{"id":38330,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1999-directors-option-plan-redback-networks-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1999-directors-option-plan-redback-networks-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1999-directors-option-plan-redback-networks-inc.html","title":{"rendered":"1999 Directors&#8217; Option Plan &#8211; Redback Networks Inc."},"content":{"rendered":"<pre>                              REDBACK NETWORKS INC.\n\n                           1999 DIRECTORS' OPTION PLAN\n\n                     (AS ADOPTED EFFECTIVE _______ __, 1999)\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                TABLE OF CONTENTS\n\n\n\n\n\n                                                                                          Page\n                                                                                    \n\nARTICLE 1.  INTRODUCTION.....................................................................1\n\nARTICLE 2.  ADMINISTRATION...................................................................1\n        2.1  Committee Composition...........................................................1\n        2.2  Committee Responsibilities......................................................1\n\nARTICLE 3.  SHARES AVAILABLE FOR GRANTS......................................................1\n        3.1  Basic Limitation................................................................1\n        3.2  Annual Increase in Shares.......................................................1\n        3.3  Additional Shares...............................................................2\n\nARTICLE 4.  AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS................................2\n        4.1  Eligibility.....................................................................2\n        4.2  Initial Grants..................................................................2\n        4.3  Annual Grants...................................................................2\n        4.4  Accelerated Exercisability......................................................2\n        4.5  Exercise Price..................................................................3\n        4.6  Term............................................................................3\n        4.7  Affiliates of Non-Employee Directors............................................3\n        4.8  Stock Option Agreement..........................................................3\n\nARTICLE 5.  PAYMENT FOR OPTION SHARES........................................................3\n        5.1  Cash............................................................................3\n        5.2  Surrender of Stock..............................................................3\n        5.3  Exercise\/Sale...................................................................3\n        5.4  Other Forms of Payment..........................................................3\n\nARTICLE 6.  PROTECTION AGAINST DILUTION......................................................4\n        6.1  Adjustments.....................................................................4\n        6.2  Dissolution or Liquidation......................................................4\n        6.3  Reorganizations.................................................................4\n\nARTICLE 7.  LIMITATION ON RIGHTS.............................................................4\n        7.1  Stockholders' Rights............................................................4\n        7.2  Regulatory Requirements.........................................................4\n        7.3  Withholding Taxes...............................................................5\n\nARTICLE 8.  FUTURE OF THE PLAN...............................................................5\n        8.1  Term of the Plan................................................................5\n        8.2  Amendment or Termination........................................................5\n\n\n                                       i\n\n\n\n\n                                                                                    \nARTICLE 9.  DEFINITIONS......................................................................5\n\nARTICLE 10.  EXECUTION.......................................................................7\n\n\n                                       ii\n\n\n\n\n\n                              REDBACK NETWORKS INC.\n\n                           1999 DIRECTORS' OPTION PLAN\n\n\n        ARTICLE 1. INTRODUCTION.\n\n               The Plan was adopted by the Board effective as of the date of the\nCompany's initial public offering. The purpose of the Plan is to promote the\nlong-term success of the Company and the creation of stockholder value by (a)\nencouraging Non-Employee Directors to focus on critical long-range objectives,\n(b) encouraging the attraction and retention of Non-Employee Directors with\nexceptional qualifications and (c) linking Non-Employee Directors directly to\nstockholder interests through increased stock ownership. The Plan seeks to\nachieve this purpose by providing for automatic and non-discretionary grants of\nOptions to Non-Employee Directors.\n\n               The Plan shall be governed by, and construed in accordance with,\nthe laws of the State of Delaware (except their choice-of-law provisions).\n\n\n        ARTICLE 2. ADMINISTRATION.\n\n        2.1  COMMITTEE COMPOSITION. The Plan shall be administered by the\nCommittee. The Committee shall consist exclusively of two or more directors of\nthe Company, who shall be appointed by the Board. In addition, the composition\nof the Committee shall satisfy such requirements as the Securities and Exchange\nCommission may establish for administrators acting under plans intended to\nqualify for exemption under Rule 16b-3 (or its successor) under the Exchange\nAct.\n\n        2.2  COMMITTEE RESPONSIBILITIES. The Committee shall interpret the\nPlan and make all decisions relating to the operation of the Plan. The Committee\nmay adopt such rules or guidelines as it deems appropriate to implement the\nPlan. The Committee's determinations under the Plan shall be final and binding\non all persons.\n\n\n        ARTICLE 3. SHARES AVAILABLE FOR GRANTS.\n\n        3.1  BASIC LIMITATION. Common Shares issued pursuant to the Plan may\nbe authorized but unissued shares or treasury shares. The aggregate number of\nCommon Shares subject to Options granted under the Plan shall not exceed (a)\n200,000 plus (b) the additional Common Shares described in Sections 3.2 and 3.3.\nThe limitations of this Section 3.1 and Section 3.2 shall be subject to\nadjustment pursuant to Article 6.\n\n        3.2  ANNUAL INCREASE IN SHARES. As of January 1 of each year,\ncommencing with the year 2000, the aggregate number of Common Shares available\nfor the grant of Options under the Plan shall automatically be increased by the\nnumber necessary to cause the total number of Common Shares then available to be\nrestored to 200,000.\n\n\n\n\n\n        3.3 ADDITIONAL SHARES. If Options are forfeited or terminate for any\nother reason before being exercised, then the Common Shares subject to such\nOptions shall again become available for the grant of Options under the Plan.\n\n\n        ARTICLE 4. AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.\n\n        4.1 ELIGIBILITY. Only Non-Employee Directors shall be eligible for the\ngrant of Options under the Plan.\n\n        4.2 INITIAL GRANTS. Each Non-Employee Director who first becomes a\nmember of the Board after the date of the Company's initial public offering\nshall receive a one-time grant of an Option covering 25,000 Common Shares\n(subject to adjustment under Article 6) on the date when such Non-Employee\nDirector first joins the Board. Each Non-Employee Director who is a member of\nthe Board on the date of the Company's initial public offering, and who did not\npreviously receive an option to purchase Common Shares, shall receive a one-time\ngrant of an Option covering 25,000 Common Shares on the date of the Company's\ninitial public offering. Options granted under this Section 4.2 shall become\nexercisable in equal monthly installments over the 48-month period commencing on\nthe date of grant, except that all of the first 12 installments shall become\nexercisable on the first anniversary of the date of grant. A Non-Employee\nDirector who previously was an Employee shall not receive a grant under this\nSection 4.2.\n\n        4.3 ANNUAL GRANTS. Upon the conclusion of each regular annual meeting\nof the Company's stockholders held in the year 2000 or thereafter, each\nNon-Employee Director who will continue serving as a member of the Board\nthereafter shall receive an Option covering 10,000 Common Shares (subject to\nadjustment under Article 6), except that such Option shall not be granted in the\ncalendar year in which the same Non-Employee Director received the Option\ndescribed in Section 4.2. Options granted under this Section 4.3 shall become\nexercisable in equal monthly installments over the 12-month period commencing on\nthe date of grant. A Non-Employee Director who previously was an Employee shall\nbe eligible to receive grants under this Section 4.3.\n\n        4.4 ACCELERATED EXERCISABILITY. All Options granted to a Non-Employee\nDirector under this Article 4 shall also become exercisable in full in the event\nof:\n\n                      (a) The termination of such Non-Employee Director's\n        service because of death or total and permanent disability; or\n\n                      (b) A Change in Control with respect to the Company,\n        except as provided in the next following sentence.\n\nIf the Company and the other party to the transaction constituting a Change in\nControl agree that such transaction is to be treated as a 'pooling of interests'\nfor financial reporting purposes, and if such transaction in fact is so treated,\nthen the acceleration of exercisability shall not occur to the extent that the\nCompany's independent accountants and such other party's independent \n\n\n\n                                       2\n\n\naccountants separately determine in good faith that such acceleration would\npreclude the use of 'pooling of interests' accounting.\n\n        4.5 EXERCISE PRICE. The Exercise Price under all Options granted to a\nNon-Employee Director under this Article 4 shall be equal to 100% of the Fair\nMarket Value of a Common Share on the date of grant, payable in one of the forms\ndescribed in Article 5.\n\n        4.6 TERM. All Options granted to a Non-Employee Director under this\nArticle 4 shall terminate on the earlier of (a) the 10th anniversary of the date\nof grant or (b) the date 12 months after the termination of such Non-Employee\nDirector's service for any reason.\n\n        4.7 AFFILIATES OF NON-EMPLOYEE DIRECTORS. The Committee may provide\nthat the Options that otherwise would be granted to a Non-Employee Director\nunder this Article 4 shall instead be granted to an affiliate of such\nNon-Employee Director. Such affiliate shall then be deemed to be a Non-Employee\nDirector for purposes of the Plan, provided that the service-related vesting and\ntermination provisions pertaining to the Options shall be applied with regard to\nthe service of the Non-Employee Director.\n\n        4.8 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan\nshall be evidenced by a Stock Option Agreement between the Optionee and the\nCompany. Such Option shall be subject to all applicable terms of the Plan and\nmay be subject to any other terms that are not inconsistent with the Plan.\n\n\n        ARTICLE 5. PAYMENT FOR OPTION SHARES.\n\n        5.1 CASH. All or any part of the Exercise Price may be paid in cash or\ncash equivalents.\n\n        5.2 SURRENDER OF STOCK. All or any part of the Exercise Price may be\npaid by surrendering, or attesting to the ownership of, Common Shares that are\nalready owned by the Optionee. Such Common Shares shall be valued at their Fair\nMarket Value on the date when the new Common Shares are purchased under the\nPlan. The Optionee shall not surrender, or attest to the ownership of, Common\nShares in payment of the Exercise Price if such action would cause the Company\nto recognize compensation expense (or additional compensation expense) with\nrespect to the Option for financial reporting purposes.\n\n        5.3 EXERCISE\/SALE. All or any part of the Exercise Price and any\nwithholding taxes may be paid by delivering (on a form prescribed by the\nCompany) an irrevocable direction to a securities broker approved by the Company\nto sell all or part of the Common Shares being purchased under the Plan and to\ndeliver all or part of the sales proceeds to the Company.\n\n        5.4 OTHER FORMS OF PAYMENT. At the sole discretion of the Committee,\nall or any part of the Exercise Price and any withholding taxes may be paid in\nany other form that is consistent with applicable laws, regulations and rules.\n\n\n\n\n                                       3\n\n\n        ARTICLE 6. PROTECTION AGAINST DILUTION.\n\n        6.1  ADJUSTMENTS. In the event of a subdivision of the outstanding\nCommon Shares, a declaration of a dividend payable in Common Shares, a\ndeclaration of a dividend payable in a form other than Common Shares in an\namount that has a material effect on the price of Common Shares, a combination\nor consolidation of the outstanding Common Shares (by reclassification or\notherwise) into a lesser number of Common Shares, a recapitalization, a spin-off\nor a similar occurrence, the Committee shall make such adjustments as it, in its\nsole discretion, deems appropriate in one or more of (a) the number of Common\nShares available for future grants under Article 3, (b) the number of Options to\nbe granted to Non-Employee Directors under Article 4, (c) the number of Common\nShares covered by each outstanding Option or (d) the Exercise Price under each\noutstanding Option. Except as provided in this Article 6, an Optionee shall have\nno rights by reason of any issue by the Company of stock of any class or\nsecurities convertible into stock of any class, any subdivision or consolidation\nof shares of stock of any class, the payment of any stock dividend or any other\nincrease or decrease in the number of shares of stock of any class.\n\n        6.2  DISSOLUTION OR LIQUIDATION. To the extent not previously\nexercised, Options shall terminate immediately prior to the dissolution or\nliquidation of the Company.\n\n        6.3  REORGANIZATIONS. In the event that the Company is a party to a\nmerger or other reorganization, outstanding Options shall be subject to the\nagreement of merger or reorganization. Such agreement shall provide for (a) the\ncontinuation of the outstanding Options by the Company, if the Company is a\nsurviving corporation, (b) the assumption of the outstanding Options by the\nsurviving corporation or its parent or subsidiary, (c) the substitution by the\nsurviving corporation or its parent or subsidiary of its own options for the\noutstanding Options, (d) full exercisability and accelerated expiration of the\noutstanding Options or (e) settlement of the full value of the outstanding\nOptions in cash or cash equivalents followed by cancellation of such Options.\n\n\n        ARTICLE 7. LIMITATION ON RIGHTS.\n\n        7.1  STOCKHOLDERS' RIGHTS. A Optionee shall have no dividend rights,\nvoting rights or other rights as a stockholder with respect to any Common Shares\ncovered by his or her Option prior to the time when he or she becomes entitled\nto receive such Common Shares by filing a notice of exercise and paying the\nExercise Price. No adjustment shall be made for cash dividends or other rights\nfor which the record date is prior to such time, except as expressly provided in\nthe Plan.\n\n        7.2  REGULATORY REQUIREMENTS. Any other provision of the Plan\nnotwithstanding, the obligation of the Company to issue Common Shares under the\nPlan shall be subject to all applicable laws, rules and regulations and such\napproval by any regulatory body as may be required. The Company reserves the\nright to restrict, in whole or in part, the delivery of Common Shares pursuant\nto any Option prior to the satisfaction of all legal requirements relating to\nthe issuance of such Common Shares, to their registration, qualification or\nlisting or to an exemption from registration, qualification or listing.\n\n\n\n                                       4\n\n\n        7.3  WITHHOLDING TAXES. To the extent required by applicable federal,\nstate, local or foreign law, an Optionee or his or her successor shall make\narrangements satisfactory to the Company for the satisfaction of any withholding\ntax obligations that arise in connection with the Plan. The Company shall not be\nrequired to issue any Common Shares or make any cash payment under the Plan\nuntil such obligations are satisfied.\n\n\n        ARTICLE 8. FUTURE OF THE PLAN.\n\n        8.1  TERM OF THE PLAN. The Plan, as set forth herein, shall become\neffective on the date of the Company's initial public offering. The Plan shall\nremain in effect until it is terminated under Section 8.2.\n\n        8.2  AMENDMENT OR TERMINATION. The Board may, at any time and for any\nreason, amend or terminate the Plan. An amendment of the Plan shall be subject\nto the approval of the Company's stockholders only to the extent required by\napplicable laws, regulations or rules. No Options shall be granted under the\nPlan after the termination thereof. The termination of the Plan, or any\namendment thereof, shall not affect any Option previously granted under the\nPlan.\n\n\n        ARTICLE 9. DEFINITIONS.\n\n        9.1  'BOARD' means the Company's Board of Directors, as constituted from\ntime to time.\n\n        9.2  'CHANGE IN CONTROL' means:\n\n                      (a) The consummation of a merger or consolidation of the\n        Company with or into another entity or any other corporate\n        reorganization, if persons who were not stockholders of the Company\n        immediately prior to such merger, consolidation or other reorganization\n        own immediately after such merger, consolidation or other reorganization\n        50% or more of the voting power of the outstanding securities of each of\n        (i) the continuing or surviving entity and (ii) any direct or indirect\n        parent corporation of such continuing or surviving entity;\n\n                      (b) The sale, transfer or other disposition of all or\n        substantially all of the Company's assets;\n\n                      (c) A change in the composition of the Board, as a result\n        of which 50% or fewer of the incumbent directors are directors who\n        either (i) had been directors of the Company on the date 24 months prior\n        to the date of the event that may constitute a Change in Control (the\n        'original directors') or (ii) were elected, or nominated for election,\n        to the Board with the affirmative votes of at least a majority of the\n        aggregate of the original directors who were still in office at the time\n        of the election or nomination and the directors whose election or\n        nomination was previously so approved; or\n\n                      (d) Any transaction as a result of which any person is the\n        'beneficial owner' (as defined in Rule 13d-3 under the Exchange Act),\n        directly or \n\n\n\n                                       5\n\n\n        indirectly, of securities of the Company representing at least 50% of\n        the total voting power represented by the Company's then outstanding\n        voting securities. For purposes of this Subsection (d), the term\n        'person' shall have the same meaning as when used in sections 13(d) and\n        14(d) of the Exchange Act but shall exclude (i) a trustee or other\n        fiduciary holding securities under an employee benefit plan of the\n        Company or of a Parent or Subsidiary and (ii) a corporation owned\n        directly or indirectly by the stockholders of the Company in\n        substantially the same proportions as their ownership of the common\n        stock of the Company.\n\nA transaction shall not constitute a Change in Control if its sole purpose is to\nchange the state of the Company's incorporation or to create a holding company\nthat will be owned in substantially the same proportions by the persons who held\nthe Company's securities immediately before such transaction.\n\n        9.3  'CODE' means the Internal Revenue Code of 1986, as amended.\n\n        9.4  'COMMITTEE' means a committee of the Board, as described in Article\n2.\n\n        9.5  'COMMON SHARE' means one share of the common stock of the Company.\n\n        9.6  'COMPANY' means Redback Networks Inc., a Delaware corporation.\n\n        9.7  'EMPLOYEE' means a common-law employee of the Company, a Parent or\na Subsidiary.\n\n        9.8  'EXCHANGE ACT' means the Securities Exchange Act of 1934, as\namended.\n\n        9.9  'EXERCISE PRICE' means the amount for which one Common Share may\nbe purchased upon exercise of such Option, as specified in the applicable Stock\nOption Agreement.\n\n        9.10 'FAIR MARKET VALUE' means the market price of Common Shares,\ndetermined by the Committee in good faith on such basis as it deems appropriate.\nThe Committee's determination of Fair Market Value by shall be based on the\nprices reported in The Wall Street Journal whenever possible, except that the\nFair Market Value on the date of the Company's initial public offering shall be\nequal to the price of Common Shares to the public in such offering. Such\ndetermination shall be conclusive and binding on all persons.\n\n        9.11 'NON-EMPLOYEE DIRECTOR' means a member of the Board who is not an\nEmployee.\n\n        9.12 'OPTION' means an option granted under the Plan and entitling the\nholder to purchase Common Shares. Options do not qualify as incentive stock\noptions described in section 422(b) of the Code.\n\n        9.13 'OPTIONEE' means an individual or estate who holds an Option.\n\n        9.14 'PARENT' means any corporation (other than the Company) in an\nunbroken chain of corporations ending with the Company, if each of the\ncorporations other than the Company \n\n\n\n                                       6\n\n\nowns stock possessing 50% or more of the total combined voting power of all\nclasses of stock in one of the other corporations in such chain. A corporation\nthat attains the status of a Parent on a date after the adoption of the Plan\nshall be considered a Parent commencing as of such date.\n\n        9.15 'PLAN' means this Redback Networks Inc. 1999 Directors' Option\nPlan, as amended from time to time.\n\n        9.16 'STOCK OPTION AGREEMENT' means the agreement between the Company\nand an Optionee that contains the terms, conditions and restrictions pertaining\nto his or her Option.\n\n        9.17 'SUBSIDIARY' means any corporation (other than the Company) in an\nunbroken chain of corporations beginning with the Company, if each of the\ncorporations other than the last corporation in the unbroken chain owns stock\npossessing 50% or more of the total combined voting power of all classes of\nstock in one of the other corporations in such chain. A corporation that attains\nthe status of a Subsidiary on a date after the adoption of the Plan shall be\nconsidered a Subsidiary commencing as of such date.\n\n\n        ARTICLE 10. EXECUTION.\n\n               To record the adoption of the Plan by the Board on March 3, 1999,\nthe Company has caused its duly authorized officer to execute this document in\nthe name of the Company.\n\n\n                                    REDBACK NETWORKS INC.\n\n\n\n                                    By:_________________________________________\n\n                                    Title:______________________________________\n\n\n\n\n                                        7\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8660],"corporate_contracts_industries":[],"corporate_contracts_types":[9539,9543],"class_list":["post-38330","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-redback-networks-inc","corporate_contracts_types-compensation","corporate_contracts_types-compensation__dsp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38330"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38330"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38330"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}