##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 (Amendment No. 1)
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to          .
 Commission File Number 001-34017
 PACKETEER, INC.
 (Exact name of Registrant as specified in its charter)
 DELAWARE
    
    77-0420107(State of incorporation)
    
    (I.R.S. EmployerIdentification No.)
 10201 NORTH DE ANZA BLVD.
CUPERTINO, CALIFORNIA 95014  (Address of principal executive offices)
 Registrants telephone number, including area code:
(408) 873-4400
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $0.001 Par Value
    
    The Nasdaq Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act:
None
 o þ
 o þ
 þ o
 o
  Large accelerated filer  o
    

Accelerated filer þ
    

Non-accelerated filer o
    

Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  EXPLANATORY NOTE
  
    
    To include information required by Part III;
    
    To include an exhibit that was inadvertently omitted (the Omitted Exhibit) from our
Annual Report on Form 10-K filed on March 4, 2008; and
    
    In connection with the filing of this Amendment and pursuant to the rules of the
Securities and Exchange Commission, to include with this Amendment certain currently
dated certifications. Accordingly, Item 15 of Part IV has also been amended to reflect
the filing of the Omitted Exhibit and these currently dated certifications.




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##### 



TABLE OF CONTENTS
 PART III
    
    
    3Item 10. Directors and Executive Officers of the Registrant
    
    
    3Item 11. Executive Compensation
    
    
    10Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    29Item 13. Certain Relationships and Related Transactions
    
    
    32Item 14. Principal Accountant Fees and Services
    
    
    32PART IV
    
    
    32Item 15. Exhibits and Financial Statement Schedules
    
    
    33Signatures
    
    
    34EXHIBIT 10.25EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  2




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PART III
 
 Item 10. Directors and Executive Officers of the Registrant
  Name
    
    Age
    
    TitleDave Côté
    
    
    53
    
    
    President, Chief Executive Officer and DirectorManuel R. Freitas
    
    
    59
    
    
    Vice President, Operations and Customer SupportNelu Mihai
    
    
    52
    
    
    Vice President, EngineeringGreg Pappas
    
    
    45
    
    
    Vice President, Human ResourcesRay Smets
    
    
    44
    
    
    Vice President, Worldwide Sales and MarketingDavid A. Winikoff
    
    
    50
    
    
    Vice President, Product ManagementDavid C. Yntema
    
    
    63
    
    
    Chief Financial Officer and SecretarySteven J. Campbell
    
    
    66
    
    
    Chairmen of the Board of DirectorsCraig W. Elliot
    
    
    47
    
    
    DirectorJoseph A. Graziano
    
    
    64
    
    
    DirectorL. William Krause
    
    
    65
    
    
    DirectorBernard F. (Bud) Mathaisel
    
    
    63
    
    
    DirectorPeter Van Camp
    
    
    52
    
    
    DirectorGregory E. Myers
    
    
    57
    
    
    Director
 Executive Officers
 Dave Côté
 Manuel R. Freitas
 3




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Nelu Mihai
 Greg Pappas
 Ray Smets
 David A. Winikoff
 David C. Yntema
  Non-Management Directors
 Directors whose terms expire at the 2008 Annual Meeting of Stockholders
 Steven J. Campbell
 4




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Craig W. Elliott
 Joseph A. Graziano
 Directors whose terms expire at the 2009 Annual Meeting of Stockholders
 L. William Krause
 Bernard F. (Bud) Mathaisel
 Peter Van Camp
 Directors whose terms expire at the 2010 Annual Meeting of Stockholders
 Gregory E. Myers
 5




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CORPORATE GOVERNANCE
 Director Independence
  http://www.packeteer.com/company/investors/corpgov.cfm.
 Director Attendance at Meetings
   Committees of the Board of Directors
 Nominatingand CorporateName of Director
    
    Audit
    
    Compensation
    
    GovernanceDave CôtéSteven J. Campbell
    
    MemberCraig W. Elliott
    
    
    
    Member (1)Joseph A. Graziano
    
    Chairman and
    
    
    
    MemberFinancial ExpertL. William Krause
    
    
    
    Chairman
    
    ChairmanBernard F. (Bud) Mathaisel
    
    MemberGregory E. Myers
    
    MemberPeter Van Camp
    
    
    
    MemberNumber of Meetings:
    
    5
    
    13
    
    3
 
 (1)
    
    Mr. Elliott resigned as a member of the Compensation Committee on
January 4, 2007 and rejoined the Compensation Committee on October 18,
2007. Director Attendance at Annual Meetings of Stockholders
  Board Committees
 Audit Committee. http://www.packeteer.com/company/investors/corpgov.cfm.
 6




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Compensation Committee. http://www.packeteer.com/company/investors/corpgov.cfm.
      7




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Corporate Governance and Nominating Committee. http://www.packeteer.com/company/investors/corpgov.cfm.
 Director Nominations
     8




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Communications with Directors
 dyntema@packeteer.com
 Code of Business Conduct and Ethics
 http://www.packeteer.com/company/investors/corpgov.cfm.
 Corporate Governance Principles
 http://www.packeteer.com/company/investors/corpgov.cfm.
 Compensation Committee Interlocks and Insider Participation
    SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
   REPORT OF THE AUDIT COMMITTEE
   Review with Management
  Review and Discussions with Independent Registered Public Accounting Firm
   Conclusion
  
 9




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Item 11. Executive Compensation
 Compensation Discussion and Analysis
 Overview
  Philosophy and Objectives
   Compensation Process
  Role of the Compensation Consultant
  Role of Management
  Performance Review Process
  10




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Competitive Market Study
  Blue Coat Systems
    
    MRV Communications
    
    Secure ComputingExtreme Networks
    
    NetScout Systems
    
    Sierra WirelessF5 Networks
    
    Novatel Wireless
    
    SonicWALLFoundry Networks
    
    Riverbed Technology
    
    Websense
  Compensation Elements
  Compensation Mix
  11




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(PIE CHART)
 Base Salary
  Short Term Incentive Compensation
 Semi-Annual Awards
   12




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2007 Base
    
    
    
    
    
    2007 AnnualSalary
    
    2007
    
    Target
    
    2007 AnnualRate
    
    Target
    
    Incentive
    
    Incentive(Annualized)
    
    Incentive
    
    Amount
    
    Award EarnedOfficer Name
    
    Position
    
    ($)
    
    Rate
    
    ($)
    
    ($)(1)Dave Côté
    
    CEO & President
    
    
    415,000
    
    
    
    100
    %
    
    
    415,000
    
    
    
    205,675David C. Yntema
    
    Chief FinancialOfficer
    
    
    290,000
    
    
    
    50
    %
    
    
    145,000
    
    
    
    71,862Manuel R. Freitas
    
    VP Operations andCustomer Support
    
    
    235,000
    
    
    
    40
    %
    
    
    94,000
    
    
    
    46,587Nelu Mihai
    
    VP Engineering
    
    
    250,000
    
    
    
    50
    %
    
    
    125,000
    
    
    
    61,950Greg Pappas
    
    VP Human Resources
    
    
    215,000
    
    
    
    40
    %
    
    
    86,000
    
    
    
    42,622Former Officers:Arturo Cázares
    
    VP Worldwide Sales
    
    
    235,000
    
    
    
    90
    %(2)
    
    
    52,875
    (2)
    
    
    (2
    )Alan Menezes
    
    VP Marketing
    
    
    230,000
    
    
    
    40
    %
    
    
    92,000
    
    
    
    (3
    )
 13




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(1)
    
    Reflects annual target incentive earned for 2007 performance. During
the first half of 2007, no bonuses were
earned as we did not achieve our minimum financial targets during that
period. For the second half of 2007, bonuses were earned based upon
the Companys achievement of positive operating income and 99.5%
of the revenue goal. Actual bonus compensation for performance in the
second half of 2007 was paid in early 2008.(2)
    
    Our formula for determining Mr. Cázares short-term incentive compensation differed from other
executive officers as indicated below as it was intended to emphasize performance of the sales
organization and reward him for this performance against our revenue
goals:(a) Mr. Cázares Annual Target Incentive Amount of $52,875 represents 25% of his Target
Incentive Rate multiplied by his base salary rate and was intended to be a cash bonus to be based
on our achievement of the operating income goal and to be paid semi-annually. Mr. Cázares was no
longer an employee effective April 30, 2007, however, and was therefore ineligible to receive a
bonus under our performance-based cash bonus plan for either the semi-annual period ended June 30
or December 31, 2007.(b) In addition to the Annual Target Incentive Amount, Mr. Cázares was eligible to earn
short-term incentive compensation under the sales commission plan in an amount equal to 75% of the
Target Incentive Rate multiplied by his base salary, or $158,625. For 2007, Mr. Cázares earned
$96,134 under the sales commission plan.(3)
    
    Mr. Menezes was no longer an employee effective September 17, 2007
and was therefore ineligible to receive a bonus under our
performance-based cash bonus plan for the semi-annual period ended
December 31, 2007. For payments made to Mr. Menezes in connection
with his departure, please see the Summary Compensation Table below.
 Other Bonus Payments
  Long-Term Incentive Compensation
 Annual Equity Program
  Option Awards
  14




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Performance Share Awards
  Compensation Committee Philosophy on Change in Control and Severance Benefits
  15




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Other Benefits
  Tax Considerations
  COMPENSATION COMMITTEE REPORT
  
 16




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Summary Compensation Table
  2007 SUMMARY COMPENSATION TABLE
 Non-EquityIncentivePlan
    
    All OtherOption
    
    Compensation
    
    Compens-Salary (1)
    
    Bonus (2)
    
    Stock
    
    Awards (4)
    
    (2)
    
    ation (5)
    
    TotalName and Principal Position
    
    Year
    
    ($)
    
    ($)
    
    Awards (3)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Dave Côté
    
    
    2007
    
    
    
    415,000
    
    
    
    
    
    
    
    
    
    
    
    839,187
    
    
    
    205,675
    
    
    
    2,134
    
    
    
    1,461,996President and Chief
Executive Officer
    
    
    2006
    
    
    
    375,000
    
    
    
    
    
    
    
    
    
    
    
    1,022,105
    
    
    
    212,223
    
    
    
    1,929
    
    
    
    1,611,257David C. Yntema
    
    
    2007
    
    
    
    290,000
    
    
    
    
    
    
    
    
    
    
    
    501,117
    
    
    
    71,862
    
    
    
    4,148
    
    
    
    867,127Chief Financial Officer
    
    
    2006
    
    
    
    265,000
    
    
    
    7,500
    
    
    
    
    
    
    
    425,510
    
    
    
    85,698
    
    
    
    3,785
    
    
    
    787,493Manuel R. Freitas
    
    
    2007
    
    
    
    235,000
    
    
    
    
    
    
    
    
    
    
    
    380,299
    
    
    
    46,587
    
    
    
    2,154
    
    
    
    664,040Vice President
Operations and Customer
Support
    
    
    2006
    
    
    
    225,000
    
    
    
    14,089
    (6)
    
    
    
    
    
    
    425,510
    
    
    
    72,762
    
    
    
    2,060
    
    
    
    739,421Nelu Mihai(7)
    
    
    2007
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    478,981
    
    
    
    61,950
    
    
    
    1,228
    
    
    
    792,159Vice President,
Engineering
    
    
    2006
    
    
    
    215,256
    
    
    
    7,500
    
    
    
    
    
    
    
    477,363
    
    
    
    69,554
    
    
    
    1,084
    
    
    
    770,757Greg Pappas
    
    
    2007
    
    
    
    215,000
    
    
    
    
    
    
    
    
    
    
    
    392,936
    
    
    
    42,622
    
    
    
    674
    
    
    
    651,232Vice President Human
Resources
    
    
    2006
    
    
    
    195,000
    
    
    
    
    
    
    
    
    
    
    
    373,398
    
    
    
    69,061
    
    
    
    374
    
    
    
    637,833Former Officers:Arturo Cázares
    
    
    2007
    
    
    
    174,468
    (8)
    
    
    
    
    
    
    
    
    
    
    475,670
    
    
    
    
    
    
    
    127,640
    (9)
    
    
    775,518Former Vice President
Worldwide Sales
    
    
    2006
    
    
    
    387,993
    (10)
    
    
    6,000
    
    
    
    
    
    
    
    692,037
    
    
    
    25,875
    
    
    
    492
    
    
    
    1,112,397Alan Menezes (11)
    
    
    2007
    
    
    
    144,782
    
    
    
    
    
    
    
    
    
    
    
    643,307
    
    
    
    
    
    
    
    73,410
    (12)
    
    
    861,499Former Vice President
Marketing
 
 (1)
    
    Unless otherwise noted, reflects the annual base salaries paid to the Named Executive
Officers in the indicated year.(2)
    
    Performance-based bonuses are generally paid under our performance-based cash bonus
plan and the amounts of such bonuses are reported under the Non-Equity Incentive Plan
Compensation column. Additional discretionary bonuses awarded by the Compensation
Committee, if any, are reported under the Bonus column. Unless otherwise noted, the
amounts reported under the Bonus column represent discretionary cash bonuses awarded to
several executive officers for contributions made during 2006 in connection with the
acquisition and integration of Tacit Networks. These discretionary bonuses were
approved by the Compensation Committee on January 31, 2007.(3)
    
    It was estimated at December 31, 2007 that no shares would ultimately vest and no
related compensation expense was recorded during 2007. See Note 7 of the Notes to the
Consolidated Financial Statements included with this Annual Report for additional
information.(4)
    
    Dollar amount of compensation expense related to stock options recognized for financial
statement reporting purposes in accordance with FAS 123(R). The assumptions used in the
calculation of these amounts are included in Note 7 to our Consolidated Financial
Statements included with this Annual Report.(5)
    
    Unless otherwise noted, represents premiums paid for group term life insurance benefits.(6)
    
    Represents (a) $6,000 in a discretionary cash bonus for performance related to the
Tacit acquisition and (b) $8,089 in an additional discretionary bonus awarded to Mr.
Freitas in recognition of additional management duties he performed in 2005 and 2006
while we were searching for a Vice President, Engineering. This additional
discretionary bonus was awarded by the Chief Executive Officer pursuant to authority
granted by our Compensation Committee.(7)
    
    Mr. Mihai commenced employment with Packeteer in January 2006.(8)
    
    Represents (a) $78,334 in annual salary and (b) $96,134 in commissions earned in 2007. 17




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(9)
    
    Includes $349 in premiums paid for group term life insurance benefits while Mr. Cázares
was our employee and $27,114 of accrued vacation pay. Mr. Cázares resigned his
employment with us effective April 30, 2007 and pursuant to a separation agreement, Mr.
Cázares received $97,917 in severance and $2,260 in COBRA benefits. For more
information regarding Mr. Cázares separation agreement, see the section entitled
Potential Payments upon Termination or Change in Control  Benefits Paid to Former
Officers upon Separation.(10)
    
    Represents (a) $230,000 in annual salary and (b) $157,993 in commissions earned in 2006.(11)
    
    Mr. Menezes commenced employment with Packeteer in February 2007.(12)
    
    Includes $430 in premiums paid for group term life insurance benefits while Mr. Menezes
was our employee and $1,712 of accrued vacation pay. Mr. Menezes resigned his
employment with us effective September 17, 2007 and pursuant to a separation agreement,
Mr. Menezes received $67,083 in severance and $4,185 in COBRA benefits. For more
information regarding Mr. Menezes separation agreement, see the section entitled
Potential Payments upon Termination or Change in Control  Benefits Paid to Former
Officers upon Separation.
 Grants of Plan-Based Awards
  GRANTS OF PLAN-BASED AWARDS
 Estimated Future Payouts Under
    
    Estimated Future Payouts UnderNon-Equity Incentive Plan
    
    Equity Incentive Plan Awards (2)Awards (1)All OtherOptionAwards:Number of
    
    Exercise or
    
    Grant Date FairSecurities
    
    Base Price of
    
    Value of StockUnderlying
    
    Option
    
    and OptionThreshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    Options
    
    Awards
    
    AwardsName
    
    Grant Date
    
    ($) (3)
    
    ($)
    
    ($) (4)
    
    (#) (5)
    
    (#)
    
    (#) (6)
    
    (#)(7)
    
    ($/Sh)
    
    ($) (8)Dave Côté
    
    
    1/24/2007
    
    
    
    139,025
    
    
    
    415,000
    
    
    
    554,0251/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,125
    
    
    
    50,000
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    621,0001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    12.78
    
    
    
    657,906David C. Yntema
    
    
    1/24/2007
    
    
    
    48,575
    
    
    
    145,000
    
    
    
    193,5751/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,500
    
    
    
    40,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    496,8001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000
    
    
    
    12.78
    
    
    
    493,4307/27/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    150,469Manuel R. Freitas
    
    
    1/24/2007
    
    
    
    31,490
    
    
    
    94,000
    
    
    
    125,4901/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,250
    
    
    
    20,000
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    248,4001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    12.78
    
    
    
    263,1637/27/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    150,469Nelu Mihai
    
    
    1/24/2007
    
    
    
    41,875
    
    
    
    125,000
    
    
    
    166,8751/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,063
    
    
    
    25,000
    
    
    
    62,500
    
    
    
    
    
    
    
    
    
    
    
    310,5001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    12.78
    
    
    
    328,9547/27/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    7.16
    
    
    
    188,086Greg Pappas
    
    
    1/24/2007
    
    
    
    28,810
    
    
    
    86,000
    
    
    
    114,810
    
    
    
    11,250
    
    
    
    20,000
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    248,4001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    12.78
    
    
    
    263,1637/27/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    150,469Former Officers:Arturo Cázares (9)
    
    
    1/24/2007
    
    
    
    0
    
    
    
    58,750
    
    
    
    58,7501/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,063
    
    
    
    25,000
    
    
    
    62,500
    
    
    
    
    
    
    
    
    
    
    
    310,5001/24/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    12.78
    
    
    
    328,954Alan Menezes (10)
    
    
    2/14/2007
    
    
    
    30,820
    
    
    
    92,000
    
    
    
    122,8202/14/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185,000
    
    
    
    12.94
    
    
    
    1,232,2157/27/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    150,469
 18




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##### Table of Contents



(1)
    
    We award short term incentive compensation under our
performance-based cash bonus plan as described under the section
entitled Compensation Discussion and Analysis  Short Term
Incentive Compensation  Semi-Annual Awards. The amounts under the
Threshold, Target and Maximum columns assume that identical
performance levels are achieved in both semi-annual periods. The
actual amount paid to each Named Executive Officer in 2007 under the
performance-based cash bonus plan is set forth above in the Summary
Compensation Table under the Non-Equity Incentive Plan Compensation
column.(2)
    
    We award long term incentive compensation in the form of performance
share awards as described under the section entitled Compensation
Discussion and Analysis  Long Term Incentive Compensation 
Performance Share Awards. It was estimated at December 31, 2007
that no shares would ultimately vest and no related compensation
expense was recorded during 2007. See Note 7 of the Notes to the
Consolidated Financial Statements included with this Annual Report
for additional information.(3)
    
    Assumes achievement of 80% of the revenue goal and positive operating
income at a level less than 95% of the operating income goal for both
semi-annual periods. See the section entitled Compensation
Discussion and Analysis  Short Term Incentive Compensation 
Semi-Annual Awards for more information.(4)
    
    Assumes achievement of 120% of revenue goal and 100% of the operating
income goal for both semi-annual periods. See the section entitled
Compensation Discussion and Analysis  Short Term Incentive
Compensation  Semi-Annual Awards for more information.(5)
    
    Assumes achievement of revenue and operating income goals at minimum
levels for vesting of performance shares at a rate of 56.25% of the
target number of shares. See the section entitled Compensation
Discussion and Analysis  Long Term Incentive Compensation 
Performance Share Awards for more information.(6)
    
    Assumes achievement of revenue and operating income goals at maximum
levels for vesting of performance shares at a rate of 250% of the
target number of shares. See the section entitled Compensation
Discussion and Analysis  Long Term Incentive Compensation 
Performance Share Awards for more information.(7)
    
    Options to purchase our Common Stock vest and become exercisable at
the rate of: (a) 25% of the shares upon completion of 12 months of
service following the date of grant and (b) the remainder of the shares
in 36 equal monthly installments upon completion of each
additional month of service thereafter. See the section entitled
Executive Compensation  Potential Payments upon a Termination or
Change in Control for a description of applicable acceleration
features.(8)
    
    Reflects the grant date fair value of each equity award in accordance
with FAS 123(R). The assumptions used in the calculation of this
amount are included in Note 7 to our Consolidated Financial
Statements included in this Annual Report.(9)
    
    Mr. Cázares was no longer an employee effective April 30, 2007 and
was therefore ineligible to receive a bonus under our
performance-based cash bonus plan for either the semi-annual period
ended June 30 or December 31, 2007. For other payments made to Mr.
Cázares in connection with his departure, please see the Summary
Compensation Table above. Additionally, the performance share award
and unvested options to purchase 370,000 shares of our common stock
held by Mr. Cázares were cancelled.(10)
    
    Mr. Menezes was no longer an employee effective September 17, 2007
and was therefore ineligible to receive a bonus under our
performance-based cash bonus plan for either the semi-annual period
ended June 30 or December 31, 2007. For other payments made to Mr.
Menezes in connection with his departure, please see the Summary
Compensation Table above. Additionally, unvested options to purchase
225,000 shares of our common stock held by Mr. Menezes were
cancelled.
 19




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##### Table of Contents



Outstanding Equity Awards at Year-End
  OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2007
 Option Awards (1)
    
    
    Stock AwardsEquity IncentiveEquity Incentive
    
    Plan Awards:Number of
    
    
    
    
    
    
    
    
    
    
    Plan Awards:
    
    Market or PayoutNumber of
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Number of Unearned
    
    Value of UnearnedSecurities
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Shares, Units or
    
    Shares, Units orUnderlying
    
    Unexercised
    
    
    
    
    
    
    
    
    
    
    Other Rights That
    
    Other Rights ThatUnexercised Options
    
    Options (#)
    
    Option Exercise
    
    Option Expiration
    
    
    Have Not Vested
    
    Have Not VestedName
    
    (#) Exercisable (2)
    
    Unexercisable(3)
    
    Price ($)
    
    Date (4)
    
    
    (#)(5)
    
    ($)(6)Dave Côté
    
    
    350,000
    
    
    
    0
    
    
    
    3.50
    
    
    
    10/7/201237,500
    
    
    
    0
    
    
    
    8.36
    
    
    
    1/22/2013122,395
    
    
    
    2,605
    
    
    
    19.40
    
    
    
    1/28/2014100,625
    
    
    
    37,375
    
    
    
    14.00
    
    
    
    1/26/201552,708
    
    
    
    57,292
    
    
    
    9.51
    
    
    
    1/25/20160
    
    
    
    100,000
    
    
    
    12.78
    
    
    
    1/24/201728,125
    
    
    
    173,250David C. Yntema
    
    
    30,000
    
    
    
    0
    
    
    
    48.06
    
    
    
    1/26/201030,000
    
    
    
    0
    
    
    
    16.88
    
    
    
    1/29/201143,541
    
    
    
    0
    
    
    
    4.71
    
    
    
    10/22/2011110,000
    
    
    
    0
    
    
    
    8.36
    
    
    
    1/22/201339,166
    
    
    
    834
    
    
    
    19.40
    
    
    
    1/28/201443,750
    
    
    
    16,250
    
    
    
    14.00
    
    
    
    1/26/201523,958
    
    
    
    26,042
    
    
    
    9.51
    
    
    
    1/25/20160
    
    
    
    75,000
    
    
    
    12.78
    
    
    
    1/24/20170
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    7/27/201722,500
    
    
    
    138,600Manuel R. Freitas
    
    
    45,000
    
    
    
    0
    
    
    
    12.00
    
    
    
    5/24/201030,000
    
    
    
    0
    
    
    
    16.88
    
    
    
    1/29/201139,166
    
    
    
    834
    
    
    
    19.40
    
    
    
    1/28/201443,750
    
    
    
    16,250
    
    
    
    14.00
    
    
    
    1/26/201511,458
    
    
    
    26,042
    
    
    
    9.51
    
    
    
    1/25/20160
    
    
    
    40,000
    
    
    
    12.78
    
    
    
    1/24/20170
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    7/27/201711,250
    
    
    
    69,300Nelu Mihai
    
    
    78,854
    
    
    
    91,146
    
    
    
    9.51
    
    
    
    1/25/20160
    
    
    
    50,000
    
    
    
    12.78
    
    
    
    1/24/20170
    
    
    
    50,000
    
    
    
    7.16
    
    
    
    7/27/201714,063
    
    
    
    86,625Greg Pappas
    
    
    85,937
    
    
    
    79,063
    
    
    
    8.35
    
    
    
    11/7/20150
    
    
    
    40,000
    
    
    
    12.78
    
    
    
    1/24/20170
    
    
    
    40,000
    
    
    
    7.16
    
    
    
    7/27/201711,250
    
    
    
    69,300Former Officers:Arturo Cázares (7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alan Menezes (8)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Options vest and become exercisable at the rate of: (a) 25% of the shares upon completion of 12 months of service measured from the date of grant and
(b) the remainder of the shares in 36 equal monthly installments upon completion of each additional month of service thereafter. See the section
entitled Executive Compensation  Potential Payments upon a Termination or Change in Control for a description of applicable acceleration features. 20




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##### Table of Contents



(2)
    
    Represents stock options that are fully vested and unexercised as of December 31, 2007. Stock options become exercisable only as they vest(3)
    
    Represents stock options that remain unvested and unexercisable as of December 31, 2007.(4)
    
    Each option expires ten years after the date of grant.(5)
    
    Represents the number of shares subject to performance share awards that would vest if our performance against relevant corporate measures for the performance
period is at threshold levels. See the section entitled Compensation Discussion and Analysis  Long-Term Incentive Compensation  Performance Share Awards
for more information.(6)
    
    Valued at the $6.16 closing market price of our Common Stock at December 31, 2007.(7)
    
    In connection with Mr. Cázares resignation from employment with us effective April 30, 2007, his fully unvested performance share award and unvested options to
purchase 370,000 shares of our Common Stock held by Mr. Cázares were cancelled.(8)
    
    In connection with Mr. Menezes resignation from employment with us effective September 17, 2007, unvested options to purchase 225,000 shares of our Common
Stock held by Mr. Menezes were cancelled. Option Exercises and Stock Vested
  OPTION EXERCISES AND STOCK VESTED
 Option AwardsNumber of Shares
    
    Value Realized onName
    
    Acquired on Exercise (#)
    
    Exercise ($)(1)Dave Côté
    
    
    57,000
    
    
    
    556,371David C. Yntema
    
    
    0
    
    
    
    0Manuel R. Freitas
    
    
    40,459
    
    
    
    191,310Nelu Mihai
    
    
    5,000
    
    
    
    20,111Greg Pappas
    
    
    0
    
    
    
    0Former Officers:Arturo Cázares
    
    
    0
    
    
    
    0Alan Menezes
    
    
    0
    
    
    
    0
 
 (1)
    
    Based on the difference between the market price of our Common Stock on
the date of exercise and the exercise price. 21




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##### Table of Contents



Potential Payments upon Termination or Change in Control
 Corporate Transaction in which Options and Performance Share Awards are Not Assumed
   
    
    an acquisition of beneficial ownership of more than 50% of our
outstanding voting stock by a stockholder-approved merger,
    
    a merger in which voting stock is transferred to the persons who
acquired control pursuant to either (i) the completion of a tender or
exchange offer for more than 50% of our outstanding voting stock or
(ii) a change in the majority of the Board of Directors effected
through one or more contested elections for membership on the Board of
Directors; or
    
    a sale of substantially all of our assets.
 Estimated Benefit to our Named Executive Officers upon a Corporate Transaction in which Options and
Performance Share Awards are Not Assumed
  Value of Acceleration ofValue of Acceleration of
    
    Vesting of PerformanceName
    
    Vesting of Options ($)(1)
    
    Shares ($)(2)Dave Côté
    
    
    0
    
    
    
    308,000David C. Yntema
    
    
    0
    
    
    
    246,400Manuel R. Freitas
    
    
    0
    
    
    
    123,200Nelu Mihai
    
    
    0
    
    
    
    154,000Greg Pappas
    
    
    0
    
    
    
    123,200
 
 (1)
    
    Reflects 100% acceleration of vesting of options that were unvested on
December 31, 2007. Value of acceleration is calculated as the
difference between the closing market price per share of our Common
Stock on December 31, 2007 of $6.16 and the exercise price per share
of unvested options having an exercise price per share less than
$6.16.(2)
    
    Reflects acceleration of vesting of 100% of the 2007 target
performance share awards that were unvested at December 31, 2007.
Value of acceleration is calculated using the closing market price per
share of our Common Stock on December 31, 2007 of $6.16. Involuntary Termination or Resignation for Good Reason Following a Change in Control
 Change of Control Agreements for Named Executive Officers Other than the Chief Executive Officer
and Chief Financial Officer
  22




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##### Table of Contents




    
    a lump sum cash severance payment equal to 18 months of base salary;
    
    continuation of health insurance, life insurance and long-term
disability benefits for 12 months following termination;
    
    accelerated vesting in full of any outstanding stock option or other
equity award that was granted with an exercise price equal to or
greater than the fair market value of the underlying shares on the
grant date; and
    
    accelerated vesting of 50% of the then unvested portion of any
outstanding restricted stock, restricted stock unit, performance share
(other than the performance share awards,
discussed further below) or other outstanding equity award that does
not have an exercise price or that was granted with an exercise price
less than fair market value of the underlying shares on the grant
date.
   
    
    any acquisition of beneficial ownership of more than 50% of our outstanding voting stock;
    
    an acquisition of Packeteer by merger;
    
    a change in the majority of our Board of Directors effected through one or more
contested elections for membership on the Board of Directors, or a Board Turn-over; or
    
    a sale of substantially all of our assets.
   
    
    theft, dishonesty, misconduct, breach of fiduciary duty for personal profit, or
falsification of any of our documents or records;
    
    material failure to abide by our code of conduct or other policies;
    
    misconduct that results in a required accounting restatement;
    
    unauthorized use, misappropriation, destruction or diversion of any of our tangible or
intangible assets or corporate opportunity;
    
    any intentional act which has a material detrimental effect on our reputation or business;
    
    repeated failure or inability to perform any reasonable assigned duties after written
notice, and a reasonable opportunity to cure, such failure or inability;
    
    any material breach of any employment, non-disclosure, non-competition, non-solicitation
or other similar agreement which is not cured pursuant to the terms of such agreement;
    
    failure to cooperate in a corporate investigation; or
    
    conviction (including any plea of guilty or nolo contendere) of any criminal act
involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the
executives ability to perform his duties on our behalf.
  
    
    a material, adverse change in the executives title, duties or responsibilities;
    
    a decrease in the executives base salary rate or target bonus amount;
    
    a relocation of the executives work place that increases the executives
regular commute by more than 50 miles one-way; or
 23




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##### Table of Contents




    
    a material breach by us or our successor of the agreement providing for change
in control benefits following the consummation of a change in control.
   Severance and Change of Control Agreements for Chief Executive Officer and our Chief Financial
Officer
   Performance Share Award Agreements for All Named Executive Officers
  Estimated Benefits Payable to our Named Executive Officers upon Involuntary Termination or
Resignation for Good Reason Following a Change in Control
  24




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##### Table of Contents



Value ofHealth, Life
    
    
    
    
    
    AccelerationInsurance
    
    Value of
    
    of Vesting ofLump Sum Cash
    
    and Long-Term
    
    Acceleration of
    
    Performance
    
    TotalPayment
    
    Disability Benefits
    
    Vesting of
    
    Shares
    
    PaymentsName(1)
    
    ($)(2)
    

($)(3)1
    
    Options ($)(4)
    
    ($) (5)
    
    ($)Dave Côté
    
    
    830,000
    (6)
    
    
    14,527
    
    
    
    0
    
    
    
    154,000
    
    
    
    998,527David C. Yntema
    
    
    435,000
    
    
    
    10,148
    
    
    
    0
    
    
    
    123,200
    
    
    
    568,348Manual R. Freitas
    
    
    352,500
    
    
    
    10,136
    
    
    
    0
    
    
    
    61,600
    
    
    
    424,236Nelu Mihai
    
    
    375,000
    
    
    
    14,522
    
    
    
    0
    
    
    
    77,000
    
    
    
    466,522Greg Pappas
    
    
    322,500
    
    
    
    14,463
    
    
    
    0
    
    
    
    61,600
    
    
    
    398,563
 
 (1)
    
    See the section entitled Benefits Paid to Former Officers upon
Separation below for disclosure related to Mr. Cazares and Mr.
Menezes.(2)
    
    Unless otherwise noted, consists of a lump sum cash payment equal to
18 months of 2007 base salary at the monthly base salary rate in
effect immediately prior to the assumed termination date of
December 31, 2007.(3)
    
    Consists of 12 months of continued health insurance, life insurance
and long-term disability benefits. The value of these benefits is
based on the premium cost as in effect on December 31, 2007.(4)
    
    Reflects 100% acceleration of vesting of options that were unvested on
December 31, 2007. Value of acceleration is calculated as the
difference between the closing market price per share of our Common
Stock on December 31, 2007 of $6.16 and the exercise price per share
of unvested options having an exercise price per share less than
$6.16.(5)
    
    Reflects acceleration of vesting of 50% of the 2007 target performance
share awards that were unvested at December 31, 2007. Value of
acceleration is calculated using the closing market price per share of
our Common Stock on December 31, 2007 of $6.16. Value would be
recognized only upon an involuntary termination upon or within 12 months
following a corporate transaction as defined in our 1999 Plan and
summarized under the heading Corporate Transaction in which Options
and Performance Share Awards Are Not Assumed above. There is no
acceleration of vesting of 2007 performance share awards in connection
with an executives resignation for any reason, or for an involuntary
termination upon or within 12 months of an acquisition of beneficial ownership
of more than 50% of our outstanding voting stock pursuant to a tender
or exchange offer or a Board Turn-Over.(6)
    
    Consists of a lump sum cash payment equal to 24 months of 2007 base
salary at the monthly base salary rate in effect immediately prior to
the assumed termination date of December 31, 2007. Involuntary Termination Other than Following a Change of Control
  
    
    In the case of Mr. Côté, a lump sum cash severance payment equal to 12 months of his base salary; and
    
    In the case of Mr. Yntema, a lump sum cash severance payment equal to nine months of his base salary.
 25




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##### Table of Contents



Estimated Benefits Payable to our Named Executive Officers upon Involuntary Termination Other than
Following a Change in Control
  Lump Sum CashName
    
    Payment ($)(1)Dave Côté
    
    
    415,000David C. Yntema
    
    
    217,500
 
 (1)
    
    Consists of a lump sum cash payment equal to 12 months of 2007 base
salary in the case of Mr. Côté and nine months of 2007 base salary for
Mr. Yntema, in each case at the monthly base salary rate in effect
immediately prior to the assumed termination date of December 31,
2007. Options and Performance Share Awards Granted to our Executive Officers after December 31, 2007
  
    
    50% of the target number of shares subject thereto will accelerate in vesting upon a
corporate transaction that closes before February 28, 2009;
    
    in the event of a corporate transaction that closes February 28, 2009 or later, (i)
if the awards are not assumed, continued or replaced, 100% of the target number of
shares subject thereto will accelerate in vesting; and (ii) if the awards are assumed,
continued or replaced, and the executive is involuntarily terminated without cause upon
or within 12 months following such transaction, a percentage of the Earned Performance
Shares (as defined therein) subject thereto equal to the greater of (a) 50% or (b) the
percentage of the period since the last vesting date to the final vesting date that has
elapsed at the date of termination will vest.
  Benefits Paid to Former Officers upon Separation
  26




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##### Table of Contents



Compensation of Directors
 
 Fees Earnedor Paid in
    
    Option AwardsCash(2)
    
    (3)(4)(5)
    
    TotalName(1)
    
    ($)
    
    ($)
    
    ($)Steven J. Campbell
    
    
    32,000
    
    
    
    90,764
    
    
    
    122,764Craig W. Elliott
    
    
    24,000
    
    
    
    90,764
    
    
    
    114,764Joseph A. Graziano
    
    
    46,000
    
    
    
    90,764
    
    
    
    136,764L. William Krause
    
    
    44,000
    
    
    
    90,764
    
    
    
    134,764Bernard F. (Bud) Mathaisel
    
    
    32,000
    
    
    
    113,453
    
    
    
    145,453Gregory E. Myers
    
    
    32,000
    
    
    
    108,142
    
    
    
    140,142Peter Van Camp
    
    
    28,000
    
    
    
    90,764
    
    
    
    118,764
 
 (1)
    
    See the Summary Compensation Table for disclosure related to Dave
Côté, who is also our Chief Executive Officer and President.
Mr. Côté is our only employee director and does not receive any
additional compensation for his services as a member of our Board of
Directors.(2)
    
    See narrative below for a description of our standard cash
compensation arrangements for directors in 2007.(3)
    
    See narrative below for a description of our standard equity
compensation arrangements for directors in 2007.  
 (4)
    
    Dollar amount of compensation expense related to stock options
recognized for financial statement reporting purposes in accordance
with FAS 123(R). The assumptions used in the calculation of this
amount are included in Note 7 to our Consolidated Financial Statements
included in this Annual Report.(5)
    
    For each non-employee member of our Board of Directors, below is the
aggregate grant date fair value of each option award granted to each
non-employee member of our Board of Directors in 2007 computed in
accordance with FAS 123(R) and the aggregate number of option awards
outstanding on December 31, 2007. Assumptions used in the calculation
of the grant date fair value are included in Note 7 to our
Consolidated Financial Statements included in this Annual Report. Option Awards
    
    Aggregate Grant
    
    Option AwardsGranted in 2007
    
    Date Fair Value
    
    OutstandingName
    
    (#)
    
    ($)
    
    (#)Steven J. Campbell
    
    
    15,000
    
    
    
    89,333
    
    
    
    101,000Craig W. Elliott
    
    
    15,000
    
    
    
    89,333
    
    
    
    475,000Joseph A. Graziano
    
    
    15,000
    
    
    
    89,333
    
    
    
    101,000L. William Krause
    
    
    15,000
    
    
    
    89,333
    
    
    
    94,500Bernard F. (Bud) Mathaisel
    
    
    15,000
    
    
    
    89,333
    
    
    
    75,000Gregory E. Myers
    
    
    15,000
    
    
    
    89,333
    
    
    
    45,000Peter Van Camp
    
    
    15,000
    
    
    
    89,333
    
    
    
    110,000
 27




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##### Table of Contents



Director Compensation Policy
 2007 Cash and Equity Compensation
  
 
 
  
    
    for each individual who first joined the Board of Directors as a non-employee
director, an automatic grant, at the time of such initial election or appointment, of
an initial option to purchase 30,000 shares of our Common Stock, provided such person
was not previously in our employ; and
    
    for each incumbent who was to continue to serve as a non-employee director after the
date of the annual stockholders meeting, whether or not such individual was standing for
re-election at that annual meeting, an automatically grant, on the date of that annual
meeting, of an option to purchase 15,000 shares of our Common Stock.
  2008 Cash and Equity Compensation
  
 
 
  
 28




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##### Table of Contents




  Additional Benefits Provided to Our Directors
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 1
  Common StockNumber ofSharesBeneficially
    
    Percent ofName of Beneficial Owner (1)
    
    Held (2)
    
    Class(3)Royce & Associates, LLC(4)
    
    
    4,049,700
    
    
    
    11.11414 Avenue of the Americas
New York, NY 10019Elliot Management Corp.(5)
    
    
    3,559,117
    
    
    
    9.8712 5th Avenue
New York, New York 10019FMR LLC(6)
    
    
    3,280,825
    
    
    
    9.0
    %82 Devonshire Street
Boston MA 02109Wellington Management Company, LLP(7)
    
    
    2,140,700
    
    
    
    5.975 State Street
Boston, MA 02109Tamro Capital Partners LLC(8)
    
    
    2,040,323
    
    
    
    5.61660 Duke Street, Suite 200
Alexandria, VA 22314
 29




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##### Table of Contents



Common StockNumber ofSharesBeneficially
    
    Percent ofName of Beneficial Owner (1)
    
    Held (2)
    
    Class(3)Dave Côté(9)
    
    
    726,805
    
    
    
    2.0
    %Steven J. Campbell(10)
    
    
    434,396
    
    
    
    1.2
    %Craig W. Elliott(11)
    
    
    500,150
    
    
    
    1.4
    %Joseph A. Graziano(12)
    
    
    268,500
    
    
    
    *L. William Krause(13)
    
    
    92,000
    
    
    
    *Bernard F. Mathaisel(14)
    
    
    78,500
    
    
    
    *Gregory E. Myers(15)
    
    
    27,500
    
    
    
    *Peter Van Camp(16)
    
    
    107,500
    
    
    
    *Manuel R. Freitas(17)
    
    
    195,943
    
    
    
    *Nelu Mihai(18)
    
    
    115,555
    
    
    
    *Greg Pappas (19)
    
    
    127,764
    
    
    
    *David C. Yntema(20)
    
    
    392,141
    
    
    
    1.1Arturo Cázares
    
    
    0
    
    
    
    *Alan Menezes
    
    
    0
    
    
    
    *All directors and officers
as a group (16 persons)(21)
    
    
    3,072,754
    
    
    
    8.4
 
 *
    
    Less than 1%.(1)
    
    Except as otherwise indicated, the address of each person listed on
the table is c/o Packeteer, Inc., 10201 North De Anza Boulevard,
Cupertino, California 95014.(2)
    
    The persons named in this table have sole voting and/or investment
power with respect to all shares of Common Stock shown as beneficially
owned by them unless as otherwise noted below. Under the rules of the
Securities and Exchange Commission, a person is deemed to be the
beneficial owner of shares that can be acquired by such person by
exercise of options within 60 days.(3)
    
    Calculated on the basis of 36,476,323 Common Stock outstanding as of
April 1, 2008, provided that any additional shares of Common Stock
that a stockholder has the right to acquire within 60 days after April
1, 2008 are deemed to be outstanding for the purpose of calculating
that stockholders percentage beneficial ownership. Such shares,
however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.(4)
    
    Based on a Schedule 13G filed with the SEC on February 4, 2008.(5)
    
    Based on a Schedule 13D filed with the SEC as of
March 5, 2008. Includes 1,423,647 shares owned by Elliott
Associates, L.P. and 2,135,470 shares with the shared power to vote
owned by Elliott International, L.P. and Elliott International
Capital Advisors Inc.(6)
    
    Based on a Schedule 13G filed with the SEC on February 13, 2008, amending the statement on
Schedule 13G previously filed by FMR Corp., the predecessor of FMR LLC FMR amending .13G previously filed by FMR Corp., the predecessor of FMR LLC.(7)
    
    Based on a Schedule 13G filed with the SEC on February 14, 2008. Includes 1,372,200 shares as to
which Wellington Management Company, LLP had the shared power to vote or to direct the vote.(8)
    
    Based on a Schedule 13G filed with the SEC on February 14, 2008. Includes 1,324,644 shares as to
which Tamro Capital Partners LLC had sole voting power.(9)
    
    Includes 1,806 shares held by Mr. Côté and 724,999 shares subject to stock options exercisable
within 60 days of April 1, 2008.(10)
    
    Includes 340,896 shares held by the Steven J. Campbell Rev Trust DTD 5/22/2000, of which
Mr. Campbell is trustee, and 93,500 shares subject to stock options exercisable within 60 days of
April 1, 2008.(11)
    
    Includes 24,650 shares held by the Craig W. Elliot & Lisa A. Elliott TR Elliott Family Revocable
Trust UA 11/09/99, of which Mr. Elliott is trustee, 467,500 shares subject to stock options
exercisable within 60 days of April 1, 2008, and 8,000 shares held by the Elliott Childrens
Trust for the benefit of Mr. Elliotts minor children, of which Wells Fargo is trustee.(12)
    
    Includes 175,000 shares held by Mr. Graziano and 93,500 shares subject to stock options
exercisable within 60 days of April 1, 2008.(13)
    
    Includes 5,000 shares held by Mr. Krause and 87,000 shares subject to stock options exercisable
within 60 days of April 1, 2008. 30




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##### Table of Contents



(14)
    
    Includes 11,000 shares held by Mr. Mathaisel and 67,500 shares subject to stock options
exercisable within 60 days of April 1, 2008(15)
    
    Includes 5,000 shares held by Mr. Myers and 22,500 shares subject to stock options exercisable
within 60 days of April 1, 2008.(16)
    
    Includes 5,000 shares held by Mr. Van Camp and 102,500 shares subject to stock options
exercisable within 60 days of April 1, 2008.(17)
    
    Includes 944 shares held by Mr. Freitas and 194,999 shares subject to stock options exercisable
within 60 days of April 1, 2008.(18)
    
    Includes 1,806 shares held by Mr. Mihai and 113,749 shares subject to stock options exercisable
within 60 days of April 1, 2008.(19)
    
    Includes 11,306 shares held by Mr. Pappas and 116,458 shares subject to stock options exercisable
within 60 days of April 1, 2008.(20)
    
    Includes 34,434 shares held by the David C. Yntema Trust, of which Mr. Yntema is trustee, and
357,707 shares subject to stock options exercisable within 60 days of April 1, 2008.(21)
    
    Includes 630,842 shares held directly or indirectly by such individuals and 2,441,912 shares
subject to stock options exercisable within 60 days of April 1, 2008. EQUITY
COMPENSATION PLAN INFORMATION 1
  Number of SharesNumber of Shares to
    
    
    
    
    
    
    Remaining Available forbe Issued Upon
    
    
    Weighted-Average
    
    
    Future Issuance UnderExercise of
    
    
    Exercise Price of
    
    
    Equity Compensation PlansOutstanding Options,
    
    
    Outstanding Options,
    
    
    (Excluding SharesWarrants and Rights
    
    
    Warrants and Rights
    
    
    Reflected in Column (a))Plan Category(1)
    
    (a)(2)
    
    
    (b)
    
    
    (c)(3)Equity compensation plans
approved by security
holders
    
    
    7,422,687
    
    
    $
    10.25
    
    
    
    8,771,778Equity compensation plans
not approved by security
holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    7,422,687
    
    
    
    
    
    
    
    8,771,778
 
 (1)
    
    The information presented in this table excludes options we assumed in connection with the acquisition of
Tacit Networks. As of December 31, 2007, 34,131 shares of our Common Stock were issuable upon exercise of
these assumed options, at a weighted average exercise price of $1.89 per share.(2)
    
    Represents 6,506,157 options outstanding with a weighted average exercise price of $11.69 and a total of
916,530 shares of outstanding and unvested restricted stock units (including performance-based and
service-based restricted stock units).(3)
    
    Includes 3,551,269 shares that are reserved for issuance under the 1999 ESPP. The shares that are reserved
for issuance under the 1999 Plan and under the 1999 ESPP automatically increase on January 1 of each calendar
year by a number of shares equal to 5% and 2%, respectively, of our outstanding shares as of the close of
business on December 31 of the preceding calendar year. 31




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions
    
 Item 14. Principal Accountant Fees and Services
  2007
    
    
    2006Audit Fees(1)
    
    
    1,281,700
    
    
    
    1,617,200Audit-Related Fees
    
    
    0
    
    
    
    0Tax Fees(2)
    
    $
    177,541
    
    
    $
    199,800All Other Fees
    
    
    0
    
    
    
    0Total Fees
    
    $
    1,393,600
    
    
    $
    1,817,000
 
 (1)
    
    Audit Fees consist of fees incurred for professional services rendered
for the audit of our consolidated annual financial statements and
review of the interim consolidated financial statements included in
quarterly reports, and services that are normally provided by KPMG LLP
in connection with statutory and regulatory filings or engagements.
Audit fees also include audit services related to our compliance with
Section 404 of the Sarbanes-Oxley Act of 2002 regarding our internal
controls over financial reporting.(2)
    
    Tax Fees consist of fees billed for professional services rendered for
tax compliance, tax advice and tax planning (domestic and
international). These services included assistance regarding federal,
state and international tax compliance and international tax planning.
This category includes transfer pricing studies and analysis of our
cost sharing arrangements and cost allocation methodologies with our
international subsidiaries.   
 PART IV
 
 32




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##### Table of Contents



ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
     33




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##### Table of Contents



SIGNATURES
  PACKETEER, INC.By:
    /s/  DAVE CÔTÉDave CôtéPresident and Chief Executive Officer   Name
    
    Title
    
    Date/s/ DAVE CÔTÉ

Dave Côté
    
    President and Chief Executive Officer
(Principal Executive Officer) and Director
    
    April 29, 2008*

David Yntema
    
    Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
    
    April 29, 2008*

Steven Campbell
    
    Chairman of the Board of Directors
    
    April 29, 2008*

Craig Elliott
    
    Director
    
    April 29, 2008*

Joseph Graziano
    
    Director
    
    April 29, 2008*

L. William Krause
    
    Director
    
    April 29, 2008*

Bernard Mathaisel
    
    Director
    
    April 29, 2008*

Peter Van Camp
    
    Director
    
    April 29, 2008*

Gregory Myers
    
    Director
    
    April 29, 2008
 
 /s/ DAVE CÔTÉ
 34




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1(2)
    
    Registrants Amended and Restated Certificate of Incorporation.3.3(1)
    
    Registrants Amended and Restated Bylaws.4.1(2)
    
    Form of Registrants Specimen Common Stock Certificate.10.1(2)*
    
    Registrants 1996 Equity Incentive Plan.10.2(2)*
    
    Registrants 1999 Stock Incentive Plan.10.3(1)*
    
    Form of Stock Option Agreement and Notice of Exercise under 1999 Stock Incentive Plan.10.4(2)*
    
    Form of Indemnity Agreement entered into by Packeteer, Inc. with each of its executive officers and directors.10.5(3)*
    
    Amendment dated May 23, 2001 to the 1999 Stock Incentive Plan.10.6(4)*
    
    Amendment dated May 22, 2002 to the 1999 Stock Incentive Plan.10.7(4)
    
    Facilities Lease Agreement dated July 15, 2003, between NMSPCSLDHB, a California Limited Partnership, and
Packeteer, Inc.10.8(5)*
    
    Employment Agreement dated September 27, 2002 between Dave Côté and Packeteer, Inc.10.9(6)*
    
    Amendment dated December 15, 2004 to the 1999 Stock Incentive Plan.10.10(6)
    
    Agreement and Plan of Reorganization by and among Packeteer, Inc., P Acquisition Corporation, Mentat Inc. and
Certain Shareholders of Mentat Inc.10.11(7)*
    
    Amendment dated May 24, 2005 to the 1999 Stock Incentive Plan.10.12(8)
    
    Agreement and Plan of Reorganization by and among Packeteer, Inc., Oslo Acquisition Corporation, Tacit
Networks, Inc. and Vikram Gupta dated May 8, 2006.10.13(1)*
    
    Form of Notice of Grant and Restricted Stock Units Agreement (for U.S. Participants).10.14(1)*
    
    Form of Notice of Grant and Restricted Stock Units Agreement (for Non-U.S. Participants).10.15(9)*
    
    Form of Notice of Grant and Performance Share Agreement under 1999 Stock Incentive Plan (2007)10.16(9)
    
    First Amendment of Lease dated January 31, 2007, between NMSPCSLDHB, a California Limited Partnership, and
Packeteer, Inc.10.17(9)*
    
    Amendment dated February 5, 2007 to the 1999 Stock Incentive Plan.10.18(10)*
    
    Form of Change in Control Agreement dated March 26, 2007 by and between Packeteer, Inc. and each executive
officer (other than the Chief Executive and Chief Financial Officers)10.19(10)*
    
    Severance and Change in Control Agreement dated March 26, 2007 by and between Packeteer, Inc. and Dave Côté10.20(10)*
    
    Severance and Change in Control Agreement dated March 26, 2007 by and between Packeteer, Inc. and David Yntema10.21(1)*
    
    Amendment and Restatement dated December 12, 2007 of the 1999 Employee Stock Purchase Plan.10.22(1)*
    
    Amendment dated December 12, 2007 of the 1999 Stock Incentive Plan.10.23(1)*
    
    Form of Notice of Grant and Restricted Stock Units Agreement (for Nonemployee Directors).10.24(1)*
    
    Form of Notice of Grant and Performance Share Agreement under 1999 Stock Incentive Plan (2008)10.25(11)*
    
    Letter Agreement by and between Packeteer, Inc. and David Winikoff dated October 17, 2007.21.1(1)
    
    Subsidiaries of Packeteer.23.1(1)
    
    Consent of KPMG LLP, Independent Registered Public Accounting Firm.24.1(1)
    
    Power of Attorney (see page 77).31.1(11)
    
    Sarbanes-Oxley Section 302 Certification  CEO31.2(11)
    
    Sarbanes-Oxley Section 302 Certification  CFO32.1(11)
    
    Sarbanes-Oxley Section 906 Certification  CEO32.2(11)
    
    Sarbanes-Oxley Section 906 Certification  CFO
 35




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##### Table of Contents



*
    
    Management contract, or compensatory plan or arrangement.(1)
    
    Previously filed as an exhibit to, or part of, the Registrants Form 10-K report filed with the SEC on March 4, 2008.(2)
    
    Incorporated by reference from Packeteers Registration Statement on Form S-1 (Reg. No. 79333-79077), as amended.(3)
    
    Incorporated by reference from Packeteers 10-K dated March 22, 2002.(4)
    
    Incorporated by reference from Packeteers 10-K dated March 29, 2001.(5)
    
    Incorporated by reference from Packeteers 10-K dated March 21, 2003.(6)
    
    Incorporated by reference from Packeteers 10-K dated March 16, 2005.(7)
    
    Incorporated by reference from Packeteers 8-K dated May 26, 2005.(8)
    
    Incorporated by reference from Packeteers 10-Q dated August 9, 2006.(9)
    
    Incorporated by reference from Packeteers 10-K dated March 16, 2007.(10)
    
    Incorporated by reference from Packeteers 10-Q dated April 31, 2007.(11)
    
    Filed herewith 36