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EXHIBIT 10.4
FORM OF
CORVIS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
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CORVIS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
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1. Purpose; Effective Date. The Corvis Corporation Employee Stock
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Purchase Plan has been established to provide employees of Corvis Corporation
("Corvis") and its Participating Subsidiaries (as defined below) with an
opportunity to become owners of Corvis through the purchase of shares of Corvis'
common stock ("Stock"). For purposes of the Plan, the term "Participating
Subsidiary" means any corporation in which Corvis has, either directly or
indirectly, at least a 50 percent ownership interest and which has been
designated by Corvis as a Participating Subsidiary. It is intended that the
Plan, and all rights granted hereunder, will meet the requirements of an
"employee stock purchase plan" within the meaning of section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Plan, in all respects, shall
be interpreted and construed so as to be consistent with such requirements. The
Plan shall be effective as of the date of the final prospectus relating to the
initial public offering of the Stock (the "Effective Date") and shall remain in
effect until all shares reserved for issuance hereunder have been issued or
until the Plan is otherwise terminated in accordance with the provisions of
Section 10 hereof.
2. Administration by Committee; Authority. The Plan shall be administered
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by the Compensation Committee of Corvis' Board of Directors (the "Committee").
Subject to the terms and conditions of the Plan, the Committee shall have the
authority to (a) manage and control the operation of the Plan; (b) conclusively
interpret and construe the provisions of the Plan, and prescribe, amend and
rescind rules, regulations and procedures relating to the Plan; (c) correct any
defect or omission and reconcile any inconsistency in the Plan; and (d) make all
other determinations and take all other actions as it deems necessary or
desirable for the implementation and administration of the Plan. The
determination of the Committee on matters within its authority shall be
conclusive and binding on Corvis, the Participating Subsidiaries and all other
persons.
3. Participation. Subject to the terms and conditions of the Plan, each
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regular, full-time or part-time employee of Corvis and the Participating
Subsidiaries who regularly works more than 20 hours per week shall be eligible
to participate in the Plan for an Offering Period (as defined below) if, as of
the first day of the Offering Period, he is employed by Corvis or a
Participating Subsidiary. For purposes of the Plan, an "Offering Period" means
(1) the period beginning on the Effective Date ending on the June 30 or December
31 which is nearest to the 24 month anniversary of the Effective Date (but not
more than 27 months after the Effective Date), (2) the six month period
beginning on the first January 1 or July 1 next following the Effective Date and
ending on the next following June 30 or December 31, as applicable, and (3) the
six month period commencing on the first July 1 or January 1, as applicable,
immediately following the last day of the Offering Period described in paragraph
(2) and ending on the next following June 30 or December 31, as applicable, and
each six month period thereafter. An employee who is eligible to participate in
the Plan for an Offering Period may elect to become a "Participant" in the Plan
for that Offering Period by completing and filing with Corvis, or its designee,
an "Election Form" which authorizes payroll deductions from the Participant's
pay. Subject to the
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terms and conditions of the Plan, deductions pursuant to a Participant's
Election Form shall commence with the first payroll period ending after the
first day of the Offering Period, shall continue until the Participant
terminates participation in the Plan in accordance herewith or until the Plan is
terminated, whichever occurs first, and shall be credited to his Plan Account
(as described in paragraph 6(d)). An eligible employee may participate in the
Plan only through payroll deductions. Other contributions will not be accepted.
All Election Forms shall be filed in accordance with uniform and
nondiscriminatory rules established by the Committee.
4. Shares Subject to Plan.
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(a) Number of Shares Reserved. The shares of Stock which may be issued
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under the Plan shall be shares currently authorized but unissued or
currently held or subsequently acquired by Corvis as treasury shares,
including shares purchased in the open market or in private
transactions. Subject to the provisions of paragraph 4(c), the number
of shares of Stock which may be issued under the Plan during any
calendar year shall not exceed 2,000,000 shares, provided however,
that total number of shares of Stock which may be issued under the
Plan during the term of the Plan may not exceed 10,000,000 in the
aggregate.
(b) Reusage of Shares. In the event of the expiration, withdrawal or
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other cancellation of an Option (as defined in Section 5) under the
Plan, the number of shares of Stock that were subject to the Option
but not delivered shall again be available for issuance under the
Plan.
(c) Adjustments to Shares Reserved. In the event of any transaction
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involving Corvis (including, without limitation, any merger,
consolidation, reorganization, recapitalization, spinoff, stock
dividend, extraordinary cash dividend, stock split, reverse stock
split, combination, exchange or other distribution with respect to
shares of Stock or other change in the corporate structure or
capitalization affecting the Stock), the Committee may make
adjustments to Options under the Plan to preserve the benefits or
potential benefits of the Options. Action by the Committee may include
(i) adjustment of the number and kind of shares which are or may be
subject to Options under the Plan (ii) adjustment of the number and
kind of shares subject to outstanding Options under the Plan, (iii)
adjustment to the exercise price of outstanding Options under the
Plan, and (iv) any other adjustments that the Committee determines to
be equitable.
(d) Insufficient Shares. If, on an Exercise Date (as defined in paragraph
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8(a)), Participants in the aggregate have outstanding Options to
purchase more shares of Stock than are then available for purchase
under the Plan, each Participant shall be eligible to purchase a
reduced number of shares of Stock on a pro rata basis and any excess
payroll deductions shall be returned to such Participants, without
interest, all as provided by uniform and nondiscriminatory rules
adopted by the Committee.
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5. Grant of Options. As of the first day of each Offering Period (the
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"Grant Date"), each employee who is a Participant for such Offering Period shall
be deemed to have been granted an "Option" under the Plan; provided, however,
that:
(a) no Participant shall be granted an Option to purchase shares of Stock
on any Grant Date if such Participant, immediately after the Option is
granted, owns stock possessing 5% or more of the total combined voting
power or value of all classes of stock of Corvis or any subsidiary of
Corvis (determined in accordance with section 424(f) of the Code (each
a "Subsidiary")); and
(b) no Participant may purchase under the Plan (or any other employee
stock purchase plan of Corvis or any Subsidiary) more than $25,000 of
Fair Market Value (as defined in paragraph 9(h)) of shares of Stock
(determined at the Grant Date) for each calendar year.
The provisions of paragraph 5(b) shall be interpreted in accordance with section
423(b)(8) of the Code. For purposes of this Section 5, the rules of section
424(d) of the Code shall apply in determining the stock ownership of an
individual, and Stock which the Participant may purchase under outstanding
Options shall be treated as Stock owned by the Participant.
6. Payroll Deductions.
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(a) Source and Amount of Payroll Deductions. Payroll deductions shall be
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made from the Base Earnings (as defined in paragraph 6(e)) paid to
each Participant for each payroll period in such amounts as the
Participant shall authorize in his Election Form. Subject to the
provisions of Section 5, the Committee may, from time to time,
establish uniform and nondiscriminatory minimum and maximum payroll
deductions for any period. Unless otherwise specified by the
Committee, payroll deductions for any payroll period must be made in
whole percentage increments and may not exceed 15% of the
Participant's Base Earnings for that payroll period.
(b) Insufficient Pay. If a Participant's Base Earnings are insufficient in
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any payroll period to allow the entire payroll deduction contemplated
under the Plan, no deduction will be made for such payroll period.
Payroll deductions will resume with the next payroll period in which
the Participant has Base Earnings sufficient to allow for the
deductions. Payroll deductions under the Plan shall be made in any
payroll period only after other withholdings, deductions, garnishments
and the like have been made, and only if the remaining Base Earnings
are sufficient to allow the entire payroll deduction contemplated.
(c) Changes to Deductions. Subject to any minimum and maximum deductions
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established by the Committee and the terms and conditions of the Plan,
a
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Participant may change the amount of his payroll deduction for any
payroll period occurring within an Offering Period (but not
retroactively and not more than twice during any Offering Period) by
filing a new Election Form with Corvis or its designated recordkeeper
in accordance with uniform and nondiscriminatory rules established by
the Committee. Any change to payroll deductions for an Offering Period
shall be implemented as soon as administratively feasible.
(d) Plan Accounts. The Committee shall cause a separate bookkeeping
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account (a "Plan Account") to be maintained for each Participant,
which Plan Account will reflect the accumulated payroll deductions
made on behalf of the Participant from time to time, reduced for any
distributions from such Plan Account pursuant to the provisions of the
Plan.
(e) Base Earnings. For purposes of the Plan, the term "Base Earnings" for
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any period shall have the usual meaning given to that term by Corvis
from time to time which are payable to a Participant for that period.
7. Termination of Participation.
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(a) Voluntary Termination. A Participant, at any time and for any reason,
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may voluntarily terminate participation in the Plan by written
notification of withdrawal delivered to the appropriate payroll office
at least 10 business days (or such other period provided by the
Committee) before the next payroll period.
(b) Automatic Termination. Except as provided in paragraphs (c) or (d), a
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Participant's participation in the Plan shall be automatically
terminated immediately upon termination of his employment with Corvis
and the Participating Subsidiaries for any reason.
(c) Special Rule for Death. Notwithstanding the provisions of paragraph
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(b) if a Participant's termination of employment with Corvis and the
Participating Subsidiaries occurs on account of death, the
Participant's beneficiary may elect to continue to participate in the
Plan (but only to the extent of the Participant's Plan Account balance
as of the date of his death) through the Exercise Date coincident with
or next following the Participant's death, at which time the
Participant's participation in the Plan shall automatically terminate.
Any election pursuant to the preceding sentence must be made within 30
days after the Participant's death; provided, however, that if the
Participant's death occurs less than 30 days prior to the next
Exercise Date, the beneficiary's election must be made no later than
the Exercise Date coincident with or next following the Participant's
death. If the beneficiary does not elect to continue participation in
the Plan pursuant to the foregoing provisions of this paragraph (c),
the Participant's participation in the Plan will be deemed to have
terminated as of the date of his death and any
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existing account balance will be refunded to the beneficiary in cash
without interest.
(d) Special Rule for Retirement. Notwithstanding the provisions of
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paragraph (b), if a Participant's termination of employment with
Corvis and the Participating Subsidiaries occurs on account of
Retirement (as defined below) within three months prior to an Exercise
Date, the Participant may elect to continue to participate in the Plan
(but only to the extent of his Plan Account balance as of the date of
his Retirement) through the Exercise Date coincident with or next
following his Retirement, at which time the Participant's
participation in the Plan shall automatically terminate. For purposes
of the Plan, the term "Retirement" means the Participant's termination
of employment with Corvis and the Participating Subsidiaries on or
after the Participant attains age 65. A Participant will be deemed to
have elected to continue participation in accordance with this
paragraph (d) if, as of the Exercise Date coincident with or next
following his Retirement, he has not given notice of his cessation of
Plan participation in accordance with the terms of the Plan.
(e) Effect of Termination. In the event a Participant's participation
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in the Plan is terminated for any reason, payroll deductions shall
immediately cease and any amounts then credited to the Participant's
Plan Account shall be returned to the Participant, without interest,
as soon as practicable thereafter. A Participant whose participation
in the Plan has terminated may not rejoin the Plan until the next
Offering Period following the date of such termination, subject to the
terms and conditions of the Plan.
8. Exercise of Option/Purchase of Shares.
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(a) Exercise of Option. On each June 30 and December 31 (or, if such day
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is not a business day, the next preceding business day) (each an
"Exercise Date"), each Participant who is then employed by Corvis or a
Participating Subsidiary (or who is otherwise eligible to exercise an
Option pursuant to paragraph 7(c)) shall be deemed to have exercised
his Option with respect to that number of shares of Stock equal to the
quotient of (i) the balance in the Participant's Plan Account as of
the Exercise Date and (ii) the Exercise Price. For purposes of the
Plan, the "Exercise Price" shall be the lesser of (1) 85% of the Fair
Market Value of a share of Stock on the Grant Date, or (2) 85% of the
Fair Market Value of a share of Stock on the Exercise Date, rounded up
to the nearest 1/8 point, but in no event less than the par value of a
share of Stock. In the event of overlapping or concurrent Offering
Periods, Options shall be exercised in the order granted.
(b) Statements. As soon as practicable after each Exercise Date, a
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statement shall be delivered to each Participant which shall include
the number of shares of Stock purchased on the Exercise Date on behalf
of such Participant under the Plan.
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(c) Certificates. When requested by a Participant, a stock certificate
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for whole shares of Stock purchased by the Participant under the Plan
shall be issued in the name of the Participant or, if so specified in
the Participant's Election Form, in the Participant's name and the
name of another person as joint tenants with right of survivorship or
as tenants in common. The value of any fractional shares shall be paid
to the Participant in cash.
(d) Excess Plan Account Balances. Any amounts remaining in a Participant's
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Plan Account as of any Exercise Date after the purchase of shares
described herein shall remain in the Participant's Plan Account and
shall be used as of the next Exercise Date to purchase shares of Stock
in accordance with the terms of the Plan; provided, however, that
nothing in this paragraph (d) shall affect a Participant's right to
cease participation in the Plan in accordance with the terms hereof.
9. Miscellaneous.
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(a) Compliance with Applicable Laws; Limits on Issuance. Notwithstanding
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any other provision of the Plan, Corvis shall have no obligation to
issue any shares of Stock under the Plan unless such issuance would
comply with all applicable laws and the applicable regulations or
requirements of any securities exchange or similar entity. Prior to
the issuance of any shares of Stock under the Plan, Corvis may require
a written statement that the recipient is acquiring the shares for
investment and not for the purpose or with the intention of
distributing the shares and will not dispose of them in violation of
the registration requirements of the Securities Act of 1933.
(b) Transferability. Neither the right of a Participant to purchase
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shares of Stock hereunder, nor his Plan Account balance, may be
transferred, pledged or assigned by the Participant other than by will
or the laws of descent and distribution and his rights hereunder may
be exercised during his lifetime only by him.
(c) Notices. Any notice or document required to be filed with the
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Committee under or with respect to the Plan will be properly filed if
delivered or mailed by registered mail, postage prepaid, to the
Committee at Corvis' principal executive offices. The Committee may,
by advance written notice to affected persons, revise any notice
procedure from time to time. Any notice required under the Plan may be
waived by the person entitled to notice.
(d) Withholding. All amounts withheld pursuant to the Plan, shares of
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Stock issued hereunder and any payments pursuant to the Plan are
subject to withholding of all applicable taxes and Corvis and its
subsidiaries shall have the right to withhold from any payment or
distribution of shares or to collect as a condition of any
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payment or distribution under the Plan, as applicable, any taxes
required by law to be withheld. To the extent provided by the
Committee, a Participant may elect to have any distribution of shares
otherwise required to be made pursuant to the Plan to be withheld or
to surrender to Corvis or its subsidiaries shares of Stock already
owned by the Participant to fulfill any tax withholding obligation;
provided, however, in no event shall the fair market value of the
number of shares so withheld (or accepted) exceed the amount necessary
to meet the minimum Federal, state and local marginal tax rates then
in effect that are applicable to the Participant and to the particular
transaction.
(e) Limitation of Implied Rights. The Plan does not constitute a contract
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of employment or continued service and participation in the Plan will
not give any employee the right to be retained in the employ of Corvis
or any Participating Subsidiary or any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued
under the terms of the Plan. Participation in the Plan by a
Participant shall not create any rights in such Participant as a
stockholder of Corvis until shares of Stock are registered in the name
of the Participant.
(f) Evidence. Evidence required of anyone under the Plan may be by
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certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
(g) Gender and Number. Where the context admits, words in one gender
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shall include the other gender, words in the singular shall include
the plural and the plural shall include the singular.
(h) Definition of Fair Market Value. For purposes of the Plan, the "Fair
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Market Value" of a share of Stock as of any date shall be the closing
market composite price for such Stock as reported on the Nasdaq
National Market on that date or, if Stock is not traded on that date,
on the immediately preceding date on which Stock was traded. In the
event that the Stock is not listed for trading on a national exchange
or quoted on an inter-dealer quotation system, the Fair Market Value
shall be determined by the Committee. Notwithstanding the foregoing,
the "Fair Market Value" of a share of Stock for the Grant Date
occurring on the Effective Date shall be the per share "Price to
Public" shown on the cover page of the final Prospectus filed in
connection with Corvis' initial public offering.
10. Amendment or Termination of Plan. The Board may, at any time and in
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any manner, amend, suspend or terminate the Plan or any election outstanding
under the Plan; provided, however, that no such amendment shall be made without
approval of Corvis' stockholders to the extent such approval would be required
under section 423 of the Code, the
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rules of any securities exchange or similar entity on which the Stock is listed
or otherwise by applicable law.
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