Document:

jnpr093011ex10.3

Exhibit 10.3

June 29, 2011

Robert Muglia 

RE: Offer of Employment

Dear Bob:

We are pleased to offer you a position of Executive Vice President, Software Solutions Group (SSG)-reporting to Kevin Johnson.  This offer is contingent upon successful background investigation.  In addition, because you would be a Section 16 reporting individual, this offer requires approval of the Compensation Committee of the Board of Directors, which we will request promptly after you convey your acceptance. Your compensation package is composed of the following components:
	
				
	Offer Component
	Offer Amount
	Currency
	Frequency

	Base Salary
Hiring Bonus
Stock Options 
Performance Shares  
	$750,000
$1,500,000
300,000
100,000
	USD
USD
Options
Shares
	Annual
Payable in 8 installments
Standard Vesting 
See Vesting Below

Base Salary:  In consideration of your services, you will be paid by Juniper Networks (also referred to as the “Company”) an annual base salary as mentioned above in “Offer components” of $750,000, which will be paid semi-monthly in the amount of $31,250, less applicable taxes, deductions and remittances, in accordance with the Company's normal payroll processing. 

Hiring Bonus:  In addition and subject to your commencing employment, you will be entitled to receive hiring bonuses totaling $1,500,000 in eight quarterly increments of $187,500, paid in arrears; except that the bonus for the first quarter will be paid to you in your first regular paycheck following your commencement of employment.  Should you voluntarily terminate your employment or if or your employment is terminated by Juniper with Cause (as defined in the Severance Agreement referenced below), you will not receive any of the future unpaid increments. 

Stock Options: A non-statutory option (the “Option”) to purchase 300,000 shares of Juniper Common Stock will be granted to you under the terms of the Company's 2006 Equity Incentive Plan and related forms (the “Plan”).  The Option will have a term of seven (7) years from the date of grant (the “Grant Date”).  Your right to exercise the Option will vest cumulatively over a period of four years so long as you remain an employee of the Company, with 12/48ths of the shares vesting on the one-year anniversary of the Grant Date and 1/48th vesting each month thereafter.  This Option will be granted effective upon on the third Friday of the month occurring after your commencement of employment (for example, if you were to commence employment on September 12, the option would be granted on September 16.  If you commenced employment on September 19, the option would be granted on October 21). 

Performance Shares: At the same time as the Option is granted, you will be granted under the terms of the Plan a performance share award (the “Performance Shares”) with an aggregate target of 100,000 shares (as noted above under the Offer Component) of Juniper Networks Common Stock. Performance shares shall vest based on achievement of specific performance objectives and on continued employment through the Vesting Date (as defined below). The amount of performance shares earned (subject to vesting) shall be based on the achievement of annual performance targets established for each applicable year. With respect to each year's performance, you can earn between zero and 250% of the target amount for that year depending on the level of achievement against the target(s) established for that year. Your target amounts are 20,000 shares for 2011, 40,000 shares for 2012 and 40,000 shares for 2013. For 2011, the performance target is operating cash flow margin as modified by the Juniper Customer Satisfaction Index, all as approved by the Compensation Committee on February 9, 2011. For each of 2012 and 2013, the annual targets will be established by the Compensation Committee. If the Compensation Committee does not establish specific targets by May 1 of such year, the targets for that year will be deemed to be the annual revenue and operating margin target as set forth in the operating plan approved by the Board of Directors for that fiscal year.  The amount applicable to a performance year will vest on the date (the “Vesting Date”) that is the next occurring third Friday of the month following the date of approval by the Board or Compensation Committee of the performance calculation for that performance year provided you are still employed by 

the Company on that Vesting Date (For example, the amount earned for the 2011 performance year is expected to vest on third Friday of February 2012 and the amount earned for the 2012 performance year is expected to vest on the third Friday of February 2013). Additional information about the Plan, company goals, and objectives will be available to you after the start of your employment.

Annual Cash Incentive Bonus:  You will be eligible to participate in Juniper Networks 2011 Executive Incentive Bonus Plan with an annualized bonus target of 150% of base salary, prorated for duration of your service to the Company in 2011.  Additional information about the plan, company goals, and objectives will be available to you after the start of your employment.  The plan and funding schedule is subject to change at any time during the plan year.

Annual Compensation Review: Your salary, annual cash incentive bonus and future additional equity awards (which could include stock options, performance shares or restricted stock units) will be considered annually at the same time as the Compensation Committee reviews Section 16 officer compensation generally (typically in February).

Relocation Assistance:  In conjunction with your relocation to the Sunnyvale area, Juniper Networks will reimburse costs for a house-hunting trip lasting no more than 5 days for you and your spouse. The Company will also provide one-way transportation for you and your spouse per the Company's Travel Policy, including 15 days of car rental and 60 days of temporary housing. Additional Company-paid long-term business housing in the Sunnyvale area will be provided for up to 4 additional months until you relocate.  You are eligible to receive packing, shipment, insurance and storage for 60 days of eligible household goods, a taxable relocation allowance of US$62,500 and up to 3 days of Settling In Assistance (collectively, “Household Relocation Expenses”). 

New Home Purchase assistance in the Sunnyvale area will be provided in the form of taxable reimbursement of reasonable and customary non-recurring closing costs up to 2% of the new loan amount and a taxable 3-2-1 thirty-six month mortgage interest buy down.  When calculating the value of New Home Purchase assistance benefits, the maximum assumed mortgage value shall not exceed $3,000,000 (“New Home Purchase Assistance”). All arrangements must be made through Juniper's relocation service provider.  

Should your employment be terminated for Cause (as defined in your Severance Agreement) or should you voluntarily terminate your employment (other than for “Good Reason” as permitted under your Change in Control Agreement with Juniper) prior to completing three full years of service after the completion of your relocation, you will be responsible for pro-rated repayment of relocation expenses where the amount to be repaid is equal to the portion of the three full years of service to Juniper Networks that is not completed.  No repayment is required should your employment be terminated by Juniper without Cause. You may utilize the Household Relocation Expenses and New Home Purchase Assistance only once, but you may do so at any time during the first three years of your employment with the Company, at your discretion. Notwithstanding any language in the Juniper Domestic Relocation Policy (or any other policies to the contrary, all expense reimbursements must be submitted within 12 months of when incurred. The provisions of this relocation section of this offer letter shall on repayment of relocation expenses supersede and govern over any inconsistent or conflicting provisions (including but not limited to, provisions relating to repayment of relocation expenses) that may be contained in Juniper's Domestic Relocation Policy (attached hereto as Exhibit A) or any other applicable policies of Juniper.  For more details, a copy of the relocation policy and to initiate the relocation process, please contact Juniper's relocation consultant at Juniper@cartus.com. 

Severance and Change in Control.  Contemporaneously with your commencement of employment, the Company will enter into a Severance Agreement (attached hereto as Exhibit B) with you, under which you will be eligible to receive certain severance benefits in the absence of a Change in Control.  Also contemporaneously with your commencement of employment, the Company will enter into a Change in Control Agreement (attached hereto as Exhibit C) with you, to provide certain severance benefits to you in certain circumstances related to a Change in Control (as defined therein).  

Benefits and Expenses: You will be entitled to receive the employee benefits made available to other employees and officers of the Company to the full extent of your eligibility.  However, rather than the usual 15 days per year of paid time off (“PTO”), you will receive 25 days of PTO per year. In addition, your request to take your first week of PTO in late October has been approved. Juniper shall reimburse you for all reasonable business and travel expenses actually incurred or paid by you in the performance of your services on behalf of the Company, in accordance with the Company's expense reimbursement policy as from time to time in effect. 

Proprietary Information Agreement: Upon commencement of your employment, you will sign the Company's standard employee Confidential Information and Invention Assignment Agreement. 

Confidentiality: Until such time as the Company discloses the contents of this agreement in a filing with the Securities and 

Exchange Commission, neither party shall disclose the contents of this agreement without first obtaining the prior written consent of the other party (except for the above-referenced filing by the Company), provided, however, that you may disclose this agreement to your attorneys, financial planners and tax advisors if you require such persons to keep the terms hereof confidential, or otherwise as required by law. 

Arbitration: Any claim, dispute or controversy arising out of this Agreement, the interpretation, validity or enforcement of this Agreement or the alleged breach thereof shall be submitted by the parties to final, binding and confidential arbitration by the American Arbitration Association (“AAA”), in San Francisco, California, conducted before a single arbitrator under the then-applicable AAA rules.  By agreeing to this arbitration procedure, you and the Company waive the right to resolve any such dispute, claim or demand through a trial by jury or judge or by administrative proceeding.  You will have the right to be represented by legal counsel at any arbitration proceeding.  The arbitrator shall:  (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator's essential findings and conclusions on which the award is based.  The Company shall pay all AAA arbitration fees, except the amount of such fees equivalent to the filing fee you would have paid if the claim had been litigated in court.  Nothing in this offer letter is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any arbitration, including but not limited to any disputes or claims relating to or arising out of the misuse or appropriation of the Company's trade secrets or confidential and proprietary information.  Judgment may be entered on the award of the arbitration in any court having jurisdiction. 

Right to Work Documentation: For purposes of federal immigration law, you will be required to provide to Juniper Networks documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three business days of your date of hire with Juniper Networks, or our employment relationship with you may be terminated. A complete list of acceptable documents is provided with this offer. Please bring the appropriate documents on your first day of employment to insure legal employment. 

This offer is contingent upon your obtaining the requisite immigration status and employment authorization. If you are a foreign national requiring work authorization to begin employment, you must contact the Company's Immigration Department at immigration@juniper.net to initiate the visa process. The Company will submit a petition on your behalf to obtain employment authorization, as well as file visa applications for your immediate dependent family members. The Company will pay the legal fees and costs related to these filings. Due to the number of work visas available each year is limited by the U.S. government, the Company reserves the right to withdraw or suspend this offer if the Company is not able to obtain work authorization for you in a reasonable period of time. Please note that if you currently have employment authorization such as practical, curricular or academic training (F-1 or J-1), you must contact the Company's Immigration Department before beginning employment. 

At-Will Employment: If you choose to accept this offer, your employment with Juniper Networks will be voluntarily entered into and will be for no specified period. As a result, you will be free to resign at any time, for any reason or for no reason, as you deem appropriate. Juniper Networks will have a similar right and may conclude its employment relationship with you at any time, with or without cause. 

Entire Agreement and Miscellaneous:  This agreement, together with all exhibits and agreements incorporated by reference herein, forms your complete and exclusive agreement with the Company concerning the subject matter hereof.  The terms in this agreement supersede any other representations or agreements made to you by any party, whether oral or written, and in the event of any conflict between the terms of this agreement and the Severance Agreement or Change in Control Agreement, this letter agreement shall govern. This agreement is to be governed by the laws of the state of California without reference to conflicts of law principles.  In case any provision contained in this agreement shall, for any reason, be held invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect the other provisions of this agreement, and such provision will be reformed, construed and enforced so as to render it valid and enforceable consistent with the general intent of the parties insofar as possible under applicable law.  With respect to the enforcement of this agreement, no waiver of any right hereunder shall be effective unless it is in writing.  This agreement may be executed in more than one counterpart, and signatures transmitted via facsimile shall be deemed equivalent to originals.  

You may accept this offer by signing below and faxing a copy to our corporate Human Resources organization at (408) 936-3198. This offer will be valid through July 7, 2011 after, which we will consider this offer closed. 

We are delighted to have you join us at Juniper Networks. Welcome Aboard! 

Very truly yours, 

Steven Rice
Executive Vice President, Human Resources
Juniper Networks Inc.

/s/ Steven Rice

I accept the terms of this letter and agree to keep the terms of this letter confidential. 
	
			
	/s/ Robert Mulgia
	 
	June 30, 2011

	Signature  - Robert Muglia
	 
	Date Signed

 Start date:  October 3, 2011

Exhibit B
JUNIPER NETWORKS, INC.
SEVERANCE AGREEMENT
This Severance Agreement (the “Agreement”) is made and entered into by and between ______________ (the “Employee”) and Juniper Networks, Inc., a Delaware Corporation (the “Company”), effective on the last date signed below.
RECITALS
The Compensation Committee believes that it is imperative to provide the Employee with certain severance benefits upon certain terminations of employment.  These benefits will provide the Employee with enhanced financial security and incentive and encouragement to remain with the Company.
Certain capitalized terms used in the Agreement are defined below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:
1.     Term of Agreement.  This Agreement shall terminate upon the later of (i) January 1, 2015 or (ii) if Employee is terminated involuntarily by Company without Cause prior to January 1, 2015, the date that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2.    At-Will Employment.  The Company and the Employee acknowledge that the Employee's employment is and shall continue to be at-will, as defined under applicable law, except as may otherwise be specifically provided by applicable law or under the terms of any written formal employment agree-ment or offer letter between the Company and the Employee (an “Employment Agreement”). This Agreement does not constitute an agreement to employ Employee for any specific time. 

3.    Severance Benefits.

(a)    In the event the Employee is terminated involuntarily by Company without Cause, as defined below, and provided the Employee executes and does not revoke a full release of claims with the Company (in the form attached as Exhibit A) (the “Release”), the Employee will be entitled to receive the severance benefits set out in subsections (i) and (ii).  For purposes of this Agreement, “Cause” is defined as: (i) willfully engaging in gross misconduct that is demonstrably injurious to Company; (ii) willful act or acts of dishonesty or malfeasance undertaken by the individual; (iii) conviction of or a plea of nolo contendere to a felony; or (iv) willful and continued refusal or failure to substantially perform duties with Company (other than incapacity due to physical or mental illness); provided that the action or conduct described in clause (iv) above will constitute “Cause” only if such failure continues after the Company's CEO, COO or Board of Directors has provided the individual with a written demand for substantial performance setting forth in detail the specific respects in which it believes the individual has willfully and not substantially performed the individual's duties thereof and has been provided a reasonable opportunity (to be not less than 30 days) to cure the same.

(i)    A cash payment in a lump sum (less any withholding taxes) equal to 15 months of base salary (as in effect immediately prior to the termination). 

(ii)    In lieu of continuation of benefits, Employee shall receive $18,000 (whether or not Employee elects COBRA).

(b)    Release Effectiveness. The receipt of any severance pursuant to Section 3(a) will be subject to Employee signing and not revoking the Release and further subject to  the Release becoming effective within fifty-two (52) days following Employee's termination of employment.

(c)    Timing of Severance Payments.  Any cash severance payment to which Employee is entitled shall be paid by the Company to Employee in a single lump sum in cash on the fifty-third (53rd) day after Employee's termination of employment.

(d)    Change of Control Benefits.  In the event the Employee receives severance and other benefits pursuant to a change in control agreement that are greater than or equal to the amounts payable hereunder, then the Employee 

shall not be entitled to receive severance or any other benefits under this Agreement. 

(e)    Section 409A.

(i)    Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”) at the time of Employee's termination (other than due to death) or resignation, then the severance payable to Employee, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) that are payable within the first six (6) months following Employee's termination of employment, will become payable on or within ten days following the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employee's termination of employment.  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Employee dies following his termination but prior to the six (6) month anniversary of his termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee's death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(ii)    Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.

(iii)    Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.  “Section 409A Limit” will mean the lesser of two (2) times: (i) Employee's annualized compensation based upon the annual rate of pay paid to Employee during the Employee's taxable year preceding the Employee's taxable year of Employee's termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Employee's employment is terminated.

(iv)    The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A.

4.    Successors.

(a)    The Company's Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 4(a) or which becomes bound by the terms of this Agreement by operation of law. The term “Company” shall also include any direct or indirect that is majority owned by Juniper Networks, Inc.

(b)    The Employee's Successors.  The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

5.    Notice.  All notices and other communications required or permitted here-under shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if 

delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential address and (ii) if to the Company, at the address of its principal corporate offices (attention:  Secretary), or in any such case at such other address as a party may designate by ten (10) days' advance written notice to the other party pursuant to the provisions above.

6.    Miscellaneous Provisions.

(a)No Duty to Mitigate.  The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.

(b)Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

(d)Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof.

(e)Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California.  The Superior Court of Santa Clara County and/or the United States District Court for the Northern District of California shall have exclusive jurisdiction and venue over all controversies in connection with this Agreement.

(f)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

(h)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY    JUNIPER NETWORKS, INC.
By:                            
Name:     ____________________________________
Title:                            
Date:    ___________________________________
EMPLOYEE                                
Name:     
Date:    ___________________________________

EXHIBIT A
JUNIPER NETWORKS, INC.
RELEASE OF CLAIMS
This Release of Claims (“Agreement”) is made by and between Juniper Networks, Inc. (the “Company”) and __________________ (“Employee”).
WHEREAS, Employee has agreed to enter into a release of claims in favor of the Company upon certain events specified in the Severence Agreement by and between Company and Employee (the “Severence Agreement”).
NOW THEREFORE, in consideration of the mutual promises made in this Agreement, the parties hereby agree as follows:

1.     Termination.  Employee's employment from the Company terminated on ________________ (the “Termination Date”).

2.    Confidential Information.  Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company.  Employee shall return all the Company property and confidential and proprietary information in Employee's possession to the Company on the Effective Date of this Agreement.

3.    Payment of Salary.  Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee.

4.    Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company.  Employee, on behalf of Employee, and Employee's respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corpora-tions, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation,

(a)any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship; 
(b)any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; 

(c)any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and 

implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospec-tive economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

(d)any and all claims for violation of any federal, state or municipal stat-ute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and all amendments to each such Act as well as the regulations issued under each such Act;

(e)any and all claims for violation of the federal, or any state, constitution; 

(f)any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

(g)any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any severance obligations due Employee under the Severence Agreement.  Nothing in this Agreement waives Employee's rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance.

5.    Acknowledgment of Waiver of Claims under ADEA.  Employee acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary.  Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled.  Employee further acknowledges that Employee has been advised by this writing that (a) Employee should consult with an attorney prior to executing this Agreement; (b) Employee has at least twenty-one (21) days within which to consider this Agreement; (c) Employee has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective until the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.  Any revocation should be in writing and delivered to the Vice-President of Human Resources at the Company by close of business on the seventh day from the date that Employee signs this Agreement.

6.    Civil Code Section 1542.  Employee represents that Employee is not aware of any claims against the Company other than the claims that are released by this Agreement.  Employee acknowledges that Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code 1542, below, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive any rights Employee may have under such code section, as well as under any statute or common law principles of similar effect.

7.    No Pending or Future Lawsuits.  Employee represents that Employee has no lawsuits, claims, or actions pending in Employee's name, or on behalf of any other person or entity, against the Company or any other person or entity referred to in this Agreement.  Employee represents that Employee will not bring any lawsuits, claims, or actions against the Company (or any other party subject to Employee's release herein) with respect to any claim released in this Agreement.

8.    Application for Employment.  Employee understands and agrees that, as a condition of this Agreement, Employee shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Employee hereby waives any right, or alleged right, of employment or re-employment with the Company.

9.    No Cooperation.  Employee agrees that Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so.

10.    No Admission of Liability.  Employee understands and acknowledges that this Agreement constitutes a compromise and settlement of disputed claims.  No action taken by the Company, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Employee or to any third party.

11.    Costs.  The parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Agreement.

12.    Authority.  Employee represents and warrants that Employee has the capacity to act on Employee's own behalf and on behalf of all who might claim through Employee to bind them to the terms and conditions of this Agreement.

13.    No Representations.  Employee represents that Employee has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Neither party has relied upon any representations or statements made by the other party which are not specifically set forth in this Agreement.

14.    Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

15.    Entire Agreement.  This Agreement, along with the Employee's written equity compensation agreements with the Company, represents the entire agreement and understanding between the Company and Employee concern-ing Employee's separation from the Company.

16.    No Oral Modification.  This Agreement may only be amended in writing signed by Employee and the Chairman of the Board of Directors of the Company.

17.    Governing Law.  This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California.

18.    Effective Date.  This Agreement is effective eight (8) days after it has been signed by both parties.

19.    Counterparts.  This Agreement may be executed in counter-parts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

20.    Voluntary Execution of Agreement.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties to this Agreement, with the full intent of releasing all claims.  The parties acknowledge that:

(a)    They have read this Agreement;

(b)    They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

(c)    They understand the terms and consequences of this Agreement and of the releases it contains; 

(d)    They are fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth below.
Dated:                      , 20__                    Juniper Networks, Inc.
Dated:                      , 20__                    By _________________, an individual

Exhibit C
JUNIPER NETWORKS, INC.
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the “Agreement”) is made and entered into by and between Robert Muglia (the “Employee”) and Juniper Networks, Inc., a Delaware Corporation (the “Company”), effective on the last date signed below.
RECITALS
1.    It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control.  The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities.  The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein) of the Company.
2.    The Board believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment and to motivate the Employee to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.
3.    The Board believes that it is imperative to provide the Employee with certain severance benefits upon certain terminations of employment following a Change of Control.  These benefits will provide the Employee with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.
4.    Certain capitalized terms used in the Agreement are defined in Section 6 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.    Term of Agreement.  This Agreement shall terminate upon the later of (i) January 1, 2015 or (ii) if a Change of Control has occurred on or before January 1, 2015 (or if a definitive agreement relating to a Change in Control has been signed by the Company on or before January 1, 2015 and the closing of that transaction occurs on or before March 31, 2015), the date that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2.    At-Will Employment.  The Company and the Employee acknowledge that the Employee's employment is and shall continue to be at-will, as defined under applicable law, except as may otherwise be specifically provided under the terms of any written formal employment agree-ment or offer letter between the Company and the Employee (an “Employment Agreement”).  If the Employee's employment terminates for any reason, including (without limitation) any termination prior to a Change of Control, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement or under his or her Employment Agreement, or as may otherwise be available in accordance with the Company's established employee plans. 

3.    Severance Benefits.

(a)Involuntary Termination Other than for Cause or Voluntary Termination for Good Reason Following a Change of Control Period.  If (i) between the date that is four (4) months following a Change of Control and the date that is twelve (12) months following a Change of Control the Employee terminates his or her employment with the Company (or any parent or subsidiary of the Company) for “Good Reason” (as defined herein), provided however, that the grounds for Good Reason may arise at anytime within the twelve (12) months following the Change of Control, or (ii) within twelve (12) months following a Change of Control the Company (or any parent or subsidiary of the Company) terminates the Employee's employment for other than “Cause” (as defined herein), and the Employee signs and does not revoke a release of claims with the Company, in substantially the form attached hereto as Exhibit A, but which may be updated to reflect changes in law and regulations (the “Release”), then the Employee shall receive the following severance from the Company:

(i)Severance Payment.  The Employee shall be entitled to receive a lump-sum severance payment (less applicable withholding taxes) equal to 100% of the Employee's annual base salary (as in effect immediately prior to (A) the Change of Control, or (B) the Employee's termination, whichever is greater) plus 100% of the Employee's target bonus for the fiscal year in which the Change of Control or the Employee's termination occurs, whichever is greater).

(ii)Equity Compensation Acceleration.  One hundred percent (100%) of Employee's then unvested outstanding stock options, stock appreciation rights, performance shares, restricted stock units and other Company equity compensation awards (the “Equity Compensation Awards”) that vest based on time (such as an option that vests 25% on the first anniversary of grant and 1/48th monthly thereafter) shall immediately vest and became exercisable (and any rights of repurchase by the Company or restriction on sale shall lapse).  With respect to Equity Compensation Awards that vest wholly or in part based on factors other than time, such as performance (whether individual or based on external measures such as Company performance, market share, stock price, etc.), (i) any portion for which the measurement or performance period or performance measures have been completed and the resulting quantities have been determined or calculated, shall immediately vest and become exercisable (and any rights of repurchase by the Company or restriction on sale shall lapse) and (ii) the remaining portions shall immediately vest and become exercisable (and any rights of repurchase by the Company or restriction on sale shall lapse) in an amount equal to the number that would be calculated if the performance measures were achieved at the target level (for example, if the employee were granted 300 three-year performance shares, where (a) the amount that can be earned is determined each year based on performance against annual performance targets but the entire amount vests at the end of the three years based upon continued service, and (b) at target performance levels the employee could earn 1/3 of the amount each year and (c) the first year had been completed and the performance resulted in a calculation that 85 shares were earned and (d) the employee is terminated prior to the completion of year 2, then the amount that would vest and become immediately exercisable would be 285 shares -- representing the 85 shares calculated for year 1 and the target amount of 100 shares for each of year 2 and year 3); provided however, that if there is no “target” number, then the number that vest shall be 100% of the amounts that could vest with respect to that measurement period. Any Company stock options and stock appreciation rights shall thereafter remain exercisable following the Employee's employment termination for the period prescribed in the respective option and stock appreciation right agreements.

(iii)Continued Employee Benefits Payment.  In lieu of continuation of benefits, Employee shall receive $36,000 (whether or not Employee elects COBRA). 

(b)Timing of Severance Payments.  

(i)Payment Timing.  One half of the severance payment to which Employee is entitled shall be paid by the Company to Employee in cash on the 53rd calendar day after Employee's termination of employment, subject to any delay required to avoid additional taxation under Internal Revenue Code Section 409A and the final regulations and any guidance promulgated thereunder (“Section 409A”). The other half of the severance payment to which Employee is entitled shall be paid by the Company to Employee in cash on the first payroll date that is on or after six months and one day following Employee's termination of employment. If the Employee should die before all amounts have been paid, such unpaid amounts shall be paid in a lump-sum payment (less any withholding taxes) to the Employee's designated beneficiary, if living, or otherwise to the personal representative of the Employee's estate.

(ii)Release Effectiveness.  The receipt of any severance pursuant to Section 3(a) will be subject to Employee signing and not revoking the Release and further subject to  the Release becoming effective within fifty-two (52) days following Employee's termination of employment.

(c)Voluntary Resignation; Termination for Cause.  If the Employee's employ-ment with the Company terminates (i) voluntarily by the Employee other than for Good Reason, or (ii) for Cause by the Company, then the Employee shall not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company's then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

(d)Termination Outside of Change of Control Period.  In the event the Employee's employment is terminated for any reason, either prior to the occurrence of a Change of Control or after the twelve (12) month period following a Change of Control, or if the Employee terminates for Good Reason within four months after a Change in Control, then the Employee shall be entitled to receive severance and any other benefits only as may then be established under the Company's existing written severance and benefits plans and practices or pursuant to other written agreements with the Company. 

(e)Section 409A.  

(i)Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified employee” within the meaning of Section 409A at the time of Employee's termination (other than due to death) or resignation, 

then the severance payable to Employee, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) that are payable within the first six (6) months following Employee's termination of employment, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employee's termination of employment.  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Employee dies following his termination but prior to the six (6) month anniversary of his termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee's death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(ii)Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.

(iii)Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.  “Section 409A Limit” will mean the lesser of two (2) times: (i) Employee's annualized compensation based upon the annual rate of pay paid to Employee during the Employee's taxable year preceding the Employee's taxable year of Employee's termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Employee's employment is terminated.

(iv)The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A.

4.    Conditional Nature of Severance Payments and Benefits.

(a)    Noncompete.  Employee acknowledges that the nature of the Company's business is such that if Employee were to become employed by, or substantially involved in, the business of a competitor of the Company during the twelve (12) months following the termination of Employee's employment with the Company, it would be very difficult for Employee not to rely on or use the Company's trade secrets and confidential information.  Thus, to avoid the inevitable disclosure of the Company's trade secrets and confidential information, Employee agrees and acknowledges that Employee's right to receive the severance benefits set forth in Section 3(a) (to the extent Employee is otherwise entitled to such payments) shall be conditioned upon Employee not directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), nor having any ownership interested in or participating in the financing, operation, management or control of, any person, firm, corporation or business in Competition (as defined herein) with Company.  Notwithstanding the foregoing, Employee may, without violating this Section 4, own, as a passive investment, shares of capital stock of a corporation or other entity that engages in Competition where the number of shares of such corporation's capital stock that are owned by Employee represent less than three percent of the total number of shares of such entity's capital stock outstanding.

(b)    Non-Solicitation.  Until the date twelve (12) months after the termination of Employee's employment with the Company for any reason, Employee agrees and acknowledges that Employee's right to receive the severance payments set forth in Section 3(a) (to the extent Employee is otherwise entitled to such payments) shall be conditioned upon Employee neither directly nor indirectly soliciting, inducing, recruiting or encouraging an employee to leave his or her employment either for Employee or for any other entity or person with which or whom Employee has a business relationship.

(c)    Understanding of Covenants.  Employee represents that he (i) is familiar with the foregoing covenants not to compete and not to solicit, and (ii) is fully aware of his obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.

(d)    Remedy for Breach.  Upon any breach of this section by Employee, all severance payments and benefits pursuant to this Agreement shall immediately cease and any stock options or stock appreciation rights then held by Employee shall immediately terminate and be without further force and effect, and Employee shall return all of the consideration paid by 

the Company under this Section 3 and remit any shares subject to Equity Compensation Awards or shares purchased under stock options or stock appreciation rights to the extent that such Equity Compensation Awards, stock options or stock appreciation rights had their vesting accelerated under Section 3 above (or the profits from the sale of such shares if they are or  have been sold).

5.    Golden Parachute Excise Tax Best Results.  In the event that the severance and other benefits provided for in this agreement or otherwise payable to Employee (a) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (b) would be subject to the excise tax imposed by Section 4999 of the Code, then such benefits shall be either be:

(i)    delivered in full, or

(ii)    delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in the receipt by Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  Unless the Company and Employee otherwise agree in writing, any determination required under this Section 5 will be made in writing by a national “Big Four” accounting firm selected by the Company or such other person or entity to which the parties mutually agree (the “Accountants”), whose determination will be conclusive and binding upon Employee and the Company for all purposes.  For purposes of making the calculations required by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 5.  Any reduction in payments and/or benefits required by this Section 5 shall occur in the following order: (A) cash payments shall be reduced first and in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash payment to be reduced; and (B) accelerated vesting of stock awards shall be cancelled/reduced next and in the reverse order of the date of grant for such stock awards (i.e., the vesting of the most recently granted stock awards will be reduced first), with full-value awards reversed before any stock option or stock appreciation rights are reduced.

6.    Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

(a)    Cause.  “Cause” shall mean:

(i)    an act of personal dishonesty taken by the Employee in connection with his responsibilities as an employee and intended to result in substantial personal enrichment of the Employee; or

(ii)    Employee being convicted of, or pleading nolo contendere to a felony; or

(iii)    a willful act by the Employee which constitutes gross misconduct and which is injurious to the Company; or

(iv)    following delivery to the Employee of a written demand for performance from the Company which describes the basis for the Company's reasonable belief that the Employee has not substantially performed his duties, continued violations by the Employee of the Employee's obligations to the Company which are demonstrably willful and deliberate on the Employee's part.

(b)    Change of Control.  “Change of Control” means the occurrence of any of the following events:  

(i)    A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group, (“Person”) acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection (i), the acquisition of additional stock by any one Person, who is considered to own more than 50% of the total voting power of the stock of the Company will not be considered a Change in Control; or 

(ii)    A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed 

by a majority of the members of the Board prior to the date of the appointment or election.  For purposes of this clause (ii), if any Person is considered to effectively control the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii)    A change in the ownership of a substantial portion of the Company's assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company's assets: (A) a transfer to an entity that is controlled by the Company's stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company's stock, (2) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person.  For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this Section 6(b), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction shall not be deemed a Change in Control unless the transaction qualifies as a change in the ownership of the Company, change in the effective control of the Company or a change in the ownership of a substantial portion of the Company's assets, each within the meaning of Section 409A.

(c)    Competition. means the development, marketing or sale of networking equipment or network security software or products in the United States. For the avoidance of doubt, Competition includes, but is not limited to, Cisco Systems, Huawei, Alcatel-Lucent, Check Point Software, Palo Alto Networks, Fortinet, Aruba, Hewlett-Packard, and Brocade Communications Systems, Inc.

(d)    Disability.  “Disability” shall mean that the Employee has been unable to perform his or her Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee's legal representative (such agreement as to acceptability not to be unreasonably withheld).  Termination resulting from Disability may only be effected after at least thirty (30) days' written notice by the Company of its intention to terminate the Employee's employment.  In the event that the Employee resumes the performance of substantially all of his or her duties hereunder before the termination of his or her employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked.

(e)    Good Reason.  “Good Reason” means Employee's termination of employment following the expiration of any cure period (discussed below) following the occurrence, without Employee's express written consent, of one or more of the following: 

(i)    a material reduction of the Employee's duties, title, authority or responsibilities, relative to the Employee's duties, title, authority or responsibilities as in effect immediately prior to such reduction; provided, however, that a reduction in duties, title, authority or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Financial Officer of the Company remains the Chief Financial Officer of the subsidiary or business unit substantially containing the Company's business following a Change of Control) shall not by itself constitute grounds for a “Voluntary Termination for Good Reason”; or

(ii)    a substantial reduction of the facilities and perquisites (including office space and location) available to the Employee immediately prior to such reduction; or

(iii)    a reduction by the Company in the base compensation or total target cash compensation of the Employee as in effect immediately prior to such reduction; or

(iv)    a material reduction by the Company in the kind or level of benefits to which the Employee was entitled immediately prior to such reduction with the result that such Employee's overall benefits package is significantly reduced; or

(v)    the relocation of the Employee to a facility or a location more than forty (40) miles from such Employee's then present location.
Employee will not resign for Good Reason without first providing the Company with written notice within sixty (60) days of the event that Employee believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than thirty (30) days following the date of such notice.

7.    Successors.

(a)    The Company's Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

(b)    The Employee's Successors.  The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

8.    Notice.

(a)    General.  All notices and other communications required or permitted here-under shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential address and (ii) if to the Company, at the address of its principal corporate offices (attention:  Secretary), or in any such case at such other address as a party may designate by ten (10) days' advance written notice to the other party pursuant to the provisions above.

(b)    Notice of Termination.  Any termination by the Company for Cause or by the Employee for Good Reason or Disability or as a result of a voluntary resignation shall be communi-cated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement.  Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than thirty (30) days after the giving of such notice).  The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Good Reason or Disability shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing his or her rights hereunder.

9.    Miscellaneous Provisions.

(a)    No Duty to Mitigate.  The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.

(b)    Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)    Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

(d)    Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto and supersedes 

in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof.

(e)    Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California.  The Superior Court of Santa Clara County and/or the United States District Court for the Northern District of California shall have exclusive jurisdiction and venue over all controversies in connection with this Agreement.

(f)    Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)    Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

(h)    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY    JUNIPER NETWORKS, INC.
By:                            
Name:     ____________________________________
Title:                            

Date: _____________________________________    

EMPLOYEE                                
Name: Robert Muglia

Date: _____________________________________    

EXHIBIT A
JUNIPER NETWORKS, INC.
RELEASE OF CLAIMS
This Release of Claims (“Agreement”) is made by and between Juniper Networks, Inc. (the “Company”) and __________________ (“Employee”).
WHEREAS, Employee has agreed to enter into a release of claims in favor of the Company upon certain events specified in the change of control agreement by and between Company and Employee (the “Change of Control Agreement”).
NOW THEREFORE, in consideration of the mutual promises made in this Agreement, the parties hereby agree as follows:

1.    Termination.  Employee's employment from the Company terminated on ________________ (the “Termination Date”).

2.    Confidential Information.  Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company.  Employee shall return all the Company property and confidential and proprietary information in Employee's possession to the Company on the Effective Date of this Agreement.

3.    Payment of Salary.  Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee.

4.    Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company.  Employee, on behalf of Employee, and Employee's respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corpora-tions, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation,

(a)any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship; 

(b)any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; 

(c)any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospec-tive economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

(d)any and all claims for violation of any federal, state or municipal stat-ute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, 

the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and all amendments to each such Act as well as the regulations issued under each such Act;

(e)any and all claims for violation of the federal, or any state, constitution; 

(f)any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

(g)any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not extend to any severance obligations due Employee under the Change of Control Agreement.  Nothing in this Agreement waives Employee's rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance.

5.    Acknowledgment of Waiver of Claims under ADEA.  Employee acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary.  Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled.  Employee further acknowledges that Employee has been advised by this writing that (a) Employee should consult with an attorney prior to executing this Agreement; (b) Employee has at least twenty-one (21) days within which to consider this Agreement; (c) Employee has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective until the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.  Any revocation should be in writing and delivered to the Vice-President of Human Resources at the Company by close of business on the seventh day from the date that Employee signs this Agreement.

6.    Civil Code Section 1542.  Employee represents that Employee is not aware of any claims against the Company other than the claims that are released by this Agreement.  Employee acknowledges that Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code 1542, below, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code section, agrees to expressly waive any rights Employee may have under such code section, as well as under any statute or common law principles of similar effect.

7.    No Pending or Future Lawsuits.  Employee represents that Employee has no lawsuits, claims, or actions pending in Employee's name, or on behalf of any other person or entity, against the Company or any other person or entity referred to in this Agreement.  Employee represents that Employee will not bring any lawsuits, claims, or actions against the Company (or any other party subject to Employee's release herein) with respect to any claim released in this Agreement.

8.    Application for Employment.  Employee understands and agrees that, as a condition of this Agreement, Employee shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Employee hereby waives any right, or alleged right, of employment or re-employment with the Company.

9.    No Cooperation.  Employee agrees that Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so.

10.    No Admission of Liability.  Employee understands and acknowledges that this Agreement constitutes a compromise and settlement of disputed claims.  No action taken by the Company, either previously or in connection with this 

Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Employee or to any third party.

11.    Costs.  The parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Agreement.

12.    Authority.  Employee represents and warrants that Employee has the capacity to act on Employee's own behalf and on behalf of all who might claim through Employee to bind them to the terms and conditions of this Agreement.

13.    No Representations.  Employee represents that Employee has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Neither party has relied upon any representations or statements made by the other party which are not specifically set forth in this Agreement.

14.    Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

15.    Entire Agreement.  This Agreement, along with the Employee's written equity compensation agreements with the Company, represents the entire agreement and understanding between the Company and Employee concern-ing Employee's separation from the Company.

16.    No Oral Modification.  This Agreement may only be amended in writing signed by Employee and the Chairman of the Board of Directors of the Company.

17.    Governing Law.  This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California.

18.    Effective Date.  This Agreement is effective eight (8) days after it has been signed by both parties.

19.    Counterparts.  This Agreement may be executed in counter-parts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

20.    Voluntary Execution of Agreement.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties to this Agreement, with the full intent of releasing all claims.  The parties acknowledge that:

(a)    They have read this Agreement;

(b)    They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

(c)    They understand the terms and consequences of this Agreement and of the releases it contains; 

(d)    They are fully aware of the legal and binding effect of this Agreement.

    

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth below.
Juniper Networks, Inc.

Dated:                      , 20__                    By                                     

Robert Muglia, an individual

Dated:                      , 20__                                                                                                    

Exhibit D

JUNIPER NETWORKS, INC.
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT

As a condition of my employment with Juniper Networks, Inc., its subsidiaries, affiliates, successors or assigns (together the "Company"), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by Company, I agree with the Company to the following: 

		
	1.
	Confidential Information.

(a)    Company Information. I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of an Officer of the Company, any Confidential Information of the Company.  I understand that "Confidential Information" means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called during the term of my employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing or finances disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment.  I further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved or such items that are known previous to my employment and are set forth in Exhibit A.

(b)    Former Employer Information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity , or otherwise use Company property to access such information, unless consented to in writing by such employer, person or entity.

(c)     Third Party Information. I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company's agreement with such third party.

		
	2.
	Inventions.

(a)    Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as "Prior Inventions"), which belong to me, which relate to the Company's proposed business, products or research and development, and which are not assigned to the Company hereunder, or, if no such list is attached, I represent that there are no such Prior Inventions.  If in the course of any employment with the Company, I incorporate into a Company product, process or machine a Prior Invention or any other Invention owned by me or 

in which I have, an ownership interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell and offer for sale such Prior Invention as part of or in connection with such product, process or machine, which shall be in written form and agreed to by both parties.

(b)    Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as "Inventions"), except as provided in Section 3(f) below.  I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act.  I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company's sole discretion and for the Company's sole benefit and that no royalty will be due to me as a result of the Company's efforts to commercialize or market any such invention.

(c)    Inventions Assigned to the United States. I agree to assign to the United States Government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

(d)    Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.  The records will be available to and remain the sole property of the Company at all times.

(e)    Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company's expense, in every proper way to secure the Company's rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the review and execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement.  If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

(f)    Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B).  I will advise the Company promptly in writing of any inventions that I believe meet the criteria in California Labor Code Section 2870 and not otherwise disclosed on Exhibit A.

3.    Returning Company Property. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices (including, but not limited to, laptops, PDAs and cell phones), records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, any files containing Confidential Information or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns.  In addition, I agree to permanently delete any and all Confidential Information electronically stored on any and all devices owned by me, or within my control, prior to the time I end my Company employment.  In the event my employment ends I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit C or a document containing similar provisions, then in use by the Company.

4.    Notification of New Employer. In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my rights and obligations under this Agreement. 

5.    Representations. I agree to verify any proper document required to carry out the terms of this Agreement.  I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company.  I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

6.    Solicitation of Employees.  I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I shall not, either directly or indirectly, solicit, induce, recruit (including, but not limited to, participating in interviews) or encourage any of the Company's employees to leave their employment, or attempt to solicit, induce, or recruit employees of the Company, either for myself or for any other person or entity.

7.    At-Will Employment.  I understand and acknowledge that my employment with the Company is for an unspecified duration and constitutes "at-will" employment. I also understand that any representation to the contrary is unauthorized and not valid unless obtained in writing and signed by the CEO, the Executive Vice President of Human Resources or the General Counsel.  I acknowledge that this employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice.

8.    General Provisions.

(a)    Governing Law, Consent to Personal Jurisdiction.  This Agreement will be governed by the laws of the State of California.  I hereby expressly consent to the personal jurisdiction of the state and federal courts located in California for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

(b)    Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.  No modification of or amendment to this Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

(c)    Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d)    Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

Date:                              Signature                

Name of Employee             
                                                             

Juniper Networks, Inc.
By:                          

Exhibit A

LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP

Title        Date                Identifying Number or Brief Description

Attach additional sheets, if necessary

Exhibit B

CALIFORNIA LABOR CODE SECTION 2870
INVENTION ON OWN TIME - EXEMPTION FROM AGREEMENT

"(a)     Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1)    Relate at the time of conception or reduction to practice of the invention to the employees business, or actual or demonstrably anticipated research or development of the employer; or

(2)    Result from any work performed by the employee for the employer.

 (b)    To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable."

Exhibit C

JUNIPER NETWORKS, INC.
TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, any files containing Confidential Information, or reproductions of any aforementioned items belonging to Juniper Networks, Inc., its subsidiaries, affiliates, successors or assigns (together, the "Company").  I have not used (or caused others to use) software or hardware (other than as directed and provided by the Company) to wipe, erase or otherwise render unrecoverable data from any storage devices, electronic memory, computers or other electronic devices belonging to the Company or used for Company business.  Similarly, I have not wiped, erased or otherwise rendered unrecoverable data for the purpose of eliminating evidence of wrongdoing or misconduct.  I understand that the fact that copies of such data may exist elsewhere does not constitute an exception or an excuse to my obligations.  

I further certify that I have complied with all the terms of the Company's Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for twelve (12) months from this date, I will not, directly or indirectly, solicit, induce, recruit or encourage any of the Company's employees to leave their employment, either for myself or for any other person or entity.

Date:                        

Employee's Signature:                        

Type/Print Employee's Name:Exhibit 10.01

 

FORM OF CITIGROUP INC. 2012 DIRAP AWARD AGREEMENT

 

Citigroup Inc.

Discretionary Incentive and Retention Award Agreement

Summary

 

Citigroup Inc. (“Citigroup”) hereby grants to {NAME}  (the “Participant”), the awards summarized below, pursuant to the terms of the Discretionary Incentive and Retention Award Plan (“DIRAP”). The terms, conditions and restrictions of your awards are contained in this Award Agreement, including the attached Terms and Conditions (together, the “Agreement”). Deferred stock and restricted stock awards granted under the 2012 Capital Accumulation Program (“CAP”) are summarized, along with additional information, in the 2012 Capital Accumulation Program prospectus dated January 17, 2012,  and any applicable prospectus supplements (together, the “Prospectus”) and the Citigroup 2009 Stock Incentive Plan, as amended and restated effective April 21, 2011, and as it may be further amended from time to time (the “Stock Incentive Plan”). Deferred cash awards granted under the  2012 Deferred Cash Award Plan (“DCAP”) are summarized, along with additional information, in the 2012 Deferred Cash Award Plan brochure dated January 17, 2012 (the “Brochure”) and the DCAP plan document.

 

For the awards to be effective, you must [accept][sign] below[ and return this page of the Agreement]. If you do not formally accept the terms and conditions of these awards within the time period prescribed by Citigroup, the awards summarized below may be cancelled.

 

Summary of Participant’s 2012 Capital Accumulation Program Stock Award (the “Stock Award”)

 

	
Award date
    	
 
    	
January 17, 2012
    
	
Award vehicle
    	
 
    	
[Deferred][Restricted] stock
    
	
Number of shares
    	
 
    	
[    ]
    
	
Vesting dates (and amount; subject to rounding)
    	
 
    	
January 20, 2013 (25%)

January 20, 2014 (25%)

January 20, 2015 (25%)

January 20, 2016 (25%)(1)
    

 

Summary of Participant’s 2012 Deferred Cash Award (the “Deferred Cash Award”)

 

	
Award date
    	
 
    	
January 17, 2012
    
	
Principal amount
    	
 
    	
[    ]
    
	
Notional interest rate (compounded annually)
    	
 
    	
[  ]%(2)
    
	
Vesting dates (and amount)
    	
 
    	
January 20, 2013 (25%)

January 20, 2014 (25%)

January 20, 2015 (25%)

January 20, 2016 (25%)(1)
    

 

Acceptance and Agreement by Participant. I hereby accept the awards described above, and agree to be bound by the terms, conditions, and restrictions of such awards as set forth in this Agreement (which includes the attached Terms and Conditions), the Prospectus and Brochure, as applicable (acknowledging hereby that I have read and that I understand such documents), and Citigroup’s policies, as in effect from time to time, relating to the administration of Citigroup’s incentive compensation programs.

 

	
CITIGROUP INC.
    	
 
    	
PARTICIPANT’S [SIGNATURE][ACCEPTANCE]:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
[Name]
    	
 
    	
Name:
    
	
 
    	
[Title]
    	
 
    	
GEID:
    

 

(1)  Pro-rata vesting over three years (subject to post-vesting retention requirements) may be applicable for Code Staff in the United Kingdom or Identified Staff in the European Union, or elsewhere, as contemplated by local regulations.

(2)  Interest rate may vary according to regulatory standards.

 

 

CITIGROUP INC.

2012 DIRAP AWARD AGREEMENT

TERMS AND CONDITIONS

 

The Terms and Conditions below constitute part of this Agreement and relate to the Awards described on the preceding Summary page.  The Stock Award and the Deferred Cash Award are together referred to as the “Awards” and each, an “Award.” All references to a Deferred Cash Award in this Agreement shall include any notional interest or return accrued thereon. Except as otherwise provided herein, the “Company” shall mean Citigroup and its subsidiaries that participate in DIRAP, CAP, or DCAP through the making of Awards to their employees.  The “Committee” shall mean the Personnel and Compensation Committee of the Citigroup Board of Directors and any person with authority directly or indirectly delegated from the Committee.

 

1. Participant Acknowledgements.  By accepting the Awards, Participant acknowledges that:

 

(a)                                  He or she has read and understands the Prospectus and the Brochure and these Terms and Conditions.  Participant acknowledges that the official language of these documents is English, and that unofficial translations of program documents to a language Participant understands have been made available to Participant upon request to aid his or her understanding of the official English-language versions.

 

(b)                                 Participant understands that the Awards and all other incentive awards are entirely discretionary. Participant acknowledges that, absent a prior written agreement to the contrary, he or she has no right to receive the Awards, or any incentive award, that receipt of an Award or any other incentive award is neither an indication nor a guarantee that an incentive award of any type or amount will be made in the future, and that the Company is free to change its practices and policies regarding incentive awards at any time in its sole discretion.

 

(c)                                  Because the Awards are intended to promote employee retention, among other interests, the Awards will be cancelled if vesting conditions set forth herein are not satisfied.

 

(d)                                 Any actual, anticipated, or estimated financial benefit to Participant from the Awards (or any other incentive award) is not and shall not be deemed to be a normal or an integral part of Participant’s regular or expected salary or compensation from employment for any purpose. Participant hereby agrees that neither the Awards nor any amounts payable in respect of the Award shall be considered when calculating any statutory, common law or other employment-related payment to Participant, including any severance, resignation, termination, redundancy, end-of-service, bonus, long-service awards, pension, superannuation or retirement or welfare or similar payments, benefits or entitlements.

 

(e)                                  The value that may be realized from a Stock Award, if any, is contingent and depends on the future market price of Citigroup stock, among other factors. Equity awards are intended to promote stock ownership and to align employees’ interests with those of stockholders. Any monetary value assigned to a Stock Award in any communication is contingent, hypothetical, and for illustrative purposes only and does not express or imply any promise or intent by the Company to deliver, directly or indirectly, any certain or determinable cash value to Participant.

 

(f)                                    A Deferred Cash Award is an unsecured general obligation of Citigroup and, until paid in accordance with its terms, is subject to the claims of Citigroup’s creditors. A Deferred Cash Award will remain denominated in the currency in which it was awarded throughout the vesting period. However, if Participant works in more than one country between the award date and a vesting date, Participant will receive proportionate distribution payments in the local currency of each work country, at exchange rates determined by the Committee in its sole discretion.

 

2. Vesting Conditions and Transfer Restrictions.  Vesting of any Award is conditioned on Participant’s continuous employment with the Company up to and including the scheduled vesting date, unless otherwise provided in this Agreement.  If the conditions to vesting as specified in this Section 2 are not satisfied as of the applicable vesting date(s) (including circumstances in which vesting occurs after

 

2

 

termination of employment), unvested shares in a Stock Award and/or the unvested portion of the Deferred Cash Award may be canceled.

 

(a)                                  [intentionally omitted].

 

(b) Clawback; Misconduct; Error; Downturn in Performance or Failure of Risk Management.

 

(i)                                     Any unvested shares in a Stock Award and/or any unvested portion of a Deferred Cash Award may be canceled or forfeited if the Committee, in its sole discretion, determines that (1) Participant received the Award based on materially inaccurate financial statements (which includes, but is not limited to, statements of earnings, revenues, or gains), (2) Participant knowingly engaged in providing inaccurate information (including knowingly failing to timely correct inaccurate information) relating to financial statements, (3) Participant materially violated any risk limits established or revised by senior management, a business head and/or risk management, or any balance sheet or working or regulatory capital guidance provided by a business head, or (4) Participant has engaged in “gross misconduct” as defined in Section 3(f) hereof.

 

(ii)                                  If Participant has been designated as “U.K. Code Staff” or “EU Identified Staff” (hereinafter, “Identified Staff”) and the Committee determines (1) there is reasonable evidence that Participant engaged in misconduct or committed material error, in either case in connection with his or her employment, or (2) the Company or Participant’s business unit has suffered a material downturn in its financial performance or a material failure of risk management, the Committee in its sole discretion may determine that any unvested shares in a Stock Award [and/or the unvested portion of a Deferred Cash Award] shall be canceled or that the number of shares [and/or the cash payment] that is or may otherwise become distributable [or payable] to Participant pursuant to this Agreement shall be reduced.

 

(c) Transfer Restriction Applicable to Identified Staff.

 

(i) Stock Awards. If Participant has been designated as Identified Staff, shares that vest pursuant to this Agreement may not be sold or otherwise transferred for a period beginning on the applicable vesting date and ending on the earlier of (1) [six months](3) from the applicable vesting date, or (2) the date of Participant’s death. Notwithstanding the foregoing, if the Company is required to withhold any tax upon the vesting of such shares, the number of whole shares that are sufficient to satisfy the minimum amount of tax that is required to be withheld will be so withheld, but only to the extent permitted by applicable law, and in such case, only the net, after-tax shares will be subject to the restriction on sale or other transfer.  If Participant’s tax liability in connection with the vesting of any shares subject to the Award exceeds the minimum statutory withholding obligation of the Company, or if Participant is an Expatriate subject to hypothetical tax that exceeds the minimum statutory withholding obligation of the Company (including, in each case, if no withholding is required by applicable law), the Company may, in its discretion, but only to the extent permitted by applicable law, release from restriction a number of whole shares that, if sold at then current market prices, as determined by the Company, will be sufficient to cover Participant’s actual (or hypothetical) tax liability. To the extent the withholding or release of sale-restricted shares for the purpose of funding tax (or hypothetical tax) obligations is not permitted for any reason, Participant will be required to fund payment of the amount due in cash.

 

[(ii) Deferred Cash Awards. If Participant has been designated as Identified Staff, each portion of a Deferred Cash Award that vests pursuant to this Agreement will not be distributable to the Participant for a period beginning on the applicable vesting date and ending on the earlier of (1) [six months] (1)  from the applicable vesting date or (2) the date of Participant’s death. Notional interest shall continue to accrue until such award is distributable.  Notwithstanding the foregoing, if the Company is required to withhold any tax upon the vesting of a portion of the Deferred Cash Award, the Company will withhold from the vested portion of the Deferred Cash Awards to the extent permitted by applicable law, and net after-tax amount will be distributable at the end of the six-month period. If Participant’s tax liability exceeds the

 

(3)  Restricted periods may range from six months to one year.

 

3

 

minimum statutory withholding obligation of the Company, or if Participant is an Expatriate subject to hypothetical tax that exceeds the minimum statutory withholding obligation of the Company (including, in each case, if no withholding is required by applicable law), Participant will be required to fund payment of the amount due in cash.]

 

(d) Additional Conditions.  Only whole shares of Citigroup stock may be delivered when shares are distributable, and the Company will not be liable to Participant with respect to canceled fractional shares or for payment in lieu of fractional shares except to the extent provided in the Prospectus. Once all applicable conditions to vesting have been satisfied, vested Awards will be distributed as soon as administratively practicable, except as may be provided elsewhere in this Agreement.  Vesting and distribution in each case are subject to receipt of the information necessary to make required tax payments and confirmation by Citigroup that all applicable conditions to vesting and distribution have been satisfied.  All distributions of shares pursuant to the Stock Award shall be net of any shares withheld for taxes, and distributions pursuant to the Deferred Cash Award will be net of any amounts withheld for taxes.

 

3. Termination of Employment and Other Changes in Status.  If Participant’s employment with the Company terminates or is interrupted, or if Participant’s status changes under the circumstances described below, Participant’s rights with respect to the Awards will be affected as provided in this Section 3.  If Participant’s employment with the Company terminates for any reason not described below, the Awards will be canceled.

 

(a) Voluntary Resignation.  If Participant voluntarily terminates his or her employment with the Company and at such time does not satisfy the conditions of Section 3(j), (k) or (l) below, vesting of the Award will cease on the date Participant’s employment is so terminated; all unvested shares in a Stock Award and the unvested portion a Deferred Cash Award will be canceled and Participant shall have no further rights of any kind with respect to the Awards.

 

(b) Disability.  Awards will continue to vest on schedule subject to all other provisions of this Agreement during Participant’s approved disability leave pursuant to a Company disability policy.  If Participant’s approved disability leave ends with a termination of Participant’s employment by the Company on account of Participant’s disability, unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement.

 

(c) Approved Personal Leave of Absence (Non-Statutory Leave).

 

(i) Awards will continue to vest on schedule subject to all other provisions of this Agreement during the first six months of Participant’s personal leave of absence that was approved by management of Participant’s business unit in accordance with the leave of absence policies applicable to Participant (an “approved personal leave of absence”).  Unvested shares in a Stock Award and/or the unvested portion of a Deferred Cash Award will be canceled as soon as the approved personal leave of absence has exceeded six months, except as provided in paragraph (ii) below.

 

(ii) If Participant’s employment terminates for any reason specified elsewhere in this Section 3 during the first six months of an approved personal leave of absence, the Awards will be treated as described in the applicable provision of this Section 3. If Participant satisfies the conditions of Section 3(k) or (l) before the approved personal leave of absence exceeds six months, unvested Awards will continue to vest on schedule subject to Section 3(k) or (l), as applicable.

 

(d) Statutory Leave of Absence. Unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement during a leave of absence that is approved by management of Participant’s business unit, is provided by applicable law and is taken in accordance with such law and applicable Company policy (a “statutory leave of absence”).  If Participant’s employment terminates for any reason specified elsewhere in this Section 3 during a statutory leave of absence, the Awards will be treated as described in the applicable provision of this Section 3. If Participant satisfies the conditions of Section 3(k) or (l) during a statutory leave of absence, unvested Awards will continue to vest on schedule,

 

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subject to Section 3(k) or (l), as applicable. If a statutory leave of absence is followed without interruption by an approved personal leave of absence, Participant will be deemed to have voluntarily terminated his or her employment pursuant to Section 3(a) (or Section 3(k) or (l), if applicable) on the date that the combined leaves exceed six months.

 

(e) Death.  If Participant’s employment terminates by reason of Participant’s death, or if Participant dies following a termination of his or her employment, unvested Awards will vest and become distributable to Participant’s estate at such time.

 

(f) Involuntary Termination for Gross Misconduct. If the Company terminates Participant’s employment because of Participant’s “gross misconduct” (as defined below), vesting of the Awards will cease on the date Participant’s employment is so terminated; unvested shares and any vested but undistributed shares in a Stock Award, and/or the unvested portion or vested but undistributed portion of a Deferred Cash Award will be canceled as of the date Participant’s employment is terminated and Participant shall have no further rights of any kind with respect to the Award.  For purposes of this Agreement, “gross misconduct” means any conduct that is determined by the Committee, in its sole discretion, (i) to be in competition with the Company’s business operations, (ii) to be in breach of any obligation that Participant owes to the Company or Participant’s duty of loyalty to the Company, (iii) to be materially injurious to the Company, or (iv) to otherwise constitute gross misconduct. For purposes of this Section 3(f), “Company” shall mean Citigroup and any of its subsidiaries.

 

(g) Involuntary Termination Other than for Gross Misconduct. If Participant’s employment is terminated by the Company involuntarily other than for gross misconduct, including under a reduction in force or job discontinuance program, unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement.

 

(h) Transfer to Non-Participating Subsidiary.  If Participant transfers to a subsidiary of Citigroup that does not participate in DIRAP, CAP or DCAP, unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement.

 

(i) Employing Company is Acquired by Another Entity (Change in Control). If Participant is employed by a company or other legal entity that is the subject of a transaction that is described in Section 409A(a)(2)(A)(v) of the United States Internal Revenue Code of 1986, as amended (the “Code”)(hereinafter, a “change in control”), or if Citigroup experiences a change in control, unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement. In the event of a “Change of Control” (as defined in the Stock Incentive Plan) of Citigroup, the Committee, in its sole discretion may, subject only to the limitations specified in the Stock Incentive Plan and in Sections 12, 13 and 14 of this Agreement, take any actions with respect to awards (including this Award) that are permitted by the Stock Incentive Plan, including, but not limited to, making adjustments that it deems necessary or appropriate to reflect the transaction, or causing awards to be assumed, or new rights substituted therefor, by the surviving entity in such transaction.

 

(j) Voluntary Resignation to Pursue Alternative Career.  If Participant has not met the conditions of Section 3(k) or (l), and Participant voluntarily resigns from his or her employment with the Company to work in a full-time paid career in government service, for a bona fide charitable institution, or as a teacher at a bona fide educational institution, and/or otherwise satisfies the alternative or additional requirements (including written management approvals) that may be imposed by then applicable guidelines adopted for the purposes of administering this provision (an “alternative career”), unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement, provided that Participant remains employed in the alternative career (or a new alternative career) until each scheduled vesting date, or until such earlier date on which Section 3(e) applies. Vesting under this Section 3(j) will be conditioned upon Participant providing by each subsequent vesting date, if requested by the Company, a written certification of compliance with the Company’s alternative career guidelines, in a form satisfactory to the Company. If an acceptable certification is not provided by the relevant vesting date, unvested Awards will be canceled.

 

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(k) Satisfying the “Rule of 75.”  If Participant has completed a number of full years of service with the Company that, when added to his or her age, equals at least 75 (the “Rule of 75”), unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement, except Participant will no longer be required to remain employed by the Company, provided that if Participant has voluntarily terminated his or her employment, Participant is not, at any time up to and including each scheduled vesting date (or until such earlier date on which Section 3(e) applies), employed by a Significant Competitor of the Company (as defined in Section 3(m) below).

 

(l) Satisfying the “Rule of 60.”  If Participant does not satisfy the conditions of Section 3(k) above, but (i) is at least age 50 and has completed at least five full years of service with the Company and Participant’s age plus the number of full years of service with the Company equals at least 60, or (ii) Participant is under age 50, but has completed at least 20 full years of service with the Company and Participant’s age plus the number of full years of service with the Company equals at least 60 (the “Rule of 60”), unvested Awards will continue to vest on schedule subject to all other provisions of this Agreement, except Participant will no longer be required to remain employed by the Company, provided that if Participant has voluntarily terminated his or her employment, Participant is not, at any time up to and including each scheduled vesting date (or until such earlier date on which Section 3(e) applies), employed by a Significant Competitor of the Company (as defined in Section 3(m) below).

 

(m) Definition of “Significant Competitor;” Certification of Compliance.

 

(i) For purposes of this Agreement, a “Significant Competitor” of the Company shall mean any company or other entity designated by the Committee as such and included on a list of Significant Competitors that will be made available to Participant and which may be updated by the Company from time to time in its discretion.  For purposes of this Section 3(m), “Company” shall mean Citigroup and any of its subsidiaries.

 

(ii) Whenever an Award continues to vest pursuant to Section 3(k) or (l) following a termination of employment, the vesting of the Award will be conditioned upon Participant’s providing by each subsequent vesting date, if requested by the Company, a written certification that Participant has not been employed by a Significant Competitor in a form satisfactory to the Company. The list of Significant Competitors in effect at the time Participant terminates employment with the Company will apply to such certification. If an acceptable certification is not provided by the relevant vesting date, vesting of Awards will cease and Participant shall have no further rights of any kind with respect to the Awards.

 

4. Transferability.

 

(i)                                     Unvested Awards and vested and sale-restricted or undistributed Awards may not be sold, pledged, hypothecated, assigned, margined or otherwise transferred, other than by will or the laws of descent and distribution, and no Award or interest or right therein shall be subject to the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, lien, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy or divorce), and any attempted disposition thereof shall be null and void, of no effect, and not binding on the Company in any way. Participant agrees that any purported transfer shall be null and void, and shall constitute a breach of this Agreement causing damage to the Company for which the remedy shall be cancelation of the Award. During Participant’s lifetime, all rights with respect to the Awards shall be exercisable only by Participant, and any and all payments in respect of the Awards shall be to Participant only. The Company shall be under no obligation to entertain, investigate, respect, preserve, protect or enforce any actual or purported rights or interests asserted by any creditor of Participant or any other third party in the Award, and Participant agrees to take all reasonable measures to protect the Company against any such claims being asserted in respect of Participant’s Awards and to reimburse the Company for any and all reasonable expenses it incurs defending against or complying with any such third-party claims if Participant could have reasonably acted to prevent such claims from being asserted against the Company.

 

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(ii)                                  Citigroup may assign the legal obligation to pay Participant’s Deferred Cash Award to Participant’s employer without the consent of Participant.

 

5. Stockholder Rights.  Participant shall have no rights as a stockholder of Citigroup over any shares subject to a Stock Award, unless and until the shares are distributed to Participant following their vesting.  During the vesting period, Participant will be entitled to receive dividend equivalent payments in respect of unvested shares still subject to the Stock Award, to the extent dividends would be payable at such times to record holders of the same number of shares of outstanding Citigroup stock.

 

6. Right of Set Off.  Participant agrees that the Company may, to the extent determined by the Company to be permitted by applicable law and consistent with the requirements of Section 409A of the Code, retain for itself funds or securities otherwise payable to Participant pursuant to the Awards or any award under any award program administered by Citigroup to offset any amounts paid by the Company to a third party pursuant to any award, judgment, or settlement of a complaint, arbitration, or lawsuit of which Participant was the subject; to satisfy any obligation or debt that Participant owes the Company or its affiliates; or in the event any award is canceled pursuant to its terms.  The Company may not retain such funds or securities and set off such obligations or liabilities, as described above, until such time as they would otherwise be distributable to Participant in accordance with the applicable award terms.

 

7. Consent to Electronic Delivery.  In lieu of receiving documents in paper format, Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that Citigroup may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, brochures, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms or communications) in connection with the Awards and any other prior or future incentive award or program made or offered by Citigroup or its predecessors or successors.  Electronic delivery of a document to Participant may be via a Company e-mail system or by reference to a location on a Company intranet or secure internet site to which Participant has access.

 

8. Plan Administration.  The Stock Award described in this Agreement has been granted subject to the terms of the Stock Incentive Plan, and the shares deliverable to Participant in connection with a Stock Award will be from the shares available for grant pursuant to the terms of the Plan. The Deferred Cash Award described in this Agreement has been granted subject to the terms of the DCAP plan document.  The Committee has the exclusive discretionary authority to make determinations regarding the administration of the Awards.

 

9. Adjustments to Awards.

 

(a)                                  Stock Awards.  In the event of any change in Citigroup’s capital structure on account of (i) any extraordinary dividend, stock dividend, stock split, reverse stock split or any similar equity restructuring; or (ii) any combination or exchange of equity securities, merger, consolidation, recapitalization, reorganization, divestiture or other distribution (other than ordinary cash dividends) of assets to stockholders, or any other similar event affecting Citigroup’s capital structure, to the extent necessary to prevent the enlargement or diminution of the rights of Participants, the Committee shall make such appropriate equitable adjustments as may be permitted by the terms of the Stock Incentive Plan and applicable law, to the number or kind of shares subject to a Stock Award.

 

(b)                                  Deferred Cash Awards. In the event of any change in applicable tax laws or accounting principles, the Committee shall make appropriate equitable adjustments to any Deferred Cash Award, which adjustments shall not require the consent of the affected Participants.

 

(c)                                  Adverse Consequences.  Notwithstanding the foregoing, the Committee may, in its discretion, decline to adjust any Award made to a Participant, if it determines that such adjustment would violate applicable law or result in adverse tax consequences to Participant or the Company, and neither the Committee nor Citigroup shall be bound to compensate any Participant for any such adjustment not made, nor shall they be liable to Participant for any additional personal tax or other consequences of any adjustments that are made to an Award.

 

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10. Taxes and Tax Residency Status.

 

(a)                                  Compliance. By accepting the Awards, Participant agrees to pay all applicable taxes (or hypothetical tax, if Participant is subject to tax equalization or tax protection pursuant to a Citigroup Expatriate policy) and to file all required tax returns in all jurisdictions where Participant is subject to tax and/or an income tax filing requirement. To the extent the Company is required to withhold tax in any jurisdiction upon the vesting of the Awards or at such times as otherwise may be required in connection with the Awards, Participant acknowledges that the Company may (but is not required to) provide Participant alternative methods of paying the Company the minimum amount due to the appropriate tax authorities, as determined by the Company (or to the Company, in the case of hypothetical tax). If Participant is a current or former Citigroup Expatriate subject to tax equalization, Participant agrees to promptly pay to the Company, in cash (or by any other means acceptable to the Company), the excess of the amount of hypothetical tax due over the minimum amount of actual tax that is required by law to be withheld with respect to the Awards (or other subject award). To assist Citigroup in achieving full compliance with its obligations under the laws of all relevant taxing jurisdictions, Participant agrees to keep complete and accurate records of his or her income tax residency status and the number and location of workdays outside his or her country of income tax residency from the date of the Awards until the vesting of the Awards and the subsequent sale of any shares received in connection with a Stock Award. Participant also agrees to provide, upon request, complete and accurate information about his or her tax residency status to Citigroup during such periods. Participant will be responsible for any tax due, including penalties and interest, arising from any misstatement by Participant regarding such information.

 

(b)                                  Stock Awards. If no method of tax withholding is specified at or prior to the time any tax (or hypothetical tax) is due on a Stock Award, or if Participant does not make a timely election, the Company will withhold a sufficient number of shares from the vested shares that are distributable to Participant to fund only the minimum amount of tax that is required by law to be withheld, but only if such shares have vested pursuant to the terms of this Agreement. Participant agrees that the Company, in its discretion, may require that some or all of the tax (or hypothetical tax) withholding obligations in connection with the Stock Award or any other equity award must be satisfied in cash only, that timely payment of such amounts when due will be considered a condition to vesting of the Stock Award (or other subject equity award), and that if the required amounts are not timely remitted to the Company, the Stock Award (or other subject equity award) may be canceled. Whenever withholding in shares is permitted or mandated by the Company, the number of shares to be withheld will be based on the fair market value of the shares on the date they are withheld, as determined by the Company. Whenever the payment of required withholding tax (or hypothetical tax) in cash is permitted or mandated by the Company and provision for timely payment of such amounts by Participant has not been made, instead of canceling an equity award (as provided above), the Company, in its sole discretion, may sell on behalf of Participant, at Participant’s market risk and expense, the number of shares subject to the award that at the market sale price obtainable for the shares on or as soon as practicable after the due date for the tax (or hypothetical tax) owed by Participant, will produce sufficient proceeds to satisfy Participant’s tax (or hypothetical tax) obligation, and remit such proceeds to the appropriate tax authorities (or in the case of hypothetical tax, retain such proceeds in satisfaction of Participant’s obligation to the Company); any remaining sales proceeds, after deduction for commissions and other reasonable and customary expenses, and any remaining shares (if otherwise distributable to Participant) will be delivered to Participant.

 

11. Entire Agreement; No Right to Employment.  The plan and program documents, the Prospectus, the Brochure and this Agreement constitute the entire understanding between the Company and Participant regarding the Awards and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof, including any written or electronic agreement, election form or other communication to, from or between Participant and the Company.  Nothing contained herein or in any incentive plan or program documents shall confer upon Participant any rights to continued employment or employment in any particular position, at any specific rate of compensation, or for any particular period of time.

 

12. Amendment.  The Committee may in, its sole discretion, modify, amend, terminate or suspend an Award at any time to the extent permitted or required by applicable law, the Plan, and the DCAP plan document, except that no termination, suspension, modification or amendment of an Award shall cause an award to violate Section 409A of the Code.

 

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13. Section 409A and Section 457A Compliance.

 

(a)                                  Tax Liability.  Participant understands that as a result of Section 409A and/or Section 457A of the Code, if Participant is a U.S. taxpayer he or she could be subject to adverse tax consequences if the Award or the plans and program documents are not administered in accordance with the requirements of Section 409A or Section 457A.  Participant further understands that if Participant is a U.S. taxpayer, and an Award is considered to be a “nonqualified deferred compensation plan” and Participant’s employer is considered to be a “nonqualified entity” (as such terms are defined in Section 409A and/or Section 457A of the Code), Participant could be subject to accelerated income recognition or other adverse tax consequences with respect to all or a portion of the Award. In such circumstances, Citigroup may, but will not be required to, modify or amend the Awards, as provided by the Stock Incentive Plan or the DCAP plan document. However, Participant acknowledges that there is no guarantee that the Awards, or any amendment or modification thereto, will successfully avoid unintended tax consequences to Participant and that the Company does not accept any liability therefor.

 

(b)                                  Specified Employees. If an Award is subject to Section 409A of the Code, this Agreement may not be amended, nor may the Award be administered, to provide for any distribution of shares to occur upon any event that would constitute a “separation from service” (within the meaning of Section 409A of the Code) if Participant is a “specified employee” (within the meaning of Treas. Reg. § 1.409A-1(i)(1)) at the time of such Participant’s “separation from service,” unless it is provided that the distribution shall not be made until the date which is six months from such “separation from service,” or, if earlier, the date of Participant’s death and that during such six-month deferral period, Participant shall not be entitled to interest, dividends, dividend equivalents, or any compensation for any loss in market value or otherwise which occurs with respect to the Award during such deferral period.

 

(c)                                  Modification. By accepting the Awards, Participant hereby consents to the amendment or modification of an Award and any outstanding award(s) heretofore granted to Participant, as provided by Section 13(a) of this Agreement, to the extent any such awards may result in taxation pursuant to Section 409A or Section 457A of the Code; provided, however, that (i) no such amendment or modification shall be made if it would violate the terms and conditions of Participant’s offer letter or employment agreement, and (ii) unless the Committee determines otherwise, any amendment or modification to outstanding award(s) pursuant to this Section 13(c) shall maintain, to the maximum extent practicable, the original intent of the amended or modified provision without contravening the provisions of Section 409A or Section 457A of the Code. The amendment or modification of any award(s) pursuant to this consent shall be at the Company’s sole discretion and the Company shall not be obligated to amend or modify the Award(s) or any plan or program documents, nor shall the Company be liable for any adverse tax or other consequences to Participant resulting from such amendments or modifications or the Company’s failure to make any such amendments or modifications for purposes of complying with Section 409A or Section 457A of the Code or for any other purpose.

 

14. Compliance with Regulatory Requirements.  Notwithstanding any provision of this Agreement to the contrary, the Awards may be amended or modified to the extent required or permitted under any policy implemented at any time by the Company in its discretion to (a) to comply with any legal, regulatory or governmental requirements, directions, supervisory comments, guidance or promulgations specifically including but not limited to guidance on remuneration practices or sound incentive compensation practices promulgated by any U.S. or non-U.S. governmental or regulatory agency or authority, (b) comply with the listing requirements of any stock exchange on which the Company’s common stock is traded or (c) comply with or enable the Company to qualify for any government loan, subsidy, investment or other program.

 

15. Arbitration; Conflict; Governing Law.  Any disputes related to the Awards shall be resolved by arbitration in accordance with the Company’s arbitration policies. In the absence of an effective arbitration policy, Participant understands and agrees that any dispute related to an Award shall be submitted to arbitration in accordance with the rules of the American Arbitration Association, if so elected by the Company in its sole discretion. This Agreement shall control in the event of a conflict between this Agreement and the Prospectus or the Brochure. In the event of a conflict between this Agreement and the Stock Incentive Plan and/or the DCAP plan document, the Stock Incentive Plan or the DCAP plan

 

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document, as applicable, shall control. This Agreement shall be governed by the laws of the State of New York (regardless of conflict of laws principles) as to all matters, including, but not limited to, the construction, application, validity and administration of the Company’s incentive award programs.

 

16. Disclosure Regarding Use of Personal Information and Participant’s Consent.

 

(a)                                  Definition and Use of “Personal Information.” In connection with the grant of the Awards, and any other award under other incentive award program, and the implementation and administration of any such program, including, without limitation, Participant’s actual participation, or consideration by the Company for potential future participation, in any program at any time, it is or may become necessary for the Company to collect, transfer, use, and hold certain personal information regarding Participant in and/or outside of Participant’s home country.

 

The “personal information” that Citigroup may collect, process, store and transfer for the purposes outlined above may include Participant’s name, nationality, citizenship, tax or other residency status, work authorization, date of birth, age, government/tax identification number, passport number, brokerage account information, GEID or other internal identifying information, home address, work address, job and location history, compensation and incentive award information and history, business unit, employing entity, and Participant’s beneficiaries and contact information. Participant may obtain more details regarding the access and use of his/her personal information, and may correct or update such information, by contacting his/her human resources representative or local equity coordinator.

 

Use, transfer, storage and processing of personal information, electronically or otherwise, may be in connection with the Company’s internal administration of its incentive award programs, or in connection with tax or other governmental and regulatory compliance activities directly or indirectly related to an incentive award program. For such purposes only, personal information may be used by third parties retained by the Company to assist with the administration and compliance activities of its incentive award programs, and may be transferred by the company that employs (or any company that has employed) Participant from Participant’s home country to other Citigroup entities and third parties located in the United States and in other countries. Specifically, those parties that may have access to Participant’s information for the purposes described herein include, but are not limited to, (i) human resources personnel responsible for administering the award programs, including local and regional equity award coordinators, and global coordinators located in the United States; (ii) Participant’s U.S. broker and equity account administrator and trade facilitator; (iii) Participant’s U.S., regional and local employing entity and business unit management, including Participant’s supervisor and his/her superiors; (iv) the Committee or its designee, which is responsible for administering the Stock Incentive Plan and DCAP; (v) Citigroup’s technology systems support team (but only to the extent necessary to maintain the proper operation of electronic information systems that support the incentive award programs); and (vi) internal and external legal, tax and accounting advisors (but only to the extent necessary for them to advise the Company on compliance and other issues affecting the incentive award programs in their respective fields of expertise). At all times, Company personnel and third parties will be obligated to maintain the confidentiality of Participant’s personal information except to the extent the Company is required to provide such information to governmental agencies or other parties.  Such action will always be undertaken only in accordance with applicable law.

 

(b) Participant’s Consent.  BY ACCEPTING THE AWARDS, PARTICIPANT EXPLICITLY CONSENTS (I) TO THE USE OF PARTICIPANT’S PERSONAL INFORMATION FOR THE PURPOSE OF BEING CONSIDERED FOR PARTICIPATION IN FUTURE EQUITY, DEFERRED CASH OR OTHER AWARD PROGRAMS (TO THE EXTENT HE/SHE IS ELIGIBLE UNDERTHE TERMS OF SUCH PLAN OR PROGRAM, AND WITHOUT ANY GUARANTEE THAT ANY AWARD WILL BE MADE); AND (II) TO THE USE, TRANSFER, PROCESSING AND STORAGE, ELECTRONICALLY OR OTHERWISE, OF HIS/HER PERSONAL INFORMATION, AS SUCH USE HAS OCCURRED TO DATE, AND AS SUCH USE MAY OCCUR IN THE FUTURE, IN CONNECTION WITH THIS OR ANY OTHER EQUITY OR OTHER AWARD, AS DESCRIBED ABOVE.

 

***

 

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