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 2008 ANNUAL MEETING
OF STOCKHOLDERS
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Time and Date |
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9:00 a.m., Pacific time, on Wednesday, May 21, 2008
Juniper Networks, Inc. |
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Place |
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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 two Class III directors;
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(2) To approve the Juniper Networks, Inc. 2008 Employee
Stock Purchase Plan
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(3) To ratify the appointment of Ernst & Young
LLP, an independent registered public accounting firm, as
auditors for the fiscal year ending December 31, 2008; and
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(4) 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, 2008. |
This
notice of annual meeting and proxy statement and form of proxy
are being distributed on or about
April 18, 2008.
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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, 2008 or 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 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, 2008, a copy of
the 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 submit your proxy or voting instructions as soon
as possible. You may submit your proxy or voting instructions
for the annual meeting by completing, signing, dating and
returning your proxy 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 or voting
instruction card. |
By Order of the Board of Directors,
Mitchell L. Gaynor
Vice President, General Counsel and Secretary
Important
Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to
be Held on May 21, 2008
The proxy
statement, form of proxy and our 2007 Annual Report on
Form 10-K
are available at
www.proxyvote.com
2008
ANNUAL MEETING OF STOCKHOLDERS
NOTICE
OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF
CONTENTS
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A-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 (we,
Juniper Networks or the Company), is
providing these proxy materials to you in connection with
Juniper Networks annual meeting of stockholders, which
will take place on May 21, 2008. As a stockholder as of
March 24, 2008, 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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What information is contained in this proxy
statement? |
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The information included in this proxy statement relates to the
proposals to be voted on at the annual meeting, the voting
process, the compensation of directors and executive officers,
and certain other required information. |
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How may I obtain Juniper Networks
10-K? |
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A copy of our 2007 Annual Report on
Form 10-K
is enclosed. |
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Stockholders may request another free copy of the 2007
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 2007 Annual Report on
Form 10-K
is also available on the website of the Securities and Exchange
Commission. 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 address of the
Investor Relations Center is: |
http://www.juniper.net/company/investor_relations/
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We will also furnish any exhibit to the 2007 Annual Report on
Form 10-K
if specifically requested in writing. |
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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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The election of two Class III directors;
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To approve the Juniper Networks, Inc. 2008 Employee
Stock Purchase Plan (the 2008 ESPP);
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The ratification of Ernst & Young LLP, an
independent registered public accounting firm, as auditors for
the fiscal year ending December 31, 2008; and
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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 FOR
each of the nominees to the Board, FOR the approval
of the 2008 ESPP, and FOR the ratification of
Ernst & Young LLP, an independent registered public
accounting firm as auditors for the fiscal year ending
December 31, 2008. |
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What shares can I vote? |
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Each share of Juniper Networks common stock issued and
outstanding as of the close of business on March 24, 2008,
(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
(1) shares held directly in your name as the stockholder
of record and (2) 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 524,225,748 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
your ability to 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 these proxy materials are
being 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 or to vote in person
at the meeting. We have enclosed or sent a proxy card for you to
use. |
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Beneficial Owner |
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If your shares are held in a brokerage account or by another
nominee, you are considered the beneficial owner of
shares held in street name, and these proxy materials are
being forwarded to you together with a voting instruction card.
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 voting instructions
for you to use in directing the broker, trustee or nominee how
to vote your shares. |
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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, 2008 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 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, 2008, a
copy of the 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 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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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 below and those
included on your 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. Most Juniper Networks stockholders who hold shares
beneficially in street name may vote by accessing the website
specified on the voting instruction cards provided by their
brokers, trustee or nominees. Please check the voting
instruction card 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. 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 on the voting instruction cards
provided by their brokers, trustee or nominees. Please check the
voting instruction card for telephone voting availability. |
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By Mail Stockholders of record of Juniper
Networks common stock 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 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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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 bearing a later date
(which automatically revokes the earlier proxy), by providing a
written notice of revocation to the Juniper Networks Corporate
Secretary prior to your shares being voted, or by attending the
annual meeting and voting in person. Attendance at the 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 meeting and voting in person. |
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How many shares must be present or
represented to conduct business at the annual
meeting? |
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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. Both abstentions and broker
non-votes are counted for the purpose of determining the
presence of a quorum. |
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Will my shares be voted if I do not return
my proxy card? |
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If your shares are held in street name, your broker may, under
certain circumstances, vote your shares. Brokerage firms have
authority to vote clients unvoted shares on some
routine matters. If you do not give a proxy to vote
your shares, your broker may either (1) vote your shares on
routine matters or (2) leave your shares
unvoted. In addition, the terms of the agreement with your
broker may grant your broker discretionary authority to vote
your shares. |
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How are votes counted? |
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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 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 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 approval of the 2008 ESPP and
FOR ratification of the independent registered
public accounting firm) and in the discretion of the proxy
holders as to any other matters that may properly come before
the annual meeting. |
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What is the voting requirement to approve
each of the proposals? |
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In the election of directors, the two nominees receiving the
highest number of FOR votes at the annual meeting
will be elected. The proposals for the approval of the 2008 ESPP
and the ratification of the independent registered public
accounting firm requires the affirmative FOR vote of
a majority of those shares present in person or represented by
proxy and entitled to vote on each proposal at the annual
meeting. 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 and instructions are not given. In tabulating the voting
result for any particular proposal, shares that constitute
broker non-votes are not considered entitled to vote on that
proposal. Thus, broker non-votes will not affect the outcome of
any matter being voted on at the meeting, assuming that a quorum
is obtained. Abstentions have the same effect as votes against
the matter. |
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Is cumulative voting permitted for the
election of directors? |
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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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What happens if additional matters are
presented at the annual meeting? |
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Other than the three 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 proxyholders, Robyn Denholm and Mitchell Gaynor, will
have the discretion to vote your shares on any additional
matters properly presented for a vote at the 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 of Directors. |
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What should I do if I receive more than one
set of voting materials? |
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You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards
or voting instruction cards. For example, if you hold your
shares in more than one brokerage account, you may receive a
separate voting instruction card for each brokerage account in
which you hold shares. If you are a stockholder of record and
your shares are registered in more than one name, you will
receive more than one proxy card. Please complete, sign, date
and return each proxy card and voting instruction card that you
receive. |
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Q: |
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How may I obtain a separate set of voting
materials? |
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A: |
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If you share an address with another stockholder, you may
receive only one set of proxy materials (including our letter to
stockholders, 2007 Annual Report on
Form 10-K
and proxy statement) unless you have provided contrary
instructions. If you wish to receive a separate set of proxy
materials now or in the future, you may write or call us to
request a separate copy of these materials from: |
Juniper Networks, Inc.
Attn: Investor Relations
1194 North Mathilda Avenue
Sunnyvale, CA 94089
(408) 745-2000
http://www.juniper.net/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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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 proxy materials and soliciting votes. If you
choose to access the proxy materials and/or vote over the
Internet, you are responsible for Internet access charges you
may incur. If you choose to |
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vote by telephone, you are responsible for telephone charges you
may incur. In addition to the mailing of these proxy 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 Morrow & Co. to assist us in the distribution of
proxy materials and the solicitation of votes described above.
We will pay Morrow & Co. a fee of $5,000 plus
customary costs and expenses for 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 preliminary voting results at the annual
meeting and publish final results in our quarterly report on
Form 10-Q
for the second quarter of 2008. |
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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 2008 annual meeting has
passed, you may submit proposals, including 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 annual meeting next year,
the written proposal must be received by the Corporate Secretary
of Juniper Networks at our principal executive offices no later
than December 19, 2008. If the date of next years
annual meeting is moved more than 30 days before or after
the anniversary date of this years annual meeting, the
deadline for inclusion of proposals in Juniper Networks
proxy statement is instead a reasonable time before Juniper
Networks begins to print and mail its proxy materials. Such
proposals also will need to comply with Securities and Exchange
Commission 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
notice be received by the Corporate Secretary of Juniper
Networks not less than 120 days prior to the date of
Juniper Networks proxy statement released to stockholders in
connection with the previous years annual meeting of
stockholders, or by December 19, 2008 for the 2009 annual
meeting. |
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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 of Directors 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 of Directors must direct the recommendation in
writing to Juniper Networks, Inc., Corporate Secretary, 1194
North Mathilda Avenue, Sunnyvale, California
94089-1206,
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 stock. |
5
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A stockholder that instead desires to nominate a person directly
for election to the Board of Directors must meet the deadlines
and other requirements set forth in Section 2.5 of the
Companys bylaws and the rules and regulations of the
Securities and Exchange Commission. To be timely, such
stockholders notice must be delivered to or mailed and
received by the Corporate Secretary of the Company not less than
one hundred twenty (120) days prior to the date of the
Companys proxy statement released to stockholders in
connection with the Companys previous years annual
meeting of stockholders. To be in proper form, a
stockholders notice to the Secretary shall set forth: |
|
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(i) the name and address of the stockholder who
intends to make the nominations and the name and address of the
person or persons to be nominated;
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|
(ii) a representation that the stockholder is a
holder of record of stock of the Company entitled to vote at
such meeting and, if applicable, intends to appear in person or
by proxy at the meeting to nominate the person or persons
specified in the notice;
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(iii) if applicable, a description of all
arrangements or understandings between the stockholder and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to
be made by the stockholder;
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(iv) such other information regarding each
nominee as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be
nominated by the Board of Directors; and
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(v) if applicable, the consent of each nominee
to serve as director of the Company if so elected.
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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. |
6
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,
directors, contractors and agents are available at
http://www.juniper.net/company/investor_relations/.
Our Worldwide Code of Business Conduct and Ethics complies with
the rules of the SEC, the listing standards of the NASDAQ Global
Select Market and Rule 406 of the Sarbanes-Oxley Act of
2002. Juniper Networks has also adopted procedures for
accounting and auditing matters in compliance with the listing
standards of the NASDAQ Global Select Market. Concerns relating
to accounting, 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 Senior Director of
Global Audit Services), or to the Audit Committee directly.
Concerns are handled in accordance with procedures established
with respect to such matters. For information on how to contact
the Audit Committee directly, please see the section entitled
Stockholder Communications with the Board below.
Board
Independence
Our Board of Directors (the Board) has determined
that, except for Scott Kriens and Pradeep Sindhu, each of whom
is an executive officer of the company, 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 material relationship with Juniper
Networks) and is independent within the meaning of the NASDAQ
Stock Market, Inc. (NASDAQ) director independence
standards. Furthermore, the Board has determined that each of
the members of each of the committees of the Board has no
material relationship with Juniper Networks (either directly or
as a partner, stockholder or officer of an organization that has
a material relationship with Juniper Networks) and is
independent within the meaning of the NASDAQ
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 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 company. In particular, the Board
considered transactions between Juniper Networks and each of
Ariba, Inc., where Mr. Robert Calderoni serves as President
and Chief Executive Officer, and Pillsbury Winthrop Shaw Pittman
LLP, 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
NetScreen Technologies, Inc. and Ariba prior to our acquisition
of NetScreen in 2004. 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. In
addition, Pillsbury was retained by our Audit Committee as
counsel to the Audit Committee in connection with their
independent investigation into our historical stock option
practices, which investigation was substantially completed in
December 2006. Ms. Cranston joined our board in November
2007 and was not involved in Pillsburys representation of
Juniper Networks. 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 under applicable SEC and NASDAQ rules.
Board
Structure and Committee Composition
As of December 31, 2007, our Board had 10 directors
divided into three classes Class I,
Class II and Class III with a three-year
term for each class. As of December 31, 2007, the classes
were comprised as follows:
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Class I
|
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Class II
|
|
Class III
|
(Term Expires in 2009)
|
|
(Term Expires in 2010)
|
|
(Term Expires this Year)
|
|
Scott Kriens
|
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Pradeep Sindhu
|
|
Mary B. Cranston
|
Stratton Sclavos
|
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Robert M. Calderoni
|
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Kenneth Goldman*
|
William R. Stensrud
|
|
Michael Rose
|
|
William R. Hearst III**
|
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J. Michael Lawrie
|
7
|
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* |
|
In January 2008, Mr. Goldman resigned from the Board.
Mr. Goldmans decision to resign was due to his
appointment in 2007 as an executive officer of a competitor of
Juniper Networks, and was not due to any disagreement with
Juniper Networks on any matters relating to our operations,
policies or practices. |
|
** |
|
In addition, in February 2008, Mr. Hearst informed the
Board that he would retire from and not stand for re-election to
the Board effective upon the expiration of his current term in
2008. Mr. Hearsts decision was not due to any
disagreement with Juniper Networks on any matters relating to
our operations, policies or practices. As such, he will not
stand for re-election at the 2008 annual meeting. |
The Board has a standing Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee. The
membership during the last fiscal year and the function of each
of the committees are described below. Each of these committees
operates under a written charter adopted by the Board. All of
those committee charters are available on Juniper Networks
website at
http://www.juniper.net/company/investor_relations/.
In addition, the Board has a Stock Committee comprised of the
Chief Executive Officer, Chief Financial Officer and beginning
in February 2007, a non-employee director, currently
Mr. Stensrud. The Stock Committee has authority to grant
stock options and restricted stock awards to employees who are
not executive officers. During 2007, the Stock Committee held
ten meetings, and took action by written consent twice. The
Board has also established special litigation, securities
pricing and stock repurchase committees for specific purposes,
such as oversight of, litigation matters the issuance of
securities or repurchases of our common stock. During 2007, the
Special Litigation Committee, consisting of Messrs. Lawrie
and Rose, met four times and the Stock Repurchase Committee,
consisting of Messrs. Kriens, Calderoni, Goldman and
Stensrud, met once. During 2007, each incumbent director
attended at least 75% of all Board and applicable committee
meetings.
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Nominating
|
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and Corporate
|
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Name of Director
|
|
Board
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Audit
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|
Compensation
|
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|
Governance
|
|
|
Non-Employee Directors:
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|
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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(2)
|
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X
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Kenneth Goldman(3)
|
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X
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|
|
X
|
|
|
|
|
|
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|
X
|
|
William R. Hearst III(4)
|
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X
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|
|
X
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|
|
|
|
|
|
X
|
|
J. Michael Lawrie(5)
|
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|
X
|
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|
|
|
|
|
|
X
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|
|
|
|
Frank Marshall(6)
|
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X
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|
|
|
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|
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X
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|
|
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|
Kenneth Levy(7)
|
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X
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|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
Michael Rose
|
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X
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|
|
|
X
|
|
|
|
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|
|
|
Stratton Sclavos
|
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|
X
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
William R. Stensrud(8)
|
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
Employee Directors:
|
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|
|
|
|
|
|
|
|
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|
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|
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|
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Scott Kriens
|
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X
|
|
|
|
|
|
|
|
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|
|
|
|
|
Pradeep Sindhu
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Meetings in Fiscal 2007
|
|
|
7
|
|
|
|
14
|
|
|
|
6
|
|
|
|
5
|
|
X = Committee member
|
|
|
(1) |
|
The Board has determined that Mr. Calderoni is an
audit committee financial expert within the meaning
of the rules promulgated by the Securities and Exchange
Commission. |
|
(2) |
|
Ms. Cranston was appointed to the Nominating and Corporate
Governance Committee in February 2008. |
|
(3) |
|
Mr. Goldman resigned from the Board in January 2008 and was
replaced on the Audit Committee by Mr. Stensrud. |
|
(4) |
|
Mr. Hearst stepped down from the Audit Committee in August
2007 and was replaced on the committee by Mr. Rose. |
|
(5) |
|
Mr. Lawrie is the Boards Lead Independent Director. |
|
(6) |
|
Mr. Marshall resigned from the Board in February 2007. |
8
|
|
|
(7) |
|
Mr. Levys term as a director expired on May 17,
2007 and he did not seek re-election to the Board. |
|
(8) |
|
Mr. Stensrud stepped down from the Nominating and Corporate
Governance Committee in August 2007 and was replaced on the
committee by Mr. Hearst. |
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 assessment and risk
management. 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 47. The charter of the Audit Committee is available at
http://www.juniper.net/company/investor_relations/.
Compensation
Committee
The Compensation Committee discharges the Boards
responsibilities relating to compensation of our executive
officers, including evaluation of the CEO; produces an annual
report on executive compensation, including compensation
discussion and analysis, 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 39. The charter of the Compensation Committee is
available at
http://www.juniper.net/company/investor_relations/.
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee identifies
individuals qualified to become Board members, consistent with
criteria approved by the Board; oversees the organization of the
Board to discharge the Boards duties and responsibilities
properly and efficiently; 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 Governance Committee is available at
http://www.juniper.net/company/investor_relations/.
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 Committee regularly reviews the current composition and size
of the Board.
|
|
|
|
The 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 Committee deems proper.
|
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|
The Committee evaluates the performance of 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 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 Committee considers many
factors, including, issues of character, judgment, independence,
age, expertise,
|
9
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|
|
diversity of experience, length of service, other commitments,
ability to serve on committees of the Board and the like. The
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
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, such as financial literacy or financial
expertise with respect to audit committee members.
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In evaluating and identifying candidates, the 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 Committee selects, or
recommends that the Board of Directors select, the slate of
director nominees, either at a meeting of the Committee at which
a quorum is present or by unanimous written consent of the
Committee.
|
J. Michael Lawrie was appointed to the Board as a
Class III director in February 2007. The recommendation
that Mr. Lawrie be considered for appointment to the Board
was submitted to the Nominating and Corporate Governance
Committee by Mr. Kriens.
Michael J. Rose was appointed to the Board as a Class II
director in July 2007. The recommendation that Mr. Rose be
considered for appointment to the Board was submitted to the
Nominating and Corporate Governance Committee by Mr. Kriens.
Mary B. Cranston was appointed to the Board as a Class III
director in November 2007. The recommendation that
Ms. Cranston be considered for appointment to the Board was
submitted to the Nominating and Corporate Governance Committee
by Mr. Sclavos.
Each of the nominees for re-election at the 2008 annual meeting
was evaluated by the Nominating and Corporate Governance
Committee, recommended by the Committee to the Board for
nomination and nominated by the Board for re-election. In
February 2008, Mr. Hearst informed the Board that he will
retire from the Board upon the expiration of his current term
and will not stand for re-election at the 2008 annual meeting.
Stockholder
Communications with the Board
Stockholders of Juniper Networks, Inc. and other parties
interested in communicating with the Board may contact any of
our directors by writing to them by mail or express mail
c/o Juniper
Networks, Inc., 1194 North Mathilda Avenue, Sunnyvale,
California
94089-1206.
The Nominating and Corporate Governance Committee of the Board
has approved a process for handling stockholder communications
received by the Company. Under that process, the General Counsel
receives and logs stockholder communications directed to the
Board and, unless marked confidential, reviews all
such correspondence and regularly (not less than quarterly)
forwards to the Board 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).
Policy on
Director Attendance at Annual Meetings
Although we do not have a formal policy regarding attendance by
members of the Board at our annual meetings of stockholders,
directors are encouraged to attend annual meetings of Juniper
Networks stockholders. Seven of our eight incumbent directors
attended the 2007 annual meeting of stockholders.
10
DIRECTOR
COMPENSATION
Non-Employee
Director Meeting Fee and Retainer Information
The following table provides information on Juniper
Networks compensation and reimbursement practices during
fiscal 2007 for non-employee directors.
|
|
|
|
|
Annual retainer for all Non-employee Directors (payable
quarterly)
|
|
$
|
30,000
|
|
Additional annual retainer for Audit Committee members (payable
quarterly)
|
|
$
|
10,000
|
|
Additional annual retainer for Compensation Committee members
(payable quarterly)
|
|
$
|
5,000
|
|
Additional annual retainer for Nominating and Corporate
Governance Committee members (payable quarterly)
|
|
$
|
5,000
|
|
Additional annual retainer for Audit Committee Chairman (payable
quarterly)
|
|
$
|
20,000
|
|
Additional annual retainer for Compensation Committee Chairman
(payable quarterly)
|
|
$
|
5,000
|
|
Additional annual retainer for Nominating and Corporate
Governance Committee Chairman (payable quarterly)
|
|
$
|
5,000
|
|
Stock options granted upon initial appointment or election to
the Board(1)
|
|
|
50,000
|
|
Stock options granted annually(2)
|
|
|
20,000
|
(3)
|
Payment for each Board meeting attended in person
|
|
$
|
1,250
|
|
Payment for each Board meeting attended by phone or video
conference
|
|
$
|
625
|
|
Payment for each committee meeting attended in person
|
|
$
|
625
|
|
Payment for each committee meeting attended by phone or video
conference
|
|
$
|
312.50
|
|
Payment for each Audit Committee meeting relating to the stock
option investigation or each meeting of the Special Litigation
Committee attended in person or by phone or video conference
|
|
$
|
1,250
|
|
Reimbursement for expenses attendant to Board membership
|
|
|
Yes
|
|
|
|
|
(1) |
|
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. |
|
(2) |
|
Vests monthly over twelve months commencing on the date of grant. |
|
(3) |
|
Each non-employee director who was not a non-employee director
on the date of the prior years annual stockholder meeting
receives an option covering the number of shares of Common Stock
determined by multiplying 20,000 shares by a fraction, the
numerator of which is the number of days since the non-employee
director received his/her option upon initial appointment to the
Board, and the denominator of which is 365, rounded down to the
nearest whole share. |
11
Non-Employee
Director Compensation Table For Fiscal 2007
The following table shows compensation information for our
current and former non-employee directors for fiscal 2007.
Neither Mr. Kriens nor Dr. Sindhu received any
separate compensation for their Board activities.
Non-Employee
Director Compensation for Fiscal 2007
|
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|
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|
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|
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|
|
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|
|
|
|
|
|
|
|
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|
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|
|
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|
Change in
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name
|
|
in Cash
|
|
|
Awards
|
|
|
Awards(1)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
|
Robert M. Calderoni(2)
|
|
$
|
52,813
|
|
|
|
|
|
|
$
|
137,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
190,806
|
|
Mary Cranston(3)
|
|
|
|
|
|
|
|
|
|
$
|
24,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,863
|
|
Kenneth Goldman(4)
|
|
$
|
77,188
|
|
|
|
|
|
|
$
|
137,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
215,181
|
|
William R. Hearst III(5)
|
|
$
|
53,438
|
|
|
|
|
|
|
$
|
137,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
191,431
|
|
J. Michael Lawrie(6)
|
|
$
|
47,500
|
|
|
|
|
|
|
$
|
114,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
162,444
|
|
Kenneth Levy(7)
|
|
$
|
14,688
|
|
|
|
|
|
|
$
|
43,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
57,963
|
|
Frank Marshall(8)
|
|
$
|
10,313
|
|
|
|
|
|
|
$
|
92,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
102,327
|
|
Michael Rose(9)
|
|
$
|
29,375
|
|
|
|
|
|
|
$
|
68,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
98,318
|
|
Stratton Sclavos(10)
|
|
$
|
44,063
|
|
|
|
|
|
|
$
|
137,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
182,056
|
|
William R. Stensrud(11)
|
|
$
|
56,250
|
|
|
|
|
|
|
$
|
137,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
194,243
|
|
|
|
|
(1) |
|
Amounts shown do not reflect compensation actually received by
the director. Instead, the amounts shown are the compensation
costs recognized by Juniper Networks in fiscal 2007 for option
awards as determined pursuant to FAS 123R disregarding
forfeiture assumptions. These compensation costs reflect option
awards granted in 2007 and years prior to fiscal 2007. The
assumptions used to calculate the value of option awards are set
forth under Note 9 of the Notes to Consolidated Financial
Statements included in Juniper Networks Annual Report on
Form 10-K
for 2007 filed with the SEC on February 29, 2008. |
|
(2) |
|
As of December 31, 2007, Mr. Calderoni held
outstanding options to purchase 112,300 shares of the
Companys common stock. The aggregate grant date fair value
for the stock option award granted to Mr. Calderoni on
May 17, 2007 was $152,048. |
|
(3) |
|
As of December 31, 2007, Ms. Cranston held outstanding
options to purchase 50,000 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Ms. Cranston on November 14,
2007 was $579,775. |
|
(4) |
|
As of December 31, 2007, Mr. Goldman held outstanding
options to purchase 144,508 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Goldman on May 17, 2007
was $152,048. |
|
(5) |
|
As of December 31, 2007, Mr. Hearst held outstanding
options to purchase 109,445 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Hearst on May 17, 2007 was
$152,048. |
|
(6) |
|
As of December 31, 2007, Mr. Lawrie held outstanding
options to purchase 54,712 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Lawrie on February 20,
2007 was $348,685. The aggregate grant date fair value for the
stock option award granted to Mr. Lawrie on May 17,
2007 was $35,823. |
|
(7) |
|
As of December 31, 2007, Mr. Levy held no outstanding
options. Mr. Levy did not receive any new option awards in
2007. |
|
(8) |
|
As of December 31, 2007, Mr. Marshall held no
outstanding options. Mr. Marshall did not receive any new
option awards in 2007. |
12
|
|
|
(9) |
|
As of December 31, 2007, Mr. Rose held outstanding
options to purchase 50,000 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Rose on July 17, 2007 was
$452,465. |
|
(10) |
|
As of December 31, 2007, Mr. Sclavos held outstanding
options to purchase 220,000 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Sclavos on May 17, 2007
was $152,048. |
|
(11) |
|
As of December 31, 2007, Mr. Stensrud held outstanding
options to purchase 200,000 shares of the Companys
common stock. The aggregate grant date fair value for the stock
option award granted to Mr. Stensrud on May 17, 2007
was $152,048. |
13
PROPOSALS TO
BE VOTED ON
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
There are two nominees for election to Class III of the
Board this year Mary B. Cranston and J. Michael
Lawrie. 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. Each of
the Class III directors are elected to serve a three-year
term until the Companys annual meeting in 2011 and until
their respective successors is elected. There are no family
relationships among our executive officers and directors.
In February 2008, William R. Hearst III informed the Board
that he will retire from the Board upon the expiration of his
current term and will not stand for re-election at the 2008
annual meeting. As of the date of this proxy statement, we had
not identified a suitable nominee to replace Mr. Hearst on
the Board. Accordingly, at the 2008 annual meeting there will be
fewer persons nominated for election as Class III directors
than are authorized to be elected under our current bylaws and
no other nominations were submitted by the deadline for
nominations. Votes may not be cast in person or by proxy at the
2008 annual meeting for greater than two nominees to the Board.
If you sign your proxy or voting instruction card but do not
give instructions with respect to the voting of directors, your
shares will be voted for the two 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.
Our Board recommends a vote FOR the election to
the Board of Mary B. Cranston and J. Michael Lawrie.
Vote
Required
The two 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.
|
|
|
Nominees for Election
|
|
|
Mary B. Cranston
Director since 2007
Age 60
|
|
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. She also serves as a member of
the board of directors of Visa, Inc., a financial services
company, and GrafTech International, Ltd., a manufacturer of
carbon and graphite products.
|
J. Michael Lawrie
Director since 2007
Age 54
|
|
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. 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
IBM responsible for sales and distribution of all IBM products
and services worldwide. Mr. Lawrie also serves as a
National Trustee for the Ohio University board of trustees.
|
14
|
|
|
Continuing Directors
|
|
|
Scott Kriens
Director since 1996
Age 50
|
|
Mr. Kriens has served as Chief Executive Officer and Chairman of
the Board of Directors of Juniper Networks since October 1996.
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 boards of
directors of Equinix, Inc. and VeriSign, Inc.
|
Robert M. Calderoni
Director since 2003
Age 48
|
|
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.
|
Michael J. Rose
Director since 2007
Age 55
|
|
Mr. Rose is the retired Executive Vice President and Chief
Information Officer of Royal Dutch Shell plc where he served
from 2001 to December 2005. Prior to Royal Dutch Shell, Mr. Rose
worked for 23 years in a wide range of positions at Hewlett
Packard, including controller for various business groups. In
1997, he was named Hewlett Packards Chief Information
Officer, and in 2000 he was elected an officer by the Board of
Directors of Hewlett Packard. He was named the companys
Controller in 2001. Mr. Rose also serves on the board of
directors of Brocade Communications Systems, a storage area
network equipment company.
|
Stratton Sclavos
Director since 2000
Age 46
|
|
Mr. Sclavos has served as a General Partner of Radar Partners
LLC, a venture capital 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
boards of directors of Salesforce.com and Intuit, Inc.
|
Pradeep Sindhu
Director since 1996
Age 55
|
|
Dr. Sindhu co-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, Xerox
Corporation, Palo Alto Research Center, a technology research
center.
|
15
|
|
|
William R. Stensrud
Director since 1996
Age 57
|
|
Mr. Stensrud is an independent investor. From January 2007 to
March 2007, he served as Chairman and CEO of Muze, Inc., a
provider of B2B 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.
|
16
PROPOSAL NO. 2
APPROVAL
OF THE JUNIPER NETWORKS, INC. 2008 EMPLOYEE STOCK
PURCHASE
PLAN
The following is a summary of the principal provisions of the
Juniper Networks, Inc. 2008 Employee Stock Purchase Plan, or the
2008 ESPP. The 2008 ESPP was adopted to replace the 1999
Employee Stock Purchase Plan, which is due to expire in early
2009. The 2008 ESPP is generally similar to the expiring plan.
This summary is qualified in its entirety by reference to the
full text of the 2008 ESPP which is attached to this proxy
statement as Appendix A.
Purchase
Plan Background
In February 2008, the Board of Directors adopted the 2008 ESPP,
subject to approval by our stockholders. Each offering under the
2008 ESPP will be for a period of six months and will consist of
consecutive offering periods of approximately six months in
length. Offering periods begin on February 1 and August 1,
or if such date is not a trading day (as defined in
the 2008 ESPP), the next trading day, with the first such
offering period anticipated to commence on February 1, 2009
(assuming stockholders approve the 2008 ESPP). Each participant
will be granted an option on the first day of the offering
period and the option will be automatically exercised on the
last day of each offering period during the offering period
using the contributions the participant has made for this
purpose. The purchase price for the common stock purchased under
the 2008 ESPP is 85% of the lesser of the fair market value of
the common stock on the first business day of the applicable
offering period and on the last business day of the applicable
offering period. The 2008 ESPP Administrator (as described
below) has the power to change the duration of offering periods.
Our 1999 Employee Stock Purchase Plan is currently in effect,
with the current offering period under that plan having
commenced on February 1, 2008 and scheduled to end no later
than July 31, 2008. If the 2008 ESPP is approved by our
stockholders, we will terminate the 1999 Employee Stock Purchase
Plan immediately following the conclusion of the offering period
ending January 30, 2009, and the remaining shares reserved
for issuance thereunder, which as of March 1, 2008 was
13,149,032 shares, would no longer be available under the
1999 Employee Stock Purchase Plan.
Shares
Subject to the 2008 ESPP
The Board has reserved an aggregate of 12,000,000 shares of
Juniper Networks common stock for issuance under the 2008 ESPP.
In contrast to the 1999 Employee Stock Purchase Plan, which had
automatic annual increases to the shares reserved under such
plan, no further increases can be made to the shares reserved
for issuance under the 2008 ESPP without the approval of our
stockholders.
Administration
The 2008 ESPP may generally be administered by the Board or a
committee of the Board (as applicable, the
Administrator). The Administrator has the authority
to construe and interpret any of the provisions of the 2008 ESPP.
International
Stock Purchase Rights
To provide us with greater flexibility in structuring our equity
compensation programs for our non-U.S. employees, the 2008 ESPP
also permits us to grant our non-U.S. employees rights to
purchase stock pursuant to rules or sub-plans adopted by the
Administrator in order to achieve tax, securities law or other
compliance objectives (International Awards). While
the 2008 ESPP is intended to be an employee stock purchase
plan within the meaning of Section 423 of the
Internal Revenue Code (Section 423), these
International Awards will
17
not qualify under Section 423. See Federal Tax
Consequences below for a discussion of tax consequences
under Section 423.
Eligibility
Employees generally are eligible to participate in the 2008 ESPP
if they are customarily employed by Juniper Networks or by a
participating subsidiary for more than twenty (20) hours
per week and more than five (5) months in any calendar
year. International Awards may be made to employees customarily
employed for fewer hours or months Eligible employees may select
a rate of payroll deduction between 1% and 10% of their
compensation and are subject to certain maximum purchase
limitations.
As of March 31, 2008, approximately 5,800 employees,
including all of our executive officers, would be eligible to
participate in the 2008 ESPP. For the offering period under our
1999 Employee Stock Purchase Plan that concluded on
January 31, 2008, 3,540 employees actually
participated in such offering.
Special
Limitations
The 2008 ESPP imposes certain limitations upon a
participants rights to acquire common stock, including the
following limitations:
|
|
|
|
|
Purchase rights may not be granted to any individual who owns
stock, including stock purchasable under any outstanding
purchase rights, possessing 5% or more of the total combined
voting power or value of all classes of stock of Juniper
Networks or any of its affiliates;
|
|
|
|
Purchase rights granted to a participant may not permit the
individual to accrue the right to purchase our common stock at
an annual rate of more than $25,000, valued at the time each
purchase right is granted; and
|
|
|
|
Unless otherwise approved by the Administrator in advance for
future offering periods, no participant will be permitted to
purchase during any twelve (12) month period more than six
thousand (6,000) shares of the Common Stock (subject to any
adjustment pursuant to stock splits, recapitalizations,
dividends or other similar events).
|
Termination
of Purchase Rights
A purchase right will terminate upon the participants
election to withdraw from the 2008 ESPP. Any payroll deductions
that the participant may have made with respect to the
terminated purchase right will be refunded to the participant if
the election to withdraw from the 2008 ESPP is received by
Juniper Networks prior to the end of an offering period. A
participants election to withdraw from the 2008 ESPP is
irrevocable, and the participant may not rejoin the offering
period for which the terminated purchase right was granted.
A purchase right will also terminate upon the participants
termination of employment. Any payroll deductions that the
participant may have made during the offering period in which
the termination occurs will be refunded to the participant.
In addition, Juniper Networks has specifically reserved the
right, exercisable in the sole discretion of the Administrator
to terminate the 2008 ESPP, or any offering period thereunder,
at any time.
Stockholder
Rights
No participant will have any stockholder rights with respect to
the shares covered by his or her purchase rights until the
shares are actually purchased on the participants behalf.
No adjustment will be made for dividends, distributions or other
rights for which the record date is prior to the date of the
purchase.
18
Assignability
No purchase rights will be assignable or transferable by the
participant, except by will or the laws of inheritance following
the participants death. Each purchase right will, during
the lifetime of the participant, be exercisable only by the
participant.
Mergers,
Consolidations and Change in Control
The 2008 ESPP provides that, in the event of the proposed
dissolution or liquidation of Juniper Networks, the offering
period will terminate immediately prior to the consummation of
the proposed action, provided that the Administrator may, in its
sole discretion, fix an earlier date for termination of the 2008
ESPP and provide each participant the opportunity to purchase
shares under the 2008 ESPP prior to the termination. The 2008
ESPP also provides that, in the event of certain merger or
change-in-control
transactions, in the event that the successor corporation
refuses to assume or substitute for the option under an ongoing
offering period, the offering period with respect to which such
option relates will be shortened by setting a new exercise date
that occurs before the date of the Companys proposed
merger or change in control.
Amendment
of the Plan
The Administrator has the authority to amend, terminate or
extend the term of the 2008 ESPP, except that stockholder
approval is required to increase the number of shares that may
be issued under the 2008 ESPP.
The 2008 ESPP will terminate in 2028, on the twentieth
anniversary of the date of its adoption by our Board, unless
terminated earlier under the terms of the 2008 ESPP. The effect
of termination is that no new offering periods will commence
under the 2008 ESPP, but any outstanding offering periods will
continue according to their terms.
Federal
Tax Consequences
Except with respect to International Awards, the 2008 ESPP is
intended to be an employee stock purchase plan
within the meaning of Section 423 of the Internal Revenue
Code. Under such a plan, no taxable income will be reportable by
a participant, and no deductions will be allowable to Juniper
Networks, as a result of the grant or exercise of the purchase
rights issued under the 2008 ESPP. Taxable income will not be
recognized until there is a sale or other disposition of the
shares acquired under the 2008 ESPP or in the event the
participant should die while still owning the purchased shares.
If the participant sells or otherwise disposes of the purchased
shares within two years after commencement of the offering
period during which those shares were purchased or within one
year of the date of purchase, the participant will recognize
ordinary income in the year of sale or disposition equal to the
amount by which the fair market value of the shares on the
purchase date exceeded the purchase price paid for those shares.
If the participant sells or disposes of the purchased shares
more than two years after the commencement of the offering
period in which those shares were purchased and more than one
year from the date of purchase, then the participant will
recognize ordinary income in the year of sale or disposition
equal to the lesser of the amount by which the fair market value
of the shares on the sale or disposition date exceeded the
purchase price paid for those shares or 15% of the fair market
value of the shares on the date of commencement of such offering
period. Any additional gain upon the disposition will be taxed
as a capital gain.
If the participant still owns the purchased shares at the time
of death, the lesser of the amount by which the fair market
value of the shares on the date of death exceeds the purchase
price or 15% of the fair market value of the shares on the date
of commencement of the offering period during which those shares
were purchased will constitute ordinary income in the year of
death.
19
If the purchased shares are sold or otherwise disposed of within
two years after commencement of the offering period during which
those shares were purchased or within one year after the date of
purchase, then Juniper Networks will be entitled to an income
tax deduction in the year of sale or disposition equal to the
amount of ordinary income recognized by the participant as a
result of such sale or disposition. No deduction will be allowed
in any other case.
New
Benefits Under the 2008 ESPP
Because awards to employees under the 2008 ESPP are based on
voluntary contributions in amounts determined by the
participant, the benefits and amounts that will be received or
allocated under the 2008 ESPP are not determinable at this time.
Therefore, we have not included a table reflecting such benefits
or awards.
Based on their stockholdings as of March 1, 2008,
(determined in accordance with Section 423 of the Code) all
of our named executive officers (as defined in
Compensation Discussion and Analysis below) will be
eligible to participate in our 2008 ESPP, except for Robert R.B.
Dykes who resigned from the Company in 2007 and
Stephen Elop who resigned from the Company in 2008. Only
two of our named executive officers currently participate in our
1999 Employee Stock Purchase Plan. None of our non-employee
directors will be eligible to participate in the 2008 ESPP.
The Board of Directors Recommends a Vote FOR
Approval of the Juniper Networks, Inc. 2008 Employee Stock
Purchase Plan.
If you sign your proxy or voting instruction card but do not
give specific voting instructions, your shares will be voted for
the approval of the Juniper Networks, Inc. 2008 Employee Stock
Purchase Plan, as recommended by the Board.
Vote
Required
Approval of the of the Juniper Networks, Inc. 2008 Employee
Stock Purchase Plan 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.
20
PROPOSAL NO. 3
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, 2008. During fiscal
2007, 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 46. 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 2008 fiscal year. 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 direct the appointment of 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 but do not
give specific voting instructions, 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 2008 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 2008 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.
21
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information, as of March 1,
2008, concerning:
|
|
|
|
|
beneficial owners of more than 5% of Juniper Networks
common stock;
|
|
|
|
beneficial ownership by Juniper Networks directors and the named
executive officers set forth in the Summary Compensation table
on page 40; and
|
|
|
|
beneficial ownership by all Juniper Networks directors named in
this proxy statement and Juniper Networks executive officers as
a group.
|
The information provided in the table is based on Juniper
Networks records, information filed with the Securities
and Exchange Commission 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
Securities and Exchange Commission, 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 April 30, 2008
(60 days after March 1, 2008) 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
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
|
|
of Beneficial
|
|
|
Percent
|
|
Name and Address of Beneficial Owner
|
|
Ownership(1)
|
|
|
of Class(1)
|
|
|
Holders of Greater Than 5%
|
|
|
|
|
|
|
|
|
FMR LLC.
82 Devonshire Street
Boston, MA 02109
|
|
|
63,540,494
|
(2)
|
|
|
12.1
|
%
|
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
62,501,612
|
(3)
|
|
|
11.9
|
%
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Robert M. Calderoni(4)
|
|
|
110,633
|
|
|
|
*
|
|
Mary Cranston(4)
|
|
|
6,944
|
|
|
|
*
|
|
Robyn Denholm
|
|
|
0
|
|
|
|
*
|
|
Robert Dykes
|
|
|
874
|
|
|
|
*
|
|
Stephen Elop
|
|
|
421
|
|
|
|
*
|
|
Kenneth Goldman(5)
|
|
|
60,494
|
|
|
|
*
|
|
William R. Hearst III(6)
|
|
|
962,697
|
|
|
|
*
|
|
Scott Kriens(7)
|
|
|
14,888,215
|
|
|
|
2.8
|
%
|
J. Michael Lawrie(4)
|
|
|
23,763
|
|
|
|
*
|
|
Kenneth Levy
|
|
|
0
|
|
|
|
*
|
|
Frank Marshall(8)
|
|
|
609,938
|
|
|
|
*
|
|
Edward Minshull(4)
|
|
|
155,892
|
|
|
|
*
|
|
Kim Perdikou(9)
|
|
|
397,979
|
|
|
|
*
|
|
Michael Rose(4)
|
|
|
12,500
|
|
|
|
*
|
|
Stratton Sclavos(10)
|
|
|
226,333
|
|
|
|
*
|
|
Pradeep Sindhu(11)
|
|
|
8,964,310
|
|
|
|
1.7
|
%
|
William R. Stensrud(12)
|
|
|
1,367,834
|
|
|
|
*
|
|
All Directors and Executive Officers as a Group
(19 persons)(13)
|
|
|
28,116,795
|
|
|
|
5.4
|
%
|
22
|
|
|
* |
|
Represents holdings of less than one percent. |
|
|
|
(1) |
|
The percentages are calculated using 524,020,999 outstanding
shares of the Companys common stock on March 1, 2008
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, beneficial
ownership information also includes shares subject to options
exercisable within 60 days of March 1, 2008. |
|
(2) |
|
Based on information reported on Schedule 13G filed with
the Securities and Exchange Commission on February 14, 2008. |
|
(3) |
|
Based on information reported on Schedule 13G filed with
the Securities and Exchange Commission on February 13,
2008. These securities are owned by various individual and
institutional investors 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
Securities Exchange Act of 1934, Price Associates is deemed to
be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities. |
|
(4) |
|
Consists of shares which are subject to options that may be
exercised within 60 days of March 1, 2008. |
|
(5) |
|
Includes 39,166 shares which are subject to options that
may be exercised within 60 days of March 1, 2008.
Mr. Goldman resigned from the Board in January 2008. |
|
(6) |
|
Includes 107,778 shares which are subject to options that
may be exercised within 60 days of March 1, 2008. |
|
(7) |
|
Includes 9,481,672 shares held by the Kriens 1996 Trust, of
which Mr. Kriens and his spouse are the trustees, and
4,951,457 shares which are subject to options that may be
exercised within 60 days of March 1, 2008. |
|
(8) |
|
Includes 192,582 shares held by Big Basin Partners, LP,
88,204 shares held by Timark, LP, of which
Mr. Marshall is a general partner and 272,152 shares
held by the Frank & Judith Marshall Trust.
Mr. Marshall resigned from the Board in February 2007. |
|
(9) |
|
Includes 384,875 shares which are subject to options that
may be exercised within 60 days of March 1, 2008. |
|
(10) |
|
Includes 218,333 shares which are subject to options that
may be exercised within 60 days of March 1, 2008. |
|
(11) |
|
Includes 1,618,780 shares held by the Sindhu Investments,
LP, a family limited partnership; 3,563,370 shares held by
the Sindhu Family Trust and 6,867 shares held by
Dr. Sindhus spouse. Also includes
2,167,082 shares which are subject to options that may be
exercised within 60 days of March 1, 2008. |
|
(12) |
|
Includes 983,101 shares held in a trust as community
property and 198,333 shares which are subject to options
that may be exercised within 60 days of March 1, 2008. |
|
(13) |
|
Includes an aggregate of 8,713,578 shares which are subject
to options that may be exercised within 60 days of
March 1, 2008. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our directors, executive officers and holders
of more than 10% of Juniper Networks Common Stock to file with
the Securities and Exchange Commission reports regarding their
ownership and changes in ownership of our securities. We believe
that, during fiscal 2007, 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.
23
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The Companys Worldwide Code of Business Conduct and Ethics
(the Code) requires that the Companys
employees, officers and directors should 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
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 NASDAQ 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.
The Company reimburses Mr. Kriens for ordinary operating
costs relating to his use of his aircraft for business purposes
up to a maximum amount of $650,000 per year. In 2007
Mr. Kriens received approximately $352,000 in such
reimbursements.
24
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Executive
Compensation Philosophy and Objectives
The Compensation Committee of the Board of Directors (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
executive officers who will be able to operate effectively in a
high growth, complex environment. In that regard, the Company
must offer compensation that (a) is competitive in the
industry; (b) motivates executive officers to achieve the
Companys strategic business objectives; and
(c) aligns the interests of executive officers with the
long-term interests of stockholders.
The Committees intention is to adopt compensation programs
that encourage creation of long-term value for stockholders,
employee retention, and equity participation. The
Committees approach is based on the philosophy that a
substantial portion of aggregate compensation for executive
officers should be contingent upon the Companys overall
performance and an individuals contribution to the
Companys success in meeting certain critical objectives.
In this regard, the Committee historically targeted base salary
at approximately the 50th percentile, or median, relative
to competitive market practices, although actual base salaries
may be higher or lower than this targeted positioning. Incentive
compensation and long term equity awards were intended to target
overall compensation at approximately the 50th percentile,
although the financial performance of the Company and changes in
the market price of the Companys Common Stock can result
in total compensation above or below the target.
Overview
of Executive Compensation
Under the charter of 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 2007, as well as the
other individuals included in the Summary Compensation Table on
page 40, are referred to as the named executive
officers. All of the named executive officers are
Section 16 officers.
The Committee approves all compensation decisions for the
Section 16 officers. The Committee has the authority to
engage its own advisors to assist it in carrying out its
responsibilities and has approved the Companys retention
of Mercer (US) Inc. (Mercer) to provide analysis,
advice and guidance from with respect to compensation. The
Committee is free to replace its compensation advisors or retain
additional advisors at any time. Mercer assists the Committee by
providing compensation information, analyzing various
compensation alternatives and data, and helping to develop
recommendations regarding all awards to Section 16
officers. Mercer and Mercer affiliates also provide other
services to the Company, including U.S. benefits
administration, consulting services related to generally
available Company benefit plans, and brokerage services for
U.S. and international benefit plans.
Mercer generally works with the Companys Executive Vice
President responsible for Human Resources and the Companys
Senior Director of Compensation and Benefits. Mercer provides
analysis to the Company and the Committee regarding the
Section 16 officers compensation relative to external
market benchmarks. Mercer also provides information to the
Company and the Committee regarding compensation trends,
compensation strategy and structure of incentive programs.
The Chief Executive Officer annually reviews the performance of
each Section 16 officer (other than the Chief Executive
Officer whose performance is reviewed by the Committee). As
Chief Executive Officer, Mr. Scott Kriens is responsible
for making a recommendation regarding the salary, incentive
target and equity awards for each individual Section 16
officer other than himself, based on the analysis and guidance
provided by the Committees advisors and on his assessment
of the performance of the individuals. He is assisted by the
Executive Vice President,
25
Human Resources and the Senior Director of Compensation and
Benefits in these recommendations to the Committee regarding
compensation for Section 16 officers. Performance factors
considered in developing recommendations for the Committee
include the applicable officers leadership, strategic
planning, delivery of financial results (if such officer is
responsible for such results, such as a general manager of a
business group), and succession planning. Mr. Kriens takes
an active part in the discussions at Committee meetings at which
compensation of his direct reports and the other Section 16
officers are discussed.
The Executive Vice President, Human Resources and the Senior
Director of Compensation and Benefits make the recommendation
regarding the Chief Executive Officers compensation with
the input and advice of the Committees advisors.
Performance factors considered in developing recommendations for
the Committee include Mr. Kriens leadership,
strategic planning, delivery of financial results and succession
planning. All decisions regarding Mr. Kriens compensation
are made by the Committee in executive session, without
Mr. Kriens present. The Committee considers, but is not in
any way bound by, and frequently changes recommendations made by
Company management. Similarly, the conclusions reached and
recommendations made by outside advisors can also be accepted,
rejected or modified by the Committee.
Assessing
the Competitive Market for Talent
In making compensation decisions, the Committee takes into
account many factors described below, including the competitive
market for executive talent. The Committee uses competitive
market data to establish reference points for evaluating
compensation for Section 16 officers. As there is
considerable variation in the compensation amounts and
methodologies used among companies and because no two companies
possess the exact same characteristics, size, structure,
business, history and prospects, the Committee relies on a
specific peer company analysis of publicly-available data on a
group of publicly-traded networking equipment and other high
technology companies (the Peer Group) and
market data composed of a broad technology company
sample. The companies included in the Peer Group are ones which
the Committee believes are similar in size and business scope to
Juniper Networks and companies with which Juniper Networks
competes 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 peer
companies. For 2007, the Peer Group consisted of the following
companies: Adobe Systems, Inc.; Autodesk, Inc.; Avaya, Inc.; BEA
Systems, Inc.; BMC Software, Inc.; CA, Inc.; Corning, Inc.;
Earthlink, Inc.; eBay, Inc.; Intuit, Inc.; Network Appliance,
Inc.; Symantec Corporation; Tellabs, Inc.; VeriSign, Inc.; and
Yahoo, Inc. Because of the variations between companies as to
which individuals and roles compensation is disclosed, there
will not be available directly comparable information from each
peer company with respect to each of our Section 16
officers or named executive officers.
For the 2007 annual compensation review completed by Mercer, the
broad-based technology company data was drawn from several
sources, including: the Buck Executive High Technology
Survey, the Radford Executive Survey, the Watson
Wyatt Report on Top Executive Compensation, and the
Mercer Benchmark Database. For corporate positions, data
was collected for companies between $1 billion and
$6 billion in sales revenue. For the general managers who
are compensated in part based on the performance of their
respective business unit, the Committee received survey data for
Top Business Unit Executives scoped to the sales revenue size of
each respective business unit at the Company.
For 2008, the Peer Group was revised at the recommendation of
Mercer to replace certain companies that were acquired or were
deemed to engage in atypical pay practices compared to the other
members of the group. The 2008 Peer Group consisted of the
following companies: Adobe Systems, Inc.; Autodesk, Inc.; Avaya,
Inc.; BMC Software, Inc.; CA, Inc.; Corning, Inc.; Earthlink,
Inc.; eBay, Inc.; Harris Corporation; Intuit, Inc.; Network
Appliance, Inc.; Symantec Corporation; Tellabs, Inc.; VeriSign,
Inc.; and UTStarcom, Inc. The data on the compensation practices
of the Peer Group is gathered through publicly available
information. Because of the variations between companies as to
which individuals and roles compensation is disclosed, there
will not be available directly comparable information from each
peer company with respect to each of our Section 16
officers or named executive officers.
For the 2008 annual compensation review completed by Mercer, the
broad-based technology company data was drawn from several
sources, including: the Buck Executive High Technology Survey
and the Radford Executive
26
Survey. For corporate positions, data was collected for
companies between $1 billion and $6 billion in sales
revenue. For the general managers who are compensated in part
based on the performance of their respective business unit, the
Committee received survey data for Top Business Unit Executives
scoped to the sales revenue size of each respective business
unit at the Company.
In addition to the market data sources discussed above, the
Committee also considers other information and factors in
determining compensation for individual Section 16 officers
including, internal consistency between Juniper Networks
employees, job performance, skills, prior experience,
competitive job offers made to Juniper Networks employees,
recruiting offers made by Juniper Networks, and market
conditions. Finally, in some cases, the compensation for newly
hired Section 16 officers may be determined based on the
recruitment negotiations with such individuals, and may reflect
such factors as the amounts of compensation that the individual
would forego by joining Juniper Networks or the costs of
relocation.
Elements
of Executive Compensation
The principal components of compensation for Section 16
officers are:
|
|
|
|
|
Base salary
|
|
|
|
Performance-based cash incentive compensation
|
|
|
|
Long-term equity incentive compensation, such as stock options,
restricted stock units and performance shares
|
|
|
|
Employee benefits and perquisites
|
|
|
|
Severance benefits
|
Juniper Networks has selected these elements of compensation
because each is considered useful
and/or
necessary to meet one or more of the principal objectives of our
compensation policy. Base salary and employee benefits are set
with the goal of attracting employees by guaranteeing a minimum
level of compensation for services performed. Performance-based
cash incentives are provided to incentivize or reward
achievement of short-term or annual performance goals. Long-term
equity incentives are provided to align executive interests with
those of our stockholders and to promote achievement of
long-term business objectives and retention of key talent.
The Committee reviews the compensation program on an annual
basis. The Committees annual review is primarily focused
on the structure of the performance based incentive plans
overall and, with respect to individual Section 16
officers, on (i) base salary, (ii) total target cash
compensation (base salary + performance based cash incentive)
and (iii) long-term equity incentive compensation and total
direct compensation (total target cash comp + long-term equity
incentive). Except for the proposed Deferred Compensation
Program and Executive Wellness Program described below, the
Company does not typically offer perquisites or employee
benefits to Section 16 officers that are not also made
available to employees on a broad basis. Severance benefits have
been approved either in connection with the negotiations to
recruit individual executives or periodically as part of a
program to extend such benefits to Section 16 officers as a
group. Accordingly, severance benefits, employee benefits and
perquisites are reviewed from time to time, but not annually, to
ensure that benefit levels remain competitive and are reasonable
and not excessive.
Base
Salary
Salaries are used to provide a fixed amount of compensation for
the executives regular work. The Company targets base
salary levels for each position, on average, at the
50th percentile
of similar positions based on competitive market data. Some
variation above or below the competitive median occurs when, in
the judgment of management
and/or the
Compensation Committee, as appropriate, the factors described
above influence a different positioning.
The salaries of the Section 16 officers are reviewed on an
annual basis, as well as at the time of a promotion or other
change in responsibilities. The effective date of annual
increases typically is April 1st of each year.
27
Pursuant to the 2007 annual compensation review and based on the
performance of the company in 2006, no changes were made to the
base salaries of Mr. Edward Minshull, Mr. Robert
Dykes. The Committee approved an increase in base salary for
Mr. Kriens intended to make his salary more competitive
with the market and to place his salary above that of our Chief
Operating Officer. The Committee also approved an increase in
salary and a decrease in annual target incentive for
Ms. Kim Perdikou in order to rebalance her cash
compensation between salary (which was below market) and annual
cash incentive compensation (which was above market).
In January 2007, Mr. Stephen Elop joined the Company and in
August 2007, Ms. Robyn Denholm joined the Company. Their
respective base salaries and other compensation were determined
with reference to the competitive market data discussed above
and through negotiation.
Pursuant to the 2008 annual compensation review, no changes were
made to the base salary of Mr. Minshull because his salary
was above the median percentile of the competitive market data.
The Committee noted that this was primarily due to the fact that
Mr. Minshull is paid in British Pounds and exchange rates
have impacted his compensation relative to the other named
executive officers. The base salaries of Mr. Kriens,
Ms. Denholm and Ms. Perdikou were increased by
approximately 16.7%, 4.2% and 5%, respectively. The increases to
the salaries of Mr. Kriens and Ms. Perdikou were
intended to bring their salaries closer to the median of the
Peer Group. Even after the adjustment, Mr. Kriens
salary is substantially below the median. However, the Committee
concluded that it would continue to move his salary toward the
median over multiple years rather than attempt to close this gap
in one large step. The increase to Ms. Denholms
salary places her total target cash compensation slightly above
the median for the Peer Group and the Committee determined this
was appropriate in light of Ms. Denholms performance
in 2007.
Performance-Based
Cash Incentive Compensation
Target
Incentives as a Percentage of Salary
As discussed above, the Companys compensation objective is
to have a significant portion of each Section 16
officers compensation tied to performance. To this end,
the Company has established a target annual performance-based
cash incentive opportunity for each Section 16 officer
expressed as a percent of base salary. In establishing the
amount of target incentive, the Committee takes into account the
competitive market data, a desired positioning at the market
median, the individuals role and contribution to
performance, and internal consistency among executives at a
comparable level. 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 2007, taking into account the changes made to base salary
and other factors discussed above, the Committee determined that
no changes be made to the target incentive (as a percentage of
base salary) for Mr. Kriens, Mr. Minshull or
Mr. Dykes and they remained at 150%, 100% and 100%,
respectively. With respect to Ms. Perdikou, the Committee
determined that in light of her review of total cash
compensation market data, the mix of cash compensation between
base salary and variable incentive should be rebalanced. As a
result, the amount of target incentive was reduced from 100% to
75% of base salary for Ms. Perdikou.
In connection with their joining the Company,
Mr. Elops target incentive was established at 125% of
base salary earned in 2007 and Ms. Denholms target
incentive was established at 100% of base salary earned in 2007.
The Committee determined Mr. Elops target based on
two factors. First, the Committee concluded that it was
desirable to use the 125% amount in order to weight
Mr. Elops total cash compensation more heavily on
achievement of Company performance objectives than other
executive officers (other than Mr. Kriens). Second, the
Committee determined that the target incentive percentage was
consistent with the general compensation objective of targeting
Mr. Elops total cash compensation at approximately
the median percentile for his position based on competitive
market data. The target incentive for Ms. Denholm placed
her total cash compensation slightly above the median percentile
for her position based on the competitive market data, but the
Committee determined that this was necessary to recruit
Ms. Denholm to join Juniper Networks, was consistent with
the target incentive for the Companys prior Chief
Financial Officer and was consistent with the opportunities for
other senior executives with comparable positions.
28
In 2008, the Companys objective was to target total cash
compensation at approximately the market median of the Peer
Group. Taking into account the changes made to base salary
discussed above and the Peer Group data for total cash
compensation, the Committee determined that no changes be made
to the target incentive percentages for the Companys named
executive officers.
Annual
Incentive Plans
Each year an annual incentive plan is established for
Section 16 officers in order to reward those individuals
based on performance against various business objectives for
that year or for a portion of that year, as described below. For
2007, the Company altered its executive short-term incentive
plan from a six month plan to an annual plan. The Company took
this action to align its short-term incentive plan with market
practice. In addition, the Company believes that achievement of
the Companys business plan and near term business
objectives are best effectuated through a cash incentive plan
tied to performance goals established for a period of one year.
Because of the rapidly changing industry in which the Company
competes, the Company believes that by establishing goals that
are measured over an annual basis, the goals can be established
with greater specificity and linkage to the operating plan
objectives and with less risk of subsequent revision than if
objectives were based on longer measurement periods. The
Committee also believes that goals that can be achieved over an
annual period are more effective at motivating performance and
promoting retention than goals which take a longer time to
achieve and are therefore inherently less under the control of
the individual to accomplish. Moreover, the Company also
believes that establishing an annual plan provides the Company
with the flexibility to adjust the structure and objectives of
its plan to meet changes in the Companys business and
competitive environment.
To promote achievement of longer term objectives, the Company
relies on equity incentives discussed in more detail below.
2007 Annual Incentive Plan. For the 2007
fiscal year, the Committee approved the 2007 Annual Incentive
Plan (the 2007 AIP) for Section 16 officers.
Under the 2007 AIP, each participant is eligible to receive an
annual incentive bonus once per year following the end of the
year based on achievement of specified objectives established at
the beginning of the year. The Company believes that the primary
performance measurements should be based on achieving key
financial targets tied to the Companys annual operating
plan. The incentive is based 50% on the Companys revenue
results, 30% on the Companys non-GAAP operating income
results and 20% on achieving other specified strategic goals,
such as employee engagement and leadership development. However,
in the case of a general manager of a business group, such as
Ms. Kim Perdikou, Executive Vice President and General
Manager Infrastructure Products Group, the revenue and operating
income factors are based half on achieving the Companys
revenue and non-GAAP operating income targets and half on
achieving the applicable business groups revenue and
non-GAAP contribution margin targets. The incentive amounts are
calculated and paid after the end of the year. The amounts paid
depend on the level of achievement against the objectives and,
with respect to the revenue and operating income objectives,
range between zero and 200% of the target incentive. With
respect to the specified strategic goals, payments range between
zero and 100% of the target incentive. However, no payment is
earned for any component if less than 80% of the operating
income objective is achieved. At 80% of the objective, 30% of
the applicable component is earned; achievement of 100% of the
objective results in 100% of the component earned; and if 120%
of the revenue or operating income objective is achieved, 200%
of that component is earned. At the time the Committee set the
performance goals for the participants under the 2007 AIP, it
believed that they were achievable but only with significant
effort.
Upon completion of the measurement period for 2007, the
Committee reviewed the performance of the Company, each
applicable business group and each Section 16 officer to
verify and approve the calculations of the amounts to be paid
under the 2007 AIP.
29
Payments to Section named executive officers under the 2007
Bonus Plan ranged between 109% and 117% of the individuals
target bonus for year. The following table summarizes the
payments for the Companys named executive officers:
2007
Annual Incentive Plan Payments
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
Fiscal 2007
|
|
|
|
|
|
|
Performance
|
|
|
2007 AIP
|
|
Name
|
|
Target Achieved
|
|
|
Payment
|
|
|
Scott Kriens
|
|
|
109
|
%
|
|
$
|
981,000
|
|
Chairman and
Chief Executive Officer
|
|
|
|
|
|
|
|
|
Robyn Denholm
|
|
|
109
|
%
|
|
$
|
218,000
|
(1)
|
Executive Vice President,
Chief Financial Officer
|
|
|
|
|
|
|
|
|
Robert Dykes(2)
|
|
|
N/A
|
|
|
|
N/A
|
|
Executive Vice President,
Chief Financial Officer
|
|
|
|
|
|
|
|
|
Stephen Elop
|
|
|
109
|
%
|
|
$
|
735,750
|
|
Executive Vice President,
Chief Operating Officer
|
|
|
|
|
|
|
|
|
Edward Minshull(3)
|
|
|
109
|
%
|
|
$
|
506,414
|
|
Executive Vice President,
Worldwide Field Operations
|
|
|
|
|
|
|
|
|
Kim Perdikou
|
|
|
117
|
%
|
|
$
|
302,738
|
|
Executive Vice President and
General Manager, Infrastructure Products Group
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Ms. Denholms payment is based on her annual base
salary, prorated from the commencement of her employment in
August 2007. |
|
(2) |
|
Mr. Dykes resigned from his position at the Company in 2007
and was not eligible for payment under the 2007 AIP. |
|
(3) |
|
Mr. Minshull is paid in British Pounds (£). The 2007
compensation amounts for Mr. Minshull in this proxy
statement are presented on an as-converted to U.S. Dollars ($)
basis at a rate of $2.02 for each £1. This represents the
exchange rate in effect for conversion of British Pounds to U.S.
Dollars as of December 31, 2007. |
2008 Annual Incentive Plan. For the 2008
fiscal year, the Committee approved the 2008 Annual Incentive
Plan (the 2008 AIP) for Section 16 officers.
Under the 2008 AIP, each participant is eligible to receive an
annual incentive bonus once per year following the end of the
year based on achievement of specified objectives established at
the beginning of the year. The Company believes that the primary
performance measurements should be based on achieving key
financial targets tied to the Companys annual operating
plan. The incentive is based 50% on the Companys revenue
results, 30% on the Companys non-GAAP operating income
results and 20% on achieving other specified strategic goals,
such as employee engagement and leadership development. However,
in the case of a general manager of a business group, the
revenue and operating income factors are based half on achieving
the Companys revenue and non-GAAP operating income targets
and half on achieving the applicable business groups
revenue and non-GAAP operating income targets. The incentive
amounts are calculated and paid after the end of 2008. The
amounts paid depend on the level of achievement against the
objectives and, with respect to the revenue and operating income
objectives, range between zero and 200% of the target incentive.
With respect to the specified strategic goals, payments range
between zero and 100% of the target incentive. However, no
payment is earned for any component if less than 80% of the
operating income objective is achieved. At 80% of the objective,
30% of the applicable component is earned; achievement of 100%
of the objective results in 100% of the component earned; and if
120% of the revenue or operating income objective is achieved,
200% of that component
30
is earned. At the time the Committee set the performance goals
for the participants under the 2007 AIP, it believed that they
were achievable but only with significant effort.
Sign-on
Incentive for Ms. Denholm
In connection with the hiring of Ms. Denholm in August
2007, the Committee approved the payment of a sign-on incentive
to Ms. Denholm of $250,000, which is subject to repayment
on a prorated basis if she is terminated with cause or
voluntarily terminates her employment without good reason, each
as defined in her offer letter, in the first year of her
employment. The Committee determined that such bonus was
reasonable and necessary to secure the services of
Ms. Denholm in light of the expected incentive compensation
from her prior employer that Ms. Denholm had forgone in
connection with joining Juniper Networks.
Long-Term
Equity Incentive Compensation
Juniper Networks provides long-term equity incentive
compensation through awards of stock options, performance shares
and restricted stock units. The Companys equity
compensation programs are intended to align the interests of its
employees with those of its stockholders by creating an
incentive for our Section 16 officers to drive financial
performance over time and maximize stockholder value. The equity
compensation program also is designed to encourage our
Section 16 officers to remain employed with the Company.
2007 Long-Term Incentive Program. For 2007,
the Company reviewed its approach to equity awards and decided
to increase the focus on pay-for-performance by introducing
performance shares into the mix of equity awards, replacing the
performance-awarded restricted stock unit grant opportunity
provided to Section 16 officers in 2006. The Company
retained stock options as a key element of its equity
compensation program.
The performance shares are earned based on performance against
specific financial goals and then vest over time. To the extent
that specified performance goals are not met, shares are not
earned. If an executive fails to satisfy the service
requirement, any earned shares are forfeited. The Committee
believes that this combination of performance and service
requirements provides incentives to achieve both specified
performance objectives and increases in the Companys stock
price and also promotes retention.
For 2007, in determining the amount of long-term equity
incentives to award each individual, the Committee evaluated the
value of the proposed long-term equity awards and total direct
compensation and compared those values to the market data
discussed above. For 2007, to reflect the change in the
Companys size and maturity, the Companys objective
was to move total direct compensation towards the
50th percentile of the market. However, in making
individual awards, the Committee took into account the
individual executives performance, previously granted
awards, and in the case of executives other than the CEO, the
CEOs recommendations for award levels.
In structuring the 2007 awards, the Committee sought to allocate
approximately 50% of the value to stock options and 50% to
performance shares. The Committee believed that the 50/50 split
fairly balanced the need for focus on long-term stockholder
value creation and on intermediate financial performance
objectives. Stock option grants were valued using a
risk-adjusted present value methodology, assuming an exercise
price of $20.00 and resulting in an estimated option value of
$9.52 per share. Performance shares were valued assuming target
performance and at an assumed grant price of $20.00 per share.
The stock options were granted by the Company on March 9,
2007 and have an exercise price equal to the closing market
price on the date of grant of $18.31 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.
The performance shares were granted on March 9, 2007 and
vest based on achievement of specific performance objectives
established for each year of a 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 2007 and 2008, the performance goals are based on
revenue and non-GAAP operating margin. At the time the Committee
set the target performance goals, it believed that they were
achievable but only with significant effort. With respect to
each years performance, the individual can earn between 0%
and 200% of the target number of shares for that year depending
on the level of achievement against the goals established for
that year. (The target
31
number of shares for each year is one third of the target number
of shares for the entire three year period). Provided the
employee is still employed on the date that the Committee
approves the performance calculation for the third year, the
employee is issued a number of fully paid and fully vested
shares of common stock equal to the number earned
over the three year period.
For example: an employee is granted performance shares for a
maximum of 60,000 shares with a target number of
30,000 shares over a three year period. During the first
year the Company achieves the target revenues and target
operating margin, and the employee earns the target number of
10,000 shares for that year, or 1/3 of the total target
number of shares for the full three year period. During the
second year, the Company achieves target revenue but is below
target operating margin and the employee earns
5,000 shares. During the third year, the Company exceeds
its performance targets and the employee earns
20,000 shares. Accordingly, the employee is issued at the
completion of the three year cycle a total of 35,000 fully
vested shares. 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 paid. The following table reflects the performance
shares earned by our named executive officers under the 2007
performance share award program for the awards granted on
March 9, 2007:
2007
Performance Share Awards
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Original Total
|
|
Percentage of
|
|
Performance Shares
|
|
Remaining
|
|
|
Target Performance
|
|
Fiscal 2007 Targets
|
|
Earned for Fiscal
|
|
Performance Share
|
Name
|
|
Share Amount
|
|
Achieved
|
|
2007 Performance
|
|
Target Amount
|
|
Scott Kriens
|
|
|
100,000
|
|
|
|
112
|
%
|
|
|
37,334
|
|
|
|
66,666
|
|
Robyn Denholm
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
(1)
|
Robert Dykes
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
(2)
|
Stephen Elop
|
|
|
100,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
(3)
|
Edward Minshull
|
|
|
33,000
|
|
|
|
112
|
%
|
|
|
12,320
|
|
|
|
22,000
|
|
Kim Perdikou
|
|
|
33,000
|
|
|
|
112
|
%
|
|
|
12,320
|
|
|
|
22,000
|
|
|
|
|
(1) |
|
Ms. Denholm was not employed by the Company at the time
these awards were granted. |
|
(2) |
|
Not applicable due to resignation of individual in 2007. |
|
(3) |
|
Not applicable due to resignation of individual in 2008. |
2007 Restricted Stock Unit Awards (Based on 2006
Results). Prior to 2006, the Company relied
primarily on stock options to provide equity incentives to its
Section 16 officers. In 2006, the Committee concluded that
a combination of both stock options and performance-awarded
restricted stock units would better address the Companys
compensation strategy, especially the need to balance incentives
to drive performance with the need to attract and retain
executive talent.
In establishing the amount of long-term equity incentives to
award each individual, the Committee evaluated the total value
of the proposed long-term equity awards and compared it to the
competitive market data discussed above. In 2006, the
Companys objective was to target long term equity
incentive compensation at approximately the 75th percentile
of market data. In addition, the Committee also evaluated the
retention value of prior equity awards granted to an individual
based on the potential value of the unvested portion of those
awards under various scenarios. In structuring the 2006 awards,
the Committee sought to allocate 50% of the value to stock
options and 50% to performance awarded restricted stock units.
Performance awarded restricted stock grant guidelines were
created by applying a ratio of one share subject to a restricted
stock unit being equivalent to 2.5 shares subject to a
stock option. This number was then increased by 20% to reflect
the additional risk associated with the performance feature
discussed below.
The restricted stock units were awarded under a program pursuant
to which the number of restricted stock units issued to each
officer was dependent on the achievement of earnings per share
objectives for 2006. At the time the Committee set the target
performance goals for the participants under the 2006 restricted
stock unit program, it believed that they were achievable but
only with significant effort. Depending on the level of
performance against the objectives, participants could receive
restricted stock units for as much as 150% of the target number
of
32
restricted stock units or as few as 25% of the target number of
restricted stock units. The restricted stock units were issued
after the 2006 performance period vest as to 75% of the shares
on February 27, 2008, 15% on February 27, 2009 and 10%
on February 27, 2010.
The following table reflects the restricted stock units earned
by our named executive officers under the 2006 restricted stock
unit program and issued on February 27, 2007:
2007
Restricted Stock Unit Awards (Based on 2006 Results)
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|
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|
Target
|
|
|
|
|
|
Number of
|
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|
Number
|
|
|
Number
|
|
|
Number
|
|
|
|
Restricted
|
|
|
Percentage
|
|
|
Restricted
|
|
|
Vesting
|
|
|
Vesting
|
|
|
Vesting
|
|
|
|
Stock Unit
|
|
|
of Targets
|
|
|
Stock Units
|
|
|
February 27,
|
|
|
February 27,
|
|
|
February 27,
|
|
Name
|
|
Amount
|
|
|
Achieved
|
|
|
Issued
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Scott Kriens
|
|
|
100,000
|
|
|
|
56
|
%
|
|
|
56,000
|
|
|
|
42,000
|
|
|
|
8,400
|
|
|
|
5,600
|
|
Robyn Denholm
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Robert Dykes
|
|
|
33,000
|
|
|
|
56
|
%
|
|
|
18,480
|
|
|
|
0
|
(1)
|
|
|
0
|
(1)
|
|
|
0
|
(1)
|
Stephen Elop
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Edward Minshull
|
|
|
50,000
|
|
|
|
56
|
%
|
|
|
28,000
|
|
|
|
21,000
|
|
|
|
4,200
|
|
|
|
2,800
|
|
Kim Perdikou
|
|
|
25,000
|
|
|
|
56
|
%
|
|
|
14,000
|
|
|
|
10,500
|
|
|
|
2,100
|
|
|
|
1,400
|
|
|
|
|
(1) |
|
Due to resignation of individual, none of the amounts vested. |
2007 Retention Equity Awards. On
January 4, 2007, the Compensation Committee awarded
restricted stock units to Mr. Minshull and
Ms. Perdikou in the amount of 120,000 and
80,000 shares respectively. Such restricted stock units
vest as to 25% of the shares on February 1, 2008, 25% on
February 1, 2009 and 50% on February 1, 2010. The
recommendation for these awards was made by the Chief Executive
Officer. In determining whether to provide these awards and how
many restricted stock units to award, the Compensation Committee
considered several factors including the expected value of the
awards currently and under various stock price scenarios,
whether existing options were underwater, how critical are the
contributions made by the individual, an assessment of retention
risk and the employees current target compensation before
and after the award relative to market data and other executive
officers in the Company. These equity awards were intended to
promote the retention of the individuals by providing additional
time-based equity awards.
2006 Promotion Equity Award Granted in
2007. In May 2006, Ms. Perdikou was promoted
from acting General Manager to Executive Vice President
Infrastructure Products Group and General Manager, Service
Provider Business Team. However, due to the stock option pricing
investigation being conducted by the Company, the Company did
not grant her any stock options associated with that promotion
until some time after the completion of the investigation.
Accordingly, Ms. Perdikou was granted an option to purchase
300,000 shares of our common stock on February 27,
2007. The stock option award has an exercise price equal to the
closing market price on the date of grant of $18.53 per share.
The option has a seven year term and vests 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.
2008 Long-Term Incentive Program. For 2008,
the Company reviewed its approach to equity awards, and the
Committee decided to maintain the structure of long-term
incentives similar to 2007 by providing a mix of stock option
and performance shares to Section 16 officers. Like the
2007 awards, the performance shares approved by the Committee
vest based on a combination of time and performance against
specific objectives.
In determining the amount of long-term equity incentives to
award each individual, the Committee evaluated the value of the
proposed long-term equity awards and total direct compensation
and compared those values to the competitive market data
discussed above. For 2008, to reflect the growth in the
Companys size and maturity, and based on the evaluation of
its compensation practices relative to the Peer Group, the
Companys 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 Section 16 officers was based on their
respective roles and grade level. In structuring the 2008
awards, the Committee sought to allocate 50% of the value to
stock options and 50% to the performance shares. Stock option
grants were valued using a
33
Black-Scholes methodology, assuming an exercise price of $29.57
and resulting in an estimated option value of $11.03 per share.
Performance shares were valued assuming target performance and
at an assumed grant price of $29.57 per share for the purpose of
establishing grant guidelines.
The stock options were granted by the Company on March 21,
2008 and have an exercise price equal to the closing market
price in effect on the date of grant of $25.16 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.
The performance shares were granted on March 21, 2008 and
vest at the end of three years based on achievement of specific
performance objectives established for each year of a 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 2008, the performance targets are
based on revenue and non-GAAP operating margin. At the time the
Committee set the target performance goals, it believed that
they were achievable but only with significant effort. With
respect to each years performance, the individual can earn
between 0% and 200% 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). The terms of
the 2008 performance shares are otherwise substantially
identical to the 2007 performance shares discussed above.
Equity Ownership Guidelines. The Company
believes that the significant component of each Section 16
officers overall compensation based on equity awards is
sufficient to align the officers interests with those of
the stockholders. Moreover, the Company has also established
limitations on the maximum amount of an officers stock and
option holdings that the officer can sell within any quarter or
year without first obtaining the approval of the Board of
Directors. Accordingly, the Company has not adopted any specific
requirements as to a minimum number of shares that must be owned
by an officer.
Stock Option Granting Policy. In 2007, the
Board of Directors approved a policy for granting stock options
and equity awards. 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. If a quorum of the Stock Committee (currently composed of
the Chief Executive Officer, Chief Financial Officer and one
outside director) is not available for a meeting on or prior to
the third Friday of the month or in the four days preceding it,
grants are to be approved by means of an action by written
consent. Such consent shall by its terms provide that the
options will be granted upon the later of (i) the third
Friday of the month or (ii) the date of the last signature
of the Stock Committee members. Annual performance grants to
non-Section 16 officers will also be 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 will be generally scheduled to be approved at a meeting
of the Compensation Committee in the first quarter after the Q4
earnings announcement and prior to March 1. The annual
grants to Section 16 persons are also generally
scheduled to be effective on the third Friday of the month if
the meeting approving such grants 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 doing 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 be in violation of such
agreement. The exercise price of options granted will be the
closing market price on the effective 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.
Deferred Compensation Program. In addition to
the long term incentive programs described above, the Company
plans to adopt and implement a deferred compensation program for
certain grade levels of Company
34
management, including Section 16 officers, beginning in
June 2008. The Company plans to implement this program in order
to offer benefits that are competitive with companies with which
it competes for talent. This program, once implemented, would
allow participants to elect to defer a certain amount of
compensation earned into one or more investment choices. The
participants would not be 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.
Employee
Benefits and Perquisites
Historically, the Company has made available to Section 16
officers the same employee benefits and perquisites that are
available to employees broadly. The Company provides employee
benefit programs and perquisites to employees, including
Section 16 officers, that the Company and the Committee
believe are reasonable and consistent with its overall
compensation program to better enable the Company to attract and
retain employees. Except for the Deferred Compensation Program
described above and the Executive Wellness Program described
below, there are no other special benefit plans or programs
applicable to Section 16 officers. Accordingly, employee
benefits and perquisites are reviewed from time to time
generally to ensure that benefit levels remain competitive but
are generally not included in the Committees annual
determination of a Section 16 officers compensation
package.
Section 16 officers are entitled to participate on the same
basis and in the same medical, dental, vision, disability, life
insurance and other plans and programs made available to other
full time employees in the applicable country of residence. In
addition, the Committee approved the adoption of an Executive
Wellness Program (the Wellness Program) beginning in
June 2008. Under the Wellness Program, eligible executives,
including Section 16 officers, will 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 by promoting the
health and wellness of its executives can result in a number of
benefits to the Company, including increased productivity,
better presenteeism and increased organizational stability,
among others.
The Company has a 401(k) tax-qualified retirement savings plan
pursuant to which all U.S. based employees are entitled to
participate. Employees can make contributions to the plan on a
before-tax basis to the maximum amount prescribed by the
Internal Revenue Service. The Company will match 25% of the
amount contributed by the employee. The Company matching
contributions are fully-vested upon contribution.
Mr. Minshull participates in the Group Personal Pension
Plan which is a tax-qualified defined contribution retirement
plan available to all full time employees in the United Kingdom.
The Company contributes 7% of an employees base salary to
the plan following an initial period of service, which
Mr. Minshull has satisfied. As such, Company contributions
for Mr. Minshull are fully-vested upon contribution. The
Company does not match employee contributions to this plan.
Other than these generally available plans, there are no other
deferred savings plans in which the Section 16 officers
currently participate. The Company does not maintain or provide
any defined benefit plans for its employees.
As is typical for the Companys managers in Europe,
Mr. Minshull is given a car allowance. Mr. Minshull
receives a car allowance of $2,424 per month in arrears, less
deductions for tax and U.K. National Insurance taxes
contributions. He is also entitled to reimbursement of fuel
costs through the standard expense reimbursement process.
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 connection
with Mr. Elops joining the Company in
January 2007, the Company agreed to reimburse Mr. Elop
for relocation expenses to facilitate his move to a location
near the Companys corporate headquarters. Mr. Elop
was reimbursed $19,843 in connection with such expenses.
Attributed costs of the personal benefits described above for
the named executive officers for the fiscal year ended
December 31, 2007, are included in the column entitled
All Other Compensation in the Summary Compensation
Table on page 40.
35
Severance
Benefits
In addition to compensation designed to reward employees for
service and performance, the Company has approved certain
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 Company 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. On January 4, 2007, the Committee approved
severance benefits for several members of senior management,
including Mr. Kriens, Mr. Elop, Mr. Minshull and
Ms. Perdikou. In the event the employee is terminated
involuntarily by Juniper Networks without cause, as defined in
the agreement, 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 and (ii) an amount equal to half
of the individuals annual target bonus for the fiscal year
in which the termination occurs. Upon the commencement of her
employment in August 2007, Ms. Denholm entered into a
severance agreement with the Company that provided the
aforementioned benefits upon substantially similar terms as the
other named executive officers plus six months of Company-paid
health, dental and vision insurance coverage. In addition,
Ms. Denholms severance agreement provides that in the
event Ms. Denholm voluntarily terminates her employment
with the Company within the first two (2) years of
employment for good reason, as defined in the agreement, and
provided she executes a full release of claims, promptly
following termination Ms. Denholm shall receive the
following severance benefits: (i) an amount equal to six
months of base salary, (ii) an amount equal to half of her
annual target bonus for the fiscal year in which the termination
occurs, (iii) six months of Company-paid health, dental and
vision insurance coverage, (iv) provided no shares have
otherwise vested under the restricted stock unit award granted
to Ms. Denholm in August 2007, acceleration of vesting of
such restricted stock units equal to the total number of shares
covered by such award, multiplied by the number of full months
of service to the Company completed through the date of
termination divided by 48, and (v) provided no shares have
otherwise vested under the above stock option award granted to
Ms. Denholm in August 2007, acceleration of vesting of such
options equal to the total number of shares covered by such
award, multiplied by the number of full months of service to the
Company completed through the date of termination divided by 48.
The Company 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.
The Company had also entered into an agreement with
Mr. Dykes on December 13, 2004, which provides that if
Mr. Dykes is terminated involuntarily by the Company
without cause, as defined in the agreement, promptly following
termination Mr. Dykes will be entitled to receive the
following severance benefits: (i) an amount equal to six
months of his base salary, (ii) an amount equal to half of
his annual at target bonus for the fiscal year in which
termination occurs and (iii) and acceleration of six months
of vesting of his initial grant of options to purchase shares of
the Companys common stock. Mr. Dykes was provided the
benefits described above after his employment terminated.
36
The following table describes the potential payments upon
termination of employment without cause (assuming the change in
control benefits discussed below do not apply) for each of the
named executive officers as described above. Amounts payable is
cash assume relevant salary, bonus and benefit values in effect
as of December 31, 2007. The amounts in the following table
for equity awards for Ms. Denholm represent the additional
value of the awards that vest as a result of the resignation for
good reason (as defined in the applicable agreement). For
purposes of valuing the equity awards, the amounts below are
based on a per share price of $33.20, which was the closing
price as reported on the Nasdaq Global Select Market on
December 31, 2007. The amounts in the following table
related to benefits represent the amounts payable by the Company
to maintain Ms. Denholms benefits for the period
following termination of employment as described above.
Potential
Severance Payments for Termination Without Cause
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Value of
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|
|
Cash
|
|
|
|
Accelerated Equity
|
|
|
Name
|
|
Severance
|
|
Bonus
|
|
Awards
|
|
Benefits
|
|
Scott Kriens
|
|
$
|
300,000
|
|
|
$
|
450,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Robyn Denholm
|
|
$
|
240,000
|
|
|
$
|
240,000
|
|
|
$
|
157,625
|
(1)
|
|
$
|
7,262
|
|
Robert Dykes(2)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Stephen Elop(3)
|
|
$
|
270,000
|
|
|
$
|
337,500
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Edward Minshull
|
|
$
|
232,300
|
|
|
$
|
232,300
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Kim Perdikou
|
|
$
|
172,500
|
|
|
$
|
129,375
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
(1) |
|
Vesting acceleration applicable only in connection with
resignation for good reason as described above. |
|
(2) |
|
Not applicable due to resignation of Mr. Dykes in 2007. |
|
(3) |
|
Mr. Elop resigned from the Company in January 2008. |
Change in Control Severance. The Committee
considers maintaining a stable and effective management team to
be essential to protecting and enhancing the best interests of
Juniper Networks and its stockholders. To that end, Juniper
Networks recognizes that the possibility of a change in 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 in
control. As a result, the Committee approved certain severance
benefits for Mr. Kriens, Ms. Denholm, Mr. Dykes,
Mr. Elop, Mr. Minshull and Ms. Perdikou, as well
as for several members of senior management, in the event of a
change in control. In approving these benefits the committee
considered a number of factors, including the prevalence of
similar benefits adopted by other publicly traded companies.
Under the benefits approved by the Committee, provided the
employee signs a release of claims and complies with certain
post termination non-solicitation and non-competition
obligations, the employee will receive change in control
severance benefits if either (i) the employee is terminated
without cause within 12 months following the change in
control or (ii) between 4 and 12 months following a
change in control the employee 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.
The change in control severance benefits consist of: (i) a
cash payment equal to the employees annual base salary
plus the employees target bonus for the fiscal year in
which the change of control or the employees termination
occurs, whichever is greater, (ii) acceleration of vesting
of all of the employees then unvested outstanding stock
options, stock appreciation rights, restricted stock units and
other Company equity compensation awards, and (iii) one
year of Company-paid health, dental and vision insurance
coverage.
37
The following table describes the potential payments upon
termination of employment in connection with a change in 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 in
control. For purposes of valuing the stock options, the amounts
below are based on a per share price of $33.20, which was the
closing price as reported on the Nasdaq Global Select Market on
December 31, 2007. Other amounts payable assume relevant
salary, bonus and benefit values in effect as of
December 31, 2007. 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 in control as described above.
Potential
Payments Upon Termination in Connection with a Change in
Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Cash
|
|
|
|
|
|
Accelerated Equity
|
Name
|
|
Severance
|
|
Bonus
|
|
Benefits
|
|
Awards
|
|
Scott Kriens
|
|
$
|
600,000
|
|
|
$
|
900,000
|
|
|
$
|
14,523
|
|
|
$
|
11,546,608
|
|
Robyn Denholm
|
|
$
|
480,000
|
|
|
$
|
480,000
|
|
|
$
|
14,523
|
|
|
$
|
1,891,500
|
|
Robert Dykes(1)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Stephen Elop(2)
|
|
$
|
540,000
|
|
|
$
|
675,000
|
|
|
$
|
14,523
|
|
|
$
|
7,211,000
|
|
Edward Minshull
|
|
$
|
464,600
|
|
|
$
|
464,600
|
|
|
$
|
14,523
|
|
|
$
|
9,535,375
|
|
Kim Perdikou
|
|
$
|
345,000
|
|
|
$
|
258,750
|
|
|
$
|
14,523
|
|
|
$
|
10,828,576
|
|
|
|
|
(1) |
|
Not applicable due to resignation of Mr. Dykes in 2007. |
|
(2) |
|
Mr. Elop resigned from the Company in January 2008. |
Amendment
of Certain Stock Options
On May 1, 2007, the Company increased the exercise price of
certain unexercised stock options held by Ms. Perdikou that
had original exercise prices per share that were less than the
fair market value per share of the Companys common stock
on the options date of grant, as determined by the Company
for financial accounting purposes in connection with its
investigation into historical stock option practices. The
options were amended to increase the exercise price for the
unexercised portion of these affected options to the appropriate
fair market value per share on the date of grant. The purpose of
these amendments was to avoid unfavorable tax consequences for
Ms. Perdikou under United States Internal Revenue Code
Section 409A (Section 409A) which would
result upon the vesting of options that have an exercise price
that is less than fair market value of the underlying common
stock on the options date of grant. All options covered by
these amendments were granted to Ms. Perdikou prior to the
dates upon which she was promoted to her role as a
Section 16 officer. In exchange for Ms. Perdikou
agreeing to increase the exercise price of these options, the
Company agreed make a cash payment to Ms. Perdikou of
$61,391.63 (less any applicable tax withholdings), an amount
equal to the to the incremental per share exercise price
increase multiplied by the corresponding number of shares
subject to the affected options. In order to satisfy the
provisions of Section 409A, this payment was made in
January 2008.
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 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 deducibility.
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 each of its five most highly
paid 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.
38
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 and performance shares
awarded under the Companys 2006 Equity Incentive Plan will
meet the terms of the exception. Restricted stock units are not
considered performance-based under Section 162(m) of the
Tax Code and, as such, are generally not deductible by the
Company. The Company has not sought stockholder approval of its
annual cash incentive plans, and therefore, payments under those
plans may not be fully deductible.
Beginning on January 1, 2006, the Company began accounting
for stock-based payments including its Stock Option Program,
Long-Term Stock Grant Program, Restricted Stock Program and
Stock Award Program in accordance with the requirements of FASB
Statement 123(R). 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
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
Compensation
Committee Interlocks And Insider Participation
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.
39
Summary
Compensation Table
The following table discloses compensation received by Juniper
Networks Chief Executive Officer and Chief Financial
Officer during Fiscal 2006 and 2007 and Juniper Networks
three other most highly paid executive officers (together with
those persons serving as CEO and CFO during 2007, the
named executive officers) as of December 31,
2007.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Compensation
|
|
All
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Plan
|
|
on
|
|
Other
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Awards(1)
|
|
Awards(1)
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Scott Kriens
|
|
|
2007
|
|
|
$
|
568,750
|
|
|
$
|
|
|
|
$
|
767,768
|
|
|
$
|
2,945,118
|
|
|
$
|
981,000(2
|
)
|
|
$
|
|
|
|
$
|
6,367(4
|
)
|
|
$
|
5,269,003
|
|
Chairman and
|
|
|
2006
|
|
|
$
|
475,000
|
|
|
$
|
|
|
|
$
|
182,482
|
|
|
$
|
5,270,777
|
|
|
$
|
591,376(3
|
)
|
|
$
|
|
|
|
$
|
2,540(5
|
)
|
|
$
|
6,522,175
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robyn Denholm
|
|
|
2007
|
|
|
$
|
183,637
|
|
|
$
|
250,000(6
|
)
|
|
$
|
135,240
|
|
|
$
|
264,207
|
|
|
$
|
218,000(2
|
)
|
|
$
|
|
|
|
$
|
2,954(7
|
)
|
|
$
|
1,054,038
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
President, Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Dykes
|
|
|
2007
|
|
|
$
|
143,939
|
|
|
$
|
|
|
|
$
|
216,015
|
|
|
$
|
1,303,805
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
441,275(9
|
)
|
|
$
|
2,105,034
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
400,000
|
|
|
$
|
125,000(8
|
)
|
|
$
|
60,219
|
|
|
$
|
1,933,599
|
|
|
$
|
338,000(3
|
)
|
|
$
|
|
|
|
$
|
4,257(5
|
)
|
|
$
|
2,861,075
|
|
President, Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Elop
|
|
|
2007
|
|
|
$
|
529,772
|
|
|
$
|
|
|
|
$
|
113,177
|
|
|
$
|
530,369
|
|
|
$
|
735,750(2
|
)
|
|
$
|
|
|
|
$
|
24,609(10
|
)
|
|
$
|
1,933,677
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
President, Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward Minshull(11)
|
|
|
2007
|
|
|
$
|
464,600
|
|
|
$
|
|
|
|
$
|
943,233
|
|
|
$
|
749,109
|
|
|
$
|
506,414(2
|
)
|
|
$
|
|
|
|
$
|
61,610(12
|
)
|
|
$
|
2,724,966
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
440,789
|
|
|
$
|
250,000(8
|
)
|
|
$
|
91,241
|
|
|
$
|
792,476
|
|
|
$
|
381,519(3
|
)
|
|
$
|
|
|
|
$
|
174,262(13
|
)
|
|
$
|
2,130,287
|
|
President, Worldwide Field Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kim Perdikou
|
|
|
2007
|
|
|
$
|
333,750
|
|
|
$
|
|
|
|
$
|
586,722(14
|
)
|
|
$
|
824,833
|
|
|
$
|
302,738(2
|
)
|
|
$
|
|
|
|
$
|
64,562(15
|
)
|
|
$
|
2,112,605
|
|
Executive Vice
|
|
|
2006
|
|
|
$
|
290,861
|
|
|
$
|
300,000(8
|
)
|
|
$
|
45,620
|
|
|
$
|
394,553
|
|
|
$
|
284,833(3
|
)
|
|
$
|
|
|
|
$
|
3,250(5
|
)
|
|
$
|
1,319,118
|
|
President and General Manager, Infrastructure Products Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts shown do not reflect compensation actually received by
the named executive officer. Instead, the amounts shown are the
compensation costs recognized by Juniper Networks in fiscal 2007
or fiscal 2006, as applicable for equity awards as determined
pursuant to FAS 123R disregarding forfeiture assumptions. These
compensation costs reflect option awards granted in and prior to
fiscal 2007 or fiscal 2006, as applicable, as well as restricted
stock unit awards earned in 2006 but issued in 2007 as described
in Compensation Discussion and Analysis above. The
assumptions used to calculate the value of option awards are set
forth under Note 1 of the Notes to Consolidated Financial
Statements included in Juniper Networks Annual Report on
Form 10-K
for 2007 filed with the SEC on February 29, 2008. |
|
(2) |
|
Amounts reflect bonuses earned in 2007 but paid in 2008 under
the 2007 Juniper Networks Annual Incentive Plan. |
|
(3) |
|
Amounts reflect bonuses earned in 2006 but paid in 2007 under
the 2006 Juniper Networks Executive Officer Bonus Plan. |
|
(4) |
|
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. |
|
(5) |
|
Consists of costs related to the standard employee benefit
portion paid by the Company for life and disability insurance
premiums and $2,000 in matching contributions paid under the
Companys 401(k) plan. |
|
(6) |
|
Amount paid reflects a $250,000 sign on bonus paid to
Ms. Denholm upon commencement of employment with the
Company. |
40
|
|
|
(7) |
|
Consists of costs related to the standard employee benefit
portion paid by the Company for life and disability insurance
premiums and $2,500 in matching contributions paid under the
Companys 401(k) plan. |
|
(8) |
|
On January 4, 2007, the Compensation Committee approved
discretionary cash bonuses for 2006 for Mr. Minshull,
Ms. Perdikou and Mr. Dykes in the amounts of $250,000,
$125,000 and $125,000, respectively. In determining the amount
these bonuses, the Committee considered the additional
responsibilities and projects assumed by the individuals, their
performance in their roles, and their overall cash compensation.
These amounts were in addition to incentives paid pursuant to
the 2006 Executive Incentive Plan which provides variable
compensation based primarily on financial performance. Based on
the leadership and performance demonstrated in 2006 in new roles
assumed by the individuals or in managing additional projects
and responsibilities undertaken during the year, it was
determined that discretionary bonuses be awarded to these
individuals in recognition of those contributions in addition to
amounts earned based on financial performance. In addition, in
May 2006, Ms. Perdikou was promoted from acting General
Manager to Executive Vice President Infrastructure Products
Group and General Manager, Service Provider Business Team.
However, due to the stock option pricing investigation being
conducted by the Company, the Company did not grant her any
stock options associated with that promotion until some time
after the completion of the investigation. In recognition of
Ms. Perdikous service in the role for seven months
without having received any equity awards in connection with
this promotion, the Company approved in December 2006 a special
cash bonus of $175,000. |
|
(9) |
|
Consists of a severance payment of $400,000, $34,028 payment of
paid time off accrual upon Mr. Dykes resignation from the
Company, $1,000 related to a patent filing under a program
generally available to all employees, $5,125 in matching
contributions paid under the companys 401(k) plan; and
$1,122 in costs related to the standard employee benefit portion
paid by the Company for life and disability insurance premiums. |
|
(10) |
|
Consists of costs related to the standard employee benefit
portion paid by the Company for life and disability insurance
premiums, $19,843 in reimbursed relocation expenses, $3,875 in
matching contributions paid under the Companys 401(k) plan
and a $374 gift received under an internal award program. |
|
(11) |
|
Mr. Minshull is paid in British Pounds (£). The 2006
and 2007 compensation amounts for Mr. Minshull in this
proxy statement are presented on an as-converted to U.S. Dollars
($) basis at a rate of $1.9515 and $2.02 for each £1,
respectively. This represents the exchange rate in effect for
conversion of British Pounds to U.S. Dollars as of
December 31, 2006 and December 31, 2007, respectively. |
|
(12) |
|
Amounts paid reflect $29,088 in car allowance and $32,522 in
contributions paid by Juniper Networks under the Companys
UK Group Personal Pension Plan, a defined contribution plan
available to all full-time UK employees. |
|
(13) |
|
Amount reflects $115,305 in commissions paid; $28,102 in car
allowance and $30,855 in matching contributions paid under the
Companys UK Group Personal Pension Plan, a defined
contribution plan available to all full-time UK employees. |
|
(14) |
|
Amount reflects incremental increase in fair value related to
the stock option exercise price adjustment for Ms. Perdikou on
May 1, 2007 as described in Compensation Discussion and
Analysis. Because the applicable exercise prices were increased,
there was no incremental increase in such fair value. |
|
(15) |
|
Amount reflects $61,392 paid in January 2008 in relation to the
stock option exercise price adjustment for Ms. Perdikou on
May 1, 2007, costs related to the standard employee benefit
portion paid by the Company for life and disability insurance
premiums and $1,258 in matching contributions paid under the
Companys 401(k) plan. |
41
Grants of
Plan Based Awards for Fiscal 2007
The following table shows all plan-based awards granted to our
named executive officers during 2007. The option awards
identified in the table below are also reported in the
Outstanding Equity Awards at Fiscal 2007 Year-End Table on
the following page.
Grants of
Plan-Based Awards for Fiscal 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
or Base
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number
|
|
|
Price of
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
of
|
|
|
Option
|
|
|
Date
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards(1)
|
|
|
Estimated Future Payouts Under Equity Incentive Plan
Awards(2)
|
|
|
of Stock
|
|
|
Securities
|
|
|
Awards
|
|
|
Fair
|
|
Name
|
|
Grant Date
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units(3)
|
|
|
Underlying Options
|
|
|
($/sh)
|
|
|
Value(4)
|
|
|
Scott Kriens
|
|
3/9/2007
|
|
$
|
0
|
|
|
$
|
900,000
|
|
|
$
|
1,620,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
100,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,662,000
|
|
|
|
2/27/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1,037,680
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,000
|
|
|
$
|
18.31
|
|
|
$
|
1,199,022
|
|
Robyn Denholm
|
|
8/14/2007
|
|
$
|
161,280
|
(5)
|
|
$
|
201,600
|
|
|
$
|
362,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1,422,450
|
|
|
|
8/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
$
|
31.61
|
|
|
$
|
2,777,025
|
|
Robert Dykes
|
|
3/9/2007
|
|
$
|
0
|
|
|
$
|
400,000
|
|
|
$
|
720,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Elop
|
|
3/9/2007
|
|
$
|
0
|
|
|
$
|
675,000
|
|
|
$
|
1,215,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
100,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,662,000
|
|
|
|
1/8/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
$
|
20.23
|
|
|
$
|
2,170,500
|
|
Edward Minshull
|
|
3/9/2007
|
|
$
|
0
|
|
|
$
|
464,600
|
|
|
$
|
836,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
33,000
|
|
|
|
66,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,208,460
|
|
|
|
1/4/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
2,340,000
|
|
|
|
2/27/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
|
|
|
|
|
$
|
518,840
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
$
|
18.31
|
|
|
$
|
453,684
|
|
Kim Perdikou
|
|
3/9/2007
|
|
$
|
0
|
|
|
$
|
258,750
|
|
|
$
|
465,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
33,000
|
|
|
|
66,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,208,460
|
|
|
|
1/4/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
1,560,000
|
|
|
|
2/27/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
$
|
259,420
|
|
|
|
2/27/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
$
|
18.53
|
|
|
$
|
1,926,600
|
|
|
|
3/9/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
$
|
18.31
|
|
|
$
|
453,684
|
|
|
|
5/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
8.46
|
|
|
$
|
0
|
(7)
|
|
|
5/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,563
|
|
|
$
|
7.70
|
|
|
$
|
0
|
(7)
|
|
|
|
(1) |
|
Amounts reflect potential cash bonuses payable under the
Companys 2007 Annual Incentive Plan described in
Compensation Discussion and Analysis above. Actual payment
amounts under the 2007 Annual Incentive Plan for
Mr. Kriens, Ms. Denholm, Mr. Dykes,
Mr. Elop, Mr. Minshull and Ms. Perdikou were
$981,000, $218,000, $0, $735,750, $506,414 and $302,738
respectively. |
|
(2) |
|
Amounts reflect shares subject to performance share awards
issuable under the Companys 2007 Long Term Incentive
Program described in Compensation Discussion and Analysis above. |
|
(3) |
|
Includes the restricted stock units earned by our named
executive officers under the 2006 performance-awarded restricted
stock unit program and issued on February 27, 2007. |
|
(4) |
|
Represents an aggregate grant date fair value of each equity
award granted in 2007 including the maximum shares issuable
under the 2007 performance share awards, restricted stock units
and non-qualified stock options. |
|
(5) |
|
Ms. Denholms offer letter guaranteed payment of at
least 80% of her target bonus for 2007. |
|
(6) |
|
On January 4, 2007, the Compensation Committee awarded
restricted stock units for Mr. Minshull and
Ms. Perdikou in the amount of 120,000 and
80,000 shares respectively. These awards were in addition
to the awards made for the performance-awarded restricted stock
unit plan as described above. |
|
(7) |
|
Amount reflects incremental increase in fair value related to
the stock option exercise price adjustment for Ms. Perdikou
on May 1, 2007 as described in Compensation Discussion and
Analysis above. Because the applicable exercise prices were
increased, there was no incremental increase in such fair value. |
42
Outstanding
Equity Awards at Fiscal 2007 Year-End
The following table shows all outstanding equity awards held by
our named executive officers at December 31, 2007.
Outstanding
Equity Awards at Fiscal 2007 Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
Value of
|
|
Awards:
|
|
Equity Incentive
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
Shares or
|
|
Number of
|
|
Plan Awards:
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Units of
|
|
Unearned
|
|
Market or Payout
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Stock
|
|
Shares, Units
|
|
Value of Unearned
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
Option
|
|
|
|
Units of
|
|
That
|
|
or Other
|
|
Shares, Units or
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
Stock That
|
|
Have Not
|
|
Rights That
|
|
Other Rights That
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Price
|
|
Expiration
|
|
Have Not
|
|
Vested
|
|
Have Not
|
|
Have Not Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
($)
|
|
Date
|
|
Vested (#)
|
|
($)
|
|
Vested (#)
|
|
($)(12)
|
|
Scott Kriens
|
|
|
2,200,000
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
|
|
5/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
550,000
|
|
|
|
|
|
|
|
|
|
|
|
5.69
|
|
|
|
7/1/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
15.00
|
|
|
|
9/26/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
734,375
|
|
|
|
15,625
|
(1)
|
|
|
|
|
|
|
28.17
|
|
|
|
1/29/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
397,395
|
|
|
|
147,605
|
(2)
|
|
|
|
|
|
|
22.59
|
|
|
|
4/29/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,999
|
|
|
|
50,001
|
(3)
|
|
|
|
|
|
|
22.59
|
|
|
|
4/29/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,791
|
|
|
|
100,209
|
(4)
|
|
|
|
|
|
|
18.96
|
|
|
|
2/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
185,000
|
(5)
|
|
|
|
|
|
|
18.31
|
|
|
|
3/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
(11)
|
|
$
|
6,640,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,000
|
|
|
$
|
1,859,200
|
|
Robyn Denholm
|
|
|
0
|
|
|
|
250,000
|
(6)
|
|
|
|
|
|
|
31.61
|
|
|
|
8/14/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
$
|
1,494,000
|
|
Robert Dykes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven Elop
|
|
|
0
|
|
|
|
300,000
|
(10)
|
|
|
|
|
|
|
20.23
|
|
|
|
1/8/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
(11)
|
|
$
|
6,640,000
|
|
Edward Minshull
|
|
|
34,813
|
|
|
|
162,500
|
(4)
|
|
|
|
|
|
|
18.96
|
|
|
|
2/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,250
|
|
|
|
18,750
|
(7)
|
|
|
|
|
|
|
24.14
|
|
|
|
9/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
70,000
|
(5)
|
|
|
|
|
|
|
18.31
|
|
|
|
3/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
$
|
3,984,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
$
|
929,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,000
|
(11)
|
|
$
|
2,191,200
|
|
Kim Perdikou
|
|
|
3,938
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
|
|
5/28/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,563
|
|
|
|
|
|
|
|
|
|
|
|
7.70
|
|
|
|
7/1/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
|
8.46
|
|
|
|
3/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,125
|
|
|
|
|
|
|
|
|
|
|
|
15.00
|
|
|
|
9/26/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
24.14
|
|
|
|
9/17/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,333
|
|
|
|
11,667
|
(4)
|
|
|
|
|
|
|
18.96
|
|
|
|
2/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,583
|
|
|
|
70,417
|
(8)
|
|
|
|
|
|
|
18.96
|
|
|
|
2/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
300,000
|
(9)
|
|
|
|
|
|
|
18.53
|
|
|
|
2/27/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
70,000
|
(5)
|
|
|
|
|
|
|
18.31
|
|
|
|
3/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
$
|
2,656,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
$
|
464,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,000
|
(11)
|
|
$
|
2,191,200
|
|
|
|
|
(1) |
|
The option was granted on 1/29/2004. The shares became
exercisable as to 25% of the shares on 1/29/2005 and vest
monthly thereafter to be fully vested on 1/29/2008, assuming
continued employment with Juniper Networks. |
|
(2) |
|
The option was granted on 4/29/2005. The shares became
exercisable as to 25% of the shares on 1/1/2006 and vest monthly
thereafter to be fully vested on 1/1/2009 assuming continued
employment with Juniper Networks. |
|
(3) |
|
The option was granted on 4/29/2005. The shares became
exercisable as to one-forty-eighth of the shares on
1/1/2006 and
vest monthly thereafter to be fully vested on 1/1/2010 assuming
continued employment with Juniper Networks. |
43
|
|
|
(4) |
|
The option was granted on 2/8/2006. The shares became
exercisable as to 25% of the shares on 2/8/2007 and vest monthly
thereafter to be fully vested on 2/8/2010 assuming continued
employment with Juniper Networks. |
|
(5) |
|
The option was granted on 3/9/2007. The shares became
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. |
|
(6) |
|
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 08/14/2011 assuming
continued employment with Juniper Networks. |
|
(7) |
|
The option was granted on 9/17/2004. The shares became
exercisable as to 25% of the shares on 9/17/2005 and vested
monthly thereafter. On December 16, 2005, the Board
approved the acceleration of the vesting of certain unvested and
out-of-the-money stock options that had an exercise
price per share equal to or greater than $22.00, all of which
were previously granted under its stock option plans and that
were outstanding on December 16, 2005, including this
option held by Ms. Perdikou. Options accelerated excluded
options previously granted to certain employees, including all
of the Companys executive officers and its directors.
However, the acceleration occurred before Ms. Perdikou had
been promoted to her role as an executive officer of the
Company. The acceleration of the unvested and
out-of-the-money options was accompanied by
restrictions imposed on any shares purchased through the
exercise of accelerated options. Those restrictions will prevent
the sale of any such shares prior to the date such shares would
have originally vested had the optionee been employed on such
date, whether or not the optionee is actually an employee at
that time. |
|
(8) |
|
The option was granted on 2/8/2006. 7,292 of the shares became
exercisable as on 2/8/2006 and vest monthly thereafter to be
fully vested on 04/01/2009 assuming continued employment with
Juniper Networks. |
|
(9) |
|
The option was granted on 2/27/2007. The shares became
exercisable as to 25% of the shares on 2/27/2008 and vest
monthly thereafter to be fully vested on 2/27/2011 assuming
continued employment with Juniper Networks. |
|
(10) |
|
The option was granted on 1/08/2007. The shares became
exercisable as to 25% of the shares on 1/8/2008 and vest monthly
thereafter to be fully vested on 1/8/2011. |
|
(11) |
|
Represents maximum shares issuable under performance share
awards granted in 2007. |
|
(12) |
|
The market value of the Stock Awards made is based on the
closing market price of our common stock as of December 31,
2007, which was $33.20. |
Option
Exercises and Stock Vested For Fiscal 2007
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
2007.
Option
Exercises and Stock Vested For Fiscal 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value
|
|
|
Acquired on
|
|
|
Value
|
|
Name
|
|
Exercise
|
|
|
Realized
|
|
|
Vesting
|
|
|
Realized
|
|
|
Scott Kriens
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Robyn Denholm
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Robert Dykes
|
|
|
398,898
|
|
|
$
|
1,310,341
|
|
|
|
|
|
|
$
|
|
|
Stephen Elop
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Edward Minshull
|
|
|
145,605
|
|
|
$
|
1,772,122
|
|
|
|
|
|
|
$
|
|
|
Kim Perdikou
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
44
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information as of December 31,
2007 about our common stock that may be issued under the
Companys prior and existing equity compensation 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, 2007 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)
|
|
|
52,397,358
|
(4)
|
|
$
|
21.72
|
|
|
|
56,899,960
|
(5)
|
Equity compensation plans not approved by security holders(2)
|
|
|
10,854,854
|
|
|
$
|
16.78
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
63,252,212
|
|
|
$
|
20.87
|
|
|
|
56,899,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes the 2006 Equity Incentive Plan (the 2006
Plan), Amended and Restated 1996 Stock Plan (the
1996 Plan) and the 1999 Employee Stock Purchase Plan
(the 1999 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). No options were issued under this Plan to any
directors or persons serving as executive officers at the time
of grant. 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 6,289,843 shares subject to restricted stock units
and performance share awards outstanding as of December 31,
2007 that were issued under the 1996 Plan and 2006 Plan. |
|
(4) |
|
Excludes purchase rights accruing under the 1999 Purchase Plan,
which had a remaining stockholder-approved reserve of
10,894,510 shares as of December 31, 2007. As of
March 1, 2008, the remaining stockholder-approved reserve
under the 1999 Purchase Plan was 13,149,032 shares. If the
2008 Employee Stock Purchase Plan (the 2008 ESPP) is
approved on the terms set forth in this proxy statement, the
1999 Purchase Plan will be terminated immediately following the
conclusion of the offering period ending January 30, 2009,
and the remaining shares reserved for issuance thereunder would
no longer be available for issuance. |
|
(5) |
|
Consists of shares available for future issuance under the 2006
Plan and the 1999 Purchase Plan. As of December 31, 2007,
an aggregate of 46,005,450 and 10,894,510 shares of Common
Stock were available for issuance under the 2006 Plan and the
1999 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 are 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. Under the
terms of the 1999 Purchase Plan, an annual increase is added on
the first day of each fiscal year equal to the lesser of
(a) 3,000,000 shares, (b) 1% of the
Companys outstanding shares on that date or (c) a
lesser amount determined by the Board of Directors. The Board
has reserved 12,000,000 shares of Common Stock for issuance
under the 2008 ESPP and, in contrast to the 1999 Purchase Plan,
which had automatic annual increases to the shares reserved
under such plan, no further increases can be made to the shares
reserved for issuance under the 2008 ESPP without the approval
of the Companys stockholders. |
45
|
|
|
(6) |
|
As of December 31, 2007, a total of 3,680,430 shares
of the Companys Common Stock were issuable upon exercise
of outstanding options under plans assumed in connection with
acquisitions. The weighted average exercise price of those
outstanding options is $11.60 per share. No additional options
may be granted under those assumed plans. |
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, 2008. 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:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit fees:
|
|
|
|
|
|
|
|
|
Core audit fees
|
|
$
|
3,802,000
|
|
|
$
|
3,808,000
|
|
Audit fees related to financial restatement and independent
stock option investigation
|
|
|
|
|
|
|
2,615,000
|
|
|
|
|
|
|
|
|
|
|
Total audit fees
|
|
|
3,802,000
|
|
|
|
6,423,000
|
|
Audit-related fees
|
|
|
|
|
|
|
|
|
Tax fees
|
|
|
248,000
|
|
|
|
488,000
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,050,000
|
|
|
$
|
6,911,000
|
|
|
|
|
|
|
|
|
|
|
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. Total
audit fees in 2006 also include $2.6 million related to the
audit of the Companys restated financial statements and
the review of the independent investigation into the
Companys historical stock option practices. 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 2007.
46
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 the systems of
internal controls. 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 14 meetings during
fiscal year 2007, a majority of which were specifically
associated with the independent investigation into the
Companys historical stock option practices.
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 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 Securities and Exchange Commission 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 independent registered public accounting
firm required by Independence Standards Board Standard
No. 1 (Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committee) and
has discussed with the 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
audited financial statements be included in Juniper
Networks Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007, for filing
with the Securities and Exchange Commission.
MEMBERS OF THE AUDIT COMMITTEE
Robert M. Calderoni (Chairman)
Michael Rose
William R. Stensrud
47
Appendix A
JUNIPER
NETWORKS, INC.
2008
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the
Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock
through accumulated payroll deductions. The Companys
intention is to have the Plan qualify as an employee stock
purchase plan under Section 423 of the Code (the
423(b) Plan), although the Company makes no
undertaking nor representation to maintain such qualification.
The provisions of the 423(b) Plan, accordingly, will be
construed so as to extend and limit Plan participation in a
uniform and nondiscriminatory basis consistent with the
requirements of Section 423 of the Code. In addition, this
Plan document authorizes the grant of rights to purchase stock
that do not qualify under Section 423(b) of the Code
(Non-Section 423(b) Plan) pursuant to rules,
procedures or sub-plans adopted by the Board or Committee
designed to achieve tax, securities law or other Company
compliance objectives in particular locations outside the United
States. Such references to the Plan include the 423(b) and the
Non-Section 423(b) Plan components.
If grants are intended to be made under the
Non-Section 423(b) Plan, they will be designated as such at
the time of grant.
2. Definitions.
(a) Administrator means the Board
or any Committee designated by the Board to administer the Plan
pursuant to Section 14.
(b) Applicable Laws means the
requirements relating to the administration of equity-based
awards under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign country or jurisdiction
where Awards are, or will be, granted under the Plan.
(c) Board means the Board of
Directors of the Company.
(d) Change in Control means the
occurrence of any of the following events:
(i) Any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in
Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the
total voting power represented by the Companys then
outstanding voting securities; or
(ii) The consummation of the sale or disposition by the
Company of all or substantially all of the Companys
assets; or
(iii) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented
by the voting securities of the Company or such surviving entity
or its parent outstanding immediately after such merger or
consolidation; or
(iv) A change in the composition of the Board occurring
within a two (2) year period, as a result of which less
than a majority of the Directors are Incumbent Directors.
Incumbent Directors means Directors who either
(A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the
Directors at the time of such election or nomination (but will
not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating
to the election of Directors to the Company).
(e) Code means the Internal
Revenue Code of 1986, as amended. Any reference to a section of
the Code herein will be a reference to any successor or amended
section of the Code.
(f) Committee means a committee
of the Board appointed in accordance with Section 14 hereof.
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(g) Common Stock means the common
stock of the Company.
(h) Company means Juniper
Networks, Inc., a Delaware corporation.
(i) Compensation means an
Employees base straight time gross earnings and
commissions, exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses, sales
commission, and other compensation.
(j) Designated Subsidiary means
any Parent or Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as
eligible to participate in the Plan.
(k) Director means a member of
the Board.
(l) Employee means any individual
who is a common law employee of an Employer and is customarily
employed for at least twenty (20) hours per week and more
than five (5) months in any calendar year by the Employer,
provided, however that under the Non-Section 423(b) Plan,
the Board or Committee appointed by the Board may determine that
Employees are eligible to participate in the Plan even if they
are employed for less than twenty (20) hours per week or
less than five (5) months in any calendar year by the
Employer, if such Employee has a right to participate in the
Plan under applicable law. For purposes of the Plan, the
employment relationship will be treated as continuing intact
while the individual is on sick leave or other leave of absence
that the Employer approves. Where the period of leave exceeds
ninety (90) days and the individuals right to
reemployment is not guaranteed either by statute or by contract,
the employment relationship will be deemed to have terminated on
the ninety-first (91st) day of such leave.
(m) Employer means any one or all
of the Company and its Designated Subsidiaries.
(n) Exchange Act means the
Securities Exchange Act of 1934, as amended, including the rules
and regulations promulgated thereunder.
(o) Exercise Date means the last
day of each Offering Period.
(p) Fair Market Value means, as
of any date and unless the Administrator determines otherwise,
the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq Global Select Market, the Nasdaq Global
Market or the Nasdaq Capital Market of The Nasdaq Stock Market,
its Fair Market Value will be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the date of determination, as
reported in The Wall Street Journal or such other source
as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not
reported, its Fair Market Value will be the mean of the closing
bid and asked prices for the Common Stock on the date of
determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof will be determined
in good faith by the Administrator; or
(q) Fiscal Year means the fiscal
year of the Company.
(r) New Exercise Date means a new
Exercise Date implemented by shortening any Offering Period then
in progress.
(s) Non-Section 423(b) Plan
shall mean an employee stock purchase plan which does not meet
the requirements set forth in Section 423(b) of the Code,
as amended.
(t) Offering Date means the first
Trading Day of each Offering Period.
(u) Offering Period means a
period of approximately six (6) months during which an
option granted pursuant to the Plan may be exercised, commencing
on the first Trading Day on or after February 1 and terminating
on the last Trading Day in the period ending the following
July 31, or commencing on the first Trading Day on or
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after August 1 and terminating on the last Trading Day in the
period ending the following January 31. The duration and
timing of Offering Periods may be changed pursuant to
Sections 4, 20 and 21.
(v) Parent means a parent
corporation, whether now or hereafter existing, as defined
in Section 424(e) of the Code.
(w) Plan means this Juniper
Networks, Inc. 2008 Employee Stock Purchase Plan, which includes
a Section 423(b) Plan and a Non-Section 423(b) Plan.
Unless specified otherwise, references to the Plan herein shall
refer to the Section 423(b) Plan.
(x) Purchase Price means an
amount equal to eighty-five percent (85%) of the Fair Market
Value of a share of Common Stock on the Offering Date or on the
Exercise Date, whichever is lower; provided however, that the
Purchase Price may be determined for future Offering Periods
pursuant to Section 20.
(y) Section 423(b) Plan
means an employee stock purchase plan which is designed to meet
the requirements set forth in Section 423(b) of the Code,
as amended. The provisions of the 423(b) Plan shall be
construed, administered and enforced in accordance with
Section 423(b) of the Code.
(z) Subsidiary means a
subsidiary corporation, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
(aa) Trading Day means a day on
which the national stock exchanges and the Nasdaq System are
open for trading.
3. Eligibility.
(a) Offering Periods. Any
individual who is an Employee on a given Offering Date will be
eligible to participate in such Offering Period, subject to the
requirements of Section 5.
(b) Limitations. Any provisions of
the Plan to the contrary notwithstanding, no Employee will be
granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own capital stock of the
Company or any Parent or Subsidiary of the Company
and/or hold
outstanding options to purchase such stock possessing five
percent (5%) or more of the total combined voting power or value
of all classes of the capital stock of the Company or of any
Parent or Subsidiary of the Company, or (ii) to the extent
that his or her rights to purchase stock under all employee
stock purchase plans (as defined in Section 423 of the
Code) of the Company or any Parent or Subsidiary of the Company
accrues at a rate which exceeds twenty-five thousand dollars
($25,000) worth of stock (determined at the Fair Market Value of
the stock at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
4. Offering Periods. The Plan will
be implemented by consecutive Offering Periods with a new
Offering Period commencing on the first Trading Day on or after
February 1 and August 1 each year, or on such other date as the
Administrator will determine. The Administrator will have the
power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings
without stockholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the
first Offering Period to be affected thereafter.
5. Participation. An Employee may
participate in the Plan pursuant to Section 3(a) by
(i) submitting to the Companys payroll office (or its
designee), on or before a date prescribed by the Administrator
prior to an applicable Offering Date, a properly completed
subscription agreement authorizing payroll deductions in the
form provided by the Administrator (which may be similar to the
form attached hereto as Exhibit A) for such purpose,
or (ii) following an electronic or other enrollment
procedure prescribed by the Administrator. Participants in the
offering period under the Companys 1999 Employee Stock
Purchase Plan ending on or about January 30, 2009 shall, on
termination of such offering period, automatically be enrolled
in the Offering Period under this Plan commencing on the first
Trading Day on or after February 1, 2009 at the same
contribution levels as last elected under the 1999 Employee
Stock Purchase Plan.
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6. Payroll Deductions.
(a) At the time a participant enrolls in the Plan pursuant
to Section 5, he or she will elect to have payroll
deductions made on each pay day during the Offering Period in an
amount not exceeding ten percent (10%) of the Compensation which
he or she receives on each pay day during the Offering Period.
The Administrator, in its discretion, may decide that an
Employee may submit contributions to the Non-Section 423(b)
Plan by means other than payroll deductions. A
participants subscription agreement will remain in effect
for successive Offering Periods unless terminated as provided in
Section 10 hereof.
(b) Payroll deductions for a participant will commence on
the first pay day following the Offering Date and will end on
the last pay day prior to the Exercise Date of such Offering
Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10
hereof.
(c) All payroll deductions made for a participant will be
credited to his or her account under the Plan and will be
withheld in whole percentages only. A participant may not make
any additional payments into such account.
(d) A participant may discontinue his or her participation
in the Plan as provided in Section 10, or may decrease the
rate of his or her payroll deductions during the Offering Period
by (i) properly completing and submitting to the
Companys payroll office (or its designee), on or before a
date prescribed by the Administrator prior to an applicable
Exercise Date, a new subscription agreement authorizing the
change in payroll deduction rate in the form provided by the
Administrator for such purpose, or (ii) following an
electronic or other procedure prescribed by the Administrator.
If a participant has not followed such procedures to change the
rate of payroll deductions, the rate of his or her payroll
deductions will continue at the originally elected rate
throughout the Offering Period and future Offering Periods
(unless terminated as provided in Section 10). The
Administrator may, in its sole discretion, limit the nature
and/or
number of payroll deduction rate changes that may be made by
participants during any Offering Period. Any change in payroll
deduction rate made pursuant to this Section 6(d) will be
effective as of the first full payroll period following five
(5) business days after the date on which the change is
made by the participant.
(e) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and
Section 3(b), a participants payroll deductions may
be decreased to zero percent (0%) at any time during an Offering
Period. Subject to Section 423(b)(8) of the Code and
Section 3(b) hereof, payroll deductions will recommence at
the rate originally elected by the participant effective as of
the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the
participant as provided in Section 10.
(f) At the time the option is exercised, in whole or in
part, or at the time some or all of the Common Stock issued
under the Plan is disposed of, the participant must make
adequate provision for the Companys or Employers
federal, state, or any other tax withholding liability payable
to any authority, national insurance, social security or other
tax withholding obligations, if any, which arise upon the
exercise of the option or the disposition of the Common Stock.
At any time, the Company or the Employer may, but will not be
obligated to, withhold from the participants compensation
the amount necessary for the Company or the Employer to meet
applicable withholding obligations, including any withholding
required to make available to the Company or the Employer any
tax deductions or benefits attributable to the sale or early
disposition of Common Stock by the Employee.
7. Grant of Option. On the
Offering Date of each Offering Period, each Employee
participating in such Offering Period will be granted an option
to purchase on each Exercise Date during such Offering Period
(at the applicable Purchase Price) up to a number of shares of
Common Stock determined by dividing such Employees payroll
deductions accumulated prior to such Exercise Date and retained
in the Employees account as of the Exercise Date by the
applicable Purchase Price; provided that in no event will an
Employee be permitted to purchase during any twelve
(12) month period more than six thousand (6,000) shares of
the Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase will
be subject to the limitations set forth in Sections 3(b)
and 13. The Employee may accept the grant of such option with
respect to any Offering Period under the Plan, by electing to
participate in the Plan in accordance with the requirements of
Section 5. The Administrator may, for future Offering
Periods, increase or decrease, in its absolute discretion, the
maximum number of shares of Common Stock that each Employee may
purchase during each Offering Period. Exercise of the
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option will occur as provided in Section 8, unless the
participant has withdrawn pursuant to Section 10. The
option will expire on the last day of the Offering Period.
8. Exercise of Option.
(a) Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase
of shares of Common Stock will be exercised automatically on the
Exercise Date, and the maximum number of full shares subject to
option will be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions in his or
her account. No fractional shares of Common Stock will be
purchased; any payroll deductions accumulated in a
participants account which are not sufficient to purchase
a full share will be retained in the participants account
for the subsequent Offering Period, subject to earlier
withdrawal by the participant as provided in Section 10.
Any other funds left over in a participants account after
the Exercise Date will be returned to the participant. During a
participants lifetime, a participants option to
purchase shares hereunder is exercisable only by him or her.
(b) If the Administrator determines that, on a given
Exercise Date, the number of shares of Common Stock with respect
to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale
under the Plan on the Offering Date of the applicable Offering
Period, or (ii) the number of shares of Common Stock
available for sale under the Plan on such Exercise Date, the
Administrator may in its sole discretion provide that the
Company will make a pro rata allocation of the shares of Common
Stock available for purchase on such Offering Date or Exercise
Date, as applicable, in as uniform a manner as will be
practicable and as it will determine in its sole discretion to
be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and continue all
Offering Periods then in effect or terminate all Offering
Periods then in effect pursuant to Section 20. The Company
may make a pro rata allocation of the shares available on the
Offering Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of
additional shares for issuance under the Plan by the
Companys stockholders subsequent to such Offering Date.
9. Delivery. As soon as reasonably
practicable after each Exercise Date on which a purchase of
shares of Common Stock occurs, the Company will arrange the
delivery to each participant the shares purchased upon exercise
of his or her option in a form determined by the Administrator
(in its sole discretion) and pursuant to rules established by
the Administrator. No participant will have any voting,
dividend, or other stockholder rights with respect to shares of
Common Stock subject to any option granted under the Plan until
such shares have been purchased and delivered to the participant
as provided in this Section 9.
10. Withdrawal.
(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not
yet used to exercise his or her option under the Plan at any
time by (i) submitting to the Companys payroll office
(or its designee) a written notice of withdrawal in the form
prescribed by the Administrator for such purpose (which may be
similar to the form attached hereto as Exhibit B),
or (ii) following an electronic or other withdrawal
procedure prescribed by the Administrator. All of the
participants payroll deductions credited to his or her
account will be paid to such participant promptly after receipt
of notice of withdrawal and such participants option for
the Offering Period will be automatically terminated, and no
further payroll deductions for the purchase of shares will be
made for such Offering Period. If a participant withdraws from
an Offering Period, payroll deductions will not resume at the
beginning of the succeeding Offering Period, unless the
participant re-enrolls in the Plan in accordance with the
provisions of Section 5.
(b) A participants withdrawal from an Offering Period
will not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted
by the Company or in succeeding Offering Periods which commence
after the termination of the Offering Period from which the
participant withdraws.
11. Termination of
Employment. Upon a participants ceasing
to be an Eligible Employee, for any reason, he or she will be
deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participants account during
the Offering Period but not yet used to purchase shares of
Common Stock under the Plan will be returned to such participant
or, in the case of his or her death, to the person or persons
entitled thereto under Section 15, and such
participants option will be automatically terminated.
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12. Interest. No interest will
accrue on the payroll deductions of a participant in the Plan.
13. Stock.
(a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19 hereof, the maximum
number of shares of Common Stock which will be made available
for sale under the Plan will be twelve million (12,000,000)
shares.
(b) Until the shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), a participant will
only have the rights of an unsecured creditor with respect to
such shares, and no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to such
shares.
(c) Shares of Common Stock to be delivered to a participant
under the Plan will be registered in the name of the participant
or, at the sole discretion of the Company, in the name of the
participant and his or her spouse.
14. Administration. The Plan will
be administered by the Board or a Committee appointed by the
Board, which Committee will be constituted to comply with
Applicable Laws. The Administrator will have full and exclusive
discretionary authority to construe, interpret and apply the
terms of the Plan, to determine eligibility and to adjudicate
all disputed claims filed under the Plan. Every finding,
decision and determination made by the Administrator will, to
the full extent permitted by law, be final and binding upon all
parties. Notwithstanding any provision to the contrary in this
Plan, and, with respect to the Section 423(b) Plan, to the
extent permissible under Code Section 423 and proposed or
final Treasury Regulations promulgated thereunder (and other
Internal Revenue Service guidance), the Administrator may adopt
rules or procedures relating to the operation and administration
of the Plan to accommodate the specific requirements of local
laws and procedures for jurisdictions outside of the United
States. Without limiting the generality of the foregoing, the
Administrator is specifically authorized to adopt rules and
procedures regarding handling payroll deductions, making of
contributions to the Plan, defining eligible Compensation,
establishment of bank or trust accounts to hold payroll
deductions, conversion of local currency, obligations to pay
payroll tax, determination of beneficiary designation
requirements, withholding procedures and handling of stock
certificates which vary with local requirements.
The Administrator may also adopt rules, procedures or sub-plans
applicable to particular Subsidiaries or locations, which
sub-plans may be designed to be outside the scope of Code
Section 423. The rules of such sub-plans may take
precedence over other provisions of this Plan, but unless
otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such
sub-plan. To the extent inconsistent with the requirements of
Section 423, such sub-plan shall be considered part of the
Non-Section 423(b) Plan, and rights granted thereunder
shall not be considered to comply with Code Section 423.
15. Designation of Beneficiary.
(a) At the sole discretion of the Administrator, a
participant may file a designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the
participants account under the Plan in the event of such
participants death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant
may file a designation of a beneficiary who is to receive any
cash from the participants account under the Plan in the
event of such participants death prior to exercise of the
option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent will be required
for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by notice in a form determined by the
Administrator. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan
who is living at the time of such participants death, the
Company will deliver such shares
and/or cash
to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares
and/or cash
to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may
designate.
(c) All beneficiary designations will be in such form and
manner as the Administrator may designate from time to time.
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16. Transferability. Neither
payroll deductions credited to a participants account nor
any rights with regard to the exercise of an option or to
receive shares of Common Stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and distribution or as
provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition
will be without effect, except that the Company may treat such
act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.
17. Use of Funds. The Company may
use all payroll deductions received or held by it under the Plan
for any corporate purpose, and the Company will not be obligated
to segregate such payroll deductions. Until shares of Common
Stock are issued, participants will only have the rights of an
unsecured creditor with respect to such shares.
18. Reports. Individual accounts
will be maintained for each participant in the Plan. Statements
of account will be given to participating Employees at least
annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares of Common
Stock purchased and the remaining cash balance, if any.
19. Adjustments, Dissolution, Liquidation, Merger or
Change in Control.
(a) Adjustments. In the event that
any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property),
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation,
split-up,
spin-off, combination, repurchase, or exchange of Common Stock
or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock
occurs, the Administrator, in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, will, in such manner as it may
deem equitable, adjust the number and class of Common Stock
which may be delivered under the Plan, the Purchase Price per
share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised, and the
numerical limits of Sections 7 and 13.
(b) Dissolution or Liquidation. In
the event of the proposed dissolution or liquidation of the
Company, any Offering Period then in progress will be shortened
by setting a New Exercise Date, and will terminate immediately
prior to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Administrator. The
New Exercise Date will be before the date of the Companys
proposed dissolution or liquidation. The Administrator will
notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the
Exercise Date for the participants option has been changed
to the New Exercise Date and that the participants option
will be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
(c) Merger or Change in
Control. In the event of a merger or Change
in Control, each outstanding option will be assumed or an
equivalent option 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, the Offering Period with respect to which such
option relates will be shortened by setting a New Exercise Date
and will end on the New Exercise Date. The New Exercise Date
will occur before the date of the Companys proposed merger
or Change in Control. The Administrator will notify each
participant in writing, at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for the
participants option has been changed to the New Exercise
Date and that the participants option will be exercised
automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as
provided in Section 10 hereof.
20. Amendment or Termination.
(a) The Administrator, in its sole discretion, may amend,
suspend, or terminate the Plan, or any part thereof, at any time
and for any reason; provided, however, that adding additional
shares available for sale under the Plan (other than pursuant to
Section 19(a)) shall require stockholder approval. If the
Plan is terminated, the Administrator, in its discretion, may
elect to terminate all outstanding Offering Periods either
immediately or upon completion of the purchase of shares of
Common Stock on the next Exercise Date (which may be sooner than
originally scheduled, if determined by the Administrator in its
discretion), or may elect to permit Offering Periods to expire
in accordance with their terms (and subject to any adjustment
pursuant to Section 19). If the Offering Periods
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are terminated prior to expiration, all amounts then credited to
participants accounts which have not been used to purchase
shares of Common Stock will be returned to the participants
(without interest thereon, except as otherwise required under
local laws) as soon as administratively practicable.
(b) Without stockholder consent and without limiting
Section 20(a), the Administrator will be entitled to change
the Offering Periods, limit the frequency
and/or
number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the
Companys processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods
and/or
accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant
properly correspond with amounts withheld from the
participants Compensation, and establish such other
limitations or procedures as the Administrator determines in its
sole discretion advisable which are consistent with the Plan.
(c) In the event the Administrator determines that the
ongoing operation of the Plan may result in unfavorable
financial accounting consequences, the Administrator may, in its
discretion and, to the extent necessary or desirable, modify,
amend or terminate the Plan to reduce or eliminate such
accounting consequence including, but not limited to:
(i) amending the Plan to conform with the safe harbor
definition under Statement of Financial Accounting Standards
123(R), including with respect to an Offering Period underway at
the time;
(ii) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change
in Purchase Price;
(iii) shortening any Offering Period by setting a New
Exercise Date, including an Offering Period underway at the time
of the Administrator action;
(iv) reducing the maximum percentage of Compensation a
participant may elect to set aside as payroll
deductions; and
(v) reducing the maximum number of shares a participant may
purchase during any Offering Period.
Such modifications or amendments will not require stockholder
approval or the consent of any Plan participants.
21. Notices. All notices or other
communications by a participant to the Company under or in
connection with the Plan will be deemed to have been duly given
when received in the form and manner specified by the Company at
the location, or by the person, designated by the Company for
the receipt thereof.
22. Conditions Upon Issuance of
Shares. Shares of Common Stock will not be
issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant
thereto will comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the shares may then be listed, and
will be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and
warrant at the time of any such exercise 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 by
any of the aforementioned applicable provisions of law.
23. Term of Plan. The Plan will
become effective upon the earlier to occur of its adoption by
the Board or its approval by the stockholders of the Company. It
will continue in effect for a term of twenty (20) years,
unless sooner terminated under Section 20.
A-8
24. Reimbursement of Taxes. The
Administrator shall have the discretion to require reimbursement
from any Plan participant in full for any liability that the
Company or the Employer incurs towards any tax paid or payable
in respect to participants participation in the Plan, the
grant of any option pursuant to the Plan, or the exercise of
participants option, provided that such reimbursement is
provided for in the subscription agreement. The Company may
require security for such reimbursement of taxes as a
precondition to participant participating in the Plan, the grant
of any option, or the exercise of this option on behalf of
Participant. The Administrator shall have the authority to
approve additional documents or forms which may be requested by
the Company for such security, collection or otherwise for
reimbursement of such taxes to the Company.
25. Stockholder Approval. The Plan
will be subject to approval by the stockholders of the Company
within twelve (12) months after the date the Plan is
adopted by the Board. Such stockholder approval will be obtained
in the manner and to the degree required under Applicable Laws.
A-9
EXHIBIT A
JUNIPER
NETWORKS, INC.
2008
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION
AGREEMENT
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Original
Application
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Offering Date:
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Change
in Payroll Deduction Rate
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Change
of Beneficiary(ies)
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1.
hereby elects to participate in the Juniper Networks, Inc. 2008
Employee Stock Purchase Plan (the Plan) and
subscribes to purchase shares of the Companys Common Stock
in accordance with this Subscription Agreement and the Plan.
2. I hereby authorize payroll deductions from each paycheck
in the amount of % of my
Compensation on each payday (from 0 to 10%) during the Offering
Period in accordance with the Plan. (Please note that no
fractional percentages are permitted.)
3. I understand that said payroll deductions will be
accumulated for the purchase of shares of Common Stock at the
applicable Purchase Price determined in accordance with the
Plan. I understand that if I do not withdraw from an Offering
Period, any accumulated payroll deductions will be used to
automatically exercise my option and purchase Common Stock under
the Plan.
4. I have received a copy of the complete Plan and its
accompanying prospectus. I understand that my participation in
the Plan is in all respects subject to the terms of the Plan.
5. Shares of Common Stock purchased for me under the Plan
should be issued in the name(s) of (Eligible Employee or
Eligible Employee and Spouse only).
6. I understand that if I dispose of any shares received by
me pursuant to the Employee Stock Purchase Plan within two
(2) years after the Offering Date (the first day of the
Offering Period during which I purchased such shares) or one
(1) year after the Exercise Date, I will be treated for
federal income tax purposes as having received ordinary income
at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares
were purchased by me over the price which I paid for the shares.
I hereby agree to notify the Company in writing within thirty
(30) days after the date of any disposition of my shares
and I will make adequate provision for Federal, state or other
tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will
not be obligated to, withhold from my compensation the amount
necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by me. If I dispose of such
shares at any time after the expiration of the two (2)-year and
one (1)-year holding periods, I understand that I will be
treated for federal income tax purposes as having received
income only at the time of such disposition, and that such
income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (a) the excess of the fair
market value of the shares at the time of such disposition over
the purchase price which I paid for the shares, or (b) 15%
of the fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any, recognized
on such disposition will be taxed as capital gain.
7. In the event that I am an Employee resident in India, I
agree to reimburse or pay the Company or Indian Subsidiary, as
applicable, in full for any liability that the Company or Indian
Subsidiary incurs towards any fringe benefit tax
(FBT) or other such tax paid or payable in respect
of my participation in the Plan, the grant of any option
pursuant to the Plan, or the exercise of my option. The Company
or Indian Subsidiary may require security for such reimbursement
of taxes as a precondition to my participation in the Plan, the
grant of any option, or the exercise of the option on my behalf
and I agree to execute any additional documents requested by the
Company or Indian Subsidiary in connection with my FBT or other
tax reimbursement obligation.
8. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Plan.
A-10
9. In the event of my death, I hereby designate the
following as my beneficiary(ies) to receive all payments and
shares due me under the Employee Stock Purchase Plan:
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NAME: (please print)
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First
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Relationship
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Percentage Benefit
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Address
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NAME: (please print)
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First
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Relationship
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Percentage Benefit
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Address
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Employees Social Security Number:
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Employees Address:
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I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN
EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED
BY ME.
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Dated:
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Signature of Employee
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Dated:
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Spouses Signature (If beneficiary other than spouse)
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A-11
EXHIBIT B
JUNIPER
NETWORKS, INC.
2008
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the
Juniper Networks Inc. 2008 Employee Stock Purchase Plan that
began
on ,
(the Offering Date) hereby notifies the
Company that he or she hereby withdraws from the Offering
Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll
deductions credited to his or her account with respect to such
Offering Period. The undersigned understands and agrees that his
or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned will be eligible
to participate in succeeding Offering Periods only by delivering
to the Company a new Subscription Agreement.
Name and Address of Participant:
Signature:
A-12
Directions
to Juniper Networks, Inc.
1220 N. Mathilda
Avenue
Building 3, Pacific Conference Room
Sunnyvale, CA 94089
From
San Francisco Airport:
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Travel south on Highway 101.
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Exit Highway 237 east in Sunnyvale.
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Exit Mathilda and turn left onto Mathilda Avenue.
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Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
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From
San Jose Airport and points south:
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Travel north on Highway 101 to Mathilda Avenue in Sunnyvale.
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Exit Mathilda Avenue north.
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Continue on Mathilda past Highway 237 and Lockheed Martin Avenue.
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Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
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From
Oakland Airport and the East Bay:
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Travel south on Interstate 880 until you get to Milpitas.
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Turn right on Highway 237 west.
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Continue approximately 10 miles.
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Exit Mathilda Avenue and turn right at the stoplight.
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Juniper Networks Corporate Headquarters and Knowledge Center
will be on the right side across from the Lockheed/Martin light
rail station.
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48
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Our Annual Report on Form 10-K are available at www.proxyvote.com. |
JUNIPER NETWORKS, INC.
2008 ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 21, 2008 9:00 a.m. Pacific time
Juniper Networks, Inc. 1220 N. Mathilda Ave.
Building 3, Pacific Conference Room Sunnyvale, CA 94089
Juniper Networks, Inc.
Mailing Address: 1194 N. Mathilda Avenue, Sunnyvale, CA 94089Proxy
This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 21, 2008.
If no choice is specified, the proxy will be voted ''FOR Items 1, 2 and 3.
By signing the proxy, you revoke all prior proxies and appoint Robyn M. Denholm and Mitchell Gaynor, and each of them,
with ful 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.
Address Change: |
If you noted an Address Change above, please check the corresponding box on the reverse side. |
JUNIPER NETWORKS, INC. 1194 N. MATHILDA AVENUE SUNNYVALE, CA 94089 |
There are three ways to vote your Proxy
Your Internet or telephone vote authorizes the Named Proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card.
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.
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 Juniper Networks, Inc., c/o Broadridge, 51 Mercedes Wa y, Edgewood, NY 11717.
ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Juniper Networks, Inc. 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 stockholder communications electronically in future years. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:JUNIP1KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
JUNIPER NETWORKS, INC.For Withhold For All To withhold authority to vote for any individual All All
Except nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below.
The Board of Directors Recommends a Vote
FOR Items 1, 2 and 3.0 0 0
1.Election of Class III Directors:
01) Mary B. Cranston 02) J. Michael Lawrie
For Against Abstain
2.Approval of the Juniper Networks, Inc. 2008 Employee Stock Purchase Plan.0 0 0
3.Ratification of Ernst & Young LLP, an independent registered public accounting firm, as auditors.0 0 0
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
Please sign exactly as your name(s) appear(s) on this Proxy. If held in joint tenancy, all persons must sign. Trustees, admin istrators, etc.,
should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.
Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date |