{"id":38362,"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-stock-incentive-plan-redback-networks-in2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1999-stock-incentive-plan-redback-networks-in2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1999-stock-incentive-plan-redback-networks-in2.html","title":{"rendered":"1999 Stock Incentive Plan &#8211; Redback Networks Inc."},"content":{"rendered":"<pre>                             REDBACK NETWORKS INC.\n\n                           1999 STOCK INCENTIVE PLAN\n\n                    (AS ADOPTED EFFECTIVE _______ __, 1999)\n\n\n\n                                TABLE OF CONTENTS\n\n\n\n\n                                                                                               Page\n                                                                                            \nARTICLE 1.  INTRODUCTION.....................................................................    1\n                                                                                                 \nARTICLE 2.  ADMINISTRATION...................................................................    1\n        2.1  Committee Composition...........................................................    1\n        2.2  Committee Responsibilities......................................................    1\n        2.3  Committee for Non-Officer Grants................................................    1\n                                                                                                 \nARTICLE 3.  SHARES AVAILABLE FOR GRANTS......................................................    2\n        3.1  Basic Limitation................................................................    2\n        3.2  Annual Increase in Shares.......................................................    2\n        3.3  Additional Shares...............................................................    2\n                                                                                                 \nARTICLE 4.  ELIGIBILITY......................................................................    2\n        4.1  Nonstatutory Stock Options and Restricted Shares................................    2\n        4.2  Incentive Stock Options.........................................................    2\n                                                                                                 \nARTICLE 5.  OPTIONS..........................................................................    3\n        5.1  Stock Option Agreement..........................................................    3\n        5.2  Number of Shares................................................................    3\n        5.3  Exercise Price..................................................................    3\n        5.4  Exercisability and Term.........................................................    3\n        5.5  Effect of Change in Control.....................................................    3\n        5.6  Modification or Assumption of Options...........................................    4\n        5.7  Buyout Provisions...............................................................    4\n        5.8  Salary Reduction Option Grants..................................................    4\n                                                                                                 \nARTICLE 6.  PAYMENT FOR OPTION SHARES........................................................    4\n        6.1  General Rule....................................................................    4\n        6.2  Surrender of Stock..............................................................    5\n        6.3  Exercise\/Sale...................................................................    5\n        6.4  Exercise\/Pledge.................................................................    5\n        6.5  Promissory Note.................................................................    5\n        6.6  Other Forms of Payment..........................................................    5\n                                                                                                 \nARTICLE 7.  RESTRICTED SHARES................................................................    5\n        7.1  Restricted Stock Agreement......................................................    5\n        7.2  Payment for Awards..............................................................    5\n        7.3  Vesting Conditions..............................................................    6\n        7.4  Voting and Dividend Rights......................................................    6\n\nARTICLE 8.  PROTECTION AGAINST DILUTION......................................................    6\n        8.1  Adjustments.....................................................................    6\n\n\n\n                                       i\n\n\n\n\n<font size=\"2\">\n                                                                                               Page\n                                                                                            \n        8.2  Dissolution or Liquidation......................................................    6\n        8.3  Reorganizations.................................................................    7\n                                                                                                 \nARTICLE 9.  DEFERRAL OF DELIVERY OF SHARES...................................................    7\n                                                                                                 \nARTICLE 10.  AWARDS UNDER OTHER PLANS........................................................    7\n                                                                                                 \nARTICLE 11.  LIMITATION ON RIGHTS............................................................    7\n        11.1  Retention Rights...............................................................    7\n        11.2  Stockholders' Rights...........................................................    7\n        11.3  Regulatory Requirements........................................................    8\n                                                                                                 \nARTICLE 12.  WITHHOLDING TAXES...............................................................    8\n        12.1  General........................................................................    8\n        12.2  Share Withholding..............................................................    8\n                                                                                                 \nARTICLE 13.  LIMITATION ON PAYMENTS..........................................................    8\n        13.1  Scope of Limitation............................................................    8\n        13.2  Basic Rule.....................................................................    9\n        13.3  Reduction of Payments..........................................................    9\n        13.4  Overpayments and Underpayments.................................................    9\n        13.5  Related Corporations...........................................................   10\n                                                                                                 \nARTICLE 14.  FUTURE OF THE PLAN..............................................................   10\n        14.1  Term of the Plan...............................................................   10\n        14.2  Amendment or Termination.......................................................   10\n                                                                                                 \nARTICLE 15.  DEFINITIONS.....................................................................   10\n                                                                                                 \nARTICLE 16.  EXECUTION.......................................................................   13\n<\/font>\n\n\n                                       ii\n\n\n\n                              REDBACK NETWORKS INC.\n                            1999 STOCK INCENTIVE 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 Employees, Outside Directors and Consultants to focus on critical\nlong-range objectives, (b) encouraging the attraction and retention of\nEmployees, Outside Directors and Consultants with exceptional qualifications and\n(c) linking Employees, Outside Directors and Consultants directly to stockholder\ninterests through increased stock ownership. The Plan seeks to achieve this\npurpose by providing for Awards in the form of Restricted Shares or Options\n(which may constitute incentive stock options or nonstatutory stock options).\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:\n\n                (a) Such requirements as the Securities and Exchange Commission\n        may establish for administrators acting under plans intended to qualify\n        for exemption under Rule 16b-3 (or its successor) under the Exchange\n        Act; and\n\n                (b) Such requirements as the Internal Revenue Service may\n        establish for outside directors acting under plans intended to qualify\n        for exemption under section 162(m)(4)(C) of the Code.\n\n        2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the\nEmployees, Outside Directors and Consultants who are to receive Awards under the\nPlan, (b) determine the type, number, vesting requirements and other features\nand conditions of such Awards, (c) interpret the Plan and (d) make all other\ndecisions relating to the operation of the Plan. The Committee may adopt such\nrules or guidelines as it deems appropriate to implement the Plan. The\nCommittee's determinations under the Plan shall be final and binding on all\npersons.\n\n        2.3 COMMITTEE FOR NON-OFFICER GRANTS. The Board may also appoint a\nsecondary committee of the Board, which shall be composed of one or more\ndirectors of the Company who need not satisfy the requirements of Section 2.1.\nSuch secondary committee may administer the Plan with respect to Employees and\nConsultants who are not considered officers or directors of\n\n\n\nthe Company under section 16 of the Exchange Act, may grant Awards under the\nPlan to such Employees and Consultants and may determine all features and\nconditions of such Awards. Within the limitations of this Section 2.3, any\nreference in the Plan to the Committee shall include such secondary committee.\n\n\n        ARTICLE 3. SHARES AVAILABLE FOR GRANTS.\n\n        3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be\nauthorized but unissued shares or treasury shares. The aggregate number of\nOptions and Restricted Shares awarded under the Plan shall not exceed (a)\n2,500,000 plus (b) the aggregate number of Common Shares remaining available for\ngrants under the Predecessor Plan on the date of the Company's initial public\noffering plus (c) the additional Common Shares described in Sections 3.2 and\n3.3. No additional grants shall be made under the Predecessor Plan after the\ndate of the Company's initial public offering. The limitations of this Section\n3.1 and Section 3.2 shall be subject to adjustment pursuant to Article 8.\n\n        3.2 ANNUAL INCREASE IN SHARES. As of January 1 of each year, commencing\nwith the year 2000, the aggregate number of Options and Restricted Shares that\nmay be awarded under the Plan shall automatically increase by a number equal to\nthe lesser of (a) five percent of the total number of Common Shares then\noutstanding or (b) 1,500,000.\n\n        3.3 ADDITIONAL SHARES. If Options granted under this Plan or the\nPredecessor Plan are forfeited or terminate for any other reason before being\nexercised, then the corresponding Common Shares shall again become available for\nthe grant of Options or Restricted Shares under this Plan. If Common Shares\nissued upon the exercise of Options granted under this Plan or the Predecessor\nPlan are forfeited, then such Common Shares shall again become available for the\ngrant of NSOs and Restricted Shares under this Plan. If Restricted Shares issued\nunder this Plan or the Predecessor Plan are forfeited, then the corresponding\nCommon Shares shall again become available for the grant of NSOs and Restricted\nShares under this Plan. The aggregate number of Common Shares that may be issued\nunder the Plan upon the exercise of ISOs shall not be increased when Restricted\nShares or other Common Shares are forfeited.\n\n\n        ARTICLE 4. ELIGIBILITY.\n\n        4.1 NONSTATUTORY STOCK OPTIONS AND RESTRICTED SHARES. Only Employees,\nOutside Directors and Consultants shall be eligible for the grant of NSOs and\nRestricted Shares.\n\n        4.2 INCENTIVE STOCK OPTIONS. Only Employees who are common-law employees\nof the Company, a Parent or a Subsidiary shall be eligible for the grant of\nISOs. In addition, an Employee who owns more than 10% of the total combined\nvoting power of all classes of outstanding stock of the Company or any of its\nParents or Subsidiaries shall not be eligible for the grant of an ISO unless the\nrequirements set forth in section 422(c)(6) of the Code are satisfied.\n\n\n                                       2\n\n\n\n        ARTICLE 5. OPTIONS.\n\n        5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall\nbe evidenced by a Stock Option Agreement between the Optionee and the Company.\nSuch Option shall be subject to all applicable terms of the Plan and may be\nsubject to any other terms that are not inconsistent with the Plan. The\nprovisions of the various Stock Option Agreements entered into under the Plan\nneed not be identical. A Stock Option Agreement may provide that a new Option\nwill be granted automatically to the Optionee when he or she exercises a prior\nOption and pays the Exercise Price in the form described in Section 6.2.\n\n        5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the\nnumber of Common Shares subject to the Option and shall provide for the\nadjustment of such number in accordance with Article 8. Options granted to any\nOptionee in a single fiscal year of the Company shall not cover more than one\nmillion Common Shares, except that Options granted to a new Employee in the\nfiscal year of the Company in which his or her service as an Employee first\ncommences shall not cover more than two million Common Shares. The limitations\nset forth in the preceding sentence shall be subject to adjustment in accordance\nwith Article 8.\n\n        5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the\nExercise Price; provided that the Exercise Price under an ISO shall in no event\nbe less than 100% of the Fair Market Value of a Common Share on the date of\ngrant and the Exercise Price under an NSO shall in no event be less than 30% of\nthe Fair Market Value of a Common Share on the date of grant. In the case of an\nNSO, a Stock Option Agreement may specify an Exercise Price that varies in\naccordance with a predetermined formula while the NSO is outstanding.\n\n        5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify\nthe date or event when all or any installment of the Option is to become\nexercisable. The Stock Option Agreement shall also specify the term of the\nOption; provided that the term of an ISO shall in no event exceed 10 years from\nthe date of grant. A Stock Option Agreement may provide for accelerated\nexercisability in the event of the Optionee's death, disability or retirement or\nother events and may provide for expiration prior to the end of its term in the\nevent of the termination of the Optionee's service.\n\n        5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the\ntime of granting an Option or thereafter, that such Option shall become\nexercisable as to all or part of the Common Shares subject to such Option in the\nevent that a Change in Control occurs with respect to the Company, subject to\nthe following limitations:\n\n                (a) In the case of an ISO, the acceleration of exercisability\n        shall not occur without the Optionee's written consent.\n\n                (b) If the Company and the other party to the transaction\n        constituting a Change in Control agree that such transaction is to be\n        treated as a 'pooling of interests' for financial reporting purposes,\n        and if such transaction in fact is so treated, then the acceleration of\n        exercisability shall not occur to the extent that the Company's\n        independent accountants and such other party's \n\n\n                                       3\n\n\n\n        independent accountants separately determine in good faith that such\n        acceleration would preclude the use of 'pooling of interests'\n        accounting.\n\nIn addition, acceleration of exercisability may be required under Section 8.3.\n\n        5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the\nPlan, the Committee may modify, extend or assume outstanding options or may\naccept the cancellation of outstanding options (whether granted by the Company\nor by another issuer) in return for the grant of new options for the same or a\ndifferent number of shares and at the same or a different exercise price. The\nforegoing notwithstanding, no modification of an Option shall, without the\nconsent of the Optionee, alter or impair his or her rights or obligations under\nsuch Option.\n\n        5.7 BUYOUT PROVISIONS. The Committee may at any time (a) offer to buy\nout for a payment in cash or cash equivalents an Option previously granted or\n(b) authorize an Optionee to elect to cash out an Option previously granted, in\neither case at such time and based upon such terms and conditions as the\nCommittee shall establish.\n\n        5.8 SALARY REDUCTION OPTION GRANTS. The Committee, at its sole\ndiscretion, may offer one or more Employees, Outside Directors and Consultants\nan opportunity to receive NSOs in consideration of a voluntary reduction in\ntheir cash compensation from the Company, a Parent or a Subsidiary. The\nCommittee shall determine the maximum and minimum amounts of the reduction that\nan Employee, Outside Director or Consultant may elect. If an Employee, Outside\nDirector or Consultant designated by the Committee wishes to receive NSOs under\nthis Section 5.8, then he or she shall file a written and irrevocable election\nwith the Company prior to the close of a calendar year. Such election shall\nspecify the dollar amount by which the compensation of the Employee, Outside\nDirector or Consultant shall be reduced during the next following calendar year\n(within the limitations prescribed by the Committee). On the first trading day\nof the calendar year next following the receipt of an election by the Company,\nthe Employee, Outside Director or Consultant who filed such election shall\nautomatically receive an NSO. Such NSO shall cover a number of Common Shares\nequal to (a) the amount of the compensation reduction elected by the Optionee\ndivided by (b) two-thirds of the Fair Market Value of one Common Share on the\ndate of grant. The Exercise Price of such NSO shall be equal to one-third of the\nFair Market Value of one Common Share on the date of grant. Such NSO shall\nbecome exercisable in 12 equal monthly installments over the calendar year in\nwhich the grant occurred, but no portion of such NSO shall become exercisable\nafter the Optionee's service has terminated for any reason. The term of such NSO\nshall be 10 calendar years, commencing with the calendar year in which the grant\noccurred (regardless of whether the Optionee's service has terminated). Except\nas provided in this Section 5.8, the NSOs granted under this Section 5.8 shall\nbe subject to the provisions applicable to other NSOs granted under the Plan.\n\n\n        ARTICLE 6. PAYMENT FOR OPTION SHARES.\n\n        6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon\nexercise of Options shall be payable in cash or cash equivalents at the time\nwhen such Common Shares are purchased, except as follows:\n\n\n                                       4\n\n\n\n                (a) In the case of an ISO granted under the Plan, payment shall\n        be made only pursuant to the express provisions of the applicable Stock\n        Option Agreement. The Stock Option Agreement may specify that payment\n        may be made in any form(s) described in this Article 6.\n\n                (b) In the case of an NSO, the Committee may at any time accept\n        payment in any form(s) described in this Article 6.\n\n        6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is\napplicable, all or any part of the Exercise Price may be paid by surrendering,\nor attesting to the ownership of, Common Shares that are already owned by the\nOptionee. Such Common Shares shall be valued at their Fair Market Value on the\ndate when the new Common Shares are purchased under the Plan. The Optionee shall\nnot surrender, or attest to the ownership of, Common Shares in payment of the\nExercise Price if such action would cause the Company to recognize compensation\nexpense (or additional compensation expense) with respect to the Option for\nfinancial reporting purposes.\n\n        6.3 EXERCISE\/SALE. To the extent that this Section 6.3 is applicable,\nall or any part of the Exercise Price and any withholding taxes may be paid by\ndelivering (on a form prescribed by the Company) an irrevocable direction to a\nsecurities broker approved by the Company to sell all or part of the Common\nShares being purchased under the Plan and to deliver all or part of the sales\nproceeds to the Company.\n\n        6.4 EXERCISE\/PLEDGE. To the extent that this Section 6.4 is applicable,\nall or any part of the Exercise Price and any withholding taxes may be paid by\ndelivering (on a form prescribed by the Company) an irrevocable direction to\npledge all or part of the Common Shares being purchased under the Plan to a\nsecurities broker or lender approved by the Company, as security for a loan, and\nto deliver all or part of the loan proceeds to the Company.\n\n        6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,\nall or any part of the Exercise Price and any withholding taxes may be paid by\ndelivering (on a form prescribed by the Company) a full-recourse promissory\nnote. However, the par value of the Common Shares being purchased under the\nPlan, if newly issued, shall be paid in cash or cash equivalents.\n\n        6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is\napplicable, all or any part of the Exercise Price and any withholding taxes may\nbe paid in any other form that is consistent with applicable laws, regulations\nand rules.\n\n\n        ARTICLE 7. RESTRICTED SHARES.\n\n        7.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted Shares under\nthe Plan shall be evidenced by a Restricted Stock Agreement between the\nrecipient and the Company. Such Restricted Shares shall be subject to all\napplicable terms of the Plan and may be subject to any other terms that are not\ninconsistent with the Plan. The provisions of the various Restricted Stock\nAgreements entered into under the Plan need not be identical.\n\n        7.2 PAYMENT FOR AWARDS. Subject to the following sentence, Restricted\nShares may be sold or awarded under the Plan for such consideration as the\nCommittee may determine, \n\n\n                                       5\n\n\n\nincluding (without limitation) cash, cash equivalents, full-recourse promissory\nnotes, past services and future services. To the extent that an Award consists\nof newly issued Restricted Shares, the consideration shall consist exclusively\nof cash, cash equivalents or past services rendered to the Company (or a Parent\nor Subsidiary) or, for the amount in excess of the par value of such newly\nissued Restricted Shares, full-recourse promissory notes, as the Committee may\ndetermine.\n\n        7.3 VESTING CONDITIONS. Each Award of Restricted Shares may or may not\nbe subject to vesting. Vesting shall occur, in full or in installments, upon\nsatisfaction of the conditions specified in the Restricted Stock Agreement. A\nRestricted Stock Agreement may provide for accelerated vesting in the event of\nthe Participant's death, disability or retirement or other events. The Committee\nmay determine, at the time of granting Restricted Shares or thereafter, that all\nor part of such Restricted Shares shall become vested in the event that a Change\nin Control occurs with respect to the Company, except as provided in the next\nfollowing sentence. If the Company and the other party to the transaction\nconstituting a Change in Control agree that such transaction is to be treated as\na 'pooling of interests' for financial reporting purposes, and if such\ntransaction in fact is so treated, then the acceleration of vesting shall not\noccur to the extent that the Company's independent accountants and such other\nparty's independent accountants separately determine in good faith that such\nacceleration would preclude the use of 'pooling of interests' accounting.\n\n        7.4 VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares awarded\nunder the Plan shall have the same voting, dividend and other rights as the\nCompany's other stockholders. A Restricted Stock Agreement, however, may require\nthat the holders of Restricted Shares invest any cash dividends received in\nadditional Restricted Shares. Such additional Restricted Shares shall be subject\nto the same conditions and restrictions as the Award with respect to which the\ndividends were paid.\n\n\n        ARTICLE 8. PROTECTION AGAINST DILUTION.\n\n        8.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common\nShares, a declaration of a dividend payable in Common Shares, a declaration of a\ndividend payable in a form other than Common Shares in an amount that has a\nmaterial effect on the price of Common Shares, a combination or consolidation of\nthe outstanding Common Shares (by reclassification or otherwise) into a lesser\nnumber of Common Shares, a recapitalization, a spin-off or a similar occurrence,\nthe Committee shall make such adjustments as it, in its sole discretion, deems\nappropriate in one or more of (a) the number of Options and Restricted Shares\navailable for future Awards under Article 3, (b) the limitations set forth in\nSection 5.2, (c) the number of Common Shares covered by each outstanding Option\nor (d) the Exercise Price under each outstanding Option. Except as provided in\nthis Article 8, a Participant shall have no rights by reason of any issue by the\nCompany of stock of any class or securities convertible into stock of any class,\nany subdivision or consolidation of shares of stock of any class, the payment of\nany stock dividend or any other increase or decrease in the number of shares of\nstock of any class.\n\n        8.2 DISSOLUTION OR LIQUIDATION. To the extent not previously exercised,\nOptions shall terminate immediately prior to the dissolution or liquidation of\nthe Company.\n\n\n                                       6\n\n\n\n        8.3 REORGANIZATIONS. In the event that the Company is a party to a\nmerger or other reorganization, outstanding Options and Restricted Shares shall\nbe subject to the agreement of merger or reorganization. Such agreement shall\nprovide for (a) the continuation of the outstanding Awards by the Company, if\nthe Company is a surviving corporation, (b) the assumption of the outstanding\nAwards by the surviving corporation or its parent or subsidiary, (c) the\nsubstitution by the surviving corporation or its parent or subsidiary of its own\nawards for the outstanding Awards, (d) full exercisability or vesting and\naccelerated expiration of the outstanding Awards or (e) settlement of the full\nvalue of the outstanding Awards in cash or cash equivalents followed by\ncancellation of such Awards.\n\n\n        ARTICLE 9. DEFERRAL OF DELIVERY OF SHARES.\n\n               The Committee (in its sole discretion) may permit or require an\nOptionee to have Common Shares that otherwise would be delivered to such\nOptionee as a result of the exercise of an Option converted into amounts\ncredited to a deferred compensation account established for such Optionee by the\nCommittee as an entry on the Company's books. Such amounts shall be determined\nby reference to the Fair Market Value of such Common Shares as of the date when\nthey otherwise would have been delivered to such Optionee. A deferred\ncompensation account established under this Article 9 may be credited with\ninterest or other forms of investment return, as determined by the Committee. An\nOptionee for whom such an account is established shall have no rights other than\nthose of a general creditor of the Company. Such an account shall represent an\nunfunded and unsecured obligation of the Company and shall be subject to the\nterms and conditions of the applicable agreement between such Optionee and the\nCompany. If the conversion of Options is permitted or required, the Committee\n(in its sole discretion) may establish rules, procedures and forms pertaining to\nsuch conversion, including (without limitation) the settlement of deferred\ncompensation accounts established under this Article 9.\n\n\n        ARTICLE 10. AWARDS UNDER OTHER PLANS.\n\n               The Company may grant awards under other plans or programs. Such\nawards may be settled in the form of Common Shares issued under this Plan. Such\nCommon Shares shall be treated for all purposes under the Plan like Restricted\nShares and shall, when issued, reduce the number of Common Shares available\nunder Article 3.\n\n\n        ARTICLE 11. LIMITATION ON RIGHTS.\n\n        11.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the\nPlan shall be deemed to give any individual a right to remain an Employee,\nOutside Director or Consultant. The Company and its Parents, Subsidiaries and\nAffiliates reserve the right to terminate the service of any Employee, Outside\nDirector or Consultant at any time, with or without cause, subject to applicable\nlaws, the Company's certificate of incorporation and by-laws and a written\nemployment agreement (if any).\n\n        11.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,\nvoting rights or other rights as a stockholder with respect to any Common Shares\ncovered by his or her Award prior to the time when a stock certificate for such\nCommon Shares is issued or, in the case of an \n\n\n                                       7\n\n\n\nOption, the time when he or she becomes entitled to receive such Common Shares\nby filing a notice of exercise and paying the Exercise Price. No adjustment\nshall be made for cash dividends or other rights for which the record date is\nprior to such time, except as expressly provided in the Plan.\n\n        11.3 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 Award prior to the satisfaction of all legal requirements relating to the\nissuance of such Common Shares, to their registration, qualification or listing\nor to an exemption from registration, qualification or listing.\n\n\n        ARTICLE 12. WITHHOLDING TAXES.\n\n        12.1 GENERAL. To the extent required by applicable federal, state, local\nor foreign law, a Participant or his or her successor shall make arrangements\nsatisfactory to the Company for the satisfaction of any withholding tax\nobligations 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        12.2 SHARE WITHHOLDING. The Committee may permit a Participant to\nsatisfy all or part of his or her withholding or income tax obligations by\nhaving the Company withhold all or a portion of any Common Shares that otherwise\nwould be issued to him or her or by surrendering all or a portion of any Common\nShares that he or she previously acquired. Such Common Shares shall be valued at\ntheir Fair Market Value on the date when they are withheld or surrendered.\n\n\n        ARTICLE 13. LIMITATION ON PAYMENTS.\n\n        13.1 SCOPE OF LIMITATION. This Article 13 shall apply to an Award only\nif:\n\n                (a) The independent auditors most recently selected by the Board\n        (the 'Auditors') determine that the after-tax value of such Award to the\n        Participant, taking into account the effect of all federal, state and\n        local income taxes, employment taxes and excise taxes applicable to the\n        Participant (including the excise tax under section 4999 of the Code),\n        will be greater after the application of this Article 13 than it was\n        before the application of this Article 13; or\n\n                (b) The Committee, at the time of making an Award under the Plan\n        or at any time thereafter, specifies in writing that such Award shall be\n        subject to this Article 13 (regardless of the after-tax value of such\n        Award to the Participant).\n\nIf this Article 13 applies to an Award, it shall supersede any contrary\nprovision of the Plan or of any Award granted under the Plan.\n\n\n                                       8\n\n\n\n        13.2 BASIC RULE. In the event that the Auditors determine that any\npayment or transfer by the Company under the Plan to or for the benefit of a\nParticipant (a 'Payment') would be nondeductible by the Company for federal\nincome tax purposes because of the provisions concerning 'excess parachute\npayments' in section 280G of the Code, then the aggregate present value of all\nPayments shall be reduced (but not below zero) to the Reduced Amount. For\npurposes of this Article 13, the 'Reduced Amount' shall be the amount, expressed\nas a present value, which maximizes the aggregate present value of the Payments\nwithout causing any Payment to be nondeductible by the Company because of\nsection 280G of the Code.\n\n        13.3 REDUCTION OF PAYMENTS. If the Auditors determine that any Payment\nwould be nondeductible by the Company because of section 280G of the Code, then\nthe Company shall promptly give the Participant notice to that effect and a copy\nof the detailed calculation thereof and of the Reduced Amount, and the\nParticipant may then elect, in his or her sole discretion, which and how much of\nthe Payments shall be eliminated or reduced (as long as after such election the\naggregate present value of the Payments equals the Reduced Amount) and shall\nadvise the Company in writing of his or her election within 10 days of receipt\nof notice. If no such election is made by the Participant within such 10-day\nperiod, then the Company may elect which and how much of the Payments shall be\neliminated or reduced (as long as after such election the aggregate present\nvalue of the Payments equals the Reduced Amount) and shall notify the\nParticipant promptly of such election. For purposes of this Article 13, present\nvalue shall be determined in accordance with section 280G(d)(4) of the Code. All\ndeterminations made by the Auditors under this Article 13 shall be binding upon\nthe Company and the Participant and shall be made within 60 days of the date\nwhen a Payment becomes payable or transferable. As promptly as practicable\nfollowing such determination and the elections hereunder, the Company shall pay\nor transfer to or for the benefit of the Participant such amounts as are then\ndue to him or her under the Plan and shall promptly pay or transfer to or for\nthe benefit of the Participant in the future such amounts as become due to him\nor her under the Plan.\n\n        13.4 OVERPAYMENTS AND UNDERPAYMENTS. As a result of uncertainty in the\napplication of section 280G of the Code at the time of an initial determination\nby the Auditors hereunder, it is possible that Payments will have been made by\nthe Company which should not have been made (an 'Overpayment') or that\nadditional Payments which will not have been made by the Company could have been\nmade (an 'Underpayment'), consistent in each case with the calculation of the\nReduced Amount hereunder. In the event that the Auditors, based upon the\nassertion of a deficiency by the Internal Revenue Service against the Company or\nthe Participant which the Auditors believe has a high probability of success,\ndetermine that an Overpayment has been made, such Overpayment shall be treated\nfor all purposes as a loan to the Participant which he or she shall repay to the\nCompany, together with interest at the applicable federal rate provided in\nsection 7872(f)(2) of the Code; provided, however, that no amount shall be\npayable by the Participant to the Company if and to the extent that such payment\nwould not reduce the amount which is subject to taxation under section 4999 of\nthe Code. In the event that the Auditors determine that an Underpayment has\noccurred, such Underpayment shall promptly be paid or transferred by the Company\nto or for the benefit of the Participant, together with interest at the\napplicable federal rate provided in section 7872(f)(2) of the Code.\n\n\n                                       9\n\n\n\n        13.5 RELATED CORPORATIONS. For purposes of this Article 13, the term\n'Company' shall include affiliated corporations to the extent determined by the\nAuditors in accordance with section 280G(d)(5) of the Code.\n\n\n        ARTICLE 14. FUTURE OF THE PLAN.\n\n        14.1 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 14.2, except that no ISOs\nshall be granted on or after the 10th anniversary of the later of (a) the date\nwhen the Board adopted the Plan or (b) the date when the Board adopted the most\nrecent increase in the number of Common Shares available under Article 3 which\nwas approved by the Company's stockholders.\n\n        14.2 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 Awards shall be granted under the Plan\nafter the termination thereof. The termination of the Plan, or any amendment\nthereof, shall not affect any Award previously granted under the Plan.\n\n\n        ARTICLE 15. DEFINITIONS.\n\n        15.1 'AFFILIATE' means any entity other than a Subsidiary, if the\nCompany and\/or one or more Subsidiaries own not less than 50% of such entity.\n\n        15.2 'AWARD' means any award of an Option or a Restricted Share under\nthe Plan.\n\n        15.3 'BOARD' means the Company's Board of Directors, as constituted from\ntime to time.\n\n        15.4 'CHANGE IN CONTROL' shall mean:\n\n                (a) The consummation of a merger or consolidation of the Company\n        with or into another entity or any other corporate reorganization, if\n        persons who were not stockholders of the Company immediately prior to\n        such merger, consolidation or other reorganization own immediately after\n        such merger, consolidation or other reorganization 50% or more of the\n        voting power of the outstanding securities of each of (i) the continuing\n        or surviving entity and (ii) any direct or indirect parent corporation\n        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 of\n        which 50% or fewer of the incumbent directors are directors who either\n        (i) had been directors of the Company on the date 24 months prior to the\n        date of the event that may constitute a Change in Control (the 'original\n        directors') or (ii) were elected, or nominated for election, to the\n        Board with the affirmative votes of at \n\n\n                                       10\n\n\n\n        least a majority of the aggregate of the original directors who were\n        still in office at the time of the election or nomination and the\n        directors whose election or 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 indirectly, of securities of the Company representing at\n        least 50% of the total voting power represented by the Company's then\n        outstanding voting securities. For purposes of this Subsection (d), the\n        term 'person' shall have the same meaning as when used in sections 13(d)\n        and 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        15.5 'CODE' means the Internal Revenue Code of 1986, as amended.\n\n        15.6 'COMMITTEE' means the compensation committee of the Board, as\ndescribed in Article 2.\n\n        15.7 'COMMON SHARE' means one share of the common stock of the Company.\n\n        15.8 'COMPANY' means Redback Networks Inc., a Delaware corporation.\n\n        15.9 'CONSULTANT' means a consultant or adviser who provides bona fide\nservices to the Company, a Parent, a Subsidiary or an Affiliate as an\nindependent contractor. Service as a Consultant shall be considered employment\nfor all purposes of the Plan, except as provided in Section 4.2.\n\n        15.10 'EMPLOYEE' means a common-law employee of the Company, a Parent, a\nSubsidiary or an Affiliate.\n\n        15.11 'EXCHANGE ACT' means the Securities Exchange Act of 1934, as\namended.\n\n        15.12 '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        15.13 'FAIR MARKET VALUE' means the market price of Common Shares,\ndetermined by the Committee in good faith on such basis as it deems appropriate.\nWhenever possible, the determination of Fair Market Value by the Committee shall\nbe based on the prices reported in The Wall Street Journal. Such determination\nshall be conclusive and binding on all persons.\n\n        15.14 'ISO' means an incentive stock option described in section 422(b)\nof the Code.\n\n\n                                       11\n\n\n\n        15.15 'NSO' means a stock option not described in sections 422 or 423 of\nthe Code.\n\n        15.16 'OPTION' means an ISO or NSO granted under the Plan and entitling\nthe holder to purchase Common Shares.\n\n        15.17 'OPTIONEE' means an individual or estate who holds an Option.\n\n        15.18 'OUTSIDE DIRECTOR' shall mean a member of the Board who is not an\nEmployee. Service as an Outside Director shall be considered employment for all\npurposes of the Plan, except as provided in Section 4.2.\n\n        15.19 '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 owns stock possessing 50% or more of the\ntotal combined voting power of all classes of stock in one of the other\ncorporations in such chain. A corporation that attains the status of a Parent on\na date after the adoption of the Plan shall be considered a Parent commencing as\nof such date.\n\n        15.20 'PARTICIPANT' means an individual or estate who holds an Award.\n\n        15.21 'PREDECESSOR PLAN' means the Redback Networks Inc. 1997 Stock\nPlan.\n\n        15.22 'PLAN' means this Redback Networks Inc. 1999 Stock Incentive Plan,\nas amended from time to time.\n\n        15.23 'RESTRICTED SHARE' means a Common Share awarded under the Plan.\n\n        15.24 'RESTRICTED STOCK AGREEMENT' means the agreement between the\nCompany and the recipient of a Restricted Share that contains the terms,\nconditions and restrictions pertaining to such Restricted Share.\n\n        15.25 '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        15.26 '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                                       12\n\n\n\n        ARTICLE 16. 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                                       13\n\n\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":[9539,9545],"class_list":["post-38362","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-redback-networks-inc","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38362","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=38362"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38362"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38362"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}