CHANGE OF CONTROL
AGREEMENT
This Change of
Control Agreement (the “Agreement”) is made and entered
into by and between ___(the “Employee”) and Juniper
Networks, Inc., a Delaware Corporation (the “Company”),
effective as of November 19, 2008 (the “Effective
Date”).
1. It is
expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of
control. The Board of Directors of the Company (the
“Board”) recognizes that such consideration can be a
distraction to the Employee and can cause the Employee to consider
alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication and
objectivity of the Employee, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein) of
the Company.
2. The Board
believes that it is in the best interests of the Company and its
stockholders to provide the Employee with an incentive to continue
his or her employment and to motivate the Employee to maximize the
value of the Company upon a Change of Control for the benefit of
its stockholders.
3. The Board
believes that it is imperative to provide the Employee with certain
severance benefits upon certain terminations of employment
following a Change of Control. These benefits will provide the
Employee with enhanced financial security and incentive and
encouragement to remain with the Company notwithstanding the
possibility of a Change of Control.
4. Certain
capitalized terms used in the Agreement are defined in
Section 6 below.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. Term
of Agreement . This Agreement shall terminate upon the later of
(i) January 1, 2011 or (ii) if a Change of Control
has occurred on or before January 1, 2011 (or if a definitive
agreement relating to a Change in Control has been signed by the
Company on or before January 1, 2011 and the closing of that
transaction occurs on or before April 1, 2011), the date that
all of the obligations of the parties hereto with respect to this
Agreement have been satisfied.
2.
At-Will Employment . The Company and the Employee
acknowledge that the Employee’s employment is and shall
continue to be at-will, as defined under applicable law, except as
may otherwise be specifically provided under the terms of any
written formal employment agreement or offer letter between the
Company and the Employee (an “Employment Agreement”).
If the
Employee’s employment terminates for any
reason, including (without limitation) any termination prior to a
Change of Control, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as
provided by this Agreement or under his or her Employment
Agreement, or as may otherwise be available in accordance with the
Company’s established employee plans.
(a)
Involuntary Termination Other than for Cause or Voluntary
Termination for Good Reason Following a Change of Control
Period . If (i) between the date that is four
(4) months following a Change of Control and the date that is
twelve (12) months following a Change of Control the Employee
terminates his or her employment with the Company (or any parent or
subsidiary of the Company) for “Good Reason” (as
defined herein), provided however, that the grounds for Good Reason
may arise at anytime within the twelve (12) months following
the Change of Control, or (ii) within twelve (12) months
following a Change of Control the Company (or any parent or
subsidiary of the Company) terminates the Employee’s
employment for other than “Cause” (as defined herein),
and the Employee signs and does not revoke a standard release of
claims with the Company (in a form acceptable to the Company and
effective no later than March 15 of the year following the
year in which the termination occurs) (the “Release”),
then the Employee shall receive the following severance from the
Company:
(i)
Severance Payment . The Employee shall be entitled to
receive a lump-sum severance payment (less applicable withholding
taxes) equal to 100% of the Employee’s annual base salary (as
in effect immediately prior to (A) the Change of Control, or
(B) the Employee’s termination, whichever is greater)
plus 100% of the Employee’s target bonus for the fiscal year
in which the Change of Control or the Employee’s termination
occurs, whichever is greater.
(ii)
Equity Compensation Acceleration . One hundred percent
(100%) of Employee’s then unvested outstanding stock options,
stock appreciation rights, restricted stock units and other Company
equity compensation awards (the “Equity Compensation
Awards”) that vest based on time (such as an option that
vests 25% on the first anniversary of grant and 1/48
th monthly thereafter) shall immediately vest and
became exercisable (and any rights of repurchase by the Company or
restriction on sale shall lapse). 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.), (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 (for example, if the employee were granted 300
three year performance shares, where (a) the amount that can
be earned is determined each year based on performance against
annual performance targets but the entire amount vests at the end
of the three years and (b) at target performance levels the
employee could earn 1/3 of the amount each year and (c) the
first year had been completed and the performance resulted in a
calculation that 85 shares were earned and (d) the employee is
terminated
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prior to the
completion of year 2, then the amount that would vest and become
immediately exercisable would be 285 shares — representing
the 85 shares calculated for year 1 and the target amount of 100
shares for each of year 2 and year 3); provided however, that if
there is no “target” number, then the number that vest
shall be 100% of the amounts that could vest with respect to that
measurement period. Any Company stock options and stock
appreciation rights shall thereafter remain exercisable following
the Employee’s employment termination for the period
prescribed in the respective option and stock appreciation right
agreements.
(iii)
Continued Employee Benefits . To the extent permitted to be
continued under COBRA coverage, Company-paid health, dental and
vision insurance coverage at the same level of coverage as was
provided to such Employee immediately prior to the Change of
Control and at the same ratio of Company premium payment to
Employee premium payment as was in effect immediately prior to the
Change of Control (the “Company-Paid Coverage”). If
such coverage included the Employee’s dependents immediately
prior to the Change of Control, such dependents shall also be
covered at Company expense. Company-Paid Coverage shall continue
until the earlier of (i) twelve (12) months from the date
of termination, or (ii) the date upon which the Employee and
his dependents become covered under another employer’s group
health, dental and vision insurance plans that provide Employee and
his dependents with comparable benefits and levels of coverage. For
purposes of Title X of the Consolidated Budget Reconciliation Act
of 1985 (“COBRA”), the date of the “qualifying
event” for Employee and his or her dependents shall be the
date upon which the Company-Paid Coverage terminates.
(b)
Timing of Severance Payments .
(i)
Payment Timing . One half of the severance payment to which
Employee is entitled shall be paid by the Company to Employee in
cash on the 60th calendar day after Employee’s termination of
employment, but in no case prior to the effective date of the
Release. The other half of the severance payment to which Employee
is entitled shall be paid by the Company to Employee in cash not
later than six months after Employee’s termination of
employment, but in no case prior to the effective date of the
Release. If the Employee should die before all amounts have been
paid, such unpaid amounts shall be paid in a lump-sum payment (less
any withholding taxes) to the Employee’s designated
beneficiary, if living, or otherwise to the personal representative
of the Employee’s estate.
(ii)
Release Effectiveness. The receipt of any severance pursuant
to Section 3(a) will be subject to Employee signing and not
revoking the Release and provided that such Release is effective
within sixty (60) days following the termination of
employment. No severance pursuant to such Section will be paid or
provided until the Release becomes effective. In the event the
termination occurs at a time during the calendar year where it
would be possible for the Release to become effective in the
calendar year following the calendar year in which the
Employee’s termination occurs, any severance that would be
considered Deferred Compensation Separation Benefits (as defined in
Section 3(f)) will be paid on the first payroll date to occur
during the calendar year following the calendar year in which such
termination occurs, or such later time as required by the payment
schedule applicable to each payment or benefit, or
Section 3(f)
(c)
Voluntary Resignation; Termination for Cause . If the
Employee’s employment with the Company terminates
(i) voluntarily by the Employee other than for Good Reason,
or
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(ii) for
Cause by the Company, then the Employee shall not be entitled to
receive severance or other benefits except for those (if any) as
may then be established under the Company’s then existing
severance and benefits plans and practices or pursuant to other
written agreements with the Company.
(d)
Termination Outside of Change of Control Period . In the
event the Employee’s employment is terminated for any reason,
either prior to the occurrence of a Change of Control or after the
twelve (12) month period following a Change of Control, or if
the Employee terminates for Good Reason within four months after a
Change in Control, then the Employee shall be entitled to receive
severance and any other benefits only as may then be established
under the Company’s existing written severance and benefits
plans and practices or pursuant to other written agreements with
the Company.
(i) Notwithstanding
anything to the contrary in this Agreement, if Employee is a
“specified employee” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the final regulations and any guidance
promulgated thereunder (“Section 409A”) at the
time of Employee’s termination (other than due to death) or
resignation, then the severance payable to Employee, if any,
pursuant to this Agreement, when considered together with any other
severance payments or separation benefits that are considered
deferred compensation under Section 409A (together, the
“Deferred Compensation Separation Benefits”) that are
payable within the first six (6) months following
Employee’s termination of employment, will become payable on
the first payroll date that occurs on or after the date six
(6) months and one (1) day following the date of
Employee’s termination of employment. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in
accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if
Employee dies following his termination but prior to the six
(6) month anniversary of his termination, then any payments
delayed in accordance wi
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