Document:

Redback Networks Inc. 1999 Stock Incentive Plan, as amended

 Exhibit 10.37 
 REDBACK NETWORKS INC. 
 1999 STOCK
INCENTIVE PLAN 
 (AS AMENDED AND RESTATED
AS OF MAY 11, 2006) 

 TABLE OF CONTENTS 
  

			
	 	  	Page
	 ARTICLE 1. INTRODUCTION
	  	1
		
	 ARTICLE 2. ADMINISTRATION
	  	1
	 2.1 Committee Composition
	  	1
	 2.2 Committee Responsibilities
	  	1
	 2.3 Committee for Non-Officer Grants
	  	2
		
	 ARTICLE 3. SHARES AVAILABLE FOR GRANTS
	  	2
	 3.1 Basic Limitation
	  	2
	 3.2 Increase in Shares
	  	2
	 3.3 Additional Shares
	  	2
		
	 ARTICLE 4. ELIGIBILITY
	  	3
	 4.1 Awards Other than ISOs
	  	3
	 4.2 Incentive Stock Options
	  	3
		
	 ARTICLE 5. CODE SECTION 162(M) PROVISIONS
	  	3
	 5.1 Option and SAR Annual Share Limit
	  	3
	 5.2 Restricted Share and Restricted Stock Unit Annual Limit
	  	3
	 5.3 Section 162(m) Performance Restrictions
	  	3
		
	 ARTICLE 6. OPTIONS
	  	3
	 6.1 Stock Option Agreement
	  	3
	 6.2 Number of Shares
	  	4
	 6.3 Exercise Price
	  	4
	 6.4 Exercisability and Term
	  	4
	 6.5 Effect of Change in Control
	  	4
	 6.6 Modification or Assumption of Options
	  	5
	 6.7 Buyout Provisions
	  	5
	 6.8 ISO $100,000 Rule
	  	5
		
	 ARTICLE 7. STOCK APPRECIATION RIGHTS
	  	5
	 7.1 Grant of SARs
	  	5
	 7.2 Number of Shares
	  	5
	 7.3 Exercise of SARs
	  	5
	 7.4 SAR Agreement
	  	5
	 7.5 Expiration of SARs
	  	6
	 7.6 Payment of SAR Amount
	  	6
	 7.7 Form of Payment
	  	6
	 7.8 Exercisability; Rights of a Stockholder
	  	6
	 7.9 Method of Exercise
	  	6

  

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	 ARTICLE 8. PAYMENT FOR OPTION AND SAR SHARES
	  	6
	 8.1 General Rule
	  	6
	 8.2 Surrender of Stock
	  	7
	 8.3 Exercise/Sale
	  	7
	 8.4 Exercise/Pledge
	  	7
	 8.5 Promissory Note
	  	7
	 8.6 Other Forms of Payment
	  	7
		
	 ARTICLE 9. RESTRICTED SHARES
	  	7
	 9.1 Restricted Stock Agreement
	  	7
	 9.2 Payment for Awards
	  	8
	 9.3 Vesting Conditions
	  	8
	 9.4 Other Restrictions
	  	8
	 9.5 Voting and Dividend Rights
	  	8
		
	 ARTICLE 10. RESTRICTED STOCK UNITS
	  	8
	 10.1 Grant
	  	8
	 10.2 Value of Restricted Stock Units
	  	9
	 10.3 Vesting Criteria and Other Terms
	  	9
	 10.4 Earning Restricted Stock Units
	  	9
	 10.5 Form and Timing of Payment
	  	9
	 10.6 Cancellation
	  	9
		
	 ARTICLE 11. PROTECTION AGAINST DILUTION
	  	9
	 11.1 Adjustments
	  	9
	 11.2 Dissolution or Liquidation
	  	10
	 11.3 Reorganizations
	  	10
		
	 ARTICLE 12. DEFERRAL OF DELIVERY OF SHARES
	  	10
		
	 ARTICLE 13. AWARDS UNDER OTHER PLANS
	  	11
		
	 ARTICLE 14. LIMITATION ON RIGHTS
	  	11
	 14.1 Retention Rights
	  	11
	 14.2 Stockholders’ Rights
	  	11
	 14.3 Regulatory Requirements
	  	11
		
	 ARTICLE 15. WITHHOLDING TAXES
	  	11
	 15.1 General
	  	11
	 15.2 Share Withholding
	  	11
		
	 ARTICLE 16. LIMITATION ON PAYMENTS
	  	12
	 16.1 Scope of Limitation
	  	12
	 16.2 Basic Rule
	  	12
	 16.3 Reduction of Payments
	  	12
	 16.4 Overpayments and Underpayments
	  	13
	 16.5 Related Corporations
	  	13
		
	 ARTICLE 17. FUTURE OF THE PLAN
	  	13
	 17.1 Term of the Plan
	  	13
	 17.2 Amendment or Termination
	  	13
		
	 ARTICLE 18. DEFINITIONS
	  	13

  

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 REDBACK NETWORKS INC. 
 1999 STOCK INCENTIVE PLAN 
 ARTICLE 1. INTRODUCTION. 
 The
Plan was adopted by the Board effective as of the date of the Company’s initial public offering. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees,
Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, Options (which may constitute incentive stock options or
nonstatutory stock options), Restricted Stock Units and Stock Appreciation Rights. 
 The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware (except their choice-of-law provisions). 
 ARTICLE 2. ADMINISTRATION.

 2.1 Committee Composition. The Plan shall be administered by the Committee. The Committee shall consist exclusively of two or
more directors of the Company, who shall be appointed by the Board. In addition, the composition of the Committee shall satisfy: 
 (a) Such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and 
 (b) Such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for
exemption under Section 162(m)(4)(C) of the Code. 
 2.2 Committee Responsibilities. The Committee shall (a) select the
Employees, Outside Directors and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards (including, but not limited to, exercise price and any
acceleration or waiver of forfeiture restrictions, and any other restrictions regarding an Award or the Common Shares relating thereto), (c) interpret the Plan and the Awards, (d) to approve forms of Award Agreement for use under the Plan,
(e) to create sub-plans or Plan addendums for the purpose of satisfying Applicable Laws, meeting the objectives of the Plan, and/or qualifying for preferred tax treatment under foreign tax laws, (f) to prescribe, amend, interpret and
rescind rules and 

 
regulations relating to the administration, interpretation and application of the Plan that are consistent therewith, including rules and regulations
relating to sub-plans or Plan addendums, (g) to modify or amend each Award (subject to Sections 6.6 and 17.2 of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options and SARs
longer than is otherwise provided for in the Plan, (h) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Committee, and (i) make all other
decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons.

 2.3 Committee for Non-Officer Grants. The Board may also appoint a secondary committee of the Board, which shall be composed of one
or more directors of the Company who need not satisfy the requirements of Section 2.1. Such secondary committee may administer the Plan with respect to Employees and Consultants who are not considered officers or directors of the Company under
Section 16 of the Exchange Act, may grant Awards under the Plan to such Employees and Consultants and may determine all features and conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the
Committee shall include such secondary committee. 
 ARTICLE 3. SHARES AVAILABLE FOR GRANTS. 
 3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares. Subject to
Section 3.2, the aggregate number of Common Shares awarded under the Plan shall not exceed 11,111,864 except for the permitted increases provided for in Section 3.2 below. The limitations of this Section 3.1 and Section 3.2 shall
be subject to adjustment pursuant to Article 11. 
 3.2 Increase in Shares. On May 6, 2006 and May 6, 2007, the
aggregate number of Common Shares that may be awarded under the Plan shall automatically increase by 4,611,582 and 3,000,000 Common Shares respectively, resulting in an aggregate number of 21,822,642 Common Shares available under the Plan.

 3.3 Additional Shares. If Awards granted under this Plan expire, are forfeited or repurchased, or terminate for any other reason
before being exercised, then the corresponding Common Shares shall again become available for the grant of Awards under this Plan. The aggregate number of Common Shares that may be issued under the Plan upon the exercise of ISOs shall not be
increased when Restricted Shares or other Common Shares are forfeited. Common Shares that have actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the
Plan; provided, however, that if Restricted Shares, or Restricted Stock Units are repurchased by the Company or are forfeited to the Company, such Common Shares shall become available for future grant under the Plan. Shares used to pay the exercise
price of an Award shall become available for future grant or sale under the Plan. With respect to SARs, only Common Shares actually issued pursuant to an SAR shall cease to be available under the Plan. To the extent an Award under the Plan is paid
out in cash rather than stock, such cash payment shall not reduce the number of Shares available for issuance under the Plan. 
  

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 ARTICLE 4. ELIGIBILITY. 
 4.1 Awards Other than ISOs. Only Employees, Outside Directors and Consultants shall be eligible for the grant of NSOs, Restricted Shares,
Restricted Stock Units and Stock Appreciation Rights. 
 4.2 Incentive Stock Options. Only Employees who are common-law employees of
the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or
Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in Section 422(c)(6) of the Code are satisfied. 
 ARTICLE 5. CODE SECTION 162(M) PROVISIONS. 
 5.1 Option and SAR Annual Share Limit.
No Participant shall be granted, in any Fiscal Year, Options or SARs covering an aggregate of more than three million Common Shares; provided, however, that such limit shall be six million in the Fiscal Year in which the Participant’s
employment first commences. The limits in this Section 5.1 are subject to adjustment under Article 11. 
 5.2 Restricted Share
and Restricted Stock Unit Annual Limit. No Participant shall be granted, in any Fiscal Year, more than 1,500,000 Common Shares in the aggregate of the following: (i) Restricted Shares or (ii) Restricted Stock Units; provided, however,
that such limit shall be three million Shares in the Fiscal Year in which the Participant’s employment first commences. The limits in this Section 5.2 are subject to adjustment under Article 11. 
 5.3 Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Shares or Restricted Stock Units as
“performance-based compensation” under Section 162(m) of the Code, the Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by the Committee on or
before the latest date permissible to enable the Restricted Shares or Restricted Stock Units to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Restricted Shares or Restricted Stock Units
which are intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the
Code (e.g., in determining the Performance Goals). 
 ARTICLE 6. OPTIONS. 
 6.1 Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Option Agreements entered into under the Plan need not be
identical. A Stock Option Agreement may provide that a new Option will be granted automatically to the Optionee when he or she exercises a prior Option and pays the Exercise Price in the form described in Article 8.2. 
  

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 6.2 Number of Shares. Each Stock Option Agreement shall specify the number of Common Shares
subject to the Option, subject to the limits set forth in Section 5.1 and shall provide for the adjustment of such number in accordance with Article 11. 
 6.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise Price; provided that the per share Exercise Price under an ISO shall in no event be less than 100% of the Fair Market Value of a Common
Share on the date of grant and the Exercise Price under an NSO shall in no event be less than 30% of the Fair Market Value of a Common Share on the date of grant. Notwithstanding the foregoing, in the case of an ISO granted to a Participant who, at
the time the ISO is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary or any Parent, the per share Exercise Price shall be no less than 110% of the Fair
Market Value of a Common Share on the date of grant. In the case of an NSO, a Stock Option Agreement may specify an Exercise Price that varies in accordance with a predetermined formula while the NSO is outstanding. Notwithstanding the foregoing,
Options may be granted with a per share Exercise Price of less than 100% of the Fair Market Value per Common Share on the date of grant pursuant to a merger or other corporate transaction. 
 6.4 Exercisability and Term. Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed ten (10) years from the date of grant. Moreover, in the case of an ISO granted to a Participant who, at
the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary or Parent, the term of the ISO shall in no event exceed five
(5) years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its
term in the event of the termination of the Optionee’s service. 
 6.5 Effect of Change in Control. The Committee may determine,
at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Common Shares subject to such Option in the event that a Change in Control occurs with respect to the Company, subject to the
following limitations: 
 (a) In the case of an ISO granted prior to March 31, 2006, the acceleration of exercisability
shall not occur without the Optionee’s written consent. 
 (b) If the Company and the other party to the transaction
constituting a Change in Control agree that such transaction is to be treated as a “pooling of interests” for financial reporting purposes, and if such transaction in fact is so treated, then the acceleration of exercisability shall not
occur to the extent that the Company’s independent accountants and such other party’s independent accountants separately determine in good faith that such acceleration would preclude the use of “pooling of interests” accounting.

  

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 In addition, acceleration of exercisability may be required under Section 11.3. 
 6.6 Modification or Assumption of Options. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding options or
may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such Option. 
 6.7 Buyout Provisions. The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an
Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish. 
 6.8
ISO $100,000 Rule. Each Option shall be designated in the Stock Option Agreement as either an ISO or a NSO. However, notwithstanding such designations, to the extent that the aggregate Fair Market Value: 
 (a) of Common Shares subject to a Participant’s ISO granted by the Company or any Subsidiary or Parent, which 
 (b) becomes exercisable for the first time during any calendar year (under all plans of the Company or any Subsidiary or Parent) exceeds $100,000,
such excess Options shall be treated as NSO. For purposes of this Section 6.8, ISOs shall be taken into account in the order in which they were granted, and the Fair Market Value of the Common Shares shall be determined as of the time of grant.

 ARTICLE 7. STOCK APPRECIATION RIGHTS. 
 7.1 Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted Employees, Outside Directors and Consultants at any time and from time to time as shall be determined by the Committee,
in its sole discretion. 
 7.2 Number of Shares. The Committee shall have complete discretion to determine the number of SARs granted
to any Employee, Outside Director and Consultant, subject to the limits set forth in Section 5.1. 
 7.3 Exercise of SARs. SARs
shall be exercisable on such terms and conditions as the Committee, in its sole discretion, will determine. 
 7.4 SAR Agreement. Each
SAR grant will be evidenced by an Award Agreement that will specify the Exercise Price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Committee, in its sole discretion, will determine; provided, however,
that the Exercise Price will not be less than 100% of the Fair Market Value on the date of grant. 
  

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 7.5 Expiration of SARs. An SAR granted under the Plan will expire upon the date determined by the
Committee, in its sole discretion, and set forth in the Award Agreement; provided, however, that no SAR will have a term of more than ten (10) years from the date of grant. 
 7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount determined by
multiplying: 
 (a) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

 (b) The number of Shares with respect to which the SAR is exercised. 
 7.7 Form of Payment. The Company’s obligation arising upon the exercise of a SAR may be paid in Common Shares or in cash, or in any
combination of Common Shares and cash, as the Committee, in its sole discretion, may determine. Shares issued upon the exercise of a SAR shall be valued at their Fair Market Value as of the date of exercise. 
 7.8 Exercisability; Rights of a Stockholder. SARs shall become exercisable at such time or times, whether or not in installments, as shall be
determined by the Committee in an Award Agreement; provided, however, that all SARs must be exercised within ten (10) years of the date they become exercisable or they shall automatically expire. The Committee may, at any time,
accelerate the exercisability of all or any portion of any SAR. A SAR Agreement may provide for accelerated exercisability in the event of the Participant’s death, disability or retirement or other events and may provide for expiration prior to
the end of its term in the event of the termination of the Participant’s service. 
 7.9 Method of Exercise. SARs may be
exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. 
 The actual or constructive delivery of certificates representing the shares of Stock to be delivered pursuant to the exercise of a Stock Appreciation Right will be contingent upon fulfilling any requirements contained in the Stock
Appreciation Right Award or Applicable Laws. 
 ARTICLE 8. PAYMENT FOR OPTION AND SAR SHARES. 
 8.1 General Rule. The entire Exercise Price of Common Shares issued upon exercise of Options and SARs shall be payable in cash or cash equivalents
at the time when such Common Shares are purchased, except as follows: 
 (a) In the case of an ISO granted under the Plan,
payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 8. 
  

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 (b) In the case of an NSO or a SAR, the Committee may at any time accept payment in any
form(s) described in this Article 8. 
 8.2 Surrender of Stock. To the extent that this Section 8.2 is applicable, all or any
part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Common Shares that are already owned by the Participant. Such Common Shares shall be valued at their Fair Market Value on the date when the new Common Shares
are purchased under the Plan. 
 8.3 Exercise/Sale. To the extent that this Section 8.3 is applicable, all or any part of the
Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the Common Shares being purchased under the Plan
and to deliver all or part of the sales proceeds to the Company. 
 8.4 Exercise/Pledge. To the extent that this Section 8.4 is
applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to pledge all or part of the Common Shares being purchased under the Plan to a
securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company. 
 8.5 Promissory Note. To the extent that this Section 8.5 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) a full-recourse promissory
note. However, the par value of the Common Shares being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 
 8.6 Other Forms of Payment. To the extent that this Section 8.6 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid in any other form that is consistent with applicable laws, regulations
and rules. 
 ARTICLE 9. RESTRICTED SHARES. 
 9.1 Restricted Stock Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject
to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. The Committee shall have
complete discretion to determine the number of Restricted Shares granted to any Employee, Outside Director and Consultant, subject to the limits set forth in Section 5.2. 
  

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 9.2 Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or
awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly
issued Restricted Shares, the consideration shall consist exclusively of cash, cash equivalents or past services rendered to the Company (or a Parent or Subsidiary) or, for the amount in excess of the par value of such newly issued Restricted
Shares, full-recourse promissory notes, as the Committee may determine. 
 9.3 Vesting Conditions. Each Award of Restricted Shares may
or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the event of the
Participant’s death, disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares or thereafter, that all or part of such Restricted Shares shall become vested in the event that a Change in
Control occurs with respect to the Company, except as provided in the next following sentence. If the Company and the other party to the transaction constituting a Change in Control agree that such transaction is to be treated as a “pooling of
interests” for financial reporting purposes, and if such transaction in fact is so treated, then the acceleration of vesting shall not occur to the extent that the Company’s independent accountants and such other party’s independent
accountants separately determine in good faith that such acceleration would preclude the use of “pooling of interests” accounting. 
 9.4 Other Restrictions. The Committee, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. 
 (a) General Restrictions. The Committee may set restrictions based upon the achievement of Company-wide, Subsidiary-wide, departmental, business
unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Committee in its discretion. 
 (b) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals. 
 9.5 Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock
Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid. 
 ARTICLE 10. RESTRICTED STOCK UNITS. 
 10.1 Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Committee. Each Restricted Stock Unit
grant shall be evidenced by 

  

 8 

 
an Award Agreement that shall specify such other terms and conditions as the Committee, in its sole discretion, shall determine, including all terms,
conditions, and restrictions related to the grant and the number of Restricted Stock Units (subject to the limitations set forth in Section 5.2). 
 10.2 Value of Restricted Stock Units. Each Restricted Stock Unit shall have an initial value equal to the Fair Market Value of a Common Share on the date of grant (and therefore shall be the equivalent of one
Common Share for purposes of determining the number of Common Shares subject to an Award). 
 10.3 Vesting Criteria and Other Terms.
The Committee shall set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. 
 (a) General Restrictions. The Committee may set vesting criteria based upon the achievement of Company-wide, Subsidiary-wide, departmental,
business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Committee in its discretion. 
 (b) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock Units as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its discretion, may set performance objectives based upon the achievement of Performance Goals. 
 10.4 Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant shall be entitled to receive a payout as
specified in the Award Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Committee, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. 

10.5 Form and Timing of Payment. Payment of earned Restricted Stock Units shall be made as soon as practicable after the date(s) set forth in
the Award Agreement. The Committee, in its sole discretion, shall pay earned Restricted Stock Units in Common Shares. 
 10.6
Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units shall be forfeited to the Company. 
 ARTICLE 11. PROTECTION AGAINST DILUTION. 
 11.1 Adjustments. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a declaration of a dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in
one or more of (a) the number of Common Shares available for 

  

 9 

 
future Awards under Article 3, (b) the limitations set forth in Article 5, (c) the number of Common Shares covered by each outstanding
Award, (d) the Exercise Price or purchase price under each outstanding Award, or (e) the number of Common Shares that may be granted pursuant to ISOs under Article 3. Except as provided in this Article 11, a Participant shall
have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class. 
 11.2 Dissolution or Liquidation. To the extent not previously exercised
(with respect to Options and SARs) or vested (with respect to all other Awards), all outstanding Awards shall terminate immediately prior to the dissolution or liquidation of the Company. 
 11.3 Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the continuation of the outstanding Awards by the Company, if the Company is a surviving corporation, (b) the assumption of the outstanding Awards by the surviving
corporation or its parent or subsidiary, (c) the substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards, (d) full exercisability or vesting and accelerated expiration of the
outstanding Awards or (e) settlement of the full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards. In addition, the Committee may determine, at the time of granting an Award or thereafter, that
all or part of such Award shall become vested in the event that a Change in Control occurs with respect to the Company, subject to the restrictions of Sections 6.5 and 9.3. 
 ARTICLE 12. DEFERRAL OF DELIVERY OF SHARES. 
 The Committee (in its sole discretion) may permit or require a Participant to have Common Shares that otherwise would be delivered to such Participant as a result of the exercise or grant of an Award converted into amounts credited to a
deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such Common Shares as of the date when they otherwise
would have been delivered to such Participant. A deferred compensation account established under this Article 12 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an
account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable
agreement between such Participant and the Company. If the conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such conversion, including (without limitation)
the settlement of deferred compensation accounts established under this Article 12. Any deferral pursuant to this Article 12 shall be in accordance with rules and procedures established by the Committee, which rules and procedures shall, unless
otherwise determined by the Committee, at all times comply with the requirements of Section 409A of the Code. 
  

 10 

 ARTICLE 13. AWARDS UNDER OTHER PLANS. 
 The Company may grant awards under other plans or programs. Such awards may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Restricted Shares and shall, when issued, reduce the number of Common Shares available under Article 3. 
 ARTICLE 14. LIMITATION ON RIGHTS. 
 14.1 Retention Rights. Neither the Plan nor any Award
granted under the Plan shall be deemed to give any individual a right to remain an Employee, Outside Director or Consultant. The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the service of any Employee, Outside
Director or Consultant at any time, with or without cause, subject to applicable laws, the Company’s certificate of incorporation and by-laws and a written employment agreement (if any). 
 14.2 Stockholders’ Rights. A Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Award prior to the time when a stock certificate for such Common Shares is issued or, in the case of an Option or SAR, the time when he or she becomes entitled to receive such Common Shares by filing a notice of
exercise and paying the Exercise Price. No adjustment shall be made for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan. 
 14.3 Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common Shares under the Plan
shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to
the satisfaction of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing. 
 ARTICLE 15. WITHHOLDING TAXES. 
 15.1 General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be required to issue any Common Shares or make any cash payment under the Plan until such obligations are satisfied. 
 15.2 Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Common Shares that he or she previously acquired. Such Common Shares shall be valued at their
Fair Market Value on the date when they are withheld or surrendered. 
  

 11 

 ARTICLE 16. LIMITATION ON PAYMENTS. 
 16.1 Scope of Limitation. This Article 16 shall apply to an Award only if: 
 (a) The independent auditors most recently selected by the Board (the “Auditors”) determine that the after-tax value of such
Award to the Participant, taking into account the effect of all federal, state and local income taxes, employment taxes and excise taxes applicable to the Participant (including the excise tax under Section 4999 of the Code), will be greater
after the application of this Article 16 than it was before the application of this Article 16; or 
 (b) The
Committee, at the time of making an Award under the Plan or at any time thereafter, specifies in writing that such Award shall be subject to this Article 16 (regardless of the after-tax value of such Award to the Participant). 
 If this Article 16 applies to an Award, it shall supersede any contrary provision of the Plan or of any Award granted under the Plan. 
 16.2 Basic Rule. In the event that the Auditors determine that any payment or transfer by the Company under the Plan to or for the benefit of a
Participant (a “Payment”) would be nondeductible by the Company for federal income tax purposes because of the provisions concerning “excess parachute payments” in Section 280G of the Code, then the aggregate present value
of all Payments shall be reduced (but not below zero) to the Reduced Amount. For purposes of this Article 16, the “Reduced Amount” shall be the amount, expressed as a present value, which maximizes the aggregate present value of the
Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. 
 16.3 Reduction of
Payments. If the Auditors determine that any Payment would be nondeductible by the Company because of Section 280G of the Code, then the Company shall promptly give the Participant notice to that effect and a copy of the detailed
calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the
Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within 10 days of receipt of notice. If no such election is made by the Participant within such 10-day period, then the Company may elect which
and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes of this
Article 16, present value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations made by the Auditors under this Article 16 shall be binding upon the Company and the Participant and shall be made
within 60 days of the date when a Payment becomes payable or transferable. As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such
amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan. 
  

 12 

 16.4 Overpayments and Underpayments. As a result of uncertainty in the application of
Section 280G of the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an “Overpayment”) or that additional Payments
which will not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation of the Reduced Amount hereunder. In the event that the Auditors, based upon the assertion of a deficiency
by the Internal Revenue Service against the Company or the Participant which the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the
Participant which he or she shall repay to the Company, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant to the Company if
and to the extent that such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or
transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code. 
 16.5 Related Corporations. For purposes of this Article 16, the term “Company” shall include affiliated corporations to the extent
determined by the Auditors in accordance with Section 280G(d)(5) of the Code. 
 ARTICLE 17. FUTURE OF THE PLAN. 

17.1 Term of the Plan. The Plan shall become effective on the date of the Company’s initial public offering. The Plan shall remain in
effect until it is terminated under Section 17.2, except that no ISOs shall be granted on or after the 10th anniversary of the later of (a) the date when the Board adopted the Plan or (b) the date when the Board adopted the most recent increase in the number of Common Shares available under Article 3 that was approved by the
Company’s stockholders. 
 17.2 Amendment or Termination. The Board may, at any time and for any reason, amend or terminate the
Plan. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. No Awards shall be granted under the Plan after the termination thereof. The
termination of the Plan, or any amendment thereof, shall not adversely affect any Award previously granted under the Plan, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing (or electronic
format) and signed by the Participant and the Company or its Affiliate. 
 ARTICLE 18. DEFINITIONS. 
 18.1 “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such
entity. 
 18.2 “Annual Revenue” means the Company’s or a business unit’s net sales for the Fiscal Year,
determined in accordance with generally accepted accounting principles; provided, however, that prior to the Fiscal Year, the Committee shall determine whether any significant item(s) shall be excluded or included from the calculation of Annual
Revenue with respect to one or more Participants. 
  

 13 

 18.3 “Award” means any award of an Option, Stock Appreciation Right, Restricted Share or
Restricted Stock Unit under the Plan. 
 18.4 “Award Agreement” means the agreement between the Company and the recipient of
an Award that contains the terms, conditions and restrictions pertaining to such Award. 
 18.5 “Board” means the
Company’s Board of Directors, as constituted from time to time. 
 18.6 “Cash Position” means as to any Performance
Period, the Company’s or business unit’s level of cash and cash equivalents. 
 18.7 “Change in Control” shall
mean: 
 (a) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate
reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of
the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity; 
 (b) The sale, transfer or other disposition of all or substantially all of the Company’s assets; 
 (c) A change in the composition of the Board, as a result of which 50% or fewer of the incumbent directors are directors who either
(i) had been directors of the Company on the date 24 months prior to the date of the event that may constitute a Change in Control (the “original directors”) or (ii) were elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved; or 
 (d) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Subsection (d), the term “person”
shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and
(ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company. 
  

 14 

 A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. 
 18.8 “Code” means the Internal Revenue Code of 1986, as amended. 
 18.9 “Committee” means a committee of the Board, as described in Article 2. 
 18.10 “Common Share” means one share of the common stock of the Company. 
 18.11 “Company” means Redback Networks Inc., a Delaware corporation. 
 18.12 “Consultant” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate
as an independent contractor. Service as a Consultant shall be considered employment for all purposes of the Plan, except as provided in Section 4.2. 
 18.13 “Earnings Per Share” means as to any Performance Period, the Company’s or a business unit’s Net Income, divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding, determined in accordance with generally accepted accounting principles. 
 18.14
“Employee” means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate. 
 18.15 “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 
 18.16 “Exercise Price” means the amount for which
one Common Share may be purchased upon exercise of such Option or SAR, as specified in the applicable Award Agreement. 
 18.17 “Fair
Market Value” means the market price of Common Shares, determined by the Committee in good faith on such basis as it deems appropriate. Whenever possible, the determination of Fair Market Value by the Committee shall be based on the prices
reported in The Wall Street Journal. Such determination shall be conclusive and binding on all persons. 
 18.18 “Fiscal
Year” means a fiscal year of the Company. 
 18.19 “ISO” means an incentive stock option described in
Section 422(b) of the Code. 
 18.20 “Net Income” means as to any Performance Period, the income after taxes of the
Company or a business unit determined in accordance with generally accepted accounting principles, provided that prior to the beginning of the Performance Period, the Committee shall determine whether any significant item(s) shall be included or
excluded from the calculation of Net Income with respect to one or more Participants. 
  

 15 

 18.21 “NSO” means a stock option not described in Sections 422 or 423 of the Code.

 18.22 “Operating Cash Flow” means as to any Performance Period, the Company’s or a business unit’s sum of Net
Income plus depreciation and amortization less capital expenditures plus changes in working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance payments
from customers and long-term accrued expenses, determined in accordance with generally acceptable accounting principles. 
 18.23
“Operating Income” means as to any Performance Period, the Company’s or a business unit’s income from operations determined in accordance with generally accepted accounting principles. 
 18.24 “Option” means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares. 
 18.25 “Optionee” means an individual or estate who holds an Option. 
 18.26 “Outside Director” shall mean a member of the Board who is not an Employee. Service as an Outside Director shall be considered
employment for all purposes of the Plan, except as provided in Section 4.2. 
 18.27 “Parent” means any corporation
(other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 
 18.28 “Participant” means an individual or estate who holds an Award. 
 18.29 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the following measures: (a) Annual Revenue,
(b) Cash Position, (c) Earnings Per Share, and (d) Net Income, (e) Operating Cash Flow (f) Operating Income, (g) Return on Assets, (h) Return on Equity, (i) Return on Sales, and (j) Total Stockholder
Return. The Performance Goals may differ from Participant to Participant and from Award to Award. The Committee shall appropriately adjust any evaluation of performance under a Performance Goal to exclude (i) any extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial conditions and results of operations appearing in the Company’s annual report to stockholders for the
applicable year, or (ii) the effect of any changes in accounting principles affecting the Company’s or a business units’ reported results. Any 

  

 16 

 
criteria used may be measured, as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, passage of time and/or
against another company or companies), (iii) on a per-share basis, (iv) against the performance of the Company as a whole or of a business unit or product line of the Company or against specific markets, and/or (v) to the extent not
otherwise specified by the definition of the Performance Goal, on a pre-tax or after-tax basis. 
 18.30 “Performance
Period” means the time period of any Fiscal Year or such longer period as determined by the Committee in its sole discretion during which the performance objectives must be met. 
 18.31 “Plan” means this Redback Networks Inc. 1999 Stock Incentive Plan, as amended from time to time. 
 18.32 “Restricted Share” means a Common Share awarded under the Plan. 
 18.33 “Restricted Stock Agreement” means the agreement between the Company and the recipient of a Restricted Share that contains the
terms, conditions and restrictions pertaining to such Restricted Share. 
 18.34 “Restricted Stock Unit” means an Award
granted pursuant to Article 10 of the Plan. 
 18.35 “Return on Assets” means as to any Performance Period, the percentage
equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by average net Company or business unit, as applicable, assets, determined in accordance with generally accepted accounting principles.

 18.36 “Return on Equity” means as to any Performance Period, the percentage equal to the Company’s Net Income
divided by average stockholder’s equity, determined in accordance with generally accepted accounting principles 
 18.37 “Return
on Sales” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by the Company’s or the business unit’s, as applicable,
revenue, determined in accordance with generally accepted accounting principles. 
 18.38 “Stock Appreciation Right” or
“SAR” means an Award granted pursuant to Article 7 of the Plan. 
 18.39 “Stock Option Agreement” means the
agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 
 18.40
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary
commencing as of such date. 
 18.41 “Total Stockholder Return” means as to any Performance Period, the total return (change
in share price plus reinvestment of any dividends) of a share of the Company’s common stock. 
  

 17Redback Networks Inc. 2004 Stock Inducement Award Plan, as amended

 Exhibit 10.39 
 REDBACK NETWORKS INC. 
 2004 EMPLOYMENT INDUCEMENT AWARD PLAN 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
	1. Purposes of the Plan	  	1
		
	2. Definitions	  	1
			
	         (a)
	 	“Administrator”	  	1
	        (b)	 	“Applicable Laws”	  	1
	        (c)	 	“Award”	  	1
	        (d)	 	“Award Agreement”	  	1
	        (e)	 	“Change in Control”	  	1
	        (f)	 	“Code”	  	2
	        (g)	 	“Committee”	  	2
	        (h)	 	“Common Stock”	  	2
	        (i)	 	“Company”	  	2
	        (j)	 	“Consultant”	  	2
	        (k)	 	“Director”	  	2
	        (l)	 	“Disability”	  	2
	        (m)	 	“Employee”	  	2
	        (n)	 	“Exchange Act”	  	3
	        (o)	 	“Fair Market Value”	  	3
	        (p)	 	“Independent Director”	  	3
	        (q)	 	“Nonstatutory Stock Option”	  	3
	        (r)	 	“Notice of Grant”	  	3
	        (s)	 	“Officer”	  	3
	        (t)	 	“Option”	  	3
	        (u)	 	“Optioned Stock”	  	3
	        (v)	 	“Parent”	  	3
	        (w)	 	“Participant”	  	3
	        (x)	 	“Plan”	  	3
	        (y)	 	“Restricted Stock”	  	4
	        (z)	 	“Restricted Stock Units”	  	4
	        (aa)	 	“Rule 16b-3”	  	4
	        (bb)	 	“Section 16(b)”	  	4
	        (cc)	 	“Service Provider”	  	4
	        (dd)	 	“Share”	  	4
	        (ee)	 	“Stock Appreciation Right” or “SAR”	  	4
	        (ff)	 	“Subsidiary”	  	4
		
	3. Stock Subject to the Plan	  	4
		
	4. Administration of the Plan	  	5
			
	        (b)	 	Powers of the Administrator	  	5
	        (c)	 	Effect of Administrator’s Decision	  	6

  

 -i- 

 TABLE OF CONTENTS 
 (Continued) 
  

					
	 	 	 	  	Page
	5. Eligibility	  	6
		
	6. Limitations	  	6
		
	7. Term of Plan	  	6
		
	8. Stock Options	  	6
			
	        (a)	 	Term of Option	  	6
	        (b)	 	Option Exercise Price, Waiting Period and Consideration	  	7
	        (c)	 	Termination of Relationship as a Service Provider	  	8
	        (d)	 	Disability of Optionee	  	8
	        (e)	 	Death of Optionee	  	8
		
	9. Restricted Stock/Restricted Stock Units	  	9
			
	        (a)	 	Grant of Restricted Stock/Restricted Stock Units	  	9
	        (b)	 	Exercise Price and other Terms	  	9
	        (c)	 	Restricted Stock or Restricted Stock Unit Award Agreement	  	9
		
	10. Stock Appreciation Rights	  	9
			
	        (a)	 	Grant of SARs	  	9
	        (b)	 	Exercise Price and other Terms	  	9
	        (c)	 	Payment of SAR Amount	  	10
	        (d)	 	Payment upon Exercise of SAR	  	10
	        (e)	 	Cash Settlements and Plan Share Allocation	  	10
	        (f)	 	SAR Agreement	  	10
	        (g)	 	Expiration of SARs	  	10
	        (h)	 	Termination of Relationship as a Service Provider	  	10
	        (i)	 	Disability of Participant	  	11
	        (j)	 	Death of Participant	  	11
		
	11. Leaves of Absence	  	11
		
	12. Limited Transferability of Awards	  	11
		
	13. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation or Change of Control	  	12
			
	        (a)	 	Changes in Capitalization	  	12
	        (b)	 	Dissolution or Liquidation	  	12
	        (c)	 	Change of Control	  	13
		
	14. Award Date of Grant	  	14

  

 -ii- 

 TABLE OF CONTENTS 
 (Continued) 
  

					
	 	 	 	  	Page
	15. Amendment and Termination of the Plan	  	14
			
	        (a)	 	Amendment and Termination	  	14
	        (b)	 	Stockholder Approval	  	14
	        (c)	 	Effect of Amendment or Termination	  	14
		
	16. Conditions Upon Issuance of Shares	  	14
			
	        (a)	 	Legal Compliance	  	14
	        (b)	 	Investment Representations	  	14
		
	17. Inability to Obtain Authority	  	14
		
	18. Reservation of Shares	  	14

  

 -iii- 

 REDBACK NETWORKS INC. 
 2004 EMPLOYMENT INDUCEMENT AWARD PLAN 
 1. Purposes of the Plan . The purposes of this 2004
Employment Inducement Award Plan are: 
  

	 	•	 	to provide a material inducement for the best available employees to join the Company; and 

  

	 	•	 	to promote the success of the Company’s business. 

 The Plan permits the grant of Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights. 
 2. Definitions. As used herein, the following definitions shall apply: 
 (a) “Administrator” means the
Committee as shall be administering the Plan in accordance with Section 4 of the Plan. 
 (b) “Applicable Laws” means
the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan. 
 (c) “Award” means,
individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock or Restricted Stock Units. 
 (d) “Award
Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 
 (e) “Change in Control” means the occurrence of any of the following events: 
 (i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were
not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of
(A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; 
 (ii) The sale, transfer or other disposition of all or substantially all of the Company’s assets; 

 (iii) A change in the composition of the Board, as a result of which 50% or fewer of the incumbent
directors are directors who either (A) had been directors of the Company on the date 24 months prior to the date of the event that may constitute a Change in Control (the “original directors”) or (B) were elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously
so approved; or 
 (iv) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Subsection (d), the term
“person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or
Subsidiary and (B) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company. 
 A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a
holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. 
 (f) “Code” means the U.S. Internal Revenue Code of 1986, as amended. 
 (g)
“Committee” means a committee of independent Directors appointed by the Board in accordance with Section 4 of the Plan. 
 (h) “Common Stock” means the common stock of the Company. 
 (i) “Company” means Redback
Networks Inc. 
 (j) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity. 
 (k) “Director” means a member of the Company’s Board of
Directors. 
 (l) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

 (m) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  

 -2- 

 (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 (o) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
 (ii) If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination,
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
 (iii) in the absence of an
established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 
 (p)
“Independent Director” means a Director who is not an Employee and who qualifies as an Independent Director under the applicable rules of Nasdaq (and/or the similar rules of any other stock exchange(s) on which the Company’s
securities become publicly traded). 
 (q) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option. 
 (r) “Notice of Grant” means a written or electronic notice evidencing certain terms and
conditions of an individual Award. The Notice of Grant is part of the Award Agreement. 
 (s) “Officer” means a person
who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 (t) “Option” means a stock option granted pursuant to the Plan. 
 (u) “Optioned
Stock” means the Common Stock subject to an Option or SAR. 
 (v) “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
 (w)
“Participant” means the holder of an outstanding Award granted under the Plan. 
 (x) “Plan” means
this 2004 Employment Inducement Award Plan. 
  

 -3- 

 (y) “Restricted Stock” means shares of Common Stock granted pursuant to
Section 9 of the Plan that are subject to vesting. 
 (z) “Restricted Stock Units” means units representing rights
to acquire shares of Common Stock granted pursuant to Section 9 of the Plan that are subject to vesting. 
 (aa)
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
 (bb) “Section 16(b)” means Section 16(b) of the Exchange Act. 
 (cc) “Service Provider” means an Employee, Director or Consultant. 
 (dd) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 
 (ee) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with a related Option,
that pursuant to Section 10 is designated as an SAR. 
 (ff) “Subsidiary” means a “subsidiary
corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code and also include partnerships, limited liability companies and other entities that are at least 30% owned by the Company. 
 3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares which may be
issued under the Plan is five million (5,000,000) Shares; provided, however, that in no event shall more than 50% of the Shares issuable under the Plan be granted pursuant to Awards with an exercise price or purchase price that is less than
100% of Fair Market Value on the date of grant. The Shares may be authorized, but unissued, or reacquired Common Stock. 
 If an Award
expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock or Restricted Stock Units, is forfeited back to or repurchased by the Company, the unpurchased Shares (or for Restricted Stock or Restricted
Stock Units, the forfeited or repurchased shares) which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to SARs, only shares actually issued pursuant to an SAR (or in
the event of a cash payout, the share equivalent) shall cease to be available under the Plan; all remaining shares under SARs, shall remain available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have
actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock are repurchased by the Company at their original
purchase price or are forfeited to the Company, such Shares shall become available for future grant under the Plan. 
  

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 4. Administration of the Plan.
 (a) Procedure. 
 (i)
Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

 (ii) Plan Administration. The Plan shall be administered by the Company’s Compensation Committee. 
 (b) Powers of the Administrator. Subject to the provisions of the Plan the Administrator shall have the authority, in its discretion: 

(i) to determine the Fair Market Value; 
 (ii) to select the new Employees to whom Awards may be granted hereunder; 
 (iii) to determine the number of shares of Common
Stock to be covered by each Award granted hereunder; 
 (iv) to approve forms of agreement for use under the Plan; 
 (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise or purchase price, the time or times when Awards may be vested, exercised, purchased or granted (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions
or repurchase rights, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
 (vi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan, including, but not limited to, a determination of a
Participant’s date of termination with respect to any Award granted under the Plan; 
 (vii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws, satisfying foreign securities law or achieving other foreign legal
compliance objectives; 
 (viii) to modify or amend each Award (subject to Section 15 of the Plan), including the discretionary
authority to extend the post-termination vesting or exercisability of Awards longer than is otherwise provided for in the Plan; 
  

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 (ix) to allow Participants to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued upon exercise of an Option or SAR or upon the vesting or earlier tax recognition of Restricted Stock or Restricted Stock Units that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may deem necessary or advisable; 
 (x) to authorize any person to execute
on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; and 
 (xi) to
make all other determinations deemed necessary or advisable for administering the Plan. 
 (c) Effect of Administrator’s
Decision. The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards. 
 5. Eligibility. Awards may be granted only to Employees as a material inducement to entering into their initial employment with the Company; provided, however, that a former employee who is returning to
the employ of the Company following a bona-fide period of non-employment by the Company may also receive an Award hereunder. 
 6.
Limitations.
 (a) Each Option shall be designated in the Option Agreement as a Nonstatutory Stock Option. 
 (b) Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing their relationship as a Service Provider, nor
shall they interfere in any way with the right of the Participant or the right of the Company or its Parent or Subsidiaries to terminate such relationship at any time, with or without cause. 
 7. Term of Plan. The Plan shall become effective upon the date of Board approval in 2004. It shall continue in effect for a term of ten
(10) years from the date upon which the Board approved the Plan. 
 8. Stock Options.
 (a) Term of Option. The term of each Option shall be stated in the Option Agreement and shall be no more than ten (10) years from the
date of grant. 
  

 -6- 

 (b) Option Exercise Price, Waiting Period and Consideration.
 (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, with a minimum exercise price equal to par value. 
 (ii) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may become vested or be exercised and shall determine any conditions which must be satisfied before the Option may vest or be exercised. 
 (iii) Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the
method of payment. Such consideration, subject to Applicable Laws, may consist entirely of: 
 (1) cash; 
 (2) check; 
 (3) other Shares which
(A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised; 
 (4) consideration received by the Company under a broker-assisted
cashless exercise program acceptable to the Company, in its sole discretion; 
 (5) any combination of the foregoing methods of payment; or

 (6) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
 (iv) Exercise of Option; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. 
 An Option shall be deemed
exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the 

  

 -7- 

 
Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 
 Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised. An Option may not be exercised for a fraction of a Share. 
 (c)
Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent that the Option is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan. 
 Notwithstanding the above, in the event of an Optionee’s change in status from Employee to
Consultant, an Optionee’s status as a Service Provider shall continue notwithstanding the change in status. 
 (d) Disability of
Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option
is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for six (6) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
 (e) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested and exercisable on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s
termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert 

  

 -8- 

 
to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise
the Option under the Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 9. Restricted Stock/Restricted Stock Units.
 (a) Grant of Restricted Stock/Restricted Stock Units. Subject to the terms and conditions of the Plan, Restricted Stock may be granted to new Employees as shall be determined by the Administrator, in its
sole discretion. The Administrator shall have complete discretion to determine (i) the number of Shares subject to a Restricted Stock or Restricted Stock Unit award granted to any new Employee, (ii) whether the form of the award shall be
Shares or units to acquire Shares (which latter shall be referred to herein as Restricted Stock Units), and (iii) the conditions that must be satisfied, including performance-based milestones, upon which is conditioned the grant or vesting of
Restricted Stock or Restricted Stock Units. For Restricted Stock Units, each such unit shall be the equivalent of one Share of Common Stock for purposes of determining the number of Shares subject to an Award. Until the Shares are issued, no right
to vote or receive dividends or any other rights as a stockholder shall exist with respect to Restricted Stock or Restricted Stock Units. 
 (b) Exercise Price and other Terms. The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of Restricted Stock and Restricted Stock Units granted under the
Plan. Restricted Stock and Restricted Stock Unit grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the stock or unit is awarded, which may include such performance-based milestones as are
determined appropriate by the Administrator. The Administrator may require the recipient to sign a Restricted Stock or and Restricted Stock Unit Agreement as a condition of the award. Any certificates representing the shares of Stock awarded shall
bear such legends as shall be determined by the Administrator. 
 (c) Restricted Stock or Restricted Stock Unit Award
Agreement. Each Restricted Stock and Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the purchase price (if any) and such other terms and conditions as the Administrator, in its sole discretion, shall
determine; provided; however, that if the Restricted Stock or Restricted Stock Unit grant has a purchase price, such purchase price must be paid no more than ten (10) years following the date of grant. 
 10. Stock Appreciation Rights.
 (a)
Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Employees at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete
discretion to determine the number of SARs granted to any Employee. 
 (b) Exercise Price and other Terms. The Administrator,
subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, that no SAR may have a term of more than ten (10) years from the date of grant.

  

 -9- 

 (c) Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying: 
 (i) The difference between the Fair Market Value of a Share on the date
of exercise over the exercise price; times 
 (ii) The number of Shares with respect to which the SAR is exercised. 
 (d) Payment upon Exercise of SAR. At the discretion of the Administrator, payment for a SAR may be in cash, Shares or a combination thereof.

 (e) Cash Settlements and Plan Share Allocation. Cash payments of Stock Appreciation Rights as well as Common Stock issued upon
exercise of Stock Appreciation Rights shall be applied against the maximum number of shares of Common Stock that may be issued pursuant to the Plan. The number of shares to be applied against such maximum number of shares in such circumstances shall
be the number of shares equal to the amount of the cash payment divided by the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right is granted. 
 (f) SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, shall determine. 
 (g)
Expiration of SARs. A SAR granted under the Plan shall expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. 
 (h) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the
Participant’s death or Disability, the Participant may exercise his or her Stock Appreciation Right within such period of time as is specified in the Stock Appreciation Right Agreement to the extent that the Stock Appreciation Right is vested
and exercisable on the date of termination (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement). In the absence of a specified time in the Stock Appreciation
Right Agreement, the Stock Appreciation Right shall remain exercisable for three (3) months following the Participant’s termination. If, on the date of termination, the Participant is not vested as to his or her entire Stock Appreciation
Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant does not exercise his or her Stock Appreciation Right within the time specified by the Administrator,
the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
  

 -10- 

 Notwithstanding the above, in the event of a Participant’s change in status from Employee to
Consultant, a Participant’s status as a Service Provider shall continue notwithstanding the change in status. 
 (i) Disability of
Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Stock Appreciation Right within such period of time as is specified in the Stock
Appreciation Right Agreement to the extent the Stock Appreciation Right is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in the Stock
Appreciation Right Agreement). In the absence of a specified time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable for twelve (12) months following the Participant’s termination. If, on the
date of termination, the Participant is not vested as to his or her entire Stock Appreciation Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant does not
exercise his or her Stock Appreciation Right within the time specified herein, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
 (j) Death of Participant. If a Participant dies while a Service Provider, the Stock Appreciation Right may be exercised within such period of
time as is specified in the Stock Appreciation Right Agreement (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in the Notice of Grant), by the Participant’s estate or by a person who acquires
the right to exercise the Stock Appreciation Right by bequest or inheritance, but only to the extent that the Stock Appreciation Right is vested and exercisable on the date of death. In the absence of a specified time in the Stock Appreciation Right
Agreement, the Stock Appreciation Right shall remain exercisable for twelve (12) months following the Participant’s termination. If, at the time of death, the Participant is not vested as to his or her entire Stock Appreciation Right, the
Shares covered by the unvested portion of the Stock Appreciation Right shall immediately revert to the Plan. The Stock Appreciation Right may be exercised by the executor or administrator of the Participant’s estate or, if none, by the
person(s) entitled to exercise the Stock Appreciation Right under the Participant’s will or the laws of descent or distribution. If the Stock Appreciation Right is not so exercised within the time specified herein, the Stock Appreciation Right
shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
 11. Leaves of Absence. The
effect of leaves of absence on Award vesting, if any, shall be as set forth in the applicable Award Agreement. 
 12. Limited
Transferability of Awards. Except as otherwise specified in an individual Award Agreement, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Participant, only by the Participant. 
  

 -11- 

 13. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation or Change of
Control.
 (a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of
shares of Common Stock covered by each outstanding Award, the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. 
 (b) Dissolution or
Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its
discretion may provide for a Participant to have the right to exercise his or her Award until ten (10) days prior to such transaction as to all of the stock covered thereby, including Shares as to which the Award would not otherwise be vested
or exercisable. In addition, the Administrator may provide that any Company repurchase option or forfeiture applicable to any Shares covered by an Award shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action. 
  

 -12- 

 (c) Change of Control.
 (i) SARs and Options. In the event of a Change of Control, each outstanding SAR and Option shall be assumed or an equivalent option substituted by
the successor corporation or a Parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the SAR and Option, the Participant shall fully vest in and have the right to exercise
the SAR or Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an SAR or Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change
of Control, the Administrator shall notify the Participant in writing or electronically that the SAR or Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the SAR or Option shall
terminate upon the expiration of such period. For the purposes of this paragraph, the SAR or Option shall be considered assumed if, following the Change of Control, the SAR or option confers the right to purchase or receive, for each Share of
Optioned Stock subject to the SAR or Option immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change
of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the SAR or Option, for each
Share of Optioned Stock subject to the SAR or Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change of Control.

 (ii) Restricted Stock and Restricted Stock Units. In the event of a Change of Control, each outstanding Restricted Stock and
Restricted Stock Unit award shall be assumed or an equivalent award substituted by the successor corporation or a Parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the
Restricted Stock or Restricted Stock Unit award, the Participant shall fully vest in the Restricted Stock or Restricted Stock Unit award, including Shares as to which it would not otherwise be vested. For the purposes of this paragraph, the
Restricted Stock or Restricted Stock Unit award shall be considered assumed if, following the Change of Control, the Restricted Stock or Restricted Stock Unit award confers the right to receive, for each Share and each unit to acquire a Share that
is subject to the Restricted Stock or Restricted Stock Unit award immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by holders of Common Stock for
each Share and each unit to acquire a Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be
received, for each Share and each unit to acquire a Share subject to the Restricted Stock or Restricted Stock Units award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the Change of Control. 
  

 -13- 

 14. Award Date of Grant. The date of grant of an Award shall be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each new Employee within a reasonable time after the date of
such grant. 
 15. Amendment and Termination of the Plan.
 (a) Amendment and Termination. The Committee may at any time amend, alter, suspend or terminate the Plan. 
 (b) Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
 (c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 
 16.
Conditions Upon Issuance of Shares.
 (a) Legal Compliance. Shares shall not be issued pursuant to the exercise or vesting
of an Award unless the exercise or vesting of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 (b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such
Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required. 
 17. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been obtained. 
 18. Reservation of Shares. The Company,
during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  

 -14-

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