def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Juniper Networks, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
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(1) Title of each class of securities to which transaction applies: |
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(2) Aggregate number of securities to which transaction applies: |
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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(4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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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. |
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(1) Amount Previously Paid: |
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(2) Form, Schedule or Registration Statement No.: |
JUNIPER
NETWORKS, INC.
1194 North Mathilda Avenue
Sunnyvale, California 94089
www.juniper.net
(408) 745-2000
NOTICE OF 2011 ANNUAL MEETING
OF STOCKHOLDERS
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Time and Date |
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9:00 a.m., Pacific Time, on Wednesday, May 18, 2011 |
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Place |
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Juniper Networks, Inc.
1220 North Mathilda Avenue
Building 3, Pacific Conference Room
Sunnyvale, CA 94089 |
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Items of Business |
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(1) To elect four Class III directors;
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(2) To ratify the appointment of Ernst & Young
LLP, an independent registered public accounting firm, as
auditors for the fiscal year ending December 31, 2011;
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(3) To approve the 2012 Performance Bonus Plan for purposes
of complying with Internal Revenue Code Section 162(m);
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(4) To approve an amendment to the Juniper Networks, Inc.
2006 Equity Incentive Plan to increase the number of shares
reserved for issuance thereunder by 30,000,000 shares;
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(5) To hold a non-binding advisory vote regarding executive
compensation;
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(6) To hold a non-binding advisory vote on the frequency of
the vote regarding equity compensation;
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(7) To consider a stockholder proposal, if properly
presented at the meeting, requesting that the board of directors
take action to declassify the board of directors; and
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(8) To consider such other business as may properly come
before the meeting.
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Adjournments and Postponements |
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Any action on the items of business described above may be
considered at the annual meeting at the time and on the date
specified above or at any time and date to which the annual
meeting may be properly adjourned or postponed. |
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Record Date |
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You are entitled to vote only if you were a Juniper Networks
stockholder as of the close of business on March 24, 2011. |
This notice of annual meeting and proxy statement and form of
proxy are first being provided to our stockholders on or about
April 8, 2011.
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Meeting Admission |
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You are entitled to attend the annual meeting only if you were a
Juniper Networks stockholder as of the close of business on
March 24, 2011. You should be prepared to present valid
government-issued photo identification for admittance. In
addition, if you are a stockholder of record, your ownership
will be verified against the list of stockholders of record on
the record date prior to being admitted to the meeting. If you
are not a stockholder of record but hold shares through a broker
or nominee (i.e., in street name), you should provide proof of
beneficial ownership as of the record date, such as your most
recent account statement prior to March 24, 2011, a copy of
any voting instruction card provided by your broker, trustee or
nominee, or other similar evidence of ownership. If you do not
provide photo identification or comply with the other procedures
outlined above upon request, you may not be admitted to the
annual meeting. |
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The annual meeting will begin promptly at 9:00 a.m.,
Pacific Time. Check-in will begin at 8:30 a.m., Pacific
Time, and you should allow ample time for the check-in
procedures. |
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Voting |
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Your vote is very important. Whether or not you plan to
attend the annual meeting, we encourage you to read this proxy
statement and vote your shares as soon as possible. If you
received notice of how to access the proxy materials over the
Internet, a proxy card and voting instruction card were not sent
to you, but you may vote by telephone or over the Internet. If
you received a proxy card and other proxy materials by mail, you
may submit your proxy card or voting instruction card for the
annual meeting by completing, signing, dating and returning your
proxy card or voting instruction card in the pre-addressed
envelope provided, or, in most cases, by using the telephone or
the Internet. For specific instructions on how to vote your
shares, please refer to the section entitled Questions
and Answers beginning on page 1 of this proxy statement
and the instructions on the proxy card or voting instruction
card or that are provided by email or over the Internet. |
By Order of the Board of Directors,
Mitchell L. Gaynor
Executive Vice President, General Counsel and
Secretary
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to
be Held on May 18, 2011
The proxy
statement, form of proxy and our 2010 Annual Report on
Form 10-K
are available at
www.proxyvote.com
2011
ANNUAL MEETING OF STOCKHOLDERS
NOTICE
OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF
CONTENTS
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A-1
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B-1
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ii
QUESTIONS
AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL
MEETING
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Q: |
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Why am I receiving these
materials? |
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A: |
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The Board of Directors (the Board) of Juniper
Networks, Inc., a Delaware corporation (Juniper
Networks or the Company), has made these
materials available to you on the Internet or, upon your
request, has delivered printed versions of these materials to
you by mail, in connection with the Boards solicitation of
proxies for use at Juniper Networks annual meeting of
stockholders, which will take place on May 18, 2011. As a
Juniper Networks stockholder as of March 24, 2011 (the
Record Date), you are invited to attend the annual
meeting and are entitled to and requested to vote on the items
of business described in this proxy statement. |
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Q: |
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What is included in these
materials? |
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A: |
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These materials include: |
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Our proxy statement for the annual meeting; and
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Our 2010 Annual Report on
Form 10-K,
which includes our audited consolidated financial statements.
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If you requested printed versions of these materials by mail,
these materials also include the proxy card or voting
instruction card for the Annual Meeting. |
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Q: |
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Why did I receive a one-page notice in the
mail regarding the Internet availability of proxy materials this
year instead of a full set of proxy materials? |
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A: |
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Pursuant to rules adopted by the Securities and Exchange
Commission (the SEC), we have elected to provide
access to our proxy materials over the Internet. Accordingly, on
or about April 8, 2011, we are sending a Notice of Internet
Availability of Proxy Materials (the Notice) to our
stockholders of record and beneficial owners as of the Record
Date. All stockholders will have the ability to access the proxy
materials on the website referred to in the Notice
(www.proxyvote.com) or request to receive a set of the proxy
materials by mail or electronically by email. Instructions on
how to access the proxy materials over the Internet or to
request a printed copy may be found in the Notice. In addition,
stockholders may request to receive proxy materials in printed
form by mail or electronically by email on an ongoing basis. |
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Q: |
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How can I get electronic access to the proxy
materials? |
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The Notice will provide you with instructions regarding how to: |
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View our proxy materials for the annual meeting on
the Internet; and
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Instruct us to send future proxy materials to you
electronically by email.
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Choosing to receive future proxy materials by email will save us
the cost of printing and mailing documents to you and will
reduce the impact of our annual meetings on the environment. If
you choose to receive future proxy materials by email, you will
receive an email next year with instructions containing a link
to those materials and a link to the proxy voting site. Your
election to receive proxy materials by email will remain in
effect until you terminate it. |
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Q: |
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How may I obtain Juniper Networks 2010
Annual Report on
Form 10-K? |
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A: |
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Stockholders may request a free copy of the 2010 Annual Report
on
Form 10-K
from our principal executive offices at: |
Juniper Networks, Inc.
Attn: Investor Relations
1194 North Mathilda Avenue
Sunnyvale, CA 94089
(408) 745-2000
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A copy of our 2010 Annual Report on
Form 10-K
is also available with our other proxy materials at
www.proxyvote.com. In addition, you can access a copy on the
website of the SEC. You can reach this website by going to the
Investor Relations Center on our website, and clicking on the
drop-down menu labeled SEC Filings. The website of
the Investor Relations Center is: |
http://www.juniper.net/us/en/company/investor-relations/
We will also furnish any exhibit to the 2010 Annual Report on
Form 10-K
if specifically requested in writing.
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Q: |
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How may I obtain a separate set of proxy
materials? |
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If you share an address with another stockholder, you may
receive only one Notice (or other stockholder communications,
including our 2010 Annual Report on
Form 10-K
and proxy statement) unless you have provided contrary
instructions. If you wish to receive a separate Notice now or in
the future, you may write or call us to request a separate copy
from: |
Juniper
Networks, Inc.
Attn: Investor Relations
1194 North Mathilda Avenue
Sunnyvale, CA 94089
(408) 745-2000
http://www.juniper.net/us/en/company/investor-relations/
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Similarly, if you share an address with another stockholder and
have received multiple copies of our proxy materials, you may
write or call us at the above address and phone number to
request delivery of a single copy of these materials. |
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Q: |
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What items of business will be voted on at
the annual meeting? |
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A: |
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The items of business scheduled to be voted on at the annual
meeting are: |
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To elect four Class III directors;
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To ratify the appointment of Ernst & Young
LLP, an independent registered public accounting firm, as
auditors for the fiscal year ending December 31, 2011;
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To approve the 2012 Performance Bonus Plan for
purposes of complying with Internal Revenue Code
Section 162(m);
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To approve an amendment to the Juniper Networks,
Inc. 2006 Equity Incentive Plan (the 2006 Plan) to
increase the number of shares reserved for issuance thereunder
by 30,000,000 shares;
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To hold a non-binding advisory vote regarding
executive compensation;
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To hold a non-binding advisory vote on the frequency
of the vote regarding executive compensation; and
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To consider a stockholder proposal, if properly
presented at the meeting, requesting that the board of directors
take action to declassify the board of directors.
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We will also consider other business that properly comes before
the annual meeting. |
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Q: |
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How does the Board recommend that I
vote? |
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Our Board recommends that you vote your shares: |
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FOR each of the nominees to the Board;
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FOR the ratification the appointment of
Ernst & Young LLP, an independent registered public
accounting firm, as auditors for the fiscal year ending
December 31, 2011;
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FOR the approval of the Performance
Bonus Plan;
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FOR the approval of the amendment to the
2006 Plan;
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FOR the approval of our executive
compensation; and
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FOR a vote on executive compensation
every 1YEAR.
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The Board has not made a recommendation either in favor of or
opposed to the stockholder proposal asking the Board to take
action to declassify the board of directors. |
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Q: |
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What shares can I vote? |
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A: |
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Each share of Juniper Networks common stock issued and
outstanding as of the close of business on March 24, 2011,
the Record Date, is entitled to be voted on all items being
voted upon at the annual meeting. You may vote all shares owned
by you as of the Record Date, including (i) shares held
directly in your name as the stockholder of record and
(ii) shares held for you as the beneficial owner
through a broker, trustee or other nominee such as a bank.
More information on how to vote these shares is contained in
this proxy statement. On the Record Date, we had approximately
534,156,526 shares of common stock issued and outstanding. |
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Q: |
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What is the difference between holding
shares as a stockholder of record and as a beneficial
owner? |
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Most Juniper Networks stockholders hold their shares through a
broker or other nominee rather than directly in their own name.
As summarized below, there are some distinctions between shares
held of record and those owned beneficially, which may affect
how you can vote your shares. |
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Stockholder of Record |
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If your shares are registered directly in your name with Juniper
Networks transfer agent, Wells Fargo Shareowner Services,
you are considered, with respect to those shares, the
stockholder of record, and the Notice or proxy statement
was sent directly to you by Juniper Networks. As the
stockholder of record, you have the right to grant your
voting proxy directly to Juniper Networks as described in the
Notice and this proxy statement or to vote in person at the
annual meeting. |
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Beneficial Owner |
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If your shares are held in a brokerage account, by trustee or by
another nominee, you are considered the beneficial owner
of shares held in street name, and the Notice or proxy
statement was forwarded to you by such broker or nominee. As the
beneficial owner, you have the right to direct your
broker, trustee or nominee how to vote and are also invited to
attend the annual meeting. |
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Since a beneficial owner is not the stockholder of
record, you may not vote these shares in person at the
meeting unless you obtain a legal proxy from the
broker, trustee or nominee that holds your shares, giving you
the right to vote the shares at the meeting. Your broker,
trustee or nominee has enclosed or provided a voting instruction
card for you to use in directing the broker, trustee or nominee
how to vote your shares. |
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Q: |
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How can I attend the annual
meeting? |
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A: |
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You are entitled to attend the annual meeting only if you were a
Juniper Networks stockholder as of the close of business on
March 24, 2011, the Record Date, or you hold a valid proxy
for the annual meeting. You should be prepared to present valid
government-issued photo identification for admittance. In
addition, if you are a stockholder of record, your name
will be verified against the list of stockholders of record on
the record date prior to your being admitted to the annual
meeting. If you are not a stockholder of record but hold
shares through a broker, trustee or nominee (i.e., in street
name), you should provide proof of beneficial ownership on the
record date, such as your most recent account statement prior to
March 24, 2011, the Record Date, a copy of any voting
instruction card provided by your broker, trustee or nominee, or
other similar evidence of ownership. If you do not provide valid
government-issued photo identification or comply with the other
procedures outlined above upon request, you will not be admitted
to the annual meeting. |
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The annual meeting will be held on May 18, 2011 at our
corporate headquarters located at 1194 North Mathilda Avenue,
Sunnyvale, CA 94089. The annual meeting will begin promptly at
9:00 a.m., Pacific Time. Check-in will begin at
8:30 a.m., and you should allow ample time for the check-in
procedures. |
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Q: |
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If I am unable to attend the annual meeting
in person, can I view the meeting via webcast? |
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A: |
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The annual meeting will be available live via webcast beginning
at 9:00 a.m. Pacific Time on May 18, 2011. Please
visit the following link to view the webcast:
http://investor.juniper.net. |
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Q: |
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How can I vote my shares in person at the
annual meeting? |
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A: |
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Shares held in your name as the stockholder of record may
be voted in person at the annual meeting. Shares held
beneficially in street name may be voted in person only if you
obtain a legal proxy from the broker, trustee or nominee that
holds your shares giving you the right to vote the shares.
Even if you plan to attend the annual meeting, you may also
submit your proxy or voting instructions as described below so
that your vote will be counted if you later decide not to attend
the meeting. |
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Q: |
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How can I vote my shares without attending
the annual meeting? |
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A: |
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Whether you hold shares directly as the stockholder of record
or beneficially in street name, you may direct how your
shares are voted without attending the meeting. If you are a
stockholder of record, you may vote by submitting a
proxy. If you hold shares beneficially in street name, you may
vote by submitting voting instructions to your broker, trustee
or nominee. For directions on how to vote, please refer to the
instructions in the proxy card or, for shares held beneficially
in street name, the voting instruction card provided by your
broker, trustee or nominee. |
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By Internet Stockholders of record of Juniper
Networks common stock with Internet access may submit proxies by
following the Vote by Internet instructions on their
proxy cards or Notice or by following the voting instructions
provided by email or over the Internet. Most Juniper Networks
stockholders who hold shares beneficially in street name may
vote by accessing the website specified in the voting
instruction cards provided by their brokers, trustee or
nominees. If you hold your shares in street name, please check
the voting instruction card provided by your broker, trustee or
nominee for Internet voting availability. |
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By Telephone Stockholders of record of
Juniper Networks common stock who live in the United States or
Canada may submit proxies by following the Vote by
Phone instructions on their proxy cards or the Notice or
by following the voting instructions provided by email or over
the Internet. Most Juniper Networks stockholders who hold shares
beneficially in street name and live in the United States or
Canada may vote by phone by calling the number specified in the
voting instruction cards provided by their brokers, trustee or
nominees. If you hold your shares in street name, please check
the voting instruction card provided by your broker, trustee or
nominee for telephone voting availability. |
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By Mail Stockholders of record of Juniper
Networks common stock who receive proxy materials by mail may
submit proxies by completing, signing and dating their proxy
cards and mailing them in the accompanying pre-addressed
envelopes. Juniper Networks stockholders who hold shares
beneficially in street name and who receive voting materials by
mail from their brokers, trustees or nominees may vote by mail
by completing, signing and dating the voting instruction cards
provided and mailing them in the accompanying pre-addressed
envelopes. |
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Q: |
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Can I change my vote or otherwise revoke my
proxy? |
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A: |
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You may change your vote at any time prior to the vote at the
annual meeting. If you are the stockholder of record, you
may change your vote by granting a new proxy by telephone, over
the Internet or by submitting a properly signed proxy card
bearing a later date (which automatically revokes the earlier
proxy), by providing a written notice of revocation to the
Juniper Networks Corporate Secretary at Juniper Networks, Inc.,
ATTN: Corporate Secretary, 1194 North Mathilda Avenue,
Sunnyvale, California 94089 prior to your shares being voted, or
by attending the annual meeting and voting in person. Attendance
at the annual meeting will not cause your previously granted
proxy to be revoked unless you specifically so request. For
shares you hold beneficially in street name, you may change your
vote by submitting new voting instructions to your broker,
trustee or nominee, or, if you have obtained a legal proxy from
your broker or nominee giving you the right to vote your shares,
by attending the annual meeting and voting in person. |
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Q: |
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How many shares must be present or
represented to conduct business at the annual
meeting? |
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A: |
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The quorum requirement for holding the annual meeting and
transacting business is that holders of a majority of shares of
Juniper Networks common stock entitled to vote must be present
in person or represented by proxy at the annual meeting. Both
abstentions and broker non-votes will be counted for the purpose
of determining the presence of a quorum. |
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Q: |
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Will my shares be voted if I do not vote as
described in the Notice? |
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A: |
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If your shares are held in street name, your broker may, under
certain circumstances, vote your shares. Certain brokerage
firms, trustees and nominees have authority to vote
clients unvoted shares on some routine
matters. If you do not give voting instructions to your broker,
trustee or nominee, your broker, trustee or nominee may either
(1) vote your shares on routine matters or
(2) leave your shares unvoted. The proposal related to the
ratification of the appointment of Ernst & Young as
auditors for the fiscal year ending December 31, 2011 is
considered a routine matter. None of the other
proposals are considered routine matters and
therefore, your broker will not be able to vote on these
proposals without your instructions. |
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Q: |
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How are votes counted? |
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A: |
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In the election of directors, you may vote FOR all
of the nominees or your vote may be WITHHELD with
respect to one or more of the nominees. |
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For the non-binding advisory vote on the frequency of the vote
regarding executive compensation, you may vote 1
YEAR, 2 YEARS, 3 YEARS or
ABSTAIN. If you ABSTAIN, it will have no
effect on the outcome of the vote. |
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For the other items of business, you may vote FOR,
AGAINST or ABSTAIN. If you
ABSTAIN, the abstention has the same effect as a
vote AGAINST. |
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If you provide specific instructions with regard to certain
items, your shares will be voted as you instruct on such items.
If you sign your proxy card or voting instruction card or vote
by telephone or over the Internet without giving specific
instructions, your shares will be voted in accordance with the
recommendations of the Board (FOR all of Juniper
Networks nominees to the Board, FOR
ratification of the independent registered public accounting
firm, FOR approval of the Performance Bonus Plan,
FOR approval of the proposed amendment to the 2006
Plan, FOR approval of our executive compensation, a
vote on executive compensation every 1 YEAR and in
the discretion of the proxy holders as to any other matters that
may properly come before the annual meeting. If you do not give
specific voting instructions, your shares will not be voted on
the stockholder proposal, if it is properly presented at the
meeting |
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Q: |
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What is the vote required to approve each of
the proposals? |
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In the election of directors, the four nominees
receiving the highest number of FOR votes at the
annual meeting will be elected.
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For the proposal on the frequency of the vote on
executive compensation, the frequency
(1-year,
2-years or
3-years)
that receives the highest number of FOR votes will
be considered as the frequency chosen by our stockholders.
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The proposal for the approval of the Performance
Bonus Plan requires the affirmative FOR vote of a
majority of the votes cast on the proposal.
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The proposals for the approval of the ratification
of the independent registered public accounting firm, and the
approval of our executive compensation each require the
affirmative FOR vote of a majority of the shares
present in person or represented by proxy and entitled to vote
on each proposal at the annual meeting.
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The proposal to approve the amendment of the 2006
Plan requires the affirmative FOR vote of a majority
of the votes cast on the proposal, provided that the total
number of votes cast on the proposal must be more than 50% of
the votes entitled to vote.
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5
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Broker Non-Votes: For purposes of all
proposals other than the proposal to approve the amendment to
the 2006 Stock Plan, broker non-votes will not affect the
outcome of proposals, assuming that a quorum is obtained. For
purposes of the proposal to amend the 2006 Stock Plan, broker
non-votes will not affect the requirement that a majority of the
votes cast vote FOR the amendment, but broker
non-votes will not be counted as votes cast on the proposal for
purposes of satisfying the requirement that a majority of the
outstanding shares vote on the proposal. |
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Abstentions: Abstentions will have the same
effect as a vote AGAINST approval of the amendment
to the 2006 Stock Plan, the non-binding, advisory proposal on
executive compensation and the stockholder proposal. Abstentions
will not affect the vote on the election of directors, approval
of the Performance Bonus Plan or the frequency of the vote on
executive compensation. |
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Q: |
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What are broker non-votes? |
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A: |
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If you hold shares beneficially in street name and do not
provide your broker with voting instructions, your shares may
constitute broker non-votes. Generally, broker
non-votes occur on a matter when a broker is not permitted to
vote on that matter without instructions from the beneficial
owner, such as the proposals related to the election of
directors, the approval of the Performance Bonus Plan, the
approval of proposed amendment to 2006 Plan, the non-binding
advisory vote to approve executive compensation, the non-binding
advisory vote on the frequency of the vote regarding executive
compensation and the stockholder proposal, and voting
instructions are not given. |
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Q: |
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Is cumulative voting permitted for the
election of directors? |
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A: |
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No. Each share of common stock outstanding as of the close
of business on the Record Date is entitled to one vote. |
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Q: |
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What happens if additional matters are
presented at the annual meeting? |
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A: |
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Other than the seven items of business described in this proxy
statement, we are not aware of any other business to be acted
upon at the annual meeting. If you grant a proxy, the persons
named as proxy holders, Robyn M. Denholm and Mitchell Gaynor,
will have the discretion to vote your shares on any additional
matters properly presented for a vote at the annual meeting. If
for any unforeseen reason any of our nominees is not available
as a candidate for director, the persons named as proxy holders
will vote your proxy for such other candidate or candidates as
may be nominated by the Board. |
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Q: |
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Who will bear the cost of soliciting votes
for the annual meeting? |
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A: |
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Juniper Networks is making this solicitation and will pay the
entire cost of preparing, assembling, printing, mailing and
distributing these materials and soliciting votes. If you access
the proxy materials and/or vote over the Internet, you are
responsible for Internet access charges you may incur. If you
choose to vote by telephone, you are responsible for telephone
charges you may incur. In addition to the mailing of these
materials, the solicitation of proxies or votes may be made in
person, by telephone or by electronic communication by our
directors, officers and employees, who will not receive any
additional compensation for such solicitation activities. We
also have hired Innisfree M&A Incorporated to assist us in
the distribution of proxy materials and the solicitation of
votes described above. We will pay Innisfree M&A
Incorporated a fee of $15,000 and reimburse them for customary
costs and expenses associated with these services. Upon request,
we will also reimburse brokerage houses and other custodians,
nominees and fiduciaries for forwarding proxy and solicitation
materials to stockholders. |
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Q: |
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Where can I find the voting results of the
annual meeting? |
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A: |
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We intend to announce voting results from the annual meeting in
a current report on
Form 8-K
within four (4) business days of the annual meeting. If the
voting results announced in the
Form 8-K
are preliminary, we will file any amended
Form 8-K
reporting final voting results within four (4) business
days of such final voting results becoming available. |
6
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Q: |
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What is the deadline to propose actions for
consideration or to nominate individuals to serve as
directors? |
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A: |
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Although the deadline for submitting proposals or director
nominations for consideration at the 2011 annual meeting has
passed, you may submit proposals, and director nominations, for
consideration at future stockholder meetings. |
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Stockholder Proposals: For a stockholder
proposal to be considered for inclusion in Juniper
Networks proxy statement for the 2012 annual meeting, the
written proposal must be received by the Corporate Secretary of
Juniper Networks at our principal executive offices no later
than December 10, 2011. If the date of the 2012 annual
meeting is moved more than 30 days before or after the
anniversary date of the 2011 annual meeting, the deadline for
inclusion of proposals in Juniper Networks proxy statement
for the 2012 annual meeting is instead a reasonable time before
Juniper Networks begins to print and mail its proxy materials
for the 2012 annual meeting. Such proposals also will need to
comply with SEC regulations under
Rule 14a-8
regarding the inclusion of stockholder proposals in
company-sponsored proxy materials. Proposals should be addressed
to: |
Juniper
Networks, Inc.
ATTN: Corporate Secretary
1194 North Mathilda Avenue
Sunnyvale, CA 94089
Fax:
(408) 745-2100
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For a stockholder proposal that is not intended to be included
in Juniper Networks proxy statement under
Rule 14a-8,
the stockholder must deliver a proxy statement and form of proxy
to holders of a sufficient number of shares of Juniper Networks
common stock to approve that proposal, provide the information
required by the bylaws of Juniper Networks and give timely
notice to the Corporate Secretary of Juniper Networks in
accordance with our bylaws, which, in general, require that the
proper notice be received by the Corporate Secretary of Juniper
Networks not more than 75 days and not less than
45 days prior to the one year anniversary of the date
Juniper Networks first mailed its proxy materials or a notice of
availability of proxy materials (whichever is earlier) to
stockholders in connection with the previous years annual
meeting of stockholders. For the 2012 annual meeting, the notice
must be received no earlier than January 22, 2012 and no
later than February 21, 2012. However, if the date of the
2012 annual meeting is advanced more than 30 days before or
more than 60 days after the anniversary date of this
years annual meeting, then for notice to be timely, the
notice must be received by the Corporate Secretary not earlier
than the 120th day prior to the 2012 annual meeting and not
later than the close of business on the later of the 90th day
prior to the 2012 annual meeting or the 10th day following the
day on which public announcement of the date of the 2012 annual
meeting is first made by Juniper Networks. To be in proper form,
a stockholders notice to the Corporate Secretary must set
forth the information required by the Companys bylaws. |
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Recommendation and Nomination of Director
Candidates: The Nominating and Corporate
Governance Committee will consider both recommendations and
nominations for candidates to the Board from Qualifying
Stockholders. A Qualifying Stockholder is a
stockholder that has owned for a period of one year prior to the
date of the submission of the recommendation through the time of
submission of the recommendation at least 1% of the total common
stock of the Company outstanding as of the last day of the
calendar month preceding the submission. A Qualifying
Stockholder that desires to recommend a candidate for election
to the Board must direct the recommendation in writing to
Juniper Networks, Inc., ATTN: Corporate Secretary, 1194
North Mathilda Avenue, Sunnyvale, California 94089, and
must include the candidates name, home and business
contact information, detailed biographical data and
qualifications, information regarding any relationships between
the candidate and the Company within the last three years,
written evidence that the candidate is willing to serve as a
director of the Company if nominated and elected and evidence of
the nominating persons ownership of Company common stock. |
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A stockholder that instead desires to nominate a person directly
for election to the Board must meet the deadlines and other
requirements set forth in Section 2.5 of the Companys
bylaws and the rules and regulations of the SEC. To be timely,
such stockholders notice must be delivered to or mailed
and received by the Corporate Secretary of the Company not more
than 75 days and not less than 45 days prior to the
one year anniversary of |
7
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the date Juniper Networks first mailed its proxy materials or a
notice of availability of proxy materials (whichever is earlier)
to stockholders in connection with the Companys previous
years annual meeting of stockholders. For the 2012 annual
meeting, the notice must be received no earlier than
January 22, 2012 and no later than February 21, 2012.
However, if the date of the 2012 annual meeting is advanced more
than 30 days before or more than 60 days after the
anniversary date of this years annual meeting, then for
notice to be timely, the notice must be received by the
Corporate Secretary not earlier than the 120th day prior to the
2012 annual meeting and not later than the close of business on
the later of the 90th day prior to the 2012 annual meeting or
the 10th day following the day on which public announcement of
the date of the 2012 annual meeting is first made by Juniper
Networks. To be in proper form, a stockholders notice to
the Corporate Secretary must set forth the information required
by the Companys bylaws. |
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Copy of Bylaws: You may contact the Juniper
Networks Corporate Secretary at our principal executive offices
for a copy of the relevant bylaw provisions regarding the
requirements for making stockholder proposals and nominating
director candidates. |
8
CORPORATE
GOVERNANCE PRINCIPLES AND BOARD MATTERS
Juniper Networks is committed to having sound corporate
governance principles. Having such principles is essential to
running our business efficiently and to maintaining our
integrity in the marketplace. Juniper Networks Corporate
Governance Standards and Worldwide Code of Business Conduct and
Ethics applicable to all Juniper Networks employees, officers
and directors are available at
http://www.juniper.net/us/en/company/investor-relations/.
Our Worldwide Code of Business Conduct and Ethics complies with
the rules of the SEC, the listing standards of the New York
Stock Exchange (NYSE) and Rule 406 of the
Sarbanes-Oxley Act of 2002. Juniper Networks has also adopted
procedures for raising concerns related to accounting and
auditing matters in compliance with the listing standards of the
NYSE. Concerns relating to accounting, legal, internal controls
or auditing matters may be brought to the attention of either
the Companys Concerns Committee (comprised of the
Companys Chief Financial Officer, General Counsel,
Executive Vice President of Human Resources, Corporate
Controller and the Vice President of Internal Audit), or to the
Audit Committee directly. Concerns are handled in accordance
with procedures established with respect to such matters under
our Reporting Ethics Concerns Policy. For information on how to
contact the Audit Committee directly, please see the section
entitled Communications with the Board below.
Board
Independence
Our Board of Directors (the Board) has determined
that, except for Kevin Johnson and Pradeep Sindhu, each of whom
is an employee of the Company, and Scott Kriens, who was an
employee of the Company until April 1, 2011, each of the
current directors has no material relationship with Juniper
Networks (either directly or as a partner, stockholder or
officer of an organization that has a relationship with Juniper
Networks). The Board has also determined that the following
directors are independent within the meaning of the NYSE
director independence standards: Messrs. Calderoni, Lawrie,
Meehan, Schlotterbeck, Sclavos and Stensrud, and
Ms. Cranston. Furthermore, the Board has determined that
each of the members of each of the committees of the Board has
no relationship with Juniper Networks (either directly or as a
partner, stockholder or officer of an organization that has a
relationship with Juniper Networks) and is
independent within the meaning of the NYSE director
independence standards, including in the case of the members of
the Audit Committee, the heightened independence
standard required for such committee members set forth in the
applicable SEC rules.
In making the determination of the independence of our
directors, the Board considered all transactions in which
Juniper Networks was a participant and any director had any
interest, including transactions involving Juniper Networks and
payments made to or from companies and entities in the ordinary
course of business where our directors serve as partners,
directors or as a member of the executive management of the
other party to the transaction.
In particular, the Board considered transactions between Juniper
Networks and each of Ariba, Inc. (Ariba), where
Mr. Robert Calderoni serves as President and Chief
Executive Officer, and Pillsbury Winthrop Shaw Pittman LLP
(Pillsbury), where Ms. Mary Cranston serves as
Firm Senior Partner. We lease office space from Ariba,
approximately two-thirds of which is pursuant to an agreement
originally entered into by and between NetScreen Technologies,
Inc. and Ariba prior to our acquisition of NetScreen in 2004. In
2010, we paid approximately $9.7 million in connection with
this lease. This agreement was negotiated and is maintained at
arms-length, and we do not believe it is material to the results
of operations or business of Juniper Networks. Pillsbury
Winthrop was originally retained by the Juniper Networks Audit
Committee as counsel to the Audit Committee in connection with
their independent investigation into the companys
historical stock option practices, which investigation was
substantially completed in December 2006, prior to the time when
Mary Cranston joined the Juniper Networks Board in November
2007. Ms. Cranston was not and is not involved in
Pillsburys representation of Juniper Networks. In
addition, Ms. Cranston is a retired non-equity partner of
Pillsbury and is no longer an employee of the firm.
Ms. Cranston does not receive financial compensation from
Pillsbury and does not have a financial interest in the business
of Pillsbury. As such, she is not directly or indirectly
entitled to any of the fees paid by Juniper Networks to the
firm. Although Juniper Networks settled all litigation related
to the Companys historical stock option practices
involving the Company directly,
3rd
parties in litigation matters to which Juniper Networks is not a
party have made discovery requests involving the Audit
Committees investigation. Pillsbury has performed services
solely with respect to these discovery requests. Juniper
Networks has not retained and does not intend to retain
Pillsbury for any new matters so long as Ms. Cranston is
associated with Pillsbury.
9
In each case, the Board determined that the nature, size and
circumstances of the relationships between Juniper Networks and
each of Ariba and Pillsbury did not preclude a determination of
independence of Mr. Calderoni or Ms. Cranston,
respectively, under applicable SEC and NYSE rules.
Board
Structure and Committee Composition
As of April 1, 2011, our Board had ten directors divided
into three classes Class I, Class II and
Class III with a three-year term for each
class. As of April 1, 2011, the classes were comprised as
follows:
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Class I
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Class II
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Class III
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(Term Expires in 2012)
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(Term Expires in 2013)
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(Term Expires this Year)
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Scott Kriens
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Pradeep Sindhu
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Mary B. Cranston
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Stratton Sclavos
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Robert M. Calderoni
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Kevin R. Johnson
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William R. Stensrud
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William F. Meehan
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J. Michael Lawrie
David Schlotterbeck
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The Board has a standing Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee. The
membership during the last fiscal year and the principal
function of each of these committees are described below. Each
of these committees operates under a written charter adopted by
the Board. The charters of these committees are available on
Juniper Networks website at
http://www.juniper.net/us/en/company/investor-relations/.
In addition, the Board has a Stock Committee comprised of the
Chief Executive Officer, Chief Financial Officer and a
non-employee director, currently Ms. Cranston, who replaced
Mr. Stensrud in 2010. The Stock Committee has authority to
grant equity awards to employees who are not executive officers.
During 2010, the Stock Committee held 12 meetings. The Board has
also established special litigation, offering, and stock
repurchase committees for specific purposes, such as oversight
of specific litigation matters, the issuance of securities or
repurchases of our common stock. During 2010, the Special
Litigation Committee, consisting of Mr. Lawrie, met 2 times
and the Stock Repurchase Committee, currently consisting of
Messrs. Kriens, Calderoni, and Stensrud and the Offering
Committee, consisting of Messrs. Johnson, Calderoni and
Lawrie, did not meet. During 2010, each director attended at
least 75% of all Board and applicable committee meetings other
than Mr. Meehan who attended 71% of all Board and
applicable committee meetings. Mr. Meehan attended 15 Board
and committee meetings during 2010 out of 21 meetings.
Mr. Meehan missed two brief special telephonic Board
meetings that were called on short notice. Mr. Meehan also
missed an Audit Committee meeting that was rescheduled on short
notice to a date that Mr. Meehans academic
obligations prevented him from attending. Had Mr. Meehan
been able to attend one more meeting, his attendance would have
been greater than 75%.
The following table shows all persons who served on the Board
and applicable committees during 2010 or were serving as of the
date this proxy statement was filed with the SEC:
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Nominating
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and Corporate
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Name of Director
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Board
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Audit
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Compensation
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Governance
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Non-Employee Directors:
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Robert M. Calderoni(1)
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X
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X
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Mary B. Cranston
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X
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X
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J. Michael Lawrie(2)
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X
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X
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William F. Meehan
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X
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X
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X
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(4)
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Stratton Sclavos
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X
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X
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(3)
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X
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William R. Stensrud
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X
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X
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David Schlotterbeck
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X
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X
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(3)
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X
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(5)
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Employee Directors:
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Kevin R. Johnson
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X
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Scott Kriens
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X
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Pradeep Sindhu
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X
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Number of Meetings in Fiscal 2010
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9
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12
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5
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4
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10
X = Committee member
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(1) |
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The Board has determined that Mr. Calderoni is an
audit committee financial expert within the meaning
of the rules promulgated by the SEC. |
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(2) |
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Mr. Lawrie is the Boards Lead Independent Director. |
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(3) |
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Mr. Sclavos stepped down from the Audit Committee effective
November 15, 2010 and Mr. Schlotterbeck became a
member of the Audit Committee effective November 15, 2010. |
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(4) |
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Mr. Meehan became a member of the Nominating and Corporate
Governance Committee effective February 9, 2011. |
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(5) |
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Mr. Schlotterbeck became a member of the Compensation
Committee effective February 9, 2011. |
Audit
Committee
The Audit Committee assists the Board in fulfilling its
responsibilities for general oversight of the integrity of
Juniper Networks financial statements, Juniper
Networks compliance with legal and regulatory
requirements, the independent registered public accounting
firms qualifications and independence, the performance of
Juniper Networks internal audit function and independent
registered public accounting firm, and risk management process.
The Audit Committee works closely with management as well as our
independent registered public accounting firm. The Audit
Committee has the authority to obtain advice and assistance
from, and receive appropriate funding from Juniper Networks for,
outside legal, accounting or other advisors as the Audit
Committee deems necessary to carry out its duties.
The report of the Audit Committee is included herein on
page 69. The charter of the Audit Committee is available at
the Investor Relations Center on our website at
http://www.juniper.net/us/en/company/investor-relations/.
Compensation
Committee
The Compensation Committee discharges the Boards
responsibilities relating to compensation of our executive
officers, including evaluation of the Chief Executive Officer;
reviews the Compensation Discussion and Analysis and prepares an
annual report on executive compensation, for inclusion in
Juniper Networks proxy statement; and has overall
responsibility for approving and evaluating executive officer
compensation plans. The Compensation Committee also has
responsibility for reviewing the overall equity award practices
of the Company. The report of the Compensation Committee is
included herein beginning on page 60. The charter of the
Compensation Committee is available at the Investor Relations
Center on our website at
http://www.juniper.net/us/en/company/investor-relations/.
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee seeks and
recommends nomination of individuals qualified to become Board
members, consistent with criteria approved by the Board;
oversees the governance of the Board, including establishing and
ensuring compliance with our corporate governance standards; and
identifies best practices and recommends corporate governance
principles, including giving proper attention and making
effective responses to stockholder concerns regarding corporate
governance. The charter of the Nominating and Corporate
Governance Committee is available at the Investor Relations
Center on our website at
http://www.juniper.net/us/en/company/investor-relations/.
Board
Leadership Structure and Role of the Lead Independent
Director
The Companys Board leadership structure is comprised of a
Chairman of the Board, a Chief Executive Officer and a Lead
Independent Director. In the current structure, the roles of
Chief Executive Officer and Chairman of the Board are separated.
The Chief Executive Officer is responsible for setting the
strategic direction for the Company and the day to day
leadership and performance of the Company. The Chairman of the
Board sets the agenda for Board meetings, presides over meetings
of the full Board and, in conjunction with the Nominating and
Corporate Governance Committee, contributes to board governance
and board process matters. Mr. Kriens, the Chairman of the
Board, has served as Chairman of the Board since 1996 and served
as Chief Executive Officer from 1996 to 2008. The Board believes
that this structure benefits Juniper Networks by enabling the
Chief Executive Officer to focus on strategic matters while
enabling the Chairman of the Board to focus on Board process and
governance
11
matters, while also allowing Juniper Networks to benefit from
Mr. Kriens experience as former Chief Executive
Officer. The Board has also appointed a Lead Independent
Director, Mr. Lawrie. In addition to the duties of all
Board members, the specific responsibilities of the Lead
Independent Director are to:
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provide the Chairman of the Board with input as to an
appropriate schedule of Board meetings;
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provide the Chairman of the Board with input as to the
preparation of agendas for Board meetings;
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provide the Chairman of the Board with input as to the quality,
quantity, and timeliness of the flow of information from the
Companys management that is necessary for the independent
directors to effectively and responsibly perform their duties;
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make recommendations to the Chairman of the Board regarding the
retention of consultants who report directly to the Board (other
than consultants who are selected by the various committees of
the Board);
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preside over executive sessions of the Board; and
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act as a liaison between the independent directors and the
Chairman of the Board on sensitive issues.
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The Board believes that this overall structure of a separate
Chairman of the Board and Chief Executive Officer, combined with
a Lead Independent Director, results in an effective balancing
of responsibilities, experience and independent perspective that
meets the current corporate governance needs and oversight
responsibilities of the Board.
The independent directors of the Company meet periodically, at
least quarterly, in executive session, (i.e., with no management
directors present). Executive sessions of the independent
directors are chaired by the Lead Independent Director. The
executive sessions include discussions and recommendations
regarding guidance to be provided to the Chief Executive Officer
and such topics as the independent directors determine.
Identification
and Evaluation of Nominees for Directors
The Nominating and Corporate Governance Committees
criteria and process for evaluating and identifying the
candidates that it selects, or recommends to the full Board for
selection, as director nominees, are as follows:
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The Nominating and Corporate Governance Committee regularly
reviews the current composition and size of the Board.
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The Nominating and Corporate Governance Committee reviews the
qualifications of any candidates who have been properly
recommended or nominated by a stockholder, as well as those
candidates who have been identified by management, individual
members of the Board or, if the committee determines, a search
firm. Such review may, in the committees discretion,
include a review solely of information provided to the committee
or may also include discussions with persons familiar with the
candidate, an interview with the candidate or other actions that
the Nominating and Corporate Governance Committee deems proper.
Please see the information under Recommendation and
Nomination of Director Candidates on page 7 of this
proxy statement for more information on stockholder
recommendations of director candidates.
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The Nominating and Corporate Governance Committee conducts an
annual evaluation of the performance of individual directors and
the Board as a whole, and evaluates the qualifications of
individual members of the Board eligible for re-election at the
annual meeting of stockholders.
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The Nominating and Corporate Governance Committee considers the
suitability of each candidate, including the current members of
the Board, in light of the current size and composition of the
Board. In evaluating the qualifications of the candidates, the
Nominating and Corporate Governance Committee considers many
factors, including issues of character, judgment, independence,
age, education, expertise, diversity of experience, length of
service, other commitments and ability to serve on committees of
the Board, as well as other individual qualities and attributes
that contribute to board heterogeneity, including
characteristics such as race, gender, and national origin. The
Nominating and Corporate Governance Committee evaluates such
factors, among others, and does not assign any particular
weighting or priority to any of these factors. The committee
considers each individual candidate in the context of the
current perceived needs of the Board as a whole. While the
committee has not established specific minimum
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12
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qualifications for director candidates, the committee believes
that candidates and nominees must reflect a Board that is
comprised of directors who (i) are predominantly
independent, (ii) are of high integrity, (iii) have
qualifications that will increase overall Board effectiveness
and (iv) meet other requirements as may be required by
applicable rules and regulations, such as financial literacy or
financial expertise with respect to Audit Committee members.
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In evaluating and identifying candidates, the Nominating and
Corporate Governance Committee has the authority to retain and
terminate any third party search firm that is used to identify
director candidates, and has the authority to approve the fees
and retention terms of any search firm.
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After such review and consideration, the Nominating and
Corporate Governance Committee selects, or recommends that the
Board select, the slate of director nominees, either at a
meeting of the Nominating and Corporate Governance Committee at
which a quorum is present or by unanimous written consent of the
committee.
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Each of the directors nominated for re-election at the 2011
annual meeting was evaluated and recommended to the Board for
nomination by the Nominating and Corporate Governance Committee,
and nominated by the Board for re-election.
Communications
with the Board
Stockholders of Juniper Networks and other parties interested in
communicating with the Board may contact any of our directors by
writing to them
c/o Juniper
Networks, Inc., 1194 North Mathilda Avenue, Sunnyvale,
California 94089. The Nominating and Corporate Governance
Committee of the Board has approved a process for handling
communications received by the Company. Under that process, the
General Counsel receives and logs communications directed to the
Board, the Lead Independent Director or the independent
directors of the Board, and, unless marked
confidential, reviews all such correspondence and
regularly (not less than quarterly) forwards to the Board, the
Lead Independent Director or the independent directors of the
Board, as applicable, a summary of such correspondence and
copies of such correspondence. Communications marked
confidential will be logged as received by the
General Counsel and then will be forwarded to the addressee(s).
Boards
Role in Risk Oversight
The Board has an active role, as a whole and also at the
committee level, in overseeing management of Company risk. This
role is one of informed oversight rather than direct management
of risk. The Board regularly reviews and consults with
management on strategic direction, challenges and risks faced by
the Company. The Board also reviews and discusses with
management quarterly financial results and forecasts. The Audit
Committee of the Board oversees management of financial risks,
and its charter tasks the committee with providing oversight of
and review at least annually the Companys risk management
policies, including its investment policies and anti-fraud
program, as well as managements overall risk management
process. The Compensation Committee of the Board is responsible
for overseeing the management of risks relating to and arising
from the Companys executive compensation plans and
arrangements. These committees provide regular reports,
generally on a quarterly basis, to the full Board.
Management is tasked with the direct management and oversight of
legal, financial, and commercial compliance matters, which
includes identification and mitigation of associated areas of
risk. The General Counsel provides regular reports of legal
risks to the Audit Committee and the Board. The Chief Financial
Officer, the Controller and Vice President of Internal Audit
provide regular reports to the Audit Committee concerning
financial, tax and audit related risks. In addition, the Audit
Committee receives periodic reports from management on the
Companys compliance programs and efforts, investment
policy and practices and the results of various internal audit
projects. Management and the Companys compensation
consultant provide analysis of risks related to the
Companys compensation programs and practices to the
Compensation Committee.
Policy on
Director Attendance at Annual Meetings
As set forth in our Corporate Governance Standards, absent
extraordinary circumstances, each member of the Board is
strongly encouraged to attend each annual stockholder meeting in
person. 7 of our 9 directors at the time attended the 2010
annual meeting of stockholders.
13
DIRECTOR
COMPENSATION
Non-Employee
Director Meeting Fee and Retainer Information
The following table provides information on Juniper
Networks compensation and reimbursement practices during
fiscal 2010 for non-employee directors:
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|
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Annual retainer for all non-employee directors (payable
quarterly)
|
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$
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55,000
|
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Additional annual retainer for Audit Committee members (payable
quarterly)
|
|
$
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10,000
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Additional annual retainer for Compensation Committee members
(payable quarterly)
|
|
$
|
10,000
|
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Additional annual retainer for Nominating and Corporate
Governance Committee members (payable quarterly)
|
|
$
|
5,000
|
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Additional annual retainer for Audit Committee Chairman (payable
quarterly)
|
|
$
|
35,000
|
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Additional annual retainer for Compensation Committee Chairman
(payable quarterly)
|
|
$
|
35,000
|
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Additional annual retainer for Nominating and Corporate
Governance Committee Chairman (payable quarterly)
|
|
$
|
10,000
|
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Additional annual retainer for the Chairman of the Board
(payable quarterly)(1)
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$
|
75,000
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Additional annual retainer for the Lead Independent Director
(payable quarterly)(1)
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$
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30,000
|
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Stock options granted upon initial appointment or election to
the Board(2)
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$
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50,000
|
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Restricted Stock Units granted annually(3)
|
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$
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125,000
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(4)
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Reimbursement for expenses attendant to Board membership
|
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Yes
|
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Payment for each additional committee meeting attended after
total committee meeting attendance exceeds eighteen (18) in
a calendar year:
|
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$
|
1,250
|
|
|
|
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(1) |
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Effective February 9, 2011. |
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(2) |
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Vests monthly over three years commencing on the date of grant
with the last 1/36th vesting on the day prior to our annual
stockholder meeting in the third calendar year following the
date of grant. |
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(3) |
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Vests monthly over twelve months commencing on the date of grant. |
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(4) |
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At each annual stockholder meeting, each non-employee director
who was a non-employee director on the date of the prior
years annual stockholder meeting is automatically granted
Restricted Stock Units (RSUs) for a number of shares
equal to the Annual Value (as defined below) and each
non-employee director who was not a non-employee director on the
date of the prior years annual stockholder meeting shall
receive a RSU award for a number of shares determined by
multiplying the Annual Value by a fraction, the numerator of
which is the number of days since the non-employee director
received their initial stock option grant (or, in the case of a
director who has transitioned from an employee director to a
non-employee director and did not receive an initial stock
option grant, the date the director became a non-employee
director) and the denominator of which is 365, rounded down to
the nearest whole share. The Annual Value means the number of
RSUs equal to $125,000 divided by the average daily closing
price of the Companys common stock over the six month
period ending on the last day of the fiscal year preceding the
date of grant (for example, the period from July 1,
2010 December 31, 2010 for Annual Awards
granted in May 2011). These RSU awards vest approximately one
year from the grant date subject to the non-employee
directors continuous service on the Board. |
Director
Compensation Table For Fiscal 2010
The following table shows compensation information for our
non-employee directors for fiscal 2010. Messrs. Johnson,
Kriens or Dr. Sindhu have not received any separate
compensation for their Board service. Compensation information
for Mr. Johnson and Dr. Sindhu is included in the
Summary Compensation Table on
14
page 61 and compensation information for Mr. Kriens,
who was an employee of the Company until April 1, 2011 but
not a named executive officer, is below.
Non-Employee
Director Compensation for Fiscal 2010
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|
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Change in
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|
|
|
|
|
|
|
|
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|
|
|
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Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
and
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|
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Fees
|
|
|
|
|
|
|
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Nonqualified
|
|
|
|
|
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Earned
|
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|
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Non-Equity
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Deferred
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|
|
|
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or Paid
|
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Stock
|
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Option
|
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Incentive Plan
|
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Compensation
|
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All Other
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Name
|
|
in Cash
|
|
Awards(1)
|
|
Awards(1)
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Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Robert M. Calderoni(2)
|
|
$
|
100,000
|
|
|
$
|
140,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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$
|
240,146
|
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Mary Cranston(3)
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$
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60,000
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|
|
$
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140,146
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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$
|
200,146
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J. Michael Lawrie(4)
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|
$
|
65,000
|
|
|
$
|
140,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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$
|
205,146
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William F. Meehan(5)
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|
$
|
65,000
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|
|
$
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140,146
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
205,146
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David Schlotterbeck(6)
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|
$
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30,000
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|
|
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$
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446,375
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|
|
|
|
|
|
|
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|
|
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|
|
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$
|
476,375
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Stratton Sclavos(7)
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|
$
|
80,000
|
|
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$
|
140,146
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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$
|
220,146
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William R. Stensrud(8)
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|
$
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100,000
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|
|
$
|
140,146
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
240,146
|
|
|
|
|
(1) |
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Amounts shown do not reflect compensation actually received by
the director. Instead, the amount shown is the aggregate grant
date fair value of stock-related awards in fiscal 2010 computed
in accordance with ASC Topic 718
Compensation Stock Compensation (ASC
Topic 718), disregarding forfeiture assumptions. The
assumptions used to calculate the value of option awards are set
forth under Note 12, Employee Benefit Plans, in the
Notes to Consolidated Financial Statements in Item 8 of
Part II of Juniper Networks Annual Report on
Form 10-K
for 2010 filed with the SEC on February 25, 2011. |
|
(2) |
|
As of December 31, 2010, Mr. Calderoni held
outstanding options to purchase 40,000 shares and 4,846
RSUs of the Companys common stock. The aggregate grant
date fair value for the stock award granted to
Mr. Calderoni on May 12, 2010 was $140,146. |
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(3) |
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As of December 31, 2010, Ms. Cranston held outstanding
options to purchase 60,356 shares and 4,846 RSUs of the
Companys common stock. The aggregate grant date fair value
for the stock award granted to Ms. Cranston on May 12,
2010 was $140,146. |
|
(4) |
|
As of December 31, 2010, Mr. Lawrie held outstanding
options to purchase 74,712 shares and 4,846 RSUs of the
Companys common stock. The aggregate grant date fair value
for the stock award granted to Mr. Lawrie on May 12,
2010 was $140,146. |
|
(5) |
|
As of December 31, 2010, Mr. Meehan held outstanding
options to purchase 50,000 shares and 4,846 RSUs of the
Companys common stock. The aggregate grant date fair value
for the stock award granted on May 12, 2010 was $140,146. |
|
(6) |
|
As of December 31, 2010, Mr. Schlotterbeck held
outstanding options to purchase 50,000 shares and zero RSUs
of the Companys common stock. The aggregate grant date
fair value for the stock option award granted on August 31,
2010 was $446,375. |
|
(7) |
|
As of December 31, 2010, Mr. Sclavos held outstanding
options to purchase 40,000 shares and 4,846 RSUs of the
Companys common stock. The aggregate grant date fair value
for the stock award granted to Mr. Sclavos on May 12,
2010 was $140,146. |
|
(8) |
|
As of December 31, 2010, Mr. Stensrud held outstanding
options to purchase 200,000 shares and 4,846 RSUs of the
Companys common stock. The aggregate grant date fair value
for the stock award granted to Mr. Stensrud on May 12,
2010 was $140,146. |
15
Chairman
of the Board Compensation
Employee
Director Compensation for Fiscal 2010
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|
|
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
Earned
|
|
Stock
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
or Paid
|
|
Awards
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Name
|
|
in Cash
|
|
(1)
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Scott Kriens(2)
|
|
|
|
|
|
$
|
499,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
407,570
|
(3)
|
|
$
|
906,978
|
|
|
|
|
(1) |
|
Amounts shown do not reflect compensation actually received by
the director. Instead, the amount shown is the aggregate grant
date fair value of stock-related awards in fiscal 2010 computed
in accordance with ASC Topic 718, disregarding forfeiture
assumptions. The assumptions used to calculate the value of
option awards are set forth under Note 12, Employee
Benefit Plans, in the Notes to Consolidated Financial
Statements in Item 8 of Part II of Juniper
Networks Annual Report on
Form 10-K
for 2010 filed with the SEC on February 25, 2011. |
|
(2) |
|
As of December 31, 2010, Mr. Kriens held outstanding
options to purchase 2,695,000 shares, 67,434 earned but
unvested shares issuable under performance share awards and
41,533 unearned shares representing the target shares issuable
under performance share awards. |
|
(3) |
|
Represents the salary earned by Mr. Kriens as an employee
in 2010 and includes $2,070 related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $5,500 in matching contributions paid
under the Companys 401(k) plan. |
Mr. Kriens did not serve as an executive officer of the
Company in 2010, but he remained an employee of the Company,
providing services to the Company at the direction of
Mr. Johnson and the Board pursuant to the following
compensation arrangement:
|
|
|
|
|
Annual base salary of $400,000.
|
|
|
|
Performance share award for a target number of
18,200 shares, which vest after 1 year. The number of
shares actually earned can range between 0 and
45,500 shares depending on the achievement, during 2010, of
the performance measures described in the long-term equity
compensation section of the Compensation Discussion and
Analysis beginning on page 44.
|
Mr. Kriens was not eligible to participate in the
Companys 2010 annual cash incentive program.
Mr. Kriens continued to earn performance shares from
previous grants based on performance and vest in other
time-based equity awards, so long as he was an employee of the
Company. Mr. Kriens ceased to be an employee on
April 1, 2011 and became a non-employee Chairman of the
Board.
16
PROPOSALS TO
BE VOTED ON
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
There are four nominees for election as Class III directors
of the Board at this years annual meeting Mary
B. Cranston, Kevin R. Johnson, J. Michael Lawrie and David
Schlotterbeck. Each of the nominees is presently a member of the
Board. Information regarding the business experience of each
nominee and the other members of the Board is provided below. A
discussion of the qualifications, attributes and skills of each
director that led our Board and the Nominating and Corporate
Governance Committee to the conclusion that he or she should
serve or continue to serve as a director has been added
following each of the director biographies. Each of the
Class III directors will be elected to serve a three-year
term until the Companys annual meeting in 2014 and until
their respective successors are elected. There are no family
relationships among our executive officers and directors.
If you sign your proxy or voting instruction card or vote by
telephone or over the Internet but do not give instructions with
respect to the voting of directors, your shares will be voted
for the four persons recommended by the Board. If you wish to
give specific instructions with respect to the voting of
directors, you may do so by indicating your instructions on your
proxy or voting instruction card or when you vote by telephone
or over the Internet. If you do not give voting instructions to
your broker, your broker will not be able to vote your shares
and your shares will not be voted on this matter.
Our Board recommends a vote FOR the election to the Board of
Mary B. Cranston, Kevin R. Johnson, J. Michael Lawrie and
David Schlotterbeck as Class III directors.
Vote
Required
The four persons receiving the highest number of FOR
votes represented by shares of Juniper Networks common stock
present in person or represented by proxy and entitled to be
voted at the annual meeting will be elected.
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Nominees for Election
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|
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Mary B. Cranston
Director since 2007
Age 63
|
|
Ms. Cranston is currently the Firm Senior Partner of Pillsbury
Winthrop Shaw Pittman LLP, an international law firm. She was
the Chair and Chief Executive Officer of Pillsbury from January
1999 until April 2006, and continued to serve as Chair of
Pillsbury until December 2006. Ms. Cranston also serves as a
member of the board of directors of Visa, Inc., a financial
services company, GrafTech International, Ltd., a manufacturer
of carbon and graphite products, International Rectifier, a
power management company and Exponent, Inc., an engineering and
scientific consulting company.
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Ms. Cranstons extensive experience as an attorney,
including serving as the chair of a large national law firm, has
provided her with broad management expertise, extensive
experience in the career development of women and a detailed
understanding of corporate governance, regulatory and legal
matters. Ms Cranston also has deep understanding of the
telecommunications industry through her experience representing
several carrier clients, which can provide the Board insight
into the Companys customers needs. In addition, her
experience as a director in several other companies provides her
with an understanding of the operation of other boards of
directors that she can contribute in her role as a member of the
Nominating and Corporate Governance Committee.
|
17
|
|
|
Kevin R. Johnson
Director since 2008
Age 50
|
|
Mr. Johnson joined Juniper Networks in September 2008 as Chief
Executive Officer and a member of our Board of Directors. Prior
to Juniper Networks, Mr. Johnson was at Microsoft Corporation, a
worldwide provider of software, services, and solutions, where
he had served as President, Platforms and Services Division
since January 2007. He had been Co-President of the Platforms
and Services Division since September 2005. Prior to that role,
he held the position of Microsofts Group Vice President,
Worldwide Sales, Marketing and Services since March 2003. Before
that position, Mr. Johnson had been Senior Vice President,
Microsoft Americas since February 2002 and Senior Vice
President, U.S. Sales, Marketing, and Services since August
2000. Before joining Microsoft in 1992, Mr. Johnson worked in
IBMs systems integration and consulting business and
started his career as a software developer. Mr. Johnson also
serves on the board of directors of Starbucks Corporation, a
worldwide coffee retailer.
|
|
|
Mr. Johnsons day-to-day involvement in the Companys
business has provided him with extensive knowledge and
understanding of the Company and its industry. As Chief
Executive Officer, he is able to provide the Companys
Board of Directors with insight and information related to the
Companys strategy, operations, and business. His prior
experience in a number of substantial management roles at
Microsoft Corporation provided him with extensive experience in
research and development, operations and management.
|
J. Michael Lawrie
Director since 2007
Age 57
|
|
Mr. Lawrie has served as Chief Executive Officer of Misys plc, a
UK-based
provider of industry-specific software products and solutions,
since November 2006. Mr. Lawrie also served as the Executive
Chairman of Allscripts-Misys Healthcare Solutions, Inc., a
provider of software, services, information and connectivity
solutions for the healthcare industry from October 2008 to
August 2010. From October 2005 to November 2006, Mr. Lawrie
served as a partner of ValueAct Capital. From May 2004 to April
2005, Mr. Lawrie served as Chief Executive Officer of
Siebel Systems, Inc. From May 2001 to May 2004, Mr. Lawrie
served as Senior Vice President and Group Executive at
International Business Machines (IBM), a global
provider of information technology products and services,
responsible for sales and distribution of all IBM products and
services worldwide. Mr. Lawrie also serves on the Drexel
University board of trustees. Mr. Lawrie also served on the
boards of directors of SSA Global Technologies, Inc., a provider
of enterprise software applications, from September 2005 to May
2007, Symbol Technologies, Inc., a provider of enterprise
mobility solutions, from June 2005 to January 2007 and
Allscripts-Misys Healthcare Solutions from October 2008 to
August 2010.
|
|
|
Mr. Lawries experience as Chief Executive Officer of Misys
and in executive roles at Siebel Systems and IBM has provided
him with broad leadership and executive experience. Moreover,
his management of a company headquartered in Europe provides him
with a perspective on global business operations. In addition,
his experience as a director in other technology companies
provides him with an understanding of the operation of other
boards of directors that he can contribute in his role as Lead
Independent Director.
|
18
|
|
|
David Schlotterbeck
Director since 2010
Age 63
|
|
Mr. Schlotterbeck served as Chairman and Chief Executive Officer
of Carefusion, a global medical technology company that was
spun-off from Cardinal Health, a diversified health service
company from September 2009 until his retirement in February
2011. Prior to the spinoff, beginning in January 2008, he served
as Vice Chairman of Cardinal Health, and, beginning in August
2006, he served as Chief Executive Officer of Cardinal
Healths Clinical and Medical Products business. He has
previously held executive leadership roles at Alaris Medical
Systems, Pacific Scientific Company, Vitalcom, Inc. and Nellcor,
Inc. Mr. Schlotterbeck is a graduate of the General Motor
Institute with a bachelors of science degree in electrical
engineering. He also holds a masters of science degree in
electrical engineering from Purdue University and completed the
Executive Institute at Stanford University. Mr. Schlotterbeck
also served as a member of the board of directors or Virtual
Radiologic Corporation from June 2008 to July 2010.
|
|
|
Mr. Schlotterbecks experience as Chairman and Chief
Executive Officer of Carefusion and vice chairman and chief
executive officers of the Clinical and Medical Products business
segment of Cardinal Health has provided him with broad
leadership and executive experience. In addition, his experience
as a director in other public companies provides him with an
understanding of the operation of other boards of directors that
he can contribute as a board member and a member of the audit
and compensation committees.
|
Continuing Directors
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Robert M. Calderoni
Director since 2003
Age 51
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Mr. Calderoni has served as President and Chief Executive
Officer and a member of the board of directors of Ariba, Inc., a
provider of spend management solutions, since October 2001. From
January 2001 to October 2001, Mr. Calderoni served as
Aribas Executive Vice President and Chief Financial
Officer. From November 1997 to January 2001, he served as Chief
Financial Officer at Avery Dennison Corporation, a manufacturer
of pressure-sensitive materials and office products. From June
1996 to November 1997, Mr. Calderoni served as Senior Vice
President of Finance at Apple Computer, a provider of hardware
and software products and Internet-based services. Mr. Calderoni
also serves as a member of the board of directors of KLA-Tencor,
Inc., a semiconductor equipment manufacturer.
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Mr. Calderonis experience as a Chief Financial Officer
and in other finance roles has provided him with broad
experience in finance including accounting and financial
reporting. This experience has led our Board of Directors to
determine that he is an audit committee financial
expert as that term is defined in Item 407(d)(5) of
Regulation S-K under the 1934 Act. In addition, as Chief
Executive Officer of Ariba, Inc., a provider of spend management
solutions, he has broad management expertise and a knowledge and
understanding of software and software as a service business
issues.
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19
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Scott Kriens
Director since 1996
Age 53
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Mr. Kriens has served as Chairman of the Board of Directors of
Juniper Networks since October 1996 and served as Chief
Executive Officer of Juniper Networks from October 1996 to
September 2008. Mr. Kriens is currently an employee of Juniper
Networks. From April 1986 to January 1996, Mr. Kriens served as
Vice President of Sales and Vice President of Operations at
StrataCom, Inc., a telecommunications equipment company, which
he co-founded in 1986. Mr. Kriens also serves on the board of
directors of Equinix, Inc., a provider of global data center
services and served on the board of directors of VeriSign, Inc.,
a provider of digital infrastructure solutions, from January
2001 to May 2008.
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As a result of Mr. Kriens prior service as the
Companys Chief Executive Officer, he developed an
extensive understanding of the Companys business and the
networking industry and can contribute to the Board a highly
informed perspective on the business independent from that of
the Chief Executive Officer. Mr. Kriens experience with
the Company from its early stages also offers the Board insight
to the evolution of the Company, including from execution,
cultural, operational, competitive and industry points of view.
In addition, his experience as a director in other technology
companies provides him with an understanding of the operation of
other boards of directors that he can contribute in his role as
Chairman.
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William F. Meehan
Director since 2009
Age 58
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Mr. Meehan is the Raccoon Partners Lecturer in Management at the
Graduate School of Business at Stanford University, where he is
also a faculty affiliate of the Center for Social Innovation and
a member of the Board of Advisors of the Stanford Social
Innovation Review. From August 1978 to December 2008, Mr. Meehan
served at McKinsey and Company, Inc., a management consulting
firm, most recently serving as a Senior Director. While at
McKinsey, Mr. Meehan was a member of the Shareholders Council; a
member of McKinseys Board of Directors; Chair of the
Client Committee; Chair of the McKinsey Investment Office;
Vice-Chair of the Directors Review Committee; founder and leader
of the Private Equity Practice; Chair of the West Coast
Practice; and Managing Director of the San Francisco Office.
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Through Mr. Meehans experience at McKinsey, he brings
extensive expertise in analyzing numerous aspects of a
companys business, including strategy, organizational
design and planning as well as formulating and driving strategic
direction and change. In particular, Mr. Meehans
experience with a wide range of companies gives him the ability
to offer the Board valuable insight to best-in-class examples of
successful companies against which the Company can model growth
and culture to enable scaling of the organization in an optimal
manner.
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Stratton Sclavos
Director since 2000
Age 49
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Mr. Sclavos has served as a General Partner of Radar Partners
LLC, a private investment firm, since November 2007. From July
1995 to May 2007, Mr. Sclavos served as President and Chief
Executive Officer of VeriSign, Inc., a provider of digital
infrastructure solutions, and Chairman of its board of directors
from December 2001 to May 2007. From October 1993 to June 1995,
he was Vice President, Worldwide Marketing and Sales of
Taligent, Inc., a software development company that was a joint
venture among Apple Computer, Inc., IBM and Hewlett-Packard.
Prior to that time, he served in various sales, business
development and marketing capacities for GO Corporation, MIPS
Computer Systems, Inc. and Megatest Corporation. Mr. Sclavos
also serves on the board of directors of Salesforce.com, a
provider of customer relationship management services. Mr.
Sclavos served on the board of directors of Intuit, Inc., a
provider of business and financial management solutions, from
2001 to March 2010 and Verisign, Inc. from July 1995 to May 2007.
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Mr. Sclavos experience as the Chairman and Chief Executive
Officer of VeriSign has provided him with an extensive
understanding of internet and network related businesses. In
addition, his experience as a director in several other
technology companies provides him with an understanding of the
operation of other boards of directors that he can contribute in
his role as Chairman of the Nominating and Corporate Governance
Committee.
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Pradeep Sindhu
Director since 1996
Age 58
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Dr. Sindhu founded Juniper Networks in February 1996 and
served as Chief Executive Officer and Chairman of the Board of
Directors until September 1996. Since then, Dr. Sindhu has
served as Vice Chairman of the Board of Directors and Chief
Technical Officer of Juniper Networks. From September 1984 to
February 1991, Dr. Sindhu worked as a Member of the
Research Staff, and from March 1987 to February 1996, as the
Principal Scientist, and from February 1994 to February 1996, as
Distinguished Engineer at the Computer Science Lab at Xerox
Corporation, Palo Alto Research Center, a technology research
center. Dr. Sindhu served as a member of the board of
directors of Infinera Corporation, a provider of optical
networking equipment, from September 2001 to May 2008.
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As the founder and Chief Technical Officer of the Company,
Dr. Sindhu is a leading expert in networking technology and
is able to provide the Board with an understanding of the
Companys products and technology as well as provide expert
perspective on industry trends and opportunities.
Dr. Sindhus experience with the Company from its
founding also offers the Board insight to the evolution of the
Company, including from execution, cultural, operational,
competitive and industry points of view.
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William R. Stensrud
Director since 1996
Age 60
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Mr. Stensrud is an independent investor. From January 2007 to
March 2007, he served as Chairman and CEO of Muze, Inc., a
provider of business-to-business digital commerce solutions and
descriptive entertainment media information. Mr. Stensrud was a
general partner with the venture capital firm of Enterprise
Partners from January 1997 to December 2006. Mr. Stensrud was an
independent investor and turn-around executive from March 1996
to January 1997. During this period, Mr. Stensrud served as
President of Paradyne Corporation and as a director of Paradyne
Corporation, GlobeSpan Corporation and Paradyne Partners LLP,
all data networking companies. From January 1992 to July 1995,
Mr. Stensrud served as President and Chief Executive Officer of
Primary Access Corporation, a data networking company acquired
by 3Com Corporation. From 1986 to 1992, Mr. Stensrud served as
the Marketing Vice President of StrataCom, Inc., a
telecommunications equipment company, which Mr. Stensrud
co-founded.
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Mr. Stensruds years of experience in venture capital and
in the management of a wide variety of technology companies have
exposed him to a broad range of issues affecting businesses,
including a number of businesses in our industry. In particular,
Mr. Stensruds experience as an operating executive in
the telecommunications and data communications industry provides
the Board and management with knowledge and perspective on the
Companys daily operating challenges. His work has included
analyzing and focusing on improving various aspects of
businesses, including operations, strategies and financial
performance.
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22
PROPOSAL NO. 2
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has appointed Ernst &
Young LLP, an independent registered public accounting firm, to
audit Juniper Networks consolidated financial statements
for the fiscal year ending December 31, 2011. During fiscal
2010, Ernst & Young served as Juniper Networks
independent registered public accounting firm and also provided
certain tax and other audit related services. See
Principal Accountant Fees and Services on
page 68. Representatives of Ernst & Young are
expected to attend the annual meeting, where they are expected
to be available to respond to appropriate questions and, if they
desire, to make a statement.
Our Board recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP, an independent
registered public accounting firm, as Juniper Networks
auditors for the 2011 fiscal year. Although ratification is
not required by our bylaws or otherwise, the Board is submitting
the selection of Ernst & Young LLP to our stockholders
for ratification because we value our stockholders views
on the Companys independent registered public accounting
firm and as a matter of good corporate practice. If the
appointment is not ratified, the Audit Committee will consider
whether it should select other independent auditors. Even if the
appointment is ratified, the Audit Committee, in its discretion,
may appoint a different independent registered public accounting
firm as Juniper Networks independent auditors at any time
during the year if the Audit Committee determines that such a
change would be in the Companys and its stockholders
best interests.
If you sign your proxy or voting instruction card or vote by
telephone or over the Internet but do not give instructions with
respect to this proposal, your shares will be voted for the
ratification of the appointment of Ernst & Young LLP,
an independent registered public accounting firm, as Juniper
Networks auditors for the 2011 fiscal year, as recommended
by the Board.
Vote
Required
Ratification of the appointment of Ernst & Young LLP,
an independent registered public accounting firm, as auditors
for fiscal 2011 requires the affirmative vote of a majority of
the shares of Juniper Networks common stock present in person or
represented by proxy and entitled to be voted at the meeting.
23
PROPOSAL NO. 3
APPROVAL
OF PERFORMANCE BONUS PLAN
On March 28, 2011 our Compensation Committee unanimously
approved the Performance Bonus Plan (the Bonus Plan)
and directed that the Bonus Plan be submitted to stockholders at
the Annual Meeting. If approved by our stockholders, the plan
will be effective for the Companys 2012 fiscal year.
The purpose of the Bonus Plan is to motivate certain executives
to achieve corporate or business unit performance objectives and
to reward them when those objectives are satisfied. The Bonus
Plan is designed to permit the payout of performance-based
compensation that is fully deductible under Internal Revenue
Code Section 162(m).
The Board recommends a vote FOR the approval of
the Performance Bonus Plan.
Description
of the Performance Bonus Plan
Eligibility. Our executive officers who are
chosen solely at the discretion of the Compensation Committee
are eligible to participate in the Bonus Plan. Because our
executive officers are eligible to receive awards under the
Bonus Plan, our executive officers have an interest in this
proposal. No person is automatically entitled to participate in
the Bonus Plan in any Bonus Plan year. We may also pay
discretionary bonuses, or other types of compensation, outside
of the Bonus Plan.
Purpose. The purpose of the Bonus Plan is to
motivate the participants to achieve our corporate and business
unit performance objectives and to reward them when those
objectives are satisfied. If certain requirements are satisfied,
bonuses issued under the Plan may qualify as deductible
performance-based compensation within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Code).
Administration. The Bonus Plan is administered
by the Compensation Committee, consisting of no fewer than two
independent members of the Board.
Determination of Awards. Under the Bonus Plan,
participants are eligible to receive cash payments based upon
the attainment and certification of certain objective
performance criteria established by the Compensation Committee.
The performance measures for any performance period will be any
one or more of the following objective performance criteria,
applied to either the Company as a whole or, except with respect
to stockholder return metrics, to a region, business unit,
affiliate or business segment, and measured either on an
absolute basis or relative to a pre-established target, to a
previous periods results, to a designated comparison group
or to another performance measure, in each case as specified by
the Compensation Committee, and, with respect to financial
metrics, which may be determined in accordance with United
States Generally Accepted Accounting Principles
(GAAP), in accordance with accounting principles
established by the International Accounting Standards Board
(IASB) or which may be adjusted when established to
exclude any items otherwise includable under GAAP or IASB:
(i) cash flow (including operating cash flow or free cash
flow) or cash flow margin, (ii) cash position,
(iii) revenue (on an absolute basis or adjusted for
currency effects), (iv) gross margin, (v) operating
margin, (vi) operating expenses or operating expenses as a
percentage of revenue, (vii) earnings (which may include,
without limitation, earnings before interest and taxes, earnings
before taxes and earnings before income, taxes, depreciation and
amortization), (viii) earnings per share,
(ix) operating income, (x) net income, (xi) stock
price, (xiii) return on equity, (xiii) total
stockholder return, (xiv) growth in stockholder value
relative to a specified publicly reported index (such as the
S&P 500 Index), (xv) return on capital,
(xvi) return on assets or net assets, (xvii) return on
investment, (xviii) economic value added, (xix) market
share, (xx) contract awards or backlog, (xxi) overhead
or other expense reduction, (xxii) credit rating,
(xxiii) objective customer indicators (including, without
limitation, a customer satisfaction rating), (xxiv) new
product invention or innovation, (xxv) attainment of
research and development milestones, (xxvi) improvements in
productivity, (xxvii) attainment of objective operating
goals, and (xxviii) objective employee metrics.
The performance criteria may differ for each participant. Our
Compensation Committee retains the discretion to reduce or
eliminate any award that would otherwise be payable pursuant to
the Bonus Plan.
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Payment of Awards. All awards will be paid in
cash as soon as is practicable following determination of the
award. The Committee may also defer the payment of awards in its
discretion, as necessary or desirable to preserve the
deductibility of such awards under Code Section 162(m).
Maximum Award. The amounts that will be paid
pursuant to the Bonus Plan are not currently determinable. The
maximum bonus payment that any participant may receive under the
Bonus Plan in any of our fiscal years is $20,000,000.
Amendment and Termination. The Compensation
Committee may amend, suspend or terminate the Bonus Plan, in
whole or in part, at any time, including the adoption of
amendments deemed necessary or desirable to correct any defect
or supply omitted data or reconcile any inconsistency in the
Bonus Plan or in any award granted thereunder. The Compensation
Committee may amend or modify the Bonus Plan in any respect, or
terminate the Bonus Plan, without the consent of any affected
participant. However, in no event may such amendment or
modification result in an increase in the amount of compensation
payable pursuant to any award.
Indemnification. Our Board of Directors and
Compensation Committee are generally indemnified by the Company
for any liability arising from claims relating to the Bonus Plan.
Federal Income Tax Consequences. Under present
federal income tax law, participants will recognize ordinary
income equal to the amount of the award received in the year of
receipt. That income will be subject to applicable income and
employment tax withholding by the Company. If and to the extent
that the Bonus Plan payments satisfy the requirements of
Section 162(m) of the Code and otherwise satisfy the
requirements for deductibility under federal income tax law, we
will receive a deduction for the amount constituting ordinary
income to the participant. Bonus Plan payments have been
structured to qualify for the short-term deferral exception to
Internal Revenue Code Section 409A, which regulates certain
deferred compensation arrangements.
A full copy of the Bonus Plan is attached to this proxy
statement as Annex A.
Bonus
Plan Benefits
Future benefits under the Bonus Plan are not determinable
because awards under the Bonus Plan are determined based on
actual future performance.
Vote
Required
Approval of the Bonus Plan requires the affirmative vote of a
majority of the votes cast on the proposal.
25
PROPOSAL NO. 4
APPROVAL
OF AMENDMENT TO THE JUNIPER NETWORKS, INC. 2006 EQUITY
PLAN
Background
Our 2006 Equity Incentive Plan (the 2006 Plan)
allows us to grant equity awards (including stock options,
restricted stock units and performance share awards) to our
employees, officers and directors.
We believe our success is due to our highly talented employee
base and that future success depends on the ability to attract
and retain high caliber personnel. Our primary centers for
innovation are in technology centers such as Silicon Valley
where we must compete with many companies for a limited pool of
talented people. The ability to grant equity awards is a
necessary and powerful recruiting and retention tool for us to
obtain the quality personnel we need to move our business
forward.
We designed the 2006 Plan to conform to best practices in equity
incentive plans. The 2006 Plan replaced our previously existing
equity incentive plans and adopted many features designed to
address stockholder concerns related to equity incentive plans,
such as the prohibition on option and stock appreciation right
repricing without stockholder consent, reduced maximum option
terms, elimination of evergreen share reserve
increases and the flexibility of restricted stock, restricted
stock units, performance shares or deferred stock units which
can be used in lieu of stock options to reduce the total number
of our shares necessary to grant competitive equity awards.
We have been focused on managing our annual equity usage as a
percentage of our common stock outstanding to align with peer
group competitive levels and have made changes in recent years
to reduce the number of shares underlying the equity awards we
grant. For each of calendar years 2011 and 2012, we intend to
target the number of shares underlying equity awards granted at
below three percent (3%) of our outstanding common stock at the
end of each calendar year (counting each RSU as one share and
counting each performance share award based on the target number
of shares).
Summary
of the Proposal
Our Board of Directors approved an amendment to the 2006 Plan
(as amended and restated, the Amended Plan) on
February 9, 2011, subject to approval by our stockholders
at our 2011 annual meeting. We are seeking stockholder approval
of an amendment to the 2006 Plan that increases the number of
shares reserved for issuance thereunder by
30,000,000 shares.
When the 2006 Plan was adopted and approved by our stockholders
in May 2006, the 2006 Plan had an initial authorized base share
reserve of 64,500,000 shares of common stock and in 2010,
our stockholders approved an increase of 30,000,000 shares.
In addition to the base share reserve, any shares subject to
outstanding options under our previously existing equity
incentive plans, the 2000 Nonstatutory Stock Option Plan (the
2000 Plan) and the Amended and Restated 1996 Stock
Plan (the 1996 Plan), that expire unexercised
following May 18, 2006 become available for grant under the
2006 Plan, up to a maximum of 75,000,000 additional shares of
common stock. Since the adoption of the 2006 Plan through
March 24, 2011, 16,577,302 shares subject to such
previous awards have become available for grant under the 2006
Plan.
As of March 24, 2011, the 2006 Plan had
61,291,377 million shares subject to currently outstanding
equity awards including 19, 274,842 shares subject to
outstanding restricted stock units and performance share awards
and 42,016,535 outstanding options with a weighted average
remaining term of 4.38 years and a weighted average exercise
price of $23.88 and 12,715,052 million shares available for
future issuance.
Why the
Proposed Increase in Shares
We believe that increasing the shares reserved for issuance
under the 2006 Plan is necessary for us to continue to offer a
competitive equity incentive program in the future. Based upon
recent equity award requirements, we believe that the addition
of 30,000,000 shares to the shares reserved for issuance
under the 2006 Plan will provide us with enough shares to
continue to offer competitive equity compensation through 2012.
Of the shares subject to the proposed increase, we intend to
allocate a substantial majority of such shares to performance
share awards and RSUs.
26
If the stockholders do not approve the proposed share increase,
we believe we will not be able to continue to offer competitive
equity packages to retain our current employees and hire new
employees in 2012 and future years. This could significantly
hamper our plans for growth and adversely affect our ability to
operate our business. In addition, if we were unable to grant
competitive equity awards, we may be required to offer
additional cash-based incentives to replace equity as a means of
competing for talent. This could have a significant effect upon
our quarterly results of operations and balance sheet and not be
competitive with other companies that offer equity.
Description
of the Amended Plan
ELIGIBILITY; LIMITATIONS. Options, stock
appreciation rights, performance shares, performance units,
restricted stock, restricted stock units, deferred stock units
and dividend equivalents may be granted under the 2006 Plan.
Options granted under the 2006 Plan may be either
incentive stock options, as defined in
Section 422 of the Internal Revenue Code of 1986, as
amended (the Code), or nonstatutory stock options.
Incentive stock options may be granted only to employees of the
Company or of any subsidiary of the Company. Other awards may be
granted under the 2006 Plan to any employee, consultant or
non-employee director of the Company or of any parent or
subsidiary of the Company. Non-employee directors, however, may
only be granted restricted stock units and stock options under
the 2006 Plan, and these are made pursuant to an automatic,
non-discretionary formula. Otherwise, the 2006 Plan
administrator, in its discretion, selects the person(s) to whom
awards may be granted, and (except for performance units and
dividend equivalents, which are cash awards) the number of
shares subject to each such grant. For this reason, it is not
possible to determine the benefits or amounts that will be
received by any particular individual or individuals in the
future. The 2006 Plan provides that no person(s) may be granted,
in any fiscal year of the Company: (i) options or stock
appreciation rights to purchase more than four million
(4,000,000) shares of common stock in such persons first
fiscal year of service with the Company and more than two
million (2,000,000) shares of common stock in any other fiscal
year of service; (ii) performance shares, restricted stock
units, restricted stock or deferred stock units to more than two
million (2,000,000) shares of common stock in such persons
first fiscal year of service with the Company and more than one
million (1,000,000) shares of common stock in any other fiscal
year of service; and (iii) performance units having an
initial value more than four million dollars ($4,000,000) in
such persons first fiscal year of service with the Company
and more than two million dollars ($2,000,000) in any other
fiscal year of service. As of March 24, 2011 the Company
had 7 non-employee directors and approximately
9,100 employees that could be eligible for awards under the
2006 Plan.
SHARES AVAILABLE FOR ISSUANCE. A total of
124,500,000 shares of common stock have been reserved for
issuance under the 2006 Plan plus the addition of shares subject
to outstanding options under the Companys 2000 Plan and
1996 Plan that expire unexercised after May 18, 2006, up to
a maximum of 75,000,000 additional shares.
Any shares subject to options or stock appreciation rights shall
be counted against the shares available for issuance as one
share for every share subject thereto. Any restricted stock,
restricted stock units, performance shares or deferred stock
units with a per share purchase price lower than 100% of fair
market value on the date of grant shall be counted against the
shares available for issuance as two and one-tenth (2.1) shares
for every one share subject thereto. To the extent that a share
that was subject to an award that counted as two and one-tenth
shares against the 2006 Plan reserve is recycled back into the
2006 Plan, the 2006 Plan shall be credited with two and
one-tenth shares.
If an award expires or becomes unexercisable without having been
exercised in full, or, with respect to restricted stock,
performance shares, restricted stock units or deferred stock
units, is forfeited to or repurchased by the Company due to its
failure to vest, the unpurchased shares (or for awards other
than options and stock appreciation rights, the forfeited or
repurchased shares) which were subject thereto shall become
available for future grant or sale under the 2006 Plan. With
respect to stock appreciation rights, when a stock-settled SAR
is exercised, the shares subject to a SAR grant agreement shall
be counted against the shares available for issuance under the
2006 Plan as one share for every share subject thereto,
regardless of the number of shares used to settle the SAR upon
exercise. Shares that have actually been issued under the 2006
Plan under any award shall not be returned to the 2006 Plan and
shall not become available for future distribution under the
2006 Plan; provided, however, that if shares of restricted
stock, performance shares, restricted stock units or deferred
stock units are repurchased by the Company at their original
purchase price or are forfeited to the Company due to their
failure to vest, such shares shall become available for future
grant under the 2006 Plan as described above. Shares used to pay
the exercise price
27
of a stock option shall not become available for future grant or
sale under the 2006 Plan. Shares used to satisfy tax withholding
obligations shall not become available for future grant or sale
under the 2006 Plan. To the extent a 2006 Plan award is paid out
in cash rather than stock, such cash payment shall not reduce
the number of shares available for issuance under the 2006 Plan.
Any payout of dividend equivalents or performance units, because
they are payable only in cash, shall not reduce the number of
shares available for issuance under the 2006 Plan. Conversely,
any forfeiture of dividend equivalents or performance units
shall not increase the number of shares available for issuance
under the 2006 Plan.
ADMINISTRATION. The 2006 Plan may generally be
administered by the Board or a committee appointed by the Board
(as applicable, the Administrator). The Board has
authorized the Compensation Committee of the Board to approve
awards and grants to Section 16 reporting executive
officers. The Compensation Committee is composed entirely of
independent non-employee directors. The Board has also
authorized the Stock Committee to approve awards and grants,
within limits, to employees and consultants other than the
Section 16 reporting executive officers. The Stock
Committee is composed of the Chief Executive Officer, Chief
Financial Officer and one outside director.
OPTION TERMS AND CONDITIONS. Each option is
evidenced by a stock option agreement between the Company and
the optionee, and is subject to the following additional terms
and conditions:
EXERCISE PRICE. The Administrator determines
the exercise price of options at the time the options are
granted. The exercise price of an option may not be less than
100% of the fair market value of our common stock on the date
such option is granted. The fair market value of our common
stock is set at the closing sale price for our common stock on
the date the option is granted.
EXERCISE OF OPTION; FORM OF
CONSIDERATION. The Administrator determines when
options become exercisable, and may in its discretion accelerate
the vesting of any outstanding option. Stock options granted
under the 2006 Plan generally vest and become exercisable over a
four (4) year period. The 2006 Plan permits payment to be
made by cash, check, other shares of common stock of the
Company, cashless exercises, a reduction in the amount of any
Company liability to the optionee, any other form of
consideration permitted by applicable law, or any combination
thereof.
TERM OF OPTION. Currently, options granted
under the 2006 Plan expire seven (7) years from the date of
grant. However, the 2006 Plan allows an option to be granted
with a shorter term determined by the Administrator. No option
may be exercised after its term expires.
TERMINATION OF EMPLOYMENT. If the
optionees employment or status as a service provider
terminates for any reason other than death or permanent total
disability or unless the Administrator otherwise approves, then
options may be exercised no later than 90 days after such
termination and may be exercised only to the extent the option
was exercisable on the termination date.
DEATH OR DISABILITY. If an optionees
employment or status as a service provider terminates as a
result of his or her death or permanent total disability, then
all options held by such optionee under the 2006 Plan may be
exercised within twelve (12) months or as may be provided
in the option agreement, but only to the extent the options
would have been exercisable at the date of death or permanent
total disability.
OTHER PROVISIONS. The stock option agreement
may contain other terms, provisions and conditions not
inconsistent with the 2006 Plan as may be determined by the
Administrator.
STOCK APPRECIATION RIGHTS. Stock appreciation
rights are exercisable in whole or in part at such times as the
Administrator specifies in the grant or agreement. However, the
term of a stock appreciation right may be no more than seven
(7) years from the date of grant. The Companys
obligations arising upon the exercise of a stock appreciation
right may be paid in cash or common stock, or any combination of
the same, as the Administrator may determine. We expect,
however, that most or all of the stock appreciation rights that
we grant, if any, will provide that they may only be settled in
shares of common stock. Shares issued upon the exercise of a
stock appreciation right are valued at their fair market value
as of the date of exercise.
VESTING OF CERTAIN AWARDS. Restricted stock,
performance shares, restricted stock units or deferred stock
units that vest solely based on continuing as an employee or
service provider will vest in full no earlier (except
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if accelerated pursuant to a change of control or related
cessations of service) than the three (3) year anniversary
of the grant date. If vesting is based on factors other than
solely on continued employment or provision of services, they
will vest in full no earlier than the one (1) year
anniversary of the grant date (except if accelerated pursuant to
a change of control or related cessations of service). The
foregoing limitations do not apply to any such awards that
result in issuing up to 5% of the maximum aggregate number of
shares authorized for issuance under the 2006 Plan.
Discretionary accelerated vesting of certain 2006 Plan awards
(except if accelerated pursuant to a change of control, related
cessation of service or pursuant to the participants death
or permanent disability) count against the 5% exception.
RESTRICTED STOCK. Subject to the terms and
conditions of the 2006 Plan, restricted stock may be granted to
participants at any time and from time to time at the discretion
of the Administrator. Subject to the annual share limit and
vesting limitations set forth above, the Administrator shall
have complete discretion to determine (i) the number of
shares subject to a restricted stock award granted to any
participant, and (ii) the conditions for grant or for
vesting that must be satisfied, which typically will be based
principally or solely on continued provision of services but may
include a performance-based component. Each restricted stock
grant shall be evidenced by an agreement that shall specify the
purchase price (if any) and such other terms and conditions as
the Administrator shall determine; provided, however, that if
the restricted stock grant has a purchase price, the purchase
price must be paid no more than seven (7) years following
the date of grant.
RESTRICTED STOCK UNITS. Restricted stock units
are awards that obligate the Company to deliver common stock
shares to the participant as specified on each vesting date.
Subject to the annual share limit and vesting limitations set
forth above, the Administrator has complete discretion to
determine (i) the number of shares subject to a restricted
stock unit award granted to any participant, and (ii) the
conditions for grant or for vesting that must be satisfied,
which typically will be based principally or solely on continued
provision of services but may include a performance-based
component.
PERFORMANCE SHARES. Performance shares are
also awards that obligate the Company to deliver common stock
shares to the participant as specified on each vesting date.
Performance shares may be granted to employees and consultants
at any time and from time to time as shall be determined at the
discretion of the Administrator. Subject to the annual share
limit and vesting limitations set forth above, the Administrator
shall have complete discretion to determine (i) the number
of shares of common stock subject to a performance share award
granted to any service provider and (ii) the conditions
that must be satisfied for grant or for vesting, which typically
will be based principally or solely on achievement of
performance milestones but may include a service-based component.
PERFORMANCE UNITS. Performance Units are
similar to Performance Shares, except that they are settled in a
cash equivalent to the Fair Market Value of the underlying
shares, determined as of the vesting date. Subject to the terms
and conditions of the 2006 Plan, Performance Units may be
granted to participants at any time and from time to time as
shall be determined by the Administrator, in its sole
discretion. The Administrator shall have complete discretion to
determine the conditions that must be satisfied, which typically
will be based principally or solely on achievement of
performance milestones but may include a service-based
component, upon which is conditioned the grant or vesting of
Performance Units. Performance Units shall be granted in the
form of units to acquire shares. Each such unit shall be the
cash equivalent of one share of common stock. No right to vote
or receive dividends or any other rights as a stockholder shall
exist with respect to Performance Units or the cash payable
thereunder.
DEFERRED STOCK UNITS. Deferred Stock Units
consist of a Restricted Stock, Restricted Stock Unit,
Performance Share or Performance Unit Award that the
Administrator, in its sole discretion permits to be paid out in
installments or on a deferred basis, in accordance with rules
and procedures established by the Administrator and applicable
law, including Code Section 409A. Deferred Stock Units
shall remain subject to the claims of the Companys general
creditors until distributed to the participant.
DIVIDEND EQUIVALENTS. A dividend equivalent is
a credit, payable in cash, awarded at the discretion of the
Administrator, to the account of a participant in an amount
equal to the cash dividends paid on one share for each share
represented by an award. Dividend equivalents may be subject to
the same vesting restrictions as apply to a related award.
29
CODE SECTION 162(m) PERFORMANCE
GOALS. The 2006 Plan is designed to permit the
Company to issue awards that qualify as performance-based under
Section 162(m) of the Code. Thus, the Administrator may
make performance goals applicable to a participant with respect
to an award. At the Administrators discretion, one or more
of the following performance goals may apply: (i) cash flow
(including operating cash flow or free cash flow),
(ii) cash position, (iii) revenue (on an absolute
basis or adjusted for currency effects), (iv) revenue
growth, (v) contribution margin, (vi) gross margin,
(vii) operating margin (viii) operating expenses or
operating expenses as a percentage of revenue,
(ix) earnings (which may include earnings before interest
and taxes, earnings before taxes and net earnings),
(x) earnings per share, (xi) operating income,
(xii) net income, (xiii) stock price,
(xiv) return on equity, (xv) total stockholder return,
(xvi) growth in stockholder value relative to a specified
publicly reported index (such as the S&P 500 Index),
(xvii) return on capital, (xviii) return on assets or
net assets, (xix) return on investment, (xx) economic
value added, (xxi) operating profit or net operating
profit, (xxii) operating margin, (xxiii) market share,
(xxiv) contract awards or backlog, (xxv) overhead or
other expense reduction, (xxvi) credit rating,
(xxvii) objective customer indicators, (xxviii) new
product invention or innovation, (xxix) attainment of
research and development milestones, (xxx) improvements in
productivity, (xxxi) attainment of objective operating
goals, and (xxxii) objective employee metrics. The
performance measures listed above may apply to either the
Company as a whole or, except with respect to stockholder return
metrics, a region, business unit, affiliate or business segment,
and measured either on an absolute basis or relative to a
pre-established target, to a previous periods results or
to a designated comparison group, and, with respect to financial
metrics, which may be determined in accordance with GAAP, in
accordance with IASB Principles or which may be adjusted when
established to exclude or include any items otherwise includable
or excludable under GAAP or under IASB Principles or any other
objectively determinable items including, without limitation,
(a) any extraordinary non-recurring items, (b) the
effect of any merger, acquisition, or other business combination
or divestiture, or (c) the effect of any changes in
accounting principles affecting the Companys or a business
units, regions, affiliates or business
segments reported results.
NO REPRICING. The 2006 Plan prohibits option
or stock appreciation right repricings (including by way of
exchange for another award) unless stockholder approval is
obtained.
NONTRANSFERABILITY OF AWARDS. Unless
determined otherwise by the Administrator, an award granted
under the 2006 Plan is not transferable other than by will or
the laws of descent and distribution, and may be exercised
during the participants lifetime only by the participant.
In no event may a Plan award be transferred for value.
AUTOMATIC GRANTS TO OUTSIDE DIRECTORS. The
2006 Plan provides that each non-employee member of the Board
(each, an Outside Director) shall be automatically
granted an option to purchase 50,000 shares of common stock
upon the date on which such person first becomes a director,
whether through election by the stockholders of the Company or
appointment by the Board to fill a vacancy (the First
Option). At each of the Companys annual stockholder
meetings (A) each Outside Director who was an Outside
Director on the date of the prior years annual stockholder
meeting shall be automatically granted Restricted Stock Units
for a number of shares equal to the Annual Value, and
(B) each Outside Director who was not an Outside Director
on the date of the prior years annual stockholder meeting
shall receive a Restricted Stock Unit for a number of shares
determined by multiplying the Annual Value by a fraction, the
numerator of which is the number of days since the Outside
Director received their First Option (or, in the case of a
Director who has transitioned from an employee director to an
Outside Director and did not receive a First Option, the date
the Director became an Outside Director), and the denominator of
which is 365, rounded down to the nearest whole share. Each
award specified in A and B is generically referred to as an
Annual Award. The Annual Value means the number
equal to $125,000 divided by the average daily closing price
over the six month period ending on the last day of the fiscal
year preceding the date of grant (for example, the period from
July 1, 2010 December 31, 2010 for Annual
Awards granted in May 2011). The First Option shall vest and
become exercisable as to 1/36th of the covered shares each
month following the grant date, with the last
1/36th vesting on the day prior to the Companys
annual stockholder meeting in the third calendar year following
the date of grant, so as to become 100% vested on the
approximately three-year anniversary of the grant date, subject
to the Outside Director continuing to serve as a director on
each vesting date. The Annual Award shall become 100% vested on
the day prior to the Companys annual stockholder meeting
in the year following the grant date, subject to the Outside
Director continuing to serve as a director on each vesting date.
The
30
First Option granted to Outside Directors will have a maximum
term of seven (7) years. Outside Directors are not
otherwise eligible to receive discretionary awards under the
2006 Plan.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In
the event that the stock of the Company changes by reason of any
stock split, reverse stock split, stock dividend, combination,
reclassification or other similar change in the capital
structure of the Company effected without the receipt of
consideration, appropriate adjustments shall automatically be
made in the number and class of shares of stock subject to the
2006 Plan, the number and class of shares of award outstanding
under the 2006 Plan, the fiscal year limits on the number of
awards that any person may receive, the number of shares subject
to automatic option and restricted stock unit grants to Outside
Directors and the exercise price of any outstanding option or
stock appreciation right.
In the event of a liquidation or dissolution, the Administrator
shall notify each participant prior to the effective date.
Except with respect to Outside Director options, the
Administrator may, in its discretion, provide that each
participant shall have the right to exercise all of their
options and stock appreciation rights, as to all of the shares
covered by the option or stock appreciation right, including as
to those shares not otherwise exercisable. In addition, the
Administrator may provide, except with respect to Outside
Director restricted stock units, that any Company repurchase
option or forfeiture rights applicable to any award shall lapse
100%, and that any award vesting shall accelerate 100%, provided
the proposed dissolution or liquidation takes place at the time
and in the manner contemplated.
MERGER OR ASSET SALE. In the event of a merger
of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding
option and stock appreciation right shall be assumed or an
equivalent option or stock appreciation right substituted by the
successor corporation or a parent or subsidiary of the successor
corporation. In the event that the successor corporation refuses
to assume or substitute for the option or stock appreciation
right, the participant shall fully vest in and have the right to
exercise the option or stock appreciation right as to all of the
common stock covered thereby including shares as to which it
would not otherwise be vested or exercisable. If an option or
stock appreciation right becomes fully vested and exercisable in
lieu of assumption or substitution in such event, the
Administrator shall notify the participant that the option or
stock appreciation right shall be fully vested and exercisable
for a period of thirty days, and the option or stock
appreciation right shall terminate upon the expiration of such
period. With respect to options granted to Outside Directors, in
the event that the Outside Director is required to terminate his
or her position as an Outside Director at the request of the
acquiring entity within twelve (12) months following such
merger or asset sale, each outstanding option held by such
Outside Director shall become fully vested and exercisable,
including as to shares as to which it would not otherwise be
exercisable, unless the Board, in its discretion, determines
otherwise.
In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of
the Company, each outstanding restricted stock, restricted stock
unit, performance share, performance unit, dividend equivalent
and deferred stock unit award (and any related dividend
equivalent) shall be assumed or an equivalent award substituted
by the successor corporation or a parent or subsidiary of the
successor corporation. In the event that the successor
corporation refuses to assume or substitute for the award, the
participant shall fully vest in the award, including as to
shares (or with respect to dividend equivalents and performance
units, the cash equivalent thereof) which would not otherwise be
vested.
TAX WITHHOLDING. At the Administrators
discretion, participants may satisfy the minimum statutory tax
withholding requirements arising in connection with the
exercise, vesting or delivery of their awards by having the
Company retain shares with a fair market value equal to the
minimum amount required to be withheld.
AMENDMENT AND TERMINATION OF THE 2006
PLAN. The Board may amend, alter, suspend or
terminate the 2006 Plan, or any part thereof, at any time and
for any reason. However, the Company shall obtain stockholder
approval for the 2006 Plan and any amendment to the 2006 Plan to
the extent it desires that the amendments satisfy the
requirements of Section 422 of the Code, or any other
applicable rule or statute. No such amendment by the Board or
stockholders may alter or impair any award previously granted
under the 2006 Plan without the written consent of the
participant.
TERM OF THE 2006 PLAN. The 2006 Plan will
continue in effect until March 1, 2016.
31
FEDERAL
INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. An optionee who is
granted an incentive stock option does not recognize taxable
income at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the
alternative minimum tax. Upon an optionees sale of the
shares (assuming that the sale occurs at least two years after
grant of the option and at least one year after exercise of the
option), any gain will be taxed to the optionee as long-term
capital gain. If the optionee disposes of the shares prior to
the expiration of the above holding periods, then the optionee
will recognize ordinary income in an amount generally measured
as the difference between the exercise price and the lower of
the fair market value of the shares at the exercise date or the
sale price of the shares. Any gain or loss recognized on such
premature sale of the shares in excess of the amount treated as
ordinary income will be characterized as capital gain or loss.
NONSTATUTORY STOCK OPTIONS. An optionee does
not recognize any taxable income at the time he or she is
granted a nonstatutory stock option. Upon exercise, the optionee
recognizes taxable income generally measured by the excess of
the then fair market value of the shares over the exercise
price. Upon a disposition of such shares by the optionee, any
difference between the sale price and the optionees
exercise price, to the extent not recognized as taxable income
as provided above, is treated as long-term or short-term capital
gain or loss, depending on the holding period.
RESTRICTED STOCK. If at the time of purchase,
restricted stock is subject to a substantial risk of
forfeiture within the meaning of Section 83 of the
Code, the purchaser will not recognize ordinary income at the
time of purchase. Instead, the purchaser will recognize ordinary
income on the dates when a stock ceases to be subject to a
substantial risk of forfeiture. At such times, the purchaser
will recognize ordinary income measured as the difference
between the purchase price and the fair market value of the
stock on the date the stock is no longer subject to a
substantial risk of forfeiture.
The purchaser may accelerate to the date of purchase his or her
recognition of ordinary income, if any, and the beginning of any
capital gain holding period by timely filing an election
pursuant to Section 83(b) of the Code. In such event, the
ordinary income recognized, if any, is measured as the
difference between the purchase price and the fair market value
of the stock on the date of purchase, and the capital gain
holding period commences on such date. The ordinary income
recognized by a purchaser who is an employee will be subject to
tax withholding by the Company.
STOCK APPRECIATION RIGHTS. No income will be
recognized by a recipient in connection with the grant of a
stock appreciation right. When the stock appreciation right is
exercised, the recipient will generally be required to include
as taxable ordinary income in the year of exercise an amount
equal to the sum of the amount of cash received and the fair
market value of any common stock received upon the exercise.
RESTRICTED STOCK UNITS AND PERFORMANCE
SHARES. A participant will not have taxable
income upon grant. Instead, he or she will recognize ordinary
income at the time of vesting equal to the fair market value (on
the vesting date) of the vested shares or cash received minus
any amount paid for the shares.
DIVIDEND EQUIVALENTS. A participant will
recognize taxable income upon the payout of a dividend
equivalent.
DEFERRED STOCK UNITS. Typically, a participant
will recognize employment taxes upon the vesting of a Deferred
Stock Unit and income upon its delivery. The participant may be
subject to additional taxation, interest and penalties if the
Deferred Stock Unit does not comply with Internal Revenue Code
Section 409A.
COMPANY TAX DEDUCTION. The Company generally
will be entitled to a tax deduction in connection with an award
under the 2006 Plan in an amount equal to the ordinary income
realized by a participant and at the time the participant
recognizes such income (for example, the exercise of a
nonqualified stock option). Special rules limit the
deductibility of compensation paid to the Chief Executive
Officer and to certain other highly compensated executive
officers. Under Section 162(m) of the Code, the annual
compensation paid to any of these specified executives will be
deductible only to the extent that it does not exceed
$1,000,000. However, the Company can preserve the deductibility
of certain compensation in excess of $1,000,000 if the
conditions of Section 162(m) are met with respect to
awards. These conditions include stockholder approval of the
performance goals under the 2006
32
Plan, setting individual annual limits on each type of award,
approving the material terms of the 2006 Plan and certain other
requirements. The 2006 Plan has been designed to permit the
Administrator to grant certain awards that qualify as
performance-based for purposes of satisfying the conditions of
Section 162(m), thereby permitting the Company to receive a
federal income tax deduction in connection with such awards.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF
U.S. FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE
COMPANY UNDER THE 2006 PLAN. IT DOES NOT PURPORT TO BE COMPLETE,
AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF THE EMPLOYEES
DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE EMPLOYEE MAY
RESIDE.
ACCOUNTING TREATMENT. Under current accounting
rules mandating expensing for all compensatory equity awards,
including stock options, the Company recognizes compensation
expense for all awards granted under the 2006 Plan. This will
result in a direct charge to the Companys reported
earnings.
A full copy of the 2006 Plan is attached to this proxy statement
as Annex B.
Members of our Board and our named executive officers have an
interest in this proposal because they are eligible to receive
awards under the 2006 Plan.
Amended
Plan Benefits
2006 Equity Incentive Plan
The following table shows the aggregate benefits received by our
named executive officers, our executive officers as a group, our
non-employee directors as a group and our non-executive officer
employees under the 2006 Plan in fiscal 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Subject to Restricted
|
|
|
|
|
|
|
Stock Unit or
|
|
Number of Shares
|
|
|
|
|
Performance Share
|
|
Subject to Stock
|
|
Grant Date
|
Name and Position
|
|
Awards(1)
|
|
Option Awards
|
|
Fair Value(2)
|
|
Kevin R. Johnson
|
|
|
100,000
|
|
|
|
300,000
|
|
|
$
|
5,533,130
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn M. Denholm
|
|
|
32,000
|
|
|
|
100,000
|
|
|
$
|
1,807,790
|
|
Executive Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Bauhaus
|
|
|
32,000
|
|
|
|
100,000
|
|
|
$
|
1,807,790
|
|
Executive Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Layer Technology Business Group
|
|
|
|
|
|
|
|
|
|
|
|
|
John Morris
|
|
|
27,000
|
|
|
|
85,000
|
|
|
$
|
1,531,134
|
|
Executive Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Sales and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
|
32,000
|
|
|
|
100,000
|
|
|
$
|
1,807,790
|
|
Chief Technical Officer and
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer Group (9 persons)
|
|
|
300,300
|
|
|
|
922,000
|
|
|
$
|
16,812,158
|
|
Non-Executive Director Group (8 persons)(3)
|
|
|
47,276
|
|
|
|
50,000
|
|
|
$
|
1,786,661
|
|
Non-Executive Officer Employee Group
|
|
|
5,249,335
|
|
|
|
5,195,221
|
|
|
$
|
209,156,537
|
|
|
|
|
(1) |
|
Shares equal to target number of shares that could be issued
pursuant to performance share awards for the named executive
officers and the employee chairman of the board. Maximum number
of shares issuable pursuant to performance shares awards equals
250% of target. |
|
(2) |
|
Based on the grant date fair value of the award on the date of
grant. Non-qualified stock options are granted with an exercise
price equal to 100% of the market value on the date of grant.
Restricted stock units and performance share awards are full
value awards. |
|
(3) |
|
Includes Mr. Kriens who was an employee and director of the
Company during fiscal year 2010, but not an executive officer. |
33
The Board of Directors Recommends a Vote FOR
approval of the foregoing Amendment to the Juniper Networks,
Inc. 2006 Equity Incentive Plan.
If you sign your proxy or voting instruction card or vote by
telephone or over the Internet but do not give instructions with
respect to this proposal, your shares will be voted for the
approval of the foregoing amendment to the Juniper Networks,
Inc. 2006 Equity Incentive Plan, as recommended by the Board.
Vote
Required
Approval of the foregoing amendment to the Juniper Networks,
Inc. 2006 Equity Incentive Plan requires the affirmative vote of
a majority of the votes cast on the proposal provided that the
total number of votes cast on the proposal must be more than 50%
of the votes entitled to vote.
34
PROPOSAL NO. 5
NON-BINDING
ADVISORY VOTE ON EXECUTIVE COMPENSATION
This proposal provides our stockholders with the opportunity to
cast an advisory vote on the compensation of our named executive
officers. This proposal, commonly known as a Say on
Pay proposal, gives you, as a stockholder, the opportunity
to express your views on our executive compensation programs and
policies and the compensation paid to our named executive
officers.
The Say on Pay vote is advisory, and therefore not binding on
the Compensation Committee or Board of Directors. Although the
vote is non-binding, the Compensation Committee and the Board
will review the voting results, seek to determine the cause or
causes of any significant negative voting, and take them into
consideration when making future decisions regarding executive
compensation programs.
We design our executive compensation programs to implement our
core objectives of providing competitive pay, pay for
performance, and alignment of managements interests with
the interests of long-term stockholders.
Executive
Compensation Philosophy and Objectives
The Companys executive compensation programs are overseen
by the Compensation Committee. In 2010, the Compensation
Committee established the guiding principles below for the
Companys go-forward executive compensation program. The
Compensation Committee believes that these guiding principles
drive the right behaviors, accountability and alignment with
stockholder interests.
|
|
|
Principle
|
|
Strategy
|
|
1. Enhance Accountability
|
|
Executive compensation linked to a clear set of business
objectives
|
2. Manage to Balanced Results
|
|
Compensation strategy that drives balanced results between the
following:
|
|
|
|
|
|
Short- and long-term objectives
|
|
|
|
|
|
Individual and team performance
|
|
|
|
|
|
Financial and non-financial objectives
|
|
|
|
|
|
Customer satisfaction and growth
|
3. Reward High Performance
|
|
Upside potential in the incentive plans for superior performance
with downside risk for underperformance
|
4. Attract & Retain Talent
|
|
Market-competitive programs with flexibility to be aggressive
for mission-critical talent retention and acquisition
|
5. Align with Stockholder Interests
|
|
Programs that are transparent, easily understood and meet
fiduciary commitments to stockholders
|
Fiscal
2010 Compensation
The Company did not change its overall approach to executive
compensation through the downturn and the start of the economic
recovery. Executive base salaries were reviewed at the start of
fiscal 2010. Due to the uncertainty that still surrounded the
economic recovery, we did not grant salary increases at that
time to any of our named executive officers; however, we did
restore their base salaries to the levels they were at in March
2009 prior to the temporary salary reductions. By the end of the
second quarter, the Compensation Committee determined that the
strength of the business had recovered to the extent that we
provided salary increases to our named executive officers
effective July 1, 2010 at the same time we increased
salaries for other employees.
We met our revenue growth, operating margin and Juniper Customer
Satisfaction Index (JCSI) targets (see discussion of JSCI in
Compensation Discussion and Analysis section of this
proxy statement) and significantly exceeded our operating cash
flow margin objectives. The Company met its strategic objectives
for the year and significant strides were made with respect to
our innovation, people and excellence in execution agenda
setting the foundation for 2011. Annual cash incentive payouts
for Named Executive Officers were 123% of target in aggregate
and the performance achievement for the 2010 year for
performance shares was 200% of target. For a detailed
35
discussion of individual pay outcomes and program design see the
Compensation Discussion and Analysis section of this
proxy statement beginning on page 44.
The Compensation Committee and the Board believe that the skill
and motivation of our employees, and especially our executive
leaders, are essential to the Companys performance and
creation of shareholder value. We believe our compensation
program motivates performance that differentiates us from our
competitors. We will continue to provide a compensation program
that we believe is effective, serves shareholder interests and
is worthy of shareholder support.
In addition to the above summary shareholders are urged to read
the Compensation Discussion and Analysis section of
this Proxy Statement beginning on page 44 for greater
detail about our executive compensation programs executive
officers.
Recommendation
The Board believes the Companys executive compensation
programs use appropriate structures and sound pay practices that
are effective in achieving our core objectives. Accordingly, the
Board of Directors recommends that you vote in favor of the
following resolution:
RESOLVED, that Juniper Networks, Inc. stockholders
approve, on an advisory basis, the compensation of the
Companys named executive officers as disclosed pursuant to
the Securities and Exchange Commissions compensation
disclosure rules, including the Compensation Discussion and
Analysis and Executive Compensation sections of this Proxy
Statement.
Vote
Required
The advisory approval of our executive compensation requires a
majority of the shares present in person or represented by proxy
and entitled to vote on each proposal at the annual meeting. As
this is an advisory vote, the result will not be binding on the
Company, the board of directors or the Compensation Committee,
although our Compensation Committee will consider the outcome of
the vote when evaluating our compensation principles, design and
practices.
36
PROPOSAL NO. 6
NON-BINDING
ADVISORY VOTE ON FREQUENCY OF VOTE ON EXECUTIVE
COMPENSATION
This proposal gives our stockholders the opportunity to advise
the Board how often we should conduct an advisory Say on Pay
vote on the compensation of our named executive officers. The
enclosed proxy card or voting instruction form gives you four
choices for voting on this item. You can choose whether the Say
on Pay vote should be conducted every 3 years, every
2 years, or every year. You may also abstain.
Our Board has reviewed the evolution of Say on Pay proposals and
considerations regarding the frequency of such proposals, and
has evaluated the alternatives in an effort to determine the
approach that would best serve Juniper Networks and its
stockholders.
After considering this agenda item, our Board has determined
that an annual advisory vote on executive compensation is the
most appropriate alternative for Juniper Networks. The
Boards determination was influenced by the fact that the
compensation of our named executive officers is evaluated,
adjusted and approved on an annual basis. As part of the annual
review process, the Board believes that stockholder views of our
executive compensation practices should be a factor that is
taken into consideration by the Board and the Compensation
Committee in making decisions with respect to executive
compensation. By providing an advisory vote on executive
compensation on an annual basis, our stockholders will be able
to provide us with direct input on our compensation philosophy,
policies and practices as disclosed in the proxy statement every
year.
Recommendation
The Board recommends that the stockholders vote for a Say on Pay
vote every 1 YEAR.
Because your vote is advisory, it will not be binding upon the
Board. However, our Board values the opinions that our
stockholders express in their votes and will take into account
the outcome of the vote when considering how frequently we
should conduct an advisory Say on Pay vote on the compensation
of our named executive officers.
Vote
Required
The frequency choice
(1-year,
2-years or
3-years)
that receives the highest number of votes will be considered as
the frequency chosen by our stockholders.
37
PROPOSAL NO. 7
NON-BINDING
STOCKHOLDER PROPOSAL REGARDING
DECLASSIFICATION OF BOARD OF DIRECTORS
Juniper Networks has been advised that The City of New York
Office of Comptroller, as the custodian and a trustee of the New
York City Employees Retirement System, the New York City
Teachers Retirement System, the New York City Police
Pension Fund and the New York City Fire Department Pension Fund
and custodian of the New York City Board of Education Retirement
System, 1 Centre Street, New York, NY 10007, intends to submit
the proposal set forth below at the annual meeting.
BE IT RESOLVED, that the stockholders of Juniper Networks, Inc.
request that the Board of Directors take the necessary steps to
declassify the Board of Directors and establish annual elections
of directors, whereby directors would be elected annually and
not by classes. This policy would take effect immediately, and
be applicable to the re-election of any incumbent director whose
term, under the current classified system, subsequently expires.
SUPPORTING
STATEMENT
We believe that the ability to elect directors is the single
most important use of the shareholder franchise. Accordingly,
directors should be accountable to shareholders on an annual
basis. The election of directors by classes, in our opinion,
minimizes accountability and precludes the full exercise of the
rights of shareholders to approve or disapprove annually the
performance of a director or directors.
In addition, since only a fraction of the Board of Directors is
elected annually, we believe that classified boards could
frustrate, to the detriment of long-term shareholder interest,
the efforts of a bidder to acquire control or a challenger to
engage successfully in a proxy contest.
We urge your support for the proposal to repeal the classified
board and establish that all directors be elected annually.
The
Companys Response
For the benefit of our stockholders considering this proposal
who are not familiar with the classified board structure, our
Board is divided into three classes, with directors elected to
staggered three-year terms. Under this system, approximately
one-third of the directors stand for election each year, and the
entire Board can be replaced in the course of three annual
meetings, all held within approximately two years. The intended
benefits of this structure include increased board stability,
improved long-term planning and an enhanced ability to protect
stockholder value in a potential takeover and resist potentially
unfair and abusive takeover tactics.
Recommendation
The Board has carefully considered the stockholder proposal
submitted by The City of New York Office of Comptroller and the
Board has determined not to make a recommendation either in
favor of or opposed to the foregoing proposal. The Board looks
forward to receiving input from our stockholders on this
important issue.
Effect of
the Proposal
The elimination of our classified Board structure would require
more than passage of this proposal; it would require Board
approval of an amendment to our Amended and Restated Certificate
of Incorporation and, the affirmative vote of
662/3%
of our shares having voting power with respect to such an
amendment. Board approval of an amendment to our Bylaws will
also be required. The Board will consider proposing an amendment
to our Amended and Restated Certificate of Incorporation to
declassify the Board consistent with its fiduciary duties, if it
believes such an amendment to be in our stockholders best
interests.
Vote
Required
Approval of the stockholder proposal requires the affirmative
vote of a majority of the shares of Juniper Networks common
stock present in person or represented by proxy and entitled to
be voted at the meeting. Because your vote is advisory, it will
not be binding upon the Board. However, our Board values the
opinions that our stockholders express in their votes and will
take into account the outcome of the vote when considering
whether to eliminate the classified board structure.
38
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information, as of March 24,
2011, concerning:
|
|
|
|
|
beneficial owners of more than 5% of Juniper Networks
common stock;
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|
|
|
beneficial ownership by Juniper Networks directors and the named
executive officers included in the Summary Compensation table on
page 61; and
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|
|
|
beneficial ownership by all current Juniper Networks directors
and current Juniper Networks executive officers as a group.
|
The information provided in the table is based on Juniper
Networks records, information filed with the SEC and
information provided to Juniper Networks, except where otherwise
noted.
The number of shares beneficially owned by each entity, person,
director or executive officer is determined under rules of the
SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the
individual has the sole or shared voting power or investment
power and also any shares that the individual has the right to
acquire as of May 23, 2011 (60 days after
March 24, 2011) through the exercise of any stock
option or other right. Unless otherwise indicated, each person
has sole voting and investment power (or shares such powers with
his or her spouse) with respect to the shares set forth in the
following table. In addition, unless otherwise indicated, all
persons named below can be reached at Juniper Networks, Inc.,
1194 N. Mathilda Avenue, Sunnyvale, California 94089.
BENEFICIAL
OWNERSHIP TABLE
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|
|
|
|
|
|
|
|
Amount and Nature
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|
Percent
|
|
|
of Beneficial
|
|
of Class
|
Name and Address of Beneficial Owner
|
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Ownership(1)
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(1)
|
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Holders of Greater Than 5%
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|
|
|
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T. Rowe Price Associates
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|
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60,242,374
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(2)
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11.3
|
%
|
100 E. Pratt Street
Baltimore, MD 21202
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|
|
|
|
|
|
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FMR LLC
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52,020,083
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(3)
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9.7
|
%
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82 Devonshire Street
Boston, MA 02109
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|
|
|
|
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Prudential Financial, Inc.
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|
|
31,263,152
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(4)
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|
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5.9
|
%
|
751 Broad Street
Newark, NJ 07102
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|
|
|
|
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|
Jennison Associates LLC
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29,783,567
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(5)
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5.6
|
%
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466 Lexington Avenue
New York, NY 10017
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|
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Directors and Named Executive Officers:
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|
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Mark Bauhaus(6)
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277,303
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|
|
|
*
|
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Robert M. Calderoni
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10,846
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|
|
|
*
|
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Mary Cranston(7)
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71,202
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|
|
|
*
|
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Robyn M. Denholm(8)
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344,042
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|
|
|
*
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Kevin R. Johnson(9)
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1,520,925
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|
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*
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Scott Kriens(10)
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8,689,532
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1.6
|
%
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J. Michael Lawrie(11)
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83,158
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|
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|
*
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William F. Meehan(12)
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44,187
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|
|
|
*
|
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John Morris(13)
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44,202
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|
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|
*
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David Schlotterbeck(14)
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11,111
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|
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Stratton Sclavos
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4,846
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|
|
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*
|
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Pradeep Sindhu(15)
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6,627,842
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1.2
|
%
|
William R. Stensrud(16)
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|
1,055,785
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|
|
*
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All Directors and Executive Officers as a Group
(17 persons)(17)
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19,473,738
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|
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3.6
|
%
|
39
|
|
|
* |
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Represents holdings of less than one percent. |
|
(1) |
|
The percentages are calculated using 534,156,526 outstanding
shares of the Companys common stock on March 24,
2011, as adjusted pursuant to
Rule 13d-3(d)(1)(i).
Pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of
1934, as amended (the Exchange Act), beneficial
ownership information also includes (i) shares subject to
options exercisable within 60 days of March 24, 2011
and (ii) shares subject to RSUs or performance share awards
that will vest within 60 days of March 24, 2011. |
|
(2) |
|
Based on information reported on Schedule 13G/A filed with
the SEC on February 10, 2011. These securities are owned by
various individual and institutional investors for which T. Rowe
Price Associates, Inc. (Price Associates) serves as
investment adviser with power to direct investments and/or sole
power to vote the securities. For purposes of the reporting
requirements of the Exchange Act, Price Associates is deemed to
be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is the beneficial owner
of such securities. |
|
(3) |
|
Based on information reported on Schedule 13G/A filed with
the SEC on February 14, 2011. Fidelity
Management & Research Company, a wholly-owned
subsidiary of FMR LLC, is the beneficial owner of
48,046,652 shares as a result of acting as an investment
advisor to various investment companies. Members of Edward C.
Johnson 3ds family are the predominant owners of FMR LLC
and Mr. Johnson serves as the chairman of FMR LLC.
Mr. Johnson and FMR LLC have the sole power to dispose or
direct the disposition of 52,020,083 shares and the sole
power to vote or direct the vote of 3,882,461 shares. |
|
(4) |
|
Based on information reported on Schedule 13G filed with
the SEC on February 8, 2011. These securities are owned by
various direct and indirect subsidiaries of Prudential
Financial, Inc. (Prudential). Prudential, through
its beneficial ownership of the Prudential Insurance Company of
America may be deemed to presently hold 215,500 shares for
the benefit of PICOAs general account. Prudential may have
direct or indirect voting and/or investment discretion over
31,047,652 shares which are held for its own benefit or for
the benefit of its clients by its separate accounts, externally
managed accounts, registered investment companies, subsidiaries
and/or other affiliates.. For purposes of the reporting
requirements of the Exchange Act, Prudential may be deemed to be
a beneficial owner of such securities; however, but expressly
disclaims any admission of beneficial ownership. |
|
(5) |
|
Based on information reported on Schedule 13G filed with
the SEC on February 11, 2011. These securities are owned by
various investment companies, insurance separate accounts and
institutional clients for which Jennison Associates LLC
(Jennison) serves as investment adviser with power
to exercise or direct the exercise of voting or dispositive
power. Prudential indirectly owns 100% of the equity interests
of Jennison and maybe deemed to have the power to exercise or
direct the exercise of such voting or dispositive power that
Jennison may have with respect to the securities. Jennison does
not file jointly with Prudential, as such, shares reported by
Jennison may also be reported by Prudential. |
|
(6) |
|
Includes 222,936 shares which are subject to options that
may be exercised within 60 days of March 24, 2011. |
|
(7) |
|
Includes 65,202 shares which are subject to options or
restricted stock units that may be exercised or vested within
60 days of March 24, 2011. |
|
(8) |
|
Includes 321,958 shares which are subject to options that
may be exercised within 60 days of March 24, 2011. |
|
(9) |
|
Includes 1,304,166 shares which are subject to options that
may be exercised within 60 days of March 24, 2011 |
|
(10) |
|
Includes 3,645,636 shares held by the Kriens 1996 Trust, of
which Mr. Kriens and his spouse are the trustees;
384,750 shares held by Saratoga Investments, LP;
355,000 shares held by KDI Trust LP;
2,000,000 shares held by the 2010 Kriens 10 year
Charitable Remainder Trust, of which Mr. Kriens and his
spouse are the trustees; 2,000,000 shares held by the 2010
Kriens 20 year Charitable Remainder Trust, of which
Mr. Kriens and his spouse are the trustees; 202,037 shares
held by the Kriens Family Foundation; and 11,355 shares
which are subject to options that may be exercised within
60 days of March 24, 2011. |
|
(11) |
|
Includes 79,558 shares which are subject to options or
restricted stock units that may be exercised or vested within
60 days of March 24, 2011. |
40
|
|
|
(12) |
|
Includes 42,436 shares which are subject to options or
restricted stock units that may be exercised or vested within
60 days of March 24, 2011. |
|
(13) |
|
Includes 43,312 shares which are subject to options that
may be exercised within 60 days of March 24, 2011. |
|
(14) |
|
Consists of shares which are subject to options that may be
exercised within 60 days of March 24, 2011. |
|
(15) |
|
Includes 1,201,276 shares held by the Sindhu Investments,
LP, a family limited partnership; 1,616,225 shares held by
the Sindhu Family Trust, 793,948 shares held in a grantor
retained annuity trust and 6,867 shares held by
Dr. Sindhus spouse. Also includes
1,351,083 shares which are subject to options that may be
exercised within 60 days of March 24, 2011. |
|
(16) |
|
Includes 850,939 shares held in trust as community property
and 204,846 shares which are subject to options or
restricted stock units that may be exercised or vested within
60 days of March 24, 2011. |
|
(17) |
|
Includes an aggregate of 4,333,072 shares which are subject
to options or restricted stock units that may be exercised or
vested within 60 days of March 24, 2011. |
EXECUTIVE
OFFICER AND DIRECTOR STOCK OWNERSHIP GUIDELINES
The Company has adopted stock ownership guidelines to further
align the interests of the Companys named executive
officers and directors with the interests of its stockholders
and promote the Companys commitment to sound corporate
governance.
The ownership guidelines applicable to named executive officers
are determined as a multiple of the officers base salary.
The Companys Chief Executive Officer is required to hold
shares of Juniper Networks common stock with a value equal to at
least three (3) times his or her annual base salary. The
other named executive officers are required to hold shares of
Juniper Networks common stock with a value equal to one and
one-half (1.5) times his or her annual base salary. This
ownership guideline is initially calculated using the applicable
base salary as of the later of (a) February 11, 2009,
and (b) the date the person first became subject to these
guidelines as a named executive officer. The base salary
guideline for each person will be re-calculated February 7,
2012 and each third year thereafter, and will be based on
applicable base salary in effect on such calculation date. Named
executive officers are required to achieve the applicable level
of ownership within five (5) years of the later of
(a) February 11, 2009, and (b) the date the
person was initially designated a named executive officer of the
Company.
Outside directors are required to hold shares of Juniper
Networks common stock with a value equal to three (3) times
the amount of the annual retainer paid to outside directors for
service on the Board (excluding additional committee retainers,
if any). This ownership guideline is initially calculated using
the annual cash retainer for service as a director (but not
including additional retainers associated with committee or
Chairman service) as of the date the person first became subject
to these guidelines as an outside director. The ownership
guidelines will be re-calculated based on applicable annual
director retainers as of February 7, 2012 and each third
year thereafter, and will be based on applicable annual Board
retainer in effect on such calculation date. Outside directors
are required to achieve applicable level of ownership within
three (3) years of the later of (a) February 11,
2009, and (b) the date the person first became a
non-employee member of the Board.
A complete copy of the Companys equity ownership
guidelines is located at
http://www.juniper.net/us/en/local/pdf/legal/stock-ownership-guidelines.pdf.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors,
executive officers and holders of more than 10% of Juniper
Networks common stock to file with the SEC reports regarding
their ownership and changes in ownership of our securities.
Other than one late filing for Mr. Sclavos on May 24,
2010 to report the annual RSU grant he received as a
non-employee director on May 12, 2010, we believe that,
during fiscal 2010, our directors, executive officers and 10%
stockholders complied with all Section 16(a) filing
requirements. In making this statement, we have relied upon
examination of the copies of Forms 3, 4 and 5, and
amendments thereto, provided to Juniper Networks and the written
representations of its directors and executive officers.
41
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The Companys Worldwide Code of Business Conduct and Ethics
(the Code) requires that the Companys
employees, officers and directors avoid conducting Company
business with a relative or significant other, or with a
business in which a relative or significant other is associated
in any significant role (as used in the Code, a related
party transaction). If the related party transaction (as
defined in the Code or applicable SEC and NYSE rules and
regulations) involves the Companys directors or executive
officers or is determined by the Companys Chief Financial
Officer to be material to the Company (or if applicable SEC or
NYSE rules require approval by the Audit Committee), the Audit
Committee of the Board, in accordance with the Code and its
charter, must review and approve the matter in writing in
advance of any such related party transactions.
Since the beginning of fiscal year 2010, Juniper Networks has
not been a participant in a transaction in which any related
person of Juniper Networks had or will have a direct or indirect
material interest, as contemplated by Item 404(a) of
Regulation S-K
under the Exchange Act.
COMPENSATION
CONSULTANT FEE DISCLOSURE
During 2010, the Compensation Committee did not engage its own
advisor. The Compensation Committee approved the Companys
retention of Mercer (US) Inc. (Mercer) to provide
analysis, advice and guidance with respect to compensation.
Mercer is a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc. (MMC). Mercers fees
for executive compensation consulting in fiscal year 2010 were
approximately $460,339. Mercer performed the following services
related to executive compensation.
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|
|
|
|
Evaluated the competitive positioning of the Companys
executive officers base salaries, annual incentive and
long-term incentive compensation relative to our primary peer
companies and the broader industry;
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|
Advised on 2010 target award levels within the annual and
long-term incentive programs and, as needed, on actual
compensation actions;
|
|
|
|
Assessed the alignment of the Companys compensation levels
relative to performance against primary peer companies and
relative to the Compensation Committees articulated
compensation philosophy;
|
|
|
|
Provided advice on the design of the Companys 2010 annual
and long-term incentive plans;
|
|
|
|
Advised on the 2010 performance measures and performance targets
for the annual and long-term incentive programs; and
|
During the fiscal year, the Company decided to retain Mercer and
its MMC affiliates to provide services unrelated to executive
compensation including U.S. benefits administration,
consulting services related to generally available Company
benefit plans, brokerage services for U.S. and
international benefit plans and insurance brokerage services.
The aggregate fees paid for these other services were
approximately $2,066,913.
Because the Compensation Committee did not retain its own
independent compensation consultant in 2010, the Compensation
Committee and Mercer implemented policies and procedures so
Mercer and the Compensation Committee are confident that the
advice the Compensation Committee receives from the individual
executive compensation consultant at Mercer is objective and not
influenced by Mercers or its affiliates
relationships with the Company. These policies and procedures
include:
|
|
|
|
|
Mercers professional standards prohibit the individual
consultant from considering any other relationships Mercer or
any of its affiliates may have with the Company in rendering his
or her advice and recommendations;
|
|
|
|
The Compensation Committee evaluates the quality and objectivity
of the services provided by the consultant each year; and
|
|
|
|
The protocols for the engagement (described below) limit how the
consultant may interact with management.
|
42
In advising the Compensation Committee, it is necessary for the
consultant to interact with management to gather information,
but the Compensation Committee has adopted protocols governing
if and when the consultants advice and recommendations to
the Compensation Committee can be shared with management. These
protocols are included in Mercers engagement letter. The
Compensation Committee also determines the appropriate forum for
receiving consultant recommendations. Where appropriate,
management invitees are present to provide context for the
recommendations. This approach protects the Compensation
Committees ability to receive objective advice from the
consultant so that the Committee may make independent decisions
about executive pay at the Company.
In 2011, the Compensation Committee engaged Semler Brossy
Consulting Group, LLC (Semler Brossy) as its own
separate compensation consultant. Semler Brossy will not provide
other services to the Company and will provide services only to
the Compensation Committee.
As the independent advisor to the Compensation Committee, Semler
Brossy reports to the Compensation Committee and receives its
instructions from the Compensation Committee. Semler Brossy
works in collaboration with the Companys management at the
Compensation Committees direction as needed to review
recommendations being made to the Committee and to provide
information and guidance to management on the Compensation
Committees behalf. The Compensation Committees
consultant may also make recommendations directly to the
Compensation Committee and attend portions of the Compensation
Committees executive sessions without the involvement of
management as required by the Compensation Committee and in
order to support the Compensation Committees independent
decision-making.
43
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The Compensation Committee (the Committee) is
comprised entirely of independent directors and has the
responsibility for approving compensation for those officers who
are designated as reporting officers under Section 16 of
the Securities Exchange Act of 1934 (Section 16
officers). Generally, the types of compensation and
benefits provided to the Section 16 officers are also
provided to other non-Section 16 officers reporting to the
Chief Executive Officer. Throughout this proxy statement, the
individuals who served as the Companys Chief Executive
Officer or Chief Financial Officer during 2010, as well as the
other individuals included in the Summary Compensation Table on
page 61, are referred to as the named executive
officers.
This discussion describes and analyzes the 2010 compensation
program for the named executive officers of the Company.
Executive
Summary
The Company has had a long-standing orientation in its executive
compensation program toward pay for performance. This
orientation has held constant throughout the business cycles
that our organization has confronted over time. The compensation
decisions made for fiscal 2010 reflect strong actual performance
relative to initial expectations for the year. Our compensation
programs include base salary, annual incentive compensation,
long-term incentives, benefits similar to those available to any
employee in the Company and a limited perquisite package. We
believe the decisions described in this proxy statement validate
our focus on pay for performance and demonstrate our ongoing
commitment to our shareholders.
Fiscal
2010 Performance
Early in the year, the Board approved a business plan that
reflected our initial expectations for our Company performance.
The Committee set goals for revenue growth, operating margin,
operating cash flow margin, JCSI and strategic goals at the
beginning of the year. These goals served as targets for our
annual incentive plans and performance share award plans. In
establishing these goals, the Committee considered the
uncertainty related to the timing of the economic recovery. The
Committee determined that meeting these goals would require
continued execution of our growth and performance strategy.
The Company achieved strong financial performance in fiscal year
2010 with 23% revenue growth compared to fiscal year 2009. We
benefited from our investments in R&D and focus on cost
management as well as the execution of our growth and
performance strategy and experienced an improved global economic
climate. We made great strides in our innovation agenda,
strengthened our leadership capabilities and focused on
operational efficiency to enhance our ability to scale.
Fiscal
2010 Pay Implications
The Company did not change its overall approach to executive
compensation through the downturn and the start of the economic
recovery. Executive base salaries were reviewed at the start of
fiscal 2010. Due to the uncertainty that still surrounded the
economic recovery, we did not grant salary increases at that
time to any of our named executive officers; however, we did
restore their base salaries to the levels they were at in March
2009 prior to the temporary salary reductions. By the end of the
second quarter, the Committee determined that the strength of
the business had recovered to the extent that we provided salary
increases to our named executive officers effective July 1,
2010 at the same time we increased salaries for other employees.
We did not change the design or performance measures of our
annual incentive plan. Our executive equity grants continued to
be a combination of stock options and performance shares. The
only change we made was to the design of the performance share
program as follows:
|
|
|
|
|
Added JCSI as a metric. The Committee believes that as we
execute on our growth agenda it is critical that we stay focused
on customer satisfaction and quality. JCSI is designed to
measure the satisfaction of our customers with our products and
services. The metric is discussed in further detail on
page 53.
|
44
|
|
|
|
|
Given the addition of JCSI as a metric, the Committee approved
increasing the maximum payout opportunity under the 2010
performance share program to 250% of target compared to 200% of
target under the 2009 program.
|
We met our revenue growth, operating margin and JCSI targets and
significantly exceeded our operating cash flow margin
objectives. The Company met its strategic objectives for the
year and significant strides were made with respect to our
innovation, people and excellence in execution agenda setting
the foundation for 2011. Annual cash incentive payouts for Named
Executive Officers were 123% of target in aggregate and the
performance achievement for the 2010 year for performance
shares was 200% of target, see tables # and # for details.
The Committee and the Board believe that the skill and
motivation of our employees, and especially our executive
leaders, are essential to the Companys performance and
creation of shareholder value. We believe our compensation
program motivates performance that differentiates us from our
competitors and provides an attractive compensation opportunity
that allows us to attract and retain highly talented executives.
We will continue to provide a compensation program that we
believe is effective, serves shareholder interests and is worthy
of shareholder support.
Executive
Compensation Philosophy and Objectives
The Companys executive compensation programs are overseen
by the Committee. The Committee recognizes that in order for the
Company to successfully develop, introduce, market and sell
products, the Company must be able to attract, retain and reward
qualified executives who will be able to operate effectively in
a high growth, complex environment. In 2010, the Committee
established the guiding principles below for the Companys
go-forward executive compensation program. The Committee
believes that these guiding principles drive the right
behaviors, accountability and alignment with stockholder
interests.
Table
1
|
|
|
Principle
|
|
Strategy
|
|
1. Enhance Accountability
|
|
Executive compensation linked to a clear set of business
objectives
|
2. Manage to Balanced Results
|
|
Compensation strategy that drives balanced results between the
following:
|
|
|
|
|
|
Short- and long-term objectives
|
|
|
|
|
|
Individual and team performance
|
|
|
|
|
|
Financial and non-financial objectives
|
|
|
|
|
|
Customer satisfaction and growth
|
3. Reward High Performance
|
|
Upside potential in the incentive plans for superior performance
with downside risk for underperformance
|
4. Attract & Retain Talent
|
|
Market-competitive programs with flexibility to be aggressive
for mission-critical talent retention and acquisition
|
5. Align with Stockholder Interests
|
|
Programs that are transparent, easily understood and meet
fiduciary commitments to stockholders
|
In addition, the Committee also established a framework for
executive compensation positioning relative to market.
Competitive compensation is fundamental for attracting and
retaining the talent profile required for the success of the
business. The 2010 market positioning strategy is presented
below. The framework provides a starting point in compensation
decision-making and final decisions regarding compensation
opportunity for an executive officer take into account
individual performance, tenure, criticality of role, and ability
to impact business results.
45
Table
2
|
|
|
|
|
|
|
|
|
|
|
Element
|
|
Market Definition
|
|
Target Pay Positioning
|
|
Rationale
|
Base Salary
|
|
|
|
|
|
At market median
|
|
|
|
Market definition is primarily industry-specific as future
employees will predominately be sourced from Juniper
Networks industry
|
|
|
|
|
|
|
|
|
|
|
Base pay adjusted to reflect local cost of living
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Incentives
|
|
|
|
|
|
Target at or slightly above market median
|
|
|
|
Provides focus on annual financial and non-financial goals
|
|
|
|
|
|
|
Upside potential positions total cash at or above
75th percentile
|
|
|
|
Motivates superior performance with upside potential
|
Total Cash Compensation
|
|
Comparable U.S. public companies with whom the Company competes
for talent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentives
|
|
|
|
|
|
Between median and 75th percentile
|
|
|
|
Creates ownership and aligns employee efforts with stockholder
value creation
|
|
|
|
|
|
|
|
|
|
|
Annual grants based on value delivered in the market for
comparable jobs
|
|
|
|
|
|
|
|
|
|
|
|
Total Direct Compensation
|
|
|
|
|
|
Target above market median
|
|
|
|
Reward executives for achieving financial and strategic results
that drive stockholder value over the long-term
|
|
|
|
|
|
|
Upside potential positions total direct compensation at or above
75th percentile
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Role of
the Compensation Consultant
The Committee has the authority to engage its own advisors to
assist in carrying out its responsibilities. During 2010,
although the Committee did not engage its own advisor, it
approved the Companys retention of Mercer (US) Inc.
(Mercer) to provide analysis, advice and guidance
with respect to compensation. Starting in 2011, the Committee
has retained the services of the Semler Brossy Consulting Group
to serve as its own independent advisor. The Committee is free
to replace its compensation advisors or retain additional
advisors at any time.
With respect to compensation matters over the course of 2010,
Mercer reported to the Companys Executive Vice President
of Human Resources. In addition, the compensation
consultants reports, recommendations and advice are
provided directly to the Committee at the direction of the
Companys management. For detailed discussion on
Mercers role and fees for fiscal 2010, please refer to
page 42 of this filing.
46
Role of
the Chief Executive Officer
The Chief Executive Officer makes recommendations to the
Committee regarding the salary, incentive target and equity
awards for the Chief Financial Officer and other named executive
officers (except for himself) based on the analysis and guidance
provided by the compensation consultant and the Chief Executive
Officers assessment of individual performance. The Chief
Executive Officer is also assisted by the Executive Vice
President, Human Resources in making these recommendations.
The Committee independently decides the salary, incentive target
and equity awards for the Chief Executive Officer. The Executive
Vice President, Human Resources made recommendations regarding
the Chief Executive Officers compensation with the
compensation consultants input and advice for 2010. In
2011, the Committees independent compensation consultant
provided input directly to the Committee for the CEOs
compensation, without the involvement of the Executive Vice
President, Human Resources. Based on the information presented,
the Committee discusses the Chief Executive Officers
performance, Company performance and the competitive market, and
independently makes compensation decisions in an executive
session, without the Chief Executive Officer present.
Factors
Considered in Determining Executive Compensation
As a starting point, the Committee reviews competitive
compensation market data to establish reference points and
relies on the following data sources:
|
|
|
|
|
Peer Group: A group of publicly-traded
networking equipment and other high technology companies set
forth in the table below (the Peer Group). The
companies included in the Peer Group are ones which the
Committee believes are similar in size and business scope and
which compete with the Company for talent. This list is
periodically reviewed and updated by the Committee to take into
account changes in both the Companys business and the
businesses of the companies in the Peer Group. The data on the
compensation practices of the Peer Group is gathered through
publicly available information.
|
Table
3
|
|
|
|
|
|
|
FY 2010 Revenues
|
|
Peer Group Company
|
|
(In millions)
|
|
|
EMC Corp.
|
|
$
|
17,015
|
|
Qualcomm Inc.
|
|
$
|
10,991
|
|
Western Digital Corp.
|
|
$
|
9,850
|
|
Ebay Inc.
|
|
$
|
9,156
|
|
Corning Inc.
|
|
$
|
6,632
|
|
Symantec Corp.
|
|
$
|
5,985
|
|
Harris Corp.
|
|
$
|
5,206
|
|
SanDisk Corp.
|
|
$
|
4,827
|
|
CA Inc.
|
|
$
|
4,353
|
|
Network Appliance Inc.
|
|
$
|
3,931
|
|
Adobe Systems Inc.
|
|
$
|
3,800
|
|
Intuit Inc.
|
|
$
|
3,455
|
|
Commscope Inc.(1)
|
|
$
|
3,025
|
|
Autodesk Inc.
|
|
$
|
1,714
|
|
|
|
|
|
|
Peer Group Median
|
|
$
|
5,016
|
|
Juniper Networks
|
|
$
|
4,093
|
|
|
|
|
|
|
|
|
|
(1) |
|
Revenues for Commscope Inc. are for fiscal year 2009, fiscal
year 2010 information is not publicly available. |
47
|
|
|
|
|
Published Surveys: For the 2010 annual
compensation review, broader technology company data was drawn
from the Radford 2009 Executive Compensation Survey for
companies of comparable size, approximately $4 billion in
revenue.
|
After reviewing the market data, the Committee takes into
consideration other factors, such as internal equity, individual
performance, tenure, leadership skills and ability to impact
business performance. In addition, while recruiting key
executive talent, the compensation decisions may be determined
based on the recruiting negotiations with such individuals and
reflect such factors as the amounts of compensation that the
individual would forego by joining the Company or the costs of
relocation.
Elements
of Executive Compensation
The named executive officer compensation program comprises the
following elements:
Table
4
|
|
|
Element
|
|
Rationale
|
|
Base Salary
|
|
Provides fixed level of compensation for day-to-day
responsibilities and achieving target goals and objectives
|
Annual Cash Incentives
|
|
Aligns executive efforts with short-term (annual) financial and
strategic Company goals
|
Long-term Incentives
|
|
Bridges short- and long-term goals and aligns executive effort
with stockholder value creation
|
Stock Options
|
|
Explicitly aligns executive efforts with stockholder value
creation (stock price appreciation)
|
Performance Shares
|
|
Rewards longer-term sustained financial performance, further
strengthening the link with stockholder value creation
|
Restricted Stock Units
|
|
Key tool used in specific situations for retention and
attraction needs (not used in a programmatic way for executives)
|
Benefits
|
|
Except as referenced below, executives participate in
company-wide benefit programs. Executives may choose to defer a
portion of salary and annual incentive bonus under a deferred
compensation program
|
Severance
|
|
Provides a financial bridge to new employment in line with
market competitive practices
|
Change of Control Related Benefits
|
|
Encourage the continued attention, dedication and continuity of
assigned duties without the distraction that may arise from the
possibility of a change of control
|
Base
Salary
In 2010, Mr. Johnson recommended pay increases for the
named executive officers in light of a review of competitive
external market data as well as the Companys compensation
framework. The Committee approved Mr. Johnsons
recommendations and independently decided the pay increase for
Mr. Johnson. As indicated in the table below,
Mr. Bauhaus and Dr. Sindhu received increases that
were intended to better align their salaries with those of
executives at Juniper with similar levels of responsibility and
comparable positions among similarly sized companies in the
technology industry, as well as recognition that no salary
increases were made in 2009. Merit increases were effective
July 1, 2010.
48
Table
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 Base
|
|
2010 Base
|
|
|
|
|
Salary Before
|
|
Salary After
|
|
|
Executive
|
|
Increase
|
|
Increase (1)%
|
|
Increase
|
|
Kevin R. Johnson
|
|
$
|
800,000
|
|
|
$
|
840,000
|
|
|
|
5
|
%
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn M. Denholm
|
|
$
|
500,000
|
|
|
$
|
525,000
|
|
|
|
5
|
%
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Bauhaus
|
|
$
|
357,000
|
|
|
$
|
500,000
|
|
|
|
40
|
%
|
Executive Vice President, Service
Layer Technology Business Group
|
|
|
|
|
|
|
|
|
|
|
|
|
John Morris
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
|
0
|
%
|
Executive Vice President,
Worldwide Sales and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
$
|
396,750
|
|
|
$
|
550,000
|
|
|
|
39
|
%
|
Chief Technical Officer and
Vice Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
Cash Incentive Compensation
As discussed above, one of the key program objectives is to have
a significant portion of each named executive officers
compensation tied to performance. To this end, the Company has
established a target annual performance-based cash incentive
opportunity for each named executive officer expressed as a
percentage of base salary. In establishing the amount of target
incentive, the Committee takes into account competitive market
data, desired positioning against market, the individuals
role and contribution to performance, and internal equity. The
actual award earned may be higher or lower than this target
incentive amount based on company, business unit
and/or
individual performance factors.
For 2010, the Committee determined not to make any changes to
the target incentives (as a percentage of base salary) from 2009
levels, except for Mr. Bauhaus and Dr. Sindhu, who
both received increases in target incentive opportunity from 75%
of base salary to 100% . The increase was intended to better
align their annual incentive opportunity with executives at
Juniper with similar levels of responsibility, as well as
comparable positions among
49
similarly sized companies in the technology industry. The target
incentives as a percentage of base salary for 2010 are presented
below:
Table
6
2010
Target Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentives (as
|
|
|
|
|
|
|
Adjusted Base
|
|
% of Base
|
|
Target
|
Executive
|
|
Base Salary
|
|
Salary(1)
|
|
Salary)
|
|
Incentives
|
|
Kevin R. Johnson
|
|
$
|
840,000
|
|
|
$
|
820,000
|
|
|
|
150
|
%
|
|
$
|
1,230,000
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn M. Denholm
|
|
$
|
525,000
|
|
|
$
|
512,500
|
|
|
|
100
|
%
|
|
$
|
512,500
|
|
Executive Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Bauhaus
|
|
$
|
500,000
|
|
|
$
|
428,500
|
|
|
|
100
|
%
|
|
$
|
428,500
|
|
Executive Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Layer Technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Morris
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
|
100
|
%
|
|
$
|
500,000
|
|
Executive Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Worldwide
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
$
|
550,000
|
|
|
$
|
473,375
|
|
|
|
100
|
%
|
|
$
|
473,375
|
|
Chief Technical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer and Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Adjusted base salaries reflect the weighted average base salary
for the year given that salary increases were effective
July 1, 2010. |
Named executive officers could earn annual cash incentives in
2010 based on achievement of pre-determined revenue growth and
non-GAAP operating margin targets as well as strategic
objectives. The strategic objectives component was based on a
company-wide scorecard which included individualized goals for
the named executive officers based on the Companys overall
strategy. The illustration and table below layout the annual
incentive plan design, the performance objectives and the
weighting assigned to each measure for each individual named
executive officer.
50
Table
7
2010
Performance Target Weighting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Financial
|
|
|
|
|
Performance
|
|
Business Group Financial Performance
|
|
|
Revenue
|
|
Operating
|
|
Revenue
|
|
Operating
|
|
Strategic
|
Executive
|
|
Growth
|
|
Margin
|
|
Growth
|
|
Margin
|
|
Goals
|
|
Kevin R. Johnson
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
30
|
%
|
Robyn M. Denholm
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
30
|
%
|
Mark Bauhaus
|
|
|
10
|
%
|
|
|
10
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
30
|
%
|
John Morris
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
30
|
%
|
Pradeep Sindhu
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
30
|
%
|
The actual amounts paid to individuals depend on the level of
achievement against the objectives and, with respect to the
revenue growth, operating margin and strategic objectives, range
between zero and 200% of the target incentive. The portion of
incentives tied to financial objectives is formulaic. However,
the strategic component is funded at target and the Chief
Executive Officer makes recommendations for individual payouts
for officers other than himself based on his evaluation of their
performance. The Chief Executive Officer has the ability to
present a case to the Committee for above target funding for the
strategic component; final approval of actual payout amounts is
at the discretion of the Committee. For 2010, the Committee set
target performance goals for revenue growth and operating margin
per the table below. Strategic goals varied based on
individuals. Some examples of strategic goals used for 2010 are
as follows:
|
|
|
|
|
Quality of products
|
|
|
|
Increased number of design wins
|
|
|
|
Expanded customer usage of emerging Company products
|
|
|
|
Growth in market share
|
|
|
|
Improve customer loyalty
|
|
|
|
Develop the Companys leadership capabilities
|
|
|
|
Expand operating margins through scale and efficiency
|
Table
8
2010
Performance Target Achievement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Financial
|
|
SLT Business Group
|
|
Corporate Financial
|
|
SLT Business Group
|
|
|
Performance
|
|
Financial Performance(2)
|
|
Payouts
|
|
Financial Payouts
|
|
|
Revenue
|
|
Operating
|
|
Revenue
|
|
Operating
|
|
Revenue
|
|
Operating
|
|
Revenue
|
|
Operating
|
Performance Level(1)
|
|
Growth
|
|
Margin
|
|
Growth
|
|
Margin
|
|
Growth
|
|
Margin
|
|
Growth
|
|
Margin
|
|
Maximum
|
|
|
25.0
|
%
|
|
|
24.1
|
%
|
|
|
18.4
|
%
|
|
|
22.0
|
%
|
|
|
200
|
%
|
|
|
200
|
%
|
|
|
200
|
%
|
|
|
200
|
%
|
Target
|
|
|
16.9
|
%
|
|
|
21.1
|
%
|
|
|
10.8
|
%
|
|
|
17.8
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
Inter Point
|
|
|
8.5
|
%
|
|
|
19.6
|
%
|
|
|
5.7
|
%
|
|
|
17.2
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
Threshold
|
|
|
0
|
%
|
|
|
18.1
|
%
|
|
|
0
|
%
|
|
|
14.8
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Actual
|
|
|
16.2
|
%
|
|
|
21.2
|
%
|
|
|
18.1
|
%
|
|
|
19.6
|
%
|
|
|
96.1
|
%
|
|
|
103.8
|
%
|
|
|
196.4
|
%
|
|
|
142.5
|
%
|
|
|
|
(1) |
|
No payout for individual component for performance levels below
threshold. Payment scales between Threshold and Target and
between Target and Maximum are linear. |
51
|
|
|
(2) |
|
Service Layer Technologies (SLT) is one of several Business
Groups (BGs) in the Company. Details are disclosed above because
Mr. Bauhauss annual incentive plan is based on both
Corporate- and BG-level performance. |
Upon completion of the measurement period for 2010, the
Committee reviewed the performance of the Company to verify and
approve the calculations of the amounts to be paid. Actual
payments to named executive officers under the incentive program
ranged between 103% and 135% of the individuals target
bonus for the year. The following table summarizes the payments
for the Companys named executive officers (expressed as
percentage of their 2010 target incentive):
Table
9
Payments
Under 2010 Annual Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Component
|
|
Strategic Component
|
|
Total Amount
|
|
|
|
|
Payout as %
|
|
|
|
Payout as %
|
|
|
|
Payout as %
|
Executive
|
|
Payout $
|
|
of Target
|
|
Payout $
|
|
of Target
|
|
Payout $
|
|
of Target
|
|
Kevin R. Johnson
|
|
$
|
861,000
|
|
|
|
70.0
|
%
|
|
$
|
738,000
|
|
|
|
60.0
|
%
|
|
$
|
1,599,000
|
|
|
|
130.0
|
%
|
Robyn M. Denholm
|
|
$
|
358,750
|
|
|
|
70.0
|
%
|
|
$
|
225,000
|
|
|
|
43.9
|
%
|
|
$
|
583,750
|
|
|
|
113.9
|
%
|
Mark Bauhaus
|
|
$
|
448,639
|
|
|
|
104.7
|
%
|
|
$
|
128,000
|
|
|
|
29.9
|
%
|
|
$
|
576,639
|
|
|
|
134.6
|
%
|
John Morris
|
|
$
|
350,000
|
|
|
|
70.0
|
%
|
|
$
|
260,000
|
|
|
|
52.0
|
%
|
|
$
|
610,000
|
|
|
|
122.0
|
%
|
Pradeep Sindhu
|
|
$
|
331,363
|
|
|
|
70.0
|
%
|
|
$
|
156,000
|
|
|
|
33.0
|
%
|
|
$
|
487,363
|
|
|
|
103.0
|
%
|
Actual 2010 Corporate revenue growth and operating margin
performance approximated target and resulted in 100% payout of
total target bonus for this component. Revenue growth and
operating margin performance under the SLT BG significantly
exceeded target. For the strategic objectives-related payouts,
the Chief Executive Officer presented to the Committee an
evaluation of all of his direct reports relative to their goals
and also made recommendations for their payouts. For the Chief
Executive Officer, the Committee independently determined the
payout for the strategic objectives component.
Long-Term
Equity Incentive Compensation
The Company has been focused on managing its annual equity usage
as a percentage of its common stock outstanding to align with
Peer Group competitive levels. To reduce its equity usage, the
Committee reviewed its overall equity compensation program and
made changes intended to position the Companys annual
equity run rate below the Peer Groups
75th percentile. For 2010, the Company sought to implement
a more consistent and comprehensive compensation system. The
Company created a compensation range for each job grade,
including the executive officer grades, with a specified base
salary, target cash incentive and long-term incentive range. In
determining the ranges for long-term incentives, the Committee
sought to allocate to the named executive officers approximately
50% of award value in stock options and 50% of award value in
performance shares. The number of shares for the equity
guidelines is calculated using the six month average stock price
in the second half of 2010, i.e., July 1 Dec 31.
Using an average stock price mitigates the impact of spot stock
price volatility on any given day in converting long-term
incentive value to number of shares. In determining the amount
of long-term equity incentives to award each individual, the
Committee evaluated grant levels in the Peer Group and reported
in the survey data. The Committees objective was to
continue to target total direct compensation near the
50th percentile of the Peer Group market data discussed
above. However, within this general objective, the specific
number of equity awards for each of the named executive officers
was based on his or her respective role and grade level.
The Companys equity compensation programs are intended to
align the interests of our named executive officers with those
of our stockholders by creating an incentive to drive financial
performance over time and
52
maximize stockholder value creation. The vehicles used for the
equity compensation program and the rationale for their use is
as follows:
Stock
Options
Stock options provide payout opportunity to the named executive
officers only if the stock price appreciates relative to the
date of grant, which is an express link between stockholder
value creation and executive efforts. The stock options vest
based upon continued service over a four year period. Stock
options were granted to the named executive officers by the
Company on February 19, 2010 and have an exercise price
equal to the closing market price in effect on the date of grant
of $27.44 per share. The options have a seven-year term and vest
with respect to 25% of the shares on the first anniversary of
grant and with respect to 1/48th of the shares each month
thereafter, assuming continued service to the Company.
Performance
Share Awards
Performance share awards are designed to reward executive
efforts with respect to
year-over-year
sustained financial performance, which in the longer-term has
the potential to positively impact stockholder value.
Named executive officers receive performance share grants that
are earned annually based on performance over a three-year
period. In general, earned shares vest following the end of the
three-year period. The amount of performance shares earned for a
particular year is based on the achievement of annual
performance targets established for that year. For the shares
granted in 2010, the Committee added JCSI as a measure to the
performance share program, in addition to operating cash flow
margin. The Committees believes that as we execute on our growth
agenda, it is critical that we focus on customer satisfaction, a
key driver of sustainable success. JCSI comprises of three
metrics: (1) Overall satisfaction with Juniper,
(2) Likelihood to recommend Juniper to a colleague, and
(3) Continued use of Juniper products, services and or
support. JCSI is measured based on the results of a customer
satisfaction survey, designed, administered and analyzed by an
external firm in partnership with the Companys management.
The survey process typically begins towards the middle of the
second quarter and final results are available towards the end
of the last quarter. For 2010, 3844 nomination were sent across
810 client accounts for participation in the Companys
customer satisfaction survey and 774 customers participated, up
131% vs. 2009. JCSI functions as a multiplier to the interim
payout outcome based on operating cash flow margin performance
relative to objectives per the illustration below. For 2010, the
Committee set target performance goals at levels which it
believed at the time to be difficult but achievable and set
maximum performance goals at a level which it believed to be
very difficult. With respect to each years performance,
the participants can earn between 0% and 250% of the target
amount for that year depending on the level of achievement
against the targets established for that year (the target amount
for each year is one third of the target amount for the entire
three year period). Shares earned vest on satisfaction of the
service period of three years from date of grant. No shares are
vested or issued prior to the completion of the third year, and
any earned but unvested shares are forfeited if the employee
leaves the Company before they are vested and issued.
Performance shares were granted to named executive officers on
February 19, 2010, and vest after the Committee approves
the third year payout calculations following the end of the
third performance year based on achievement of specific
performance objectives established for each year of a three-year
period as described above. However, in the case of
Mr. Johnson, his September 2008 performance share award
granted in connection with the commencement of his employment
vests each year after the Committee approves the payout
calculations following 2008, 2009, 2010, 2011, and 2012. Details
on individual grants can be found in the Grants of Plan Based
Awards Table on page 63 of this document.
Tables 10 and 11 provide operating cash flow margin and Juniper
Customer Satisfaction Index goals for 2010, actual achievement
and details of shares earned for the 2010 performance
measurement year. The Companys achievement of this goal
reflects increased efficiency in its use of cash.
53
Table
10
2010
Operating Cash Flow Margin Goal Achievement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modifier
|
|
|
Corporate
|
|
|
|
Juniper Customer
|
|
(Multiple of
|
|
|
Operating Cash
|
|
Payout (% of
|
|
Satisfaction Index
|
|
OCF Margin
|
Performance Measure(1)
|
|
Flow Margin
|
|
Target)(1)
|
|
(JCSI)
|
|
Payout %)
|
|
Maximum
|
|
|
25.0
|
%
|
|
|
200
|
%
|
|
|
8.41 and above
|
|
|
|
1.25x
|
|
Target
|
|
|
22.5
|
%
|
|
|
100
|
%
|
|
|
7.91 8.07
|
|
|
|
1.00
|
x
|
Threshold
|
|
|
18.5
|
%
|
|
|
0
|
%
|
|
|
7.54 and below
|
|
|
|
0.75
|
x
|
Actual
|
|
|
25.6
|
%
|
|
|
200
|
%
|
|
|
8.04
|
|
|
|
1.00x
|
|
|
|
|
(1) |
|
No payout for performance levels below threshold. Payment scales
between Threshold and Target and between Target and Maximum are
linear. |
Table
11
Shares Earned
for 2010 Performance Goal Achievement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
Performance
|
|
|
|
|
|
|
Grant Year of
|
|
Performance
|
|
|
|
Achievement
|
|
2010 Total
|
|
|
|
|
Performane
|
|
Share
|
|
|
|
(% of
|
|
Shares
|
|
Shares
|
Executive
|
|
Shares
|
|
Target
|
|
2010 Target
|
|
Target)
|
|
Earned
|
|
Vested
|
|
Kevin R. Johnson
|
|
|
2010
|
|
|
|
100,000
|
|
|
|
33,334
|
|
|
|
200
|
%
|
|
|
66,667
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
100,000
|
|
|
|
33,334
|
|
|
|
200
|
%
|
|
|
66,667
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
335,000
|
|
|
|
75,000
|
|
|
|
200
|
%
|
|
|
150,000
|
|
|
|
150,000
|
|
Robyn M. Denholm
|
|
|
2010
|
|
|
|
32,000
|
|
|
|
10,667
|
|
|
|
200
|
%
|
|
|
21,334
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
28,000
|
|
|
|
9,333
|
|
|
|
200
|
%
|
|
|
18,667
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
25,000
|
|
|
|
8,333
|
|
|
|
200
|
%
|
|
|
16,666
|
|
|
|
40,751
|
|
Mark Bauhaus
|
|
|
2010
|
|
|
|
32,000
|
|
|
|
10,667
|
|
|
|
200
|
%
|
|
|
21,334
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
25,000
|
|
|
|
8,333
|
|
|
|
200
|
%
|
|
|
16,666
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
25,000
|
|
|
|
8,333
|
|
|
|
200
|
%
|
|
|
16,666
|
|
|
|
40,751
|
|
John Morris
|
|
|
2010
|
|
|
|
27,000
|
|
|
|
9,000
|
|
|
|
200
|
%
|
|
|
18,000
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
22,000
|
|
|
|
7,333
|
|
|
|
200
|
%
|
|
|
14,667
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
100,000
|
|
|
|
41,666
|
|
|
|
200
|
%
|
|
|
83,334
|
|
|
|
179,750
|
|
Pradeep Sindhu
|
|
|
2010
|
|
|
|
32,000
|
|
|
|
10,667
|
|
|
|
200
|
%
|
|
|
21,334
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
28,000
|
|
|
|
9,333
|
|
|
|
200
|
%
|
|
|
18,667
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
25,000
|
|
|
|
8,333
|
|
|
|
200
|
%
|
|
|
16,667
|
|
|
|
40,751
|
|
Benefits
and Perquisites
The named executive officers are provided the same benefits
available to employees broadly. The Committee believes that the
benefits programs are reasonable and consistent with its overall
compensation program to better enable the Company to attract and
retain talent.
In addition to the company wide benefits, named executives
officers are eligible to participate in the Deferred
Compensation Plan and Executive Wellness Program described below.
Deferred
Compensation Plan
In June 2008, the Company adopted and implemented a deferred
compensation plan. All named executive officers are eligible to
participate in the deferred compensation plan. The Company
implemented this plan in order to offer benefits that are
competitive with companies with which we compete for talent.
This plan allows participants to elect to defer a certain amount
of compensation earned into one or more investment choices.
54
The participants are not taxed on the compensation deferred into
these investments until distribution of invested funds to the
participant at a future date, which may be upon termination of
employment with the Company or a designated
in-service date elected by the participant. The
deferred compensation plan is intended to comply with Internal
Revenue Code Section 409A. In 2010, only one named
executive officer, Mr. Bauhaus, participated in this plan,
deferring $50,854.70 of his 2010 compensation.
Executive
Wellness Program
Under the Executive Wellness Program, eligible executives
receive additional benefits focused on health care screening and
wellness. The total value this benefit is limited to $10,000 per
year for each eligible executive. The Committee believes that
promoting the health and wellness of its executives results in a
number of benefits to the Company, including increased
productivity, lower absentee rate and increased organizational
stability, among others.
Other
Benefits
From time to time, the Company may agree to reimburse employees
for relocation costs if the employees job responsibilities
require him or her to move a significant distance. In 2010,
there were no relocation reimbursements for named executive
officers.
On May 13, 2010, the Committee authorized the Company to
provide up to 100 flight hours on a private aircraft for the use
of Mr. Johnson and his family for non-business travel
completed on or before December 31, 2012 and in fiscal year
2010, a 25 hour flight allowance was purchased by the
Company for $102,125. This arrangement will be considered
taxable compensation to Mr. Johnson upon use. This benefit
was not used by Mr. Johnson in fiscal year 2010.
Severance
Benefits
In addition to compensation designed to reward employees for
service and performance, the Committee has approved severance
and change of control provisions for certain employees,
including named executive officers.
Basic
Severance
In order to recruit executives to the Company and encourage
retention of employees, the Committee believes it is appropriate
and necessary to provide assurance of certain severance payments
if the Company terminates the individuals employment
without cause, as described below. The Committee has approved
severance benefits for several members of senior management,
including the named executive officers. Upon the commencement of
his employment, Mr. Johnson entered into a severance
agreement which is described below. Under severance agreements
with Ms. Denholm, Mr. Bauhaus, Mr. Morris and
Dr. Sindhu, in the event the employee is terminated
involuntarily by Juniper Networks without cause, as defined in
their respective agreements, and provided the employee executes
a full release of claims, in a form satisfactory to Juniper
Networks, promptly following termination, the employee will be
entitled to receive the following severance benefits:
(i) an amount equal to six months of base salary,
(ii) an amount equal to half of the individuals
annual target bonus for the fiscal year in which the termination
occurs, and (iii) in the case of Ms. Denholm,
Mr. Bauhaus and Mr. Morris, six months of Company-paid
health, dental, vision, and life insurance coverage.
Upon the commencement of his employment, Mr. Johnson
entered into a severance agreement which provided that in the
event Mr. Johnson is terminated involuntarily by the
Company without cause, as defined in the agreement, and provided
he executes a full release of claims, in a form satisfactory to
Juniper Networks promptly following termination,
Mr. Johnson will be entitled to receive the following
severance benefits: (i) an amount equal to one year of base
salary, (ii) an amount equal to his annual target bonus for
the fiscal year in which the termination occurs, and
(iii) six months of Company-paid health, dental, vision,
and life insurance coverage.
The Committee believes that the size of the severance packages
described is consistent with severance offered by other
companies of the Companys size or in the Companys
industry.
55
The following table describes the potential payments upon
termination of employment without cause, or (assuming the change
of control benefits discussed below do not apply) for each of
the named executive officers as described above. Amounts payable
in cash assume relevant salary, bonus and benefit values in
effect as of December 31, 2010. For purposes of valuing the
equity awards, the amounts below are based on a per share price
of $36.92, which was the closing price as reported on
December 31, 2010.
Table
12
Potential
Severance Payments for Termination Without Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
Incentive
|
|
Value of
|
|
Value of
|
|
|
Executive
|
|
Component
|
|
Component
|
|
Awards
|
|
Benefits
|
|
Total
|
|
Kevin R. Johnson
|
|
$
|
840,000
|
|
|
$
|
1,260,000
|
|
|
|
N/A
|
|
|
$
|
7,599
|
|
|
$
|
2,107,599
|
|
Robyn M. Denholm
|
|
$
|
262,500
|
|
|
$
|
262,500
|
|
|
|
N/A
|
|
|
$
|
9,993
|
|
|
$
|
534,993
|
|
Mark Bauhaus
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
|
N/A
|
|
|
$
|
7,765
|
|
|
$
|
507,765
|
|
John Morris
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
|
N/A
|
|
|
$
|
9,980
|
|
|
$
|
509,980
|
|
Pradeep Sindhu
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
550,000
|
|
Change
of Control Severance
The Committee considers maintaining a stable and effective
management team to be essential to protecting and enhancing the
best interests of the Company and its stockholders. To that end,
the Committee recognizes that the possibility of a change of
control may exist from time to time, and that this possibility,
and the uncertainty and questions it may raise among management,
may result in the departure or distraction of management to the
detriment of the Company and its stockholders. Accordingly, the
Committee decided to take appropriate steps to encourage the
continued attention, dedication and continuity of members of the
Companys management to their assigned duties without the
distraction that may arise from the possibility of a change of
control. As a result, the Committee approved certain severance
benefits for Mr. Johnson, Ms. Denholm,
Mr. Bauhaus, Mr. Morris, and Dr. Sindhu, as well
as for several members of senior management in the event of
certain employment terminations following a change of control.
In approving these benefits the Committee considered a number of
factors, including the prevalence of similar benefits adopted by
other publicly traded companies. In the case of
Mr. Johnson, the change of control benefits were also
deemed appropriate in light of the negotiations to secure the
services of Mr. Johnson as Chief Executive Officer. All
current change of control agreements will expire in January 2014
(other than Mr. Johnsons which expires in January
2013). The Committee takes into account current role and impact
of a transaction on the role before renewing the agreements for
another period of three years.
The change of control severance benefits approved by the
Committee for all named executive officers other than
Mr. Johnson, provided the executive signs a release of
claims and complies with certain post termination
non-solicitation and non-competition obligations, provide that
the executive will receive change of control severance benefits
if either (i) the executive is terminated without cause
within 12 months following the change of control or
(ii) between four and 12 months following a change of
control the executive terminates his or her employment with the
Company (or any parent or subsidiary of the Company) for good
reason (both cause and good reason are defined in the
agreement). For the purposes of this agreement, a reduction in
duties, title, authority or responsibilities solely by virtue of
the Company being acquired and made part of a larger entity (as,
for example, when the Chief Financial Officer of the Company
remains the Chief Financial Officer of the subsidiary or
business unit substantially containing the Companys
business following a change of control) does not by itself
constitute grounds for good reason.
These change of control severance benefits consist of (i) a
cash payment equal to the executives annual base salary
plus the executives target bonus for the fiscal year in
which the change of control or the executives termination
occurs, whichever is greater, (ii) acceleration of vesting
of all of the executives then unvested outstanding stock
options, stock appreciation rights, restricted stock units and
other Company equity compensation awards that vest based on time
and (iii) one year of Company-paid health, dental and
vision insurance coverage. With respect to equity compensation
awards that vest wholly or in part based on factors other than
time, such as
56
performance (whether individual or based on external measures
such as Company performance, market share, stock price, etc.),
the change of control severance benefits include acceleration as
follows: (i) any portion for which the measurement or
performance period or performance measures have been completed
and the resulting quantities have been determined or calculated,
shall immediately vest and become exercisable (and any rights of
repurchase by the Company or restriction on sale shall lapse),
and (ii) the remaining portions shall immediately vest and
become exercisable (and any rights of repurchase by the Company
or restriction on sale shall lapse) in an amount equal to the
number that would be calculated if the performance measures were
achieved at the target level.
Mr. Johnsons change of control severance benefits are
as follows. Provided he signs a release of claims and complies
with certain post termination non-solicitation and
non-competition obligations, Mr. Johnson will receive
change of control severance benefits if either: (i) he is
terminated without Cause (as defined below) within
18 months following the change of control, or
(ii) between 12 and 18 months following a change of
control he terminates his employment with the Company (or any
parent or subsidiary of the Company) for Good Reason (as defined
below). The change of control severance benefits consist of:
(i) a cash payment equal to his annual base salary plus his
target bonus for the fiscal year in which the change of control
or his termination occurs, whichever is greater,
(ii) acceleration of vesting of all of his then unvested
outstanding stock options, stock appreciation rights, restricted
stock units and other Company equity compensation awards that
vest based on time and (iii) one year of Company-paid
health, dental, vision, and life insurance coverage. With
respect to equity compensation awards that vest wholly or in
part based on factors other than time, such as performance
(whether individual or based on external measures such as
Company performance, market share, stock price, etc.),
Mr. Johnsons change of control severance benefits
include acceleration as follows: (i) any portion for which
the measurement or performance period or performance measures
have been completed and the resulting quantities have been
determined or calculated, shall immediately vest and become
exercisable (and any rights of repurchase by the Company or
restriction on sale shall lapse), and (ii) the remaining
portions shall immediately vest and become exercisable (and any
rights of repurchase by the Company or restriction on sale shall
lapse) in an amount equal to the number that would be calculated
if the performance measures were achieved at the target level.
In the event that any of the provisions of the Companys
2006 Plan would prevent him from receiving a portion of the
entire amount of acceleration of restricted stock, performance
shares, RSUs or Deferred Stock Units which would otherwise
accelerate under the change of control agreement, then
Mr. Johnsons employment agreement provides for paying
him the cash value of such shares.
For purposes of Mr. Johnsons change of control
agreement, Good Reason means any of the following
actions taken without Mr. Johnsons express written
consent: (i) any material reduction of his duties, title,
authority or responsibilities or a material change in who he
reports to, relative to his duties, title, authority or
responsibilities and reporting relationship as in effect
immediately prior to such reduction, (ii) a substantial
reduction of the facilities and perquisites (including office
space and location) available to Mr. Johnson immediately prior
to such reduction, (iii) a reduction by the Company in the
base compensation or total target cash compensation as in effect
immediately prior to such reduction, (iv) a material
reduction by the Company in the kind or level of benefits to
which Mr. Johnson was entitled immediately prior to such
reduction with the result that his overall benefits package is
significantly reduced, or (v) the relocation of
Mr. Johnson to a facility or a location more than forty
(40) miles from his then-present location.
For purposes of Mr. Johnsons change of control
agreement, Cause means (i) an act of personal
dishonesty taken by Mr. Johnson in connection with his
responsibilities as an employee and intended to result in
substantial personal enrichment, (ii) Mr. Johnson
being convicted of, or pleading nolo contendere to a felony,
(iii) a willful act by Mr. Johnson which constitutes
gross misconduct and which is injurious to the Company, or
(iv) following delivery to Mr. Johnson of a written
demand for performance from the Company which describes the
basis for the Companys reasonable belief that he has not
substantially performed his duties, continued violations by
Mr. Johnson of his obligations to the Company which are
demonstrably willful and deliberate. If any of the change of
control benefits would constitute a parachute
payment within the meaning of Section 280G of the
Internal Revenue Code and be subject to the excise tax and any
related interest or penalties, then he will be entitled to
receive from the Company an additional payment (the
Gross-Up
Payment) in an amount up to a maximum of $5 million
that that would fund his payment of any excise tax payments as
well as all income and employment taxes imposed on the
Gross-Up
Payment, any Excise Tax imposed on the
Gross-Up
Payment and any interest or penalties imposed with
57
respect to income and employment taxes imposed on the
Gross-Up
Payment. No
Gross-Up
Payment is required if the amount of benefits that would
constitute a Parachute Payment is $1 million or less.
The following table describes the potential payments upon
termination of employment in connection with a change of control
of Juniper Networks for each of the named executive officers.
The amounts in the following table for equity awards represent
the value of the awards that vest as a result of the termination
without cause or a resignation for good reason (as defined in
the applicable agreement) of the named executive officers
employment in connection with a change of control. For purposes
of valuing the stock options, the amounts below are based on a
per share price of $36.92, which was the closing price as
reported on December 31, 2010. Other amounts payable assume
relevant salary, bonus and benefit values in effect as of
December 31, 2010. The amounts in the following table
related to benefits represent the amounts payable by the Company
to maintain the officers benefits for the period following
the termination of the named executive officers employment
in connection with a change of control as described above.
Table
13
Potential
Payments Upon Termination in Connection with a Change of
Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
Value of
|
|
|
|
|
|
|
Base Salary
|
|
Compensation
|
|
Benefits
|
|
Accelerated
|
|
|
|
|
|
|
Severance
|
|
Severance
|
|
Severance
|
|
Equity Awards
|
|
|
|
|
Name(1)(2)
|
|
Component
|
|
Component
|
|
Component
|
|
(3)
|
|
280G Gross-up
|
|
Total
|
|
Kevin R. Johnson
|
|
$
|
840,000
|
|
|
$
|
1,260,000
|
|
|
$
|
15,198
|
|
|
$
|
30,644,167
|
|
|
$
|
5,000,000
|
|
|
$
|
37,759,365
|
|
Robyn M. Denholm
|
|
$
|
525,000
|
|
|
$
|
525,000
|
|
|
$
|
19,987
|
|
|
$
|
6,080,286
|
|
|
|
N/A
|
|
|
$
|
7,150,273
|
|
Mark Bauhaus
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
$
|
15,530
|
|
|
$
|
6,403,763
|
|
|
|
N/A
|
|
|
$
|
7,419,293
|
|
John Morris
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
$
|
19,960
|
|
|
$
|
9,564,826
|
|
|
|
N/A
|
|
|
$
|
10,584,786
|
|
Pradeep Sindhu
|
|
$
|
550,000
|
|
|
$
|
550,000
|
|
|
$
|
20,014
|
|
|
$
|
6,036,829
|
|
|
|
N/A
|
|
|
$
|
7,156,843
|
|
|
|
|
(1) |
|
If Mr. Johnsons benefits trigger excise taxes, he
will receive a gross up of up to $5 million to cover the
tax. No gross up payment is required if the amount of the
benefits that would constitute a Parachute Payment is
$1 million or less. |
|
(2) |
|
All named executive officers except for Mr. Johnson are
subject to a modified cap whereby they either pay the 280G
excise taxes or have their benefits reduced, whichever is the
best outcome for the executive. |
|
(3) |
|
The value of accelerated equity awards assumes that the
triggering event for acceleration of vesting for outstanding and
unvested options, RSUs and performance share awards occurred on
December 31, 2010. With respect to performance share
awards, the equity value is calculated based on the sum of
earned, but unvested shares, plus target unearned and unvested
shares multiplied by $36.92, the closing price of Juniper
Networks, Inc. common stock on December 31, 2010. |
Stock
Option Granting Policy
The Board has approved a policy for granting stock options and
equity awards. Pursuant to the policy, new hire and ad hoc
promotional and adjustment grants to non-executive employees are
to be granted monthly on the third Friday of the month, except
as discussed below. All approvals of option grants by the Board,
the Stock Committee, or the Compensation Committee shall be made
at a meeting, which may be either in-person or telephonic, and
not by unanimous written consent, except that this requirement
shall not apply to Board actions, such as the appointment of new
directors, as to which the granting of options is incidental to
the primary Board action. Annual performance grants to
non-Section 16 officers are scheduled to occur on the same
date as a monthly grant and shall be approved by the Stock
Committee in the manner described above. Grants in connection
with acquisitions shall, unless a date is specified in the
acquisition agreement, occur to the extent practical on a date
on which equity awards to Company employees are made by the
Stock Committee. Annual equity awards to Section 16
officers are generally scheduled to be approved at a meeting of
the Compensation Committee in the first quarter after the fourth
fiscal quarter earnings announcement and prior to March 1.
The annual grants to Section 16 officers are also generally
scheduled to be effective on the third Friday of the month if
the meeting approving such grants
58
occurs on or before such date. Notwithstanding the foregoing, if
the Company is advised by outside counsel that the granting of
equity awards on a particular date or to particular recipients,
or prior to the disclosure of certain non-public information,
could reasonably be deemed to be a violation of applicable laws
or regulations, such grants may be delayed until such time as
the granting of those awards would be not reasonably expected to
constitute a violation. If making a particular monthly grant
would cause the Company to exceed any granting limitation
imposed by the Board or Compensation Committee (such as an
annual limit), the monthly grant shall be delayed until the
first subsequent month in which the limitation would not be
exceeded. If the making of a grant would cause the Company to
violate the terms of any agreement approved by the Board or a
Committee of the Board, such grant shall be delayed until it
would not violate such agreement. The exercise price of options
granted will be the closing market price on the date of grant.
The Company intends to grant options in accordance with the
foregoing policy without regard to the timing of the release of
material non-public information, such as a positive or negative
earnings announcement.
Equity
Ownership Guidelines
The Company has adopted stock ownership guidelines to further
align the interests of the Companys named executive
officers and directors with the interests of its stockholders
and promote the Companys commitment to sound corporate
governance. Please see Executive Officer and Director
Stock Ownership Guidelines on page 41 of this proxy
statement for more information.
Committee
Policy on 280G Excise Taxes
On May 21, 2009, the Committee adopted a policy that in
unusual circumstances where the Committee believes that
accommodations have to be made to recruit a new executive
officer to the Company, limited reimbursement for excise taxes
payable may be included in the executive officers
contracts. In those circumstances, the excise tax gross
ups will be limited to payments triggered by both a change
in control and termination of employment and will be subject to
a three-year sunset provision.
Repayment
of Certain Bonus and Incentive Payments
In November 2008, the Board adopted a policy requiring the
Company to seek repayment of certain bonus and incentive
compensation in the event the Company is required to prepare an
accounting restatement on an annual financial statement included
in an Annual Report on
Form 10-K.
In such event, the Companys Chief Executive Officer and
Chief Financial Officer must deposit into an escrow account for
the benefit of the Company the difference (if any) between
(i) the amount of any cash bonus or incentive compensation
for each of the applicable years covered by the restated
financial statements previously paid by that officer, minus
(ii) the amount of such cash bonus or incentive
compensation that would have been earned by that officer for
each of the applicable years had the cash bonus or incentive
compensation been determined based on the information contained
in the restated financial statements. If a court, arbitrator or
committee of independent directors determines that the financial
restatement was not due to the gross recklessness or intentional
misconduct of the respective officer causing material
noncompliance with any financial reporting requirement under the
federal securities laws, then the amount deposited by such
officer will be returned to the officer, as applicable.
The
Impact of Favorable Accounting and Tax Treatment on Compensation
Program Design
Favorable accounting and tax treatment of the various elements
of our compensation program is a relevant consideration in their
design. However, the Company and the Committee have placed a
higher priority on structuring flexible compensation programs to
promote the recruitment, retention and performance of
Section 16 officers than on maximizing tax deductibility.
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Tax Code), places a limit of $1,000,000
on the amount of compensation that Juniper Networks may deduct
in any one year with respect to certain executive officers. To
maintain flexibility in compensating executive officers in a
manner designed to promote varying corporate goals, the
Committee has not adopted a policy requiring all compensation to
be deductible.
59
There is an exception to the $1,000,000 limitation for certain
performance-based compensation meeting certain requirements. The
Company believes that the stock options granted, as well as
performance share awards granted in 2010 and in the future,
under the 2006 Plan, will meet the terms of the exception. RSUs
are not considered performance-based under Section 162(m)
of the Tax Code and, as such, are generally not deductible by
the Company. Prior to this annual meeting, the Company has not
sought stockholder approval of its annual cash incentive plans,
and therefore, payments under those plans may not be fully
deductible.
If Proposal 3 above related to the 2012 Performance Bonus
Plan is approved by the Companys stockholders, commencing
in 2012, the Committee believes the Company will be able to make
a significant portion of annual cash incentive compensation
fully deductible performance-based compensation under Tax Code
Section 162(m).
The Company believes it has amended all executive officer
arrangements covered by Tax Code Section 409A in a timely
manner.
Beginning on January 1, 2006, the Company began accounting
for share-based payments in accordance with the requirements of
ASC Topic 718. Like many of the companies within our Peer Group,
Juniper Networks has lowered both grant guidelines and option
participation rates to ensure that the Companys equity
granting practice remains competitive but also within acceptable
cost limitations.
Compensation
Committee Report
The Compensation Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
and included in this Proxy Statement beginning on page 44
with management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement.
THE COMPENSATION COMMITTEE
William R. Stensrud (Chairman)
J. Michael Lawrie
David Schlotterbeck*
* Mr. Schlotterbeck became a member of the Compensation
Committee on February 9, 2011
Compensation
Committee Interlocks and Insider Participation
During fiscal year 2010, the Compensation Committee consisted of
Messrs. Stensrud and Lawrie. No member of the Compensation
Committee serves as a member of the board of directors or
compensation committee of any entity that has one or more
executive officers serving as a member of the Companys
Board of Directors or Compensation Committee.
Summary
Compensation Table
The following table discloses compensation received by persons
serving as our Chief Executive Officer or Chief Financial
Officer during fiscal 2010 as well as our three other most
highly paid executive officers (together with those persons
serving as Chief Executive Officer or Chief Financial Officer in
2010, the named executive officers) as of
December 31, 2010, as well as their compensation received
for each of the fiscal years ending December 31, 2009 and
2008.
60
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non Equity
|
|
Deferred
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Awards(1)
|
|
Awards(1)
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Kevin R. Johnson
|
|
|
2010
|
|
|
$
|
820,000
|
|
|
$
|
2,000,000
|
(2)
|
|
$
|
2,744,000
|
(3)
|
|
$
|
2,789,130
|
|
|
$
|
1,599,000
|
(4)
|
|
$
|
|
|
|
$
|
61,442
|
(7)
|
|
$
|
10,013,572
|
|
Chief Executive
|
|
|
2009
|
|
|
$
|
740,000
|
|
|
$
|
1,500,000
|
(2)
|
|
$
|
2,936,000
|
|
|
$
|
1,893,210
|
|
|
$
|
574,425
|
(5)
|
|
$
|
|
|
|
$
|
102,291
|
(8)
|
|
$
|
7,745,926
|
|
Officer
|
|
|
2008
|
|
|
$
|
251,515
|
|
|
$
|
1,500,000
|
(2)
|
|
$
|
18,023,000
|
|
|
$
|
15,936,360
|
|
|
$
|
344,000
|
(6)
|
|
$
|
|
|
|
$
|
34,739
|
(9)
|
|
$
|
36,089,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn M. Denholm
|
|
|
2010
|
|
|
$
|
512,500
|
|
|
$
|
|
|
|
$
|
878,080
|
(10)
|
|
$
|
929,710
|
|
|
$
|
583,750
|
(4)
|
|
$
|
|
|
|
$
|
7,606
|
(11)
|
|
$
|
2,911,646
|
|
Executive Vice
|
|
|
2009
|
|
|
$
|
481,250
|
|
|
$
|
|
|
|
$
|
822,080
|
|
|
$
|
492,235
|
|
|
$
|
224,984
|
(5)
|
|
$
|
|
|
|
$
|
7,554
|
(12)
|
|
$
|
2,028,103
|
|
President, Chief
|
|
|
2008
|
|
|
$
|
495,000
|
|
|
$
|
|
|
|
$
|
1,258,000
|
|
|
$
|
591,962
|
|
|
$
|
430,000
|
(6)
|
|
$
|
|
|
|
$
|
14,063
|
(13)
|
|
$
|
2,789,025
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Bauhaus
|
|
|
2010
|
|
|
$
|
428,500
|
|
|
$
|
|
|
|
$
|
878,080
|
(14)
|
|
$
|
929,710
|
|
|
$
|
576,639
|
(4)
|
|
$
|
|
|
|
$
|
6,238
|
(15)
|
|
$
|
2,819,167
|
|
Executive Vice
|
|
|
2009
|
|
|
$
|
343,613
|
|
|
$
|
|
|
|
$
|
734,000
|
|
|
$
|
460,681
|
|
|
$
|
251,447
|
(5)
|
|
$
|
|
|
|
$
|
5,278
|
(16)
|
|
$
|
1,795,019
|
|
President, Device &
|
|
|
2008
|
|
|
$
|
352,750
|
|
|
$
|
|
|
|
$
|
472,888
|
|
|
$
|
784,027
|
|
|
$
|
182,070
|
(6)
|
|
$
|
|
|
|
$
|
32,233
|
(17)
|
|
$
|
1,823,968
|
|
Network Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Morris
|
|
|
2010
|
|
|
$
|
500,000
|
|
|
$
|
|
|
|
$
|
740,880
|
(19)
|
|
$
|
790,254
|
|
|
$
|
610,000
|
(4)
|
|
$
|
|
|
|
$
|
9,485
|
(20)
|
|
$
|
2,650,619
|
|
Executive Vice
|
|
|
2009
|
|
|
$
|
481,250
|
|
|
$
|
|
|
|
$
|
645,920
|
|
|
$
|
391,263
|
|
|
$
|
152,797
|
(5)
|
|
$
|
|
|
|
$
|
143,795
|
(21)
|
|
$
|
1,815,025
|
|
President, Worldwide
|
|
|
2008
|
|
|
$
|
250,000
|
|
|
$
|
250,000
|
(18)
|
|
$
|
4,510,000
|
|
|
$
|
1,273,050
|
|
|
$
|
161,250
|
(6)
|
|
$
|
|
|
|
$
|
12,309
|
(22)
|
|
$
|
6,456,609
|
|
Sales and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
|
2010
|
|
|
$
|
473,375
|
|
|
$
|
4,200
|
(27)
|
|
$
|
878,080
|
(23)
|
|
$
|
929,710
|
|
|
$
|
487,363
|
(4)
|
|
$
|
|
|
|
$
|
7,668
|
(24)
|
|
$
|
2,780,396
|
|
Chief Technical
|
|
|
2009
|
|
|
$
|
381,872
|
|
|
$
|
15,000
|
(27)
|
|
$
|
822,080
|
|
|
$
|
542,720
|
|
|
$
|
119,574
|
(5)
|
|
$
|
|
|
|
$
|
9,201
|
(25)
|
|
$
|
1,890,447
|
|
Officer and Vice
|
|
|
2008
|
|
|
$
|
383,813
|
|
|
$
|
5,000
|
(27)
|
|
$
|
1,258,000
|
|
|
$
|
591,962
|
|
|
$
|
255,904
|
(6)
|
|
$
|
|
|
|
$
|
7,699
|
(26)
|
|
$
|
2,502,378
|
|
Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts shown do not reflect compensation actually received by
the named executive officer. Instead, the amounts shown
represent an aggregate grant date fair value of stock-related
awards in each fiscal year computed in accordance with ASC Topic
718 including the maximum shares issuable for the performance
share awards in 2008 and 2009 and the target shares issuable for
performance share awards in 2010, restricted stock units and
non-qualified stock options. The assumptions used to calculate
the value of option awards are set forth under Note 12,
Employee Benefit Plans of the Notes to Consolidated
Financial Statements included in Juniper Networks Annual Report
on
Form 10-K
for 2010 filed with the SEC on February 25, 2011. |
|
(2) |
|
Amount paid reflects installments of the $5,000,000 sign on
bonus to Mr. Johnson agreed to in connection with
commencement of employment with the Company. |
|
(3) |
|
The amount shown represent an aggregate grant date fair value of
the target shares issuable for performance share awards in 2010.
The aggregate grant date fair value of the maximum number of
shares issuable for performance shares awards in 2010 is
$6,860,000. |
|
(4) |
|
Amounts reflect bonuses earned in 2010 but paid in 2011 under
the 2010 Juniper Networks annual cash incentive plan. |
|
(5) |
|
Amounts reflect bonuses earned in 2009 but paid in 2010 under
the 2009 Juniper Networks annual cash incentive plan. |
|
(6) |
|
Amounts reflect bonuses earned in 2008 but paid in 2009 under
the 2008 Juniper Networks annual cash incentive plan. |
|
(7) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums, $3,500 for an executive health plan for
physicals and $55,473 associated with taxable relocation costs
and benefits. |
|
(8) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $100,581 in taxable relocation costs and
benefits. |
|
(9) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $34,169 in taxable relocation costs and
benefits. |
|
(10) |
|
The amount shown represent an aggregate grant date fair value of
the target shares issuable for performance share awards in 2010.
The aggregate grant date fair value of the maximum number of
shares issuable for performance shares awards in 2010 is
$2,195,200. |
61
|
|
|
(11) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums, $1,340 for an executive health plan for
physicals and $4,125 in matching contributions paid under the
Companys 401(k) plan. |
|
(12) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $4,125 in matching contributions paid
under the Companys 401(k) plan. |
|
(13) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $3,875 in matching contributions paid
under the Companys 401(k) plan. |
|
(14) |
|
The amount shown represent an aggregate grant date fair value of
the target shares issuable for performance share awards in 2010.
The aggregate grant date fair value of the maximum number of
shares issuable for performance shares awards in 2010 is
$2,195,200. |
|
(15) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $4,125 in matching contributions paid
under the Companys 401(k) plan. |
|
(16) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $4,125 in matching contributions paid
under the Companys 401(k) plan. |
|
(17) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums, $27,340 in deemed compensation for
attendance at a Company-sponsored recognition event and $3,875
in matching contributions paid under the Companys 401(k)
plan. |
|
(18) |
|
Amount paid reflects a $250,000 sign on bonus paid to
Mr. Morris upon commencement of employment with the Company. |
|
(19) |
|
The amount shown represent an aggregate grant date fair value of
the target shares issuable for performance share awards in 2010.
The aggregate grant date fair value of the maximum number of
shares issuable for performance shares awards in 2010 is
$1,852,200. |
|
(20) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums, $1,872 for an executive health plan for
physicals and $5,500 in matching contributions paid under the
Companys 401(k) plan. |
|
(21) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums, $138,020 in taxable relocation costs and
$4,125 in matching contributions paid under the Companys
401(k) plan. |
|
(22) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $10,174 in taxable relocation costs. |
|
(23) |
|
The amount shown represent an aggregate grant date fair value of
the target shares issuable for performance share awards in 2010.
The aggregate grant date fair value of the maximum number of
shares issuable for performance shares awards in 2010 is
$2,195,200. |
|
(24) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $5,500 in matching contributions paid
under the Companys 401(k) plan. |
|
(25) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $5,500 in matching contributions paid
under the Companys 401(k) plan |
|
(26) |
|
Amount consists of costs related to the standard employee
benefit portion paid by the Company for life and disability
insurance premiums and $5,125 in matching contributions paid
under the Companys 401(k) plan |
|
(27) |
|
Amounts reflect payment of cash bonus for the Companys
patent filing rewards program. |
62
Grants of
Plan-Based Awards for Fiscal 2010
The following table shows all plan-based awards granted to our
named executive officers during 2010. The option awards
identified in the table below are also reported in the
Outstanding Equity Awards at Fiscal 2010 Year-End Table on
the following page.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
All Other
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Stock
|
|
or Base
|
|
Grant
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
Number of
|
|
Awards:
|
|
Price of
|
|
Date Fair
|
|
|
|
|
Non-Equity Incentive Plan
|
|
Estimated Future Payouts Under
|
|
Shares
|
|
Number of
|
|
Option
|
|
Value of Stock
|
|
|
Grant
|
|
Awards(1)
|
|
Equity Incentive Plan Awards(2)
|
|
of Stock
|
|
Securities
|
|
Awards
|
|
and Option
|
Name
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
or Units
|
|
Underlying Options
|
|
($/sh)
|
|
Awards(3)
|
|
Kevin R. Johnson
|
|
02/02/2010
|
|
$
|
|
|
|
$
|
1,230,000
|
|
|
$
|
2,460,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,744,000
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
$
|
27.44
|
|
|
$
|
2,789,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn M. Denholm
|
|
02/02/2010
|
|
$
|
|
|
|
$
|
512,500
|
|
|
$
|
1,025,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
878,080
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
$
|
27.44
|
|
|
$
|
929,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Bauhaus
|
|
02/02/2010
|
|
$
|
|
|
|
$
|
428,500
|
|
|
$
|
857,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
878,080
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
$
|
27.44
|
|
|
$
|
929,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Morris
|
|
02/02/2010
|
|
$
|
|
|
|
$
|
500,000
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
|
|
|
67,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
740,880
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,000
|
|
|
$
|
27.44
|
|
|
$
|
790,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
02/02/2010
|
|
$
|
|
|
|
$
|
473,375
|
|
|
$
|
946,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
878,080
|
|
|
|
02/19/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
$
|
27.44
|
|
|
$
|
929,710
|
|
|
|
|
(1) |
|
Amounts reflect potential cash bonuses payable under the
Companys 2010 annual cash incentive plan described in
Compensation Discussion and Analysis above. Actual
payment amounts pursuant to the 2010 annual cash incentive plan
for Mr. Johnson, Ms. Denholm, Mr. Bauhaus,
Mr. Morris, and Dr. Sindhu are included in the Summary
Compensation Table and were $1,599,000, $584,000, $577,000,
$610,000, and $487,000, respectively. |
|
(2) |
|
Amounts reflect performance share awards issuable under the
Companys 2010 Long Term Equity Incentive Program described
in Compensation Discussion and Analysis above. |
|
(3) |
|
Represents an aggregate grant date fair value of stock-related
awards in fiscal 2010 computed in accordance with ASC Topic 718
including the grant date fair value for the target shares
issuable for the 2010 performance share awards, restricted stock
units and non-qualified stock options. The grant date fair value
for the maximum shares issuable for the 2010 performance share
awards is reflected for each of the named executive officers in
the footnotes to the Summary Compensation Table above. |
63
Outstanding
Equity Awards at Fiscal 2010 Year-End
The following table shows all outstanding equity awards held by
our named executive officers at December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Equity Incentive
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Plan Awards:
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
Market or Payout
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares, Units
|
|
Value of Unearned
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Units of
|
|
or Other
|
|
Shares, Units or
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
Stock That
|
|
Rights That
|
|
Other Rights That
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
Have Not Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
Vested (#)
|
|
Vested ($)
|
|
Vested (#)
|
|
($)(13)
|
|
Kevin R. Johnson
|
|
|
787,500
|
|
|
|
612,500
|
(1)
|
|
|
|
|
|
$
|
26.90
|
|
|
|
9/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,500
|
|
|
|
112,500
|
(2)
|
|
|
|
|
|
$
|
26.90
|
|
|
|
9/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,500
|
|
|
|
162,500
|
(3)
|
|
|
|
|
|
$
|
14.68
|
|
|
|
2/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
300,000
|
(4)
|
|
|
|
|
|
$
|
27.44
|
|
|
|
2/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450,000
|
(12)
|
|
$
|
16,614,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,667
|
(15)
|
|
$
|
2,461,346
|
|
|
|
197,667
|
(13)
|
|
$
|
7,297,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
(14)
|
|
$
|
9,230,000
|
|
Robyn M. Denholm
|
|
|
208,333
|
|
|
|
41,667
|
(5)
|
|
|
|
|
|
$
|
31.61
|
|
|
|
8/14/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,687
|
|
|
|
20,313
|
(6)
|
|
|
|
|
|
$
|
25.16
|
|
|
|
3/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,750
|
|
|
|
42,250
|
(3)
|
|
|
|
|
|
$
|
14.68
|
|
|
|
2/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
100,000
|
(4)
|
|
|
|
|
|
$
|
27.44
|
|
|
|
2/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,084
|
(16)
|
|
$
|
889,181
|
|
|
|
16,667
|
(12)
|
|
$
|
615,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,013
|
(15)
|
|
$
|
665,040
|
|
|
|
37,334
|
(13)
|
|
$
|
1,378,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(14)
|
|
$
|
2,953,600
|
|
Mark Bauhaus
|
|
|
162,500
|
|
|
|
37,500
|
(7)
|
|
|
|
|
|
$
|
36.61
|
|
|
|
9/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,187
|
|
|
|
20,313
|
(6)
|
|
|
|
|
|
$
|
25.16
|
|
|
|
3/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,458
|
|
|
|
39,542
|
(3)
|
|
|
|
|
|
$
|
14.68
|
|
|
|
2/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
100,000
|
(4)
|
|
|
|
|
|
$
|
27.44
|
|
|
|
2/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(8)
|
|
$
|
369,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(9)
|
|
$
|
369,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,084
|
(16)
|
|
$
|
889,181
|
|
|
|
16,667
|
(12)
|
|
$
|
615,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,084
|
(15)
|
|
$
|
593,821
|
|
|
|
33,333
|
(13)
|
|
$
|
1,230,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(14)
|
|
$
|
2,953,600
|
|
John Morris
|
|
|
6,250
|
|
|
|
59,375
|
(10)
|
|
|
|
|
|
$
|
22.55
|
|
|
|
7/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,416
|
|
|
|
33,584
|
(3)
|
|
|
|
|
|
$
|
14.68
|
|
|
|
2/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
85,000
|
(4)
|
|
|
|
|
|
$
|
27.44
|
|
|
|
2/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,416
|
(16)
|
|
$
|
3,559,679
|
|
|
|
83,334
|
(12)
|
|
$
|
3,076,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,153
|
(15)
|
|
$
|
522,529
|
|
|
|
29,334
|
(13)
|
|
$
|
1,083,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,500
|
(14)
|
|
$
|
2,492,100
|
|
Pradeep Sindhu
|
|
|
100,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
10.31
|
|
|
|
5/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
5.69
|
|
|
|
7/1/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
9/26/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
28.17
|
|
|
|
1/29/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
22.59
|
|
|
|
4/29/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
22.59
|
|
|
|
4/29/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
0
|
|
|
|
|
|
|
$
|
18.96
|
|
|
|
2/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,625
|
|
|
|
4,375
|
(11)
|
|
|
|
|
|
$
|
18.31
|
|
|
|
3/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,687
|
|
|
|
20,313
|
(6)
|
|
|
|
|
|
$
|
25.16
|
|
|
|
3/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,416
|
|
|
|
46,584
|
(3)
|
|
|
|
|
|
$
|
14.68
|
|
|
|
2/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
100,000
|
(4)
|
|
|
|
|
|
$
|
27.44
|
|
|
|
2/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,084
|
(16)
|
|
$
|
889,181
|
|
|
|
16,667
|
(12)
|
|
$
|
615,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,013
|
(15)
|
|
$
|
665,040
|
|
|
|
37,334
|
(13)
|
|
$
|
1,387,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(14)
|
|
$
|
2,953,600
|
|
|
|
|
(1) |
|
The option was granted on 9/19/2008. The shares become
exercisable as to 25% of the shares on 9/19/2009 and vest
monthly thereafter to be fully vested on 9/19/2012 assuming
continued employment with Juniper Networks. |
|
(2) |
|
The option was granted on 9/19/2008. The shares become
exercisable as to 25% of the shares on 3/1/2010 and vest monthly
thereafter to be fully vested 3/1/2013 assuming continued
employment with Juniper Networks. |
|
(3) |
|
The option was granted on 2/20/2009. The shares become
exercisable as to 25% of the shares on 2/20/2010 and vest
monthly thereafter to be fully vested on 2/20/2013 assuming
continued employment with Juniper Networks. |
64
|
|
|
(4) |
|
The option was granted on 2/19/2010. The shares become
exercisable as to 25% of the shares on 2/19/2011 and vest
monthly thereafter to be fully vested on 2/19/2014 assuming
continued employment with Juniper Networks. |
|
(5) |
|
The option was granted on 8/14/2007. The shares become
exercisable as to 25% of the shares on 8/14/2008 and vest
monthly thereafter to be fully vested on 8/14/2011 assuming
continued employment with Juniper Networks. |
|
(6) |
|
The option was granted on 3/21/2008. The shares become
exercisable as to 25% of the shares on 3/21/2009 and vest
monthly thereafter to be fully vested on 3/21/2012 assuming
continued employment with Juniper Networks. |
|
(7) |
|
The option was granted on 9/28/2007. The shares become
exercisable as to 25% of the shares on 9/28/2008 and vest
monthly thereafter to be fully vested on 9/28/2011 assuming
continued employment with Juniper Networks. |
|
(8) |
|
The RSU was granted on 9/28/2007. The RSU vests as to 50% of the
shares on 9/28/2009 and vest annually thereafter to be fully
vested on 9/28/2011 assuming continued employment with Juniper
Networks. |
|
(9) |
|
The RSU was granted on 3/21/2008. The RSU vests as to 33.34% of
the shares on 3/21/2009 and vest annually thereafter to be fully
vested on 3/21/2011 assuming continued employment with Juniper
Networks. |
|
(10) |
|
The option was granted on 7/18/2008. The shares become
exercisable as to 25% of the shares on 7/18/2009 and vest
monthly thereafter to be fully vested on 7/18/2012 assuming
continued employment with Juniper Networks. |
|
(11) |
|
The option was granted on 3/9/2007. The shares become
exercisable as to 25% of the shares on 3/9/2008 and vest monthly
thereafter to be fully vested on 3/9/2011 assuming continued
employment with Juniper Networks. |
|
(12) |
|
Represents the unearned maximum shares issuable under the
performance share award granted in 2008. |
|
(13) |
|
Represents the unearned maximum shares issuable under the
performance share award granted in 2009. |
|
(14) |
|
Represents the unearned maximum shares issuable under the
performance share award granted in 2010. |
|
(15) |
|
Represents the earned but unvested shares issuable under a
performance share award granted in 2009. |
|
(16) |
|
Represents the earned but unvested shares issuable under a
performance shares award granted in 2008. |
Option
Exercises and Stock Vested For Fiscal 2010
The following table shows all stock options exercised and value
realized upon exercise, and all stock awards vested and value
realized upon vesting, by our named executive officers during
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
|
|
Acquired on
|
|
Realized on
|
|
Acquired on
|
|
Realized on
|
Name
|
|
Exercise
|
|
Exercise
|
|
Vesting
|
|
Vesting
|
|
Kevin R. Johnson
|
|
|
|
|
|
|
|
|
|
|
144,750
|
|
|
$
|
3,643,358
|
|
Robyn M. Denholm
|
|
|
|
|
|
|
|
|
|
|
22,500
|
|
|
$
|
576,675
|
|
Mark Bauhaus
|
|
|
22,500
|
|
|
$
|
337,858
|
|
|
|
20,000
|
|
|
$
|
611,500
|
|
John Morris
|
|
|
84,375
|
|
|
$
|
541,372
|
|
|
|
|
|
|
|
|
|
Pradeep Sindhu
|
|
|
|
|
|
|
|
|
|
|
45,958
|
|
|
$
|
1,161,956
|
|
65
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information as of December 31,
2010 about our common stock that may be issued under the
Companys prior and existing equity compensation plans,
including option plans and employee stock purchase plans. The
table does not include information with respect to shares
subject to outstanding options assumed by the Company in
connection with acquisitions of the companies that originally
granted those options. Footnote (6) to the table sets forth
the total number of shares of the Companys common stock
issuable upon exercise of assumed options as of
December 31, 2010, and the weighted average exercise price
of those options. No additional options may be granted under
those assumed plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Weighted-
|
|
Number of Securities
|
|
|
Securities to be
|
|
Average
|
|
Remaining Available for
|
|
|
Issued Upon
|
|
Exercise
|
|
Future Issuance Under
|
|
|
Exercise of
|
|
Price of
|
|
Equity Compensation Plans
|
|
|
Outstanding
|
|
Outstanding
|
|
(Excluding Securities Reflected
|
Plan Category
|
|
Options(3)
|
|
Options
|
|
in the First Column)
|
|
Equity compensation plans approved by security holders(1)
|
|
|
42,926,480
|
(4)
|
|
|
22.77
|
|
|
|
39,138,446
|
(5)
|
Equity compensation plans not approved by security holders(2)
|
|
|
4,804,135
|
|
|
|
16.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
47,730,615
|
|
|
|
22.16
|
|
|
|
39,138,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes the 2006 Equity Incentive Plan (the 2006
Plan), Amended and Restated 1996 Stock Plan (the
1996 Plan) and the 2008 Employee Stock Purchase Plan
(the 2008 Purchase Plan). Effective May 18,
2006, additional equity awards under the 1996 Plan have been
discontinued and new equity awards are being granted under the
2006 Plan. Remaining authorized shares under the 1996 Plan that
were not subject to outstanding awards as of May 18, 2006,
were canceled on May 18, 2006. The 1996 Plan will remain in
effect as to outstanding equity awards granted under the plan
prior to May 18, 2006. |
|
(2) |
|
Includes the 2000 Nonstatutory Stock Option Plan (the 2000
Plan), the material terms of which are described in
note 12 of our annual report on
Form 10-K
for the year ended December 31, 2010. No options issued
under this Plan are held by any directors or executive officers.
Effective May 18, 2006, additional equity awards under the
2000 Plan have been discontinued and new equity awards are being
granted under the 2006 Plan. Remaining authorized shares under
the 2000 Plan that were not subject to outstanding awards as of
May 18, 2006, were canceled on May 18, 2006. The 2000
Plan will remain in effect as to outstanding equity awards
granted under the plan prior to May 18, 2006. |
|
(3) |
|
Excludes 13,655,382 shares subject to restricted stock
units and performance share awards outstanding as of
December 31, 2010 that were issued under the 1996 Plan and
2006 Plan. |
|
(4) |
|
Excludes purchase rights accruing under the Companys 2008
Purchase Plan, which had a remaining stockholder-approved
reserve of 8,413,677 shares as of December 31, 2010. |
|
(5) |
|
Consists of shares available for future issuance under the 2006
Plan and the 2008 Purchase Plan. As of December 31, 2010,
an aggregate of 30,724,769 and 8,413,677 shares of common
stock were available for issuance under the 2006 Plan and the
2008 Purchase Plan respectively. Under the terms of the 2006
Plan, any shares subject to any options under the Companys
2000 Plan and 1996 Plan that were outstanding on May 18,
2006, and that subsequently expire unexercised, up to a maximum
of an additional 75,000,000 shares, will become available
for issuance under the 2006 Plan. |
|
(6) |
|
As of December 31, 2010, a total of 1,625,908 shares
of the Companys common stock were issuable upon exercise
of outstanding options and 507,765 shares subject to
restricted stock units, under plans assumed in connection with
acquisitions. The weighted average exercise price of those
outstanding options is $14.32 per share. No additional options
may be granted under those assumed plans. |
66
The following supplemental table provides information as of
March 24, 2011, about our common stock that may be issued
under the Companys existing equity compensation plans,
including option plans and employee stock purchase plans. The
table does not include information with respect to shares
subject to outstanding options assumed by the Company in
connection with acquisitions of the companies that originally
granted those options. Footnote (6) to the table sets forth
the total number of shares of the Companys Common Stock
issuable upon exercise of assumed options as of March 24,
2011, and the weighted average exercise price of those options.
No additional options may be granted under those assumed plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Weighted-
|
|
|
Number of Securities
|
|
|
|
Securities to be
|
|
|
Average
|
|
|
Remaining Available for
|
|
|
|
Issued Upon
|
|
|
Exercise
|
|
|
Future Issuance Under
|
|
|
|
Exercise of
|
|
|
Price of
|
|
|
Equity Compensation Plans
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
(Excluding Securities Reflected
|
|
Plan Category
|
|
Options(3)
|
|
|
Options
|
|
|
in the First Column)
|
|
|
Equity compensation plans approved by security holders(1)
|
|
|
37,373,150
|
(4)
|
|
$
|
25.01
|
|
|
|
20,137,646
|
(5)
|
Equity compensation plans not approved by security holders(2)
|
|
|
3,339,356
|
|
|
$
|
14.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
40,712,506
|
|
|
$
|
24.18
|
|
|
|
20,137,646
|
|
|
|
|
(1) |
|
Includes the 2006 Plan, the 1996 Plan and the 2008 Purchase
Plan. Effective May 18, 2006, additional equity awards
under the 1996 Plan have been discontinued and new equity awards
are being granted under the 2006 Plan. Remaining authorized
shares under the 1996 Plan that were not subject to outstanding
awards as of May 18, 2006, were canceled on May 18,
2006. The 1996 Plan will remain in effect as to outstanding
equity awards granted under the plan prior to May 18, 2006. |
|
(2) |
|
Includes the 2000 Nonstatutory Stock Option Plan (the 2000
Plan), the material terms of which are described in
note 12 of our annual report on
Form 10-K
for the year ended December 31, 2010. No options issued
under this Plan are held by any directors or executive officers.
Effective May 18, 2006, additional equity awards under the
2000 Plan have been discontinued and new equity awards are being
granted under the 2006 Plan. Remaining authorized shares under
the 2000 Plan that were not subject to outstanding awards as of
May 18, 2006, were canceled on May 18, 2006. The 2000
Plan will remain in effect as to outstanding equity awards
granted under the plan prior to May 18, 2006. |
|
(3) |
|
Excludes 18,788,151 shares subject to restricted stock
units and performance share awards outstanding as of
March 24, 2011 that were issued under the 2006 Plan. |
|
(4) |
|
Excludes purchase rights accruing under the Companys 2008
Employee Stock Purchase Plan, which had a remaining
stockholder-approved reserve of 7,422,594 shares as of
March 24, 2011. |
|
(5) |
|
Consists of shares available for future issuance under the 2008
Purchase Plan and the 2006 Plan. As of March 24, 2011, an
aggregate of 7,422,594 and 12,715,052 shares of common
stock were available for issuance under the 2008 Purchase Plan
and the 2006 Plan respectively. Under the terms of the 2006
Plan, any shares subject to any options under the Companys
2000 Plan and 1996 Plan that were outstanding on May 18,
2006, and that subsequently expire unexercised, up to a maximum
of an additional 75,000,000 shares, will become available
for issuance under the 2006 Plan. |
|
(6) |
|
As of March 24, 2011, a total of 1,304,029 shares of
the Companys Common Stock were issuable upon exercise of
outstanding options and 486,691 shares subject to outstanding
RSUs under plans assumed in connection with acquisitions. The
weighted average exercise price of those outstanding options is
$14.56 per share. No additional options may be granted under
those assumed plans. |
67
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The Audit Committee has appointed Ernst & Young LLP,
an independent registered public accounting firm, as Juniper
Networks auditors for the fiscal year ending
December 31, 2011. Representatives of Ernst &
Young are expected to be present at the annual meeting and will
have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate
questions.
Fees
Incurred by Juniper Networks for Ernst & Young
LLP
Fees for professional services provided by the Companys
independent registered public accounting firm in each of the
last two years are approximately:
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Audit fees
|
|
$
|
3,718,643
|
|
|
$
|
3,477,133
|
|
Audit-related fees
|
|
|
287,480
|
|
|
|
587,913
|
|
Tax fees
|
|
|
418,763
|
|
|
|
362,433
|
|
All other fees
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,424,886
|
|
|
$
|
4,427,479
|
|
Audit fees are for professional services rendered in connection
with the audit of the Companys annual financial statements
and the review of its quarterly financial statements.
Audit-related fees consist of fees billed for assurance and
related services that are reasonably related to the performance
of the audit or review of the Companys consolidated
financial statements, and are not reported under Audit
Fees. These services include accounting consultations in
connection with transactions, attest services that are required
by statute or regulation, and consultations concerning financial
accounting and reporting standards. Tax fees are for
professional services rendered for tax compliance, tax advice
and tax planning.
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the Companys independent
registered public accounting firm. The Audit Committee has
delegated such pre-approval authority to the chairman of the
committee. The Audit Committee pre-approved all services
performed by the Companys independent registered public
accounting firm in 2010 and 2009.
68
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee oversees the Companys financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process including establishing and
maintaining adequate internal control over the Companys
financial reporting. The Audit Committee discussed with the
Companys independent registered public accounting firm the
overall scope and plans for the audit. The Audit Committee meets
with the independent registered public accounting firm, with and
without management present, to discuss the results of their
examinations, their evaluations of the Companys internal
controls, and the overall quality of the Companys
financial reporting. The Audit Committee held 12 meetings during
fiscal year 2010.
In this context, the Audit Committee hereby reports as follows:
1. The Audit Committee has reviewed and discussed the
audited financial statements with the Companys management.
2. The Audit Committee has discussed with the
Companys independent registered public accounting firm the
matters required to be discussed by SAS 61 (Codification of
Statements on Auditing Standard, AU 380), SAS 99 (Consideration
of Fraud in a Financial Statement Audit) and SEC rules discussed
in Final Releases Nos.
33-8183 and
33-8183a.
3. The Audit Committee has received the written disclosures
and the letter from the Companys independent registered
public accounting firm required by PCAOB Ethics and Independence
Rule 3526 (Rule 3526, Communications with Audit
Committees Concerning Independence) and has discussed with
the Companys independent registered public accounting firm
its independence.
4. Based on the review and discussion referred to in
paragraphs (1) through (3) above, the Audit Committee
recommended to the Board, and the Board has approved, that the
Companys audited financial statements for the fiscal year
ended December 31, 2010 be included in Juniper
Networks Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, for filing
with the SEC.
MEMBERS OF THE AUDIT COMMITTEE
Robert M. Calderoni (Chairman)
William F. Meehan
Stratton Sclavos*
David Schlotterbeck*
* Mr. Schlotterbeck replaced Mr. Sclavos as a member
of the Audit Committee effective November 15, 2010.
69
Directions
to Juniper Networks, Inc.
1220 N. Mathilda
Avenue
Building 3, Pacific Conference Room
Sunnyvale, CA 94089
From San Francisco Airport:
|
|
|
|
|
Travel south on Highway 101.
|
|
|
|
Exit Highway 237 east in Sunnyvale.
|
|
|
|
Exit Mathilda and turn left onto Mathilda Avenue.
|
|
|
|
Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
|
From San Jose Airport and points south:
|
|
|
|
|
Travel north on Highway 101 to Mathilda Avenue in Sunnyvale.
|
|
|
|
Exit Mathilda Avenue north.
|
|
|
|
Continue on Mathilda past Highway 237 and Lockheed Martin Avenue.
|
|
|
|
Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
|
From Oakland Airport and the East Bay:
|
|
|
|
|
Travel south on Interstate 880 until you get to Milpitas.
|
|
|
|
Turn right on Highway 237 west.
|
|
|
|
Continue approximately 10 miles.
|
|
|
|
Exit Mathilda Avenue and turn right at the stoplight.
|
|
|
|
Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
|
70
ANNEX A
JUNIPER
NETWORKS, INC.
PERFORMANCE
BONUS PLAN
1. Purposes of the Plan. The Plan
is intended to increase shareholder value and the success of the
Company by motivating key executives to: (1) perform to the
best of their abilities, and (2) achieve the Companys
objectives. The Plans goals are to be achieved by
providing such executives with incentive awards based on the
achievement of goals relating to the performance of the Company
or upon the achievement of objectively determinable individual
performance goals. The Plan is intended to permit the payment of
bonuses that may qualify as performance-based compensation under
Code section 162(m).
2. Definitions.
(a) Award means, with
respect to each Participant, the award determined pursuant to
Section 8(a) below for a Performance Period. Each Award is
determined by a Payout Formula for a Performance Period, subject
to the Committees authority under Section 8(a) to
eliminate or reduce the Award otherwise payable.
(b) Base Salary means as to any
Performance Period, the Participants actual annual salary
earned through the last day of the Performance Period. Such Base
Salary shall be before both (a) deductions for taxes or
benefits, and (b) deferrals of compensation pursuant to
Company-sponsored plans.
(c) Board means the Board of
Directors of the Company.
(d) Code means the Internal
Revenue Code of 1986, as amended.
(e) Committee means the
Compensation Committee of the Board.
(f) Company means Juniper
Networks, Inc. or any of its subsidiaries (as such term is
defined in Code Section 424(f)).
(g) Determination Date means the
latest possible date that will not jeopardize a Target Award or
Awards qualification as Performance-Based Compensation.
(h) Fiscal Quarter means a fiscal
quarter of the Company.
(i) Fiscal Year means a fiscal
year of the Company.
(j) Maximum Award means as to any
Participant for any Performance Period, $20 million.
(k) Participant means an
executive officer of the Company participating in the Plan for a
Performance Period.
(l) Payout Formula means as to
any Performance Period, the formula or payout matrix established
by the Committee pursuant to Section 7 in order to
determine the Awards (if any) to be paid to Participants. The
formula or matrix may differ from Participant to Participant.
(m) Performance-Based
Compensation means compensation that is intended
to qualify as performance-based compensation within
the meaning of Section 162(m).
(n) Performance Goals means
the goal(s) (or combined goal(s)) determined by the Committee
(in its discretion) to be applicable to a Participant with
respect to an Award. As determined by the Committee, the
performance measures for any performance period will be any one
or more of the following objective performance criteria, applied
to either the Company as a whole or, except with respect to
stockholder return metrics, to a region, business unit,
affiliate or business segment, and measured either on an
absolute basis or relative to a pre-established target, to a
previous periods results to a designated comparison group,
and/or to
another Performance Goal and, with respect to financial metrics,
which may be determined in accordance with United States
Generally Accepted Accounting Principles (GAAP), in
accordance with accounting principles established by the
International Accounting Standards Board (IASB
Principles) or which may be adjusted when established to
exclude any items otherwise includable under GAAP or under IASB
Principles: (i) cash flow (including operating cash flow or
free
A-1
cash flow) or cash flow margin, (ii) cash position,
(iii) revenue (on an absolute basis or adjusted for
currency effects), (iv) gross margin, (v) operating
margin, (vi) operating expenses or operating expenses as a
percentage of revenue, (vii) earnings (which may include,
without limitation, earnings before interest and taxes, earnings
before taxes and earnings before income, taxes, depreciation and
amortization), (viii) earnings per share,
(ix) operating income, (x) net income, (xi) stock
price, (xiii) return on equity, (xiii) total
stockholder return, (xiv) growth in stockholder value
relative to a specified publicly reported index (such as the
S&P 500 Index), (xv) return on capital,
(xvi) return on assets or net assets, (xvii) return on
investment, (xviii) economic value added, (xix) market
share, (xx) contract awards or backlog, (xxi) overhead
or other expense reduction, (xxii) credit rating,
(xxiii) objective customer indicators (including, without
limitation, a customer satisfaction rating), (xxiv) new
product invention or innovation, (xxv) attainment of
research and development milestones, (xxvi) improvements in
productivity, (xxvii) attainment of objective operating
goals, and (xxviii) objective employee metrics.
(o) Performance Period
means any Fiscal Year or portion thereof, or such other longer
period but not in excess of five Fiscal Years, as determined by
the Committee in its sole discretion.
(p) Plan means this Performance
Bonus Plan.
(q) Plan Year means the
Companys fiscal year.
(r) Section 162(m) means
Section 162(m) of the Code, or any successor to
Section 162(m), as that Section may be interpreted from
time to time by the Internal Revenue Service, whether by
regulation, notice or otherwise.
(s) Target Award means the target
award payable under the Plan to a Participant for the
Performance Period, expressed as a percentage of his or her Base
Salary or a specific dollar amount, as determined by the
Committee in accordance with Section 6.
3. Plan Administration.
(a) The Committee shall be responsible for the general
administration and interpretation of the Plan and for carrying
out its provisions. Subject to the requirements for qualifying
compensation as Performance-Based Compensation, the Committee
may delegate specific administrative tasks to Company employees
or others as appropriate for proper administration of the Plan.
Subject to the limitations on Committee discretion imposed under
Section 162(m), the Committee shall have such powers as may
be necessary to discharge its duties hereunder, including, but
not by way of limitation, the following powers and duties, but
subject to the terms of the Plan:
(i) discretionary authority to construe and interpret the
terms of the Plan, and to determine eligibility, Awards and the
amount, manner and time of payment of any Awards hereunder;
(ii) to prescribe forms and procedures for purposes of Plan
participation and distribution of Awards; and
(iii) to adopt rules, regulations and bylaws and to take
such actions as it deems necessary or desirable for the proper
administration of the Plan.
(b) Any rule or decision by the Committee that is not
inconsistent with the provisions of the Plan shall be conclusive
and binding on all persons, and shall be given the maximum
deference permitted by law.
4. Eligibility. The employees
eligible to participate in the Plan for a given Performance
Period shall be executive officers of the Company who are
designated by the Committee in its sole discretion. No person
shall be automatically entitled to participate in the Plan.
5. Performance Goal
Determination. The Committee, in its sole
discretion, shall establish the Performance Goals for each
Participant for the Performance Period. Such Performance Goals
shall be set forth in writing prior to the Determination Date.
6. Target Award Determination. The
Committee, in its sole discretion, shall establish a Target
Award for each Participant. Each Participants Target Award
shall be determined by the Committee in its sole discretion, and
each Target Award shall be set forth in writing prior to the
Determination Date.
7. Determination of Payout Formula or
Formulae. On or prior to the Determination
Date, the Committee, in its sole discretion, shall establish a
Payout Formula or Formulae for purposes of determining the Award
(if any)
A-2
payable to each Participant. Each Payout Formula shall
(a) be set forth in writing prior to the Determination
Date, (b) be based on a comparison of actual performance to
the Performance Goals, (c) provide for the payment of a
Participants Target Award if the Performance Goals for the
Performance Period are achieved, and (d) provide for an
Award greater than or less than the Participants Target
Award, depending upon the extent to which actual performance
exceeds or falls below the Performance Goals. Notwithstanding
the preceding, in no event shall a Participants Award for
any Performance Period exceed the Maximum Award.
8. Determination of Awards; Award Payment.
(a) Determination and
Certification. After the end of each
Performance Period, the Committee shall certify in writing
(which may be by approval of the minutes in which the
certification was made) the extent to which the Performance
Goals applicable to each Participant for the Performance Period
were achieved or exceeded. The Award for each Participant shall
be determined by applying the Payout Formula to the level of
actual performance that has been certified by the Committee.
Notwithstanding any contrary provision of the Plan, the
Committee, in its sole discretion, may eliminate or reduce the
Award payable to any Participant below that which otherwise
would be payable under the Payout Formula but shall not have the
right to increase the Award above that which would otherwise be
payable under the Payout Formula.
(b) Right to Receive Payment. Each
Award under the Plan shall be paid solely from the general
assets of the Company. Nothing in this Plan shall be construed
to create a trust or to establish or evidence any
Participants claim of any right to payment of an Award
other than as an unsecured general creditor with respect to any
payment to which he or she may be entitled. A Participant needs
to be employed by the Company through the payment date in order
to be eligible to receive an Award payout hereunder.
(c) Form of Distributions. The
Company shall distribute all Awards to the Participant in cash.
(d) Timing of
Distributions. Subject to Section 8(e)
below, the Company shall distribute amounts payable to
Participants as soon as is practicable following the
determination and written certification of the Award for a
Performance Period.
(e) Deferral. The Committee may
defer payment of Awards, or any portion thereof, to Covered
Employees as the Committee, in its discretion, determines to be
necessary or desirable to preserve the deductibility of such
amounts under Section 162(m) or for any such other reason
as the Committee may determine. In addition, the Committee, in
its sole discretion, may permit a Participant to defer receipt
of the payment of cash that would otherwise be delivered to a
Participant under the Plan. Any such deferral elections shall be
subject to such rules and procedures as shall be determined by
the Committee in its sole discretion.
9. Term of Plan. Subject to its
approval at the 2011 annual meeting of the Companys
stockholders, the Plan shall first apply to the 2012 Plan Year.
Once approved by the Companys stockholders, the Plan shall
continue until terminated under Section 10 of the Plan.
10. Amendment and Termination of the
Plan. The Committee may amend, modify,
suspend or terminate the Plan, in whole or in part, at any time,
including the adoption of amendments deemed necessary or
desirable to correct any defect or to supply omitted data or to
reconcile any inconsistency in the Plan or in any Award granted
hereunder; provided, however, that no amendment, alteration,
suspension or discontinuation shall be made which would
(i) impair any payments to Participants made prior to such
amendment, modification, suspension or termination, unless the
Committee has made a determination that such amendment or
modification is in the best interests of all persons to whom
Awards have theretofore been granted; provided further, however,
that in no event may such an amendment or modification result in
an increase in the amount of compensation payable pursuant to
such Award or (ii) cause compensation that is, or may
become, payable hereunder to fail to qualify as
Performance-Based Compensation. To the extent necessary or
advisable under applicable law, including Section 162(m),
Plan amendments shall be subject to shareholder approval. At no
time before the actual distribution of funds to Participants
under the Plan shall any Participant accrue any vested interest
or right whatsoever under the Plan except as otherwise stated in
this Plan. Nothing in this Section 10 is intended to limit
the Companys ability to recover Plan payouts pursuant to
an approved compensation recovery or clawback policy.
A-3
11. Withholding. Distributions
pursuant to this Plan shall be subject to all applicable federal
and state tax and withholding requirements.
12. At-Will Employment. No
statement in this Plan should be construed to grant any employee
an employment contract of fixed duration or any other
contractual rights, nor should this Plan be interpreted as
creating an implied or an expressed contract of employment or
any other contractual rights between the Company and its
employees. The employment relationship between the Company and
its employees is terminable at-will. This means that an employee
of the Company may terminate the employment relationship at any
time and for any reason or no reason.
13. Successors. All obligations of
the Company under the Plan, with respect to awards granted
hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business or assets
of the Company.
14. Indemnification. Each person
who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company
against and from (a) any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action taken or failure to
act under the Plan or any award, and (b) from any and all
amounts paid by him or her in settlement thereof, with the
Companys approval, or paid by him or her in satisfaction
of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which
such persons may be entitled under the Companys
Certificate of Incorporation or Bylaws, by contract, as a matter
of law, or otherwise, or under any power that the Company may
have to indemnify them or hold them harmless.
15. Nonassignment. The rights of a
Participant under this Plan shall not be assignable or
transferable by the Participant except by will or the laws of
intestacy.
16. Governing Law. The Plan shall
be governed by the laws of the State of California, without
regard to conflicts of law provisions thereunder.
A-4
ANNEX B
JUNIPER
NETWORKS, INC.
2006
EQUITY INCENTIVE PLAN
Amended
effective February 9, 2011, subject to stockholder
approval
1. Purposes of the Plan. The
purposes of this Equity Incentive Plan are to attract and retain
the best available personnel for positions of substantial
responsibility, to provide additional incentive to Service
Providers and Outside Directors and to promote the success of
the Companys business.
Awards to Service Providers granted hereunder may be Incentive
Stock Options, Nonstatutory Stock Options, Restricted Stock,
Restricted Stock Units, Stock Appreciation Rights, Performance
Shares, Performance Units, Deferred Stock Units or Dividend
Equivalents, at the discretion of the Administrator and as
reflected in the terms of the written option agreement. This
Equity Incentive Plan also provides for the automatic,
non-discretionary award of Nonstatutory Stock Options to Outside
Directors.
2. Definitions. As used herein,
the following definitions shall apply:
(a) Administrator shall mean the
Board or any of its Committees as shall be administering the
Plan, in accordance with Section 4 of the Plan.
(b) Annual Revenue shall mean the
Companys or a business units net sales for the
Fiscal Year, determined in accordance with generally accepted
accounting principles.
(c) Applicable Laws shall mean
the legal requirements relating to the administration of equity
incentive plans under California corporate and securities laws
and the Code.
(d) Award shall mean,
individually or collectively, a grant under the Plan of
Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Shares, Performance Units, Deferred Stock Units or
Dividend Equivalents.
(e) Award Agreement shall mean
the written or electronic agreement setting forth the terms and
provisions applicable to each Award granted under the Plan. The
Award Agreement is subject to the terms and conditions of the
Plan.
(f) Awarded Stock shall mean the
Common Stock subject to an Award.
(g) Board shall mean the Board of
Directors of the Company.
(h) Cash Position shall mean the
Companys level of cash and cash equivalents.
(i) Code shall mean the Internal
Revenue Code of 1986, as amended.
(j) Common Stock shall mean the
Common Stock of the Company.
(k) Committee shall mean the
Committee appointed by the Board of Directors or a
sub-committee
appointed by the Boards designated committee in accordance
with Section 4(a) of the Plan, if one is appointed.
(l) Company shall mean Juniper
Networks, Inc.
(m) Consultant shall mean any
person, including an advisor, engaged by the Company or a Parent
or Subsidiary to render services and who is compensated for such
services; provided, however, that the term
Consultant shall not include Outside Directors,
unless such Outside Directors are compensated for services to
the Company other than through payment of directors fees
and Option grants under Section 11 hereof.
(n) Continuous Status as a
Director means that the Director relationship is
not interrupted or terminated.
B-1
(o) Deferred Stock Unit means a
deferred stock unit Award granted to a Participant pursuant to
Section 16.
(p) Director shall mean a member
of the Board.
(q) Disability means total and
permanent disability as defined in Section 22(e)(3) of the
Code.
(r) Dividend Equivalent shall
mean a credit, payable in cash, made at the discretion of the
Administrator, to the account of a Participant in an amount
equal to the cash dividends paid on one Share for each Share
represented by an Award held by such Participant. Dividend
Equivalents may be subject to the same vesting restrictions as
the related Shares subject to an Award, at the discretion of the
Administrator.
(s) Employee shall mean any
person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. An Employee
shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. For purposes of
Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed
by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed,
then three (3) months following the 91st day of such
leave any Incentive Stock Option held by the Participant shall
cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option.
(t) Exchange Act shall mean the
Securities Exchange Act of 1934, as amended.
(u) Fair Market Value shall mean,
as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on a stock exchange, the
fair market value per Share shall be the closing price on such
exchange, as reported in the Wall Street Journal on the date of
determination or, if the date of determination is not a trading
day, the immediately preceding trading day;
(ii) If there is a public market for the Common Stock, the
fair market value per Share shall be the mean of the bid and
asked prices, or closing price in the event quotations for the
Common Stock are reported on the National Market System, of the
Common Stock on the date of determination, as reported in the
Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers
Automated Quotation (NASDAQ) System); or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good
faith by the Administrator.
(v) Fiscal Year shall mean a
fiscal year of the Company.
(w) Full Value Award shall mean a
grant of Restricted Stock, a Restricted Stock Unit, a
Performance Share or a Deferred Stock Unit hereunder.
(x) Incentive Stock Option shall
mean an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.
(y) Nonstatutory Stock Option
shall mean an Option not intended to qualify as an Incentive
Stock Option.
(z) Officer shall mean a person
who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(aa) Option shall mean a stock option
granted pursuant to the Plan.
(bb) Optioned Stock shall mean the Common
Stock subject to an Option.
(cc) Outside Director means a Director who
is not an Employee or Consultant.
(dd) Parent shall mean a
parent corporation, whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(ee) Participant shall mean an
Employee or Consultant who receives an Award.
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(ff) Performance Goals shall mean
the goal(s) (or combined goal(s)) determined by the
Administrator (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the
Administrator, the performance measures for any performance
period will be any one or more of the following objective
performance criteria, applied to either the Company as a whole
or, except with respect to stockholder return metrics, to a
region, business unit, affiliate or business segment, and
measured either on an absolute basis or relative to a
pre-established target, to a previous periods results or
to a designated comparison group, and, with respect to financial
metrics, which may be determined in accordance with United
States Generally Accepted Accounting Principles
(GAAP), in accordance with accounting principles
established by the International Accounting Standards Board
(IASB Principles) or which may be adjusted when
established to exclude any items otherwise includable under GAAP
or under IASB Principles: (i) cash flow (including
operating cash flow or free cash flow), (ii) cash position,
(iii) revenue (on an absolute basis or adjusted for
currency effects), (iv) revenue growth,
(v) contribution margin, (vi) gross margin,
(vii) operating margin (viii) operating expenses or
operating expenses as a percentage of revenue,
(ix) earnings (which may include earnings before interest
and taxes, earnings before taxes and net earnings),
(x) earnings per share, (xi) operating income,
(xii) net income, (xiii) stock price,
(xiv) return on equity, (xv) total stockholder return,
(xvi) growth in stockholder value relative to a specified
publicly reported index (such as the S&P 500 Index),
(xvii) return on capital, (xviii) return on assets or
net assets, (xix) return on investment, (xx) economic
value added, (xxi) operating profit or net operating
profit, (xxii) operating margin, (xxiii) market share,
(xxiv) contract awards or backlog, (xxv) overhead or
other expense reduction, (xxvi) credit rating,
(xxvii) objective customer indicators, (xxviii) new
product invention or innovation, (xxix) attainment of
research and development milestones, (xxx) improvements in
productivity, (xxxi) attainment of objective operating
goals, and (xxxii) objective employee metrics. The
Performance Goals may differ from Participant to Participant and
from Award to Award. In particular, the Administrator may
appropriately adjust any evaluation of performance under a
Performance Goal to exclude (a) any extraordinary
non-recurring items, (b) the affect of any merger,
acquisition, or other business combination or divestiture or
(ii) the effect of any changes in accounting principles
affecting the Companys or a business units,
regions, affiliates or business segments
reported results.
(gg) Performance Share
shall mean a performance share Award granted to a Participant
pursuant to Section 14.
(hh) Performance Unit means
a performance unit Award granted to a Participant pursuant to
Section 15.
(ii) Plan shall mean this
2006 Equity Incentive Plan, as amended.
(jj) Plan Minimum Vesting
Requirements shall mean the minimum vesting
requirements for Full Value Awards under Plan
Section 4(b)(vi) hereunder.
(kk) Restricted Stock shall
mean a restricted stock Award granted to a Participant pursuant
to Section 11.
(ll) Restricted Stock Unit
shall mean a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to
Section 13. Each Restricted Stock Unit represents an
unfunded and unsecured obligation of the Company.
(mm) Rule 16b-3
shall mean
Rule 16b-3
of the Exchange Act or any successor to
Rule 16b-3,
as in effect when discretion is being exercised with respect to
the Plan.
(nn) Section 16(b)
shall mean Section 16(b) of the Exchange Act.
(oo) Service Provider means an
Employee or Consultant.
(pp) Share shall mean a
share of the Common Stock, as adjusted in accordance with
Section 21 of the Plan.
(qq) Stock Appreciation
Right or SAR shall mean a stock
appreciation right granted pursuant to Section 9 below.
(rr) Subsidiary shall mean
a subsidiary corporation, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the
Plan. Subject to the provisions of
Section 21 of the Plan, the maximum aggregate number of
shares which may be optioned and sold under the Plan is
124,500,000 shares of Common Stock plus any
B-3
Shares subject to any options under the Companys 2000
Nonstatutory Stock Option Plan and 1996 Stock Incentive Plan
that are outstanding on the date this Plan becomes effective and
that subsequently expire unexercised, up to a maximum of
an additional 75,000,000 Shares. All of the shares issuable
under the Plan may be authorized, but unissued, or reacquired
Common Stock.
Any Shares subject to Options or SARs shall be counted against
the numerical limits of this Section 3 as one Share for
every Share subject thereto. Any Shares subject to Performance
Shares, Restricted Stock or Restricted Stock Units with a per
share or unit purchase price lower than 100% of Fair Market
Value on the date of grant shall be counted against the
numerical limits of this Section 3 as two and one-tenth
Shares for every one Share subject thereto. To the extent that a
Share that was subject to an Award that counted as two and
one-tenth Shares against the Plan reserve pursuant to the
preceding sentence is recycled back into the Plan under the next
paragraph of this Section 3, the Plan shall be credited
with two and one-tenth Shares.
If an Award expires or becomes unexercisable without having been
exercised in full, or, with respect to Restricted Stock,
Performance Shares or Restricted Stock Units, is forfeited to or
repurchased by the Company at its original purchase price due to
such Award failing to vest, the unpurchased Shares (or for
Awards other than Options and SARs, the forfeited or repurchased
shares) which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has
terminated). With respect to SARs, when an SAR is exercised, the
shares subject to a SAR grant agreement shall be counted against
the numerical limits of Section 3 above, as one share for
every share subject thereto, regardless of the number of shares
used to settle the SAR upon exercise (i.e., shares withheld to
satisfy the exercise price of an SAR shall not remain available
for issuance under the Plan). Shares that have actually been
issued under the Plan under any Award shall not be returned to
the Plan and shall not become available for future distribution
under the Plan; provided, however, that if Shares of Restricted
Stock, Performance Shares or Restricted Stock Units are
repurchased by the Company at their original purchase price or
are forfeited to the Company due to such Awards failing to vest,
such Shares shall become available for future grant under the
Plan. Shares used to pay the exercise price of an Option shall
not become available for future grant or sale under the Plan.
Shares used to satisfy tax withholding obligations shall not
become available for future grant or sale under the Plan. To the
extent an Award under the Plan is paid out in cash rather than
stock, such cash payment shall not reduce the number of Shares
available for issuance under the Plan. Any payout of Dividend
Equivalents or Performance Units, because they are payable only
in cash, shall not reduce the number of Shares available for
issuance under the Plan. Conversely, any forfeiture of Dividend
Equivalents or Performance Units shall not increase the number
of Shares available for issuance under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative
Bodies. If permitted by Applicable Laws, the
Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
(ii) Section 162(m). To the
extent that the Administrator determines it to be desirable to
qualify Awards granted hereunder as performance-based
compensation within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee
consisting solely of two or more outside directors
within the meaning of Section 162(m) of the Code.
(iii) Administration With Respect to Officers Subject
to Section 16(b). With respect to Option
grants made to Employees who are also Officers subject to
Section 16(b) of the Exchange Act, the Plan shall be
administered by (A) the Board, if the Board may administer
the Plan in compliance with
Rule 16b-3,
or (B) a committee designated by the Board to administer
the Plan, which committee shall be constituted to comply with
Rule 16b-3.
Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee
and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however
caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by
Rule 16b-3.
(iv) Administration With Respect to Other
Persons. With respect to Award grants made to
Employees or Consultants who are not Officers of the Company,
the Plan shall be administered by (A) the Board, (B) a
committee
B-4
designated by the Board, or (C) a
sub-committee
designated by the designated committee, which committee or
sub-committee
shall be constituted to satisfy Applicable Laws. Once appointed,
such Committee shall serve in its designated capacity until
otherwise directed by the Board. The Board may increase the size
of the Committee and appoint additional members, remove members
(with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to
the extent permitted by Applicable Laws.
(v) Administration With Respect to Automatic Grants
to Outside Directors. Automatic Grants to
Outside Directors shall be pursuant to a non-discretionary
formula as set forth in Section 11 hereof and therefore
shall not be subject to any discretionary administration.
(b) Powers of the
Administrator. Subject to the provisions of
the Plan (including the non-discretionary automatic grant to
Outside Director provisions of Section 11), and in the case
of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value in accordance with
Section 2(v) of the Plan;
(ii) to select the Service Providers to whom Awards may be
granted hereunder;
(iii) to determine whether and to what extent Awards are
granted hereunder;
(iv) to determine the number of shares of Common Stock to
be covered by each Award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted
hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Awards
vest or may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture
restrictions (subject to compliance with applicable laws,
including Code Section 409A), and any restriction or
limitation regarding any Award or the shares of Common Stock
relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
provided, however, that with respect to Full Value Awards
vesting solely based on continuing as a Service Provider, they
will vest in full no earlier (except if accelerated pursuant to
Section 21 hereof or pursuant to change of control
severance agreements entered into by and between the Company and
any Service Provider) than the three (3) year anniversary
of the grant date; provided, further, that if vesting is not
solely based on continuing as a Service Provider, they will vest
in full no earlier (except if accelerated pursuant to
Section 21 hereof or pursuant to change of control
severance agreements entered into by and between the Company and
any Service Provider) than the one (1) year anniversary of
the grant date;
(vii) to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(ix) to modify or amend each Award (subject to
Section 7 and Section 24(c) of the Plan);
(x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Award
previously granted by the Administrator;
(xi) to determine the terms and restrictions applicable to
Awards;
(xii) to determine whether Awards will be adjusted for
Dividend Equivalents and whether such Dividend Equivalents shall
be subject to vesting; and
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrators
Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding
on all Participants and any other holders of any Awards granted
under the Plan.
(d) Exception to Plan Minimum Vesting
Requirements.
B-5
(i) Full Value Awards that result in issuing up to 5% of
the maximum aggregate number of shares of Stock authorized for
issuance under the Plan (the 5% Limit) may be
granted to any one or more employees or Non-employee Directors
without respect to the Plan Minimum Vesting Requirements.
(ii) All Full Value Awards that have their vesting
discretionarily accelerated, and all Options and SARs that have
their vesting discretionarily accelerated 100%, other than, in
either case, pursuant to (A) a merger or asset sale
transaction described in Section 21(c) hereof (including
vesting acceleration in connection with employment termination
following such event), (B) a Participants death, or
(C) a Participants Disability, are subject to the 5%
Limit.
(iii) Notwithstanding the foregoing, the Administrator may
accelerate the vesting of Full Value Awards such that the Plan
Minimum Vesting Requirements are still satisfied, without such
vesting acceleration counting toward the 5% Limit.
(iv) The 5% Limit applies in the aggregate to Full Value
Award grants that do not satisfy Plan minimum vesting
requirements and to the discretionary vesting acceleration of
Awards.
5. Eligibility. Awards may be
granted only to Service Providers. Incentive Stock Options may
be granted only to Employees. A Service Provider who has been
granted an Award may, if he or she is otherwise eligible, be
granted an additional Award or Awards. Outside Directors may
only be granted Awards as specified in Section 11 hereof.
6. Code Section 162(m) Provisions.
(a) Option and SAR Annual Share
Limit. Subject to Section 7 below, no
Participant shall be granted, in any Fiscal Year, Options and
Stock Appreciation Rights to purchase more than
2,000,000 Shares; provided, however, that such limit shall
be 4,000,000 Shares in the Participants first Fiscal
Year of Company service.
(b) Restricted Stock, Performance Share and
Restricted Stock Unit Annual Limit. No
Participant shall be granted, in any Fiscal Year, more than
1,000,000 Shares in the aggregate of the following:
(i) Restricted Stock, (ii) Performance Shares, or
(iii) Restricted Stock Units; provided, however, that such
limit shall be 2,000,000 Shares in the Participants
first Fiscal Year of Company service.
(c) Performance Units Annual
Limit. No Participant shall receive
Performance Units, in any Fiscal Year, having an initial value
greater than $2,000,000, provided, however, that such limit
shall be $4,000,000 in the Participants first Fiscal Year
of Company service.
(d) Section 162(m) Performance
Restrictions. For purposes of qualifying
grants of Restricted Stock, Performance Shares, Performance
Units or Restricted Stock Units as performance-based
compensation under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based
upon the achievement of Performance Goals. The Performance Goals
shall be set by the Administrator on or before the latest date
permissible to enable the Restricted Stock, Performance Shares,
Performance Units or Restricted Stock Units to qualify as
performance-based compensation under
Section 162(m) of the Code. In granting Restricted Stock,
Performance Shares, Performance Units or Restricted Stock Units
which are intended to qualify under Section 162(m) of the
Code, the Administrator shall follow any procedures determined
by it from time to time to be necessary or appropriate to ensure
qualification of the Award under Section 162(m) of the Code
(e.g., in determining the Performance Goals).
(e) Changes in Capitalization. The
numerical limitations in Sections 6(a) and (b) shall
be adjusted proportionately in connection with any change in the
Companys capitalization as described in Section 16(a).
7. No Repricing. The exercise
price for an Option or SAR may not be reduced without the
consent of the Companys stockholders. This shall include,
without limitation, a repricing of the Option or SAR as well as
an Option or SAR exchange program whereby the Participant agrees
to cancel an existing Option in exchange for an Option, SAR or
other Award. If an Option or SAR is cancelled in the same Fiscal
Year in which it was granted (other than in connection with a
transaction described in Section 14), the cancelled Option
or SAR as well as any replacement Option or SAR will be counted
against the limits set forth in section 6(a) above.
Moreover, if the
B-6
exercise price of an Option or SAR is reduced, the transaction
will be treated as a cancellation of the Option or SAR and the
grant of a new Option or SAR.
8. Stock Options.
(a) Type of Option. Each Option
shall be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares subject to a
Participants incentive stock options granted by the
Company, any Parent or Subsidiary, that become exercisable for
the first time during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such
excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 8(a), incentive stock options
shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares shall be
determined as of the time of grant.
(b) Term of Option. The term of
each Option shall be stated in the Notice of Grant; provided,
however, that the term shall be seven (7) years from the
date of grant or such shorter term as may be provided in the
Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant
or such shorter term as may be provided in the Notice of Grant.
(c) Exercise Price and Consideration.
(i) The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as
is determined by the Administrator, but shall be subject to the
following:
(A) In the case of an Incentive Stock Option
(1) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(2) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(B) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(ii) Except with respect to automatic stock option grants
to Outside Directors, the consideration to be paid for the
Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Administrator and
may consist entirely of cash; check; delivery of a properly
executed exercise notice together with such other documentation
as the Committee and the broker, if applicable, shall require to
effect an exercise of the option and delivery to the Company of
the sale proceeds required; or any combination of such methods
of payment, or such other consideration and method of payment
for the issuance of Shares to the extent permitted under
Applicable Law.
9. Stock Appreciation Rights.
(a) Grant of SARs. Subject to the
terms and conditions of the Plan, SARs may be granted to
Participants at any time and from time to time as shall be
determined by the Administrator, in its sole discretion. Subject
to Section 6(a) hereof, the Administrator shall have
complete discretion to determine the number of SARs granted to
any Participant.
(b) Exercise Price and other
Terms. The per share exercise price for the
Shares to be issued pursuant to exercise of an SAR shall be
determined by the Administrator and shall be no less than 100%
of the Fair Market Value per share on the date of grant.
Otherwise, subject to Section 6(a) of the Plan, the
Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of
SARs granted under the Plan; provided, however, that no SAR may
have a term of more than seven(=7) years from the date of grant.
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(c) Payment of SAR Amount. Upon
exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:
(i) The difference between the Fair Market Value of a Share
on the date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the SAR is
exercised.
(d) Payment upon Exercise of
SAR. At the discretion of the Administrator,
but only as specified in the Award Agreement, payment for a SAR
may be in cash, Shares or a combination thereof. If the Award
Agreement is silent as to the form of payment, payment of the
SAR may only be in Shares.
(e) SAR Agreement. Each SAR grant
shall be evidenced by an Award Agreement that shall specify the
exercise price, the term of the SAR, the conditions of exercise,
whether it may be settled in cash, Shares or a combination
thereof, and such other terms and conditions as the
Administrator, in its sole discretion, shall determine.
(f) Expiration of SARs. A SAR
granted under the Plan shall expire upon the date determined by
the Administrator, in its sole discretion, and set forth in the
Award Agreement.
10. Exercise of Option or SAR.
(a) Procedure for Exercise; Rights as a
Shareholder. Any Option or SAR granted hereunder
shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria
with respect to the Company
and/or the
Participant, and as shall be permissible under the terms of the
Plan.
An Option or SAR may not be exercised for a fraction of a Share.
An Option or SAR shall be deemed to be exercised when written
notice of such exercise has been given to the Company in
accordance with the terms of the Option or SAR by the person
entitled to exercise the Option or SAR and, with respect to
Options only, full payment for the Shares with respect to which
the Option is exercised has been received by the Company. With
respect to Options only, full payment may, as authorized by the
Administrator, consist of any consideration and method of
payment allowable under Section 8(d) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no
right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as
provided in Section 21 of the Plan.
(b) Termination of Status as a Service
Provider. If an Employee or Consultant ceases
to serve as a Service Provider, he or she may, but only within
90 days (or such other period of time as is determined by
the Administrator and as set forth in the Option or SAR
Agreement) after the date he or she ceases to be a Service
Provider, exercise his or her Option or SAR to the extent that
he or she was entitled to exercise it at the date of such
termination. To the extent that he or she was not entitled to
exercise the Option or SAR at the date of such termination, or
if he or she does not exercise such Option or SAR (which he or
she was entitled to exercise) within the time specified herein,
the Option or SAR shall terminate.
(c) Disability. If a Participant
ceases to be a Service Provider as a result of the
Participants Disability, the Participant may exercise his
or her Option or SAR within such period of time as is specified
in the Award Agreement to the extent the Option or SAR is vested
on the date of termination (but in no event later than the
expiration of the term of such Option or SAR as set forth in the
Award Agreement). In the absence of a specified time in the
Award Agreement, the Option or SAR shall remain exercisable for
twelve (12) months following the Participants
termination. If, on the date of termination, the Participant is
not vested as to his or her entire Option or SAR, the Shares
covered by the unvested portion of the Option or SAR shall
revert to the Plan. If, after termination, the Participant does
not exercise his or her Option or SAR within the time specified
herein, the Option shall terminate, and the Shares covered by
such Option or SAR shall revert to the Plan.
(d) Death of Participant. If a
Participant dies while a Service Provider, the Option or SAR may
be exercised following the Participants death within such
period of time as is specified in the Award Agreement (but in no
event may the option be exercised later than the expiration of
the term set forth in the Award Agreement), by the
Participants
B-8
designated beneficiary, provided such beneficiary has been
designated prior to Participants death in a form
acceptable to the Administrator. If no such beneficiary has been
designated by the Participant, then such Option or SAR may be
exercised by the personal representative of the
Participants estate or by the person(s) to whom the Option
or SAR is transferred pursuant to the Participants will or
in accordance with the laws of descent and distribution. In the
absence of a specified time in the Award Agreement, the Option
or SAR shall remain exercisable for twelve (12) months
following Participants death. If the Option or SAR is not
so exercised within the time specified herein, the Option or SAR
shall terminate, and the Shares covered by such Option or SAR
shall revert to the Plan.
11. Automatic Stock Option Grants to Outside
Directors.
(a) Procedure for Grants. All
grants of Options to Outside Directors under this Plan shall be
automatic and non-discretionary and shall be made strictly in
accordance with the following provisions:
(i) No person shall have any discretion to select which
Outside Directors shall be granted Options or Restricted Stock
Units or to determine the number of Shares to be covered by
Options or Restricted Stock Units granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted
an Option to purchase 50,000 Shares (the First
Option) upon the date on which such person first becomes a
Director, whether through election by the stockholders of the
Company or appointment by the Board of Directors to fill a
vacancy.
(iii) At each of the Companys annual stockholder
meetings (A) each Outside Director who was an Outside
Director on the date of the prior years annual stockholder
meeting shall be automatically granted Restricted Stock Units
for a number of Shares equal to the Annual Value, and
(B) each Outside Director who was not an Outside Director
on the date of the prior years annual stockholder meeting
shall receive a Restricted Stock Unit for a number of Shares
determined by multiplying the Annual Value by a fraction, the
numerator of which is the number of days since the Outside
Director received their First Option (or, in the case of a
Director who has transitioned from an employee director to an
Outside Director and did not receive a First Option, the date
the Director became an Outside Director), and the denominator of
which is 365, rounded down to the nearest whole Share. Each
award specified in A and B are generically referred to as an
Annual Award. The Annual Value means the number
equal to $125,000 divided by the average daily closing price
over the six month period ending on the last day of the fiscal
year preceding the date of grant (for example, the period from
July1, 2008 December 31, 2008 for Annual Awards
granted in May 2009).
(iv) Notwithstanding the provisions of
subsections (ii) and (iii) hereof, in the event that
an automatic grant hereunder would cause the number of Shares
subject to outstanding Options and Restricted Stock Units plus
the number of Shares previously purchased upon exercise of
Options or issued upon vesting of Restricted Stock Units to
exceed the number of Shares available for issuance under the
Plan, then each such automatic grant shall be for that number of
Shares determined by dividing the total number of Shares
remaining available for grant by the number of Outside Directors
on the automatic grant date. Any further grants shall then be
deferred until such time, if any, as additional Shares become
available for grant under the Plan.
(v) The terms of an Option granted hereunder shall be as
follows:
(A) the term of the Option shall be seven (7) years.
(B) the Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth
in subsection (c) hereof.
(C) the exercise price per Share shall be 100% of the Fair
Market Value on the date of grant of the Option.
(D) the First Option shall vest and become exercisable as
to 1/36th of the covered Shares each month following the grant
date, with the last 1/36th vesting on the day prior to the
Companys annual stockholder meeting in the third calendar
year following the date of grant, so as to become 100% vested on
the approximately three-year anniversary of the grant date,
subject to the Participant maintaining Continuous Status as a
Director on each vesting date.
B-9
(E) the Annual Award shall become 100% vested on the one
year anniversary of the grant date, subject to the Participant
maintaining Continuous Status as a Director on each vesting date.
(b) Consideration for Exercising Outside Director
Stock Options. The consideration to be paid
for the Shares to be issued upon exercise of an automatic
Outside Director Option shall consist entirely of cash, check,
and to the extent permitted by Applicable Laws, delivery of a
properly executed exercise notice together with such other
documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale proceeds required to pay
the exercise price, or any combination of such methods of
payment.
(c) Post-Directorship
Exercisability. If an Outside Director ceases
to serve as a Director, (including pursuant to his or her death
or Disability) he or she may, but only within 90 days,
after the date he or she ceases to be a Director of the
Company, exercise his or her Option to the extent that he or she
was entitled to exercise it at the date of such termination. To
the extent that he or she was not entitled to exercise an Option
at the date of such termination, or if he or she does not
exercise such Option (which he was entitled to exercise) within
the time specified herein, the Option shall terminate.
12. Restricted Stock.
(a) Grant of Restricted
Stock. Subject to the terms and conditions of
the Plan, Restricted Stock may be granted to Participants at any
time as shall be determined by the Administrator, in its sole
discretion. Subject to Section 6(b) hereof as well as the
Plan Minimum Vesting Requirements set forth in
Sections 4(b)(vi) and 4(d) hereof, the Administrator shall
have complete discretion to determine (i) the number of
Shares subject to a Restricted Stock award granted to any
Participant, and (ii) the conditions that must be
satisfied, which typically will be based principally or solely
on continued provision of services but may include a
performance-based component, upon which is conditioned the
grant, vesting or issuance of Restricted Stock.
(b) Other Terms. The
Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of
Restricted Stock granted under the Plan; provided that
Restricted Stock may only be issued in the form of Shares.
Restricted Stock grants shall be subject to the terms,
conditions, and restrictions determined by the Administrator at
the time the stock or the restricted stock unit is awarded. The
Administrator may require the recipient to sign a Restricted
Stock Award agreement as a condition of the award. Any
certificates representing the Shares of stock awarded shall bear
such legends as shall be determined by the Administrator.
(c) Restricted Stock Award
Agreement. Each Restricted Stock grant shall
be evidenced by an agreement that shall specify the purchase
price (if any) and such other terms and conditions as the
Administrator, in its sole discretion, shall determine;
provided; however, that if the Restricted Stock grant has a
purchase price, such purchase price must be paid no more than
seven (7) years following the date of grant.
13. Restricted Stock Units.
(a) Grant. Restricted Stock Units
may be granted at any time and from time to time as determined
by the Administrator. After the Administrator determines that it
will grant Restricted Stock Units under the Plan, it shall
advise the Participant in writing or electronically of the
terms, conditions, and restrictions related to the grant,
including the number of Restricted Stock Units and the form of
payout, which, subject to Section 6(b) hereof, may be left
to the discretion of the Administrator.
(b) Vesting Criteria and Other
Terms. Subject to the Plan Minimum Vesting
Requirements set forth in Sections 4(b)(vi) and 4(d)
hereof, the Administrator shall set vesting criteria in its
discretion, which, depending on the extent to which the criteria
are met, will determine the number of Restricted Stock Units
that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide,
business unit, or individual goals (including, but not limited
to, continued employment), or any other basis determined by the
Administrator in its discretion.
(c) Earning Restricted Stock
Units. Upon meeting the applicable vesting
criteria, the Participant shall be entitled to receive a payout
as specified in the Restricted Stock Unit Award Agreement.
Notwithstanding the foregoing, at any time after the grant of
Restricted Stock Units, the Administrator, in its sole
discretion, may reduce or waive any vesting criteria that must
be met to receive a payout.
B-10
(d) Form and Timing of
Payment. Payment of earned Restricted Stock
Units shall be made as soon as practicable after the date(s) set
forth in the Restricted Stock Unit Award Agreement. The
Administrator, in its sole discretion, but only as specified in
the Award Agreement, may pay earned Restricted Stock Units in
cash, Shares, or a combination thereof. If the Award Agreement
is silent as to the form of payment, payment of the Restricted
Stock Units may only be in Shares.
(e) Cancellation. On the date set
forth in the Restricted Stock Unit Award Agreement, all unearned
Restricted Stock Units shall be forfeited to the Company.
14. Performance Shares.
(a) Grant of Performance
Shares. Subject to the terms and conditions
of the Plan, Performance Shares may be granted to Participants
at any time as shall be determined by the Administrator, in its
sole discretion. Subject to Section 6(b) hereof as well as
the Plan Minimum Vesting Requirements set forth in
Sections 4(b)(vi) and 4(d) hereof, the Administrator shall
have complete discretion to determine (i) the number of
Shares subject to a Performance Share award granted to any
Participant, and (ii) the conditions that must be
satisfied, which typically will be based principally or solely
on achievement of performance milestones but may include a
service-based component, upon which is conditioned the grant or
vesting of Performance Shares. Performance Shares shall be
granted in the form of units to acquire Shares. Each such unit
shall be the equivalent of one Share for purposes of determining
the number of Shares subject to an Award. Until the Shares are
issued, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the units to
acquire Shares.
(b) Other Terms. The
Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of
Performance Shares granted under the Plan. Performance Share
grants shall be subject to the terms, conditions, and
restrictions determined by the Administrator at the time the
stock is awarded, which may include such performance-based
milestones as are determined appropriate by the Administrator.
The Administrator may require the recipient to sign a
Performance Shares Award Agreement as a condition of the
award. Any certificates representing the Shares of stock awarded
shall bear such legends as shall be determined by the
Administrator.
(c) Performance Share Award
Agreement. Each Performance Share grant shall
be evidenced by an Award Agreement that shall specify such other
terms and conditions as the Administrator, in its sole
discretion, shall determine.
15. Performance Units.
(a) Grant of Performance
Units. Performance Units are similar to
Performance Shares, except that they shall be settled in a cash
equivalent to the Fair Market Value of the underlying Shares,
determined as of the vesting date. Subject to the terms and
conditions of the Plan, Performance Units may be granted to
Participants at any time and from time to time as shall be
determined by the Administrator, in its sole discretion. The
Administrator shall have complete discretion to determine the
conditions that must be satisfied, which typically will be based
principally or solely on achievement of performance milestones
but may include a service-based component, upon which is
conditioned the grant or vesting of Performance Units.
Performance Units shall be granted in the form of units to
acquire Shares. Each such unit shall be the cash equivalent of
one Share of Common Stock. No right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to
Performance Units or the cash payable thereunder.
(b) Number of Performance
Units. Subject to Section 6(c) hereof,
the Administrator will have complete discretion in determining
the number of Performance Units granted to any Participant.
(c) Other Terms. The
Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of
Performance Units granted under the Plan. Performance Unit
grants shall be subject to the terms, conditions, and
restrictions determined by the Administrator at the time the
grant is awarded, which may include such performance-based
milestones as are determined appropriate by the Administrator.
The Administrator may require the recipient to sign a
Performance Unit agreement as a condition of the award. Any
certificates representing the units awarded shall bear such
legends as shall be determined by the Administrator.
B-11
(d) Performance Unit Award
Agreement. Each Performance Unit grant shall
be evidenced by an agreement that shall specify such terms and
conditions as the Administrator, in its sole discretion, shall
determine.
16. Deferred Stock Units.
(a) Description. Deferred Stock
Units shall consist of a Restricted Stock, Restricted Stock
Unit, Performance Share or Performance Unit Award that the
Administrator, in its sole discretion permits to be paid out in
installments or on a deferred basis, in accordance with rules
and procedures established by the Administrator, subject to the
Plan Minimum Vesting Requirements set forth in
Sections 4(b)(vi) and 4(d) hereof. Deferred Stock Units
shall remain subject to the claims of the Companys general
creditors until distributed to the Participant.
(b) 162(m) Limits. Deferred Stock
Units shall be subject to the annual 162(m) limits applicable to
the underlying Restricted Stock, Restricted Stock Unit,
Performance Share or Performance Unit Award as set forth in
Section 6 hereof.
17. Leaves of Absence. If as a
condition to be granted an unpaid leave of absence by the
Company, a Participant agrees that vesting shall be suspended
during all or a portion of such leave of absence, (except as
otherwise required by Applicable Laws) vesting of Awards granted
hereunder shall cease during such agreed upon portion of the
unpaid leave of absence and shall only recommence upon return to
active service.
18. Part-Time Service. Unless
otherwise required by Applicable Laws, if as a condition to
being permitted to work on a less than full-time basis, the
Participant agrees that any service-based vesting of Awards
granted hereunder shall be extended on a proportionate basis in
connection with such transition to a less than a full-time
basis, vesting shall be adjusted in accordance with such
agreement. Such vesting shall be proportionately re-adjusted
prospectively in the event that the Employee subsequently
becomes regularly scheduled to work additional hours of service.
19. Non-Transferability of
Awards. Except as determined otherwise by the
Administrator in its sole discretion (but never a transfer in
exchange for value), Awards may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Participant, only by
the Participant, without the prior written consent of the
Administrator.
20. Stock Withholding to Satisfy Withholding Tax
Obligations. When a Participant incurs tax
liability in connection with the exercise, vesting or payout, as
applicable, of an Award, which tax liability is subject to tax
withholding under applicable tax laws, and the Participant is
obligated to pay the Company an amount required to be withheld
under applicable tax laws, the Participant may satisfy the
withholding tax obligation by electing to have the Company
withhold from the Shares to be issued upon exercise of the
Option or SAR or the Shares to be issued upon payout or vesting
of the other Award, if any, that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is
to be determined (the Tax Date).
All elections by a Participant to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date; and
(b) all elections shall be subject to the consent or
disapproval of the Administrator.
In the event the election to have Shares subject to an Award
withheld is made by a Participant and the Tax Date is deferred
under Section 83 of the Code because no election is filed
under Section 83(b) of the Code, the Participant shall
receive the full number of Shares with respect to which the
Option or SAR is exercised or other Award is vested but such
Participant shall be unconditionally obligated to tender back to
the Company the proper number of Shares on the Tax Date.
21. Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Asset Sale.
(a) Changes in
Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Award, and the
number of shares of Common
B-12
Stock which have been authorized for issuance under the Plan but
as to which no Awards have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an
Award, as well as the price per share of Common Stock covered by
each such outstanding Award, the annual share limitations under
Sections 6(a) and (b) hereof, and the number of Shares
subject to ongoing automatic First Option and Annual Award
grants to Outside Directors under Section 11 hereof shall
be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been effected without
receipt of consideration. Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock
subject to an Award.
(b) Dissolution or Liquidation. In
the event of the proposed dissolution or liquidation of the
Company, the Administrator shall notify each Participant as soon
as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion (but not with
respect to Options granted to Outside Directors) may provide for
a Participant to have the right to exercise his or her Option or
SAR until ten (10) days prior to such transaction as to all
of the Awarded Stock covered thereby, including Shares as to
which the Award would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option
or forfeiture rights applicable to any Award shall lapse 100%,
and that any Award vesting shall accelerate 100%, provided the
proposed dissolution or liquidation takes place at the time and
in the manner contemplated. To the extent it has not been
previously exercised (with respect to Options and SARs) or
vested (with respect to other Awards), an Award will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale.
(i) Stock Options and SARs. In the
event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and SAR shall be assumed or
an equivalent option or SAR substituted by the successor
corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses
to assume or substitute for the Option or SAR, the Participant
shall fully vest in and have the right to exercise the Option or
SAR as to all of the Awarded Stock, including Shares as to which
it would not otherwise be vested or exercisable. If an Option or
SAR becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or asset sale, the
Administrator shall notify the Participant in writing or
electronically that the Option or SAR shall be fully vested and
exercisable for a period of thirty (30) days from the date
of such notice, and the Option or SAR shall terminate upon the
expiration of such period. With respect to Options granted to
Outside Directors, in the event that the Outside Director is
required to terminate his or her position as an Outside Director
at the request of the acquiring entity within 12 months
following such merger or asset sale, each outstanding Option
held by such Outside Director shall become fully vested and
exercisable, including as to Shares as to which it would not
otherwise be exercisable, unless the Board, in its discretion,
determines otherwise.
(ii) Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Deferred Stock Units and
Dividend Equivalents. In the event of a
merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each
outstanding Restricted Stock, Restricted Stock Unit, Performance
Share, Performance Unit, Dividend Equivalent and Deferred Stock
Unit award (and any related Dividend Equivalent) shall be
assumed or an equivalent Restricted Stock, Restricted Stock
Unit, Performance Share, Performance Unit, Dividend Equivalent
and Deferred Stock Unit award (and any related Dividend
Equivalent) substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that
the successor corporation refuses to assume or substitute for
the Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit, Dividend Equivalent and Deferred Stock Unit
award (and any related Dividend Equivalent), the Participant
shall fully vest in the Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, Dividend Equivalent and
Deferred Stock Unit award (and any related Dividend Equivalent),
including as to Shares (or with respect to Dividend Equivalents
and Performance Units, the cash equivalent thereof) which would
not otherwise be vested. For the purposes of this paragraph, a
Restricted Stock, Restricted Stock Unit,
B-13
Performance Share, Performance Unit, Dividend Equivalent and
Deferred Stock Unit award (and any related Dividend Equivalent)
shall be considered assumed if, following the merger or asset
sale, the award confers the right to purchase or receive, for
each Share (or with respect to Dividend Equivalents and
Performance Units, the cash equivalent thereof) subject to the
Award immediately prior to the merger or asset sale, the
consideration (whether stock, cash, or other securities or
property) received in the merger or asset sale by holders of the
Companys common stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders
of a majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or asset sale
is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received, for
each Share and each unit/right to acquire a Share subject to the
Award (other than Dividend Equivalents and Performance Units) to
be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration
received by holders of the Companys common stock in the
merger or asset sale.
22. Time of Granting Awards. The
date of grant of an Award shall, for all purposes, be the date
on which the Administrator makes the determination granting such
Award. Notice of the determination shall be given to each
Employee or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.
23. Term of Plan. The Plan shall
continue in effect until March 1, 2016 .
24. Amendment and Termination of the Plan.
(a) Amendment and Termination. The
Board may at any time amend, alter, suspend or terminate the
Plan.
(b) Shareholder Approval. The
Company shall obtain shareholder approval of any Plan amendment
to the extent necessary and desirable to comply with
Rule 16b-3
or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including
the requirements of any exchange or quotation system on which
the Common Stock is listed or quoted). Such shareholder
approval, if required, shall be obtained in such a manner and to
such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or
Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of
any Participant, unless mutually agreed otherwise between the
Participant and the Administrator, which agreement must be in
writing and signed by the Participant and the Company.
25. Conditions Upon Issuance of
Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including,
without limitation, the Securities Act, the Exchange Act, the
rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise or payout, as applicable, of an
Award, the Company may require the person exercising such Option
or SAR, or in the case of another Award (other than a Dividend
Equivalent or Performance Unit), the person receiving the Shares
upon vesting, to render to the Company a written statement
containing such representations and warranties as, in the
opinion of counsel for the Company, may be required to ensure
compliance with any of the aforementioned relevant provisions of
law, including a representation that the Shares are being
purchased only for investment and without any present intention
to sell or distribute such Shares, if, in the opinion of counsel
for the Company, such a representation is required.
26. Reservation of Shares. The
Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan. Inability of the
Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Companys
counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
B-14
JUNIPER NETWORKS, INC.
ATTN: INVESTOR RELATIONS
1194 N. MATHILDA AVENUE
SUNNYVALE, CA 94089-1206
VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until
11:59 p.m. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you
access the web site and follow the instructions to
obtain your records and to create an electronic voting
instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our
company in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and
annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive
or access proxy materials electronically in future
years.
VOTE
BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 p.m. Eastern Time the day
before the cut-off date or meeting date. Have your proxy
card in hand when you call and then follow the
instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to
Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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M34216-P07362
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KEEP THIS PORTION FOR YOUR RECORDS |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY |
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JUNIPER NETWORKS, INC. |
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Withhold
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For All
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The Board of Directors recommends you vote FOR the following: |
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Except
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1. |
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Election of Class III Directors |
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Nominees: |
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01) Mary B. Cranston
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02) Kevin R. Johnson
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03) J. Michael Lawrie
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04) David Schlotterbeck
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The Board of Directors recommends you vote
FOR proposals 2, 3, 4 and 5: |
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Abstain
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Ratification of Ernst & Young LLP, an independent
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3. |
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Approval of the Performance Bonus Plan for
purposes of complying with Internal Revenue
Code Section 162(m). |
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4. |
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Approval of the proposed amendment to the
Juniper Networks, Inc. 2006 Equity Incentive
Plan that increases the number of shares
available for issuance thereunder. |
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5. |
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To approve a non-binding advisory resolution on
Juniper Networks, Inc.s executive compensation. |
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For address changes/comments, mark here.
(see reverse for instructions) |
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Please sign exactly as your name(s) appear(s) hereon,
When signing as attorney, executor, administrator, or
other fiduciary, please give full title as such. Joint
owners should each sign personally. All holders must
sign, If a corporation or partnership, please sign in
full corporate or partnership name, by authorized
officer. |
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Signature [PLEASE SIGN WITHIN BOX]
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Date |
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To withhold authority to vote for any
individual nominee(s), mark For All
Except and write the number(s) of the
nominee(s) on the line below.
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The Board of Directors recommends you
vote for 1 YEAR on proposal 6:
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1 Year
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2 Years
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3 Years
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Abstain |
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To approve a non-binding advisory
resolution on the frequency of
executive compensation advisory
votes in the future. |
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The Board of Directors has no recommendation
for proposal 7:
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For
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Against
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Abstain |
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To vote on a stockholder proposal, if properly presented at
the Annual Meeting, requesting the board of director to
take the necessary steps to declassify the board of directors
and establish annual elections of directors, whereby directors
would be elected annually and not by classes. |
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Signature (Joint Owners)
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and the Annual Report on Form 10-K are available at www.proxyvote.com.
JUNIPER NETWORKS, INC.
2011 ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 18, 2011
9:00 a.m. Pacific time
Juniper Networks, Inc.
1220 N. Mathilda Ave.
Building 3, Pacific Conference Room
Sunnyvale, CA 94089
Mailing Address: 1194 N. Mathilda Avenue, Sunnyvale, CA 94089
This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 18, 2011.
This proxy will be voted as specified on the reverse side. If no choice is specified, the proxy
will be voted FOR Items 1, 2, 3, 4 and 5 and 1 Year on Item 6.
By signing the proxy, you revoke all prior proxies and appoint Robyn M. Denholm and Mitchell
Gaynor, and each of them, with full power of substitution, to vote these shares on the matters
shown on the reverse side and any other matters which may come before the Annual Meeting and all
adjournments. The above named proxies are authorized to vote in their discretion upon such other
matters as may properly come before the Annual Meeting or any adjournments thereof.
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Address Changes/Comments: |
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(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side