2003 EMPLOYEE STOCK PURCHASE PLAN

EXHIBIT 10.1

Amended and Restated Covad Communications Group, Inc. 2003 Employee Stock Purchase Plan

COVAD COMMUNICATIONS GROUP, INC.

2003 EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

				Page
1.		Definitions			1
2.		Stock Subject to the Plan.			3
3.		Grant of Options.			3
4.		Exercise of Options; Option Price.			5
5.		Multiple Options.			6
6.		Withdrawal from the Plan.			7
7.		Termination of Employment			7
8.		Restriction upon Assignment			8
9.		No Rights of Stockholders until Shares Issued			8
10.		Changes in the Stock and Corporate Events; Adjustment of Options.			8
11.		Use of Funds; No Interest Paid			9
12.		Amendment, Suspension or Termination of the Plan			9
13.		Administration by Committee; Rules and Regulations.			9
14.		Designation of Subsidiary Corporations			10
15.		No Rights as an Employee			10
16.		Plan Term; Approval by Stockholders			10
17.		Effect upon Other Plans			10
18.		Conditions to Issuance of Stock Certificates			11
19.		Notification of Disposition			11
20.		Notices			11
21.		Additional Restrictions.			11
22.		Equal Rights and Privileges			11
23.		Information to Participants			11
24.		Compliance with Laws.			11
25.		Electronic Forms.			12
26.		Headings			12

COVAD COMMUNICATIONS GROUP, INC.

2003 EMPLOYEE STOCK PURCHASE PLAN

          Covad Communications Group, Inc., a Delaware corporation, hereby adopts the 2003 Covad Communications Group, Inc. Employee Stock Purchase Plan (the “Plan”), effective as of the Effective Date (as defined below), subject to approval of the Plan by the stockholders of the Company (as provided herein).

          The purposes of the Plan are as follows:

          (1) To assist eligible employees of the Company and its Designated Subsidiary Corporations (as defined below) in acquiring stock ownership in the Company pursuant to a plan which is intended to qualify as an “employee stock purchase plan,” within the meaning of Section 423(b) of the Code (as defined below).

          (2) To help such employees provide for their future security and to encourage them to remain in the employment of the Company and its Subsidiary Corporations.

      Definitions. Whenever any of the following terms is used in the Plan with the first letter or letters capitalized, it shall have the following meaning unless the context clearly indicates to the contrary (such definitions to be equally applicable to both the singular and the plural forms of the terms defined):

          “ Account ” shall mean the account established for a Participant under the Plan.

          “ Agent ” shall mean the brokerage firm, bank or other financial institution, entity or person(s), if any, engaged, retained, appointed or authorized to act as the agent of the Company or an Employee with regard to the Plan.

          “ Authorization ” shall mean a Participant’s payroll deduction authorization provided by such Participant in accordance with Section 3(b) or, if applicable, Section 25.

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

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

          “ Committee ” means the committee of the Board appointed to administer the Plan pursuant to Section 13.

          “ Company ” means Covad Communications Group, Inc., a Delaware corporation.

          “ Compensation ” of an Employee shall mean compensation paid to an Employee by the Company or a Designated Subsidiary Corporation, including salary, wages, and commissions; but excluding overtime, shift premiums, incentive compensation, incentive payments, bonuses, the cost of employee benefits paid by the Company or a Designated Subsidiary Corporation, education or tuition reimbursements, imputed income arising under any Company or Designated Subsidiary Corporation group insurance or benefit program, travel expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company or any Designated Subsidiary Corporation under any employee benefit plan, and similar items of compensation.

          “ Date of Exercise ” of an Option or a portion thereof means the date on which such Option or such portion thereof is exercised, which shall be the last Trading Day occurring during the Offering Period of such Option, in accordance with Sections 4(a) and 5 (except as provided in Section 10 or 12).

          “ Date of Grant ” of an Option means the date on which such Option is granted, which shall be the first Trading Day of the Offering Period of such Option, in accordance with Section 3(a).

          “ Designated Subsidiary Corporation ” means any Subsidiary Corporation designated by the Board in accordance with Section 14.

          “ Effective Date ” means July 1, 2003 (or such later date as the Committee shall designate on which Options may be granted under the Plan in compliance with federal and state securities laws and other applicable laws).

          “ Eligible Employee ” means an Employee of the Company or any Designated Subsidiary Corporation: (i) whose customary employment is more than 20 hours per week, (ii) whose customary employment is for more than five months in any calendar year, and (iii) who does not, immediately after the Option is granted, own (directly or through attribution) stock possessing five percent (5%) or more of the total combined voting power or value of all classes of Stock or other stock of the Company, a Parent Corporation or a Subsidiary Corporation (as determined under Section 423(b)(3) of the Code). For purposes of paragraph (iii), the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and Stock or other stock which an Employee may purchase under outstanding Options or other options shall be treated as Stock or other stock owned by the Employee.

          “ Employee ” means an individual who renders services to the Company or a Subsidiary Corporation in the status of an “employee,” within the meaning of Section 3401(c) of the Code. During a leave of absence meeting the requirements of Treasury Regulation Section 1.421-7(h)(2), an individual shall be treated as an Employee of the Company or Subsidiary Corporation employing such individual immediately prior to such leave. “Employee” shall not include any director of the Company or a Subsidiary Corporation who does not render services to the Company or a Subsidiary Corporation in the status of an “employee,” within the meaning of Section 3401(c) of the Code. Employee shall not include individuals who are classified by the plan sponsor for payroll and tax withholding purposes as independent contractors or who are classified by the plan sponsor as temporary agency employees and treated as payroll employees of the temporary agency, for such time as they are so classified, regardless of any determination by a court or agency that they are common law employees of the plan sponsor.

          “ Enrollment Date ” with respect to an Offering Period means the last Trading Day next preceding such Offering Period.

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

          “ Fair Market Value ” shall have the meaning set forth in Section 4(b).

          “ Offering Period ” with respect to an Option granted on or after January 1, 2006, means the six (6) month period during the Plan Term (as defined in Section 16) commencing on (i) any January 1 and ending on the next June 30 to occur thereafter, or (ii) commencing on any July 1 and ending on the next December 31 to occur thereafter. With respect to an Option granted prior to January 1, 2006, this term means the twenty-four (24) month period during the Plan Term commencing on (i) any January 1 and ending on the second December 31 to occur thereafter, or (ii) commencing on any July 1 and ending on the second June 30 to occur thereafter. The first Offering Period under the Plan shall commence on the Effective Date and end on June 30, 2005. All Offering Periods that commenced prior to January 1, 2006, shall terminate on December 31, 2005. No Offering Period under the Plan shall commence after the Offering Period that commenced on July 1, 2007, unless expressly approved by the Board.

          “ Option ” means an option to purchase shares of Stock granted under the Plan to an Eligible Employee in accordance with Section 3(a).

          “ Option Price ” means the option price per share of Stock determined in accordance with Section 4(b).

           “Parent Corporation ” means any corporation, other than the Company, in an unbroken chain of corporations ending with the Company if, at the time of the granting of the Option, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, as determined under Section 424(e) of the Code.

          “ Participant ” means an Eligible Employee who has elected to participate in the Plan, in accordance with the provisions of Section 3(b).

          “ Payday ” means the regular and recurring established day for payment of Compensation to an Employee of the Company or any Designated Subsidiary Corporation.

          “ Plan ” means the Covad Communications Group, Inc. 2003 Employee Stock Purchase Plan.

          “ Stock ” means the shares of the Company’s Common Stock, $.001 par value.

          “ Subsidiary Corporation ” means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Option, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, as determined under Section 424(f) of the Code.

          “ Trading Day ” means a day on which the National Stock Exchanges and the National Association of Securities Dealers Automated Quotation (NASDAQ) System are open for trading.

      Stock Subject to the Plan.

           Authorized Shares . Subject to the provisions of subsection (b) and Section 10 (relating to adjustments upon changes in the Stock) and Section 12 (relating to amendments of the Plan), the aggregate number of shares of Stock that may be sold pursuant to Options granted under the Plan shall be 5,000,000 shares of Stock, provided , that, effective as of January 1, 2004, and as of each subsequent January 1 during the Plan Term (as defined in Section 16), the aggregate number of shares of Stock that may be sold pursuant to Options granted under the Plan shall be increased by the least of: (a) 2% of the number of shares of Stock outstanding on the date of such increase, (b) 7,000,000 shares of Stock, and (c) such number of shares of Stock (which may be zero) as the Committee shall designate in writing prior to the date of such increase.

           Aggregate Limit on Shares . Subject to Sections 10 and 12, the aggregate number of shares of Stock that may be sold pursuant to Options granted under the Plan shall not exceed 35,000,000 shares of Stock; provided, however , that, to the extent necessary to comply with Section 260.140.45 of Title 10 of the California Code of Regulations, at no time shall the total number of shares of Stock issuable upon exercise of all outstanding Options and the total number of shares of securities provided for under any stock bonus or similar plan or agreement of the Company exceed 30% of the then outstanding securities of the Company.

           Shares Issued under the Plan . The shares of Stock sold pursuant to Options granted under the Plan may be unissued shares or treasury shares of Stock, or shares reacquired in private transactions or open market purchases. If and to the extent that any right under an Option to purchase reserved shares of Stock shall not be exercised by any Participant for any reason, or if such right to purchase shall terminate as provided herein, shares of Stock that have not been so purchased hereunder shall again become available for the purposes of the Plan, unless the Plan shall have been terminated, but all shares of Stock sold under the Plan, regardless of source, shall be counted against the limitations set forth above.

      Grant of Options.

           Option Grants . The Company shall grant Options under the Plan to all Eligible Employees until the earlier of: (i) the date on which the number of shares of Stock available under the Plan have been sold, or (ii) the date on which the Plan is suspended or terminates. Each Employee who is an Eligible Employee on the Enrollment Date of an Offering Period, and on the first Trading Day of such Offering Period, shall be granted an Option with respect to such Offering Period on the Date of Grant, and such Eligible Employee shall, to the extent such Eligible Employee elects to participate in the Plan in accordance with Section 3(b), be a Participant. Each Option with respect to an Offering Period shall expire on the last Date of Exercise occurring during that Offering Period with respect to which such Option was granted, unless such Option terminates earlier in accordance with Section 6, 7, 10 or 12 (pursuant to Section 10(b)(i) the last Date of Exercise for any Option that is outstanding on December 1, 2005, shall be the last Trading Day prior to December 31, 2005, and all Offering Periods that are ongoing as of December 1, 2005, shall terminate on December 31, 2005). Subject to Section 5, the number of shares of Stock subject to an Option held by a Participant that may be purchased on any Date of Exercise shall equal the balance then in the Participant’s Account (or portion thereof to be applied to the exercise of such Option), determined as of such Date of Exercise, divided by the Option Price of such Option; provided, however , that, on any Date of Exercise, a Participant

may not purchase an aggregate of more than 5,000 shares of Stock under the Option or Options granted to and held by such Participant on such Date of Exercise; and, provided, further , that the number of shares of Stock for which an Option shall become exercisable on any Date of Exercise shall not exceed the number determined in accordance with subsection (c). The Company shall not grant an Option with respect to an Offering Period to any Participant who is not an Eligible Employee on the Enrollment Date of such Offering Period, and the first Trading Day of such Offering Period.

           Election to Participate; Payroll Deduction Authorization .

          An Eligible Employee who is granted an Option shall become a Participant in the Plan only by means of authorizing payroll deductions. Each such Eligible Employee who elects to participate in the Plan with respect to an Offering Period shall, not later than the Enrollment Date of the Offering Period, deliver to the Company a completed written payroll deduction authorization in a form prepared by the Committee; provided, however, that, for the first Offering Period under the Plan, such written payroll authorization shall be delivered or transmitted to the Company no later than July 10, 2003 (or such later date as the Committee shall designate prior to the grant of such Options). An Eligible Employee’s written payroll deduction authorization is referred to herein as the “Authorization.” Each Participant’s Authorization shall give notice of such Participant’s election to participate in the Plan for the Offering Period (and subsequent Offering Periods) and shall designate a whole percentage of such Participant’s Compensation to be withheld by the Company or the Designated Subsidiary Corporation employing such Participant on each Payday during the Offering Period (and subsequent Offering Periods); provided, however, that, for the first Offering Period under the Plan, each Participant’s Authorization shall designate a whole percentage of such Participant’s Compensation to be withheld on the Payday occurring on July 18, 2003 (or the first Payday occurring on or after the Date of Grant of the first Offering Period) and each Payday thereafter. A Participant may designate any whole percentage of Compensation which is not less than one percent (1%) and not more than twenty percent (20%).

          A Participant’s Compensation payable during an Offering Period shall be withheld each Payday through payroll deduction in an amount equal to the percentage specified in the Authorization, and such amount shall be credited to such Participant’s Account under the Plan. A Participant may increase or decrease the percentage of Compensation designated in the Authorization, subject to the limits of this subsection (b), or may suspend the Authorization, provided , that any such change or suspension must be made no later than five (5) business days before the end of a payroll period for such change or suspension to apply with respect to the Payday for such payroll period.

          An Eligible Employee who is granted an Option prior to January 1, 2006, and who does not elect to participate in the Plan by delivering to the Company an Authorization not later than the date prescribed in paragraph (i) may subsequently become a Participant in such Offering Period effective as of the first Trading Day following any Date of Exercise during such Offering Period by delivering an Authorization to the Company prior to such Trading Day.

          Any Authorization shall remain in effect for each subsequent Offering Period, unless the Participant submits a new Authorization pursuant to this subsection (b), withdraws from the Plan pursuant to Section 6, or terminates employment as provided in Section 7. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code or Sections 3(a), (c) or (d) of the Plan, the Company may reduce a Participant’s rate of payroll deductions to zero at such time during any Offering Period. Payroll deductions shall recommence at the rate provided by the Participant in his or her Authorization to the extent such payroll deductions may be applied to purchase shares of Stock in accordance with Section 423(b)(8) of the Code and Sections 3(a), (c) and (d) of the Plan, unless such Participant submits a new Authorization pursuant to this subsection (b), withdraws from the Plan pursuant to Section 6, or terminates employment as provided in Section 7 of the Plan.

           $25,000 Limitation .

          No Eligible Employee shall be granted an Option under the Plan which permits his or her rights to purchase shares of Stock under the Plan, together with other Options or options to purchase shares of Stock or other stock under all other employee stock purchase plans of the Company, any Parent Corporation or any Subsidiary Corporation subject to the Section 423 of the Code, to accrue at a rate which exceeds $25,000 of fair market value of such shares of Stock or other stock (determined at the time the Option or other option is granted) for each calendar year in which the Option or other option is outstanding. For purpose of the limitation imposed by this subsection (c), (A) the right to purchase shares of Stock or other stock under an Option or other option accrues when the Option or other option (or any portion thereof) first becomes exercisable during the calendar year, (B) the right to purchase shares of

Stock or other stock under an Option or other option accrues at the rate provided in the Option or other option, but in no case may such rate exceed $25,000 of the fair market value of such Stock or other stock (determined at the time such Option or other option is granted) for any one calendar year, and (C) a right to purchase Stock or other stock which has accrued under an Option or other option may not be carried over to any other Option or other option. The limitation under this subsection (c) shall be applied in accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.

          For purposes of paragraph (i) (and subject to paragraph (iii)), for a Date of Exercise, (A) a Participant’s Option (if such Participant then holds only one Option), or, (B) if a Participant has been granted and then holds more than one Option, the Option designated by such Participant (or deemed to have been designated by such Participant) to be exercised on a Date of Exercise, shall become exercisable on such Date of Exercise only to the extent permitted by the limitation under paragraph (i).

          For purposes of paragraph (i), for a Date of Exercise, if a Participant has been granted and holds more than one Option, and has designated more than one Option to be exercised on a Date of Exercise in accordance with Section 5(b)(i), then with respect to such Date of Exercise, the Options designated by such Participant shall become exercisable only to the extent permitted under paragraph (i), determined as follows:

          The limitation under paragraph (i) first shall be applied to the Option designated by such Participant that has the least Option Price. If more than one outstanding Option so designated by such Participant has the least Option Price, then the limitation under paragraph (i) first shall be applied to the Option designated by such Participant that had the least Fair Market Value of a share of Stock on its Date of Grant. If more than one such outstanding Option so designated by such Participant has the least Fair Market Value of a share of Stock on its Date of Grant, then the $25,000 limitation under paragraph (i) first shall be applied to the Option that has the earliest Date of Grant.

          The limitation under paragraph (i) shall be applied to the other Options designated to be exercised by such Participant on such Date of Exercise in sequential order in accordance with subparagraph (A).

          Each Option so designated by such Participant shall become exercisable in accordance with subparagraphs (A) and (B) on such Date of Exercise only to the extent of the least of the following: (1) the number of shares determined under limitation under paragraph (i) and taking into account other Options that have already become exercisable on such Date of Exercise, (2) the limits set forth in Section 3(a) and taking into account other Options that have already become exercisable on such Date of Exercise, and (3) the number of shares of Stock purchasable under such Option based on the percentage of the balance then credited to the Participant’s Account designated by the Participant with respect to such Option in accordance with Section 5(b)(ii).

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