<PAGE> 1
Filed by CIENA Corporation.
pursuant to Rule 425
under the Securities Act of 1933
Commission File No. 333-53146
Subject Company: Cyras Systems, Inc.
The following is the text of slides being presented in investor meetings
SLIDE:
CIENA Acquires
Cyras Systems, Inc.
January 3-5, 2001
SLIDE:
This presentation may contain forward-looking statements. Such
statements should be viewed in the context of the risk factors
articulated in CIENA's most recent SEC filings.
SLIDE:
CIENA Strategy
- Provide service providers with next-generation intelligent
optical networking solutions that simplify carrier networks,
thereby
- Lowering service provider capital and operating costs
- Accelerating new service revenues
- Enabling network scalability and flexibility
- Pragmatic focus on the best economic solutions
- Deliver on rapid time-to-market with robust carrier-class
reliability
- Become a strategic next-generation vendor for our service
provider customers
SLIDE:
Transaction Details
<PAGE> 2
- 27 million shares
- Value of $2.6 billion based on closing price of CIEN on
December 18, 2000
- $150 million convertible debt assumed by CIENA
- Purchase transaction expected close during first calendar
quarter 2001
- Accretive in 2002
SLIDE:
Cyras Details
- Headquartered in Fremont, CA
- 284 employees
- Founded in July 1998
- Founders:
- Alnoor Shivji, President & CEO
- Rafat Pirzada, Executive VP Corporate Development and Chief
Strategy Officer
- Sunil Tomar, Vice President, Engineering
- Shekhar Mandal, Vice President, Finance & Administration and
Chief Financial Officer
- $70 million in equity funding from Menlo Ventures, NEA,
Worldview, Draper Fisher Jurvetson, El Dorado Ventures,
Mustang Ventures, and ViVentures
- $150 million in 4 1/2% convertible subordinated debt financing
SLIDE:
- Increases CIENA's already significant market opportunity
SLIDE:
New Addressable Market Opportunity
Graph showing the North American Optical Transport Forecast:
Dollars in Billions
<TABLE>
<CAPTION>
--------------------- ------------------ ------------------ ------------------ ------------------
Year Metro WDM Metro SONET Metro DCS Total
--------------------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C>
1999 $0.1 $3.2 $1.3 $4.6
--------------------- ------------------ ------------------ ------------------ ------------------
2000 0.6 4.6 2.4 7.6
--------------------- ------------------ ------------------ ------------------ ------------------
2001 0.9 5.1 2.6 8.6
--------------------- ------------------ ------------------ ------------------ ------------------
2002 1.3 5.7 2.7 9.7
--------------------- ------------------ ------------------ ------------------ ------------------
2003 1.8 6.1 2.7 10.6
--------------------- ------------------ ------------------ ------------------ ------------------
2004 2.3 6.3 2.8 11.4
--------------------- ------------------ ------------------ ------------------ ------------------
</TABLE>
SLIDE:
Deal Highlights
- Increases CIENA's already significant market opportunity
- Combination leverages Cyras' leading-edge product and CIENA's:
- Strong CoreDirector(TM) and optical transport presence
- Extensive sales force
- Global service and support infrastructure o Growing customer
base and strategic relationships
SLIDE:
CIENA Customer Diversification
Graph showing CIENA customers in the quarter and total customers
<TABLE>
<CAPTION>
--------------------------------- ------------------------------- -------------------------------
Quarter Customers in Quarter Total Customers
--------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C>
Q1 '99 13 18
--------------------------------- ------------------------------- -------------------------------
Q2 '99 14 19
--------------------------------- ------------------------------- -------------------------------
Q3 '99 18 22
--------------------------------- ------------------------------- -------------------------------
Q4 '99 23 29
--------------------------------- ------------------------------- -------------------------------
Q1 '00 25 34
--------------------------------- ------------------------------- -------------------------------
Q2 '00 22 35
--------------------------------- ------------------------------- -------------------------------
Q3 '00 22 37
--------------------------------- ------------------------------- -------------------------------
Q4 '00 27 42
--------------------------------- ------------------------------- -------------------------------
</TABLE>
SLIDE:
CIENA's Announced Customers
United States:
- Alltel
- BellSouth
<PAGE> 4
- Broadwing (IXC)
- Cable & Wireless USA
- Digital Teleport
- Enron
- Genuity
- Intermedia
- PSINet
- Qwest
- RCN
- Sprint
- Verizon
- Williams*
- WorldCom
- XO Communications
*Announced CoreDirector trial customer
International:
- Cable & Wireless (UK)
- Completel (France)
- Crosswave (Japan)
- DDI (Japan)
- Dynegy (Austria)
- ESAT (Ireland)
- Fibernet (UK)
- Global Crossing/Racal (UK)
- GTS (UK)
- Hansenet (Germany)
- Interoute (UK)
- Japan Telecom (Japan)
- KDD/Teleway (Japan)
- Korea Telecom (Korea)
- MobilCom AG (Germany)
- Protel (Mexico)
- Telecom Developpment (France)
- Telia (Sweden)
- WorldCom
SLIDE:
Why Cyras?
- Complementary product architecture and technology
<PAGE> 5
- Seamless extension of LightWorks Architecture across the
network
SLIDE:
CoreDirector Portfolio
Addition of K2 to CoreDirector family of intelligent optical
switches enables end-to-end service creation and management with unmatched
scalability, agility and efficiency
Synergistic technologies supporting seamless, end-to-end
LightWorks Architecture
Fully harmonized network and service management intelligence
across the network
<TABLE>
<CAPTION>
--------------------------------- ------------------------------- -------------------------------
CoreDirector (TM) CoreDirector CI (TM) K2
--------------------------------- ------------------------------- -------------------------------
<S> <C> <C>
- 640 Gbps/bay, up to 38 - 160 Gbps (320/bay) - 80 Gbps (240/bay)
Tbps - OC-3 to OC-768 - DS-1, DS-3, OC-3 to
- OC-3 to OC-768 - STS-n granularity OC-192
- Fiber*, band*, - STS-n granularity
wavelength, STS-n
granularity
--------------------------------- ------------------------------- -------------------------------
</TABLE>
*Integrated intelligent optical switch configuration
SLIDE:
Legacy Metro Network
Diagram showing complicated structure of legacy metropolitan
edge/access networks for voice and data transmission
SLIDE:
CIENA LightWorks Network
Diagram showing the simplified structure of edge/access networks
using CIENA and Cyras equipment
<PAGE> 6
SLIDE:
Metropolitan Application
Diagram showing the simplified structure of a metropolitan
network using CIENA and Cyras equipment
SLIDE:
Product Synergy
- Extend LightWorks OS and LightWorks Services to the edge of
the network
- Smart Bandwidth provisioning
- Data-centric networking
- Adds high-density interfaces to CoreDirector family
- DS-3
- OC-3/12
- GbE
- Integrates into ON-Center for seamless network-wide service
management and bandwidth provisioning
SLIDE:
Why Cyras?
- Complementary product architecture and technology
- Seamless extension of LightWorks Architecture across the
network
- Strong engineering team
- Carrier-class platform
- NEBS compliant and tested
- Osmine in-process
SLIDE:
Distinctive Product Position
- Robust Carrier-Class Platform
- NEBS Level 3 certified; OSMINE well underway
- Enables sales to RBOCs and ILECs
- Allows co-location
<PAGE> 7
- Focused on carrier, not enterprise requirements . . .
- Scalability
- 10G trunk interfaces
- 480 Gbps backplane capacity
- Seamless integration with core switching and optical
transport
- IP Convergence through G-MPLS Control plane
- Most layer 3 functions reside in core routers or
enterprise routers
- Interface between worlds is via GMPLS
- Carriers still separate IP routing and traffic
aggregation/transport
- Enterprise IT managers prefer to control edge routers
- Enables smooth evolution to next-generation architectures
while fully leveraging installed assets
SLIDE:
Product Overview
- Next Next-Generation metropolitan switching platform
- Industry leading, fully non-blocking ASICs-based
cross-connect matrix -- highest capacity
- Supports full TSI and TSA (arbitrary switching): a)
tributary to tributary, b) tributary to ring, c) ring to
ring
- 768 X 768 STS-1/STS-n granularity -- like CoreDirector
and CI
- Same platform supports multiple rates with industry
leading port density: DS1, DS3, OC-3, OC-12, OC-48,
OC-192
- Supports arbitrary concatenations -- like CoreDirector
and CI
- Data-Optimized optical platform
- Same platform supports TDM, ATM, and Ethernet
simultaneously
- ATM switch card (5Gb/s)
- 4 port Gigabit Ethernet switching card
- 16 port 10/100 Ethernet card
SLIDE:
Product Overview
- Integrated DWDM Support
- ITU Optics
<PAGE> 8
- Passive OADMs (Optical Add/Drop Multiplexing)
- Scalable up to 40 wavelengths
- Dense Architecture: 12 Universal Service Slots
- Any card, any slot
- Any service, any port software configurable (for OC-3 and
OC-12)
- 8 slots each support up to STS-48 bandwidth
- 4 slots each support up to STS-96 bandwidth (used for
OC-192)
- Multi-ring hubbing supported
- Three shelves supported in single 7 foot rack
- Topologies and Protection Schemes Supported
- Linear, ring, mesh
- Standards-based BLSR, UPSR, APS
SLIDE:
Why Cyras?
- Complementary product architecture and technology
- Strong engineering team
- Carrier-class platform
- NEBS compliant and tested
- Osmine in-process
- Geographic proximity to CIENA's Cupertino, CA facility
SLIDE:
CIENA in the U.S.
Diagram showing CIENA's locations in the United States,
including:
Cupertino, CA - 116,000 sq. ft.
Atlanta, GA - 75,000 sq. ft.
Marlborough, MA - 43,000 sq. ft.
Linthicum, MD - Headquarters: 87,000 sq. ft.
R&D: 121,000 sq. ft.
Manufacturing: 300,000 sq. ft.
SLIDE:
<PAGE> 9
Expanding Product Breadth
Chart showing CIENA's product offerings:
1. ON-Center Network and Service Management
Transport: Switching
2. CoreStream 6. CoreDirector
3. Sentry 4000 7. CoreDirector CI
4. Metro 8. K2
5. Metro One
SLIDE:
CIENA Revenue
Graph showing CIENA revenue on a quarterly basis:
Q1 '99 $100.4 million
Q2 '99 $111.5 million
Q3 '99 $128.8 million
Q4 '99 $141.4 million
Q1 '00 $152 million; 8% growth over prior quarter
Q2 '00 $185.7 million; 22% growth over prior quarter
Q3 '00 $233.3 million; 26% growth over prior quarter
Q4 '00 $287.6 million; 23% growth over prior quarter
Consensus Expectations:
Q1 '01 $321.5 million
Q2 '01 $360. million
SLIDE:
Global Intelligent Optical Networking Market
Service providers are shifting investments from legacy
technologies to next-generation intelligent optical architectures
<PAGE> 10
Graph showing estimated growth in Optical IP, Next-Gen ADM,
Multi-Svc w/DWDM, Metro DWDM, Optical Switches and Open LH DWDM markets from
1999 to 2004; source: RHK; Pioneer; CIENA analysis
SLIDE:
Competitive Landscape
Chart showing products and services offered by competitors:
<TABLE>
<CAPTION>
--------------- --------------------------------- ----------------------------------- -----------
Optical Transport Switching Network
Mgmnt
--------------- --------------------------------- ----------------------------------- -----------
Ultra- Long-haul Metro Core Core Metro/
long haul O-E-O Optical Edge
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CIENA YES YES YES YES in process YES YES
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Nortel YES YES YES in process in process NO YES
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Lucent NO YES YES NO in process in process NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
in
Sycamore process YES in process YES in process YES YES
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Cisco NO YES YES in process NO YES NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
in
Alcatel process YES in process in process in process NO NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
ONI NO NO YES NO NO NO NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Corvis YES NO NO in process in process NO NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Tellium NO NO NO YES in process NO NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
Redback NO NO NO NO NO YES NO
--------------- ---------- ---------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<PAGE> 11
NOTE TO INVESTORS
This press release contains certain forward-looking statements based on current
expectations, forecasts and assumptions of the Company that involve risks and
uncertainties. Forward-looking statements in this release, including, but not
limited to CIENA's intent to account for the transaction as a purchase and its
expectation that the transaction to qualify as a tax-free reorganization,
CIENA's expectation that on a pro forma basis the transaction will become
accretive during the latter half of the Company's fiscal year 2002, assuming
expected revenue and cost synergies, as well as anticipated product pricing,
CIENA's expectation that this transaction to be dilutive to expected 2001
earnings per share by $0.19 to $0.22, CIENA's expectation that this transaction
will close in the first calendar quarter of 2001, CIENA belief that it will be
able to enhance its strategic position as a pure-play next generation equipment
provider and expand its addressable market opportunities in the high-growth
metropolitan area markets, that ability of the K2(TM) -- Trans-Metro Optical
(TMO) platform to provide CIENA with comprehensive, synergistic, end-to-end
capabilities for the creation and management of customized services with
<PAGE> 12
unmatched scalability, agility and efficiency, the ability of K2 to deliver
advanced provisioning and transport functions to service provider's existing
metropolitan networks enabling carriers to adapt to rapidly changing, demanding
and complex mixed-traffic environments, the ability of the K2 product to
incorporate the functionality of digital cross-connects, SONET Add/Drop
Multiplexers, ATM service access multiplexers and switches, Frame Relay access
switches, DSLAMs, DWDM wavelength adapters and MPLS switches in a single network
element and to realize an immediate 10 to 40-fold increase in price/bandwidth
efficiencies over current legacy network solutions and the expected commercial
availability of K2 in the first half of calendar 2001 are based on information
available to the Company as of the date hereof. The Company's actual results
could differ materially from those stated or implied in such forward-looking
statements, due to risks and uncertainties associated with the Company's
business, which include the risk factors disclosed in the Company's Report on
Form 10K filed with the Securities and Exchange Commission on December 7, 2000.
Forward looking statements include statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future and can be
identified by forward looking words such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "should," "will," and "would" or similar
words. The Company assumes no obligation to update the information included in
this press release, whether as a result of new information, future events or
otherwise.
CIENA, its directors, executive officers and certain other
members of management and employees may be soliciting proxies from Cyras
stockholders. Cyras, its directors, executive officers and certain other members
of management and employees may be soliciting proxies from Cyras stockholders.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT - PROSPECTUS
RELATING TO THE FOREGOING TRANSACTION FILED WITH THE SEC BECAUSE IT CONTAINS
IMPORTANT INFORMATION. THE PROXY STATEMENT - PROSPECTUS AND OTHER DOCUMENTS
FILED BY CIENA WITH THE SEC MAY BE OBTAINED WHEN THEY BECOME AVAILABLE FOR FREE
AT THE SEC'S WEB SITE, WWW.SEC.GOV. THE PROXY STATEMENT-PROSPECTUS AND THESE
OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE FROM CIENA. REQUESTS TO CIENA MAY
BE DIRECTED TO 1201 WINTERSON ROAD, LINTHICUM, MD. 21090, ATTENTION: INVESTOR
RELATIONS.
