Check the appropriate box: |X| Preliminary Proxy Statement |_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2) |_| Definitive Proxy Statement |_| Definitive Additional Materials |_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12 CIENA

Ciena Corporation ~~- -------------------------------------------------------------------------------- (Name~~

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o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

(2) ~~and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by~~Form, schedule or registration number, or the Form or Schedule and the date of its filing. 1. Amount previously paid: ------------------------------------------------------------------------- 2. Form, Schedule or Registration Statement No.statement no.: ~~------------------------------------------------------------------------- 3.~~

(3) Filing ~~Party: ------------------------------------------------------------------------- 4.~~party:

(4) Date ~~Filed: ------------------------------------------------------------------------- Notes: -------------------------------------------------------------------------~~ ~~2 [LOGO] CIENA CORPORATION~~ filed:

The ~~2001~~2006 Annual Meeting of ~~Stockholders~~Shareholders of ~~CIENA~~Ciena Corporation will be held at the ~~BWI~~Baltimore Marriott ~~1743 W. Nursery Road,~~Waterfront Hotel located at 700 Aliceanna Street in Baltimore, Maryland, on Wednesday, March ~~14, 2001~~15, 2006 at 3:00 p.m. local time for the following purposes: 1. To elect three Class I directors. 2. To adopt the Third Amended and Restated CIENA Corporation 1994 Stock Option Plan to increase the number of options authorized for issuance thereunder from 40,100,000 to 46,100,000 and to make certain other changes, including eliminating the ability of the Board of Directors to reprice options granted after January 17, 2001. 3. To amend the Third Amended and Restated CIENA Corporation 1994 Stock Option Plan (or, if Proposal 2 is not adopted, the existing Second Amended and Restated 1994 Stock Option Plan) to add a provision that will automatically increase the number of shares reserved under the Plan by 0.75% of the issued and outstanding Common Stock of the Corporation on the last day of each fiscal year beginning with 2001 and ending with 2004. 4. To amend the Corporation's Third Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder from 460,000,000 shares to 980,000,000 shares. 5. To consider and act upon such other business as may properly come before the meeting. Whether or not you expect to attend the meeting, please


	1. To elect two members of the Board of Directors to serve as Class III directors for three-year terms ending in 2009, or until their respective successors are elected and qualified;

	2. To authorize the Board of Directors, in its discretion, to amend Ciena’s Third Restated Certificate of Incorporation to effect a reverse stock split of its outstanding common stock at a ratio of (i) one-for-five, (ii) one-for-seven, or (iii) one-for-ten, together with a corresponding reduction in the number of authorized shares of Ciena common stock and capital stock, at any time prior to the date of Ciena’s 2007 Annual Meeting of Shareholders, without further approval or authorization of Ciena’s shareholders;

	3. To consider the ratification of the appointment of PricewaterhouseCoopers LLP as Ciena’s independent registered public accounting firm for the fiscal year ending October 31, 2006;

	4. To consider and act upon a shareholder proposal requesting the Board to adopt a majority vote standard for the election of directors, if properly presented at the Annual Meeting; and

	5. To consider and act upon such other business as may properly come before the Annual Meeting or any adjournments thereof.

Please complete, sign, date and return the enclosed proxy card as promptly as possible in the postage paid envelope provided. Shareholders of record may also vote by telephone or Internet by following the instructions on the enclosed ~~stamped envelope. By Order~~proxy card. If you elected to receive our Proxy Statement and Annual Report to Shareholders over the Internet, you will not receive a paper proxy card and you should vote online, unless you cancel your enrollment. If your shares are held in a bank or brokerage account, please refer to the materials provided by your bank or broker for voting instructions. If you choose to attend the Annual Meeting, you may still vote your shares in person even though you have previously returned your proxy by mail, telephone or Internet. Shareholders may listen to a webcast of the ~~Board~~Annual Meeting by following the instructions that will be available on the Investor Relations page of Directors /s/ Michael O. McCarthy III Michael O. McCarthy III Secretary 2 3 our website atwww.ciena.com.

We are furnishing this Proxy Statement ~~will be furnished on or about February 1, 2001~~ to ~~stockholders~~shareholders of ~~CIENA~~Ciena Corporation, ~~(the "Corporation"),~~ 1201 Winterson Road, Linthicum, Maryland 21090, in connection with the solicitation by the Board of Directors of ~~the Corporation~~Ciena of proxies to be voted at the Annual Meeting of ~~Stockholders. The stockholder giving~~Shareholders to be held at the Baltimore Marriott Waterfront Hotel located at 700 Aliceanna Street in Baltimore, Maryland, on Wednesday, March 15, 2006 at 3:00 p.m. local time, or at any adjournment thereof. This Proxy Statement, the proxy card and our Annual Report to Shareholders will be mailed on or about February 1, 2006, to each shareholder entitled to vote.

The Board of Directors has set January 20, 2006 as the ~~power~~record date for the Annual Meeting. If you were the owner of Ciena common stock at the close of business on January 20, 2006, you may vote at the Annual Meeting. You are entitled to one vote for each share of common stock you held on the record date, including shares:


	•	held directly in your name with our transfer agent as a “shareholder of record”; and

	•	held for you in an account with a broker, bank or other nominee (shares held in “street name”).

A list of shareholders entitled to vote at the Annual Meeting will be open to the examination of any shareholder, for any purpose germane to the Annual Meeting, during normal business hours for a period of ten days before the Annual Meeting at our corporate offices at 1201 Winterson Road, Linthicum, Maryland 21090, and at the time and place of the Annual Meeting.

A majority of our shares of common stock outstanding as of the record date must be present at the Annual Meeting in order to hold the meeting and conduct business. This is called a quorum. On the record date, there were shares of Ciena common stock outstanding. Your shares are counted as present at the Annual Meeting if you:


	•	are present and vote in person at the Annual Meeting; or

	•	have properly submitted a proxy card prior to the Annual Meeting.


	•	the election of two Class III directors to the Board of Directors for three-year terms ending in 2009, or until their respective successors are elected and qualified;

	•	the authorization of the Board of Directors, in its discretion, to effect the reverse stock split of its outstanding common stock at a ratio of (i) one-for-five, (ii) one-for-seven, or (iii) one-for-ten (the “reverse stock split”), together with a corresponding reduction in the number of authorized shares of Ciena common stock and capital stock (the “authorized stock reduction”), at any time prior to the


		date of Ciena’s 2007 Annual Meeting of Shareholders, without further approval or authorization of Ciena’s shareholders;

	•	the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2006; and

	•	the consideration of a shareholder proposal requesting the Board of Directors to adopt a majority vote standard for the election of directors.

We are not currently aware of any other business to be acted upon at the Annual Meeting. If any other matters are properly submitted for consideration at the Annual Meeting, including any proposal to adjourn the Annual Meeting, the persons named as proxies shall vote the shares represented thereby in their discretion. Adjournment of the Annual Meeting may be made for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time by approval of the holders of common stock representing a majority of the votes present in person or by proxy at the Annual Meeting, whether or not a quorum exists, without further notice other than by an announcement made at the Annual Meeting.


	•	“FOR” the director nominees named in this Proxy Statement;

	•	“FOR” the authorization of the Board of Directors, in its discretion, to effect the reverse stock split and the corresponding authorized stock reduction, at any time prior to the date of Ciena’s 2007 Annual Meeting of Shareholders, without further approval or authorization of Ciena’s shareholders;

	•	“FOR” the ratification of the appointment of our independent registered public accounting firm; and

	•	“AGAINST” the shareholder proposal requesting that the Board of Directors adopt a majority vote standard for the election of directors.

Directors are elected by a plurality of the votes cast at the Annual Meeting. This means that the nominees who receive the largest number of “FOR” votes cast will be elected as directors. Notwithstanding the foregoing, any nominee, in an uncontested election for whom a greater number of votes are “WITHHELD” than are cast “FOR” his or her election will tender his or her resignation promptly after certification of the shareholder vote, and will be subject to the procedures set forth in Ciena’s Principles of Corporate Governance, as more fully described under the heading “Election of Directors and Ciena’s Principles of Corporate Governance” in Proposal No. 1 below. Ciena’s Shareholders may not cumulate votes in the election of directors.

Approval of the authorization of the Board of Directors to effect the reverse stock split and corresponding authorized stock reduction requires the affirmative vote of the holders of shares of Ciena common stock that represent a majority of the votes of all of the shares outstanding as of the record date and entitled to vote on the proposal.

Approval of the ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal.

Approval of the shareholder proposal requesting the Board of Directors to adopt a majority vote standard for the election of directors requires the affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal.

You may either vote “FOR” or “WITHHOLD” authority to vote for our director nominees. If you withhold authority to vote with respect to any nominee, your shares will be counted for purposes of establishing a quorum, but will have no effect on the election of that nominee.

You may vote “FOR,” “AGAINST” or “ABSTAIN” on the other proposals to be presented at the Annual Meeting and set forth in the Notice of Annual Meeting of Shareholders. If you abstain from voting on these proposals, your shares will be counted as present for purposes of establishing a quorum at the Annual Meeting. An abstention will have the same effect as a vote against the proposal to authorize the Board of Directors to effect the reverse stock split and corresponding authorized stock reduction. An abstention will not count as a vote for or against either the ratification of the appointment of our independent registered public accounting firm or the shareholder proposal requesting the Board to adopt a majority vote standard for the election of directors.

Broker non-votes are counted as present for purposes of determining the presence or absence of a quorum for the transaction of business but will not be counted for purposes of determining whether a proposal has been approved. Broker non-votes occur when brokers do not receive voting instructions from their customers and the broker does not have discretionary voting authority with respect to a proposal. If you hold shares through a broker, bank or other nominee and you do not give instructions as to how to vote, your broker may have authority to vote your shares on certain routine items but not on other items. Broker non-votes will not be counted for purposes of the election of directors and will have no effect on the outcome of the vote for the ratification of our independent registered public accounting firm or the shareholder proposal requesting the Board to adopt a majority vote standard for the election of directors. Broker non-votes will have the effect of a vote against the proposal to authorize the Board of Directors to effect the reverse stock split and corresponding authorized stock reduction.

The persons named as proxies are officers of Ciena. All properly executed proxies returned in time to be counted at the Annual Meeting will be voted in accordance with the instructions contained therein. If you sign and submit your proxy card without voting instructions, your shares will be voted in accordance with the recommendations of the Board of Directors set forth above.

Whether you are a “shareholder of record” or hold your shares in “street name,” you may direct your vote without attending the Annual Meeting in person. If you are a shareholder of record, you may vote by signing and dating your enclosed proxy card and mailing it in the postage-paid envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. You may also vote by telephone or Internet by following the instructions on the enclosed proxy card.

If your shares are registered in the name of a bank or a brokerage firm, you may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms participate in the ADP Investor Communications Services online program. This program provides eligible shareholders that hold shares in “street name” the opportunity to vote via the Internet or by telephone. If your bank or brokerage firm is participating in ADP’s program, your proxy materials will provide voting instructions. Eligible shareholders who elected to receive our Proxy Statement and Annual Report to Shareholders via the Internet will be receiving an e-mail on or about February 4, 2006 with information explaining how to access Annual Meeting materials and instructions for voting. If you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your broker or nominee as you have directed.

Even if you plan to attend the Annual Meeting, we encourage you to vote by signing, dating and returning the enclosed proxy card so your vote will be counted if you are unable to, or later decide not to, attend the Annual Meeting. If you are a shareholder of record, you may vote in person by marking and signing the ballot to be provided at the Annual Meeting. If you hold your shares in “street name,” you must obtain a proxy in your name from your bank, broker or other shareholder of record in order to vote by ballot at the Annual Meeting.

If your shares are held in more than one account, you will receive a proxy card (or other voting instructions if your shares are held in street name) for each account. To ensure that all of your shares in each account are voted, you must sign, date and return each proxy card you receive.

You may revoke your proxy at any time before it is exercised. Such right of revocation is not limited by or subject to compliance with any formal procedures. The Corporation will bear the cost of soliciting proxies. Copies of solicitation material may be furnished to brokers, custodians, nominees and other fiduciaries for forwarding to beneficial owners of shares of the Corporation's Common Stock, and normal handling charges may be paid for such forwarding service. Officers and other management employees of the Corporation, who will receive no additional compensation for their services, may solicit proxies by mail, personal interview, telephone and telegraph. At the close of business on January 16, 2001, there were 287,666,956 shares of the Common Stock of the Corporation outstanding and entitled to vote at the meeting. There were 1,492 record holders as of January 16, 2001 and only stockholders of record on that date will be entitled to vote at the meeting. Each share will have one vote. voted by:


	•	submitting a properly signed proxy card with a later date;

	•	delivering a written notice of revocation bearing a later date than the proxy card to Ciena Corporation, 1201 Winterson Road, Linthicum, Maryland 21090, Attention: Corporate Secretary; or

	•	voting in person at the Annual Meeting.

Ciena’s Board of Directors currently consists of ~~eight~~nine members. The directors are divided into three classes, with each class serving on the Board of Directors for a staggered three-year term. Class ~~I and Class II each consist of three directors and Class~~ III, consists of two directors. Class II, whose term expires in 2002, consists of Ms. O'Brien and Messrs. Smith and Cash; Class III, whose term expires in 2003, consists of Professor Bradley and Mr. Taylor; and Class I, whose term expires at the Annual Meeting, consists of ~~Dr. Nettles, Mr. Dillon~~Professor Stephen P. Bradley, Ph.D. and ~~Ms. Fitt.~~Messrs. Don H. Davis, Jr. and Gerald H. Taylor. At the Annual Meeting, ~~three~~two directors will be elected to fill positions in Class ~~I. Dr. Nettles,~~III. Professor Bradley and Mr. ~~Dillon~~Taylor, each of whom currently serves as a director, have been recommended by the Governance and ~~Ms. Fitt are nominees~~Nominations Committee and nominated by the Board of Directors to stand for election at the ~~meeting.~~Annual Meeting. Each of the nominees for Class I,III, if elected, will serve for ~~terms~~a term expiring at the ~~2004~~2009 Annual Meeting, or until their successors are elected and qualified. Mr. Davis’ term as a Class III director expires at the Annual Meeting. The Board of Directors expresses its gratitude to Mr. Davis for his service to Ciena and contributions to the Board of Directors. The Governance and Nominations Committee is currently conducting a search to identify someone to fill the seat now occupied by Mr. Davis. The Governance and Nominations Committee does not anticipate completing its search before the Annual Meeting. When it does identify a suitable candidate, the Governance and Nominations Committee expects to recommend that the Board of Directors appoint him or her to the vacant seat according to Ciena’s Bylaws. Pursuant to Ciena’s Principles of Corporate Governance, any director appointed to fill a vacant Board seat in a class other than the class of directors whose terms expire at the next annual meeting, will nonetheless stand for re-election at the next annual meeting of ~~stockholders.~~shareholders.

Unless otherwise instructed on the proxy ~~it is the intention of~~card, the persons named ~~in the proxy to~~as proxies will vote the shares represented by each properly executed proxy ~~for~~“FOR” the election as directors of the persons named ~~below~~in this Proxy Statement as nominees. ~~The Board~~Each of ~~Directors believes that all such~~the nominees ~~will stand for election and will~~has consented to serve if elected. However, if any of the persons nominated by the Board of Directors fails to stand for election, or ~~is unable~~declines to accept election, or is otherwise unavailable for election prior to our Annual Meeting, proxies solicited by our Board of Directors will be voted by the proxy holders for the election of ~~such~~any other person or persons as the Board of Directors may ~~recommend.~~

The following ~~table presents~~tables present information, ~~concerning persons~~including age, term of office and business experience, for each person nominated for election as ~~directors of the Corporation~~a Ciena director and for those directors whose terms of office will continue after the meeting. 3 4

Director Nominees for Election ~~as a Director for~~to Class III with Terms Expiring in ~~2004 Patrick H. Nettles, Ph.D........Chairman~~2009


		Ms. Fitt serves as Chairperson of the Audit Committee of the Ciena Board of Directors.

Patrick H. Nettles, Ph.D.		Executive Chairman of the Board of Directors of Ciena since May 2001. Dr. Nettles, age 62, was Chairman of the Board and Chief Executive Officer of Ciena from October 2000 to May 2001, and was President, Chief Executive Officer and Director from April 1994 to October 2000. Dr. Nettles serves as a Trustee for the California Institute of Technology. Dr. Nettles also serves on the board of directors of Axcelis Technologies, Inc. and The Progressive Corporation. Dr. Nettles also serves on the board of directors of Carrius Technologies, Inc., a privately held company.

Michael J. Rowny		Director of Ciena since August 2004. Mr. Rowny, age 55, has been Chairman of Rowny Capital, a private equity firm, since 1999. From 1994 to 1999, and previously from 1983 to 1986, Mr. Rowny was with MCI Communications in positions including President and Chief Executive Officer of MCI’s International Ventures, Alliances and Correspondent group, acting Chief Financial Officer, Senior Vice President of Finance, and Treasurer. Mr. Rowny serves on the board of directors of Llamagraphics, Inc. and is chairman of Step 9 Software Corporation. Mr. Rowny serves on the Audit Committee of the Ciena Board of Directors.


		September 1998 to August 1999, and was previously Vice President of International Sales since joining Ciena in November 1997. Mr. Smith currently serves on the board of directors for CommVault Systems, Inc., a privately held company, and the American Electronics Association. Mr. Smith also serves as a member of the Global Information Infrastructure Commission.

As noted above, Ciena’s directors are elected by a plurality of the votes cast at the Annual Meeting. This means that the nominees who receive the largest number of “FOR” votes cast will be elected as directors.

Notwithstanding the plurality voting standard for election of directors, Section 16 of Ciena’s Principles of Corporate Governance, “Voting for Directors,” provides that any nominee, in an uncontested election, for whom a greater number of votes are “WITHHELD” than are cast “FOR” his or her election, will tender his or her resignation promptly after certification of the shareholder vote. The Governance and Nominations Committee would then consider the nominee’s resignation and make a recommendation to the Board on whether to accept or reject the resignation. In making its recommendation, the Governance and Nominations Committee will consider all factors it deems relevant, including the stated reasons shareholders withheld their votes, the length of service and qualifications of the director, the director’s contributions to Ciena and Ciena’s Principles of Corporate Governance. The Board of Directors is required to act on the Governance and Nominations Committee’s recommendation no later than 90 days following the date of the shareholders’ meeting. Promptly following the Board’s decision, Ciena will file a Form 8-K with the SEC disclosing the nature of the Board’s decision, providing an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the director’s resignation. To the extent that one or more directors’ resignations are accepted by the Board, the Governance and Nominations Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.

Any director who tenders his or her resignation pursuant to Section 16 of Ciena’s Principles of Corporate Governance will not participate in the recommendation of the Governance and Nominations Committee or the decision of the Board on the resignation. If a majority of the members of the Governance and Nominations Committee have been required to tender their resignations because of the application of this provision, then the remaining independent directors will appoint a special committee from among themselves for the purpose of considering the resignations and recommending whether to accept or reject them.

The Board’s decision to adopt Section 16 of Ciena’s Principles of Corporate Governance, “Voting for Directors,” and its relative merits in comparison to a majority voting standard in the election of directors, is discussed more fully under Proposal No. 4 below. Ciena’s Principles of Corporate Governance are available on the Corporate Governance page of Ciena’s website atwww.ciena.com.

Proposal No. 1 — Recommendation of the Board of Directors ~~since October 2000, President~~

The Board of Directors unanimously recommends that Ciena shareholders vote “FOR” the election of the nominees listed above.

The Board of Directors has determined that, with the exception of Dr. Nettles and Mr. Smith, both of whom are employees of Ciena, all of its members are “independent directors” as that term is defined in the listing standards of the Nasdaq Stock Market.

The Board of Directors has adopted a procedure for receiving and addressing communications from shareholders. Shareholders may send written communications to the entire Board of Directors or to any of its committees, addressing them to Ciena Corporation, ~~from April 1994 through October 2000~~1201 Winterson Road, Linthicum, Maryland 21090, Attention: Corporate Secretary. Communications by e-mail should be addressed toir@ciena.com and ~~Director~~marked “Attention: Corporate Secretary” in the “Subject” field.

Ciena has adopted a Code of Business Conduct and Ethics that is applicable to all of its directors, officers and employees. The Code of Business Conduct and Ethics reflects Ciena’s policy of dealing with all persons, including its customers, employees, investors, and suppliers, with honesty and integrity. Ciena has also adopted a Code of Ethics for Senior Financial Officers that is specifically applicable to Ciena’s Chief Executive Officer, since February 1994. Dr. Nettles, 57, serves as a Trustee for the California Institute of Technology and also serves on the Advisory Board to the President at Georgia Institute of Technology. From 1992 until 1994, Dr. Nettles served as Executive Vice President and Chief Operating Officer of Blyth Holdings Inc., a publicly-held supplier of client/server software. From late 1990 through 1992, Dr. Nettles was President and Chief Executive Officer of Protocol Engines Inc., a development stage enterprise, formed as an outgrowth of Silicon Graphics Inc., and targeted toward very large scale integration based solutions for high-performance computer networking. From 1989 to 1990, Dr. Nettles was Chief Financial Officer and Controller. Its purpose is to promote honest and ethical conduct and compliance with the law, particularly as related to the maintenance of Optilink, a venture start-up that was acquired by DSC Communications. Dr. Nettles received his B.S. degree fromCiena’s financial records and the ~~Georgia Institute~~preparation of ~~Technology~~financial statements filed with the Securities and ~~his Ph.D. from~~Exchange Commission. Ciena’s Code of Ethics for Senior Financial Officers complies with the ~~California Institute~~requirements of ~~Technology. John R. Dillon..................Director~~Section 406(c) of the ~~Corporation since October 1999. Mr. Dillon, 59, serves~~Sarbanes-Oxley Act. A copy of Ciena’s Code of Ethics for Senior Financial Officers and Code of Business Conduct and Ethics can each be found on the ~~board~~Corporate Governance page of ~~directors~~our website atwww.ciena.com. You may also obtain copies of ~~Airgate PCS. Mr. Dillon's experience includes a variety~~these documents without charge by writing to: Ciena Corporation, 1201 Winterson Road, Linthicum, Maryland 21090, Attention: Corporate Secretary.

Principles of positions at such companies as The Coca-Cola Company, Scientific Atlanta and Fuqua National, where he served as President. Mr. Dillon was instrumental in taking Cox Communications private in 1985 and merging it with Cox Newspapers to form Cox Enterprises, at which time he was elected Senior Vice President, CFO and a memberCorporate Governance

Ciena has previously adopted Principles of Corporate Governance, setting forth the views of the ~~board~~Board of ~~directors. At Cox Enterprises, he was responsible for all~~Directors on significant issues of corporate ~~financial activities as well as planning~~governance, including particularly the structure, interaction and development until his retirement in December 1996. He continued to serve on the Boards of TCG and Cox Communications for two years following his retirement from Cox Enterprises. Mr. Dillon holds an MBA degree from Harvard Business School and a BEE degree from Georgia Institute of Technology, where he was elected to the Academy of Distinguished Engineering Alumni in 1997. He was a founding director of the Georgia Center for Advanced Telecommunications Technology and served on the Georgia Institute of Technology National Advisory Board. Mr. Dillon serves on the Audit Committeeoperation of the Board of Directors. ~~Lawton W. Fitt..................Director~~During 2005, the Board of ~~the Corporation since November 2000. Ms. Fitt, age 47, was elected~~Directors engaged in a partner at Goldman Sachs in 1994 and has been a managing director since 1996. Ms. Fitt has been involved in investment banking and equity underwriting for high-technology companies, including numerous initial public offerings in the Internet, software and communications equipment sectors. Ms. Fitt is currently co-headcomprehensive review of ~~Goldman Sachs' European High Technology Investment Banking Group.~~Ciena’s governance policies. In addition to ~~chairing~~the adoption of a new provision relating to voting for directors described in “Election of Directors and Ciena’s Principles of Corporate Governance” in Proposal No. 1 above, Ciena’s Board of Directors modified or added the provisions described below:

Selection of Board Members; Vacancies. For so long as the Board of Directors is classified, the Board shall endeavor, where reasonably practicable, to appoint nominees for vacancies or newly created directorships to the class of director that will stand for election at the next annual meeting of Ciena’s shareholders. If appointment to this class is not reasonably practicable, the Board will nominate the newly appointed director to stand for election at the next annual meeting of Ciena’s shareholders to serve in the class to which he or she was appointed, notwithstanding that other directors serving in that class are not required to stand for election. If the newly appointed director is nominated and fails to be elected at the next annual meeting of Ciena’s shareholders, he or she shall tender his or her resignation for consideration by the Board of Directors.

Service on Other Boards of Directors. Ciena’s Board of Directors believes that directors should not serve on more than four other boards of public companies in addition to Ciena’s Board of Directors. Ciena directors serving at the time of the adoption of this requirement may maintain directorships in excess of this limit unless the Board determines that doing so would impair the director’s service on Ciena’s Board of Directors. In the event that a director wishes to join the Board of another public company in excess of the limit above, the Board, in its sole discretion, shall determine whether service on the additional board of directors is likely to interfere with the performance of the director’s duties to Ciena, taking into account the individual, the nature of his or her other activities and such other factors or considerations as the Board of Directors deems relevant. In selecting nominees for membership, the Governance and Nominations Committee and the Board of Directors will take into account the other demands on the time of a candidate, and avoid candidates whose other responsibilities might interfere with effective service on Ciena’s Board of Directors.

Change in Principal Occupation of Director. In some cases, when a director changes his or her principal occupation, the change may result in an increased workload, actual or apparent conflicts of interest, or other consequences that may affect his or her ability to continue to serve on Ciena’s Board of Directors. As a result,

Director Stock Ownership Requirements. All non-employee directors are required to hold at least 22,500 shares of Ciena’s common stock and/or units while serving as a director. New directors and directors serving at the time of the adoption of this requirement will have three years to attain the director stock ownership threshold. Shares or units held or beneficially owned by a director, including under any applicable equity plan, are included in determining whether this minimum ownership requirement has been met. Ciena’s Board of Directors recognizes that exceptions to this policy may be necessary or appropriate in individual cases, and may approve exceptions from time to time as it deems appropriate and in the interest of Ciena and its shareholders.

A complete copy of Ciena’s Principles of Corporate Governance is available on the Corporate ~~Financing Committee~~Governance page of the National Association of Securities Dealers, Ms. Fitt serves as a director on the boards of Wink Communications, Inc. and e-Steel Corporation. Ms. Fitt is a trustee of the Darden School Foundation. Ms. Fitt received an A.B. degree in European History from Brown 4 5 University and her M.B.A degree from the Darden School of the University of Virginia. Ms. Fitt serves on the Audit CommitteeCiena’s website atwww.ciena.com.

Committees of the Board of ~~Directors.~~ Directors ~~Continuing in Office Stephen P. Bradley, Ph.D........Director~~and Meetings

During fiscal 2005, the Board of Directors held six meetings. The Board of Directors currently has three standing committees, each consisting entirely of independent directors, as defined by the Nasdaq Stock Market:


	•	the Audit Committee, which held nine meetings during fiscal 2005;

	•	the Compensation Committee, which held six meetings during fiscal 2005; and

	•	the Governance and Nominations Committee, which held six meetings during fiscal 2005.

All of the ~~Corporation since April 1998. Professor Bradley is a William Ziegler Professor of Business Administration and the Chairman~~directors attended at least 75% of the ~~Program for Management Development at the Harvard Business School. A member~~aggregate of the ~~Harvard faculty since 1968, Professor Bradley is also Chairman~~total number of Harvard's Executive Program in Competition and Strategy and teaches in Harvard's Delivering Information Services program. Professor Bradley has written extensively on the telecommunications industry and the impact of technology on competitive strategy. Professor Bradley received his B.E. degree in Electrical Engineering from Yale University in 1963 and his M.S. degree and Ph.D. in Operations Research from the University of California, Berkeley, in 1965 and 1968 respectively. Professor Bradley serves on the Audit Committeemeetings of the Board of ~~Directors. Professor Bradley's term as Director expires in 2003. Gerald H. Taylor................Director~~Directors and the committees on which they served during fiscal 2005. Two members of the ~~Corporation since January 2000.~~Board of Directors attended Ciena’s 2005 Annual Meeting. Ciena encourages, but does not require, members of the Board of Directors to attend Annual Meetings. Each of the three standing committees of the Board of Directors has a written charter, copies of which can be found on the Corporate Governance page of Ciena’s website atwww.ciena.com.

The table below details the composition of the committees of Ciena’s Board of Directors. Mr. ~~Taylor, age 59, has been a private consultant~~Smith and ~~investor~~Dr. Nettles do not serve on committees of the Board of Directors.

The Audit Committee falls within the definition of “audit committee” under Section 3(a)(58)(A) of the Securities Exchange Act. In addition to meeting the Nasdaq Stock Market’s tests for director independence, directors on audit committees must meet two basic criteria set forth in the ~~telecommunications industry since November 1998. He served~~SEC’s rules. First, audit committee

members are barred from accepting, directly or indirectly, any consulting, advisory or other compensatory fee from the issuer or an affiliate of the issuer, other than in the member’s capacity as Chief Executive Officer of MCI Communications from November 1996 to November 1998 and was President and Chief Operating Officer from July 1994 to November 1996. Mr. Taylor was a member of the Board of Directors and any Board committee. Second, a member of ~~MCI WorldCom Inc.~~an audit committee may not be an affiliated person of the issuer or any subsidiary of the issuer apart from 1998 to 1999. He currently serves on the Board of Lafarge Corporation. Mr. Taylor was Chief Operating Officer of MCI from April 1993 to November 1996. He joined MCI in 1969his or her capacity as its sixth employee and was integrally involved in building MCI through key roles held in operations, sales and marketing. Mr. Taylor received a ~~B.S. in physics from San Francisco State University. Mr. Taylor serves on the Human Resources Committee~~member of the Board of Directors. Mr. Taylor's term as Director expires in 2003. Judith M. O'Brien...............Director of the Corporation since July 2000. Since 1984, Ms. O'Brien, 50, has been a partner with Wilson Sonsini Goodrich & Rosati, where she specializes in corporate finance, mergers and acquisitions and general corporate matters. In July 1993, Ms. O'Brien was named as one of the top 25 lawyers under 45 in California by the California Law Business, and in 1997 she was named one of the top five women attorneys in Northern California by the California Lawyer as well as one of the leading women securities lawyers byany Board committee. The Recorder. In April 2000, she was named one of the top twelve Dealmakers of the Year for 1999 by American Lawyer magazine. Ms. O'Brien received her B.A. from Smith College and her law degree from UCLA. Ms. O'Brien serves on the Human Resources Committee of the Board of Directors. Ms. O'Brien's term as Director expires in 2002. Gary B. Smith .................President, Chief Operating Officer and Director since October 2000 and Senior Vice President, Chief Operating Officer from August 1999 to October 2000. Mr. Smith, age 40, served as Senior Vice President Worldwide Sales from 5 6 September 1998 to August 1999, and was previously Vice President of International Sales since joining the Company in November 1997. From June 1995 to October 1997, Mr. Smith served as Vice President, Sales and Marketing for Intelsat and from August 1991 to May 1995, Mr. Smith served as Vice President of Sales and Marketing for Cray Communications, Inc. Mr. Smith received an M.B.A. from Ashridge Management College, U.K. Mr. Smith's term as Director expires in 2002. Harvey B. Cash..................Director of the Corporation since April 1994. Mr. Cash, age 61, is a general partner of InterWest Partners, a venture capital firm in Menlo Park, California that he joined in 1985. Mr. Cash serves on the board of directors of Liberte, Inc., Panja Corporation, and i2 Technologies Inc.. He is also an advisor to Austin Ventures. Mr. Cash received a B.S. degree in Electrical Engineering from Texas A&M University and an M.B.A. degree from Western Michigan University. Mr. Cash served on the board of directors of Benchmarq Microelectronics from 1990 to 1999, and on the board of directors of Aurora Electronics, Inc. from 1991 to 1999. Mr. Cash serves on the Human Resources Committee of the Board of Directors. Mr. Cash's term as Director expires in 2002. Board and Board Committee Information Board Committees The current committees of the Board of Directors has determined that each ~~consist entirely~~member of ~~non-employee directors. The Corporation's~~the Audit Committee ~~makes recommendations concerning~~meets these independence requirements, in addition to the ~~engagement~~independence criteria established by the Nasdaq Stock Market. The Board of Directors has determined that Mr. Rowny is an “audit committee financial expert” as defined in Item 401 of Regulation S-K.

Among its responsibilities, the Audit Committee appoints and establishes the compensation for Ciena’s independent registered public ~~accountants,~~accounting firm, approves in advance all engagements with Ciena’s independent registered public accounting firm to perform audit and non-audit services, reviews and approves the procedures used by Ciena to prepare its periodic reports, reviews and approves Ciena’s critical accounting policies, discusses the plans and reviews results of the audit engagement with ~~the~~Ciena’s independent registered public ~~accountants,~~accounting firm, reviews the independence of ~~the~~Ciena’s independent registered public ~~accountants, considers the range of~~accounting firm, and oversees Ciena’s internal audit function and ~~non-audit fees and discusses~~Ciena’s accounting processes, including the adequacy of ~~the Corporation's~~its internal controls over financial reporting. Ciena’s independent registered public accounting ~~controls. Professor Bradley, Mr. Dillon~~firm and ~~Ms. Fitt are the members of~~internal audit department report directly to the Audit Committee. ~~Michael Zak was a member~~To assist it in carrying out its responsibilities, the Audit Committee is authorized to retain the services of independent advisors. A copy of the Charter of the Audit Committee ~~until his resignation from~~is attached to this Proxy Statement asAnnex A.

The Compensation Committee advises and assists management in developing Ciena’s overall compensation strategy to assure that it promotes shareholder interests, supports Ciena’s strategic and tactical objectives, and provides for appropriate rewards and incentives for Ciena’s management and employees. As part of that responsibility, the ~~Board~~Compensation Committee reviews and approves the structure of ~~Directors~~Ciena’s bonus plans and administers Ciena’s stock option plans. To assist it in ~~July 2000. Ms. O'Brien was a member~~carrying out its responsibilities, the Compensation Committee is authorized to retain the services of independent advisors.

At the end of each fiscal year, the Compensation Committee evaluates the performance of the ~~Audit Committee from August 2000 until December 2000. The Corporation's Human Resources Committee determines~~Executive Chairman and the Chief Executive Officer and establishes their compensation for the ~~Corporation's~~next fiscal year. The Compensation Committee also reviews with the Chief Executive Officer the performance of the other executive officers and ~~administers~~approves their compensation for the ~~Corporation's 1999 Non-Officer Stock Option Plan (the "Non-Officer Plan"),~~next fiscal year. Finally, the ~~Amended~~Compensation Committee establishes the corporate goals under the bonus plan and, ~~Restated 1994 Stock Option Plan (the "1994 Plan"), the Second Amended~~on occasion, determines whether there are reasons to waive aspects of those goals that were not achieved.

The Governance and ~~Restated 1994 Stock Option Plan~~Nominations Committee reviews, develops and the 1999 Employee Stock Purchase Plan. Ms. O'Brien and Messrs. Cash and Taylor are the members of the Human Resources Committee. Mr. Zak was a member of the Human Resources Committee until his resignation from the Board of Directors in July 2000. Mr. Dillon was a member of the Human Resources Committee from May 2000 until December 2000. During fiscal 2000, the Board of Directors held 16 meetings, the Audit Committee held 4 meetings and the Human Resources Committee held 7 meetings. Each director of the Corporation attended 75% or more of all Board of Director meetings and 75% or more of all meetings of each committee on which he or she served except for Director Cash who only attended 57% of the meetings of the Human Resources Committee. Ms. Fitt was electedmakes recommendations to the Board of Directors ~~in November 2000 and attended 75% or more~~regarding various aspects of ~~all~~the Board of ~~Director meetings~~Directors’ and ~~75% or more~~Ciena’s governance processes and procedures. It also recommends candidates for election to fill vacancies on the Board of ~~all meetings~~Directors, including nomination for re-election of ~~each committee on which she served during her term. Ms. O'Brien was elected~~directors whose terms are due to expire. The Governance and Nominations Committee is also responsible for making recommendations to the Board of Directors ~~in July 2000 and attended 75% or more~~regarding the compensation of ~~all~~its non-employee members.

In discharging its responsibilities to nominate candidates for election to the Board of Directors, the Governance and Nominations Committee endeavors to identify, recruit and nominate candidates characterized by wisdom, maturity, sound judgment, excellent business skills and high integrity. The Governance and Nominations Committee seeks to assure that the Board of Directors is composed of individuals of diverse backgrounds who have a variety of complementary experience, training and relationships relevant to Ciena’s needs. In nominating candidates to fill vacancies created by the expiration of the term of a member of the Board of Directors, the Governance and Nominations Committee determines whether the incumbent director is willing to stand for re-election. If so, the Governance and Nominations Committee evaluates his or her performance in office to determine suitability for continued service, taking into consideration the value of

The compensation of the non-employee directors serving on the Board of Directors is determined by the Governance and ~~75% or more~~Nominations Committee. Non-employee members of ~~all meetings~~the Board of ~~each committee on which she served during her term. Directors' Fees Members~~Directors currently receive cash and equity compensation in connection with their service to Ciena.

Cash Compensation. Non-employee members of the Board of Directors receive ~~$2,500 for participation~~cash compensation in ~~each regular~~the form of the annual retainers and attendance fees per meeting of the Board of Directors and ~~$1,250 for each committee meeting. The 6~~ ~~7 Corporation~~its Committees as set forth below:

Ciena also reimburses each non-employee member of the Board of Directors for out-of-pocket expenses incurred in connection with attendance at meetings.

During fiscal 2005, the following non-employee directors received cash compensation as set forth below:

Equity Compensation. Under ~~the Corporation's~~Ciena’s 1996 Outside Directors Stock Option Plan (the ~~"Directors Plan"~~“Directors Plan”), ~~non-employee Directors are eligible to receive stock options~~ in consideration for their ~~services. The~~service, non-employee Directors ~~Plan provides that each non-employee Director will receive~~historically have received an option grant for 60,000 shares of ~~Common Stock~~common stock upon joining the Board of Directors and an annual option grant for 20,000 shares of ~~Common Stock thereafter.~~common stock at each Annual Meeting. Directors ~~who have not served for at least~~serving less than twelve months asin advance of the ~~date immediately following the date of the last annual meeting will~~Annual Meeting were eligible to receive a pro-rata annual option ~~grant. The exercise price of options granted under the Directors Plan will be equal in all cases to the fair market value of the Common Stock on the date of~~ grant. Initial grants under the Directors Plan vest in thirds annually over a period of three years and annual grants vest in full on the first anniversary of the date of grant. Options generally must be exercised within ten years. At the ~~annual meeting~~Annual Meeting held on March 16, ~~2000,~~2005, each ~~of Professor Bradley and Messrs. Cash, and Zak,~~ non-employee ~~Directors,~~director received an annual option grant to purchase 20,000 shares of common stock under the Directors Plan, ~~for 10,000 shares of Common Stock,~~each with an exercise price of ~~$25.063~~$1.85 per share, ~~and~~the closing price per share of Ciena common stock on the Nasdaq Stock Market on the date of grant.

On October 26, 2005 the Board of Directors ~~Dillon and Taylor received a pro-rata annual option grant~~capped future equity grants under the Directors Plan and approved the prospective issuance of stock options and restricted stock unit awards to non-employee directors then serving on the date of Ciena’s annual meeting of shareholders. The equity compensation awards are to be

In addition, non-employee directors are eligible to receive a grant of options exercisable for ~~3,333~~45,000 shares of ~~Common Stock~~common stock and ~~1,666 shares~~grant of ~~Common Stock, respectively. Mr. Taylor received an initial option grant for 30,000 shares of Common Stock on January 5, 2000 when he was first appointed to~~15,000 restricted stock units upon joining the Board of Directors, with an exercise price of $49.75 per share. Ms. O'Brien received an initial option grant for 30,000 shares of Common Stock on July 18, 2000 when she was first appointed to the Board of Directors, with an exercise price of $156.938 per share. Ms. Fitt received an initial option grant for 60,000 shares of Common Stock on November 2, 2000 when she was first appointed to the Board of Directors, with an exercise price of $106.438 per share. On September 18, 2000, the number of shares for option grants were doubled and the exercise price was halved as a result of the two-for-one stock split. Beneficial Ownership of Common Stock The following table sets forth certain information as of October 31, 2000, unless otherwise specified, with respect to the beneficial ownership of the Corporation's Common Stock by each person who is known to the Corporation to have beneficial ownership of more than 5% of the outstanding shares of Common Stock, each director, each named executive officer (as defined below), and all directors and executive officers of the Corporation as a group.

* Represents less than 1%. (1) The persons named in this table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and except as indicated in the other footnotes to this table. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission ("SEC"). In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options or warrants held by that 7 8 person that are currently exercisable or exercisable within 60 days after October 31, 2000 are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. (2) Includes shares issuable upon exercise of stock options granted under the 1994 Plan or the Directors Plan. Options granted under the 1994 Plan that are reflected in the beneficial ownership table are generally exercisable immediately but may be subject to a right of repurchase based on a scheduled vesting period. Generally, shares underlying options vest over four years and options must be exercised within ten years.Directors. Initial grants ~~of options under the Directors Plan~~ vest in thirds annually over a period of three years and annual grants vest in full on the first anniversary ~~date of the grant and options must be exercised within ten years~~ of the date of grant. ~~(3) Does~~Ciena expects the modified equity compensation awards above to be granted effective upon this year’s Annual Meeting.

TO AUTHORIZE THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO AMEND CIENA’S THIRD RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF ITS OUTSTANDING COMMON STOCK AT A RATIO OF (I) ONE-FOR-FIVE, (II) ONE-FOR-SEVEN, OR (III) ONE-FOR-TEN, TOGETHER WITH A CORRESPONDING REDUCTION IN THE NUMBER OF AUTHORIZED SHARES OF CIENA COMMON STOCK AND CAPITAL STOCK, AT ANY TIME PRIOR TO THE DATE OF CIENA’S 2007 ANNUAL MEETING OF SHAREHOLDERS, WITHOUT FURTHER APPROVAL OR AUTHORIZATION

We are asking our shareholders to approve an amendment to Ciena’s Third Restated Certificate of Incorporation in the form set forth inAnnex B to this proxy statement (the “Amendment”) providing for a reverse stock split of Ciena’s outstanding common stock (the “reverse stock split” or “reverse split”), and a corresponding reduction in Ciena’s 980,000,000 shares of common stock and one billion shares of capital stock authorized and (the “authorized stock reduction”), which the Board of Directors, in its discretion, would be authorized to implement, in one of the following manners (each an “Approved Option” and collectively, the “Approved Options”):

A vote “FOR” Proposal No. 2 will constitute your approval of the Amendment and the authorization of the Board of Directors, in its discretion, to effect a reverse stock split and a corresponding authorized stock reduction at each of the Approved Options. If shareholders approve Proposal No. 2, the Board of Directors will have the authority, but not ~~include 350,000 shares held~~the obligation, to effect the reverse stock split and corresponding authorized stock reduction at any time prior to the date of the 2007 Annual Meeting of Shareholders, without further approval or authorization of shareholders. If the Board of Directors elects to effect a reverse stock split and corresponding authorized stock reduction pursuant to one of the Approved Options, the Board of Directors will be deemed to have abandoned its authorization related to the other Approved Options. The Board of Directors may elect to implement the reverse stock split only with the corresponding authorized stock reduction provided in the Approved Options.

If Proposal No. 2 is approved by shareholders, the reverse stock split will be effected, if at all, only upon a determination by the ~~Patrick H.~~Board of Directors that implementing a reverse stock split is in the best interests of Ciena and ~~Marion S. Nettles Charitable Trust~~its shareholders. The determination as to whether the reverse stock split will be effected and, ~~350,000~~if so,


	•	existing and expected marketability and liquidity of Ciena’s common stock;

	•	prevailing stock market conditions;

	•	business developments affecting Ciena;

	•	Ciena’s actual or forecasted results of operations; and

	•	the likely effect on the market price of Ciena’s common stock.

If the Board of Directors determines to implement the reverse stock split, Ciena intends to issue a press release announcing the terms and effective date of the reverse stock split and corresponding authorized stock reduction before it files the Amendment with the Delaware Secretary of State. If the Board determines not to implement a reverse stock split prior to the date of the 2007 Annual Meeting of Shareholders, the Board authorization granted by shareholders pursuant to this Proposal No. 2 would be deemed abandoned and without any further effect.

On December 16, 2005, the Board of Directors adopted resolutions declaring advisable and approving the Amendment providing for a reverse stock split and corresponding authorized stock reduction pursuant to each of the Approved Options, subject to shareholder approval, and authorizing any other action that the Board of Directors may deem necessary to implement the reverse stock split and corresponding authorized stock reduction, without further approval or authorization of shareholders, at any time prior to the date of the 2007 Annual Meeting of Shareholders. Under Ciena’s Third Restated Certificate of Incorporation, approval of the Amendment requires the affirmative vote of the holders of shares ~~held by The Patrick and Selma Nettles Charitable Remainder Unitary Trust FBO Caltech. Dr. Nettles disclaims beneficial ownership~~of Ciena common stock representing a majority of the votes of all of the shares ~~held~~outstanding as of the record date and entitled to vote on the proposal.

The primary purpose of the reverse stock split is to increase proportionately the per share trading price of Ciena’s common stock. The Board of Directors believes that doing so may improve the perception of Ciena common stock as an investment and enable Ciena common stock to appeal to a broader range of investors. Ciena believes that a number of institutional investors are unwilling to invest, and in some cases, have internal policies prohibiting them from investing, in lower priced stocks. Ciena also believes that many brokerage firms are reluctant to recommend lower priced stocks to their clients. Because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current share price of Ciena’s common stock can result in shareholders paying transaction costs that are a higher percentage of their total share value than would be the case if Ciena’s common stock were priced substantially higher. This may limit the willingness of investors to purchase Ciena common stock. By effecting a reverse stock split, Ciena believes it may be able to raise the trading price of its common stock price to a level at which Ciena’s common stock could be viewed more favorably by ~~each~~potential investors. If the reverse stock split results in an increased trading price and increased investor interest, the Board of ~~these trusts. (4) Includes 441,486~~Directors believes that shareholders may benefit from improved trading liquidity of Ciena’s common stock.

An additional purpose of the reverse stock split is to reduce proportionately the number of shares of ~~Common Stock owned~~Ciena common stock issued and outstanding. At December 31, 2005, 580,879,132 shares of common stock were issued and outstanding. The Board of Directors believes that a reduction in the number of shares outstanding through a reverse stock split may permit a more meaningful comparison by ~~InterWest Partners VI, L.P.,~~investors of Ciena’s results of operations in the future, particularly relating to period-to-period comparisons of per share net loss or net earnings measures. In connection with the reduction in number of shares of Ciena common stock issued and outstanding pursuant to the reverse stock split, the Board of Directors believes it to be advisable to amend the Restated Certificate of Incorporation to reduce correspondingly Ciena’s authorized capital stock and common stock.

If approved by shareholders, the Board will consider those market or business factors that it deems relevant in determining whether, when and at which ~~Mr. Cash may~~Approved Option to implement a reverse stock split.

These factors, including the stock market conditions and the trading price of Ciena’s common stock, are dynamic and subject to fluctuation. Given the time and expense associated with convening a special meeting of shareholders, which would be ~~deemed~~required to ~~beneficially own by virtue~~consider a reverse stock split at a later time, the Board of ~~his status as~~Directors has determined that it is most efficient to seek shareholder approval of a Managing Director of InterWest Management Partners VI, LLC, which is the general partner of InterWest Partners VI, L.P., and 13,924 shares owned by InterWest Investors VI, L.P., which Mr. Cash may be deemed to beneficially own by virtue of his status as a Managing Director of InterWest Management Partners VI, LLC, which is the general partner of InterWest Investors VI, L.P. Mr. Cash disclaims beneficial ownershipreverse stock split at this Annual Meeting.

Effect of the ~~shares held~~Reverse Stock Split and Authorized Stock Reduction

If approved by ~~such entities except~~shareholders and implemented by the Board of Directors, as of the effective time of the Amendment, each issued and outstanding share of Ciena common stock would immediately and automatically be reclassified and reduced into one-fifth, one-seventh or one-tenth of a share of Ciena common stock, depending upon the Approved Option selected by the Board.

Except to the extent that the reverse stock split would result in any shareholder receiving cash in lieu of ~~his proportionate partnership interest therein. Mr. Cash has direct~~fractional shares described below, the reverse stock split will not:


	•	affect any shareholder’s percentage ownership interest in Ciena;

	•	affect any shareholder’s proportionate voting power;

	•	substantially affect the voting rights or other privileges of any shareholder, unless the shareholder holds fewer than five, seven or ten shares of Ciena common stock, in which case, depending upon the Approved Option, such shareholder would receive cash for all of his or her Ciena common stock held before the reverse stock split and would cease to be a Ciena shareholder following the reverse stock split; or

	•	alter the relative rights of common shareholders, warrant holders or holders of equity compensation plan awards.

Depending upon the Approved Option selected by the Board of ~~172,500~~Directors, the principal effects of the reverse stock split are:


	•	the number of shares of common stock issued and outstanding will be reduced by a factor of five, seven or ten;

	•	the per share exercise price will be increased by a factor of five, seven or ten, and the number of shares issuable upon exercise shall be decreased by the same factor, for all outstanding options, restricted stock awards, restricted stock units, performance share units, warrants and other convertible or exercisable equity instruments entitling the holders to purchase shares of Ciena common stock;

	•	the number of shares reserved for issuance under Ciena’s existing equity compensation plans and employee stock purchase plan will be reduced proportionately; and

	•	the conversion rate for holders of Ciena’s 3.75% convertible notes will be adjusted proportionately.

If the reverse stock split is implemented, the Amendment also would proportionately reduce the number of shares of ~~Common~~Ciena common stock and capital stock authorized under Ciena’s Third Restated Certificate of Incorporation. The Amendment would not proportionately reduce the number of shares of Ciena preferred stock authorized, which will remain at 20,000,000. Depending upon the Approved Option used in the reverse stock split, the 980,000,000 shares of Ciena common stock and one billion shares of Ciena capital stock currently authorized would be reduced as follows:

Ciena’s common stock is currently registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, and Ciena is subject to the periodic reporting and other requirements thereof. Following the

Shareholders will not receive fractional shares in connection with the reverse stock split. Instead, Ciena’s transfer agent will aggregate all fractional shares collectively held by Ciena shareholders into whole shares and arrange for them to be sold on the open market. Shareholders otherwise entitled to fractional shares will receive a cash payment in lieu thereof in an amount equal to the shareholder’s pro rata share of the total net proceeds of these sales. Shareholders will not be entitled to receive interest for the period of time between the effective date of the reverse stock split and the date the shareholder receives his or her cash payment. The proceeds will be subject to certain taxes as discussed below.

Shareholders holding fewer than the following number of shares of Ciena common stock will receive only cash in lieu of fractional shares and will no longer hold any shares of Ciena common stock as of the effective time of the Amendment:


	•	five shares, assuming a one-for-five reverse stock split;

	•	seven shares, assuming a one-for-seven reverse stock split; and

	•	ten shares, assuming a one-for-ten reverse stock split.

Effective Time and Implementation of the Reverse Stock ~~including 145,000~~Split and Authorized Stock Reduction

The effective time for the reverse stock split and the corresponding authorized stock reduction will be the date on which Ciena files the Amendment with the office of the Delaware Secretary of State or such later date and time as specified in the Amendment, provided that the effective date must precede the date of the 2007 Annual Meeting of Shareholders.

As soon as practicable after the filing of the Amendment, Ciena intends to notify shareholders and request that they surrender to Ciena’s transfer agent their certificates representing shares ~~owned~~of pre-reverse split Ciena common stock, so that certificates representing the applicable number of shares of post-reverse split common stock, together with any cash payment in lieu of fractional shares, may be issued in exchange therefor. Ciena expects to adopt a new stock certificate in connection with any implementation of a reverse stock split.

SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

The reverse stock split will not affect the par value of a share of Ciena’s common stock. As a result of the corresponding authorized stock reduction, however, at the effective time of the reverse stock split, the stated capital attributable to common stock on Ciena’s balance sheet will be reduced proportionately based on the Approved Option (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer shares of common stock outstanding.

Under the Delaware General Corporation Law, Ciena’s shareholders are not entitled to appraisal rights with respect to the reverse stock split.

Before voting on this Proposal No. 2, you should consider the following risks associated with the implementation of the reverse stock split:


	•	Effecting the reverse stock split may not attract institutional or other potential investors, or result in a sustained market price that is high enough to overcome the investor policies and practices, and other issues relating to investing in lower priced stock described in “Purpose of the Reverse Stock Split” above.

	•	The price per share of Ciena’s common stock after the reverse stock split may not reflect the Approved Option implemented by the Board and the price per share following the effective time of the reverse stock split may not be maintained for any period of time following the reverse stock split. For example, based on the closing price of Ciena’s common stock on January 3, 2006 of $3.05 per share, if the reverse stock split was implemented at an Approved Option of 1-for-10, there can be no assurance that the post-split trading price of Ciena’s common stock would be $30.50, or even that it would remain above the pre-split trading price. Accordingly, the total market capitalization of Ciena’s common stock following a reverse stock split may be lower than before the reverse stock split.

	•	The trading liquidity of Ciena’s common stock could be adversely affected by the reduced number of shares outstanding after a reverse stock split.

If a reverse stock split is implemented by the ~~Harvey B. Cash self-directed IRA and 2,572~~Board of Directors, some shareholders may consequently own less than 100 shares ~~owned by InterWest Management Profit Sharing Retirement Plan FBO Harvey B. Cash. (5) Ms. Fitt joined~~of Ciena common stock. A purchase or sale of less than 100 shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those shareholders who own less than 100 shares following the board on November 2, 2000. She received a grant of 60,000 options upon joining the board. (6) Ms. O'Brien joined the board on July 18, 2000. She received a grant of 30,000 options upon joining the board. Following the two-for-onereverse stock split may be required to pay higher transaction costs if they should then determine to sell their shares of Ciena common stock.

A summary of the federal income tax consequences of the proposed reverse stock split to individual shareholders is set forth below. It is based upon present federal income tax law, which ~~became effective~~is subject to change, possibly with retroactive effect. The discussion is not intended to be, nor should it be relied on ~~September 18, 2000, she now holds~~as, a ~~total~~comprehensive analysis of ~~60,000 options. Compensation Summary Compensation Table The following table sets forth~~ the ~~annual and long-term compensation for services in all capacities~~tax issues arising from or relating to the ~~Corporation~~proposed reverse stock split. In addition, Ciena has not and will not seek an opinion of counsel or a ruling from the Internal Revenue Service regarding the federal income tax consequences of the proposed reverse stock split.Accordingly, shareholders are advised to consult their own tax advisors for more detailed information regarding the effects of the proposed reverse stock split on them under applicable federal, state, local and foreign income tax laws.


	1. Ciena believes that the reverse stock split will be a tax-free recapitalization. Accordingly, except with respect to any cash received in lieu of fractional shares, a shareholder will not recognize any gain or loss as a result of the receipt of the post-reverse split common stock pursuant to the reverse stock split.

	2. The shares of post-reverse split common stock in the hands of a shareholder will have an aggregate basis for computing gain or loss equal to the aggregate basis of shares of pre-reverse split common stock held by that shareholder immediately prior to the reverse stock split, reduced by the basis allocable to any fractional shares which the shareholder is treated as having sold for cash, as discussed in paragraph 4 below.

	3. A shareholder’s holding period for the post-reverse split common stock will include the holding period of the pre-reverse split common stock exchanged.

	4. Shareholders who receive cash for all of their holdings (as a result of owning fewer than five, seven or ten shares, depending on the Approved Option selected by the Board of Directors) and who are not related to any person or entity that holds common stock immediately after the reverse stock split, will recognize a gain or loss for federal income tax purposes equal to the difference between the cash received and their basis in the pre-reverse split common stock. Such gain or loss will generally be a capital gain or


	loss if the stock was held as a capital asset, and such capital gain or loss will be a long-term gain or loss to the extent that the shareholder’s holding period exceeds 12 months. Although the tax consequences to other shareholders who receive cash for fractional shares are not entirely certain, these shareholders likely will be treated for federal income tax purposes as having sold their fractional shares and will recognize gain or loss in an amount equal to the difference between the cash received and the portion of their basis for the pre-reverse split common stock allocated to the fractional shares. It is possible that such shareholders will be treated as receiving dividend income to the extent of their ratable share of our current and accumulated earnings and profits (if any) and then a tax-free return of capital to the extent of their aggregate adjusted tax basis in our shares, with any remaining amount being treated as capital gain. Shareholders who continue to hold our common stock immediately after the reverse stock split and who do not receive any cash for their holdings should not recognize any gain or loss for federal income tax purposes as a result of the reverse stock split.

	5. Shareholders will be required to provide their social security or other taxpayer identification numbers (or, in some instances, additional information) in connection with the reverse stock split to avoid backup withholding requirements that might otherwise apply. Failure to provide such information may result in backup withholding at a rate of 28%.

Board Discretion to Implement the Reverse Stock Split and Authorized Stock Reduction

If Proposal No. 2 is approved by shareholders, the reverse stock split will be effected, if at all, only upon a determination by the Board of Directors that a reverse stock split is in the best interests of Ciena and its shareholders. The Board’s determination as to whether the reverse stock split will be effected and, if so, at which Approved Option, will be based upon certain factors, including existing and expected marketability and liquidity of Ciena’s common stock, prevailing stock market conditions, business developments affecting Ciena, actual or forecasted results of operations and the likely effect on the market price of Ciena’s common stock.

If the Board of Directors determines to implement the reverse stock split, Ciena intends to issue a press release announcing the Approved Option, the record date and the effective date of the reverse stock split before it files the Amendment with the Delaware Secretary of State. If the Board does not implement a reverse stock split and corresponding authorized stock reduction prior to the date of the 2007 Annual Meeting of Shareholders, the authorization granted by shareholders pursuant to this Proposal No. 2 would be deemed abandoned and without any further effect. In that case, the Board of Directors may again seek shareholder approval at a future date for a reverse stock split if it deems it to be advisable.

The Board of Directors unanimously recommends that Ciena shareholders vote “FOR” the authorization of the Board of Directors, in its discretion, to amend Ciena’s Third Restated Certificate of Incorporation to effect the reverse stock split and the authorized stock reduction in accordance with this Proposal No. 2, at any time prior to the date of Ciena’s 2007 Annual Meeting of Shareholders, without further approval or authorization of Ciena’s shareholders.

The Audit Committee of the Board of Directors has appointed the firm of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit Ciena’s consolidated financial statements for the fiscal year ending October 31, 2006, and is asking shareholders to ratify this appointment at the Annual Meeting.

PwC has audited our consolidated financial statements annually since Ciena’s incorporation in 1992. A representative of PwC is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions. In making its

Our bylaws do not require that shareholders ratify the appointment of our independent registered public accounting firm. We are seeking ratification because we believe it is a matter of good corporate governance practice. In the event that shareholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain PwC, but may ultimately determine to retain PwC as our independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of Ciena and its shareholders.

The Board of Directors unanimously recommends that Ciena shareholders vote “FOR” the ratification of the appointment of PwC as our independent registered public accounting firm for the current fiscal year.

The following table shows the fees that were billed to Ciena by PwC for professional services rendered for the fiscal years ended October 31, 2004 and 2005. In compliance with the Audit Committee’s internal policy and auditor independence rules of the SEC, all audit and permissible non-audit services provided by PwC to Ciena for the fiscal years ended October 31, 2004 and 2005 were pre-approved by the Audit Committee.

This category of the table above includes fees for the audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements. The preparation of Ciena’s audited financial statements for the year ended October 31, 2005 included, for the first time, compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the preparation, by PwC, of an attestation report expressing its opinion regarding management’s assessment of our internal control over financial reporting and on the effectiveness of our internal control over financial reporting. As a result, audit fees for fiscal 2005 reflect PwC’s integrated audit of our financial statements and our internal control over financial reporting as of October 31, 2005.

This category of the table above includes fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included above under “Audit Fees.” These services for fiscal 2004 included accounting advice and audit services in connection with acquisitions. Ciena did not incur any audit related fees during fiscal 2005.

This category of the table above includes fees for tax compliance, tax advice, and tax planning. These services for fiscal 2004 and fiscal 2005 include tax return preparation, expatriate tax services and international VAT tax planning.

This category of the table above includes fees for products and services provided by PwC that are not included in the services reported above. These services for fiscal 2004 include consulting services and Sarbanes-Oxley Act related services in connection with our preparation for compliance with Section 404. Because Section 404 of the Sarbanes Oxley Act was effective for our fiscal 2005 audit, fees incurred during fiscal 2005 related to compliance with Section 404 are included under “Audit Fees.”

The Audit Committee pre-approves all services, including both audit and non-audit services, provided by our independent registered public accounting firm. For audit services (including statutory audit engagements as required under local country laws), each year our independent registered public accounting firm provides the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be performed during the year, which must be formally accepted by the Audit Committee before the audit commences. Our independent registered public accounting firm also submits an audit services fee proposal, which also must be approved by the Audit Committee before the audit commences.

Each year, management also submits to the Audit Committee a list of non-audit services that it recommends the independent registered public accounting firm be engaged to provide and an estimate of the fees to be paid for each. Management and the independent registered public accounting firm must each confirm to the Audit Committee that the performance of the non-audit services on the list would not compromise the independence of our registered public accounting firm and would be permissible under all applicable legal requirements. The Audit Committee must approve both the list of non-audit services and the budget for each such service before commencement of the work. Our management and our independent registered public accounting firm report to the Audit Committee at each of its regular meetings as to the non-audit services actually provided by the independent registered public accounting firm and the approximate fees incurred by Ciena for those services.

To ensure prompt handling of unexpected matters, the Audit Committee has authorized its Chairperson to amend or modify the list of approved permissible non-audit services and fees. If the Chairperson exercises this delegation of authority, she reports the action taken to the Audit Committee at its next regular meeting.

All audit and permissible non-audit services provided by PwC to Ciena for the fiscal years ended October 31, 2004 and 2005 were pre-approved by the Audit Committee.

A shareholder of Ciena, The United Brotherhood of Carpenters and Joiners of America, 101 Constitution Avenue, NW, Washington, DC 20001, which claims to be the beneficial owner of 9,200 shares of Ciena stock, has notified Ciena of its intention to propose the following item of business at the Annual Meeting. The SEC’s proxy regulations require Ciena to present the proposal and the supporting statement below, although Ciena has no responsibility for either. Following the shareholder’s proposal and supporting statement is the response of our Board of Directors. While the shareholder recommends that you vote “FOR” its proposal, our Board of Directors unanimously recommends you vote “AGAINST” this proposal.

Resolved: That the shareholders of Ciena Corporation (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders.

Supporting Statement: Our Company is incorporated in Delaware. Delaware law provides that a company’s certificate of incorporation or bylaws may specify the number of votes that shall be necessary for the transaction of any business, including the election of directors. (DCGL, Title 8, Chapter 1, Subchapter VII, Section 216). The law provides that if the level of voting support necessary for a specific action is not specified in a corporation’s certificate or bylaws, directors “shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.”

Our Company presently uses the plurality vote standard to elect directors. This proposal requests that the Board initiate a change in the Company’s director election vote standard to provide that nominees for the board of directors must receive a majority of the vote cast in order to be elected or re-elected to the Board.

We believe that a majority vote standard in director elections would give shareholders a meaningful role in the director election process. Under the Company’s current standard, a nominee in a director election can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are “withheld” from that nominee. The majority vote standard would require that a director receive a majority of the vote cast in order to be elected to the Board.

The majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoran, Marathon Oil, Marsh and McClennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommended voting in favor of the proposal.

Some companies have adopted board governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignations to the board. We believe that these policies are inadequate for they are based on continued use of the plurality standard and would allow director nominees to be elected despite only minimal shareholder support. We contend that changing the legal standard to a majority vote is a superior solution that merits shareholder support.

Our proposal is not intended to limit the judgment of the Board in crafting the requested governance change. For instance, the Board should address the status of incumbent director nominees who fail to receive a majority vote under a majority vote standard and whether a plurality vote standard may be appropriate in director elections when the number of director nominees exceeds the available board seats.

The Board of Directors of Ciena is committed to strong corporate governance policies and, as described elsewhere in this Proxy Statement, has implemented a number of modifications and proposals to strengthen our policies this year. The Board has always believed that shareholders should actively participate and play a meaningful role in the election of directors. While the Board is sensitive to the concerns underlying the shareholder’s proposal, the Board believes that implementation of a majority vote standard as proposed by the shareholder would result in ambiguity and uncertainty in the conduct of elections to the Board. The Board believes that the revision it has recently made to Ciena’s Principles of Corporate Governance better achieves the goal of giving greater weight to the withholding of shareholder votes for a nominee.

The shareholder’s proposal does not adequately address what would occur under the provisions of Delaware corporation law governing elections of directors if a nominee fails to receive the requisite vote under a majority vote standard. Delaware law provides that directors hold office until their successors are duly elected and qualified. As a result, an incumbent director running unopposed for election, who fails to attain a majority vote, would nonetheless remain in office. Such a “failed election” would result in an awkward

The majority vote standard proposed by the shareholder also could have other unintended consequences. For example, if it resulted in a failure to elect a candidate nominated to serve as the “financial expert” on the Audit Committee, the Company could find itself in violation of Nasdaq’s listing standards.

The application of a shareholder’s majority vote standard could present particular difficulties in a contested election. It could lead to a failed election simply because the votes were spread so that no nominee received a majority of the votes cast. In a failed contested election, the incumbent, holdover director would remain in office, notwithstanding the voting results and whether or not the incumbent was the nominee for re-election or was the nominee who received the most votes. In the event of a failed election to fill a vacancy or new board seat, Delaware law and Ciena’s bylaws would provide for the remaining directors to fill this vacancy. The application of a majority vote standard to these situations would not strengthen the voice of shareholders in director elections.

At the time it received the shareholder’s proposal, the Board of Directors was engaged in a comprehensive review of Ciena’s governance policies; and the Board considered the proposal as part of that review. After thorough deliberation, the Board determined that it would be better to address the concerns underlying the proposal by amending Ciena’s Principles of Corporate Governance to provide that, in an uncontested election for the Board, a nominee for whom a greater number of votes are “withheld” than are cast for his or her election must promptly tender his or her resignation. The Board, with the recommendation of its Governance and Nominations Committee, must either accept or reject the resignation within 90 days following the shareholder meeting. The determination of the Board, including an explanation of how the decision was reached, would then be publicly disclosed in an SEC filing. This new provision of our Principles of Corporate Governance, which is similar to those recently adopted by several other public companies, is set forth in its entirety below:


	16.	*Voting for Directors.* In an uncontested election of directors (i.e., an election in which the only nominees are those recommended by the Board of Directors), any nominee for director for whom a greater number of votes are “withheld” than are cast for his or her election will tender his or her resignation promptly after certification of the shareholder vote. The Governance and Nominations Committee will promptly consider the resignation and recommend to the Board whether to accept or reject it. In making its recommendation, the Governance and Nominations Committee will consider all factors it considers relevant, including the stated reasons shareholders “withheld” their votes, the length of service and qualifications of the director, the director’s contributions to the Company, and the Company’s Principles of Corporate Governance.


	The Board will act on the Governance and Nominations Committee’s recommendation no later than 90 days following the date of the shareholders’ meeting. Promptly following the Board’s decision, the Company will disclose the nature of the decision, providing a full explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the resignation, in a Form 8-K filed with the Securities and Exchange Commission.

	To the extent that one or more directors’ resignations are accepted by the Board, the Governance and Nominations Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.

	Any director who tenders his or her resignation pursuant to this provision will not participate in the Governance and Nominations Committee’s recommendation or the Board’s decision on the resignation. If a majority of the members of the Governance and Nominations Committee have been required to tender their resignations because of this provision, then the remaining independent


	directors will appoint a special committee from among themselves for the purpose of considering the resignations and recommending whether to accept or reject them.

	This corporate governance guideline will be summarized or included in each proxy statement relating to an election of directors of the Company.

The shareholder suggests that governance guidelines of this type are “inadequate for they are based on continued use of the plurality standard and would allow director nominees to be elected despite only minimal support.” In the past five years, our directors have, on average, received the affirmative vote of approximately 95% of the shares voted through the plurality process; none has received less than 87.6% of the vote. It can hardly be said, therefore, that Ciena’s directors have been “elected despite only minimal support.”

The shareholder also proposes that the Board should address this issue by amending the certificate of incorporation or bylaws. The Board believes that law and practice in this area are evolving and that it would be premature for the Board to introduce an alternative system beyond that set forth in the Principles of Corporate Governance until the issues associated with failed elections and the application of a majority vote standard have been further clarified.

For the reasons above, the Board believes that its revision to Ciena’s Principles of Corporate Governance provides shareholders with a greater voice in the election of directors and a better structure for director accountability than the majority vote proposal.

The Board believes that the adoption of the shareholder’s proposal would not be in the best interests of Ciena and its shareholders and unanimously recommends that you vote AGAINST the proposal.

The following table sets forth, as of December 31, 2005, the beneficial ownership of Ciena’s common stock for the following persons:


	•	all shareholders known by us to beneficially own more than 5% of our common stock;

	•	our Chief Executive Officer and the other Named Executive Officers (as that term is defined in the Summary Compensation Table included in this Proxy Statement);

	•	each of our directors; and

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

Certain information in the table concerning beneficial owners other than our directors and executive officers is based on information contained in filings made by such beneficial owners with the Securities and Exchange Commission.

Pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended, shares are deemed to be beneficially owned by a person if that person has the right to acquire shares (for example, upon exercise of an option) within sixty days of the date that information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the percentage of outstanding shares held by any person in the table below does not necessarily reflect the person’s actual voting power. As of December 31, 2005, there were 580,879,132 shares of Ciena common stock outstanding.


(1)	Excludes shares that may be acquired through the exercise of stock options, the vesting of restricted stock units or other convertible or exercisable rights.

(2)	Except as otherwise set forth in the footnotes below, represents shares of common stock that can be acquired upon the exercise of stock options or vesting of restricted stock units within sixty days of December 31, 2005.

(3)	The persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and except as indicated in the other footnotes to this table.


(4)	This shareholder’s address is 82 Devonshire Street, Boston, MA 02109. The information concerning this shareholder is based solely on a Schedule 13G/ A, filed jointly by FMR Corp. (“FMR”), Edward C. Johnson 3d and Abigail P. Johnson with the Securities and Exchange Commission on February 14, 2005, and reflects their beneficial ownership at December 31, 2004. Based on the Schedule 13G/ A, FMR is the parent holding company of Fidelity Management & Research Company (“Fidelity”). By acting as investment adviser to various investment companies, Fidelity is the beneficial owner of 57,139,943 shares of Ciena’s common stock, or 9.8% of the outstanding shares of Ciena common stock at December 31, 2005. Shares included in the “Right to Acquire” column above reflect shares of common stock exercisable upon conversion of Ciena’s 3.75% convertible notes held by Fidelity and another subsidiary of FMR. These notes are convertible at the option of the holder into 9.5808 shares of common stock for each $1,000 in principal amount.

(5)	Voting and investment power is shared with Mr. Alexander’s spouse.

(6)	Includes 221,486 shares of common stock owned by InterWest Partners VI, L.P. and 7,022 shares owned by InterWest Investors VI, L.P., which Mr. Cash may be deemed to beneficially own by virtue of his status as a Managing Director of InterWest Management Partners VI, LLC, which is the general partner of each limited partnership. Mr. Cash disclaims beneficial ownership of these shares except to the extent of his proportionate partnership interest therein. Also includes 145,000 shares owned by the Harvey B. Cash self-directed IRA, 2,691 shares owned by InterWest Management Profit Sharing Retirement Plan FBO Harvey B. Cash and direct ownership of 2,699 shares.

(7)	Voting and investment power is shared with Ms. O’Brien’s spouse.

The following table sets forth the compensation information for Ciena’s fiscal years ended October 31, 2003, 2004 and 2005 for Ciena’s Chief Executive Officer and the ~~Named~~other four highest-paid executive officers as of October 31, 2005. The five individuals included in the compensation information below are collectively referred to as the “Named Executive ~~Officers:~~

8 9

~~(1) The Corporation's life insurance plan provides each employee with life insurance coverage equal to two times~~Officers.” Information in the ~~employee's annual salary and bonus, up to a maximum of $500,000. These amounts represent life insurance premiums paid by~~table below regarding Restricted Stock Unit Awards reflects the ~~Corporation on behalf~~dollar value of the ~~Chief Executive Officer~~shares subject to the grant based upon the closing price per share of Ciena common stock on the grant date. Footnotes (1) and (2) to the table below describe the vesting terms of the restricted stock unit grants, the forfeiture of certain grants containing performance-based vesting, and the ~~Named Executive Officers in order to provide additional coverage equal to~~year end dollar value of such grants based upon the ~~difference between $500,000 and twice~~closing price per share of Ciena common stock of $2.37 on October 28, 2005, the ~~individual's annual salary and bonus.~~ last trading day of Ciena’s fiscal year.


(1)	Restricted stock units were granted in the following amounts on December 9, 2003: (a) 60,000 restricted stock units to Mr. Smith, and (b) 14,000 restricted stock units to each of Messrs. Chinnici, Collier and Alexander. One third of the total number of restricted stock units granted became vested on December 9, 2005. An additional one third of the total grant amount will vest on December 9, 2006 and 2007, provided the recipient remains employed by Ciena. All of the unvested restricted stock units vest upon a termination of service due to death or disability. Based upon the $2.37 closing price per share of Ciena common stock on October 28, 2005, at the end of fiscal 2005: (a) the 40,000 restricted stock units that remained held by Mr. Smith had a dollar value of $94,800, and (b) the 9,334 restricted stock units held by each of Messrs. Chinnici, Collier and Alexander, had a dollar value of $22,122.

(2)	In addition to the restricted stock units granted to Mr. Collier described in footnote (1), the amount set forth for Mr. Collier reflects the grant of 20,000 additional restricted stock units on May 18, 2004, valued at $71,600 based upon the $3.58 closing price per share of Ciena common stock on the date of the grant. These restricted stock units contained certain performance-based vesting terms. As a result of these terms, the 20,000 restricted stock units subject to this grant have been forfeited and therefore had no dollar value at the end of fiscal 2005.


	(a)	life insurance premiums, paid by Ciena on behalf of all employees, in the amount of $714 for each of the Named Executive Officers, for group term life insurance coverage equal to two times annual salary and bonus, up to a maximum of $500,000;

	(b)	additional life insurance premium of $199 for Mr. Smith pursuant to a supplemental term life insurance policy that offers $235,000 in additional coverage above the limitation in footnote (a);

	(c)	long-term disability premiums, paid by Ciena on behalf of all employees, in the amount of $570 for Dr. Nettles, $855 for Mr. Smith, $570 for Mr. Alexander, $665 for Mr. Chinnici and $482 for Mr. Collier;

	(d)	supplemental long-term disability premiums of $6,921 for Dr. Nettles, $1,819 for Mr. Smith, and $3,084 for Mr. Chinnici, paid by Ciena on their respective behalf, pursuant to executive long-term disability insurance policies held by those individuals; and

	(e)	401(k) plan matching contributions, available to all employees, paid by Ciena in the amount of $3,496 to Dr. Nettles, $3,150 to Mr. Smith, $2,154 to Mr. Alexander, $3,075 to Mr. Chinnici and $3,323 to Mr. Collier.


(4)	Salary information includes a compensation deferral of $10,000 by Mr. Smith in fiscal 2005. During fiscal 2005, Ciena’s Board of Directors terminated the deferred compensation plan and distributed all amounts previously deferred.

The following table provides the specified information concerning options granted to the Named Executive Officers for the fiscal year ended October 31, ~~2000:~~ 2005:

~~Number~~

(1)	Options granted on December 10, 2004 were initially to vest and become exercisable as to 25% of ~~Percent~~the total grant on the last day of ~~Securities Total~~ the month in which the first anniversary of the grant occurs, and 2.084% per month thereafter. As described in the “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values” table below, the vesting of these options and other “out-of-the-money” options held by employees was accelerated as of October 26, 2005.

(2)	Options ~~Potential Realizable Value~~granted on December 10, 2004 vest and become fully exercisable on the last day of the month following two consecutive quarters of achievement by Ciena of certain financial performance measures. If these goals are not met by the end of fiscal 2006, the options will not vest. These options were not subject to the October 26, 2005 acceleration of vesting.

(3)	Options were granted at ~~Underlying Granted~~exercise prices equal to ~~Exercise~~the fair market value of Ciena’s common stock based on the closing price on the Nasdaq National Market on the date of grant. Upon exercise, the aggregate exercise price is to be paid to Ciena in cash.

(4)

The dollar amounts set forth under these columns are the result of calculations of assumed annual rates of stock price appreciation of 5% and 10% from the date of grant to the date of expiration of such options. These assumptions are not intended to forecast future appreciation of Ciena’s stock price. Ciena’s stock price may increase or Assumed Annual Rates of Options Employees In Base Price Stock Price Appreciation for Granted(1) Fiscal 2000 (Per Share)(2) Expiration Date Option Term (3) ---------- ------------- -------------- --------------- ----------------------------- 5% 10% ----- ----- Patrick H. Nettles, Ph.D 262,500 2.09% $ 130.00 10/18/10 $21,461,029 $54,386,461 Gary B. Smith 292,500 2.33% 130.00 10/18/10 23,913,718 60,602,057 Mark Cummings 60,000 0.48% 130.00 10/18/10 4,905,378 12,431,191 Steve W. Chaddick 100,000 0.80% 33.41 01/17/10 2,100,917 5,324,136 105,000 0.84% 130.00 10/18/10 8,484,412 21,754,584 Joseph R. Chinnici 105,000 0.84% 130.00 10/18/10 8,584,411 21,754,584 decrease in value over the time period set forth above.

(1) Options vest and become exercisable 25% on the last day of the month in which the first anniversary of the grant occurs and 2.084% per month thereafter. As of October 31, 2000, none of these options were vested. (2) Options were granted having exercise prices at fair market value on the date of grant. (3) The dollar amounts set forth under these columns are the result of calculations of assumed annual rates of stock price appreciation of 5% and 10% from the date of grant to the date of expiration of such options. These assumptions are not intended to forecast future appreciation of the Corporation's stock price. The Corporation's stock price may increase or decrease in value over the time period set forth above.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values 9 10

The following table provides the specified information concerning option exercises in the last fiscal year and the number and dollar value of unexercised options held as of October 31, ~~2000~~2005 by the Named Executive ~~Officers:~~

~~(1) All options prior to Fiscal 1998 are exercisable at~~ the date preceding the acceleration of ~~grant, but shares purchased~~vesting) were considered “out-of-the-money.” The acceleration of vesting did not include stock options granted to executive officers that vest upon ~~exercise~~Ciena’s achievement of certain financial performance measures as set forth in footnote (2) in the “Option Grants in Last Fiscal Year” table above.


(1)	Calculated on the basis of the fair market value of the shares acquired on the exercise date, less the aggregate exercise price.

(2)	Calculated on the basis of the fair market value of the underlying common stock as of the end of fiscal 2005, based upon the $2.37 closing price per share of Ciena common stock on October 28, 2005, less the aggregate exercise price.

During fiscal 2005, the Board of Directors determined that all future grants of stock options, ~~are subject to repurchase by~~restricted stock, or other forms of equity-based compensation will be issued under the Ciena Corporation ~~based upon a scheduled vesting period. Of the shares underlying options 1,750,000, 8,646, 202,750, 795,208, and 249,159~~2000 Equity Incentive Plan (the “2000 Plan”). The Board of the shares underlying options held by Dr. Nettles and Messrs. Smith, Cummings, Chaddick, and Chinnici respectively, are vested. (2) Calculated on the basis of the fair market value of the underlying CommonDirectors capped future equity grants under all other current equity incentive plans, excluding Ciena’s 2003 Employee Stock Purchase Plan (“ESPP”). The following table provides information as of October ~~28, 2000~~31, 2005 with respect to the shares of $103.00 per share, less the aggregate exercise price. The value of vested in-the-money options held by Dr. Nettles and Messrs. Smith, Cummings, Chaddick, and Chinnici is $178,237,500, $789,641, $20,639,057, $80,718,238 and $25,628,378, respectively. Ciena’s common stock that may be issued under Ciena’s existing equity compensation plans.


	•	1994 Third Amended and Restated Stock Option Plan;

	•	1996 Outside Directors Stock Option Plan;

	•	2000 Plan;

	•	ESPP; and

	•	equity compensation plans assumed by Ciena in connection with its merger with ONI Systems Corp. (“ONI”), including, the ONI 1999 Equity Incentive Plan, the ONI 1998 Equity Incentive Plan and the ONI 1997 Stock Option Plan (“ONI Plans”).


(2)	The 2000 Plan incorporates an evergreen provision pursuant to which, on January 1 of each year, the aggregate number of shares reserved for issuance under the 2000 Plan automatically increases by 5% of the total number of shares of Ciena’s common stock outstanding on December 31 of the preceding year, unless the Compensation Committee determines to reduce the increase in that year. The Compensation Committee determined not to increase the number of shares available under the 2000 Plan at January 1, 2005 and 2006. On March 16, 2005, Ciena shareholders approved an amendment to the ESPP pursuant to which 11.8 million shares were added to the ESPP on March 16, 2005, increasing the number of shares available under the ESPP to 25 million. The amendment to the ESPP also provided for an “evergreen” provision, pursuant to which, beginning on December 31, 2005, the number of shares available for issuance under the ESPP annually increases by up to four million shares, provided that the total number of shares available for issuance at any time under the ESPP shall not exceed 25 million. On December 31, 2005, the evergreen provision automatically added an additional 2.1 million shares to the ESPP (not reflected in the table at fiscal year end above), increasing the total number of shares available to 25 million.

(3)	There are no shares available for future issuance under the ONI Plans. However, any shares subject to outstanding options or other awards under the ONI Plans that are forfeited upon cancellation become available for grant and issuance under the 2000 Plan.

(4)	Consists of the following equity compensation plans:


	•	1999 Non-Officer Stock Option Plan; and

	•	equity compensation plans assumed by Ciena in connection with mergers or acquisitions, including the Cyras Systems, Inc. 1998 Stock Plan, the Omnia Communications, Inc. 1997 Stock Plan, the Lightera Networks, Inc. 1998 Stock Plan, the WaveSmith Networks, Inc. 2000 Stock Option and Incentive Plan, the Internet Photonics, Inc. 2000 Corporate Stock Option Plan and the Catena Networks, Inc. 1998 Equity Incentive Plan.


(5)	By operation of the determination of the Board of Directors to cap future grants from equity incentive plans other than the 2000 Plan and the ESPP.

In April 1994, ~~the Corporation~~Ciena entered into an employment agreement with Dr. Nettles. The employment agreement specifies that Dr. Nettles is an employee at will. In the event that he is terminated ~~for cause,~~without “cause,” as defined in the employment agreement, he will receive ~~a severance~~continuation of benefits and payment ~~equal to~~of his monthly base salary until the earlier of the expiration of six months from such termination, or the commencement of his employment with a person or entity other than ~~the Corporation. In November 1998, the Corporation~~Ciena.

Ciena has also entered into transfer of control/severance agreements with all of its executive officers, including Dr. Nettles and Messrs. Smith, ~~Cummings, Chaddick~~Alexander, Chinnici and ~~Chinnici. The initial term of each of these agreements is three years.~~Collier. The agreements automatically renew for successive one year-terms unless Ciena gives notice of non-renewal at least 90 days prior to the anniversary of such agreement. These agreements generally provide for the continuation of payment of up to one year of salary and bonus ~~continuation~~ in the event that the ~~Named Executive Officer's~~officer’s employment is terminated without “cause,” or, upon a termination of employment by the officer for “good reason,” as each term is defined in the agreement, within one year following a change in control of Ciena. In addition, the terminated officer, and his or her family, are

eligible to continue to participate in Ciena’s benefit plans or receive payment of the equivalent cost of such benefits until the earlier of the first anniversary of termination or the last day of the month in which the officer begins employment with another employer. Under the agreements, officers are eligible to receive a tax gross up payment to cover any additional taxes incurred by reason of the continued benefits coverage and any imposition of excise tax upon severance benefits payable. Officers also remain covered by directors and officers insurance and indemnification agreements until the period under the applicable statute of limitations has ended. The agreements also provide for the vesting of stock options held by the officer to continue for up to one year following termination. Payment of the severance benefits above will also apply where the officer is terminated in advance of a change in control and the officer can reasonably demonstrate that such termination was in connection with or in anticipation of the change in control. The agreements continue in effect for one year following such change in control and payment of any severance under the agreement is conditioned on the officer delivering a one-year non-competition agreement and waiver. The agreement with Mr. Smith is generally upon the same terms above, but provides that, in the event that his employment is terminated without cause by Ciena, or for ~~"good~~good reason~~" as defined in the agreements,~~ by Mr. Smith, within one year following a ~~change-in-control~~change in control of Ciena, Mr. Smith is entitled to a payment of the ~~Corporation. In August 1999, the Corporation entered into an employment agreement with Mr. Smith. The employment agreement provides for payment of an incentive bonus~~greater of $3,000,000 or three times his then current base salary and bonus, continuation of benefits for up to ~~Mr. Smith~~three years and immediate vesting of all of his unvested options.

The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that Ciena specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Exchange Act.

The Committee administers Ciena’s executive compensation program. In this role, it establishes the compensation of Ciena’s Executive Chairman and its Chief Executive Officer and approves the compensation of the other members of Ciena’s executive leadership team upon the earlier of: (i) his termination without cause or for "good reason," as defined in the agreement, following a transfer of control, or (ii) on August 18, 2002. In the event that Mr. Smith elects to terminate his employment for "good reason" as defined in the agreement, or he is terminated for any reason other than for cause, he will receive a pro-rata portionrecommendation of the incentive bonus. Human Resources Committee Report on Executive Compensation The Human Resources Committee of the Board of Directors (the "Committee") in fiscal 2000 consisted of Messrs. Cash and Taylor and Ms. O'Brien, none of whom are employees or officers of the Corporation. Mr. Zak was a member of the Committee until his resignation from the Board of Directors in July of 2000. Mr. Dillon was elected to the Committee in May of 2000, Mr. Taylor was elected to the Committee in March of 2000 and Ms. O'Brien was elected to the Committee in August of 2000. The Committee advises and assists management in developing the Corporation's compensation and personnel policies, and provides Board oversight of their implementation. The Committee endeavors to meet no less than four times per year to review issues associated with compensation, human resources policies, personnel recruitment and retention and to 10 ~~11 consider, amend, or approve quarterly objectives for the Corporation, as recommended by the Corporation's~~ Chief Executive Officer. The Committee also administers Ciena’s various equity compensation plans and its bonus plan, and exercises general oversight over Ciena’s compensation practices.

The Committee has ~~adopted~~ a ~~performance-based~~charter and procedures that it follows in carrying out its responsibilities and it has developed a set of practices and guidelines that it uses to reach its decisions. It reviews the charter and its policies annually, modifying them as it believes desirable. While the Committee generally adheres to its compensation guidelines, significant changes in Ciena’s business or the markets in which it operates may cause us to deviate from these guidelines as we deem appropriate in order to attract, motivate, and retain talented executives and to serve the best interests of Ciena and its shareholders.

As a general matter, the Committee seeks to formulate and administer compensation programs that enable Ciena to attract and retain the highly qualified employees necessary to enable it to compete successfully and increase shareholder value. We generally seek to offer Ciena’s executive leadership team competitive compensation packages in which a portion of each executive’s compensation is tied to the achievement of financial and operational objectives. In implementing this policy the Committee attempts to take into account both the long- and short-term interests of Ciena, which we believe will increase shareholder value over the long term.

In establishing the compensation of the Executive Chairman and the Chief Executive Officer, and reviewing the proposed compensation for the other executive officers, the Committee considers, for each officer, the value of his or her role to Ciena, the contribution he or she makes to Ciena in that role, and the quality of his or her individual performance. The Committee also reviews market survey data for executive officers in a selection of companies in the same or related industries that ~~considers~~are sufficiently like Ciena that their

The Committee generally develops compensation plans, for both the ~~long~~executive leadership team and ~~short term. These two components are linked in~~the majority of Ciena’s salaried workforce, based on three principal elements: a ~~way intended~~base salary, bonuses that depend on performance, and equity-based long-term incentive compensation.

The Committee generally seeks to ~~focus management on increasing~~set base salaries for executives at or slightly above the ~~strength~~50th percentile of salaries for similar positions at comparable companies, taking into account the nature of the ~~business~~position, the responsibilities, skills and experience of the officer, and his or her performance. In view of Ciena’s financial performance over the last few years and its ~~ability~~need to ~~serve important customers with leading, high-value products, while building~~make prudent use of its cash, the ~~organization~~Committee has generally not increased the base salaries of its executive leadership team since 2001, except to recognize promotions or changes in responsibility.

Until the beginning of fiscal 2002, members of the executive leadership team were eligible under Ciena’s bonus program to receive quarterly bonus payments that were dependent on Ciena’s success in achieving performance objectives established by the Committee. The percentage was based on the particular officer’s position and responsibilities and the extent to which the objectives were met. Ciena has not paid cash bonuses to its executive leadership team since 2001 (with the exception of sales incentive compensation paid to the Senior Vice Presidents of sales during that period). If Ciena’s financial performance continues to improve, the Committee expects to be able to reinstitute a ~~deliberate, thoughtful way.~~bonus program.

The Committee believes that ~~this policy will increase stockholder value over~~long-term incentive compensation performs an essential role in attracting and retaining senior executives and providing them long-term incentives to maximize shareholder value. Historically, Ciena has relied primarily on stock options for its long-term incentive program. A stock option becomes valuable only if Ciena’s stock price increases above the ~~long term. On~~option exercise price and the holder of the option remains employed for the period required for the option to “vest.” This provides an incentive for an option holder to remain employed by Ciena. In addition, stock options link a portion of an employee’s compensation to shareholders’ interests by providing an incentive to maximize shareholder value. Over the last four years, because we have generally not increased the base salaries of the executive leadership team or paid them bonuses, we have relied heavily on stock options, making substantial grants to the executive leadership team in each of these years.

Ciena has also historically used stock options as a part of the compensation of its non-executive employees. Ciena has typically made grants to all employees at ~~least~~the time they are hired, in connection with promotions, and to reward exceptional performance. The Committee has also routinely made regular semi-annual grants in amounts based on an employee’s level within the organization and his or her performance.

Ciena’s equity-based compensation program has consisted primarily of four plans:


	•	1994 Third Amended and Restated Stock Option Plan, a plan under which executive officers, key employees and non-employee directors may be granted options;

	•	1999 Non-Officer Stock Option Plan, a broad-based plan under which options may be granted to all employees other than executive officers;

	•	Ciena Corporation 2000 Equity Incentive Plan (the “2000 Plan”), a plan under which executive officers, key employees and non-employee directors may be granted options, restricted stock, and other forms of equity-based compensation; and


	•	1996 Outside Directors Stock Option Plan, a plan that provides for automatic grants to non-employee directors.

There also are options outstanding under various plans originally established by companies that Ciena has acquired but under which Ciena cannot or does not intend to grant options or other awards in the future.

During fiscal 2005, we conducted a review of Ciena’s equity compensation program. Insofar as they relate to changes in the way we use equity-based compensation, the results of that review are described below. We also reviewed our existing option plans with a view toward simplifying their administration and significantly reducing the number of shares available under these plans to a number more realistically related to Ciena’s needs. At our regular meeting in October 2005, we formally resolved to “cap” all of the options plans except for the 2000 Plan, and to make no further grants from any of the other plans.

Ciena’s executive leadership team are eligible for the same health and dental insurance, accidental death insurance, disability insurance, vacation, and other similar benefits as the rest of Ciena’s employees. Ciena provides supplemental, executive long-term disability insurance coverage for Messrs. Nettles, Smith and Chinnici. In addition, Ciena offers the executive leadership team an annual ~~basis,~~physical, tax preparation and financial planning services, and life insurance up to two times annual salary and bonus, subject to a $500,000 cap. Supplemental life insurance procured on behalf of Mr. Smith provides an additional $235,000 of coverage in excess of this limitation.

The Committee determined at its meeting in October 2004, that it would again generally make no changes to the salaries of the executive leadership team (except in cases of promotions or changes of responsibility).

While the Committee ~~approves~~considered the ~~Corporation's compensation package~~possibility of reinstituting a bonus program for executive officers, which includes a combination of annual base salary and benefits, performance-based quarterly bonuses, and long-term compensation consisting of stock options. Annual base salaries are established following an assessment byfiscal 2005, it concluded that Ciena’s financial performance did not yet warrant doing so.

At its regular meeting in October 2004, the Committee of market survey data for comparable positions in comparable companies compiled by an independent compensation consultant. The Committee's goal is to set the Corporation's total compensation for various positions at levels that are generally comparable to the averages indicated by the market survey data. Because of the competitive nature and projected growth of the optical networking industry, the Committee typically targets between the fiftieth and the seventy-fifth percentile of these surveys in setting compensation. In setting compensation the Committee takes into account regional and national data, together with the skills and performance of the individual and the needs of the Corporation. Quarterly bonus payments to members of management are awarded following assessment by the Committee of the success of the Corporation in achieving its revenue and income objectives. Annual base salaries for members of management, including Dr. Patrick H. Nettles, the Chief Executive Officer of the Corporation, are reassessed and reset annually and were most recently reassessed and reset for fiscal 2001 in accordance with the foregoing policy in October 2000. The Committee also determined that the Corporation's quarterly corporate objectives were met or otherwise satisfied during each of the four fiscal quarters of fiscal 2000, and bonuses were paid accordingly at the conclusion of each quarter during fiscal 2000. Management participates, along with all other employees, in the Corporation's annualapproved a semi-annual grant of stock options to ~~employees. In addition, consistent with~~employees other than the ~~Corporation's policy, members of management who were promoted during fiscal 2000 received an additional grant of stock options at~~executive leadership team. At its regular meeting in December 2004, the ~~time of their promotion. The annual grant~~Committee approved grants of stock options to ~~Company employees~~the executive leadership team. One half of these options vest in equal monthly installments over four years. For the first time, we introduced an element of performance-based vesting to the equity-based compensation program, providing that the remaining half of the options will vest upon the timely achievement of corporate targets for positive cash flow from operations.

The Committee made no change in Dr. Nettles’ base salary for fiscal 2005 and ~~management was first implemented~~made no long-term incentive grants.

At a special meeting in November ~~1998. With respect~~2004, Mr. Smith recommended that the Committee approve a reduction of his annual base salary from $650,000 to $500,000. This recommendation to the Committee was voluntarily offered by Mr. Smith and was not related to his or Ciena’s performance. The Committee considered and accepted this recommendation. At its December 2004 meeting the Committee determined to grant Mr. Smith an option to purchase 700,000 shares of stock, with the same vesting provisions as the options

The Committee determined at our regular meeting in October 2005, that it would again make no changes to the salaries of ~~Dr. Nettles~~the executive leadership team with the exception of two executives who had been asked to take on increased responsibilities.

At our October meeting, we also concluded that it was still premature to reinstitute a bonus program for fiscal 2006. We did, however, agree to reconsider the issue later in the year if Ciena’s financial performance continues to improve, with a view towards possibly reinstituting a program later in the year.

During fiscal 2005, the Committee conducted a comprehensive review of Ciena’s equity-based compensation strategy and practices, both as they relate to long-term incentive compensation for the executive leadership team, and to option grants for the rest of Ciena’s employees. The review had three goals:


	•	to reexamine and revise Ciena’s overall strategy for using equity in compensating employees and executives in view of changes in the needs of the company and in the external environment;

	•	to develop an approach to equity grants for the executive leadership team in view of a revised strategy; and

	•	to arrive at specific grants for the executive team for fiscal 2006.

As in past years, we made a single grant to the members of the executive leadership team at the beginning of the fiscal year, ~~ended October 31,~~and as a general rule we do not plan to make any further grants for the remainder of the year. The Committee also considered possible changes in the use of stock options and restricted stock in compensating non-executive employees.

We retained an independent compensation consultant to assist with this review. Working with the consultant, we considered recent changes in practices relating to equity-based compensation. We believe those changes to be partly the result of changing perceptions of the advantages and disadvantages of equity-based compensation, including an increased sensitivity to the dilutive effects on existing shareholders. The new accounting requirement that companies expense grants of stock options is also likely to have significant effects on the use of options as a compensatory vehicle. In light of the increased expense associated with option grants, many companies will likely reduce their use of stock options. Many will also make increased use of restricted stock and similar vehicles in lieu of stock options.

As a result of our review, we developed principles that we believe should guide our actions in making grants of equity to the executive leadership team under the current circumstances, including the following:


	•	Since we have paid no bonuses and approved only isolated increases in salary since 2001, substantial equity grants are appropriate to assure the retention of key executives and provide appropriate incentives.

	•	A portion of the equity grants should include performance-based vesting to provide amplified incentives to achieve Ciena’s key financial goals.


	•	The “burn rate” for all grants under the 2000 Plan should remain at or below the burn rate of comparable companies and should in any event not exceed a maximum of 2.5% to 3% of Ciena’s outstanding common shares.

We believe that, especially given its current situation, Ciena’s future will depend in substantial part on the efforts of the executive leadership team. The principal goals of any compensation program for these individuals should be to retain their services and to provide them incentives to continue to work to make Ciena successful and thereby create shareholder value. We began our analysis by seeking to determine the value of the equity awards appropriate to accomplish those goals.

As a starting point, working with our consultant, we developed a list of companies that represent an appropriate peer group with which to compare Ciena’s compensation practices. We compared the total cash compensation (salary plus bonus) for the senior executives of those companies with the cash compensation (which has recently consisted of salary only) for Ciena’s executive leadership team, and concluded that, in general, the cash compensation being received by Ciena’s executives is at or below the 25th percentile of executives occupying comparable positions in the peer group. The Committee believes this level of cash compensation raises concerns for retention of key executives, particularly given the significant progress that Ciena has made over the last two years and the nature of the challenges ahead. We considered the values, at the 25th, 50th and 75th percentile levels, of long-term incentive grants made by the peer group companies to their counterparts of Ciena’s executive leadership team. We were also cognizant that Ciena provides its executives only very modest benefits and perquisites. Because of our concerns about the relatively low level of cash compensation paid to the Ciena team, we determined that we should use the higher end of this range as a guide in establishing their equity awards.

The Committee considered three forms of equity-based compensation: stock options, restricted stock and performance shares (restricted stock the vesting of which is conditioned on achieving specified performance goals). After comparing the results of different combinations of the three, given various assumptions for increases in Ciena’s stock price over a five-year period, we determined that a combination consisting of roughly 50% in value of options, 30% in value of restricted stock, and 20% in value of performance shares would best serve the goals we sought to achieve. We decided, for administrative convenience, to grant restricted stock units and performance share units (contracts that give the recipients the right to receive shares as the units vest) rather than make outright grants of stock subject to vesting.

Before reaching a decision on specific awards, the Committee ~~recognized his unique role and responsibility as Chief Executive Officer~~considered the potential dilutive effect on current shareholders of grants of the Corporation and formerly as President and Chief Executive Officer, but otherwise considered no factors or criteria different from those applied to members of management generally. Mr. Nettles' incentive compensation for fiscal 2000 was payable based upon the success of the Corporation in achieving certain quarterly revenue and income objectives that were set bygeneral magnitude proposed. Since 2002, the Committee in advance of each fiscal quarter. If the Company met or exceeded these criteria in a fiscal quarter, Dr. Nettles would receive a bonus of 25% of his base salary. If the Company did not meet the objectives set for a fiscal quarter, Dr. Nettles would not receive a bonus for that quarter. Because these criteria were met or exceeded in each of the four quarters during fiscal 2000, the full bonus amounts, equal to 100% of Dr. Nettles' base salary, was paid to Dr. Nettles in fiscal 2000. Dr. Nettles was also awardedhad managed Ciena’s stock ~~options in the Corporation's annual grant based upon market survey data. The Committee targeted between the fiftieth and the seventy-fifth percentile of this survey in setting Dr. Nettles' annual~~ option grant. For fiscal 2001, the Committee will again establish quarterly corporate objectives. If the Committee determines that the corporate objectives have been met or otherwise satisfied in each of the four fiscal quarters, the bonus payments for the executive officers of the Company, which will be paid quarterly on an equal pro rata basis, will equal, in the aggregate, up to 50% or 100% of an executive's base salary, with the exact percentageprogram based on the ~~particular officer's title~~guideline that the totalnet option grants for any fiscal year should not exceed 2.25% of the common shares outstanding. In the course of its review, the Committee determined that it should adopt a revised guideline based on thegrossnumber of shares used in grants during any fiscal year. After considering the equity compensation “burn rates” of the companies in the peer group, guidelines used by certain institutional advisory services, and ~~responsibilities~~the advice of our compensation consultant, we decided to adopt a guideline of an equity compensation burn rate on the order of 3% of the common shares outstanding (on a gross basis) in any fiscal year. We believe that this is not only consistent with our previous guideline, but that it is conservative when compared to the practices of our peer companies.

Restricted stock and performance shares dilute the outstanding shares when they vest regardless of the market price of the stock, whereas options actually become dilutive only if they are “in the money.” Accordingly, it is generally considered that restricted stock and performance shares are more dilutive than options. In calculating “burn rates,” therefore, it is necessary to convert restricted stock and performance share grants into their equivalent in stock options. No standard practice has yet emerged as ~~viewed~~to how this conversion should be made. On the advice of our consultant, and consistent with the practices of at least one institutional shareholder advisory service, we determined that, in applying our burn rate guideline, we will convert restricted stock and performance shares into “option equivalents” using a conversion ratio of 1.5 to one. We plan to monitor practices in this area as they evolve.

As described above, we initially established the general magnitude of the proposed grants based on the value of grants made by companies in the peer group. As an additional check we also compared the proposed

Finally, the Committee considered the total grants to be made to the executive leadership team in the context of Ciena’s overall equity-based compensation program. Based on projections of equity grants to be made to employees during the balance of fiscal 2006, we determined that we could make the proposed executive grants and the projected additional grants to employees and still remain within our newly-established guideline of a burn rate on the order of 3% of common shares outstanding.

Beginning with a preliminary analysis provided by the ~~Committee. Only~~Committee’s compensation consultant, the Chief Executive Officer made recommendations for the level of specific grants for each member of the executive leadership team other than himself and the ~~President~~Executive Chairman. In doing so, he took into account their performance, the value of their role to Ciena, and 11 ~~12 Chief Operating Officer are eligible for~~the need to provide them sufficient incentives to remain with Ciena and continue their work toward its success. The recommendations each included a ~~bonus~~stock option that would vest in equal monthly installments over four years, a restricted stock unit that would vest in equal quarterly installments over four years, and a performance share unit that would vest upon Ciena’s achieving certain profitability targets. Under the terms of ~~up to 100%~~the restricted stock units and the performance share units, at the option of the holder, Ciena will pay the withholding tax due as the units vest and will reduce the number of shares issued by the amount of withholding, based on the fair market value of the shares on the date of vesting. The Committee reviewed and approved these recommendations, and made grants based on them effective on the first day of fiscal 2006.

The Committee made no change in Dr. Nettles’ base salary for fiscal 2006 and made no long-term incentive grants to him. The Committee considers his salary to be appropriate and not excessive for the services he is performing for Ciena.

The Committee decided to make no change in Mr. Smith’s annual base salary, but to maintain it at the reduced level of $500,000 per year established for fiscal 2005. Using the process described above for the other members of the executive leadership team, and with the advice of its consultant, the Committee decided to grant Mr. Smith a combination of a stock option for 750,000 shares, restricted stock units for 325,000 shares and performance share units for 175,000, all on terms similar to those granted to the other members of the team. The Committee considers this compensation to be appropriate and not excessive for the services he is performing for Ciena.

As part of its review of the equity compensation strategy, the Committee considered the desirability of accelerating the vesting of some or all of the unvested stock options that were out of the money. The Committee conducted a joint special meeting with the Audit Committee during which the two committees considered a report on Statement of Financial Accounting Standard 123(R), which requires Ciena to commence in fiscal ~~2001. Under Section 162(m)~~2006 recording compensation expenses when it grants stock options. The two committees discussed the accounting effects of SFAS 123(R), the reaction of the ~~Internal Revenue Code~~financial community to it, and various alternatives for reducing the accounting expense that Ciena will be required to record as a result of ~~1986, as amended (the "Code"),~~outstanding out-of-the-money options. At its regular meeting in October 2005 the Committee discussed these alternatives further and ~~applicable Treasury regulations, no tax deduction is allowed for annual compensation in excess of $1 million paid~~agreed to ~~any of~~refer the ~~five most highly compensated executive officers. "Performance-based" compensation that has been approved by stockholders, however, is excluded from~~matter to the $1 million limit if, among other requirements, the compensation is payable only upon attainment of pre-established objective performance goals and the board committee that establishes such goals consists only of "outside directors" as defined for purposes of Section 162(m). The Board of Directors ~~has approved~~without recommendation. At its meeting on October 26, 2005, the ~~adoption~~Board voted unanimously to accelerate all out-of-the-money stock options with the exception of certain options whose vesting depends on achieving certain financial goals.

In the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan (the "Third Amended and Restated Plan"), which is structured to qualify as "performance-based," and is submitting that plan for shareholder approval at this Annual Meeting. In addition, all of thepast, members of the ~~Human Resources Committee qualify as "outside directors." Accordingly compensation awarded~~executive leadership team have been eligible to participate in Ciena’s Employee Stock Purchase Plan (ESPP), which enables employees to purchase shares of Ciena common stock

at a discount to fair market value by using funds deducted from paychecks during the ~~Committee~~preceding six months. During fiscal 2005, we reviewed the ESPP with a view to determining how it was being used and whether any modifications were in order. Although we determined not to make any significant modifications in the Corporation's five most highly compensated executive officers under the Third Amended and Restated Plan is intended to be deductible under Section 162(m). The Human Resources Committee thus intends to structure performance-based compensation, including stock option grants and annual bonuses, to executive officers who may be subject to Section 162(m) in a manner that satisfies the requirements of Section 162(m) so long as doing so is compatible with its determinations as to the most appropriate methods and approachesESPP for the ~~design and delivery~~time being, we did conclude that, because they were receiving significant grants of ~~compensation to executive officers of CIENA. Submitted by the~~equity in other forms, members of the ~~Human Resources Committee: Judith O'Brien (Chairman) Harvey B. Cash Gerald Taylor~~ executive leadership team should not be eligible to participate in the ESPP in the future. The Committee is continuing to study the costs and benefits of this program.

At our October 2005 meeting, at the request of management, we also considered the continued value to Ciena, in light of recent changes to the income tax laws, of its deferred compensation plan, pursuant to which eligible executives could elect to defer receipt of a portion of their cash compensation. On the recommendation of management, we concluded that the program was no longer worth the cost of maintaining it, and we decided to terminate the program and distribute to participants the amounts they held in the plan.


	Submitted by the members of the Compensation Committee: Judith O’Brien (Chairperson) Harvey B. Cash Don H. Davis, Jr. Gerald H. Taylor

Compensation Committee Interlocks and Insider Participation ~~The Human Resources Committee of the Board of Directors, which serves the traditional functions of a compensation committee, consists of Harvey B.~~

Messrs. Cash, ~~Gerald H. Taylor and Judith M. O'Brien. None of Messrs. Cash~~Davis and Taylor and Ms. ~~O'Brien was~~O’Brien, who comprised the Compensation Committee in fiscal 2005, were not at any time during ~~the~~ fiscal ~~year ended October 31, 2000,~~2005, or at any other time, ~~an officer~~officers or ~~employee~~employees of ~~the Corporation. No~~Ciena. During fiscal 2005, no member of the ~~Human Resources~~Compensation Committee was an executive officer of ~~the Corporation serves as a member of the~~another entity on whose compensation committee or board of directors an executive officer of Ciena served.

The information contained in this report shall not be deemed to be “soliciting material” or ~~compensation committee~~“filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of ~~any entity that has one or more executive officers serving as a member~~Section 18 of the ~~Corporation's Board~~Securities Exchange Act of ~~Directors~~1934, except to the extent that Ciena specifically incorporates it by reference into a document filed under the Securities Act of 1933 or ~~Human Resources Committee. Audit Committee Report~~the Exchange Act.

The Audit Committee met with management periodically during fiscal 2005 to consider the adequacy of Ciena’s internal controls, and discussed these matters with Ciena’s independent registered public accounting firm, PricewaterhouseCoopers LLP, and with appropriate Ciena financial personnel. The Committee also discussed with senior management and PricewaterhouseCoopers LLP Ciena’s disclosure controls and procedures and the ~~Board of Directors (the "Audit Committee") consists of Mr. Dillon, Ms. Fitt~~certifications by Ciena’s Chief Executive Officer and Professor Bradley, all of whom meet the independence and experience requirements of Rule 4200(a)(15) of the National Association of Securities Dealers' listing standards. The Audit Committee's responsibilitiesChief Financial Officer, which are ~~as described in a written Charter adopted~~required by the ~~Board, which is attached as Appendix 2~~Securities and Exchange Commission under the Sarbanes-Oxley Act of 2002 for certain filings with the Securities and Exchange Commission. The Committee has established a procedure for receiving and addressing anonymous complaints regarding financial or accounting irregularities. It has also considered and overseen the implementation of accounting policies and their communication to this Proxy Statement. Mr. Zak was a member of the Audit Committee until his resignation from the Board of Directors in July 2000. Ms. O'Brien was a member of the Audit Committee from August 2000 until December 2000. Ms. Fitt was elected to the Audit Committee in November 2000.financial and management personnel.

The Audit Committee has reviewed and discussed ~~the Corporation's~~Ciena’s audited financial statements for ~~the~~ fiscal ~~year ended October 31, 2000~~2005 with management and with ~~the Corporation's independent auditors,~~ PricewaterhouseCoopers LLP. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Statement on Auditing Standards No. 61, ~~relating~~which relates to the conduct of the audit. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and has discussed with PricewaterhouseCoopers LLP ~~their~~its independence. Based on the Audit ~~Committee's~~Committee’s review of the audited financial statements and the review and discussions described in ~~the foregoing paragraph,~~this report, the Audit Committee recommended to the Board of Directors that the audited financial statements for ~~the~~ fiscal ~~year ended October 31, 2000~~2005 be 12 13 included in ~~the Corporation's~~Ciena’s Annual Report on Form 10-K for ~~the~~ fiscal ~~year ended October 31, 2000~~2005 for filing with the Securities and Exchange Commission. Submitted by the members of the Audit Committee: John R. Dillon (Chairman) Lawton W. Fitt Stephen P. Bradley, Ph.D. 13 ~~14 Shareholder Return Performance Presentation~~


	Submitted by the members of the Audit Committee: Lawton W. Fitt (Chairperson) Stephen P. Bradley, Ph.D. Michael J. Rowny

The following graph shows a comparison of cumulative total returns for an investment in the ~~Common Stock~~common stock of Ciena, the ~~Corporation, the NASDAQ~~Nasdaq Telecommunications Index and the S&P 500 ~~Index. Although the SEC requires the Corporation~~Index from October 31, 2000 to ~~present such a graph for a five-year period, the Common Stock has been publicly traded only since February 7, 1997~~October 31, 2005. The Nasdaq Telecommunications Index includes manufacturers and ~~as a result, the following graph commences as~~distributors of ~~such date.~~digital equipment used in telecommunication, operators of wireless and fixed-line telecommunication services, independent radio and television contractors, film production, providers of television, and media services and programming facilities including those driven by subscription. This graph is not deemed to be ~~"soliciting material"~~“soliciting material” or to be ~~"filed"~~“filed” with the SEC or subject to the ~~SEC's~~SEC’s proxy rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and the graph shall not be deemed to be incorporated by reference into any prior or subsequent filing by ~~the Corporation~~Ciena under the Securities Act of 1933 or the ~~1934~~Exchange Act.

Assumes $100 invested in ~~CIENA~~Ciena Corporation, ~~NASDAQ~~Nasdaq Telecom Index and S&P 500 on ~~February 7, 1997,~~October 31, 2000 with all dividends reinvested at month-end. ~~PROPOSAL 2 Adoption of CIENA Corporation Third Amended and Restated 1994 Stock Option Plan~~

Pursuant to Increase the Number of Options Authorized for Issuance Thereunder from 40,100,000 to 46,100,000 and to Make Certain Other Changes, Including Eliminating the Ability of the Board of Directors to Reprice Options Granted after January 17, 2001. General The CIENA Corporation Amended and Restated 1994 Stock Option Plan (the "1994 Plan"), first effective in 1994, is designed to attract, retain and reward persons providing services to CIENA, and to motivate these persons to contribute to the growth and profits of CIENA in the future. In 1998, the Board of Directors approved an amendment and restatement of the 1994 Plan, resulting in the CIENA Corporation Second Amended and Restated 1994 Stock Option Plan (the "Second Amended and Restated Plan"). The Board of Directors has considered and approved an amendment and restatement of the Second Amended and Restated Plan, which will be known as the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan (the "Third Amended and Restated Plan"). The Board of Directors is proposing the Third Amended and Restated Plan for stockholder approval. The Third Amended and Restated Plan is different from the Second Amended and Restated Plan in the following ways: 14 ~~15 - The number of authorized shares reserved for issuance pursuant to stock options~~Rule 14a-8 under the ~~Third Amended and Restated Plan has been increased to forty-six million one hundred thousand (46,100,000) shares. This is an increase~~Securities Exchange Act of 6,000,000 shares over the number of shares reserved for issuance under the Second Amended and Restated Plan; - Grants under the Third Amended and Restated Plan are limited to a maximum of two million (2,000,000) shares per calendar year per person. The Second Amended and Restated Plan did not have this type of limit on grants to individuals in a calendar year; - The Third Amended and Restated Plan provides that non-qualified stock options must have an exercise price equal to no less than one hundred percent (100%) of the value of the Common Stock on the date the options are granted; - The Third Amended and Restated Plan provides that options granted under the plan on or after January 17, 20011934, some proposals by shareholders may not, without prior shareholder approval, be repriced to lower the option exercise prices, or be replaced by options with lower exercise prices; and - A provision has been added to the Third Amended and Restated Plan to clarify that, in addition to the standard credit of twelve (12) full months of accelerated vesting upon a Transfer of Control currently provided for in the Second Amended and Restated Plan, the Board has the authority to provide in an option agreement for an additional credit of accelerated vesting of the option upon a Transfer of Control. At January 16, 2001, there were 4,796,888 shares of Common Stock available for grant under the Second Amended and Restated Plan. On January 16, 2001, the closing price of CIENA's Common Stock was $90.063 per share. Because participation and the types of options granted under the Third Amended and Restated Plan are subject to the discretion of the Committee, the benefits or amounts that will be received by any participant or groups of participants if the Third Amended and Restated Plan is approved are not currently determinable. As of January 16, 2001, there were approximately 14 executive officers, 3,228 employees and 6 non-employee directors of CIENA and our subsidiaries who were eligible to participate in the Second Amended and Restated Plan. The Board of Directors has directed that the Third Amended and Restated Plan be submitted to the stockholders for their approval. Summary of the Third Amended and Restated 1994 Stock Option Plan The following summary of the Third Amended and Restated Plan does not purport to be complete, and is subject to and qualified in its entirety by reference to the complete text of the Third Amended and Restated Plan, which is attached hereto as Appendix 1 and is incorporated herein by reference. Administration The Human Resources Committee of the Board of Directors (the "Committee") administers the Third Amended and Restated Plan. Eligibility Options may be granted only to employees (including officers) and directors of CIENA or any subsidiary of CIENA or to individuals who are rendering services as consultants, advisors, or other independent contractors to CIENA or any subsidiary of CIENA. Stock Subject to the Third Amended and Restated Plan 15 16 The aggregate grants made since the 1994 Plan was originally adopted have used up most of the shares initially authorized for grants under the 1994 Plan. As of January 16, 2001, there are currently only 4,796,888 shares of Common Stock available for grant under the Second Amended and Restated Plan. The Third Amended and Restated Plan increases the shares of Common Stock reserved for issuance to forty-six million one hundred thousand (46,100,000) shares. Section 162(m) of the Internal Revenue Code Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), if the optionee is one of certain specified executive officers, then, unless certain exceptions apply, the employer is not entitled to deduct compensation with respect to the optionee, including compensation related to the exercise of stock options, to the extent such compensation in the aggregate exceeds $1,000,000 for the taxable year. The options granted under the Third Amended and Restated Plan are intended to comply with the exception to Section 162(m) for "performance-based" compensation. To be eligible for inclusion in Ciena’s proxy statement for the performance-based exception, Section 162(m) requires that option plans such as the Third Amended and Restated Plan must provide the maximum number of options that can be granted to the specified executive officers. The Third Amended and Restated Plan provides that options covering up to two million shares (2,000,000) shares may be granted to any optionee under the plan during a calendar year. Adjustments Each of the limits described above relating to the number of shares of Common Stock available for grant under the Third Amended and Restated Plan is subject to adjustment for stock dividends, splits and other similar events. In addition, if any outstanding option for any reason expires or is terminated or canceled and/or shares of Common Stock subject to repurchase are repurchased by CIENA, the shares allocable to the unexercised portion of such option or such repurchased shares may again be subject to an option under the Third Amended and Restated Plan. Stock Option Terms The Third Amended and Restated Plan permits the granting of options to purchase shares of Common Stock intended to qualify as incentive stock options under the Code and options that do not qualify as incentive stock options. The exercise price of each option will be determined by the Committee but may not be less than 100% of the fair market value of the Common Stock on the date of grant. To qualify as incentive stock options, options must meet certain federal tax requirements, including limits on the value of shares subject to incentive stock options which first become exercisable in any one calendar year, and a shorter term and higher minimum exercise price in the case of certain large stockholders. The term of each option will be fixed by the Committee and may not exceed 10 years from the date of grant. In general, the options granted under the Third Amended and Restated Plan will vest in the amount of 25% of the covered shares on the last day of the month in which the first anniversary of the date of grant occurs and a rate of 2.084% of the covered shares per month thereafter. In general, vested options are exercisable for thirty days following termination of the optionee's employment for a reason other than death or disability. Vested options are exercisable for a period of twelve months following a termination for death or disability. Options may be made exercisable in installments. The exercisability of options may be accelerated by the Committee. Upon exercise of options, the option exercise price2007 Annual Meeting. Shareholder proposals must be ~~paid~~submitted, along with proof of ownership of Ciena common stock in full either in cash or cash equivalents or by delivery of Common Stock already owned and held by the optionee for at least six months. If the Committee so permits, the exercise price may also be deliveredaccordance with Rule 14a-8(b)(2), to ~~CIENA by a broker pursuant to irrevocable instructions to the broker from the optionee. 16~~ 17 General Provisions Transfer of Control. Each option granted under the Third Amended and Restated Plan will be credited, as of the proposed effective date of a Transfer of Control, and if the optionee is still employed by CIENA on the date such Transfer of Control is consummated, with the longer of (a) twelve (12) full months of additional vesting of the shares subject to the option or (b) the number of months of additional vesting of the shares subject to the option as may be designated by the Board and set forth in the notice of grant on the date that the option was granted. If the successor entity does not assume the outstanding options or arrange for the substitution for outstanding options of new options covering the stock of the successor entity, all outstanding options will be fully exercisable thirty (30) days before the Transfer of Control and shall terminate immediately after the Transfer of Control. Amendments and Termination. The Board of Directors may at any time amend or discontinue the Third Amended and Restated Plan and the Committee may at any time amend or cancel outstanding awards for the purpose of satisfying changes in law or for any other lawful purpose. However, no such action may be taken which adversely affects any rights under an outstanding award without the holder's consent. Further, plan amendments may be subject to approval by our stockholders if and to the extent required by the Code to preserve the qualified status of incentive stock options and options granted under the Plan on or after January 17, 2001 may not, without the approval of the Corporation's stockholders, be repriced to lower the exercise prices of the options, or be replaced by options with a lower exercise price. Adjustments for Stock Dividends and Similar Events. The Committee will make appropriate adjustments in outstanding awards to reflect Common Stock dividends, splits and similar events. In the event a majority of the shares which are of the same class as the shares that are subject to outstanding options are exchanged for, converted into, or otherwise become shares of another corporation (the "New Shares"), CIENA may unilaterally amend the outstanding options to provide that such options are exercisable for New Shares. In the event of any such amendment, the number of shares and the exercise price of the outstanding options will be adjusted in a fair and equitable manner. Federal Income Tax Consequences Incentive stock options. The grant of an incentive stock option will not be a taxable event for the optionee or CIENA. An optionee will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of Common Stock received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain if the optionee holds the shares for at least two years after the date of grant and for one year after the date of exercise (the "holding period requirement"). CIENA will not be entitled to any business expense deduction with respect to the exercise of an incentive stock option, except as discussed below. For the exercise of an option to qualify for the foregoing tax treatment, the optionee generallyCiena Corporation, 1201 Winterson Road, Linthicum, Maryland 21090, Attention: Corporate Secretary. These submissions must be an employee of CIENA or a subsidiary from the date the option is granted through a date within three months before the date of exercise of the option. In the case of an optionee who is disabled, the three-month period for exercise following termination of employment is extended to one year. In the case of an employee who dies, both the time for exercising incentive stock options after termination of employment and the holding period for Common Stock received pursuant to the exercise of the option are waived. If all of the foregoing requirements are met except the holding period requirement mentioned above, the optionee will recognize ordinary income upon the disposition of the Common Stock in an amount generally equal to the excess of the fair market value of the Common Stock at the time the option was exercised over the option exercise price (but not in excess of the gain realized on the sale). The balance of the realized gain, if any, will be capital gain. The employer corporation will be allowed a business expense deduction to the extent the optionee recognizes ordinary income subject to Section 162(m) of the Code summarized below. 17 18 If an optionee exercises an incentive stock option by tendering Common Stock with a fair market value equal to part or all of the option exercise price, the exchange of shares will be treated as a nontaxable exchange (except that this treatment would not apply if the optionee had acquired the shares being transferred pursuant to the exercise of an incentive stock option and had not satisfied the holding period requirement summarized above). If the exercise is treated as a tax free exchange, the optionee would have no taxable income from the exchange and exercise (other than minimum taxable income as discussed above) and the tax basis of the shares exchanged would be treated as the substituted basis for the shares received. If the optionee used shares received pursuant to the exercise of an incentive stock option (or another statutory option) as to which the optionee had not satisfied the applicable holding period requirement, the exchange would be treated as a taxable disqualifying disposition of the exchanged shares. If, pursuant to an option agreement, CIENA withholds shares in payment of the option price for incentive stock options, the transaction should generally be treated as if the withheld shares had been sold in a disqualifying disposition after exercise of the option, so that the optionee will realize ordinary income with respect to such shares. The shares paid for by the withheld shares should be treated as having been received upon exercise of an incentive stock option, with the tax consequences described above. However, the Internal Revenue Service has not ruled on the tax treatment of shares received on exercise of an incentive stock option where the option exercise price is paid with withheld shares. Non-Qualified Stock Options. The grant of a non-qualified stock option will not be a taxable event for the optionee or CIENA. Upon exercising a non-qualified stock option, an optionee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Common Stock on the date of exercise (except that, if the optionee is subject to certain restrictions imposed by the securities laws, the measurement date will be deferred, unless the optionee makes a special tax election within 30 days after exercise). Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a non-qualified stock option, the optionee will have taxable gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised). If the employer corporation complies with applicable reporting requirements and with the restrictions of Section 162(m) of the Code, it will be entitled to a business expense deduction in the same amount and generally at the same time as the optionee recognizes ordinary income. Under Section 162(m) of the Code, if the optionee is one of certain specified executive officers, then, unless certain exceptions apply, the employer is not entitled to deduct compensation with respect to the optionee, including compensation related to the exercise of shares options, to the extent such compensation in the aggregate exceeds $1.0 million for the taxable year. The options are intended to comply with the exception to Section 162(m) for "performance-based" compensation. If the optionee surrenders Common Stock in payment of part or all of the exercise price for non-qualified stock options, no gain or loss will be recognized with respect to the shares surrendered (regardless of whether the shares were acquired pursuant to the exercise of an incentive stock option) and the optionee will be treated as receiving an equivalent number of shares pursuant to the exercise of the option in a nontaxable exchange. The basis of the shares surrendered will be treated as the substituted tax basis for an equivalent number of option shares received and the new shares will be treated as having been held for the same holding period as had expired with respect to the transferred shares. The difference between the aggregate option exercise price and the aggregate fair market value of the shares received pursuant to the exercise of the option will be taxed as ordinary income. The optionee's basis in the additional shares will be equal to the amount included in the optionee's income. 18 19 If, pursuant to an option agreement, CIENA withholds shares in payment of the option price for non-qualified stock options or in payment of tax withholding, the transaction should generally be treated as if the withheld shares had been sold for an amount equal to the exercise price after exercise of the option. The Board of Directors believes that approval of the Third Amended and Restated Plan is in the best interests of all stockholders and, accordingly, recommends a vote FOR Proposal 2. Your proxy will be so voted unless you specify otherwise. PROPOSAL 3 Adoption of and Amendment to the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan (or if that Plan is Not Adopted, the Second Amended and Restated 1994 Stock Option Plan) to Add a Provision That Will Automatically Increase the Number of Shares Reserved Under the Plan by 0.75% of the Issued and Outstanding Common Stock of the Corporation on the Last Day of Each Fiscal Year Beginning with 2001 and Ending with 2004. The Board of Directors has approved, subject to stockholder approval, the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan (the "Third Amended and Restated Plan"). The terms and conditions of the Third Amended and Restated Plan are described above in Proposal 2. The Board of Directors is also proposing for stockholder approval an amendment to the number of shares of Common Stock reserved for issuance under the Third Amended and Restated Plan, or, if that Plan is not adopted by stockholders, the existing Second Amended and Restated 1994 Stock Option Plan. This amendment, which the Board of Directors approved on January 17, 2001, provides that the number of shares of Common Stock available for grant under the relevant Plan shall be the sum of the number of shares reserved under the Plan, plus an additional three quarters of one percent (0.75%) of the number of issued and outstanding shares of Common Stock (but not including increases resulting from the issuance of shares under the Plan) on the last day of each fiscal year beginning with 2001 and ending with 2004. The Board of Directors believes that this amendment is necessary to make sure that an adequate supply of shares of Common Stock is available for grants of options for the purpose of retaining, incentivizing and attracting employees to CIENA. The Board of Directors has considered CIENA's past option granting practices and CIENA's future hiring needs in determining the proper amount by which to increase the pool of reserved shares and has determined that a three quarters of one percent (0.75%) per year increase over four years is appropriate and in the best interests of CIENA and its stockholders. The Board of Directors believes that approval of the amendment to the Third Amended and Restated Plan (or, if relevant, the Second Amended and Restated Stock Option Plan) is in the best interests of all stockholders and, accordingly, recommends a vote FOR Proposal 3. Your proxy will be so voted unless you specify otherwise. PROPOSAL 4 Adoption of Amendment to the Corporation's Third Restated Certificate of Incorporation to Increase the Number of Shares of Common Stock Authorized for Issuance Thereunder from 460,000,000 to 980,000,000 shares The Board of Directors of the Corporation has approved, declares it advisable and in the best interests of the Corporation and its stockholders, and recommends that Article FOURTH of the Corporation's Third Restated Certificate of Incorporation, as amended (the "Charter"), be amended to increase the authorized shares of Common Stock from 460,000,000 to 980,000,000. The text of the Amendment is as follows: 19 20 FOURTH: The Corporation shall have the authority to issue two (2) classes of shares to be designated respectively "Preferred Stock" and "Common Stock." The total number of shares of stock that the Corporation shall have the authority to issue is One Billion (1,000,000,000) shares of capital stock, par value $0.01 per share. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is Twenty Million (20,000,000), par value $0.01 per share. The total number of shares of Common Stock which the Corporation shall have the authority to issue is Nine Hundred Eighty Million (980,000,000) shares, par value $0.01 per share. As of December 31, 2000, there were 287,413,695 shares of Common Stock outstanding. In addition, as of December 31, 2000, options to purchase 11,798,500 shares were outstanding under the 1994 Plan and the Second Amended and Restated Plan, options to purchase 399,998 shares were outstanding under the Directors Plan, options to purchase 15,581,631 shares were outstanding under the Non-Officer Plan and options to purchase an aggregate of 2,869,858 shares were outstanding under option plans assumed by the Corporation in connection with two acquisitions. Thus, at December 31, 2000, the Corporation had outstanding or reserved for issuance 30,649,987 shares of Common Stock. The authorization of a total of 980,000,000 shares of Common Stock would give the Board the express authority, without further action of the Corporation's stockholders, to issue such shares of Common Stock from time to time as the Board deems necessary or advisable. The Corporation expends substantial funds on research and development and other commercialization activities, including investment in complementary businesses, obtaining the rights to use complementary technologies, marketing activities and administrative support of these activities. The Board believes that having the additional shares authorized and available for issuance will allow the Corporation to have greater flexibility in considering potential future actions involving the issuance of stock which may be desirable or necessary to accommodate the Corporation's business plan, including capital raising transactions. In addition, the Board believes it is necessary to have the ability to issue such additional shares for general corporate purposes. Such general corporate uses of the additional authorized shares of Common Stock may include acquisition transactions, stock dividends or distributions, and distributions in connection with future issuances of Preferred Stock of the Corporation, stock options or warrants. In any case, the additional shares of Common Stock would be available for issuance by the Board without future action by the stockholders, unless such action were specifically required by applicable law or rules of any securities market on which the Corporation's securities may be traded. The Corporation has no current plans or proposals to issue any portion of the additional shares of Common Stock. Although the proposed increase in the authorized capital stock of the Corporation could be construed as having potential anti-takeover effects, neither the Board nor management of the Corporation views this proposal in that perspective. Nevertheless, the Corporation could use the additional shares to frustrate persons seeking to effect a takeover or otherwise gain control of the Corporation by, for example, privately placing shares to purchasers who might side with the Board in opposing a hostile takeover bid. The Corporation is not aware of any such hostile takeover bid at this time. Shares of Common Stock could also be issued to a holder that would thereafter have sufficient voting power to assure that any proposal to amend or repeal the Amended and Restated By-Laws of the Corporation or certain provisions of the Charter would not receive the requisite vote required. Such uses of the Common Stock could render more difficult or discourage an attempt to acquire control of the Corporation, if such transactions were opposed by the Board. Further, an issuance of additional shares by the Corporation could have the effect on the potential realizable value of a stockholder's investment in the Corporation. In the absence of a proportionate increase in the Corporation's earnings and book value, an increase in the aggregate number of outstanding shares of Common Stock would dilute the earnings per share and book value per share of all outstanding shares of the Corporation's Common Stock. The foregoing factors, if reflected in the price per 20 21 share of Common Stock, could adversely affect the realizable value of a stockholder's investment in the Corporation. The Board of Directors believes that approval of the proposed amendment to the Corporation's Charter to increase the number of authorized shares of Common Stock from 460,000,00 shares to 980,000,000 shares is in the best interests of all stockholders and, accordingly, recommends a vote FOR Proposal 4. Your proxy will be so voted unless you specify otherwise. Voting Procedures Shares can be voted only if the stockholder is present in person or by proxy. Whether or not you plan to attend in person, you are encouraged to sign and return the enclosed proxy card. The representation in person or by proxy of at least a majority of the outstanding shares entitled to vote is necessary to provide a quorum at the meeting. Directors are elected by a plurality of the affirmative votes cast by the stockholders present at the Meeting (in person or by proxy). Proposals 2, 3, and 4 must be approved by a majority of the shares of Common Stock voting for or against the Proposals at the Meeting. Unless otherwise indicated, executed proxies will be voted for Proposals 1 through 4. Abstentions and "non-votes" are counted as present in determining whether the quorum requirement is satisfied. Abstentions and "non-votes" are treated as votes against proposals presented to stockholders other than elections of directors. A "non-vote" occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions from the beneficial owner. Stockholder Proposals All stockholder proposals intended to be presented at the 2002 Annual Meeting of the Corporation must be received by the Corporation not later than October 1, 2001 and must otherwise comply with the rules of the SEC for inclusion in Ciena’s Proxy Statement and must be received no later than October 4, 2006. Submitting a shareholder proposal does not guarantee that we will include it in our proxy statement. We strongly encourage any shareholder interested in submitting a proposal to contact our Corporate Secretary in advance of this deadline to discuss the ~~Corporation's proxy statement~~proposal, and ~~form~~shareholders may want to consult knowledgeable counsel with regard to the detailed requirements of ~~proxy relating to that meeting.~~applicable securities laws.

SEC rules ~~also~~ establish a different deadline for submission of ~~stockholder~~shareholder proposals that are not intended to be included in ~~the Corporation's~~Ciena’s proxy statement with respect to discretionary voting. ~~The~~Proxies may grant discretionary ~~voting~~authority to vote on a matter that a shareholder has not delivered written notice of to Ciena’s Corporate

Secretary at least 45 days prior to the anniversary of the date on which Ciena first mailed its proxy materials for its immediately preceding annual meeting of shareholders. The deadline for matters sought to be presented at the ~~Corporation's 2002 annual meeting~~2007 Annual Meeting is December ~~17, 2001.~~18, 2006. If a ~~stockholder~~shareholder gives notice of such a proposal after the ~~discretionary voting~~December 18, 2006 deadline, ~~the Corporation's proxy holders will be allowed to use their~~proxies for Ciena’s 2007 Annual Meeting may grant discretionary voting authority to the proxy holders to vote against the ~~stockholder~~shareholder proposal when and if the proposal is raised at ~~the Corporation's 2002 annual meeting. Certain Relationships and Related Transactions Judith O'Brien,~~Ciena’s 2007 Annual Meeting. To make a ~~director~~submission, shareholders should provide written notice to Ciena Corporation, 1201 Winterson Road, Linthicum, Maryland 21090, Attention: Corporate Secretary.

Section 16 of the ~~Corporation, may be deemed~~Securities Exchange Act of 1934, as amended, requires Ciena’s directors and officers, and persons who own more than 10% of Ciena’s common stock, to ~~beneficially have an interest~~file initial reports of ownership and reports of changes in ~~540,000 shares~~ownership with the Securities and Exchange Commission and the Nasdaq National Market. Such persons are required by Securities and Exchange Commission regulations to furnish Ciena with copies of Cyras Systems Inc. ("Cyras") Series A Preferred Stock though an interest in WSGR Investment Company 98B, an investment fund affiliated with her law firm. In the event that the merger of CIENA and Cyras, which was announced on December 19, 2000, is completed, she will receive CIENA stock in exchange for her Cyras stock. CIENA provides relocation and housing assistance packages to some of its executives. In September 2000 CIENA agreed to a relocation and housing assistance package with Ms. Elizabeth Perry, its Senior Vice President, Core Switching Division and Network Management Systems, that includes providing her a home at below market rental and granting Ms. Perry an option exercisable in 2004 to purchase the house at a reduced price.all Section 16(a) ~~Beneficial Ownership Reporting Compliance 21~~ ~~22 Perry Kamel~~forms that they file.

Based solely on Ciena’s review of the copies of such forms furnished to Ciena and written representations from our executive officers and directors, we believe that Mr. Petrik filed one late Form 4 reporting a single transaction and ~~Steve Chaddick~~that all other Section 16(a) filing requirements of our directors and executive officers were met.

A copy of Ciena’s Annual Report to Shareholders for the fiscal year ended October 31, 2005 has been mailed concurrently with this Proxy Statement to all shareholders entitled to notice of and to vote at the Annual Meeting. The Annual Report is not incorporated into this Proxy Statement and is not considered proxy-soliciting material.

Ciena filed ~~one late~~its Annual Report on Form ~~4 reporting~~10-K with the Securities and Exchange Commission on January 12, 2006. Ciena will mail without charge, upon written request, a ~~single transaction and one late~~copy of its Annual Report on Form ~~5 reporting~~10-K for the fiscal year ended October 31, 2005, excluding exhibits. Please send a ~~single transaction. Other Matters~~ written request to Investor Relations, Ciena Corporation, 1201 Winterson Road, Linthicum, Maryland, 21090, or complete the request form on the investor relations page of Ciena’s website atwww.ciena.com.

Management knows of no matters to be presented for action at the ~~meeting~~Annual Meeting other than those mentioned ~~above.~~in this Proxy Statement. However, if any other matters properly come before the ~~meeting,~~Annual Meeting, it is intended that the persons named ~~in the Corporation's form of proxy~~as proxies will vote on such other matters in accordance with their judgment of the best interests of Ciena.

Shareholders residing in the ~~Corporation. By Order~~same household who hold their stock through a bank or broker may receive only one Annual Report to Shareholders and Proxy Statement in accordance with a notice sent earlier by their bank or broker. This practice of sending only one copy of proxy materials is called “householding.” This saves Ciena money in printing and distribution costs. This practice will continue unless instructions to the contrary are received by your bank or broker from one or more of the Board of Directors /s/ Michael O. McCarthy III Michael O. McCarthy III Secretary 22 23 APPENDIX 1 CIENA CORPORATION THIRD AMENDED AND RESTATED 1994 STOCK OPTION PLAN 1. Establishmentshareholders within the household.

If you hold your shares in “street name” and Purpose. (a) Establishment. The CIENA Corporation Third Amended and Restated 1994 Employee Stock Option Plan (the "Plan") became effective January 17, 2001 upon the amendment and restatementreside in a household that received only one copy of the ~~CIENA Corporation Second Amended and Restated 1994 Employee Stock Option Plan. (b) Purpose. The purpose~~Annual Meeting materials, you can request to receive a separate copy in the future by following the instructions provided on the voting instruction card sent by your bank or broker. If your household is receiving multiple copies of the ~~Plan is~~annual report and proxy statement, you may request that only a single set of materials be sent by checking the appropriate box on the voting instruction card sent by your bank or broker. Alternatively,

Shareholders of record will receive one Proxy Statement and Annual Report for each account. Copies of our Annual Report to Shareholders and Proxy Statement are available by contacting Ciena’s Investor Relations at (888) 243-6223, or write us at Ciena Corporation, 1201 Winterson Road, Linthicum, MD 21090, Attention: Investor Relations.

Follow 95 North to Exit 53 (395 Downtown). At the third light turn right onto Pratt Street. Proceed on Pratt Street through eight lights, take a ~~Delaware corporation,~~right on President Street and ~~any successor corporation thereto (collectively referred to as~~proceed three lights, getting into the ~~"Company"),~~right hand lane after the second light (Eastern Avenue). Go straight at the third light towards the Katyn Memorial. Enter the traffic circle and any present or future parent and/or subsidiary corporations of such corporation (all of which along with the Company being individually referred to as a "Participating Company" and collectively referred to as the "Participating Company Group"), and to motivate such persons to contributefollow to the ~~growth~~first right onto Aliceanna Street. The hotel entrance is approximately 100 yards on the right.

Follow 95 South through the Fort McHenry Tunnel to Exit 53 (395 Downtown). At the third light turn right onto Pratt Street. Proceed on Pratt Street through eight lights, take a right on President Street and proceed three lights, getting into the right hand lane after the second light (Eastern Avenue). Go straight at the third light towards the Katyn Memorial. Enter the traffic circle and follow to the first right onto Aliceanna Street. The hotel entrance is approximately 100 yards on the right.

Follow 83 South until it turns into President Street at Fayette Street. Follow President Street for five lights, getting into the right hand lane after the fourth light (Eastern Avenue). Go straight at the fifth light towards the Katyn Memorial. Enter the traffic circle and follow to the first right onto Aliceanna Street. The hotel entrance is approximately 100 yards on the right.

Ciena will bear the cost of soliciting proxies. Ciena has retained the ~~Participating Company~~services of The Altman Group, for a fee of approximately $6,000 and reimbursement of reasonable out of pocket expenses, to assist in the ~~future. For purposes~~solicitation. Copies of ~~the Plan, a parent corporation~~solicitation material may be furnished to brokers, custodians, nominees and a subsidiary corporation shall be as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Definitions: (a) "Date of Option Grant" shall mean the date set forth on the Notice of Grant of Stock Options attached hereto as Exhibit A annexed hereto and made a part hereof. (b) "Number of Option Shares" shall mean the numberother fiduciaries for forwarding to beneficial owners of shares of Ciena common stock, of the Company set forth on Notice of Grant of Stock Options as adjusted from time to time pursuant to paragraph 14 below. (c) "Exercise Price" shall mean the price per share set forth on the Notice of Grant of Stock Option attached hereto as Exhibit A as adjusted from time to time pursuant to paragraph 14 below. (d) "Initial Exercise Date" shalland normal handling charges may be the Initial Vesting Date. (e) "Initial Vesting Date" shall be the last day of the calendar month in which occurs the date one (1) year after the date set forth on the Notice of Grant of Stock Options: 23 ~~24 (f) Determination of "Vested Percentage":~~ paid for such forwarding service. Officers and other Ciena management employees, who will receive no additional compensation for their services, may solicit proxies by mail, e-mail, personal interview or telephone.

~~Vested Ratio ------------~~ Prior to Initial Vesting Date 0 On Initial Vesting Date, provided the Optionee is 25% continuously employed by a Participating Company from the Date of Option Grant until the Initial Vesting Date Plus ---- For each full month

	By Order of the Optionee's continuous employment by a 2.084% Participating Company from the Initial Vesting Date In no event shall the Vested Percentage exceed 100%. Board of Directors,


	Russell B. Stevenson, Jr.
	Secretary

(g) "Option Term Date" shall mean the date ten (10) years after the Date of Option Grant. (h) On any given date, the number of "Vested Shares" shall be equal to the number of Number of Option Shares multiplied by the Vested Percentage determined as of such date pursuant to paragraph 2(f) above and rounded down to the nearest whole share. On such date, the number of "Unvested Shares" shall be equal to the Number of Option Shares reduced by the number of Vested Shares as of such date. (i) As to any individual Option granted hereunder, the Board and/or

The Audit Committee ~~referred to in Section 3(a) below, shall have authority under Sections 7, 12 and 21 of the Plan to include vesting provisions which result in~~is a different Vested Percentage or Vested Ratio than are set forth in Section 2(f) above. 3. Administration. (a) Administration by Board and/or Committee. The Plan shall be administered by the Board of Directors of the Company (the "Board") and/or by a duly appointedstanding committee of the Board having such powers as shall be specified by the Board. Any subsequent references herein to the Board shall also mean the committee if such committee has been appointed and, unless the powers of the committee have been specifically limited, the committee shall have all of the powers of the Board granted herein, including, without limitation, the power to terminate or amend the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law. All determinations by the Board shall be final and binding upon all persons having an interest in the Option. All questions of interpretation of the Plan or of any options granted under the Plan (an "Option") shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan and/or any Option. (b) Options Authorized. Options may be either incentive stock options as defined in Section 422 of the Code ("Incentive Stock Options") or non-statutory stock options. Each option shall be designated as either an Incentive Stock Option or a non-statutory Stock Option on the Notice of Grant. In the absence of any designation, options granted hereunder shall be non-statutory Stock Options. (c) Authority of Officers. Any officer of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to 24 25 the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, or election. (d) Disinterested Administration. With respect to the participation in the Plan of officers or directors of the Company subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Plan shall be administered by the Board in compliance with the requirements of Rule 16b-3, as promulgated under the Exchange Act and amended from time to time or any successor rule or regulation ("Rule 16b-3") if and to the extent still applicable. 4. Eligibility. (a) Eligible Persons. Options may be granted only to employees (including officers) and directors of the Participating Company Group or to individuals who are rendering services as consultants, advisors, or other independent contractors to the Participating Company Group. The Board shall, in its sole discretion, determine which persons shall be granted Options (an "Optionee"). Eligible persons may be granted more than one (l) Option. (b) Restrictions on Option Grants. A director of a Participating Company may only be granted a nonstatutory stock option unless the director is also an employee of the Participating Company Group. An individual who is rendering services as a consultant, advisor, or other independent contractor may only be granted a non-statutory stock option. 5. Shares Subject to Option. Options shall be for the purchase of shares of the authorized but unissued common stock or treasury shares of common stock of the Company (the "Stock"). The maximum number of shares of Stock which may be issued under the Plan shall be forty-six million one hundred thousand (46,100,000) shares. In the event that any outstanding Option for any reason expires or is terminated or canceled and/or shares of Stock subject to repurchase are repurchased by the Company, the shares allocable to the unexercised portion of such Option or such repurchased shares may again be subject to an Option grant. Notwithstanding the foregoing any such shares shall be made subject to a new Option only if the grant of such new Option and the issuance of such shares pursuant to such new Option would not cause the Plan or any Option granted under the Plan to contravene Rule 16b-3. During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, the maximum number of shares of Stock subject to Options that can be awarded under the Plan to any person eligible for an Option granted under the Plan is two million (2,000,000) per year. Each of the limits on the number of shares that may be issued or awarded under the Plan contained in this section 5 is subject to adjustment as provided in paragraph 14 below. 6. Time for Granting Options. All Options shall be granted, if at all, within ten (10) years of January 17, 2001. 7. Terms Conditions and Form of Options. Subject to the provisions of the Plan, the Board shall determine for each Option (which need not be identical) the number of shares of Stock for which the Option shall be granted, the exercise price of the Option, the timing and terms of exercisability and vesting of the Option, the time of expiration of the Option, the effect of the Optionee's termination of employment or service, whether the Option is to be treated as an Incentive Stock Option or as a non-statutory stock option, the method for satisfaction of any tax withholding obligation arising in connection with Option, including by the withholding or delivery of shares of stock, and all other terms and conditions of the Option not inconsistent with the Plan. Options granted pursuant to the Plan shall be evidenced by written notices specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to time establish, which notices may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: (a) Exercise Price. The exercise price for each Option shall be established in the sole discretion of the Board; provided, however, that (i) the 25 26 exercise price per share for an Option shall be not less than the fair market value, as determined by the closing price of the Company's common stock on the previous day, of a share of Stock on the date of the granting of the Option and (ii) no Incentive Stock Option granted to an Optionee who at the time the Option is granted owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the Code (a "Ten Percent Owner Optionee") shall have an exercise price per share less than one hundred ten percent (110%) of the fair market value, as determined by theCompany’s Board of a share of Stock on the date of the granting of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a non-statutory stock option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying with the provisions of Section 424(a) of the Code. (b) Exercise Period of Options. The Board shall have the power to set, including by amendment of an Option, the time or times within which each Option shall be exercisable or the event or events upon the occurrence of which all or a portion of each Option shall be exercisable and the term of each Option; provided, however, that (i) no Option shall be exercisable after the expiration of ten (10) years after the date such Option is granted, and (ii) no Incentive Stock Option granted to a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years after the date such Option is granted. (c) Right to Exercise. The Option shall be first exercisable on and after the Initial Vesting Date, and then only to the extent vested. Notwithstanding the foregoing, the Option may be exercised only in multiples of twenty-five (25) shares unless all shares subject to the Option are being exercised; provided, however, that the foregoing restriction shall not apply so as to prevent an exercise (i) following the Optionee's termination of employment as set forth in paragraph 10 below or (ii) during the thirty (30) day periods immediately preceding and following a Transfer of Control as defined in paragraph 15 below. (d) Method of Exercise. Exercise of the Option must be by written notice to the Company which must state the election to exercise the Option, the number of shares for which the Option is being exercised and such other representations and agreements as to the Optionee's investment intent with respect to such shares as may be required pursuant to the provisions of the Plan. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, or by confirmed facsimile transmission, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in paragraph 9 below, accompanied by (i) full payment of the exercise price for the number of shares being purchased and (ii) an executed copy, if required herein, of the then current forms of escrow and security agreements referenced below. (e) Payment of Exercise Price. (i) Forms of Payment Authorized. Payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (1) in cash, by check, or cash equivalent, (2) by tender to the Company of shares of the Company's stock owned by the Optionee having a fair market value, as determined by the Board (but without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the Company), not less than the exercise price, (3) by the assignment of the proceeds of a sale of some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System), or (4) by any combination thereof. The Board may at any time or from time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price and/or which otherwise restrict one or more forms of consideration. 26 27 (ii) Tender of Company Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company of shares of the Company's stock to the extent such tender of stock would constitute a violation of the provisions of any law, regulation and/or agreement restricting the redemption of the Company's stock or, if in the opinion of Company counsel, might impair the ability of purchasers of stock from the Company from taking full advantage of the provisions of Section 1202 of the Code relating to capital gains treatment of stock issued by the Company. Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company of shares of the Company's stock unless such shares of the Company's stock either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company. (iii) Assignment of Proceeds of Sale. The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to establish, decline to approve and/or terminate any program and/or procedures for the exercise of Options by means of an assignment of the proceeds of a sale of some or all of the shares of Stock to be acquired upon such exercise. (f) Tax Withholding. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optionee by accepting the grant of the Option shall be considered to have authorized payroll withholding and otherwise agreed to make adequate provision for foreign, federal and state tax withholding obligations of the Company, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired on exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired on exercise of the Option. The Optionee is cautioned that the Option is not exercisable unless the Company's withholding obligations are satisfied. Accordingly, the Optionee may not be able to exercise the Option when desired even though the Option is vested and the Company shall have no obligation to issue a certificate for such shares. (g) Certificate Registration. Except in the event the exercise price is paid by Immediate Sales Proceeds, the certificate or certificates for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, the heirs of the Optionee. (h) Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares upon such exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option, or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISABLE UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. Questions concerning this restriction should be directed to the Chief Financial Officer or the General Counsel of the Company. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. (i) Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option. 27 28 8. Non-Transferability of the Option; Non-Alienation of Benefits. The Option may be exercised during the lifetime of the Optionee only by the Optionee and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent unexercised and exercisable by the Optionee on the date of death, may be exercised by the Optionee's legal representative or by any person empowered to do so under the deceased Optionee's will or under the then applicable laws of descent and distribution. Except with the prior written consent of the Company, subject to the foregoing, or as otherwise provided herein, no right or benefit under this Option Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same without such consent, if applicable, shall be void. Except with such consent, no right or benefit under this Option Plan shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefit. Except to the extent previously approved by the Company in writing, or as otherwise provided herein, if the Optionee should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit hereunder, then such right or benefit shall cease and terminate, and in such event, the Company may hold or apply the same or any part thereof for the benefit of the Optionee, the Optionee's spouse, children or other dependents, or any of them, in such manner and in such proportion as the Company may in its sole determination deem proper. 9. Termination of the Option. The Option shall terminate and may no longer be exercised on the first to occur of (a) the Option Term Date as defined above, (b) the last date for exercising the Option following termination of employment as described in paragraph 10 below, or (c) a Transfer of Control to the extent provided in paragraph 15 below. 10. Termination of Employment. (a) Termination Other Than by Death or Disability. Except as otherwise provided below, if the Optionee ceases to be an employee of the Participating Company Group for any reason, except death or disability within the meaning of section 422(c) of the Code, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee ceased to be an employee, may be exercised by the Optionee within thirty (30) days after the date on which the Optionee's employment terminated, but in any event no later than the Option Term date. (b) Termination by Death or Disability. Except as otherwise provided below, if the Optionee's employment with the Company is terminated because of the death or disability of the Optionee within the meaning of section 422(c) of the Code, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee ceased to be an employee, may be exercised by the Optionee (or the Optionee's legal representative) at any time prior to the expiration of twelve (12) months from the date on which the Optionee's employment terminated, but in any event no later than the Option Term Date. The Optionee's employment shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee's termination of employment. (c) Limitations on Exercise After Termination. Except as provided in this paragraph 10, the Option shall terminate and may not be exercised after the Optionee ceases to be an employee of the Participating Company Group. Furthermore, the Board may at any time after the Optionee's termination of employment cancel the Option with respect to all or a portion of the shares otherwise remaining exercisable under the Option, if the Company finds or has found that the Optionee: (i) Engaged in willful, deliberate or gross misconduct toward the Company; 28 29 (ii) Has violated the terms of any confidentiality agreement or obligation between the Optionee and the Company; or (iii) Has accepted employment with an entity which the Company determines is in a business that could result in compromising any confidentiality agreement or obligation between the Optionee and the Company. (d) Employee and Termination of Employment Defined. For purposes of this paragraph 10, the term "employee" shall mean any person, including officers and directors, employed by a Participating Company or performing services for a Participating Company as a director, consultant, advisor or other independent contractor. For purposes of this paragraph 10, the Optionee's employment shall be deemed to have terminated if the Optionee ceases to be employed by a Participating Company (whether upon an actual termination of employment or upon the Optionee's employer ceasing to be a Participating Company). The Optionee's employment shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee serves as an employee, provided that there is no interruption or termination of the Optionee's service as an employee. (e) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth above is prevented by the provisions of paragraph 7(h) above, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Term Date. (f) Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth above would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee's termination of employment, or (iii) the Option Term Date. (g) Leave of Absence. For purposes hereof, the Optionee's employment with the Participating Company Group shall not be deemed to terminate if the Optionee takes any military leave, sick leave, or other bona fide leave of absence approved by the Company of ninety (90) days or less. In the event of a leave in excess of ninety (90) days, the Optionee's employment shall be deemed to terminate on the ninety-first (91st) day of the leave unless the Optionee's right to reemployment with the Participating Company Group remains guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company (or required by law) a leave of absence shall not be treated as employment for purposes of determining the Optionee's Vested Percentage. 11. Standard Forms of Stock Options. (a) Incentive Stock Options. Unless otherwise provided for by the Board at the time an Option is granted, an Option designated as an "Incentive Stock Option" shall comply with and be subject to the terms and conditions set forth herein. (b) Non-statutory Stock Options. Unless otherwise provided for by the Board at the time an Option is granted, an Option designated as a "Non-statutory Stock Option" shall comply with and be subject to the terms and conditions set forth herein. (c) Standard Term for Options. Unless otherwise provided for by the Board in the grant of an Option, any Option granted hereunder shall be exercisable for a term of ten (10) years. 12. Authority to Vary Terms. The Board shall have the authority from time to time to vary the terms of an individual stock option grant either in connection with the grant or amendment of an individual Option or in connection with the authorization of a new standard form or forms of Notice of Grant: provided, however, that the terms 29 30 and conditions of such revised or amended standard form or forms shall be in accordance with the terms of the Plan. In addition, any limitation on the vesting of an Option contained in the Option may be rescinded, modified or waived by the Board, in its sole discretion, at any time and from time to time after the Date of Option Grant of such Option, so as to accelerate the time at which the Option may be exercised. 13. Fair Market Value Limitation. To the extent that the aggregate fair market value (determined at the time the Option is granted) of stock with respect to which Incentive Stock Options are exercisable by an Optionee for the first time during any calendar year (under all stock option plans of the Company, including the Plan) exceeds One Hundred Thousand Dollars ($100,000), such Options shall be treated as non-statutory stock options. This paragraph shall be applied by taking Incentive Stock Options into account in the order in which they were granted. 14. Effect of Change in Stock Subject to Plan. Appropriate adjustments shall be made in the number and class of shares of Stock subject to the Plan and to any outstanding Options and in the exercise price of any outstanding Options in the event of a stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or like change in the capital structure of the Company. In the event a majority of the shares which are of the same class as the shares that are subject to outstanding Options are exchanged for, converted into, or otherwise become (whether or not pursuant to a Transfer of Control (as defined below)) shares of another corporation (the "New Shares"), the Company may unilaterally amend the outstanding Options to provide that such Options are exercisable for New Shares. In the event of any such amendment, the number of shares and the exercise price of the outstanding Options shall be adjusted in a fair and equitable manner. 15. Transfer of Control. A "Transfer of Control" shall be deemed to have occurred in the event any of the following occurs with respect to the Company. (a) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the stock of the Company where the stockholders of the Company before such sale or exchange do not retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the Acquiring Corporation as defined below after such sale or exchange; (b) a merger or consolidation where the stockholders of the Company before such merger or consolidation do not retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the Acquiring Corporation as defined below after such merger or consolidation; (c) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange, or transfer to one (1) or more subsidiary corporations (as defined in paragraph 1 above) of the Company); or (d) a liquidation or dissolution of the Company. Each Optionee shall be credited, as of the proposed effective date of a Transfer of Control, and if still employed by the Company on the date such Transfer of Control is consummated, with twelve (12) full months of additional vesting of the shares subject to his/her Option. Furthermore, in the event of a Transfer of Control, the surviving, continuing successor, or purchasing corporation or parent corporation thereof, as the case may be (the "Acquiring Corporation"), shall either assume the Company's rights and obligations under outstanding stock option agreements or substitute options for the Acquiring Corporation's stock for such outstanding Options. In the event the Acquiring Corporation elects not to assume or substitute for such outstanding Options in connection with the Transfer of Control, any unexercisable and/or unvested shares subject to such outstanding stock option agreements shall be immediately exercisable and fully vested as of the date thirty (30) days prior to the proposed effective date 30 31 of the Transfer of Control. The exercise and/or vesting of any Option that was permissible solely by reason of this paragraph 15 shall be conditioned upon the consummation of the Transfer of Control. Any Options which are neither assumed or substituted for by the Acquiring Corporation in connection with the Transfer of Control nor exercised as of the date of the Transfer of Control shall terminate and cease to be outstanding effective as of the date of the Transfer of Control. 16. Rights as a Stockholder or Employee. The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of a certificate or certificates for the shares for which the Option has been exercised. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such certificate or certificates are issued, except as provided in paragraph 14 above. Nothing in the Option shall confer upon the Optionee any right to continue in the employ of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Optionee's employment at any time. 17. Stock Dividends Subject to Plan. If, from time to time, there is any stock dividend, stock split, or other change in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of the Plan, then in such event any and all new, substituted or additional securities to which the Optionee is entitled by reason of the Optionee's ownership of the shares acquired upon exercise of the Option shall be immediately subject to any security interest held by the Company with the same force and effect as the shares subject to such security interest immediately before such event. 18. Legends. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of the Plan. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this paragraph. 19. Provision of Information. Each Optionee shall be given access to information concerning the Company equivalent to that information made available to the Company's common stockholders generally. 20. Options Non-Transferable. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee. No Option shall be assignable or transferable by the Optionee, except by will or by the laws of descent and distribution. 21. Termination or Amendment of Plan or Options. The Board, including any duly appointed committee of the Board, may terminate or amend the Plan or any Option at any time; provided, however, that without the approval of the Company's stockholders, there shall be (a) no increase in the total number of shares of Stock covered by the Plan (except by operation of the provisions of paragraph 14 above), (b) no change in the class eligible to receive Incentive Stock Options and (c) no expansion in the class eligible to receive non-statutory stock options. In addition to the foregoing, the approval of the Company's stockholders shall be sought for any amendment to the Plan for which the Board deems stockholder approval necessary in order to comply with Rule 16b-3. In any event, no amendment may adversely affect any then outstanding Option or any unexercised portion thereof, without the consent of the Optionee, unless such amendment is required to enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option. Notwithstanding the first sentence of this Section 21, Options granted under the Plan on or after January 17, 2001 may not, without the approval of the Company's stockholders, be repriced to lower the exercise prices of the Options, or be replaced by Options with lower exercise prices. 31 32 IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing CIENA Corporation Third Amended and Restated 1994 Stock Option Plan was duly adopted by the Board of Directors of the Company on the 17th day of January, 2001. /s/ Michael O. McCarthy III ---------------------------- Michael O. McCarthy III, Secretary 32 ~~33 EXHIBIT A NOTICE OF GRANT OF STOCK OPTION 33~~ 34 APPENDIX 2 CIENA CORPORATION AUDIT COMMITTEE CHARTER MISSION The Audit Committee (the "Committee") is a committee of the Company's Board of Directors (the "Board").Directors. Its mission is to assist the Board in fulfilling its oversight responsibilities by assessing and monitoring the ~~Company's~~Company’s financial information, potential financial, legal and regulatory exposures, systems of internal controls and the independent audit process. ~~MEMBERSHIP~~

The Committee shall consist of at least three ~~independent outside Directors (including a Committee Chairman) who shall be designated by~~members of the Board of ~~Directors.~~Directors (“Board”), all of whom shall be “independent” as defined by federal securities law and the listing requirements of the Nasdaq Stock Market and any securities exchanges on which the Company’s securities are listed. The ~~duties and responsibilities~~members shall be appointed by vote of athe full Board at the regular meeting of the Board that falls closest to the date of the annual meeting of shareholders. The Board shall appoint one member of the Committee ~~are in addition~~ to ~~those duties assumed~~act as aits Chair. At least one member of the ~~Board of Directors. Diligence should be used so that one of the independent members of the Audit~~ Committee ~~should~~shall have a financial/accounting background and ~~be knowledgeable~~qualify as an “expert” in accounting matters as defined by the Securities and Exchange Commission.The members of the ~~Company's business, operations~~Committee shall serve terms of one year, and ~~inherent risk. MEETINGS~~shall be eligible for re-appointment.


	•	Appoint and establish the compensation of the Company’s independent auditors, and oversee their work;

	•	Approve in advance all audit and non-audit services to be performed by the Company’s independent auditors, unless Committee approval is not required by applicable laws, rules or regulations;

	•	Resolve disagreements between management and the Company’s independent public accountants regarding financial reporting;

	•	Facilitate communication between the independent public accountants and the Board;

	•	At least annually review and approve the procedures established by the Company for collecting and processing information required to be included in its periodic reports filed with the Securities and Exchange Commission;

	•	Periodically review and discuss with management and the independent public accountants the Company’s selection, application and disclosure of critical accounting policies, any significant changes in the Company’s accounting policies and any proposed changes in accounting or financial reporting that may have a significant impact on the Company. When appropriate, the Committee will consider the effect of alternative GAAP methods on the Company’s financial statements;

	•	Oversee financial reporting processes of the Company with a view to the fulfillment of its responsibilities for the fair and accurate presentation of financial statements in accordance with generally accepted accounting principles and SEC regulations;

	•	Review the Company’s annual report on Form 10-K and discuss it with management and the Company’s independent public accountants prior to its filing with the SEC;

	•	Review legal, environmental and regulatory matters that may have a material impact on the Company’s financial statements or operations;

	•	Oversee the accounting processes of the Company including the maintenance of adequate systems of internal controls encompassing management information systems, computer systems, security, disaster


		recovery and a code of business conduct. In addition, review compliance with these controls as well as significant proposed changes;

	•	Assess with management and the independent public accountants significant risks and exposures and evaluate measures management has implemented to reduce such risks;

	•	Review with the Company’s Chief Financial Officer and the independent public accountants the audit scope and audit plan of the independent public accountants;

	•	Review with management and the independent public accountants at the completion of the annual audit:


	•	The Company’s annual financial statements and related footnotes.

	•	The independent public accountant’s audit of the Company’s financial statements and the report thereon including recommended changes in reporting policies or internal controls.

	•	Any significant changes required in the independent public accountant’s audit plan.

	•	Any significant difficulties or disputes with management during the course of the audit.

	•	Other matters related to the audit which are to be communicated to the Committee under generally accepted auditing standards.


	•	Review with the Board of Directors the results of the annual audit including the scope, effectiveness and cost of the audit;

	•	Review, confirm and assure the independence of the independent accountants by reviewing non-audit services performed by external accountants;

	•	Review the cost of audit and non-audit services performed by the independent accountants;

	•	Discuss with the Chief Financial Officer and the independent accountants their qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the Company and particularly, about the degree of aggressiveness or conservatism of its accounting principles and underlying estimates;

	•	Establish procedures for (i) processing complaints regarding accounting, internal controls or auditing matters and (ii) confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters;

	•	Report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate;

	•	At least annually, review and update the Committee’s Charter;

	•	The Committee shall perform such other functions as required the Company’s charter or bylaws, the Board of Directors or applicable laws, rules and regulations, including the rules of the SEC and the NASDAQ stock exchange. The Committee shall have the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities;

	•	The Committee shall be empowered to retain independent counsel, accountants or others to the extent the Committee considers necessary to carry out its duties. The Company will pay the expenses associated with all advisors to the Committee.

The Committee shall meet at least four times per year (usually in conjunction with regularly scheduled meetings of the Board of Directors) ~~and shall maintain minutes of each meeting.~~. In addition to the members of the Committee, the ~~Company's~~Company’s Chief Executive Officer, Chief Financial Officer, Controller and ~~the Company's~~ independent public accountants shall ~~normally~~ attend all regular meetings of the Committee. Other persons may be invited to attend as appropriate. During each of the regular meetings, ~~at the request of the Committee Chairman,~~ the Committee members ~~may~~shall meet separately with the ~~Company's~~Company’s independent public accountants with no members of management present. The Committee shall report to the Board on the major

A majority of the ~~independent public accountants and~~members of the Board. - - Periodically review the accounting principles, policies and practices followed by the Company in accounting for and reporting its business activities. In addition, review compliance with these items as well as significant proposed changes. - - Ensure that the Company fulfills its responsibilitiesCommittee shall constitute a quorum for the ~~fair~~transaction of business. The Committee shall maintain written minutes of its meetings.

The Committee shall prepare and, accurate presentation of financial statements in accordance with generally accepted accounting principles and SEC regulations (and those of other countries as appropriate) including review of all press releases containing financial results,through its Chair, submit periodic ~~financial~~ reports (including 10Qs, 10Ks, annual reports), proxy materials and any other public documents containing Company financials. - - Review legal, environmental and regulatory matters that may have a material impact on the Company's financial statements or operations. - - Ensure that the Company maintains adequate systems of internal controls encompassing management information systems, computer systems, security, disaster recovery and a code of business conduct. In addition, review compliance with these controls as well as significant proposed changes. 34 35 - - Assess with management and the independent public accountants significant risks and exposures and evaluate measures management has implemented to reduce such risks. - - Review with the Company's Chief Financial Officer and the independent public accountants the audit scope and audit plan of the ~~independent public accountants. - - Review with management~~Committee’s work and the independent public accountants at the completions of the annual audit: - The Company's annual financial statements and related footnotes. - The independent public accountant's audit of the Company's financial statements and the report thereon including recommended changes in reporting policies or internal controls. - Any significant changes required in the independent public accountant's audit plan. - Any significant difficulties or disputes with management during the course of the audit. - Other matters related to the audit which are to be communicated to the Committee under generally accepted auditing standards. - - Review with the Board of Directors the results of the annual audit including the scope, effectiveness and cost of the audit. In addition, recommend changing the accounting firm retained by the Company if necessary. - - Review, confirm and assure the independence of the independent accountants by reviewing non-audit services performed by external accountants. - - Review the cost of audit and non-audit services performed by the independent accountants. - - Discuss with the Chief Financial Officer and the independent accountants their qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the Company and, particularly, about the degree of aggressiveness or conservatism of its accounting principles and underlying estimates. - - Inquire as to the independent accountant's independent qualitative judgments about the appropriateness, not just the acceptability, of the accounting principles and the clarity of the financial disclosure practices used or proposed to be adopted by the Company. - - Report Committee actionsfindings to the Board of ~~Directors with such~~Directors; including recommendations asfor Board actions when considered appropriate by the Committee may deem appropriate. - - Periodically review and update the Committee's charter. - - The Committee shall perform such other functions as assigned by law, the Company's charter or bylaws or the Board of Directors.Committee.

The Committee shall have the ~~power~~authority to ~~conduct~~retain special legal, accounting or ~~authorize investigations into any matters within~~other consultants to advise the ~~Committee's scope of responsibilities.~~Committee. The Committee may request any officer or employee of the Company or any outside counsel or consultants to meet with any members of the Committee.

The Corporate Secretary shall ~~be empowered to retain independent counsel, accountants or others to assist~~provide the Committee such staff support as it ~~in the conduct of any investigation. 35~~ ~~36 PROXY~~ may require.

Ciena Corporation, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:


	1. The name of the corporation is Ciena Corporation.

	2. This Amendment to Third Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

	3. This Amendment to Third Restated Certificate of Incorporation amends Article Fourth of the Third Restated Certificate of Incorporation of the corporation, as heretofore amended, supplemented and restated, by deleting the first paragraph of Article Fourth thereof and substituting in lieu thereof the a new paragraph, which shall read in its entirety as follows:

FOURTH: The Corporation shall have the authority to issue two classes of shares to be designated respectively “Preferred Stock” and “Common Stock.” The total number of shares of stock that the Corporation shall have the authority to issue is[216,000,000][160,000,000] or [118,000,000] shares of capital stock, par value $0.01 per share. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is 20,000,000, par value $0.01 per share. The total number of shares of Common Stock which the Corporation shall have the authority to issue is[196,000,000][140,000,000] or [98,000,000], par value $0.01 per share.


	4. This Amendment to Third Restated Certificate of Incorporation further amends Article Fourth of the Third Restated Certificate of Incorporation of the corporation, as heretofore amended, supplemented and restated, by adding at the end of Article Fourth a new paragraph, which shall read in its entirety as follows:

Upon the filing and effectiveness (the “Effective Time”) of this amendment to the Corporation’s Certificate of Incorporation pursuant to the Delaware General Corporation Law, each[five] [seven] or [ten] shares of the Common Stock (the “Old Common Stock”) issued and outstanding immediately prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and non-assessable share of the Corporation’s common stock, $.01 par value per share (the “New Common Stock”), without any action by the holder thereof. The Corporation shall not issue fractions of shares of New Common Stock in connection with such reclassification and combination. Shareholders who, immediately prior to the Effective Time, own a number of shares of Old Common Stock which is not evenly divisible by[five] [seven] or [ten]shall, with respect to such fractional interest, be entitled to receive cash from the Corporation in lieu of fractions of shares of New Common Stock from the disposition of such fractional interest as provided below. The Corporation shall arrange for the disposition of fractional interests by those otherwise entitled thereto, by the mechanism of having (x) the transfer agent of the Corporation aggregate such fractional interests and (y) the shares resulting from the aggregation sold and (z) the net proceeds received from the sale be allocated and distributed among the holders of the fractional interests as their respective interests appear. Each certificate that theretofore represented shares of Old Common Stock shall thereafter represent that number of shares of New Common Stock into which the shares of Old Common Stock represented by such certificate shall have been reclassified and combined; provided, that each person holding of record a stock certificate or certificates that


	represented shares of Old Common Stock shall receive, upon surrender of such certificate or certificates, a new certificate or certificates evidencing and representing the number of shares of New Common Stock to which such person is entitled under the foregoing reclassification and combination.


	5. This Amendment to Third Restated Certificate of Incorporation shall be effective at[effective time], Eastern Time, on[effective date].

IN WITNESS WHEREOF, this Certificate of Amendment to Third Restated Certificate of Incorporation has been executed by a duly authorized officer of the corporation this[ ]day of[ ].


		DETACH HERE

CIENA CORPORATION

Proxy for Annual Meeting of Shareholders to be held March 15, 2006
This Proxy is Solicited on behalf of the Board of Directors

The undersigned hereby revokes all previous proxies, acknowledges receipt of the Notice of Annual Meeting of ~~Stockholders to be held March 14, 2001 The undersigned hereby~~Shareholders and the Proxy Statement, and appoints ~~Patrick H. Nettles,~~Gary B. Smith, Joseph R. Chinnici and ~~Michael O. McCarthy III,~~Russell B. Stevenson, Jr., or any of them, the proxies of the undersigned, with full power of substitution, to vote all shares of ~~Common Stock~~common stock of ~~CIENA~~Ciena Corporation ~~which~~that the undersigned is entitled to vote at the Annual Meeting of ~~Stockholders~~Shareholders of ~~the~~Ciena Corporation to be held on Wednesday, March ~~14, 2001,~~15, 2006 at 3:00 p.m., or any adjournment thereof, as ~~follows: 1. Election~~follows on the reverse side.

THIS PROXY, WHEN PROPERLY EXECUTED AND TIMELY RETURNED, WILL BE VOTED AS INDICATED. IF NO VOTING DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED “FOR” PROPOSALS 1, 2 AND 3, AND “AGAINST” PROPOSAL 4 AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTER PROPERLY COMING BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT.


SEE REVERSE SIDE		CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE		SEE REVERSE SIDE

CIENA CORPORATION

C/O COMPUTERSHARE
P.O. BOX 8694
EDISON, NJ 08818-8694

Your vote is important. Please vote immediately.


		OR

If you vote over the Internet or by telephone, please do not mail your card.


		DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL


x		Please mark votes as in this example.				#CIE

The Board of ~~three~~ Directors ~~by all Stockholders |_| FOR all~~recommends a vote “FOR” the election of each of the nominees listed ~~below |_| WITHHOLD AUTHORITY to except as marked to the contrary vote for all nominees listed below Lawton W. Fitt, Patrick~~below.

Election of two Class III Directors by Shareholders.

Nominees:(01) Stephen P. Bradley, Ph.D. (02) Gerald H. ~~Nettles, Ph.D. and John R. Dillon (Instruction:~~Taylor


		FOR ALL NOMINEES LISTED ABOVE EXCEPT AS MARKED BELOW TO THE CONTRARY		o		o		WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE

(INSTRUCTION: To withhold authority to vote for any individual ~~nominee,~~nominee(s), write ~~that nominee's~~the name onor number of the nominee(s) in the space provided below): - -------------------------------------------------------------------------------- 2. Proposal to approve the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan to increase the number of options authorized for issuance thereunder from 40,100,000 to 46,100,000 and to make certain other changes, including eliminating the ability of the Board of Directors to reprice options granted after January 17, 2001. |_| FOR |_| AGAINST |_| ABSTAIN 3. Proposal to amend the CIENA Corporation Third Amended and Restated 1994 Stock Option Plan (or, if Proposal 2 is not adopted, the CIENA Corporation Second Amended and Restated 1994 Stock Option Plan) to add a provision that will automatically increase the number of shares reserved under the Plan by 0.75% of the issued and outstanding Common Stock of the Corporation on the last day of each fiscal year beginning with 2001 and ending with 2004. |_| FOR |_| AGAINST |_| ABSTAIN 4. Proposal to amend the Corporation's Third Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder from 460,000,000 shares to 980,000,000 shares. |_| FOR |_| AGAINST |_| ABSTAIN 5. The proxies are authorized to vote in their discretion on any other matters which may properly come before the Annual Meeting to the extent set forth in the proxy statement. above).

The Board of Directors recommends a vote ~~"FOR" each~~“FOR” Proposal 2.


2.	To authorize the Board of Directors, in its discretion, to amend Ciena’s Third Restated Certificate of Incorporation to effect a reverse stock split of its outstanding common	FOR o	AGAINST o	ABSTAIN o
	stock at a ratio of (i) one-for-five, (ii) one-for-seven, or (iii) one-for-ten, together with a corresponding reduction in the number of authorized shares of Ciena common stock and capital stock, at any time prior to the date of Ciena’s 2007 Annual Meeting of Shareholders, without further approval or authorization of Ciena’s shareholders.

The Board of ~~the listed proposals. PLACE AN "X" HERE IF YOU PLAN TO VOTE YOUR SHARES AT THE MEETING. |_|~~ Directors recommends a vote “FOR” Proposal 3.


3.		Ratification of the appointment of PricewaterhouseCoopers LLP as Ciena’s independent registered public accounting firm.		FOR o		AGAINST o		ABSTAIN o

The Board of Directors recommends a vote “AGAINST” Proposal 4.


4.		Shareholder proposal requesting the Board to adopt a majority vote standard for the election of directors.		FOR o		AGAINST o		ABSTAIN o


		PLACE AN "X" HERE IF YOU PLAN TO VOTE YOUR AT THE MEETING.						o

Execute proxy exactly as your name appears on this ~~form.~~proxy card. If stock is registered in more than one name, each joint holder should sign. When signing as trustee, executor or other fiduciary, please so ~~indicate: - ------------------- ------------------------------- ---- Signature of holder Signature of co-holder (if any) Date 36~~


þ Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12


Harvey B. Cash		Director of Ciena since April 1994. Mr. Cash, age 67, is a general partner of InterWest Partners, a venture capital firm in Menlo Park, California that he joined in 1985. Mr. Cash serves on the board of directors of First Acceptance Corp., i2 Technologies, Inc., Silicon Laboratories, Inc. and Staktek Holdings, Inc. Mr. Cash also serves on the board of directors of Voyence Inc., a privately held company. Mr. Cash serves on the Compensation Committee and as Chairperson of the Governance and Nominations Committee of the Ciena Board of Directors. Mr. Cash also serves as Ciena’s lead outside director.

Judith M. O’Brien		Director of Ciena since July 2000. Ms. O’Brien, age 55, has been a Managing Director at Incubic Venture Fund, a venture capital firm in Mountain View, California, since February 2001. From 1984 until 2001, Ms. O’Brien was a partner with Wilson Sonsini Goodrich & Rosati, where she specialized in corporate finance, mergers and acquisitions and general corporate matters. Ms. O’Brien serves on the board of directors of Arcturus Bioscience, Inc., GeoVector Corporation, Grandis Inc., and Mistletoe Technologies, Inc., all of which are privately held companies. Ms. O’Brien serves on the Governance and Nominations Committee and as the Chairperson of the Compensation Committee of the Ciena Board of Directors.

Gary B. Smith		Director of Ciena since October 2000. Mr. Smith, age 45, has served as Ciena’s President and Chief Executive Officer since May 2001. Mr. Smith served as President and Chief Operating Officer from October 2000 to May 2001. Mr. Smith served as Ciena’s Senior Vice President, Chief Operating Officer from August 1999 to October 2000, as Senior Vice President, Worldwide Sales from


Annual Retainer for Each Non-Employee Director	$	20,000
Lead Outside Director Retainer	$	7,500
Audit Committee Chairperson Retainer	$	7,500
Board Meeting Attendance (excluding telephonic meetings)	$	1,500
Audit Committee Meeting Attendance (in person)	$	3,000	(Chairperson)
	$	2,000	(other members)
Other Committee Meeting Attendance (in person)	$	1,500	(Chairperson)
	$	1,000	(other directors)
All Committee Meeting Attendance (telephonic)	$	500


Restricted Stock Unit Grant to Non-Employee Directors			7,500 shares
Stock Option Grant to Non-Employee Directors			22,500 shares


Fee Category		2004		2005

Audit Fees		$	617,000	$	2,014,000
Audit-Related Fees		$	141,000	$	—
Tax Fees		$	280,000	$	91,000
All Other Fees		$	104,000	$	—

	Total Fees	$	1,142,000	$	2,105,000


(1)	Title of each class of securities to which transaction applies:


(2)	Aggregate number of securities to which transaction applies:


	By Order of the Board of Directors,

	Russell B. Stevenson, Jr.
	Secretary


Section		Page

General Information About the Annual Meeting and Voting			1
Proposal No. 1 — Election of Directors			4
	General		4
	Director Nominees for Election to Class III with Terms Expiring in 2009		5
	Class III Director with Term Expiring in 2006		5
	Class I Directors with Terms Expiring in 2007		5
	Class II Directors with Terms Expiring in 2008		6
	Election of Directors and Ciena’s Principles of Corporate Governance		7
	Proposal No. 1 — Recommendation of the Board of Directors		7
Corporate Governance and the Board of Directors			7
	Independent Directors		7
	Communicating with the Board of Directors		8
	Codes of Ethics		8
	Principles of Corporate Governance		8
	Committees of the Board of Directors and Meetings		9
	Director Compensation		11
Proposal No. 2 — Reverse Stock Split and Corresponding Authorized Stock Reduction			12
	General		12
	Purpose of the Reverse Stock Split and Authorized Stock Reduction		13
	Effect of the Reverse Stock Split and Authorized Stock Reduction		14
	Fractional Shares		15
	Effective Time and Implementation of the Reverse Stock Split and Authorized Stock Reduction		15
	Accounting Matters		15
	No Appraisal Rights		15
	Certain Risks Associated with the Reverse Stock Split		16
	Federal Income Tax Consequences of the Reverse Stock Split		16
	Board Discretion to Implement the Reverse Stock Split and Authorized Stock Reduction		17
	Proposal No. 2 — Recommendation of the Board of Directors		17
Proposal No. 3 — Ratification of Appointment of Independent Registered Public Accounting Firm			17
	Proposal No. 3 — Recommendation of the Board of Directors		18
Relationship with Independent Registered Public Accounting Firm			18
Proposal No. 4 — Shareholder Proposal Requesting the Board to Adopt a Majority Vote Standard for the Election of Directors			19
	Shareholder Proposal and Supporting Statement		20
	Statement of the Board of Directors in Opposition to the Proposal		20
Ownership of Securities			23
Compensation and Other Information Concerning Executive Officers			25
	Summary Compensation Table		25
	Option Grants in Last Fiscal Year		26
	Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values		27


Section		Page

	Equity Compensation Plan Information		27
	Employment Agreements and Change-in-Control Arrangements		28
Compensation Committee Report on Executive Compensation			29
	Compensation Committee Interlocks and Insider Participation		35
Audit Committee Report			35
Stock Performance Graph			37
Shareholder Proposals for 2007 Annual Meeting			37
Section 16(a) Beneficial Ownership Reporting Compliance			38
Annual Report on Form 10-K			38
Other Matters			38
Householding of Proxy Statement and Annual Report to Shareholders			38
Directions to the Annual Meeting			39
Miscellaneous			39
ANNEX A — Charter of the Audit Committee			A-1
ANNEX B — Certificate of Amendment to Third Restated Certificate of Incorporation			B-1


Stephen P. Bradley, Ph.D.		Director of Ciena since April 1998. Professor Bradley, age 64, is the William Ziegler Professor of Business Administration and teaches Competitive and Corporate Strategy in the Advanced Management Program at the Harvard Business School. A member of the Harvard faculty since 1968, Professor Bradley is also Chairman of Harvard’s Executive Program in Competition and Strategy: Building and Sustaining Competitive Advantage. Professor Bradley serves on the board of directors of the Risk Management Foundation of the Harvard Medical Institutions and i2 Technologies, Inc. Professor Bradley serves on the Audit Committee and the Governance and Nominations Committee of the Ciena Board of Directors.

Gerald H. Taylor		Director of Ciena since January 2000. Mr. Taylor, age 64, has served as a Managing Member of mortonsgroup, LLC, a venture partnership specializing in telecommunications and information technology, since January 2000. From 1996 to 1998, Mr. Taylor was Chief Executive Officer of MCI Communications Corporation. Mr. Taylor serves on the board of directors of Lafarge North America Inc. Mr. Taylor serves on the Compensation Committee of the Ciena Board of Directors.


Don H. Davis, Jr.		Director of Ciena since March 2002. Mr. Davis, age 66, served as Chairman of the Board of Rockwell Automation, Inc. (formerly known as Rockwell International Corporation) from February 1998 until February 2005. Mr. Davis served as Chief Executive Officer of Rockwell Automation from October 1997 to February 2004, and as President and Chief Operating Officer from 1995 to 1997. Mr. Davis serves on the boards of Rockwell Automation, Illinois Tool Works Inc. and Journal Communications, Inc. Mr. Davis is also a past chairman of the Board of Governors of the National Electrical Manufacturers Association. Mr. Davis serves on the Compensation Committee of the Ciena Board of Directors.


Lawton W. Fitt		Director of Ciena since November 2000. Ms. Fitt, age 52, served as Director of the Royal Academy of Arts in London from October 2002 to March 2005. Ms. Fitt was an investment banker with Goldman Sachs & Co. from 1979 to October 2002, where she was a partner from 1994 and a managing director from 1996 to October 2002. Ms. Fitt is a trustee of the Darden School Foundation and a director of Reuters PLC and Citizens Communications Company.


Stephen P. Bradley, Ph.D	$	37,500
Harvey B. Cash	$	39,000
Don H. Davis, Jr.	$	30,000
Lawton W. Fitt	$	50,000
Judith M. O’Brien	$	38,500
Michael J. Rowny	$	32,500
Gerald H. Taylor	$	31,500


Reverse Split Ratio	Authorized Shares of Common Stock		Authorized Shares of Capital Stock

1-for-5		196,000,000		216,000,000
1-for-7		140,000,000		160,000,000
1-for-10		98,000,000		118,000,000


	Committee Composition


	Audit Committee


	Compensation Committee


	Governance and Nominations Committee


	Number					Beneficial		Percent of
	of Shares			Right to		Ownership		Outstanding
Name of Beneficial Owner	Owned(1)			Acquire(2)		Total(3)		Shares

FMR Corp.(4)		68,529,939			522,824		69,052,763		11.9	%
Patrick H. Nettles, Ph.D.		2,446,761			2,982,800		5,429,561		*
Gary B. Smith		38,073			2,952,737		2,990,810		*
Stephen B. Alexander		130,116	(5)		1,259,942		1,390,058		*
Joseph R. Chinnici		276,052			1,096,097		1,372,149		*
James F. Collier III		4,666			768,438		773,104		*
Stephen P. Bradley, Ph.D.		40,000			310,500		350,500		*
Harvey B. Cash(6)		378,898			200,500		579,398		*
Don H. Davis, Jr.		10,000			120,000		130,000		*
Lawton W. Fitt		—			218,866		218,866		*
Judith M. O’Brien		29,349	(7)		215,466		244,815		*
Michael J. Rowny		—			20,000		20,000		*
Gerald H. Taylor		2,000			208,532		210,532		*
All executive officers and directors as a group (15 persons)		3,381,185			12,492,212		15,873,397		2.7	%



							Long Term Compensation
							Awards

			Annual Compensation (4)				Restricted			Securities
							Stock Unit			Underlying		All Other
Name and Principal Position	Year		Salary		Bonus		Award(s)(1)			Options		Compensation(3)

Patrick H. Nettles, Ph.D.		2005	$	300,000	$	—	$	—			—	$	11,701
Executive Chairman of		2004		300,000		—		—			300,000		12,012
the Board of Directors		2003		300,000		—		—			450,000		17,785
Gary B. Smith		2005	$	528,846	$	—	$	—			700,000	$	6,737
President, Chief Executive		2004		650,000		—		405,600			230,000		6,662
Officer and Director		2003		650,000		—		—			700,000		6,002
Stephen B. Alexander		2005	$	300,000	$	—	$	—			250,000	$	3,438
Senior Vice President,		2004		300,000		—		94,640			55,000		3,342
Products and Technology		2003		300,000		—		—			300,000		1,110
Chief Technology Officer
Joseph R. Chinnici		2005	$	350,000	$	—	$	—			250,000	$	7,538
Senior Vice President,		2004		350,000		—		94,640			55,000		9,463
Finance and Chief		2003		350,000		—		—			300,000		10,770
Financial Officer
James F. Collier III		2005	$	300,000	$	200,012	$	—			250,000	$	4,519
Senior Vice President,		2004		298,558		125,000		166,240	(2)		455,000		4,447
World Wide Sales		2003		210,975		116,847		—			90,000		1,416



	Individual Grants

				Percentage
				of Total							Potential Realizable Value at
	Number of			Options							Assumed Annual Rates of
	Securities			Granted to							Stock Price Appreciation for
	Underlying			Employees			Exercise				Option Term(4)
	Options			in Fiscal			Price Per		Expiration
	Granted			2005			Share(3)		Date		5%		10%

Patrick H. Nettles, Ph.D.		—			—			—		—		—		—
Gary B. Smith		350,000	(1)		2.45	%	$	2.85		12/10/2014	$	627,322	$	1,589,758
		350,000	(2)		2.45	%	$	2.85		12/10/2014	$	627,322	$	1,589,758
Stephen B. Alexander		125,000	(1)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771
		125,000	(2)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771
Joseph R. Chinnici		125,000	(1)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771
		125,000	(2)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771
James F. Collier III		125,000	(1)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771
		125,000	(2)		0.87	%	$	2.85		12/10/2014	$	224,044	$	567,771



					Number of Securities				Value of Unexercised
					Underlying Unexercised				in-the-Money Options at
	Shares				Options at 10/31/2005				10/31/2005 (2)
	Acquired		Value
	on Exercise		Realized(1)		Exercisable		Unexercisable		Exercisable		Unexercisable

Patrick H. Nettles, Ph.D.		—		—		2,982,800		—	$	2,135,000		—
Gary B. Smith		—		—		2,869,924		350,000		—		—
Stephen B. Alexander		—		—		1,227,650		125,000	$	58,621		—
Joseph R. Chinnici		200,000	$	429,000		1,069,014		125,000	$	73,705		—
James F. Collier III		—		—		745,000		125,000		—		—


	(A)				(C)
	Number of securities to be		(B)		Number of securities remaining
	issued upon exercise of		Weighted-average exercise		available for future issuance under
	outstanding options		price of outstanding		equity compensation plans (excluding
Plan category	warrants and rights		options warrants and rights		securities reflected in Column (A))

Equity compensation plans approved by security holders(1)		21,545,190	$	7.22		65,494,051	(2)(3)
Equity compensation plans not approved by security holders(4)		39,045,656	$	5.95		—	(5)

Total		60,590,846	$	6.40		65,494,051


	Long-Term Incentive Compensation of Members of the Executive Leadership Team