Document:

exv10w28

 

Exhibit 10.28

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS

EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND REPLACED WITH [****] AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Professional Manufacturing Service Agreement

(for Use with Manufacturing Services Only)

This Agreement is hereby entered into on this 17th day of January, 2005 (the “Effective Date”) by
and between Packeteer, Inc. , of 10201 N. DeAnza Blvd., Cupertino, CA 95014 (hereinafter
“Packeteer”), and Plexus Services Corp., of 55 Jewelers Park Drive, Neenah, WI 54956, (hereinafter
“Plexus”).

	1.  	DEFINITIONS

	a.  	Affiliates

Any corporation or other entity controlled by, controlling, or under common control with any other
corporation or entity. “Control” means the direct or indirect beneficial ownership of at least
fifty (50%) percent of the voting stock of, or at least a fifty (50%) percent interest in the
income of, such corporation or entity, or the power to elect at least fifty (50%) percent of the
directors or trustees of such corporation, or such other relationship which in fact constitutes
actual control.

	b.  	Assembly or Assemblies

Shall mean the systems that Plexus will manufacture for Packeteer and which has completed all
aspects of manufacture including, but not limited to, test and packaging.

	c.  	Component Value

Shall mean Plexus’ standard cost for a given Component plus mark-up as defined in Plexus’ then
effective quote for an applicable Assembly.

	d.  	Components

Shall mean any and all material used in the manufacture of Packeteer’s Assemblies.

	e.  	Customer-Supplied Components

Shall mean Components in Plexus’ possession that are provided by Packeteer at no charge or at the
then current Component Value less the Plexus markup to be used solely for the manufacture of
Packeteer’s Assemblies. Plexus shall pay such Packeteer invoice net 30 day from date of invoice
unless otherwise agreed.

	f.  	Demand

Shall mean quantities of Assemblies required by Packeteer and communicated to Plexus via Forecast
and/or Packeteer’s Purchase Orders.

	g.  	Engineering Change (“EC”)

Shall mean mechanical, software, electrical, design and/or specification changes which, if made to
the Assemblies, would affect the form, fit, function, delivery schedule, performance, reliability,
appearance, dimensions, tolerance, safety or purchase price of such Assemblies or which would require any additional test.

	h.  	Excess Components

Shall mean those Components procured by Plexus in accordance with Section 4 and that (i) are
projected to be consumed by Plexus in the manufacture of Assemblies in greater than
[****] days based on Packeteer Demand, or (ii) have remained in Plexus
inventory for greater than [****] days; provided, however, that, in each
case, such value of the specific Excess Component exceeds $[****].

	i.  	Forecast

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Shall mean a non-binding nine (9) month rolling estimate of requirements provided by Packeteer for
each Assembly including the quantities to be manufactured and the requested Delivery Date.

	j.  	Manufacturing Lead-Time

Shall mean the lead-time communicated by Plexus to Packeteer to kit Components and manufacture an
Assembly.

	k.  	Obsolete Components

Shall mean those Components procured by Plexus in accordance with Section 4 and that have been
removed from the bill of materials of all Assemblies, or which appear on an Assembly bill of
materials that has no Demand.

	l.  	OX Components

Shall mean Obsolete Components and Excess Components.

	m.  	OX Report

Shall mean the report issued by Plexus as described and defined in Section 2.b. below. The report
shall distinguish between Obsolete Components and Excess Components

	n.  	Purchase Order

Shall mean an order by Packeteer, communicated via EDI, email, facsimile or other means, to
purchase Assemblies, at a stated quantity, unit price, and delivery date.

	o  	. Quarterly Business Review (“QBR”)

Shall mean a strategic business meeting between Packeteer and Plexus to discuss current business
issues and opportunities as further defined in Section 6.

	p.  	Software

Shall mean any and all source and object code installed in the Assemblies as detailed in the
Specifications. Third party software licensed by Packeteer shall be subject to Section 4.4 of this
Agreement. Unless otherwise mutually agreed upon in writing by Plexus and Packeteer subject to
Section 4.1(c), all Software installed into the Assemblies by Plexus shall be supplied by
Packeteer. Packeteer supplied Software shall be provided to Plexus at no charge.

	q.  	Specifications

Shall mean the manufacturing and test specifications and other documentation for the Assemblies,
which Specifications are set forth in Addendum 3 hereto. All such Specifications shall be deemed
Packeteer confidential and subject to the confidentiality requirements set forth herein. Changes
to the Specification shall be managed via the EC process set forth in Section 9.

	r.  	Supplier

Shall mean any vendor, including Packeteer, that provides Components or services to Plexus.

	2.  	PURPOSE, SCOPE, AND APPLICABLE DOCUMENTS 

This Agreement sets forth the terms and conditions under which Plexus will manufacture Assemblies
for Packeteer and provide related services, other than fulfillments services, which are set forth
in the Order Fulfillment Services Agreement and Order Fulfillment Statement of Work dated January
17, 2005, or design services or other services which shall be agreed upon in a separate agreement.
In the event that such a separate written agreement is not signed, such services shall be performed
in accordance with the Order Fulfillment Services Agreement with the exception of the warranty
provision (Section 5 thereof), which shall be agreed upon by the parties in writing prior to the
engagement of any such services. All manufacture of Assemblies by Plexus shall be solely for
Packeteer and not for Plexus’ own internal use or other customers. Plexus shall deliver to
Packeteer’s specified location only that quantity of Assemblies specified in Packeteer’s Purchase
Orders, at prices and by the Delivery Dates set forth in such accepted Purchase Orders. Packeteer
reserves the right to act in its discretion to meet its requirements for Assemblies, internally,
from Plexus or from any other sources.

Unless otherwise agreed, all manufacture shall be conducted in Nampa, Idaho. In the event Plexus
chooses to

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

relocate any of its manufacturing or other services being performed on the behalf of
Packeteer, Plexus agrees to provide Packeteer not less than one hundred and eighty (180) prior
written notice before making any such relocation change.

Each party shall appoint a technical coordinator to maintain technical liaison with the other party
hereto in connection with the manufacture of the Assemblies. Communication between the parties
regarding design or engineering of the Assemblies shall be between the designated coordinators.

The parties agree that (i) each of Plexus’ and Packeteer’s Affiliates shall be entitled to the
rights and benefits afforded Plexus and Packeteer, respectively, hereunder, and (ii) Plexus and
Packeteer shall cause any such Plexus or Packeteer Affiliate participating in this Agreement to
perform the obligations of Plexus and Packeteer, respectively, hereunder as if named a party
herein. Each party shall be liable for the failure of any of its Affiliates to so perform
hereunder. No Plexus Affiliate shall perform services under this Agreement without the express
prior written consent of Packeteer.

This Agreement contains the following Addendums, which are incorporated herein and made part of
this Agreement:

Addendum 1 – Pricing as of the Effective Date

Addendum 2 – Quality Plan

Addendum 3 – Specifications

Addendum 4 – Reports

Addendum 5 – Transition Plan

In the event of any conflict between this Agreement and the Addendums attached hereto, the
Addendums shall control.

	3.  	TERM

The term of this Agreement shall be from the Effective Date and continue for a period of twelve
(12) months, and shall be automatically extended for successive terms of one (1) year each unless either party
terminates this Agreement subject to Section 15 below.

	4.  	FORECASTS/ORDERING/INVENTORY/DELIVERY/TITLE

	4.1  	Forecasts and Purchase Orders

	a.  	Forecasts. Packeteer agrees to provide Plexus an updated Forecast each month for each Assembly manufactured by
Plexus.

	b.  Purchase Orders. Packeteer agrees to issue Purchase Orders for an Assembly thirty days prior to the Delivery
Date. So long as the Purchase Order is reasonably consistent with the quantity and type of
Assemblies set forth in Packeteer’s previously issued Forecasts (e.g. within plus or minus
[****]% or Section 4.2 below), which Forecasts provide Plexus reasonably
sufficient lead-times to procure Components, and subject to Component availability from the supply
chain, Plexus will accept the Purchase Order. Plexus shall provide Packeteer an acknowledgement of
receipt of a Purchase Order within one (1) business day. Plexus may reject the Purchase Order if
unable to procure Components. Any rejection by Plexus of a Purchase Order shall be accompanied
with an explanation of the reasons for the rejection within five (5) business days of receipt of
the Purchase Order or such Purchase Order shall be deemed accepted. Plexus will make reasonable
efforts to accommodate all Purchase Orders. If Plexus rejects a Purchase Order solely due to the
Delivery Date specified by Packeteer, Plexus shall along with its explanation of the reason for the
rejection provide an alternative acceptable Delivery Date for Packeteer’s written approval. Upon
acceptance of each Purchase Order, Plexus will manufacture, conduct final testing and package the
Assemblies called for by such Purchase Order all in accordance with Packeteer’s
Specifications.

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

c. Component Procurement. Unless otherwise agreed by the parties, Plexus will procure only those Components necessary to
fulfill Demand and for which the Component lead-times require that Plexus procure such items in
advance. Notwithstanding the forgoing, Plexus will provide Packeteer with a list (a “LLT Component
List”) of all Components having a lead-time longer than ninety (90) days (“LLT Components”) at each
QBR. So long as a LLT Component has been included on a LLT Component List previously provided to
Packeteer, Plexus shall be entitled to procure the same. If a Component becomes a LLT Component
between QBRs, Plexus will notify Packeteer of the same, and add the Component to the LLT Component
List, prior to procuring the same. Further, Plexus shall at each QBR, or more frequently if
requested by Packeteer, provide Packeteer a list of the lead-times for all required Components and
a list of Components subject to minimum or economical order quantities. The LLT Component List may
be included in such list so long as Plexus makes clear the lead-time of these Components.
Packeteer acknowledges that Plexus may be required by Suppliers to procure Components in minimum or
economic order quantities and that such quantity may exceed Packeteer’s actual Demand. Packeteer
will be liable for any such minimum or economic order quantities so procured by Plexus, provided
that Packeteer has provided Plexus written approval to order such minimum or economic order
quantities. Plexus shall notify Packeteer of such instances where minimum or economical order
quantities would reduce the Component Value. Should any third party Software be included in the
Assemblies manufactured by Plexus hereunder, Packeteer and Plexus will work together to determine
(i) whether Packeteer or Plexus will be the direct licensee of such Software, and (ii) in the event
Plexus is to be responsible for licensing such third party Software, the scope of an appropriate
license to seek from such third party Software provider, including the right to sublicense such
Software to Packeteer and Packeteer’s customers. Plexus will install all Software in accordance
with the Specifications.

d. Manufacture of Assemblies. Plexus will manufacture Assemblies to support the Delivery Date set forth in Packeteer’s
accepted Purchase Order. Plexus will communicate to Packeteer on hand quantities of manufactured
Assemblies (finished goods inventory reporting) weekly, or as frequently as may otherwise be
requested by Packeteer. Such finished Assembly Report shall include such information as Packeteer
specifies and shall be in a format as reasonably requested by Packeteer.

4.2 Demand Changes and Cancellation

Within [****] days of the Delivery Date (the “Frozen Period”), Purchase
Orders may not be changed in relation to: (i) the quantities (increase or decrease), (ii)
rescheduling the Delivery Date (accelerated or delayed) or (iii) cancellation. Packeteer shall be
entitled to change quantities (increase or decrease) or reschedule delivery (acceleration or
delay), or cancel Purchase Orders with a Delivery Date extending beyond the Frozen Period according
to the table below (provided that any acceleration or increase is subject to Component
availability):

	 	 	 	 	 
	Number of days	 	 	 
	prior to Delivery Date	 	% Change	 
	[****]
	 	 	+/-[****]	%
	>[****]
	 	 	+/-[****]	%

Packeteer may reschedule Purchase Orders as often as Packeteer chooses, but such rescheduling shall
be in accordance with the above limits and will not exceed a maximum of [****] days from the
originally scheduled Delivery Date unless mutually agreed to in writing. In addition, in the event
a Purchase Order is cancelled inside the [****]  day Frozen Period, Packeteer
will pay Plexus, within thirty (30) days of the date of Plexus’ invoice, for any Assemblies in
Plexus finished goods inventory that are subject to Packeteer’s cancellation at the full applicable
price of the same. With respect to any work-in-process that is cancelled by Packeteer during the
Frozen Period, Packeteer shall, at its choosing, either (i) direct Plexus to complete the assembly
of work-in process into Assemblies and pay Plexus the full applicable price of the same, or (ii)
direct Plexus to cease manufacturing and pay Plexus for the work-in-process based on percentage
completion, as reasonably determined by the parties. Plexus agrees to use its reasonable efforts
to return, reuse, or sell any Components covered by the canceled portion of the applicable
Purchase Order. Plexus will make good faith efforts to effectively minimize costs associated with
such cancellation. Any changes in Demand will be subject to Component liability under Section 7.

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

Plexus will make all reasonable efforts to accommodate any increase in Demand by Packeteer. Plexus
will notify Packeteer as soon as practicable of any Components impeding Packeteer requested
increase in Demand. Should any additional costs be required to expedite delivery of Assemblies or
Components to meet Packeteer’s increase in Demand, Plexus will notify Packeteer of the same and, if
approved by Packeteer, Packeteer shall pay Plexus for such additional cost subject to Section 5.

Plexus agrees to use its reasonable effort to accommodate changes in versions or Engineering
Changes of an Assembly within a reasonable time after receiving a written request for such change.

	4.3  	Delivery

The delivery date for an Assembly will be the delivery date set forth in Packeteer’s Purchase Order
accepted in writing by Plexus (the “Delivery Date”). Assemblies will be shipped by Plexus FCA
(Incoterms 2000) Plexus’ plant of manufacture. Completed Assemblies will be deemed delivered and
title and risk of loss shall be transferred to Packeteer upon Plexus’ release of Assemblies to the
carrier for shipment or stocking of the Assemblies in its finished goods inventory, whichever comes
first. Assemblies shall not be deemed complete until they have passed all quality requirements set
forth in the Quality Plan. Plexus is responsible for insurance for the Assemblies while the
Assemblies are under Plexus’ control and will name Packeteer as loss payee under such insurance.
Plexus will not cause to occur any lien or encumbrance on Customer-Supplied Components and shall
insure the same at the replacement value thereof while in its possession under the terms of Plexus’
then current insurance policies and Packeteer shall be named a loss payee. Packeteer may specify
the carrier by so indicating within a mutually agreeable, reasonable period of time prior to
shipment.

Delivery in Installments. Plexus may fill a Purchase Order in installments, but only in mutually
agreeable partial quantities and at mutually agreeable intervals.

In the event of a shortfall of production or deliveries where Plexus will not meet Packeteer’s
Delivery Dates, Plexus shall allocate to Packeteer a percentage of its capacity not less than
Packeteer’s percentage share of Plexus’ total manufacturing capacity using the same manufacturing
facilities during the three (3) months prior to the first month in which the shortfall occurred.

	4.4  	Components and Software Supplied by Packeteer

Packeteer may provide Plexus with Customer-Supplied Components, Software or Components purchased by
Plexus from Packeteer that are required to manufacture Packeteer’s Assemblies. Packeteer will be
responsible as a Supplier to Plexus for the quality and on-time delivery of such Customer-Supplied
Components and Software supplied to Plexus by Packeteer. Title and risk of loss to
Customer-Supplied Components and Software shall at all times remain with Packeteer. Plexus will
not cause to occur any lien or encumbrance on Customer-Supplied Components or Software and shall
insure the same at the replacement value thereof while in its possession under the terms of Plexus’
then current insurance policies reasonably acceptable to Packeteer and Packeteer shall be named a
loss payee. Any Customer-Supplied Components and Software incorporated in the Assemblies will be
without warranty by Plexus of any kind, however, Plexus agrees to reasonably work with Packeteer to
obtain warranty from the manufacturer of such Components or Software.

Packeteer’s inability to provide defect-free Customer-Supplied Components or Software in a timely
manner may affect Plexus’ ability to meet Delivery Dates. Any additional expenses that Plexus must
incur due to delayed shipment resulting from a quality or delivery issue from Packeteer will be
borne by Packeteer. In addition, Plexus reserves the right to define a new Delivery Date based
upon the availability and condition of Components or Software supplied by Packeteer.

Packeteer may identify to Plexus certain Components and/or Software that must be used in the
manufacturing, test or packaging of the Assemblies. These Components and/or Software may be
consigned by Packeteer as Customer-Supplied Components or Packeteer supplied Software or Plexus
may be directed by Packeteer to purchase such Components from Packeteer’s approved vendor list
(AVL). If Plexus offers an alternative to Packeteer’s AVL, the alternative must be approved in
writing by Packeteer prior to use in production of the Assemblies.

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

If computer programming or programmed Software is incorporated in the Assemblies, procurement of
such programming shall be the responsibility of Plexus or Packeteer as set forth in the applicable
Specifications or Bill of Materials. Plexus shall comply with any restrictions or payment
obligations imposed by the original source. There shall be no payment or reimbursement obligation
on Packeteer’s part for programming obtained or provided by Plexus unless such payments or
reimbursements are set forth in a Bill of Materials that indicates that Packeteer has accepted such
obligation (any such costs will be included in Plexus’ quotes). Programmable parts should be
programmed as close to the manufacturing date as practical to reduce material costs. Packeteer
will be liable for a maximum of three (3) weeks inventory (based on future Demand) on programmed
parts that are scrapped due to changes in programming.

	5.  	PRICING/PAYMENT/INSURANCE

	5.1  	Pricing 

The purchase price per Assembly and other costs to be paid by Packeteer for Assemblies are
specified in Addendum 1. Plexus labor and machine rates, including Plexus profit and markup rates
shall be fixed for the initial [****] of this Agreement. Following the
[****] period, any price changes shall be mutually agreed upon by the
parties. Subject to the effect of any change to the bill of materials (including the Supplier of a
Component), which shall be addressed under the process set forth in Section 9, Prices for
Components and Software licensed directly by Plexus shall be
[****]. Both parties agree to pay for their respective travel and travel related
out-of-pocket costs unless otherwise specifically agreed to in writing. The prices quoted do not
include, unless specifically stated otherwise, the cost for testing (except with respect to testing
set forth in the Quality Plan or Specifications required to be performed by Plexus)and/or
submittals for Assembly approvals or any annual file maintenance fee, such as for UL, VDE, CSA or
FCC. Prior to any such services outside of this Agreement being provided by Plexus or Plexus
incurring any costs which it will look to Packeteer to reimburse, the parties must first mutually
agree to such terms and conditions in writing and Packeteer must issue a Purchase Order to Plexus
for such services. Unless otherwise agreed by Plexus in writing, prices quoted are FCA Plexus’
manufacturing facility. Plexus’ price quotations are based upon drawings, specifications, and
other written information available to Plexus at the time of quotation. Any additional or
different data supplied thereafter may require price adjustments. Pricing will be reviewed at QBRs
conducted by the parties on a quarterly basis. In the event new pricing is agreed to at a QBR (or
at any other time by mutual, written agreement), such new pricing will be implemented on shipments
by Plexus beginning on the day following such agreement. On the day new pricing is implemented, Plexus will also write-down or write-up, as
applicable, existing raw materials, and work-in-process held by it to reflect the new agreed to
pricing and invoice or credit Packeteer for the same, as applicable.

	5.2  	Payment 

Unless otherwise stated herein, all payments hereunder by Packeteer to Plexus shall be made in
US Dollars within thirty (30) calendar days following the date of the invoice without set-off
of any kind. Packeteer shall report any believed discrepancies in Plexus’ invoices no later than
fifteen (15) days after the date of invoice. Invoices not paid within thirty (30) days of the date
thereof will be subject to an interest charge equal to the lesser of 1% per month or the highest
rate allowed by law.

	5.3  	Invoicing 

Plexus may invoice for the Assemblies only after the completed Assemblies are deemed delivered as
provided under Section 4.3. Invoicing for OX Components shall be subject to Section 7 below.
Along with the invoice, Plexus shall furnish, at no additional charge, Packeteer an electric MS
Excel report in a format and version acceptable to Packeteer. Such report shall be organized by
Assembly serial number and shall include the following information: (1) Packeteer Assembly part
number, (2) Plexus invoice number, (3) Plexus invoice date; and (4) Packeteer Purchase Order
number. Packeteer may request modifications to this report with reasonable notice and Plexus
agrees to use it reasonable best efforts to facilitate Packeteer’s request at no additional charge.
In the event Plexus

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

can provide an alternative means in which Packeteer may obtain and download
the above report electronically to load into Packeteer’s systems, the parties agree to work in good
faith to work towards implementing such change.

	5.4  	Taxes 

Packeteer shall be responsible for sales, use, excise or custom taxes or duties resulting from the
sale or shipment of the Assemblies in accordance with its Purchase Orders. In the event Plexus is
required to pay such tax, Packeteer shall reimburse Plexus for the same subject to Section 5.2. If
the transaction between Plexus and Packeteer is exempt from all such taxes, Packeteer shall provide
Plexus with a tax exemption certificate or other document acceptable to all taxing authorities at
the time the order or contract is submitted. Packeteer assumes responsibility for obtaining resale
certificates from its customer.

	5.5  	Insurance

a. Plexus represents that it has procured and at all times during the term of this Agreement shall
maintain the following minimum levels of insurance, covering activities and obligations undertaken
by Plexus pursuant to this Agreement:

	 	i)  	Workers’ Compensation and Employer’s Liability Insurance

Limits of Liability

Workers’ Compensation — statutory limits

Employer’s Liability- $1,000,000 

	 	ii)  	General Liability, Comprehensive Form, including but not
limited to:

Premises – Operations

Completed Operations

Contractual

Broad Form Property Damage

Personal Injury

Limits of Liability

Bodily Injury: $1,000,000 per occurrence; $2,000,000 aggregate.

Property Damage: $1,000,000 per occurrence; $2,000,000 aggregate.

OR

Combined Single Limit. Bodily Injury and Property Damage

$1,000,000 per occurrence; $2,000,000 aggregate.

               iii) Property Insurance to cover the replacement value of the finished Assemblies work in
process and all Components, including Customer-Supplied Components and all Packeteer tooling and
other Packeteer equipment or supplies while under the control of Plexus up to and prior to shipment
of the Assembly to Packeteer or Packeteer’s customer. Packeteer shall be named loss payee on such
policies for all such property owned by them.

b. Plexus shall procure additional amounts or categories of insurance coverage, if required by law.
Prior to commencing work, Plexus shall provide executed certificates of insurance to Packeteer
evidencing the coverage described above and copies of such policies upon request. Plexus shall
promptly notify Packeteer of any modification, cancellation, lapse, or termination in such
insurance which may affect Packeteer.

6. QUARTERLY BUSINESS REVIEWS (“QBR”) AND OTHER BUSINESS REVIEWS

Plexus and Packeteer agree to meet quarterly, or as otherwise specified below or agreed upon by
both parties, to discuss the state of business and to review business performance issues and
improvement initiatives. The items to be reviewed include, but are not limited to, the
following:

Packeteer and Plexus Business Trends

Packeteer and Plexus agree to review their business initiatives and any significant changes that
may affect the relationship between Packeteer and Plexus. In addition, Packeteer will present
business trends and performance to

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Forecast so that Plexus can better serve the current Packeteer
requirements. Nothing herein will obligate either party to disclose any information regarding such
party’s business and any such disclosures so made shall be made in the disclosing party’s sole
discretion.

Cost Savings Initiatives (Components and Labor)

Plexus and Packeteer agree to review initiatives to reduce cost from the bill of materials and
manufacturing process for the Assemblies.

Physical Inventory Review

Plexus and Packeteer agree to review inventory and other reporting requirements set forth herein
and Plexus’ Assembly handling and inventory procedures.

Volatile Component Pricing Meeting

Plexus and Packeteer agree to review the Volatile Component List on a monthly basis. The
Volatile Component List shall include those Components as agreed and adjusted from time to time by
the parties.

OX Components Review

Plexus and Packeteer agree to review the OX Report on a monthly basis in order to adjust
the manner in which Plexus place orders for Components if Packeteer views the value of such
Components as being excess.

Delivery Performance

Plexus and Packeteer agree to measure, review and discuss delivery performance for all Assemblies.
Both parties agree to measure actual delivery dates as compared to Packeteer requested delivery
dates and to Plexus’ expected delivery dates.

Quality Performance

Plexus and Packeteer agree to discuss the agreed upon quarterly quality metrics for the
program.

Payment Performance

Plexus and Packeteer agree to review any issues that are preventing payment within the agreed upon
payment terms.

Assembly Pricing

Plexus and Packeteer agree to review Assembly pricing. Any Assembly price adjustments required
shall be based upon total Assembly order quantities, prevailing Component market prices, supply
chain programs, Engineering Change requests or other relevant data.

	7.  	INVENTORY MITIGATION/REPORTING/LIABILITY

	7.1  	Inventory Reporting, Inventory Liability and Coverage

a. Component Mitigation. Plexus may have OX Components on hand or on order as a consequence of 1)
Packeteer Demand adjustments, cancellations or rescheduling of Purchase Orders by Packeteer, 2)
Plexus’ support of increases to Demand by Packeteer, 3) the failure of Purchase Orders to consume
previously Forecasted requirements, 4) the failure to have adequate or conforming supplies of
Customer-Supplied Components, 5) end of life requirements, 6) economic or minimum order quantities,
or 7) engineering or material change orders. Plexus will use best reasonable efforts to minimize
Component liability to Packeteer caused by Packeteer Demand changes, cancellations, and other
factors. These efforts will include returning Components to, or restocking Components with
Suppliers, canceling orders with Suppliers, or using Components to meet the current demand of other
Plexus customers but only if first approved by Packeteer. Packeteer agrees to assist Plexus in
such efforts if appropriate and requested by Plexus.

Packeteer acknowledges that Plexus’ mitigation efforts, even if successful, may result in
cancellation, restocking, and similar charges imposed by Suppliers. Plexus will obtain Packeteer’s
approval prior to incurring such charges.

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

If so approved by Packeteer, Packeteer will pay Plexus
for the charges imposed within thirty (30) days from the date of Plexus’ invoice.

b. Component Inventory Reporting. Monthly on Plexus’ own initiative or sooner upon Packeteer
request, Plexus will provide a written report to Packeteer detailing the level of OX Components at
Plexus (the “OX Report”). Packeteer will respond to Plexus in writing within thirty (30) days of
receipt of the OX Report with any good faith disagreement to it, detailing with reasonable
particularity the nature of any such disagreement. Packeteer’s failure to respond within such
period will represent its acceptance of the OX Report. Should Packeteer disagree with the OX
Report, Packeteer and Plexus will work in good faith to promptly resolve the disagreement,
escalating such disagreement to executive management at the request of either party and Plexus
agrees to provide such additional information as Packeteer may reasonably request in order to
verify the accuracy of the OX Report and the basis for such Excess Components or Obsolete
Components being procured. Any undisputed portion of the OX Report will proceed to resolution as
provided in Section 7.1.c. below. The parties agree that Packeteer shall not be obligated to pay
for Excess Components or Obsolete Components that were not procured in accordance with Packeteer
Demand, at times reasonably consistent with the lead-time of such Components at the time of order,
and as otherwise required by the terms of this Agreement or permitted by Packeteer.

c. OX Component Liability Resolution. Subject to having performed the mitigation and reporting on
OX Components as provided above, Packeteer shall within thirty (30) days from the date of an
appropriate Plexus invoice to reflect the undisputed portion of the OX Report:

	 	1.  	remit payment to Plexus for Obsolete Components at the Component Value; and
	 
	 	2.  	with respect to Excess Components, at Packeteer’s option (i) remit payment to Plexus
for the Excess Material at the Component Value thereof, (ii) remit a deposit to Plexus for
the Excess Material at the Component Value thereof, or (iii) provide Plexus with a Purchase
Order for Assemblies that will consume the Excess Material within thirty (30) days.

The remittance of a deposit by Packeteer as provided above will represent a security to Plexus for
Packeteer’s Component liability. Plexus and Packeteer will review any amounts on deposit with
Plexus from time to time at either party’s discretion and make adjustments to the same to reflect
the-then current Component Value of Excess Components. Plexus may hold any such deposits made by Packeteer under this Agreement in any manner
at its discretion. Title and risk of loss for Components against which a deposit has been made
shall remain with Plexus. Plexus will also retain responsibility to insure and warehouse such
Components according to Plexus’ then-current practices.

	7.2  	Physical Inventory Reviews

Plexus shall permit Packeteer to conduct physical inventory reviews on a regular basis as deemed
necessary by Packeteer in its sole discretion. During such reviews, Plexus agrees to provided at
no additional cost a person reasonably familiar with this Agreement and Plexus’ manufacturing and
inventory procedures to assist Packeteer in conducting such reviews. In such event that Packeteer
chooses to migrate from conducting physical inventory reviews to a cycle count method of tracking
inventory, then Plexus shall at no additional cost agree to provided such services to Packeteer in
a method and manner reasonably agreed upon by the parties.

	8.  	QUALITY STANDARDS

a. General. Plexus agrees to maintain a quality assurance program compliant with the requirements
of ISO 9001: 2000 and shall be ISO 9001 certified and provide a copy of certification and/or plan
upon request. Plexus additionally agrees to obtain other Packeteer specified or legally required
Assembly certifications if requested by Packeteer. The cost of procuring such additional services
shall be mutually agreed upon in writing at prior to such services being performed. Upon
Packeteer’s request, Plexus shall provided Packeteer with a statement of origin and with applicable
customs documentation for any Components wholly or partially manufactured outside of the United
States.

b. Workmanship Requirements. Assemblies manufactured by Plexus will be assembled, inspected, and
tested in

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

accordance with the Specifications and in accordance with the attached Quality Plan.
Unless otherwise agreed upon in writing, Plexus shall maintain a Product assurance “workmanship”
requirement which mandates internal compliance to [****]. Target process in
writing and product first pass yields (or PPM’s) in manufacturing shall be jointly agreed to
between Plexus Quality Engineering and the Packeteer. These Packeteer goals will form the basis
for Continuous Quality Improvement (“CI”) Activities at Plexus.

	c.  	Continuous Improvement.

Plexus and Packeteer agree to hold a CI meeting or conference call as
often as necessary to be established with the Packeteer’s Quality Team and Plexus CI Team. This CI
event will result in documented action items at Plexus that drive improvement efforts that can be
reported to management at both organizations.

d. Chronic Tests Failures (“Production”). Packeteer Assemblies will be manufactured and tested to
the Specifications associated with the current Assembly revision and the Quality Plan. Assemblies
that fail the approved tests [****] for the same issue or that cannot be repaired by Plexus due to
a design related issue will be deemed non-repairable Assemblies. The non-repairable Assemblies
will be clearly marked as “failed Assemblies.” Both companies agree to review the status of all
“failed Assemblies” within ten (10) business days of identification and Plexus agrees to dispose of
them as directed by Packeteer either by scrapping the Assemblies or shipping the Assemblies to
Packeteer. If such failure was at no fault of Plexus, Plexus will issue Packeteer an invoice at
the quoted Assembly price with payment terms as described in Section 5 of this Agreement.
Plexus’ test data will be maintained and will be available for inspection by Packeteer during
normal business hours upon reasonable notice. Plexus agrees to comply with applicable quality
procedures and testing as set forth in the Specifications and the Quality Plan, including the
quality guidelines attached thereto, and Plexus shall provide quality-control records and reports
to Packeteer promptly upon request.

e. Packaging. Packaging will be in accordance with Packeteer’s standards set forth in the
Specifications, unless otherwise mutually agreed in writing. Packeteer shall specify in the
Specifications, the trademarks and trade dress features to appear on the Assemblies and the
publications to be included in the packaging.

f. Manufacturing and Design Documentation. Plexus shall segregate all materials and media provided
to Plexus by Packeteer or third party contractors, Suppliers or licensors acting at Packeteer’s
request or created by Plexus or third party contractors, Suppliers, or licensors acting at Plexus’
request, in each case for use in the services to be performed by Plexus for Packeteer hereunder,
and provide Packeteer with a set of copies thereof as requested by Packeteer from time to time.
Except for copies needed to be retained for Plexus to complete its obligations under this Agreement
and one copy which may be retained in a segregated manner solely for nonproductive archival
purposes for reference concerning Plexus’ obligation hereunder subject to the confidentiality
provisions set forth herein, Plexus shall turn over such materials to Packeteer upon termination of
this Agreement.

	9.  	ENGINEERING CHANGES

a. Notice of change. Packeteer agrees to submit all Engineering Changes (EC) to Plexus in writing.
An EC may be a permanent change or a temporary change or temporary deviation from Packeteer’s
Specifications as directed by Packeteer. Plexus will attempt to evaluate the feasibility of the EC
requested by Packeteer within two (2) business days of receipt and respond to Packeteer in writing
with the potential impact of the EC on current on-hand or on-order inventory, work-in-progress and
the delivery schedule. In the event that Packeteer requests an EC, Plexus agreed to use its best
efforts to implement the EC in an appropriate manner.

b. Notice of EC impact.

In addition to the written response provided above, Plexus will attempt to respond to Packeteer
within seven (7) business days of Packeteer’s submission of an EC with a written evaluation of the
EC including: a) the cost to modify tooling or related non-recurring expenses, b) the obsolete
quantity of Components Plexus has on hand and/or on order with its Suppliers related to the EC
which cannot be cancelled by Plexus without penalty, c) the cost to rework work-in-process and any
ongoing unit price adjustment resulting from the EC, d) the expected effect on the delivery
schedule to include the effect on all in-process work (e.g., re-workable, repairable, etc.), and e)
the manner in which the EC will be implemented. Should an EC affect Plexus’ ability to meet a
previously agreed upon

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

Delivery Date, Plexus shall immediately notify Packeteer of such event and
shall provide Packeteer with the alternative Delivery Date. However, Plexus will work with
Packeteer in good faith to avoid any such inability to perform and deliver the Assemblies required
by Packeteer.

	10.  	TOOLING AND TEST EQUIPMENT

All Packeteer custom tooling produced or obtained by Plexus for the Assemblies delivered
hereunder will be paid for by Packeteer at prices agreed upon by the parties. Such tooling shall
become and remain the property of Packeteer. If Plexus is required to obtain such custom tooling
for Packeteer, Plexus agrees to invoice Packeteer for such tooling within one (1) business day of
such tooling/equipment being placed into service. Packeteer may also consign tooling and/or test
equipment to Plexus for the manufacture of the Assemblies.

All Packeteer custom tooling and test equipment owned by Packeteer shall be used by Plexus only for
the benefit of Packeteer, and shall be delivered to Packeteer upon request. Plexus will not cause to occur any
lien or encumbrance on any such tooling or test equipment owned by Packeteer and in Plexus
possession. Plexus will insure any Packeteer owned tooling or test equipment in Plexus’ possession
at the replacement value thereof under the terms of Plexus’ then current insurance policies.

Plexus shall maintain, repair, calibrate, or upgrade test equipment. Packeteer will pay for any
such services on a time and materials basis subject to Plexus submitting a quotation and obtaining
Packeteer’s acceptance of such quotation prior to any such services being performed with the
exception of routine maintenance, which routine maintenance shall be performed by Plexus at no
additional cost. Such maintenance shall be quoted by Plexus, and, if accepted by Packeteer,
Packeteer shall issue a Purchase Order for such services. Replacement parts for test equipment
will be charged at Plexus’ cost plus markup as specified in Addendum 1. Travel expense incurred by
Plexus shall not be passed on to Packeteer unless specifically agreed upon in writing by
Packeteer.If Packeteer requests the return of any tooling and/or test equipment from Plexus and the
return of such tooling prevents Plexus from providing Assemblies or warranty service to Packeteer,
then Plexus shall be relieved of such obligations.

	11.  	DOCUMENTATION

Packeteer, individually or through its subcontractors, shall have primary responsibility for the
preparation of Specifications for the Assemblies and all updates to such Specifications. Packeteer
will notify Plexus of any changes to the Specifications in accordance with Section 9.

	12.  	LIMITED WARRANTY

Warranty. Plexus warrants that the Assemblies will conform to the Specifications and be free from
defects in workmanship performed by Plexus for a period of [****] from the
date the Assemblies are put into Plexus’ finished goods inventory, and that Packeteer shall receive
good and marketable title to the Assemblies upon delivery, free of any liens or claims (other than
intellectual property rights, which are addressed in Section 14). With respect to Components,
Plexus will transfer to Packeteer any transferable Component warranties received from the
manufacturer thereof. [****] Plexus shall provide Packeteer with a report identifying each
Component’s warranty and indemnity terms and conditions at the QBR or sooner at Packeteer’s
request. Such warranty shall begin no sooner than the date such Components are shipped to Plexus
by the manufacturer. If Components may be returned under manufacturer’s warranty, Plexus will, on
Packeteer’s behalf and without additional charge, manage the return of any such Components to the
manufacturer thereof for repair or replacement. Packeteer, at any time, shall have the right to
inspect the Assemblies, Component and/or work-in-process on Plexus’ premises. If inspection or
test is made on Plexus’ premises, Plexus agrees to provide Packeteer inspectors with reasonable
facilities and assistance at no additional charge. No such inspection or approval by Packeteer
shall constitute a waiver of any further warranty claim.

In Warranty Assemblies. Plexus will, at it’s option and free of charge to Packeteer, repair or
replace Assemblies not conforming to the warranties in this Section 12 provided they are returned
to Plexus bearing a return materials authorization (RMA) number issued by Plexus, securely
packaged, with freight prepaid, and within the warranty period. Plexus’ warranty for replacement
or repaired Assemblies shall be the same as the warranty stated herein provided that the duration
of such warranty shall be limited to the greater of (i) the duration of the balance of the

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

[****] warranty which remained on the original defective Assemblies; or (ii)
[****]. The duration of such warranty shall begin from the date of shipment
of the Assembly to the Packeteer customer or shipment of the Assembly to Packeteer. Plexus will
make all reasonable efforts to respond to Packeteer promptly after receiving a RMA number
request but in no event later than five (5) calendar days. Plexus will return any Assemblies
repaired or replaced pursuant to this paragraph to Packeteer with freight prepaid. If Plexus is
unable to repair or replace such Assemblies, Plexus will credit Packeteer’s account for any
Assemblies found not to conform to such warranties during the warranty period. Warranty repairs
shall be made within ten (10) business days after receipt of the non-conforming Assembly. Warranty
repairs performed by Packeteer or any third party will be only on terms to be mutually agreed by
the parties.

The above warranty does not apply to:

	 	§  	Design Deficiencies, except that this exclusion will in no way affect any design
warranty made by Plexus under any separate agreement executed by the parties for the
provision by Plexus of design services.
	 
	 	§  	Malfunctions, defects, or failures that result from misuse; abuse; accident; neglect;
improper installation, operation or maintenance; theft; vandalism; acts of God; power
failures or surges; casualty; or alteration, modification, or repairs by any party other
than Plexus, its employees or agents.
	 
	 	§  	Customer-Supplied Components
	 
	 	§  	Assemblies shipped by Plexus and not tested according to agreed-upon test procedures at
the direction of Packeteer provided that such test(s) would have reasonably been determined
to have caught such defect.

Plexus warrants that the manufacturing processes employed by it hereunder (other than those
specifically required by Packeteer’s Specifications) shall not infringe any third-party
intellectual property rights.

THE FOREGOING CONSTITUTES PACKETEER’S SOLE REMEDIES AGAINST PLEXUS FOR BREACH OF WARRANTY CLAIMS.
EXCEPT AS PROVIDED IN THIS SECTION, PLEXUS MAKES NO WARRANTIES WITH RESPECT TO THE ASSEMBLIES OR
ITS SERVICES HEREUNDER, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES RESPECTING
NONINFRINGEMENT, OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES
ARISING FROM A COURSE OF PERFORMANCE, A COURSE OF DEALING, OR TRADE USAGE. PLEXUS MAKES NO
WARRANTY WITH RESPECT TO MANUFACTURING SOFTWARE. ALL SOFTWARE IS PROVIDED “AS IS,” PROVIDED
HOWEVER PLEXUS SHALL NOT INCLUDE ANY SUCH MANUFACTURING SOFTWARE IN THE ASSEMBLIES. FOR THE
PURPOSE OF THIS SECTION, MANUFACTURING SOFTWARE SHALL MEAN SOLELY THAT SOFTWARE USED BY PLEXUS IN
ITS MANUFACTURING PROCESS.

Out-of-Warranty Assemblies. Out-of-Warranty Assemblies returned for repair shall be evaluated and
the cost to repair the Assembly determined by Plexus. Plexus will notify Packeteer of the
estimated repair cost and will await written authorization from Packeteer before commencing
repairs. Packeteer shall pay shipping charges for out-of-Warranty Assemblies. Out of warranty
repairs shall be warranted for [****]with respect to the repair work
performed. Warranty repairs shall be made within ten (10) business days after receipt of the
non-conforming Assembly. Any repair services requested of Plexus by Packeteer not explicitly
covered by the above warranty, including, but not limited to, upgrade services, will be
out-of-warranty services and performed by Plexus at its option and on a time and materials basis or
as otherwise mutually agreed upon in writing by the parties. In addition, Assemblies for which
Plexus cannot duplicate the failure reported by Packeteer and such conformity is verified by
Packeteer, shall be returned to Packeteer and Plexus will invoice Packeteer, and Packeteer shall
pay, Plexus shipping charges.

	13.  	PROPRIETARY RIGHTS

All intellectual property produced or developed (i) by Packeteer during the term of this Agreement
in connection with the Assemblies, (ii) by Plexus relating to the design of the Assemblies, or
(iii) by Plexus relating to any test

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

services, tooling, or fixtures used to manufacture, test, or
configure-to-order the Assemblies and that are custom in nature to the Assemblies shall be owned
exclusively by Packeteer. All intellectual property produced or developed by Plexus during the
term of this Agreement in connection with the manufacturing process, including relating to any test
services, tooling, or fixtures (so long as such test, tooling, stencil, or equipment intellectual
property is not custom in nature to the Assemblies) shall be owned exclusively by Plexus (“Plexus
IP”). Except with respect to the Plexus IP, Plexus hereby assigns, transfers and conveys to
Packeteer all copyright rights in the Assemblies and other services, including but not limited to
works qualifying as “works made for hire” as defined in the U.S. Copyright Laws (U.S.C. Title 17 –
Copyrights). Except for any licenses and immunities that are expressly granted by this Agreement,
nothing in this Agreement or any course of dealing between the parties will be deemed to create a
license from either party to the other of any intellectual property right, whether by estoppel,
implication, or otherwise. Each party expressly reserves all rights under trade secrets, patents,
trademarks, copyrights or maskworks owned by such party.

To the extent that Plexus incorporates into Assemblies or other services provided to Packeteer any
of Plexus’ pre-existing works and with respect to Plexus IP, Plexus agrees to grant, and hereby
grants to Packeteer a non-exclusive, fully paid up, world-wide, non-transferable, and perpetual
license under such Plexus intellectual property rights to copy, distribute, display, perform and
make derivative works of such intellectual property to the extent reasonably necessary for
Packeteer to make, use, or sell the Assemblies. Any such derivative works developed by Packeteer
shall be promptly disclosed to Plexus and will be owned by Plexus.

If Plexus incorporates any works of any third party into the Assemblies as a result of the
subcontracting of any work to be performed hereunder, Plexus agrees to acquire for Packeteer, at no
additional cost to Packeteer, a fully paid up, non-exclusive, world-wide, and perpetual license to
copy, distribute, display, perform and make derivative works of such third party works to the
extent reasonably necessary for Packeteer to make, use, or sell the Assemblies.

Plexus shall provide any reasonable assistance necessary for Packeteer to perfect its rights in the
Assemblies. Plexus’ obligation under this section shall survive and continue beyond the expiration
or termination of this Agreement.

	14.  	INDEMNIFICATION

Packeteer agrees to defend at its expense, hold harmless and indemnify Plexus, its officers,
shareholders, directors, employees, and agents, from and against any judgments, liabilities,
claims, demands, expenses, or costs (including reasonable attorneys’ fees) to the extent arising
from any claim, action, or allegation relating to the Specifications of the Assemblies or the
infringement by the Assemblies of any third party intellectual property right, except with respect
to infringement caused by Plexus’ deviation from Packeteer’s Specifications without Packeteer’s
written consent or for which Plexus has an indemnification obligation to Packeteer under the
paragraph below. Plexus shall notify Packeteer promptly upon becoming aware of any claim or action
pursuant to which indemnity will be sought and shall provide reasonable assistance to Packeteer, at
Packeteer’s expense, in the defense of any such action.

Packeteer shall have sole control over the defense or settlement of any such proceeding or claim.
Plexus, at its own expense, shall protect, defend, hold harmless, and indemnify Packeteer, and
shall pay any damages, agreed upon settlement amounts, or necessary costs (including reasonable
attorney fees and fines) finally awarded with respect to all proceedings or claims against it for
the infringement of any intellectual property rights to the extent resulting from (i) Plexus’
manufacturing process or its manufacture of tooling or fixtures and test development services or
(ii) Plexus’ deviation from Packeteer’s Specifications without Packeteer’s prior written consent.
Plexus shall not have any indemnification obligation to the extent resulting from (1) compliance
with Packeteer’s Specifications; or (2) infringement or alleged infringement caused by
Customer-Supplied Components. Plexus shall have sole control over the defense or settlement of any
such proceeding or claim.

Furthermore, each party shall indemnify and defend the other party against all claims, suits,
losses, expenses, and liabilities for bodily injury, personal injury, death, and tangible property
damage directly or indirectly caused through the willful misconduct or gross negligence of such
party or of any person for whose actions said party is legally liable.

	15.  	TERMINATION

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

Either party may terminate this Agreement at any time and for any reason upon one hundred fifty
(150) days prior written notice to the other party. In addition, either party may terminate this
Agreement in the event that the other party (i) fails to cure a material default under this
Agreement within forty-five (45) days after receiving written notice thereof or (ii) becomes
insolvent, files, or has filed against it a petition in bankruptcy, makes an assignment for the
benefit of creditors, or generally becomes unable to pay its debts as they become due.

After the issuance by either party of a notice of termination under this Section 15 hereof,
and prior to the termination of this Agreement, Plexus will accept Purchase Orders, subject only to
Component availability from the supply chain and the flexibility parameters of Section 4.2 hereof,
to accommodate Packeteer’s “last time buy” requirements. Should the fulfillment by Plexus of
these requirements extend beyond the actual termination date of this Agreement, the terms of this
Agreement will nevertheless survive such termination and apply to such Purchase Orders and their
fulfillment. However, Plexus may require that Packeteer establish an escrow account for the
payment of the Assemblies should the notice of termination be due to Packeteer breach but shall not
be obligated to accept Purchase Orders if Packeteer is in breach of Section 14 hereof or if the
fulfillment of the same will extend beyond sixty (60) days after the termination of this Agreement
based upon the Manufacturing Lead-Time established prior to the date notice of termination is
given, which is expected not to exceed four (4) weeks from the receipt of Packeteer’s Purchase
Order.

Upon termination of this Agreement, all outstanding Packeteer Purchase Orders shall be fulfilled
subject to the terms and conditions of this Agreement unless otherwise cancelled by Packeteer.
Furthermore, subject to the following paragraph, Packeteer agrees to pay Plexus the Component Value
of any Components on hand or on order as of the date of Termination provided the quantity of such
Components was procured in accordance with this Agreement.

Plexus will use best reasonable efforts to minimize Component liability to Packeteer caused by
termination. These efforts will include returning Components to, or restocking Components with
Suppliers, canceling orders with Suppliers, or using Components to meet the current demand of other
Plexus customers but only if first approved by Packeteer. Packeteer agrees to assist Plexus in
such efforts if appropriate and requested by Plexus.

Upon termination or expiration of this Agreement, Plexus shall immediately deliver or destroy, at
Packeteer’s direction, all Packeteer Confidential Information, Assemblies, Components and
Components on order for which Packeteer has paid for, and other materials, equipment, tools and
other items in Plexus’ possession or which were provided to Plexus by Packeteer or purchased by
Packeteer. With respect to equipment, tools, Components and other materials that Plexus has
purchased at Packeteer’s direction and on Packeteer’s behalf, Packeteer shall be required to have
reimbursed Plexus for such materials prior to Plexus delivering them to Packeteer.

	16.  	CONFIDENTIALITY

The parties shall abide by the terms and conditions of that certain Non-Disclosure Agreement
entered into by them and dated January 17, 2005. All information provided by Packeteer with
respect to the manufacture, testing or packaging of the Assemblies shall be treated as Confidential
Information of Packeteer whether or not marked as “Confidential” but so long as such information
qualifies as Confidential Information under said Non-Disclosure Agreement.

	17.  	SURVIVAL

Sections 1, 2, 5, 12, 13, 14, 15, 16, 17, 18, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33,
34, 35, 36, 37 of this Agreement shall survive the termination of this Agreement in accordance with
their terms. In addition, the terms of this Agreement shall survive termination in the event of
performance by the parties after termination as provided under Section 15.

	18.  	LIMITATION OF LIABILITY

EXCEPT WITH RESPECT TO SECTIONS 14, AND 16 OF THIS AGREEMENT, IN NO EVENT, WHETHER AS A RESULT OF
BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF USE, OR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR EXEMPLARY DAMAGES OF ANY KIND (“CONSEQUESTIAL
DAMAGES”),

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

WHETHER OR NOT SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND
NOTWITHSTANDING THE FAILURE, OR ESSENTIAL PURPOSE, OF ANY REMEDY.

	19.  	FORCE MAJEURE

Except with respect to obligations for the payment of money, neither party shall be liable for any
delay in or failure of performance under this Agreement due to any contingency beyond said parties’
reasonable control, including, but not limited to, an act of God, war, acts of terrorism,
insurrection, fire, riot, sabotage, an act of public enemy, flood, storm, accident, Component
shortages, or changes in laws or regulations. In the event either party becomes aware of any such
event that may lead to a force majeure claim, such party shall immediately advise the other party
and shall agree to take all precautions to avoid such event impacting the manufacture of the
Assemblies.

	20.  	ASSIGNMENT

Neither Plexus nor Customer shall assign this Agreement, or any of its rights or delegate any of
its responsibilities under this Agreement, and any purported attempt to do so will be null and
void, unless agreed to by both parties in writing; provided, however, that Plexus and Customer may,
without consent, assign this Agreement to any successor organization resulting from a merger,
spin-off, or other reorganization, or any sale of all or substantially all of such party’s assets
provided Plexus agrees that it shall not be permitted in any event to assign this Agreement to a
competitor of Packeteer and provided Plexus provide advance written notice of such action as soon
as practicable. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns.

	21.  	ALTERNATE DISPUTE RESOLUTION (“ADR”)

Each party shall escalate any disputes arising hereunder to executive management, who will make
good faith efforts to resolve the dispute in a timely manner. If attempts to resolve a dispute by
each parties’ executive management
fail, then the dispute will be mediated by a mutually acceptable mediator to be chosen by Packeteer
and Plexus within forty-five (45) days after written notice by either party demanding mediation.
Such mediation shall be conducted in Santa Clara County, California. Neither party may
unreasonably withhold consent to the selection of a mediator, and Packeteer and Plexus will share
the costs of the mediator equally. Each party shall pay its own attorneys’ fees. By mutual
agreement, however, Packeteer and Plexus may postpone mediation until each has completed some
specified but limited discovery regarding the dispute. The parties may also agree to replace
mediation with some other form of alternate dispute resolution, such as neutral fact finding or a
mini-trial.

Any dispute which cannot be resolved between the parties through negotiation, mediation, or other
form of ADR within three (3) months of the date of the initial demand for ADR by one of the parties
may then be submitted to a court of competent jurisdiction. The use of any ADR procedures will not
be construed under the doctrines of laches, waiver, or estoppel to affect adversely the rights of
either party. Nothing in this Section will prevent either party from resorting to judicial
proceedings if (i) good faith efforts to resolve the dispute under these procedures have been
unsuccessful, or (ii) interim relief from a court is necessary to prevent serious and irreparable
injury to that party or to others.

	22.  	APPLICABLE LAW

The parties hereby agree that this Agreement shall be governed by and will be construed in
accordance with the laws of the State of New York, irrespective of the conflicts of law provisions
thereof. Neither the sale of Assemblies nor any services performed in accordance with this
Agreement shall be governed by, or subject to, the United Nations Convention on Contracts for the
International Sale of Goods.

	23.  	TRADEMARKS AND TRADE NAMES

Except with respect to either parties legal or securities reporting obligations, neither this
Agreement nor the sale of Assemblies hereunder shall be deemed to give either party any right to
use any of the other party’s trademarks or trade names without such other party’s specific, written
consent. Packeteer specifically shall have the right to identify Plexus as its contract
manufacturer.

	24.  	COMPLIANCE WITH GOVERNMENT REQUIREMENTS

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

In the performance of this Agreement, Plexus shall at all times comply with all applicable
governmental laws, statutes, ordinances, rules, regulations, orders and other requirements,
including, without limitation, such governmental requirements applicable to environmental
protection, wages, hours, equal employment opportunity, nondiscrimination, health, safety and
working conditions. Plexus shall comply with the provisions outlined in the Equal Opportunity
Clauses of Executive Order 11246, (60-1.4), section 503 of the Rehabilitation Act of 1973,
(60-741.5), and, section 402 of the Vietnam Era Veterans Readjustment Act of 1974, (60-250.5), as
well as any other regulations pertaining to these orders. In particular, without limitation of the
foregoing, Plexus acknowledges and agrees that the Assemblies are subject to restrictions and
controls imposed by the Export Administration Act and the Export Administration Regulations and
other laws and regulations of the United States and any other applicable government or jurisdiction
as enacted by the United States or such other government or jurisdiction from time to time (“the
Acts”). Plexus hereby agrees to comply with such restrictions and controls as imposed by the Acts.
Plexus agrees that neither the Assemblies will be exported, directly or indirectly, in violation of
these laws, or used for any purpose prohibited by these laws, including without limitation,
nuclear, chemical, or biological weapons proliferation. Notwithstanding the foregoing, Packeteer
shall assume responsibility to secure any export licenses or
other approvals required to ship the Assemblies to Packeteer’s customers. Plexus will not be
responsible for Packeteer’s failure to comply with the Acts in such effort or any compliance by
Plexus with Packeteer instructions with regard to the shipment of Product. In the event that
Packeteer’s assistance is necessary to achieve such compliance, Plexus shall promptly notify
Packeteer. Upon Packeteer’s request, Plexus shall provide Packeteer with documentation
demonstrating Plexus’ compliance with such governmental requirements. After reasonable notice and
under reasonable conditions, Packeteer shall have the right to inspect and copy any records of
Plexus regarding such compliance.

	25.  	INSURANCE, TAXES AND BENEFITS

Plexus shall have full and exclusive liability for the payment of, and Plexus shall pay, any and
all taxes and contributions for unemployment insurance, old age retirement benefits, workers’
compensation insurance or benefits, life insurance, pensions, annuities and similar benefits and
any other employment-related costs, obligations, and duties which may now or hereafter be imposed
by law, collective bargaining agreements or otherwise with respect to persons employed by Plexus
for the performance of services under this Agreement.

	26.  	SOLICITATION OF EMPLOYMENT

Plexus agrees not to recruit, divert or solicit the employment of any Packeteer employee during the
term of this Agreement and for a period of ninety (90) days following termination of this
Agreement. If Plexus violates this provision, the parties agree that Plexus shall pay Packeteer the
equivalent of six (6) month’s salary for each of the employees so solicited. The foregoing shall
not prohibit Plexus from making general solicitations, such as by advertisement, and hiring any
Packeteer employee responding to such general solicitation.

	27.  	USE OF PACKETEER RESOURCES

If given authorization to utilize Packeteer resources (e.g. computer resources), Plexus agrees to
use such resources strictly for performing the services hereunder to Packeteer. Any other or
unauthorized use will subject Plexus to immediate termination of the Agreement without further
payment. Upon such termination, Packeteer does not waive any possible legal action arising from
the unauthorized use of Packeteer resources.

	28.  	NOTICES

All notices shall be in writing and shall be deemed given on the date deposited in the United
States mail, postage prepaid, registered or certified, with return receipt requested. Notices
shall be addressed at their respective addresses appearing in the introductory section of this
Agreement, but each party may change its address by written notice in accordance with this section.

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

	29.  	INSPECTION

At no additional cost, at reasonable times and under reasonable conditions, Packeteer, its agents
and Packeteer’s customers or potential customers shall have the right to inspect Plexus’ facility.
However, inspection of Plexus’ facility by a Packeteer agent, customer or potential customer shall
be subject to Plexus’ consent, which shall not be unreasonably withheld. Additionally, Packeteer
and its agents shall have the right to inspect and audit Plexus records and facility as they
pertain to the services performed by Plexus under this Agreement. At the conclusion of any
services performed under this Agreement, Packeteer shall have the right to make any final
inspection or tests that Packeteer shall deem advisable, but at reasonable times and under
reasonable conditions.

	30.  	TITLES AND HEADINGS

All titles or headings utilized in this Agreement are for convenience only and shall not be
considered in construing or interpreting this Agreement. The titles or headings used in this
Agreement shall not define, limit, extend or describe the scope of this Agreement or the intent of
its provisions.

	31.  	LANGUAGE

The parties agree that (i) the English language shall be the exclusive and official language of
this Agreement, (ii) this Agreement shall be interpreted exclusively in the English language, and
(iii) the English language will govern all future relations of the parties, including, but not
limited to, any proceeding, mediation, arbitration, dispute, or claim hereunder.

	32.  	RELATIONSHIP OF THE PARTIES

Neither party is designated or appointed an agent or representative to the other party and no party
will have any authority, either expressed or implied, to create or assume any agency or obligation
on behalf of or in the name of the other party. The relationship of Plexus to Packeteer is that of
independent contractor, and neither party will have any responsibility for, or obligations to, the
employees of the other.

	33.  	SEVERABILITY

If any provision of this Agreement is adjudged to be unenforceable in whole or in part, such
adjudication shall not affect the validity of the remainder of this Agreement. Each provision of
this Agreement is severable from every other provision and constitutes a separate, distinct and
binding covenant.

	34.  	COOPERATION

The parties cooperated in the preparation and negotiation of this Agreement and this Agreement will
not be construed against or in favor of any party by virtue of the identity, interest, or
affiliation of its preparer.

	35.  	NON-WAIVER

Failure by either party to exercise any right granted in this Agreement shall not be deemed a
waiver of such right. A waiver of any right under this Agreement must be in writing and signed by
an authorized representative of the party making such waiver.

	36.  	ENTIRE AGREEMENT; MODIFICATION

This Agreement and the Addendums attached hereto or referenced herein contains the entire
understanding of the parties pertaining to the subject matter hereof, and no other agreements, oral
or otherwise, shall be deemed to exist or to bind the parties pertaining to the subject matter
hereof. This Agreement may not be modified or terminated orally, and no claimed modification,
termination, or waiver shall be binding unless in writing and signed by authorized representatives
of both parties. Where there is any conflict or inconsistency with the express terms in this
Agreement and the attached Addendums, the terms of this Agreement shall supersede such conflicting
or inconsistent terms and conditions. The parties expressly agree that any preprinted terms and
conditions on any Plexus or Packeteer forms or documents shall be void and of no effect in
interpreting the obligations of either party during the term of this Agreement.

	37.  	COUNTERPARTS; FACSIMILE SIGNATURES

This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which when taken together shall constitute one and the same instrument. The
delivery of signatures to this

“CONFIDENTIAL TREATMENT REQUESTED”

 

 

Agreement by facsimile transmission shall be binding as original
signatures.

In witness whereof, the parties have executed this Agreement as of the Effective
Date.

	 	 	 	 	 	 	 	 	 
	PACKETEER, INC.	 	 	 	PLEXUS SERVICES CORP.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 	 	 	 	 	 	 	 	 

“CONFIDENTIAL TREATMENT REQUESTED”exv10w29

 

Exhibit 10.29

PACKETEER, INC.

1999 EMPLOYEE STOCK PURCHASE PLAN

As Amended and Restated Effective as of February 24, 2005

     I. PURPOSE OF THE PLAN

          This Employee Stock Purchase Plan is intended to promote the interests of Packeteer, Inc., a
Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary
interest in the Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.

          Capitalized terms herein shall have the meanings assigned to such terms in the attached
Appendix.

     II. ADMINISTRATION OF THE PLAN

          The Plan Administrator shall have full authority to interpret and construe any provision of
the Plan and to adopt such rules and regulations for administering the Plan as it may deem
necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in the Plan.

     III. STOCK SUBJECT TO PLAN

          A. The stock purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares of Common Stock purchased on the open market. The number
of shares of Common Stock initially reserved for issuance over the term of the Plan shall be
limited to 500,000 shares.

          B. The number of shares of Common Stock available for issuance under the Plan shall
automatically increase on the first trading day of January each calendar year during the term of
the Plan, beginning with calendar year 2000, by an amount equal to two percent (2%) of the total
number of shares of Common Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed 1,000,000 shares.

          C. Should any change be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities issuable under the
Plan, (ii) the maximum number and class of securities purchasable per Participant on any one
Purchase Date, (iii) the maximum number and class of securities purchasable by all Participants in
the aggregate on any one Purchase Date, (iv) the maximum number and/or class of securities by which
the share reserve is to increase automatically each calendar year pursuant to the provisions of
Section III.B of this Article One and (v) the number

 

 

and class of securities and the price per share in effect under each outstanding purchase
right in order to prevent the dilution or enlargement of benefits thereunder.

     IV. OFFERING PERIODS

          A. Shares of Common Stock shall be offered for purchase under the Plan through a series of
successive offering periods until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been
sooner terminated.

          B. Each offering period shall be of such duration (not to exceed twenty-four (24) months) as
determined by the Plan Administrator prior to the start date of such offering period. However, the
initial offering period shall commence at the Effective Time and terminate on the last business day
in July 2001. The next offering period shall commence on the first business day in August 2001,
and subsequent offering periods shall commence as designated by the Plan Administrator.

          C. Each offering period shall be comprised of a series of one or more successive Purchase
Intervals. Unless otherwise determined by the Plan Administrator, Purchase Intervals shall run
from the first business day in February to the last business day in July each year and from the
first business day in August each year to the last business day in January in the following year.
However, the first Purchase Interval in effect under the initial offering period shall commence at
the Effective Time and terminate on the last business day in January 31, 2000. Subsequent Purchase
Intervals shall commence and be of such duration as designated by the Plan Administrator.

          D. Should the Fair Market Value per share of Common Stock on the next business day following
any Purchase Date (the “Subject Purchase Date”), other than the last Purchase Date within an
offering period, be less than the Fair Market Value per share of Common Stock on any Semi-Annual
Entry Date within that offering period (including the start date of the offering period), then each
Participant whose participation in that offering period commenced on such Semi-Annual Entry Date
(the “Subject Entry Date”) shall automatically be deemed to have (i) terminated in accordance with
Section VII.F(i) his or her outstanding purchase right immediately following the purchase of shares
of Common Stock on the Subject Purchase Date and (ii) enrolled and been granted a purchase right in
a new offering period commencing on such next business day following the Subject Purchase Date.
Unless a shorter duration is established by the Plan Administrator within five (5) business days
following the start date of the new offering period, the new offering period shall have a duration
equal to (i) twenty-four (24) months if the Subject Entry Date was the start date of the old
offering period or (ii) the number of Purchase Intervals that remained following the Subject
Purchase Date in the old offering period if the Subject Entry Date was other than the start date of
the old offering period. Any payroll deductions of a Participant enrolled in a new offering period
in accordance with this Section which were withheld on or before the Subject Purchase Date and not
applied to the purchase of shares of Common Stock on the Subject Purchase Date (unless such
unapplied amount was insufficient to purchase a whole share of Common Stock) shall be promptly

2

 

refunded. This Section shall be effective for each offering period commencing on or after
July 16, 2003 and having a duration of twenty-four (24) months.1

     V. ELIGIBILITY AND ENROLLMENT

          A. Each individual who is an Eligible Employee on the start date of any offering period under
the Plan may enter that offering period on such start date or on any subsequent Periodic Entry Date
within that offering period, provided he or she remains an Eligible Employee.

          B. Each individual who first becomes an Eligible Employee after the start date of an offering
period may enter that offering period on any subsequent Periodic Entry Date within that offering
period on which he or she is an Eligible Employee.

          C. The date an individual enters an offering period shall be designated his or her Entry Date
for purposes of that offering period.

          D. To participate in the Plan for a particular offering period, an Eligible Employee must
complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase
agreement and a payroll deduction authorization) and file such forms with the Plan Administrator
(or its designee) on or before his or her scheduled Entry Date. Each Eligible Employee who has
become a Participant shall automatically participate in the next offering period commencing
immediately after the final Purchase Date of each offering period in which the Participant
participates, provided that the Participant remains an Eligible Employee on the start date of the
new offering period and has not terminated his or her purchase right as provided in Section VII.F.
A Participant who may automatically participate in a subsequent offering period as provided in this
Section is not required to deliver any additional enrollment form or stock purchase agreement for
the subsequent offering period in order to continue participation in the Plan. However, a
Participant may deliver a new enrollment form for a subsequent offering period in accordance with
the procedures set forth in Section VI if the Participant desires to change any of the elections
contained in the Participant’s then effective enrollment form.

     VI. PAYROLL DEDUCTIONS

          A. The payroll deduction authorized by the Participant for purposes of acquiring shares of
Common Stock during an offering period may be any multiple of one percent (1%) of the Cash
Compensation paid to the Participant during each Purchase Interval within that offering period, up
to a maximum not to exceed fifteen percent (15%). The Plan Administrator shall designate the
maximum payroll deduction in effect under the Plan prior to the start of any Purchase Interval; if
no designation is made, the maximum shall be fifteen percent (15%) of Cash Compensation. The
deduction rate so authorized by the Participant shall continue in effect throughout the offering
period, except to the extent such rate is changed in accordance with the following guidelines:

	1	 	Section IV.D of the Plan as in effect prior to July
16, 2003 shall apply to each offering period having a start date prior to such
date.

3

 

     (i) The Participant may, at any time during the offering period, reduce his or
her rate of payroll deduction to become effective as soon as possible after filing
the appropriate form with the Plan Administrator. The Participant may not, however,
effect more than one (1) such reduction per Purchase Interval.

     (ii) The Participant may, prior to the commencement of any new Purchase
Interval within the offering period, increase the rate of his or her payroll
deduction by filing the appropriate form with the Plan Administrator. The new rate
(which may not exceed the fifteen percent (15%) maximum) shall become effective on
the start date of the first Purchase Interval following the filing of such form.

          B. Payroll deductions shall begin on the first pay day administratively feasible following the
Participant’s Entry Date into the offering period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to the last day of that
offering period. The amounts so collected shall be credited to the Participant’s book account
under the Plan, but no interest shall be paid on the balance from time to time outstanding in such
account. The amounts collected from the Participant shall not be required to be held in any
segregated account or trust fund and may be commingled with the general assets of the Corporation
and used for general corporate purposes.

          C. Payroll deductions shall automatically cease upon the termination of the Participant’s
purchase right in accordance with the provisions of the Plan.

          D. The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall
neither limit nor require the Participant’s acquisition of Common Stock on any subsequent Purchase
Date, whether within the same or a different offering period.

     VII. PURCHASE RIGHTS

          A. Grant of Purchase Right. A Participant shall be granted a separate purchase right
for each offering period in which he or she participates. The purchase right shall be granted on
the Participant’s Entry Date into the offering period and shall provide the Participant with the
right to purchase shares of Common Stock on each Purchase Date during the remainder of such
offering period, upon the terms set forth below. The Participant shall execute a stock purchase
agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the
Plan Administrator may deem advisable.

          Under no circumstances shall purchase rights be granted under the Plan to any Eligible
Employee if such individual would, immediately after the grant, own (within the meaning of Code
Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five
percent (5%) or more of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.

          B. Exercise of the Purchase Right. Each purchase right shall be automatically
exercised on each successive Purchase Date within the offering period, and shares of Common Stock
shall accordingly be purchased on behalf of each Participant on each such

4

 

Purchase Date. The purchase shall be effected by applying the Participant’s payroll
deductions for the Purchase Interval ending on such Purchase Date to the purchase of whole shares
of Common Stock at the purchase price in effect for the Participant for that Purchase Date.

          C. Purchase Price. The purchase price per share at which Common Stock will be
purchased on the Participant’s behalf on each Purchase Date within any offering period shall be
established by the Plan Administrator; provided, however, the purchase price on each Purchase Date
shall not be less than eighty-five percent (85%) of the lower of (i) the Fair Market Value
per share of Common Stock on the Participant’s Entry Date into that offering period or (ii) the
Fair Market Value per share of Common Stock on that Purchase Date.

          D. Number of Purchasable Shares. The number of shares of Common Stock purchasable by
a Participant on each Purchase Date during the offering period shall be the number of whole shares
obtained by dividing the amount collected from the Participant through payroll deductions during
the Purchase Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of Common Stock
purchasable per Participant on any one Purchase Date shall not exceed 1,000 shares, subject to
periodic adjustments in the event of certain changes in the Corporation’s capitalization. In
addition, the maximum aggregate number of shares of Common Stock purchasable by all Participants on
any one Purchase Date shall not exceed 200,000 shares, subject to periodic adjustments in the event
of certain changes in the Corporation’s capitalization. However, the Plan Administrator shall have
the discretionary authority, exercisable prior to the start of any offering period under the Plan,
to increase or decrease the limitations to be in effect for the number of shares purchasable per
Participant and in the aggregate by all Participants on each Purchase Date during that offering
period.

          E. Excess Payroll Deductions. Any payroll deductions not applied to the purchase of
shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole
share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date.
However, any payroll deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in the aggregate on the
Purchase Date shall be promptly refunded.

          F. Termination of Purchase Right. The following provisions shall govern the
termination of outstanding purchase rights:

     (i) A Participant may, at any time prior to the next scheduled Purchase Date in
the offering period, terminate his or her outstanding purchase right by filing the
appropriate form with the Plan Administrator (or its designate), and no further
payroll deductions shall be collected from the Participant with respect to the
terminated purchase right. Any payroll deductions collected during the Purchase
Interval in which such termination occurs shall, at the Participant’s election, be
immediately refunded or held for the purchase of shares on the next Purchase Date.
If no such election is made at the time such purchase right is terminated, then the
payroll deductions collected with respect to the terminated right shall be refunded
as soon as possible.

5

 

     (ii) The termination of such purchase right shall be irrevocable, and the
Participant may not resume participation in the offering period for which the
terminated purchase right was granted unless he or she re-enrolls in the Plan (by
making a timely filing of the prescribed enrollment forms) on or before a
regularly-scheduled Periodic Entry Date into that offering period. In such event,
the Participant shall be granted a new purchase right with a new purchase price
based upon the Fair Market Value per share on Common Stock on his or her new Entry
Date, if applicable.

     (iii) Should the Participant cease to remain an Eligible Employee for any
reason (including death, disability or change in status) while his or her purchase
right remains outstanding, then that purchase right shall immediately terminate, and
all of the Participant’s payroll deductions for the Purchase Interval in which the
purchase right so terminates shall be immediately refunded. For purposes of the
Plan, a Participant shall be deemed to remain an Eligible Employee while on any
military leave, sick leave or other bona fide leave of absence approved by the
Company so long as the period of such leave does not exceed ninety (90) days or such
longer period during which the Participant’s right to reemployment with the
Corporation is guaranteed by statute or contract. However, should a Participant’s
approved leave of absence exceed ninety (90) days or such longer period during which
the Participant’s right to reemployment with the Corporation is guaranteed by
statute or contract, the Participant shall be deemed to have ceased to be an
Eligible Employee on the ninety-first (91st) day of such leave or the day
immediately following the end of the period during which the Participant’s right to
reemployment with the Corporation is guaranteed by statute or contract, whichever is
later. A Participant who has ceased to be in active service by reason of an
approved leave of absence shall, for so long as such Participant remains an
Eligible Employee, have the right, exercisable up until the last business day of the
Purchase Interval in which such leave commences, to (a) withdraw all the payroll
deductions collected to date on his or her behalf for that Purchase Interval or (b)
have such funds held for the purchase of shares on his or her behalf on the next
scheduled Purchase Date. In no event, however, shall any further payroll deductions
be collected on the Participant’s behalf during such leave other than from such
Participant’s Cash Earnings. Upon the Participant’s return to active service (x)
within ninety (90) days following the commencement of such approved leave of absence
or (y) prior to the expiration of any longer period for which such Participant’s
right to reemployment with the Corporation is guaranteed by statute or contract, his
or her payroll deductions under the Plan shall automatically resume at the rate in
effect at the time the leave began, unless the Participant withdraws from the Plan
prior to his or her return. An individual who returns to active employment
following a leave of absence which exceeds in duration the applicable (x) or (y)
time period will be treated as a new employee for purposes of subsequent
participation in the Plan and must accordingly qualify as an Eligible Employee and
re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms)
on or before his or her scheduled Entry Date into the offering period.

6

 

          G. Change in Control. Each outstanding purchase right shall automatically be
exercised, immediately prior to the effective date of any Change in Control and the date of such
exercise shall be treated as the Purchase Date for the purposes of this Section, by applying the
payroll deductions of each Participant for the Purchase Interval in which such Change in Control
occurs to the purchase of whole shares of Common Stock at a purchase price per share determined in
accordance with Section VII.C as of such Purchase Date. However, the applicable limitation on the
number of shares of Common Stock purchasable per Participant shall continue to apply to any such
purchase, but not the limitation applicable to the maximum number of shares of Common Stock
purchasable in the aggregate.

          The Corporation shall use its best efforts to provide at least ten (10)-days prior written
notice of the occurrence of any Change in Control, and Participants shall, following the receipt of
such notice, have the right to terminate their outstanding purchase rights prior to the Purchase
Date established for the purposes of this Section.

          H. Proration of Purchase Rights. Should the total number of shares of Common Stock to
be purchased pursuant to outstanding purchase rights on any particular date exceed the number of
shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata
allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate purchase price payable for
the Common Stock pro-rated to such individual, shall be refunded.

          I. Assignability. The purchase right shall be exercisable only by the Participant and
shall not be assignable or transferable by the Participant.

          J. Stockholder Rights. A Participant shall have no stockholder rights with respect to
the shares subject to his or her outstanding purchase right until the shares are purchased on the
Participant’s behalf in accordance with the provisions of the Plan and the Participant has become a
holder of record of the purchased shares.

	VIII.  	ACCRUAL LIMITATIONS

          A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any
purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with
(i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan
and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise permit such
Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the
Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share
on the date or dates such rights are granted) for each calendar year such rights are at any time
outstanding.

          B. For purposes of applying such accrual limitations to the purchase rights granted under the
Plan, the following provisions shall be in effect:

     (i) The right to acquire Common Stock under each outstanding purchase right
shall accrue in a series of installments on each

7

 

     successive Purchase Date during the offering period on which such right remains
outstanding.

     (ii) No right to acquire Common Stock under any outstanding purchase right
shall accrue to the extent the Participant has already accrued in the same calendar
year the right to acquire Common Stock under one or more other purchase rights at a
rate equal to Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the date or dates of
grant) for each calendar year such rights were at any time outstanding.

          C. If by reason of such accrual limitations, any purchase right of a Participant does not
accrue for a particular Purchase Interval, then the payroll deductions which the Participant made
during that Purchase Interval with respect to such purchase right shall be promptly refunded.

          D. In the event there is any conflict between the provisions of this Article and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be
controlling.

	IX.  	EFFECTIVE DATE AND TERM OF THE PLAN

          A. The Plan was adopted by the Board on May 19, 1999 and shall become effective at the
Effective Time, provided no purchase rights granted under the Plan shall be exercised, and
no shares of Common Stock shall be issued hereunder, until (i) the Plan shall have been approved by
the stockholders of the Corporation and (ii) the Corporation shall have complied with all
applicable requirements of the 1933 Act (including the registration of the shares of Common Stock
issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange
Commission), all applicable listing requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock is listed for trading and all other applicable
requirements established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after the date on which the
Plan is adopted by the Board, the Plan shall terminate and have no further force or effect, and all
sums collected from Participants during the initial offering period hereunder shall be refunded.

          B. Unless sooner terminated by the Board, the Plan shall terminate upon the earliest
of (i) the last business day in July 2009, (ii) the date on which all shares available for issuance
under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii)
the date on which all purchase rights are exercised in connection with a Change in Control. No
further purchase rights shall be granted or exercised, and no further payroll deductions shall be
collected, under the Plan following such termination.

	X.  	AMENDMENT OF THE PLAN

          A. The Board may alter, amend, suspend or terminate the Plan at any time to become effective
immediately following the close of any Purchase Interval. However, the Plan may be amended or
terminated immediately upon Board action, if and to the extent necessary to

8

 

assure that the Corporation will not recognize, for financial reporting purposes, any
compensation expense in connection with the shares of Common Stock offered for purchase under the
Plan, should the financial accounting rules applicable to the Plan at the Effective Time be
subsequently revised so as to require the recognition of compensation expense in the absence of
such amendment or termination.

          B. In no event may the Board effect any of the following amendments or revisions to the Plan
without the approval of the Corporation’s stockholders: (i) increase the number of shares of Common
Stock issuable under the Plan, except for permissible adjustments in the event of certain changes
in the Corporation’s capitalization, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the Plan or (iii) modify
the eligibility requirements for participation in the Plan.

	XI.  	GENERAL PROVISIONS

          A. All costs and expenses incurred in the administration of the Plan shall be paid by the
Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such
individual in the sale or other disposition of any shares purchased under the Plan.

          B. Nothing in the Plan shall confer upon the Participant any right to continue in the employ
of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate
employing such person) or of the Participant, which rights are hereby expressly reserved by each,
to terminate such person’s employment at any time for any reason, with or without cause.

          C. The provisions of the Plan shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.

9

 

Schedule A

Corporations Participating in

Employee Stock Purchase Plan

As of the Effective Time

Packeteer, Inc.

Packeteer Europe, b.v.

Packeteer Asia Pacific Limited

Packeteer K.K. (Kabushiki Kaisha)

 

 

APPENDIX

     The following definitions shall be in effect under the Plan:

     A. Board shall mean the Corporation’s Board of Directors.

     B. Cash Earnings shall mean the (i) regular base salary paid to a Participant by one
or more Participating Companies during such individual’s period of participation in one or more
offering periods under the Plan plus (ii) all overtime payments, bonuses, commissions,
profit-sharing distributions and other incentive-type payments received during such period. Such
Cash Earnings shall be calculated before deduction of (A) any income or employment tax withholdings
or (B) any and all contributions made by the Participant to any Code Section 401(k) salary deferral
plan or Code Section 125 cafeteria benefit program now or hereafter established by the Corporation
or any Corporate Affiliate. However, Cash Earnings shall not include any contributions made on
the Participant’s behalf by the Corporation or any Corporate Affiliate to any employee benefit or
welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125
contributions deducted from such Cash Earnings).

     C. Change in Control shall mean a change in ownership of the Corporation pursuant to
any of the following transactions:

     (i) a merger or consolidation in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation’s outstanding
securities are transferred to a person or persons different from the persons holding
those securities immediately prior to such transaction, or

     (ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Corporation in complete liquidation or dissolution of the Corporation,
or

     (iii) the acquisition, directly or indirectly by an person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by or is under common control with the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation’s outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation’s stockholders.

     D. Code shall mean the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

     E. Common Stock shall mean the Corporation’s common stock.

A-1

 

     F. Corporate Affiliate shall mean any parent or subsidiary corporation of the
Corporation (as determined in accordance with Code Section 424), whether now existing or
subsequently established.

     G. Corporation shall mean Packeteer, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Packeteer, Inc., which shall
by appropriate action adopt the Plan.

     H. Effective Time shall mean the time at which the Underwriting Agreement is executed
and the Common Stock priced for the initial public offering. Any Corporate Affiliate which becomes
a Participating Corporation after such Effective Time shall designate a subsequent Effective Time
with respect to its employee-Participants.

     I. Eligible Employee shall mean any person who is employed by a Participating
Corporation on a basis under which he or she is regularly expected to render more than twenty (20)
hours of service per week for more than five (5) months per calendar year for earnings considered
wages under Code Section 3401(a).

     J. Entry Date shall mean the Periodic Entry Date on which an Eligible Employee first
commences participation in the offering period in effect under the Plan. The earliest Entry Date
under the Plan shall be the Effective Time.

     K. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time traded on the Nasdaq National Market,
then the Fair Market Value shall be the closing selling price per share of Common
Stock on the date in question, as such price is reported by the National Association
of Securities Dealers on the Nasdaq National Market. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation
exists.

     (ii) If the Common Stock is at the time listed on any Stock Exchange, then the
Fair Market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Plan Administrator to
be the primary market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation
exists.

     (iii) For purposes of the initial offering period which begins at the Effective
Time, the Fair Market Value shall be deemed to be equal to the price per share at
which the Common Stock is sold in the initial public offering pursuant to the
Underwriting Agreement.

     L. 1933 Act shall mean the Securities Act of 1933, as amended.

A-2

 

     M. Participant shall mean any Eligible Employee of a Participating Corporation who is
actively participating in the Plan.

     N. Participating Corporation shall mean the Corporation and such Corporate Affiliate
or Affiliates as may be authorized from time to time by the Board to extend the benefits of the
Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in
attached Schedule A.

     O. Periodic Entry Date shall mean the first business day of each Purchase Interval
contained in an offering period and which shall be a day on which an Eligible Employee may enter
such offering period.

     P. Plan shall mean the Corporation’s 1999 Employee Stock Purchase Plan, as set forth
in this document.

     Q. Plan Administrator shall mean the committee of two (2) or more Board members
appointed by the Board to administer the Plan.

     R. Purchase Date shall mean the last business day of each Purchase Interval. The
initial Purchase Date shall be January 31, 2000.

     S. Purchase Interval shall mean a period, as determined by the Plan Administrator, at
the end of which there shall be purchased shares of Common Stock on behalf of each Participant. An
offering period may contain one or more Purchase Intervals.

     T. Semi-Annul Entry Date shall mean a Periodic Entry Date commencing on the first
business day in February and August each year pursuant to an offering period of at least twelve
(12) months in duration.

     U. Stock Exchange shall mean either the American Stock Exchange or the New York Stock
Exchange.

     V. Underwriting Agreement shall mean the agreement between the Corporation and the
underwriter or underwriters managing the initial public offering of the Common Stock.

A-3

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