients.    The persons eligible to receive Stock Awards are the Employees, Directors
and Consultants of the Company and its Affiliates. 

        (c)    Available Stock Awards.    The purpose of the Plan is to provide a means by which eligible recipients of Stock
Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) Stock Bonus Awards, (iv) Stock Purchase Awards (v) Stock Appreciation Rights, (vi) Stock Unit Awards and (vii) Other
Stock Awards. 

        (d)    General Purpose.    The Company, by means of the Plan, seeks to retain the services of the group of persons
eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and
its Affiliates. 

2.     DEFINITIONS.  

        (a)   "Affiliate" means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of the Code. 

        (b)   "Board" means the Board of Directors of the Company. 

        (c)   "Code" means the Internal Revenue Code of 1986, as amended. 

        (d)   "Committee" means a committee of one or more members of the Board appointed by the Board in accordance with subsection
3(c). 

        (e)   "Common Stock" means either Class A common stock or Class B common stock of the Company, as applicable. 

        (f)    "Company" means McDATA Corporation, a Delaware corporation. 

        (g)   "Consultant" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting or
advisory services and who is compensated for such services. However, the term "Consultant" shall not include either Directors who are not compensated by the Company for their services as Directors or
Directors who are merely paid a director's fee by the Company for their services as Directors.

 

        (h)   "Continuous Service" means that the Participant's service with the Company or an Affiliate, whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the
Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no
interruption or termination of the Participant's Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute
an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. 

        (i)    "Covered Employee" means the chief executive officer and the four (4) other highest compensated officers of the
Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 

        (j)    "Director" means a member of the Board. 

        (k)   "Disability" means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the
Code. 

        (l)    "Employee" means any person employed by the Company or an Affiliate. Mere service as a Director or payment of a
director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate. 

        (m)  "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (n)   "Fair Market Value" means, as of any date, the value of the Common Stock determined as follows: 

          (i)  If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable. 

         (ii)  In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the
Board. 

        (o)   "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated there under. 

        (p)   "Non-Employee Director" means a Director who either (i) is not a current Employee or Officer of the
Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K and is not
engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee
director" for purposes of Rule 16b-3. 

        (q)   "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option.

 

        (r)   "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated there under. 

        (s)   "Option" means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan. 

        (t)    "Option Agreement" means a written agreement between the Company and an Optionholder evidencing the terms and conditions
of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 

        (u)   "Optionholder" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who
holds an outstanding Option. 

        (v)   "Other Stock Award" means an award based in whole or in part by reference to the Common Stock which is granted pursuant
to the terms and conditions of Section 7(e). 

        (w)  "Other Stock Award Agreement" means a written agreement between the Company and a holder of an Other Stock Award
evidencing the terms and conditions of an individual Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

        (x)   "Own," "Owned," "Owner," "Ownership" A person or Entity shall be deemed to "Own," to have "Owned," to be the "Owner" of,
or to have acquired "Ownership" of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power,
which includes the power to vote or to direct the voting, with respect to such securities. 

        (y)   "Outside Director" means a Director who either (i) is not a current employee of the Company or an "affiliated
corporation" (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code. 

        (z)   "Participant" means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Stock Award. 

        (aa)     "Plan" means this McDATA Corporation 2001 Equity Incentive Plan. 

        (bb)     "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time. 

        (cc)      "Securities Act" means the Securities Act of 1933, as amended. 

        (dd)     "Stock Appreciation Right" means a right to receive the appreciation of Common Stock which is granted
pursuant to the terms and conditions of Section 7(d). 

        (ee)      "Stock Appreciation Right Agreement" means a written agreement between the Company and a holder of a Stock
Appreciation Right evidencing the terms and conditions of an individual Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan. 

        (ff)       "Stock Award" means any right granted under the Plan, including an Option, a Stock Bonus Award, a Stock
Purchase Award, a Stock Unit Award, a Stock Appreciation Right, or an Other Stock Award.

 

        (gg)     "Stock Award Agreement" means a written agreement between the Company and a holder of a Stock Award
evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

        (hh)     "Stock Bonus Award" means an award of Common Stock granted pursuant to Section 7(a). 

        (ii)       "Stock Bonus Agreement" means a written agreement between the Company and a holder of a stock bonus
evidencing the terms and conditions of an individual stock bonus grant. Each Stock Bonus Agreement shall be subject to the terms and conditions of the Plan. 

        (jj)       "Stock Purchase Award" means an award permitting a Participant to purchase shares of Common Stock pursuant
to the conditions of Section 7(b). 

        (kk)     "Stock Purchase Agreement" means a written agreement between the Company and a Participant evidencing the
terms and conditions of an individual Stock Purchase Award. Each Stock Purchase Agreement shall be subject to the terms and conditions of the Plan. 

        (ll)       "Stock Unit Award" means a right to receive shares of Common Stock which is granted pursuant to the terms
and conditions of Section 7(c). 

        (mm)     "Stock Unit Award Agreement" means a written agreement between the Company and a holder of a Stock Unit
Award evidencing the terms and conditions of an individual Stock Unit Award grant. Each Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan. 

        (nn)     "Ten Percent Stockholder" means a person who owns (or is deemed to own pursuant to Section 424(d)
of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. 

3.     ADMINISTRATION  

        (a)    Administration by Board.    The Board shall administer the Plan unless and until the Board delegates
administration to a Committee, as provided in subsection 3(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and
expediency that may arise in the administration of the Plan. 

        (b)    Powers of Board.    The Board (or the Committee) shall have the power, subject to, and within the limitations
of, the express provisions of the Plan: 

          (i)  To determine which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person
shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person. 

         (ii)  To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. 

       (iii)  To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board (or the Committee), in the exercise of
this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully
effective. 

        (iv)  To amend the Plan or a Stock Award as provided in Section 12.

 

         (v)  Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company and its Affiliates that are not in conflict with the provisions of the Plan. 

        (c)    Delegation to Committee.    In the discretion of the Board (or the Committee), a Committee may consist solely
of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3. Within the scope of such authority, the Board or the Committee may (1) delegate to a subcommittee of one or more members of the Board who are not Outside
Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a subcommittee of one
or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.
The Board and Compensation Committee of the Company have created a Compensation Subcommittee consisting of the Chief Executive Officer to make grants of Stock Awards consistent with the provisions of
this subsection. 

4.     SHARES SUBJECT TO THE PLAN  

        (a)    Share Reserve.    Subject to Section 4 (b) and subject to the provisions of Section 11
relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed thirty three million (33,000,000) shares of Class A common
stock or Class B common stock of the Company, in the aggregate. 

        (b)    Reversion of Shares to the Share Reserve.    If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the
Plan. 

        (c)    Source of Shares.    The shares of Common Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise. 

5.     ELIGIBILITY  

        (a)    Eligibility for Specific Stock Awards.    Incentive Stock Options may be granted only to Employees. Stock
Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. 

        (b)    Ten Percent Stockholders.    A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant. 

        (c)    Section 162(m) Limitation.    Subject to the provisions of Section 11 relating to adjustments
upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Options or Stock Appreciation Rights covering more than four million eight hundred thousand (4,800,000) shares
of Common Stock during any calendar year. 

        (d)    Consultants.    

          (i)  A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act ("Form S-8") is not available to register either the offer or the sale of the Company's securities to
such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant

 
is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require
registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other
relevant jurisdictions. 

         (ii)  Form S-8 generally is available to consultants and advisors only if (1) they are natural
persons; (2) they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer's parent; and (3) the services are
not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer's securities. 

6.     OPTION PROVISIONS  

        Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased
on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions: 

        (a)    Term.    No Incentive Stock Option shall be exercisable after
the expiration of ten (10) years from the date it was granted. No Nonstatutory Stock Option shall be exercisable after the expiration of ten (10) years and one (1) month from the
date it was granted. 

        (b)    Exercise Price of an Incentive Stock Option.    The exercise
price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. 

        (c)    Exercise Price of a Nonstatutory Stock Option.    The exercise
price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is
granted. 

        (d)    Consideration.    The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of
the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) by a "net
exercise" of the Option (as further described below), (3) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds,
(4) according to a deferred payment or other similar arrangement with the Optionholder (5) in the manner provided in Section 6(m) below, or (6) in any other form of legal
consideration that may be acceptable to the Board; provided, however, that at any time that if required by applicable state law, payment of the Common Stock's "par value" shall not be made by deferred
payment. 

        In
the case of a "net exercise" of an Option, the Company will not require a payment of the exercise price of the Option from the Participant but will reduce the number of shares of
Common Stock issued upon the exercise by the largest number of whole shares that has a Fair Market Value that does not exceed the aggregate exercise price. With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the Participant. The

 
shares of Common Stock so used to pay the exercise price of an Option under a "net exercise" and any shares withheld for taxes will be considered to have been withheld from the exercise of the Option.
Accordingly, the Option will not again be exercisable with respect to the shares deemed withheld to satisfy the exercise price, the shares actually delivered to the Participant or any shares withheld
for purposes of tax withholding. 

        In
the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. 

        (e)    Transferability of an Incentive Stock Option.    Except as
otherwise permitted by the Board or the Committee, in its discretion, an Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory
to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

        (f)    Transferability of a Nonstatutory Stock Option.    A
Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement, or as the Board or the Committee shall determine in its sole discretion. If the Nonstatutory Stock
Option does not provide for transferability, then, except as the Board may otherwise permit in its discretion, the Nonstatutory Stock Option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to
the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

        (g)    Vesting Generally.    The total number of shares of Common
Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and
conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary.
The provisions of this subsection 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 

        (h)    Termination of Continuous Service.    In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled
to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the
Optionholder's Continuous Service (or such longer or shorter period specified in the Option Agreement or as determined by the Board or the Committee), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate. 

        (i)    Extension of Termination Date.    An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of
(i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three

 
(3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration requirements. 

        (j)    Disability of Optionholder.    In the event that an
Optionholder's Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise
such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein,
the Option shall terminate. 

        (k)    Death of Optionholder.    In the event (i) an
Optionholder's Continuous Service terminates as a result of the Optionholder's death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the
termination of the Optionholder's Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date
of death) by the Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder's
death pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter
period specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate. 

        (l)    Early Exercise.    The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to
the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate. 

        (m)    Substituting SARs.    In the event the Company no longer uses
APB Opinion 25 to account for equity compensation and is required to or elects to expense the cost of stock options pursuant to FAS 123 (or a successor standard), the Committee shall have the
ability to substitute, without receiving Participant permission, SARs paid only in stock for outstanding Options; provided, the terms of the substituted stock SARs are the same as the terms for the
stock options and the difference between the Fair Market Value of the underlying Shares and the Grant Price of the SARs is equivalent to the difference between the Fair Market Value of the underlying
Shares and the Option Price of the Options. If this provision creates adverse accounting consequences for the Company, it shall be considered null and void. 

7.     PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS  

        (a)    Stock Bonus Awards.    Each Stock Bonus Award shall be evidenced by a Stock Bonus Agreement, which shall be in
such form and shall contain such terms and conditions as the Board (or Committee) shall deem appropriate. The terms and conditions of Stock Bonus Awards may change from time to time, and the terms and
conditions of separate Stock Bonus Awards need not be identical, but each
Stock Bonus Agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 

        (i)    Consideration.    A Stock Bonus Award may be awarded in
consideration for past services actually rendered to the Company or an Affiliate for its benefit or any other form of consideration permitted by applicable state law.

 

        (ii)    Vesting.    Shares of Common Stock awarded under the Stock
Bonus Agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. 

        (iii)    Termination of Participant's Continuous Service.    In the
event a Participant's Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination
under the terms of the Stock Bonus Agreement. 

        (iv)    Transferability.    Rights to acquire shares of Common Stock
under the Stock Bonus Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Bonus Agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the Stock Bonus Agreement remains subject to the terms of the Stock Bonus Agreement. 

        (b)    Stock Purchase Awards.    Each Stock Purchase Agreement shall be in such form and shall contain such terms and
conditions as the Board (or Committee) shall deem appropriate. The terms and conditions of the Stock Purchase Agreements may change from time to time, and the terms and conditions of separate Stock
Purchase Agreements need not be identical, but each Stock Purchase Agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each
of the following provisions: 

        (i)    Purchase Price.    The purchase price under each Stock Purchase
Agreement shall be such amount as the Board shall determine and designate in such Stock Purchase Agreement. The purchase price shall not be less than eighty-five percent (85%) of the
Common Stock's Fair Market Value on the date such award is made or at the time the purchase is consummated. 

        (ii)    Consideration.    The purchase price of Common Stock acquired
pursuant to the Stock Purchase Agreement shall be paid either: (1) in cash at the time of purchase; (2) at the discretion of the Board,
according to a deferred payment or other similar arrangement with the Participant; or (3) in any other form of legal consideration that may be acceptable to the Board in its discretion;
provided, however, that at any time that the Company is incorporated in Delaware, then payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made
by deferred payment. 

        (iii)    Vesting.    Shares of Common Stock acquired under the Stock
Purchase Agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. 

        (iv)    Termination of Participant's Continuous Service.    In the
event a Participant's Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the
date of termination under the terms of the Stock Purchase Agreement. 

        (v)    Transferability.    Rights to acquire shares of Common Stock
under the Stock Purchase Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Purchase Agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the Stock Purchase Agreement remains subject to the terms of the Stock Purchase Agreement. 

        (c)    Stock Unit Awards.    Each Stock Unit Award Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Stock Unit Award
Agreements need not be identical, provided, however, that each Stock Unit

 
Award Agreement shall include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 

        (i)    Consideration.    At the time of grant of a Stock Unit Award,
the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Stock Unit Award. To the extent required by applicable law,
the consideration to be paid by the Participant for each share of Common Stock subject to a Stock Unit Award will not be less than the par value of a share of Common Stock. The consideration may be
paid in any form permitted under applicable law. 

        (ii)    Vesting.    At the time of the grant of a Stock Unit Award,
the Board may impose such restrictions or conditions to the vesting of the Stock Unit Award as it, in its absolute discretion, deems appropriate. 

        (iii)    Additional Restrictions.    At the time of the grant of Stock
Unit, the Board may impose such restrictions or conditions that delay the delivery of the consideration after its vesting as the Board, in its absolute discretion, deems appropriate, with such terms
to be contained in the Stock Unit agreement. 

        (iv)    Payment.    Stock Unit Awards may be settled in Common Stock
or in cash or any combination of the two, or in any other form of consideration as determined by the Board and contained in the Stock Unit Award Agreement. 

        (v)    Dividend Equivalents.    Dividend equivalents may be credited
in respect of shares covered by a Stock Unit Award, as determined by the Board and contained in the Stock Unit Award Agreement. At the discretion of the Board, such dividend equivalents may be
converted into additional shares covered by the Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Stock Unit Award credited by reason of such dividend
equivalents will be subject to all the terms and conditions of the underlying Stock Unit Award Agreement to which they relate. 

        (vi)    Termination of Participant's Continuous Service.    Except as
otherwise provided in the applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that has not vested will be forfeited upon the Participant's termination of Continuous Service for
any reason. 

        (d)    Stock Appreciation Rights.    Each Stock Appreciation Right Agreement shall be in such form and shall contain
such terms and conditions, as the Board shall deem appropriate. The terms and conditions of Stock Appreciation Right Agreements may change from time to time, and the terms and conditions of separate
Stock Appreciation Right Agreements need not be identical, but each Stock Appreciation Right Agreement shall include (through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions: 

        (i)    Strike Price and Calculation of Appreciation.    Each Stock
Appreciation Right will be denominated in shares of Common Stock equivalents. The appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater than an amount
equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number of shares of
Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right and with respect to which the Participant is exercising the Stock Appreciation Right on such date, over
(B) an amount that will be determined by the Board at the time of grant of the Stock Appreciation Right. 

        (ii)    Vesting.    At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of such Stock Appreciate Right as it, in its absolute discretion, deems appropriate.

 

        (iii)    Exercise.    To exercise any outstanding Stock Appreciation
Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 

        (iv)    Payment.    The appreciation distribution in respect to a
Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration as determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right. 

        (v)    Termination of Continuous Service.    In the event that a
Participant's Continuous Service terminates, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right
as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant's Continuous
Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement) or (ii) the expiration of the term of the Stock Appreciation Right as set forth in the Stock
Appreciation Right Agreement. If, after termination, the Participant does not exercise his or her Stock Appreciation Right within the time specified in the Stock Appreciation Right Agreement, the
Stock Appreciation Right shall terminate. 

        (e)    Other Stock Awards.    Other forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock may be granted either alone or in addition to Stock Awards provided for under Section 6 and the preceding provisions of this Section 7. Subject to the provisions
of the Plan, the Board shall have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Awards and all other terms and conditions of such Awards. 

8.     COVENANTS OF THE COMPANY  

        (a)    Availability of Shares.    During the terms of the Stock Awards, the Company shall keep available at all times
the number of shares of Common Stock required to satisfy such Stock Awards. 

        (b)    Securities Law Compliance.    The Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock Awards and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. 

9.     USE OF PROCEEDS FROM STOCK  

        Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. 

10.   MISCELLANEOUS  

        (a)    Acceleration of Exercisability and Vesting.    The Board shall have the power to accelerate the time at which a
Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time
at which it may first be exercised or the time during which it will vest.

 

        (b)    Stockholder Rights.    No Participant shall be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms. 

        (c)    No Employment or other Service Rights.    Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant's agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of
the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. 

        (d)    Incentive Stock Option $100,000 Limitation.    To the extent that the aggregate Fair Market Value (determined
at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options. 

        (e)    Investment Assurances.    The Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is
acquiring Common Stock subject to the Stock Award for the Participant's own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be inoperative if (iii) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (iv) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on
stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock. 

        (f)    Withholding Obligations.    To the extent provided by the terms of a Stock Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company's
right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
shares of Common Stock from the shares of Common Stock otherwise issuable to the participant as a result of the exercise or acquisition of Common Stock under the Stock Award in an amount not to exceed
the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock. 

        (g)    Stock Awards.    Stock Awards may be issued for all lawful purposes, including but not limited to retention,
recruitment and compensation purposes. Further, the Board or Committee may, in its

 
discretion, establish (or modify) its annual Stock Awards grant program for Participants (including Non-Employee Directors). 

        (h)    Compliance with Deferred Compensation Rules.    All Stock Awards subject to Code Section 409A shall be
interpreted and administered in accordance with Code Section 409A and related guidance. To the extent any Stock Award, by its terms, is inconsistent with the requirements of Code
Section 409A, Code Section 409A shall govern. 

11.   ADJUSTMENTS UPON CHANGES IN STOCK.  

        (a)    Capitalization Adjustments.    If any change is made in the Common Stock subject to the Plan, or subject to any
Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the
Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any
person pursuant to subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such
outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be
treated as a transaction that does not involve the receipt of consideration by the Company.) 

        (b)    Change in Control.    In the event of: (1) a dissolution, liquidation, or sale of all or substantially
all of the assets of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; or (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash
or otherwise, then: 

          (i)  any surviving or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute
similar stock awards (including an award to acquire the same consideration paid to the stockholders in the transaction described in this subsection 11(b)) for those outstanding under the Plan, or 

       (iii)  in the event any surviving or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock
awards for those outstanding under the Plan, then (A) with respect to Stock Awards held by persons then performing services as Employees, Consultants, or Directors, the vesting of such Stock
Awards and the time during which such Stock Awards may be exercised shall be accelerated prior to such event and the Stock Awards terminated if not exercised after such acceleration and at or prior to
such event, and (B) with respect to Stock Awards held by persons not then performing services as Employees, Consultants, or Directors, such Stock Awards (that are not assumed or substituted for
by the surviving or acquiring corporation) shall terminate if not exercised prior to such event. 

12.   AMENDMENT OF THE PLAN AND STOCK AWARDS  

        (a)    Amendment of Plan.    The Board at any time, and from time to time, may amend the Plan. However, except as
provided in Section 11 relating to adjustments upon changes in Common Stock and except as to minor amendments to benefit the administration of the Plan, to take account of a change in
legislation or maintain favorable tax, exchange control or regulatory treatment for Participants or the Company and its Affiliates, no amendment shall be effective unless approved by the stockholders
of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 and any Nasdaq or applicable securities
exchange listing requirements.

 

        (b)    Stockholder Approval.    The Board may, in its sole discretion, submit any other amendment to the Plan for
stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations there under regarding the
exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. 

        (c)    Contemplated Amendments.    It is expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated there under
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 

        (d)    No Impairment of Rights.    Rights and obligations under any Stock Award granted before amendment of the Plan
shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such Stock Awards were granted, or except as necessary to comply with any laws or governmental
regulations, or except as necessary to ensure that the Plan and/or Stock Awards granted under the Plan comply with the requirements of Section 422 of the Code. 

13.   TERMINATION OR SUSPENSION OF THE PLAN  

        (a)    Plan Term.    The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall
terminate on September 30, 2010. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 

        (b)    No Impairment of Rights.    Suspension or termination of the Plan shall not impair rights and obligations under
any Stock Award granted while the Plan is in effect except with the written consent of the Participant. 

14.   EFFECTIVE DATE OF PLAN  

        The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and
until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 

15.   CHOICE OF LAW  

        The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state's
conflict of laws rules. 

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2001 McDATA EQUITY INCENTIVE PLAN, AS AMENDED Adopted October 1, 1997 Amended May 11, 2001, May 22, 2003, May 25, 2004 and January 14, 2005QuickLinks
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Exhibit 4.3  

McDATA SERVICES CORPORATION  

 
 

Plan Information Statement
  For Participants in the Company's
  1992 Stock Award Plan    
    

This document constitutes part of a prospectus

covering securities registered under

the Securities Act of 1933.  

The date of this document is as of June 17, 2005  

        On
May 20, 1992, the shareholders of McDATA Services Corporation (formerly known as Computer Network Technology Corporation, the "Company") approved the adoption by the Company's
Board of Directors (the "Board") of the 1992 Stock Award Plan (as amended from time to time, the "Plan") effective March 5, 1992. Subsequently, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") between McDATA Corporation ("McDATA"), the Company and Condor Acquisition, Inc., McDATA acquired all of the issued and outstanding capital stock of the Company. Pursuant to
the Merger Agreement, the Company and has become a wholly owned subsidiary of McDATA and has changed its name to from "Computer Network Technology Corporation" to "McDATA Services Corporation." Under
the Merger Agreement and pursuant to action taken under the plan, all of the outstanding Awards granted under the Plan are now exercisable for McDATA Class A Common Stock, par value $.01
("McDATA Class A Stock" or "Common Stock"), with appropriate adjustments being made to the number of shares subject to each outstanding option and the applicable exercise price as called for by
the Merger Agreement. The Plan has been amended and restated to reflect these changes. The Plan has been amended and restated to reflect these changes. In addition, any stock based Awards granted
under the Plan in the future will for McDATA Class A Stock. In brief, the Plan enables the Company to make compensation awards of cash, shares, stock units and options to purchase shares of its
McDATA Class A Stock to employees, consultants, directors and advisors of the Company and those of its parent and or subsidiary corporations, if any. 

        The
purpose of the Plan is to motivate key personnel to produce a superior return to the McDATA's stockholders by offering such personnel an opportunity to share in the appreciation of
McDATA's stock, by facilitating their ownership of McDATA stock, and by rewarding them for achieving a high level of performance. The Plan is also intended to facilitate recruiting and retaining key
personnel of outstanding ability by providing an attractive opportunity to accumulate capital. The Plan is not qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and is not subject to the Employee Retirement Income Securities Act of 1974. 

        You
have been granted an award under the Plan in the form of either restricted or unrestricted stock, incentive or non-qualified stock options, performance units, restricted
stock units or some other stock-based award (an "Award"). A copy of the Plan, as amended, is attached hereto as Exhibit A. You also have executed an agreement (the "Agreement") containing
additional terms and conditions of your Award. The Plan, along with the Agreement, contain the rights and obligations you have as the recipient of an Award under the Plan. The Company suggests that
you read the Plan and the Agreement carefully. The main body of this document briefly summarizes some of the features of the

 
Plan and also includes additional information the Company is required to provide under the federal securities laws. Capitalized terms not defined in this document shall have the meaning given to them
in Section 2.1 of the Plan. 

Administration  

        The Plan is administered by the Compensation Committee (the "Committee") of the Board which is composed of three directors who are "non-employee
director," as that term is defined in Rule 16b-3(b)(3)(i) (or its successor provisions) adopted under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Members of the Committee are appointed by, and may be removed by, a majority vote of the Board and serve on the Committee for an indefinite term at the discretion of the Board. 

        The
Committee has the authority, subject to the terms of the Plan, to adopt and revise rules relating to the Plan, to make final and binding interpretations of the Plan and to determine
the timing of grants, identity of recipients, and other terms and conditions of Awards. The Committee may delegate its responsibilities under the Plan to members of the Company's management and others
with respect to the selection and grants of Awards to Employees who are not deemed to be officers, directors or 10% stockholders of McDATA under applicable federal securities laws. (See
Sections 2.1, 3 and 5 of the Plan.) 

Eligible Participants  

        Officers, other key employees, directors, consultants, and independent contractors of the Company and its Affiliates are eligible to receive Awards under the
Plan. Except with respect to Awards to Outside Directors (which are within the discretion of the Board), the Committee decides to whom Awards should be granted, the type of Award, and the amount and
terms of any such Award. (See Sections 2.1(j) and 3) 

Stock Subject to the Plan  

        Up to an aggregate of 10,985,000 shares of McDATA Class A Stock, may be issued pursuant to Awards granted under the Plan (subject to adjustment for stock
splits, stock dividends, and similar changes in McDATA's capitalization). Any shares of stock subject to Awards under the Plan that are not used because the terms and conditions of the Awards are not
met may be reallocated under the Plan as though they had not been previously awarded. (See Sections 4, 13 and 18 of the Plan.) 

Types of Awards  

        The types of Awards that may be granted under the Plan include Incentive Stock Options, Non-Qualified Stock Options, Performance Units, Restricted
Stock, Stock and other Stock-based Awards, including Restricted Stock Units (RSUs). Subject to restrictions described in the Plan and the Agreement, Awards will be granted and exercisable or received,
as the case may be, by the recipients at such times as are determined by the Committee. Except as may be provided in the Plan or the Agreement, no Award will be assignable or transferable by a
recipient. (See Sections 3, 6, 7 and 8 of the Plan.) 

Acceleration of Awards, Lapse of Restrictions, Forfeiture  

        The Committee may provide for the lapse of restrictions on Restricted Stock or other Awards, accelerated exercisability of Options or acceleration of the term
with respect to which the achievement of performance targets for Performance Units is determined in the event of a change in control of McDATA, other fundamental changes in the corporate structure of
the Company, the death or retirement of the recipient, or such other events as the Committee may determine. The Committee

 
may provide that certain Awards may be exercised in certain events after the termination of employment or death of the recipient. (See Sections 6, 7, 8 and 14.) 

Adjustments, Modification, Termination  

        The Plan provides the Committee with discretion to adjust the kind and number of shares available for Awards or subject to outstanding Awards, the option price of
outstanding Options, and performance targets for, and payments under, outstanding Awards of Performance Units in the event of mergers, recapitalization, stock dividends, stock splits, or other
relevant changes. Adjustments in performance targets and payments on Performance Units are also permitted upon the occurrence of such other events as may be specified by the Committee, which may
include changes in McDATA's or the Company's accounting practices or changes in the recipient's title or employment responsibilities. The Board has the right to terminate, suspend, or modify the Plan,
except that amendments to the Plan are subject to stockholder approval if needed to comply with the incentive stock option provisions of federal tax law. The Committee may cancel outstanding Options
and Performance Units generally in exchange for cash payments to the recipients in the event of certain dissolutions, liquidations, mergers, statutory share exchanges, or other similar events
involving McDATA. (See Sections 6, 7, 8, 12, 13, 14, 18 and 20.) 

Tax Considerations  

        Incentive Stock Options.    No taxable income to a recipient will be realized, and the Company will not be entitled to any
related deduction, at the time any Incentive Stock Option is granted under the Plan. If certain statutory employment and holding period conditions are satisfied before the recipient disposes of Shares
acquired pursuant to the exercise of such an Option, then no taxable income will result upon the exercise of such Option and the Company will not be entitled to any deduction in connection with
such exercise. Upon disposition of the Shares after expiration of the statutory holding periods, any gain or loss realized by a recipient will be a capital gain or loss. The Company will not be
entitled to a deduction with respect to a disposition of the Shares by a recipient after the expiration of the statutory holding periods. 

        Except
in the event of death, if Shares acquired by a recipient upon the exercise of an Incentive Stock Option are disposed of by such recipient before the expiration of two years
from the date of grant of the Option or one year from the date of exercise of the Option (a "disqualifying disposition"), such recipient will be considered to have realized compensation, taxed as
ordinary income in the year of disposition, in an amount, not exceeding the gain realized on such disposition, equal to the difference between the exercise price and the fair market value (as defined
in the Code) of the Shares on the date of exercise of the Option. The Company will be entitled to a deduction at the same time and in the same amount as the recipient is deemed to have realized
ordinary income. Generally, any gain realized on the disposition in excess of the amount treated as compensation or any loss realized on the disposition will constitute capital gain or loss,
respectively. If the recipient pays the exercise price with Shares that were originally acquired pursuant to the exercise of an Incentive Stock Option and the statutory holding periods for such Shares
have not been met, the recipient will be treated as having made a disqualifying disposition of such Shares, and the tax consequences of such disqualifying disposition will be as described above. 

        The
foregoing discussion applies only for regular tax purposes. For alternative minimum tax purposes an Incentive Stock Option will be treated as if it were a Non-Qualified
Stock Option, the tax consequences of which are discussed below. 

        Non-Qualified Stock Options.    To the extent Non-Qualified Stock Options have an exercise price equal
to the fair market value of the underlying Common Stock as of the date of grant, you will not realize any taxable income, and the Company will not be entitled to any related deduction, at that time.

 
If Non-Qualified Stock Options are granted with an exercise price less than the fair market value as of the date of grant, and those options were not fully vested prior to 2005, you may
realize taxable income based on the value of that discount. The Internal Revenue Service is currently developing rules that will determine your tax consequences beginning in 2005.) Generally, at the
time Shares are transferred to the recipient pursuant to the exercise of a Non-Qualified Stock Option, the recipient will realize ordinary income, and the Company will be entitled to a
deduction, equal to the excess of the fair market value (as defined in the Code) of the Shares on the date of exercise over the exercise price. Upon disposition of the Shares, any additional gain or
loss realized by the recipient will be taxed as a capital gain or loss. 

        Stock Options—UK option holders.    If you are a UK resident for tax purposes or are working in the UK, you will not
be subject to any UK tax charge when you are granted a Stock Option under the Plan. However, when you exercise the Stock Option you will suffer a UK income tax charge
on the difference between the amount you are required to pay on the exercise of the Stock Option and the value of the Shares at that time. UK national insurance contributions will also be payable on
this difference. You will be required to pay all relevant income tax and employee's national insurance contribution (see below). 

        Restricted and Unrestricted Stock.    With respect to Restricted Stock, unless the recipient files an election to be taxed under
Section 83(b) of the Code, (a) the recipient will not realize income upon the grant of Restricted Stock, (b) the recipient will realize ordinary income, and the Company
will be entitled to a corresponding deduction when the restrictions have been removed or expire, and (c) the amount of such ordinary income and deduction will be the fair market value of the
Restricted Stock on the date the restrictions are removed or expire. If the recipient files an election to be taxed under Section 83(b) of the Code, the tax consequences to the recipient
and the Company will be determined as of the date of the grant of the Restricted Stock rather than as of the date of the removal or expiration of the restrictions. With respect to Awards of
Unrestricted Stock, (a) the recipient will realize ordinary income and the Company will be entitled to a corresponding deduction upon the grant of the Unrestricted Stock, and (b) the
amount of such ordinary income and deduction will be the fair market value of such Unrestricted Stock on the date of the grant. When the recipient disposes of Restricted or Unrestricted Stock, the
difference between the amount received upon such disposition and the fair market value of such shares on the date the recipient realizes ordinary income will be treated as a capital gain or loss. 

        Performance Units.    A Performance Unit is a promise by the Company to pay cash, Stock or a combination of cash and Stock to
you in the event certain performance goals are met. Generally: (i) the recipient will not realize income upon the grant of a Performance Unit Award; (ii) the recipient will realize
ordinary income, and the Company will be entitled to a corresponding deduction, in the year cash, shares of Common Stock, or a combination of cash and shares of Common Stock are delivered to the
recipient upon payment of the Performance Unit Award; and (iii) the amount of such ordinary income and deduction will be the amount of cash received plus the fair market value of the shares of
Common Stock received on the date they are received. When the recipient disposes of shares received in payment of a Performance Unit Award, the difference between the amount received upon such
disposition and the fair market value of such shares on the date the recipient realizes ordinary income will be treated as a capital gain or loss. 

        Restricted Stock Units.    A Restricted Stock Unit ("RSU") is a promise by the Company to issue a share of Common Stock in the
future. Each RSU will be settled in one share of Common Stock. RSUs will not be settled in cash. If dividends are declared, the number of RSUs will be increased by a number reflecting the value of the
dividend. The RSU may be restricted for a period of time. The Common Stock will be issued to you within 30 days of when the restrictions lapse unless you have made an election to defer receipt
of the shares. The terms of your RSU will be contained in an RSU

 
Agreement. The terms of your RSU Agreement may differ depending on whether your RSUs are subject to a recently adopted tax rule, Section 409A of the Code. 

        If
your RSUs were vested before January 1, 2005, and not modified after October 3, 2005, you may be able to defer the payment of shares. To elect to defer receipt of the
shares, you must sign and return an election form that you may obtain from the Company. The form will contain information about the election. However, a deferral election is not effective after your
termination of employment. Common Stock will be issued to you within 30 days after your termination of employment for RSUs that were vested at your termination of employment. 

        A
deferral election must be made at least one year before the Common Stock would otherwise be issued to you. However, when you are first issued RSUs, you have 30 days from the
date of grant to make an initial election so long as the election is made at least six months before the Common Stock would otherwise be issued to you. Once you have made the election, you can also
elect to redefer issuance so long as the new election is made at least a year ahead of when you would otherwise receive the Common Stock. At any time you can request that vested RSUs be issued to you
in Common Stock despite your deferral election. However, you will receive only 90% of RSUs that you requested be issued as Common Stock. The balance will be permanently forfeited. If you properly
elect to defer issuance of the Common Stock by making a deferral election, you will not be taxed on the value of the Common Stock until the deferral period has lapsed. If your RSUs vest on or after
January 1, 2005, or are modified on or after October 4, 2005, your RSUs are subject to restrictions under Section 409A of the Code. Payment in shares of Stock may not be deferred
without 20% penalty, immediate taxation or late tax payment penalties. The Plan and any affected outstanding RSUs may be amended until December 31, 2005 to avoid these negative tax
consequences. 

        You
will be required to pay FICA tax and Medicare tax at the time that the Common Stock would have been issued to you if you had not made a deferral election. That withholding will be
made from other income that you receive from the Company. Income tax withholding will be taken at the time that the Common Stock is issued to you by reducing the number of shares of Common Stock that
would otherwise be issued to you. Fractional shares will not be issued; you will receive cash in lieu of fractional shares. 

        Generally,
under current tax law, you are not taxed on receipt of the RSUs, but at such time as the Common Stock can be issued to you under your RSU Agreement. You will be taxed at the
Fair Market Value of the Common Stock as of the date that you must recognize it in income. The income that you realize will be ordinary income, and the Company will be entitled to a corresponding
deduction in the year that the Common Stock becomes issuable to you. 

        The
foregoing is a discussion of the current tax treatment of RSUs and their ability to be deferred or accelerated. Taxation of RSUs and deferrals and accelerations may change and those
changes may affect elections made both before and after the change. Therefore, it is possible that in the future, your deferral election will no longer be effective for tax purposes or you may not be
able to accelerate a deferral election. 

        Holders
of RSUs are unsecured creditors of the Company including during the time period that the holder has elected to defer issuance of the Common Stock. If the Company should become
insolvent during that period of time, the Common Stock might never be issued to the holder. 

        Withholding.    The Plan permits the Company to require you upon receiving Stock under the Plan to pay the Company, in cash, an
amount sufficient to cover any required withholding taxes or (in the UK) any income tax or employee's national insurance contributions for which the Company may be liable in connection with the
exercise of any Option or the receipt of the Stock. In lieu of cash, the Committee may permit you to cover withholding obligations (or the UK tax liabilities) through a reduction in the number of
Shares delivered to you or the surrender to the Company of Shares

 
previously received by you. For RSUs, the Company requires that the number of Shares delivered be reduced by the income tax withholding required at the time the Shares are settled. The use of Stock to
satisfy withholding obligations is subject to certain restrictions if the recipient is an officer or director of the McDATA or the Company or deemed to be a holder of 10% or more of McDATA's capital
stock under applicable securities laws. (See Section 11 of the Plan.) 

        This
communication was not written and cannot be used for the purposes of avoiding federal tax penalties that may be imposed. The foregoing is only a brief summary of the applicable
federal income tax laws and should not be relied upon as being a complete statement. Furthermore, the tax laws are from time to time subject to legislative changes and new or revised judicial or
administrative interpretations. In addition, a Participant may incur foreign, state or local tax consequences which are not discussed above. Therefore, each Participant is encouraged to review with a
tax adviser from time to time the tax status of the Award they have received and, prior to exercising an Option and disposing of the Shares acquired pursuant to such exercise or receiving Stock or
cash in connection with other Awards under the Plan, to consult a tax adviser as to the income tax consequences of such an event. 

Resale Considerations  

        The prospectus of which this document is a part will not be available for the resale of Shares of Stock purchased by an "affiliate" of McDATA, as that term is
defined in Rule 405 adopted under the Securities Act of 1933, as amended (the "Securities Act"). Generally, such affiliates may resell their Shares upon compliance with Rule 144 adopted
under the Securities Act or pursuant to an effective registration statement filed with respect to such shares on Form S-1, S-2, S-3 or other applicable form
under the Securities Act. Participants who are not affiliates of McDATA generally may resell their Shares without compliance with Rule 144 or further registration under the Securities Act.
Participants who are directors or officers of McDATA must also comply with the reporting and holding period requirements of Section 16 of the Exchange Act, and the rules and regulations adopted
thereunder. 

ADDITIONAL INFORMATION  

        The Company will provide without charge to each Participant, on the oral or written request of any such Participant, additional copies of this document and a copy
of any or all of the following documents (without exhibits, except where such exhibits are specifically incorporated by reference into the information incorporated into this document), all of which
are incorporated by reference into the prospectus under Section 10(a) of the Securities Act of which this document is a part (the "Prospectus"): 

	(a)
	McDATA's
latest annual report on Form 10-K filed pursuant to Section 13 or 15(d) of the Exchange Act.

	(b)
	All
other reports filed by McDATA pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the annual report referred to in
(a) above.

	(c)
	The
description of the McDATA's Common Stock in its registration statement filed under Section 12 of the Exchange Act, including any amendment or report filed for the purpose
of updating such description.

	(d)
	All
reports and other documents subsequently filed by McDATA pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold (which shall be deemed to be incorporated by
reference into the Prospectus as of the date of filing of such reports and documents). 

        The
Company will provide to each Participant a copy of each annual report to McDATA's stockholders and all reports, proxy statements and other communications distributed to McDATA's
stockholders generally when such distributions are made. Additional information about the Plan and its administrators is also available. Written requests for such copies or information should be
directed to: Secretary, McDATA Corporation, 380 Interlocken Crescent, Broomfield, Colorado 80021. Telephone requests may be directed to the office of the Secretary at
(720) 558-8000. 

EXHIBIT A

1992 STOCK AWARD PLAN

(as amended and restated through June 17, 2005)  

        1.     Purpose. The purpose of this 1992 Stock Award Plan (the "Plan") is to motivate key personnel, including
non-employee directors, to produce a superior return to the shareholders of McDATA Corporation ("McDATA") by offering such personnel an opportunity to realize Stock appreciation, by
facilitating Stock ownership, and by rewarding them for achieving a high level of corporate performance. This Plan is also intended to facilitate recruiting and retaining key personnel of outstanding
ability by providing an attractive capital accumulation opportunity. 

        2.     Definitions. 

        2.1   The
terms defined in this section are used (and capitalized) elsewhere in this Plan. 

        (a)   "Affiliate" means any corporation that is a "parent corporation" or "subsidiary corporation" of the Company, as those
terms are defined in Section 424(e) and (f) of the Code, or any successor provision. 

        (b)   "Agreement" means a written contract entered into between the Company or an Affiliate and a Participant containing the
terms and conditions of an Award in such form (not inconsistent with this Plan) as the Committee approves from time to time, together with all amendments thereto, which amendments may be unilaterally
made by the Company (with the approval of the Committee) unless such amendments are deemed by the Committee to be materially adverse to the Participant and are not required as a matter of law. 

        (c)   "Award" means a grant made under this Plan in the form of Options, Restricted Stock, Stock, Performance Units or any
other Stock-based Award. 

        (d)   "Board" means the Board of Directors of McDATA. 

        (e)   "Code" means the Internal Revenue Code of 1986, as amended from time to time. 

        (f)    "Committee" means the Compensation Committee of the Board, authorized to administer this Plan under Section 3
hereof. 

        (g)   "Company" means Computer Network Technology Corporation, a Minnesota corporation, or any successor to substantially all
of its businesses. 

        (h)   "Effective Date" means the date specified in Section 9.1 hereof. 

        (i)    "Employee" means any employee (including an officer or director who is also an employee) of the Company or an Affiliate.
"Employee" shall also include other individuals and entities who are not "employees" of the Company or an Affiliate but who provide services to the Company or an Affiliate in the capacity of an
advisor, director or consultant. In addition, references herein to "employment" and similar terms shall include the providing of services in any such capacity. 

        (j)    "Event" means any of the following: 

        (i)    The
acquisition by an individual, entity, or group (within the meaning of Section 13(d)(3) or l4(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Exchange Act Rule 13d-3) of 40% or more of either (A) the then outstanding shares of common stock of McDATA (the "Outstanding McDATA Common Stock") or
(B) the combined voting power of the then outstanding voting securities of McDATA (the "Outstanding McDATA Voting Securities) entitled to vote generally in the election of the Board; provided,
however, that the following acquisitions shall not constitute an Event: 

        (1)   any
acquisition of voting securities of McDATA directly from the McDATA, 

        (2)   any
acquisition of voting securities of McDATA by McDATA or any or any of its wholly owned Subsidiaries,

 

        (3)   any
acquisition of voting securities of McDATA by any employee benefit plan (or related trust) sponsored or maintained by the McDATA or any of its Subsidiaries, or 

        (4)   any
acquisition by any corporation with respect to which, immediately following such acquisition, more than 60% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding McDATA Common Stock and Outstanding McDATA
Voting Securities immediately prior to such acquisition in substantially the same proportions as was their ownership, immediately prior to such acquisition, of the the Outstanding McDATA Common Stock
and Outstanding McDATA Voting Securities, as the case may be; 

        (ii)   Individuals
who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by McDATA's
stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest which was (or, if threatened, would have been) subject to Exchange Act
Rule 14a-l l, or a similar successor provision; 

        (iii)  Approval
by the stockholders of McDATA of a reorganization, merger, consolidation, or statutory exchange of Outstanding McDATA Voting Securities, unless immediately
following such reorganization, merger, consolidation, or exchange, all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding McDATA
Common Stock and Outstanding McDATA Voting Securities immediately prior to such reorganization, merger, consolidation, owned, directly or indirectly, more than 60% 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
corporation resulting from such reorganization, merger, consolidation, or exchange in substantially the same proportions as was their ownership, immediately prior to such reorganization, merger,
consolidation, or exchange, of the Outstanding McDATA Common Stock and Outstanding McDATA Voting Securities, as the case may be; or 

        (iv)  Approval
by the stockholders of McDATA of (A) a complete liquidation or dissolution of McDATA or (B) the sale or other disposition of all or substantially
all of the assets of McDATA, other than to a corporation with respect to which, immediately following such sale or other disposition, more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding McDATA Common Stock and
Outstanding McDATA Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as was their ownership, immediately prior to such sale
or other disposition, of the Outstanding McDATA Common Stock and Outstanding McDATA Voting Securities, as the case may be. 

        (v)   Notwithstanding
the above, an Event shall not be deemed to occur with respect to an employee if the acquisition of the 40% or greater interest referred to in
subsection (i) is by a group, acting in concert, that includes that recipient or if at least 40% of the then outstanding

 
common stock or combined voting power of the then outstanding voting securities (or voting equity interests) of the surviving corporation or of any corporation (or other entity) acquiring all or
substantially all of the assets of McDATA shall be beneficially owned, directly or indirectly, immediately after a reorganization, merger, consolidation, statutory share exchange or disposition of
assets referred to in subsections (iii) or (iv) by a group, acting in concert, that includes that Participant. 

        (k)   "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (l)    "Fair Market Value" as of any date means, unless otherwise expressly provided in this Plan: 

        (i)    the
closing sale price of a Share on the date immediately preceding that date or, if no sale of Shares shall have occurred on that date, on the next preceding day on
which a sale occurred of Shares on the National Association of Securities Dealers, Inc. Automated Quotations National Market System ("NMS"), or 

        (ii)   if
the Shares are not quoted on the NMS, what the Committee determines in good faith to be 100% of the fair market value of a Share on that date. 

        Provided,
however, if the NMS has closed for the day at the time the event occurs that triggers a determination of Fair Market Value, whether the grant of an Award, the exercise of an
Option or otherwise, all references in this Section 2.1(m) to the "date immediately preceding that date" shall be deemed to be references to "that date." In the case of an Incentive Stock
Option, if such determination of Fair Market Value is not consistent with the then current regulations of the Secretary of the Treasury, Fair Market Value shall be determined in accordance with said
regulations. The determination of Fair Market Value shall be subject to adjustment as provided in Section 13 hereof. 

        (m)  "Fundamental Change" means a dissolution or liquidation of McDATA, a sale of substantially all of the assets of McDATA, a
merger or consolidation of McDATA with or into any other corporation,
regardless of whether McDATA is the surviving corporation, or a statutory share exchange involving capital stock of McDATA. 

        (n)   "Incentive Stock Option" means any Option designated as such and granted in accordance with the requirements of Code
Section 422 or any successor to said section. 

        (o)   "Non-Employee Director" means a member of the Board who meets the definition of "Non-Employee
Directors" as defined under Rule 16b-3(b)(3)(i) of the Exchange Act or any successor definition. 

        (p)   "Non-Qualified Stock Option" means an Option other than an Incentive Stock Option. 

        (q)   "Option" means a right to purchase Stock, including both Non-Qualified Stock Options and Incentive Stock
Options. 

        (r)   "Outside Directors" means those directors of McDATA or the Company, as applicable, who are not employees of the Company
or any Affiliate. 

        (s)   "Performance Cycle" means the period of time as specified in an Agreement over which Performance Units are to be earned. 

        (t)    "Performance Units" means an Award made under Section 7.2 hereof. 

        (u)   "Plan" means this 1992 Stock Award Plan, as amended from time to time. 

        (v)   "Restricted Stock" means Stock granted under Plan Section 7.3 so long as such Stock remains subject to one or more
restrictions.

 

        (w)  "Retirement" of an Employee means termination of employment with the Company or an Affiliate on or after the date the
Employee attains age 55. 

        (x)   "Share" means a share of Stock. 

        (y)   "Stock" or "Common Stock" means the McDATA Class A Common Stock,
$.01 par value per share (as such par value may be adjusted from time to time). 

        (z)   "Subsidiary" means a subsidiary corporation," as that term is defined in Section 424(f) of the Code, or any
successor provision. 

        (aa) "Successor" means the legal representative of the estate of a deceased Participant or the person or persons who may, by
bequest or inheritance, or under the terms of an Award or of forms submitted by the Participant to the Committee under Section 17 hereof, acquire the right to exercise an Option or receive cash
or Shares issuable in satisfaction of an Award in the event of an employee's death. 

        (bb) "Term" means the period during which an Option may be exercised or the period during which the restrictions or terms and
conditions placed on Restricted Stock are in effect. 

        (cc) "Transferee" means any member of the Participant's immediate family (i.e., his or her children,
step-children, grandchildren and spouse) or one or more trusts for the benefit of such family members or partnerships in which such family members are the only partners. 

        2.2   Number. Except when otherwise indicated by context, any term used in the singular shall also include the plural. 

        3.     Administration. 

        3.1   Authority of Committee. 

        (a)   General. Except as provided in Section 3.1(b), the Committee shall administer this Plan. The Committee may
delegate all or any portion of its authority under this Plan to persons who are not Non-Employee Directors or officers of McDATA solely for purposes of determining and administering Awards
to Employees who are not then subject to the reporting requirements of
Section 16 of the Exchange Act. The Committee shall have exclusive power to make Awards, to determine when and to whom Awards will be granted, the form of each Award, the amount of each Award,
and any other terms or conditions of each Award. Each Award shall be subject to an Agreement authorized by the Committee. The Committee's interpretation of this Plan and of any Awards made under this
Plan shall be final and binding on all persons. The Committee shall have the power to establish regulations to administer this Plan and to change such regulations. 

        (b)   Options to Outside Directors. Notwithstanding any contrary provisions of this Plan, the granting and terms, conditions,
and eligibility requirements of Awards granted to Outside Directors shall be determined by the Board. 

        3.2   Indemnification. To the full extent permitted by law, (a) no member of the Board or of the Committee or any person
to whom the Committee delegates authority under this Plan shall be liable for any action or determination taken or made in good faith with respect to this Plan or any Award made under this Plan and
(b) the members of the Board and of the Committee and each person to whom the Committee delegates authority under this Plan shall be entitled to indemnification by the Company with regard to
such actions and determinations. 

        4.     Shares Available Under this Plan. The number of Shares available for distribution under this Plan shall not exceed
10,985,000 (subject to adjustment as provided in this Section 4 and under Section 13 hereof). Any Shares subject to the terms and conditions of an Award under this Plan that are not used
because the terms and conditions of the Award are not met may again be used for an

 
Award under this Plan. In addition, if, in accordance with this Plan, an employee uses shares of Common Stock of the Company to (i) pay a purchase or exercise price, including an Option
exercise price, or (ii) satisfy tax withholdings, only the number of shares issued net of the shares tendered in payment of such purchase or exercise price and tax withholdings shall be deemed
to be issued for purposes of determining the maximum number of Shares available under the Plan. Further, the maximum number of Shares available for distribution under this Plan shall be increased to
take into account any Awards granted under Section 18 of this Plan. 

        5.     Eligibility. Awards may be granted under this Plan to Employees and Outside Directors, and such Awards shall have the
terms and conditions specified in Sections 6 and 7 hereof and elsewhere in this Plan. The granting of Awards to Employees (other than Outside Directors) is solely at the discretion of the
Committee; the granting of Awards to Outside Directors is solely at the discretion of the Board. 

        6.     General Terms of Awards. 

        6.1   Amount of Award. Each Agreement with an Employee shall set forth the number of Shares to which the Option subject to such
Agreement applies or the number of Shares of Restricted Stock, Stock, Performance Units subject to such Agreement, as the case may be. 

        6.2   Term. Each Agreement, other than those relating solely to Awards of Shares without restrictions, shall set forth the Term
of the Option or Restricted Stock or the Performance Cycle for the Performance Units, as the case may be. An Agreement may permit an acceleration of the expiration of the applicable Term upon such
terms and conditions as shall be set forth in the Agreement, which may, but need not, include without limitation acceleration resulting from the occurrence of an Event or in the event of the
Employee's death or Retirement. Acceleration of the Performance Cycle of Performance Units shall be subject to Section 7.2(b) hereof. 

        6.3   Agreements. Each Award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions, as
determined by the Committee, which shall apply to such Award, in addition to the terms and conditions specified in this Plan. 

        6.4   Transferability. Except as provided in this Section 6.4, during the lifetime of an employee to whom an Award is
granted, only that Participant (or that Participant's legal representative) may exercise an Option or receive payment with respect to Performance Units or any other Award. No Award of Restricted Stock
(prior to the expiration of the restrictions), Options or Performance Units or other Award may be sold, assigned, transferred, exchanged or otherwise encumbered other than pursuant to a domestic
relations order as defined in the Code or Title 1 of the Employee Retirement Income Security Act ("ERISA") or the rules thereunder; any attempted transfer in violation of this
Section 6.4 shall be of no effect. Notwithstanding the immediately preceding sentence, the Committee, in an Agreement or otherwise at its discretion, may provide (i) that the Award
subject to the Agreement shall be transferable to a Successor in the event of an employee's death, or (ii) that the Award (other than Incentive Stock Options) may be transferable to a
Transferee if the Participant receives no consideration for the transfer. Any Award held by a Transferee shall continue to be subject to the same terms and conditions that were applicable to such
Award immediately prior to its transfer. By way of example and not limitation, (i) an Option may be exercised by a Transferee as and to the extent that such Option has become exercisable and
has not terminated in accordance with the provisions of the Plan and the applicable Agreement and (ii) for purposes of any provision of this Plan relating to notice to an optionee or to vesting
or termination of an Option upon the death, disability or termination of employment of an optionee, the references to "optionee" shall mean the original grantee of an option and not any Transferee. 

        7.     Terms and Conditions of Specific Awards. 

        7.1   Stock Options.

 

        (a)   Terms of All Options. Each Option shall be granted as either an Incentive Stock Option or a Non-Qualified
Stock Option. Only Non-Qualified Stock Options may be granted to Outside Directors and to Employees who are not employees of the Company or an Affiliate but who provide services to the
Company or an Affiliate in the capacity of an advisor or consultant. The purchase price of each Share subject to an Option shall be determined by the Committee and set forth in the Agreement, but
shall not be less than 100% of the Fair Market Value of a Share as of the date the Option is granted. The purchase price of the Shares with respect to which an Option is exercised shall be payable in
full at the time of exercise, provided that to the extent permitted by law, the Agreement may permit some or all Participants simultaneously to exercise Options and sell the Shares thereby acquired
pursuant to a brokerage or similar relationship and use the proceeds from such sale as payment of the purchase price of such Shares. The purchase price may be payable in cash, in Stock having a Fair
Market Value as of the date the Option is exercised equal to the purchase price of the Stock being purchased pursuant to the Option, or a combination thereof as determined by the Committee and
provided in the Agreement. Each Option shall be exercisable in whole or in part on the terms provided in the Agreement. In no event shall any Option be exercisable at any time after its expiration
date. When an Option is no longer exercisable, it shall be deemed to have lapsed or terminated. The number of Shares for which any Employee may be granted Options in any one calendar year shall not
exceed 975,000. The Committee may provide, in an Agreement or otherwise, that an employee who exercises an Option and pays the Option price in whole or in part with Shares then owned by the
Participant will be entitled to receive another Option covering the same number of shares tendered and with a price of no less than Fair Market Value on the date of grant of such additional Option
("Reload Option"). 

        (b)   Incentive Stock Options. In addition to the other terms and conditions applicable to all Options: 

        (i)    the
maximum number of shares that may be covered with respect to incentive stock options is 10,985,000. 

        (ii)   the
aggregate Fair Market Value (determined as of the date the Option is granted) of the Shares with respect to which Incentive Stock Options held by an individual
first become exercisable in any calendar year (under this Plan and all other incentive stock option plans of the Company and its Affiliates) shall not exceed $100,000 (or such other limit as may be
required by the Code) if such limitation is necessary to qualify the Option as an Incentive Stock Option; 

        (iii)  an
Incentive Stock Option shall not be exercisable more than 10 years after the date of grant (or such other limit as may be required by the Code) if such
limitation is necessary to qualify the Option as an Incentive Stock Option; and 

        (iv)  the
Agreement covering an Incentive Stock Option shall contain such other terms and provisions which the Committee determines necessary to qualify such Option as an
Incentive Stock Option. 

        7.2   Performance Units. 

        (a)   Initial Award. An Award of Performance Units shall entitle such Participant (or a Successor) to future payments of cash,
Stock, or a combination of cash and Stock, as determined by the Committee and provided in the Agreement, based upon the achievement of performance targets established by the Committee. Such
performance targets may, but need not, include without limitation targets relating to one or more of corporate, group, unit, Affiliate, or individual performance. The Agreement may establish that a
portion of a full or maximum amount of an employee's Award will be paid for performance which exceeds the minimum target but falls below

 
the maximum target applicable to such Award. The Agreement shall also provide for the timing of such payment. Following the conclusion or acceleration of each Performance Cycle, the Committee shall
determine the extent to which (i) performance targets have been attained, (ii) any other terms and conditions with respect to an Award relating to such Performance Cycle have been
satisfied, and (iii) payment is due with respect to an Award of Performance Units. The maximum payment that can be made for awards granted to any one individual shall be $1,000,000 for any
single or combined performance goals established for a specified performance period. 

        (b)   Acceleration and Adjustment. The Agreement may permit an acceleration of the Performance Cycle and an adjustment of
performance targets and payments with respect to some or all of the Performance Units awarded to an employee upon such terms and conditions as shall be set forth in the Agreement, upon the occurrence
of certain events, which may, but need not include without limitation an Event, a Fundamental Change, the Participant's death or Retirement or, with respect to payments in Stock with respect to
Performance Units, a reclassification, stock dividend, stock split, or stock combination as provided in Section 13 hereof. 

        7.3   Restricted Stock Awards

        (a)   The
Committee is authorized to grant, either alone or in conjunction with other Awards, stock and stock-based Awards. The Committee shall determine the persons to whom
such Awards are made, the timing and amount of such Awards, and all other terms and conditions. Common Stock granted to recipients may be unrestricted or may contain such restrictions, including
provisions requiring forfeiture and imposing restrictions upon stock transfer, as the Committee may determine. Unless forfeited, the recipient of restricted Common Stock will have all other rights of
a stockholder, including without
limitation, voting and dividend rights. No more than 650,000 shares in the form of restricted stock and stock shall be issued under the Stock Award Plan. 

        (b)   An
Award of Restricted Stock under the Plan shall consist of Shares subject to restrictions on transfer and conditions of forfeiture, which restrictions and conditions
shall be included in the applicable Agreement. The Committee may provide for the lapse or waiver of any such restriction or condition based on such factors or criteria as the Committee, in its sole
discretion, may determine. 

        (c)   Except
as otherwise provided in the applicable Agreement, each Stock certificate issued with respect to an Award of Restricted Stock shall either be deposited with the
Company or its designee, together with an assignment separate from the certificate, in blank, signed by the Participant, or bear such legends with respect to the restricted nature of the Restricted
Stock evidenced thereby as shall be provided for in the applicable Agreement. 

        (d)   The
Agreement shall describe the terms and conditions by which the restrictions and conditions of forfeiture upon awarded Restricted Stock shall lapse. Upon the lapse of
the restrictions and conditions, Shares free of restrictive legends, if any, relating to such restrictions shall be issued to the Participant or a Successor or Transferee. 

        (e)   An
employee or a Successor or Transferee with a Restricted Stock Award shall have all the other rights of a stsockholder including, but not limited to, the right to
receive dividends and the right to vote the Shares of Restricted Stock. 

        7.4   Other Awards. The Committee may from time to time grant Stock and other Awards under the Plan including without
limitations those Awards pursuant to which Shares are or may in the future be acquired, Awards denominated in Stock units, securities convertible into Stock and Phantom securities. The Committee, in
its sole discretion, shall determine the terms and conditions of such Awards provided that such Awards shall not be inconsistent with the terms and purposes of this Plan. The Committee may, at its
sole discretion, authorize the issuance of Shares subject to restrictive legends and/or stop transfer instructions that are consistent with the terms and conditions of the Award to

 
which the Shares relate. Furthermore, the Committee may use stock available under this Plan as payment for compensation, grants or rights and earned or due under any other compensation plans or
arrangements of McDATA or the Company. No more than 650,000 shares in the form of restricted stock and stock shall be issued under the Stock Award Plan. 

        8.     Terms and Conditions of Outside Director Awards. 

        8.1   Outside
Directors may, in the discretion of the Board and in accordance with the terms of this Plan, be granted Awards under this Plan at various times, including when
an Outside Director is first elected or appointed to the Board, when an Outside Director is re-elected to the Board or at other times as may be deemed appropriate. 

        8.2   Terms of Awards. In addition to the terms set forth in Section 7.1 of this Plan, Outside Director Awards may
contain such other terms and conditions as the Board determines. 

        9.     Effective Date of this Plan. 

        9.1   Effective Date. This Plan shall become effective as of March 5, 1992, the date of adoption of this Plan by the
Board, provided that this Plan is approved and ratified by the affirmative vote of the holders of a majority of the outstanding Shares of Stock present or represented and entitled to vote in person or
by proxy at a meeting of the shareholders of the Company no later than December 31, 1992. 

        9.2   Duration of this Plan. This Plan shall remain in effect until all Stock subject to it shall be distributed or all Awards
have expired or lapsed, whichever is latest to occur, or this Plan is terminated pursuant to Section 12 hereof. No Award of an Incentive Stock Option shall be made more than 10 years
after the effective date (or such other limit as may be required by the Code) if such limitation is necessary to qualify the Option as an Incentive Stock Option. Except with respect to Director
Options, the date and time of approval by the Committee of the granting of an Award (or such other time as the Committee shall designate) shall be considered the date and time at which such Award is
made or granted, notwithstanding the date of any Agreement with respect to such Award. 

        10.   Right to Terminate Employment. Nothing in this Plan or in any Agreement shall confer upon any Employee the right to
continue in the employment of the Company or any Affiliate or affect any right which the Company or any Affiliate may have to terminate the employment of the Employee with or without cause. 

        11.   Tax

        Withholding.    The Company may withhold from any cash payment under this Plan to an employee or other person (including a
Successor or a Transferee) an amount sufficient to cover any withholding taxes required or permitted to be withheld from the employee or other person. The Company shall have the right to require an
employee or other person receiving Stock under this Plan to pay to the Company a cash amount sufficient to cover any withholding taxes, including any income tax, social security tax, national
insurance contribution, or other kind or type of tax for which the employee, the Company or any Affiliate may be liable as a consequence of the employee or other person exercising an Option or
receiving Stock. In lieu of all or any part of such a cash payment from a person receiving Stock under this Plan, the Committee may permit the individual to elect to cover all or any part of the
withholdings, and to cover any additional withholdings up to the amount needed to cover the full amount of federal, state, and local tax with respect to income arising from payment of the Award,
through a reduction of the number of Shares delivered to such individual or a subsequent return to the Company of Shares held by the employee or other person, in each case valued in the same manner as
used in computing the withholding taxes under the applicable laws. The Company or the relevant Affiliate may in accordance with and to the extent it is able under the laws of the jurisdiction with
respect to which a tax is owed, deduct the relevant amount from subsequent earnings payable to the employee. To the extent that the Company or the relevant Affiliate cannot (or does not) make the

 
relevant deductions, the employee or person receiving the Stock shall enter into such other arrangements for the individual to reimburse the Company or the Affiliate for the amount of the tax
liability as the Company shall require, and the Company may make the individual's agreement to such arrangements a condition of the exercise of any Stock Option or the receipt of any Award under the
Plan. 

        Other Tax Consequences.    To the extent required to avoid penalties under Code Section 409A, any Award shall comply in
all respects with Code Section 409A and related regulations and shall be interpreted and administered in all respects in accordance with Code Section 409A. To the extent any Award
subject to Code Section 409A, by its terms, is inconsistent with the requirements of Code Section 409A, Code Section 409A shall govern. Notwithstanding any provision to the
contrary, all taxes imposed upon the Participant associated with participation in the Plan, including any liability imposed under Code Section 409A, shall be borne solely by the Participant. 

        12.   Amendment, Modification and Termination of this Plan. 

        (a)   The
Board may at any time and from time to time terminate, suspend or modify the Plan. Except as limited in (b) below, the Committee may at any time alter or
amend any or all Agreements under the Plan to the extent permitted by law. However, no such action may, without further approval of the shareholders of the Company, be effective if such approval is
required in order that the Plan conform to the requirements of Code Section 422. 

        (b)   No
termination, suspension, or modification of the Plan will materially and adversely affect any right acquired by any Participant or Successor or Transferee under an
Award granted before the date of
termination, suspension, or modification, unless otherwise agreed to by the Participant in the Agreement or otherwise, or required as a matter of law; but it will be conclusively presumed that any
adjustment for changes in capitalization provided for in Plan Sections 7.2 or 13 does not adversely affect these rights. 

        13.   Adjustment for Changes in Capitalization. Appropriate adjustments in the aggregate number and type of Shares available
for Awards under this Plan and in the number and type of Shares and amount of cash subject to Awards then outstanding, in the Option price as to any outstanding Options and, subject to
Section 7.2(b) hereof, in outstanding Performance Units and payments with respect to outstanding Performance Units may be made by the Committee in its sole discretion to give effect to
adjustments made in the number or type of Shares of McDATA through a Fundamental Change (subject to Section 14 hereof), recapitalization, reclassification, stock dividend, stock split, stock
combination, or other relevant change, provided that fractional Shares shall be rounded to the nearest whole share. 

        14.   Fundamental Change. In the event of a proposed Fundamental Change: (a) involving a merger, consolidation, or
statutory share exchange, unless appropriate provision shall be made for the protection of the outstanding Options by the substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the parent corporation of McDATA or such surviving corporation, to be issuable upon the exercise of options in lieu of Options and
capital stock of McDATA, or (b) involving the dissolution or liquidation of McDATA, the Committee shall declare, at least 20 days prior to the occurrence of the Fundamental Change, and
provide written notice to each holder of an Option of the declaration, that each outstanding Option, whether or not then exercisable, shall be canceled at the time of, or immediately prior to the
occurrence of the Fundamental Change in exchange for payment to each holder of an Option, within ten days after the Fundamental Change, of cash equal to the amount, if any, for each Share
covered by the canceled Option, by which the Fair Market Value (as defined in this Section) per Share exceeds the exercise price per Share covered by such Option. At the time of the declaration
provided for in the immediately preceding sentence, each Option shall immediately become excercisable in full and each person holding an Option shall have the right, during the period preceding the
time of

 
cancellation of the Option, to exercise the Option as to all or any part of the Shares covered thereby; provided, however, that if such Fundamental Change does not become effective, then the
declaration pursuant to this Section 14(b) shall be rescinded, the acceleration of the exercisibility of the Option pursuant to this Section 14(b) shall be void, and the
Option shall be exercisable in accordance with its terms. In the event of a declaration pursuant to this Section 14, each outstanding Option that shall not have been exercised prior to the
Fundamental Change shall be canceled at the time of, or immediately prior to, the Fundamental Change, as provided in the declaration. Notwithstanding the foregoing, no person holding an Option shall
be entitled to the payment provided for in this Section 14 if such Option shall have expired pursuant to an Agreement. For purposes of this Section only, "Fair Market Value" per Share
means the cash plus the fair market value, as determined in good faith by the Committee, of the non-cash consideration to be received per Share by the stockholders of McDATA upon the
occurrence of the Fundamental Change, notwithstanding anything to the contrary provided in this Plan. 

        15.   Unfunded Plan. This Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any
time be represented by Awards under this Plan. 

        16.   Other Benefit and Compensation Programs. Payments and other benefits received by an employee under an Award shall not be
deemed a part of an employee's regular, recurring compensation for purposes of any termination, indemnity, or severance pay laws and shall not be included in, nor have any effect on, the determination
of benefits under any other employee benefit plan, contract, or similar arrangement provided by the Company or an Affiliate, unless expressly so provided by such other plan, contract, or arrangement
or the Committee determines that an Award or portion of an Award should be included to reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of
competitive cash compensation. 

        17.   Beneficiary Upon Employee's Death. To the extent that the transfer of an employee's Award at death is permitted under an
Agreement, (a) an employee's Award shall be transferable to the beneficiary, if any, designated on forms prescribed by and filed with the Committee and (b) upon the death of the
Employee, such beneficiary shall succeed to the rights of the Employee to the extent permitted by law and this Plan. If no such designation of a beneficiary has been made, the Participant's legal
representative shall succeed to the Awards, which shall be transferable by will or pursuant to laws of descent and distribution to the extent permitted under an Agreement. 

        18.   Corporate Mergers, Acquisitions, Etc. The Committee may also grant Options, Restricted Stock or other Awards under the
Plan having terms, conditions and provisions that vary from those specified in this Plan provided that any such awards are granted in substitution for, or in connection with the assumption of,
existing options, stock appreciation rights, restricted stock or other awards granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by McDATA pursuant to
or by reason of a transaction involving a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to which McDATA or a subsidiary is a party. 

        19.   Deferrals and Settlements. The Committee may require or permit Employees to elect to defer the issuance of Shares or the
settlement of Awards in cash under such rules and procedures as it may establish under the Plan. It may also provide that deferred settlements include the payment or crediting of interest on the
deferral amounts. 

        20.   Governing Law. To the extent that federal laws do not otherwise control, this Plan and all determinations made and
actions taken pursuant to this Plan shall be governed by the laws of Minnesota and construed accordingly. 

QuickLinks

Plan Information Statement For Participants in the Company's 1992 Stock Award Plan

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