Document:

ex10-28

Exhibit 10.28

EMPLOYMENT AGREEMENT

      THIS AGREEMENT is made this 3rd day of May, 2001, by and between VISUAL
NETWORKS, INC., a Delaware corporation (the “Company”), and ELTON KING, an
individual residing in the State of Georgia (“Executive”).

      WHEREAS, the Company desires to retain the services of Executive as
President and Chief Executive Officer of the Company pursuant to the terms and
conditions set forth herein, and Executive desires to perform such services for
the Company.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the Company and
Executive agree as follows:

      1. Employment. The Company hereby employs Executive and Executive hereby
accepts employment by the Company for the term set forth herein and upon the
terms and conditions contained in this Agreement.

      2. Office and Duties.

		
	            (a) Executive shall serve the Company as its President and Chief Executive
Officer and shall have such authority and such responsibilities as is
consistent with such position and as the Company’s Board of Directors may
determine from time to time. Executive shall be elected to the Company’s Board
of Directors in connection with his commencement of employment, without
additional compensation. Executive’s length of service on, or re-election to,
the Board of Directors is not guaranteed but is subject to applicable election
procedures of the Company.
	 
	            (b) Throughout the term of this Agreement, except as provided in Section
2(c) below, Executive shall devote his entire working time, energy, skill, and
best efforts to the performance of his duties hereunder in a manner that will
faithfully and diligently further the business and interests of the Company.
	 
	            (c) Notwithstanding the provisions of Section 2(b) hereof, Executive may
engage in activities in connection with any charitable or civic activities,
personal investments, and/or serving as an executor, trustee or in other
similar fiduciary capacity; provided, however, that such activities do not
interfere with his performance of his responsibilities and obligations pursuant
to this Agreement.

      3. Term. This Agreement shall be for a term of two (2) years, commencing
on June 18, 2001, unless sooner terminated as hereinafter provided. Unless
either party elects to terminate this Agreement at the end of the original or
any renewal term by giving the other party notice of such election at least
ninety (90) days before the expiration of the then current term, this Agreement
shall be deemed to have been

 

 renewed for an additional term of one (1) year commencing on the day after
the expiration of the then current term.

      4. Compensation and Benefits.

		
	            (a) For all of the service rendered by Executive to the Company, Executive
shall receive an annual base salary of $400,000 (Four Hundred Thousand
Dollars), less all legal withholdings, payable in reasonable periodic
installments in accordance with the Company’s regular payroll practices in
effect from time to time. Annual increases to base salary, if any, shall be
approved by the Compensation Committee of the Company’s Board of Directors.
	 
	            (b) In addition to Executive’s base salary, Executive will be entitled to
an annual performance-based bonus. The amount of said bonus will be governed
by the terms and conditions of the Annual Executive Bonus Plan approved by the
Board of Directors. Said bonus is not guaranteed and is contingent upon the
Executive and the Company achieving goals agreed upon by the Executive and the
Board of Directors as set forth in the Annual Executive Bonus Plan. For 2001,
the target bonus amount at plan will be $200,000 but is to be prorated for the
number of months during the year that Executive is an employee of the Company.
Additionally, the bonus plan for 2001 will be negotiated in good faith by
Executive and the Compensation Committee of the Board of Directors. The Company
from time to time may pay Executive other additional compensation as the
Compensation Committee of the Board of Directors of the Company may determine.
	 
	            (c) Upon signing this Employment Agreement and as set forth herein,
Executive will be granted an option to purchase 1 million shares of stock as an
inducement essential to entering into this Agreement. Executive’s option shall
be governed by the terms and conditions of the Nonstatutory Stock Option Grant
Agreement, attached hereto as Exhibit A which Executive shall execute
simultaneously with entering into this Employment Agreement with the Company.
	 
	            (d) The Company shall pay all reasonable moving expenses incurred by
Executive in connection with his employment with the Company and relocation to
the Rockville, Maryland area, including closing costs and real estate
commissions for the sale of Executive’s current residence located at 5950 Long
Island Drive, Atlanta, Georgia and purchase of his Rockville, Maryland
residence, provided Executive is employed by the Company at the time of the
particular closing for which he seeks reimbursement. The Company also will
reimburse Executive for up to six (6) months’ reasonable rent for an apartment
prior to his purchasing a home in the Rockville, Maryland area. Executive
agrees that, in the event he voluntarily resigns his employment with the
Company during the first 12 months of this Agreement (except for resignation
due to a material breach of this Agreement by the Company or due to a material
reduction in the responsibilities or reporting relationship of Executive, as
provided for in Paragraph 11 of the Agreement), he shall repay to the Company
within 30 days of his last date of employment a proportionate share off the
relocation expenses paid for by the Company. Such proportionate share shall be
equal to the

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	number of months remaining in the first year of this Agreement divided by
twelve and multiplied by the total amount of his relocation expenses paid for
by the Company.
	 
	            (e) Throughout the term of this Agreement and as long as they are kept in
force by the Company, Executive shall be entitled to participate in and receive
the benefits of any health, life, or accident insurance plans or programs made
available to other similarly-situated Executives of the Company.
	 
	            (f) Executive shall be entitled to twenty-five (25) business days paid
leave in accordance with the Company’s leave plan as in effect from time to
time, if any (for vacation, illness, personal, or otherwise) during each year
of the term of this Agreement.
	 
	            (g) Executive shall be entitled to twenty (20) business days “sabbatical”
following the completion of each four (4) years of employment with the Company.
No portion of his sabbatical shall be earned until Executive completes four
years of employment, nor shall any unused portion of this sabbatical be paid to
Executive following termination of employment. This sabbatical must be taken
within a finite period of being earned, such period to be in accordance with
the Company’s leave plan as in effect from time to time, if any, or if no such
policy is in effect, as shall be determined by the Board of Directors of the
Company.

      5. Expenses. The Company will reimburse Executive for all reasonable
expenses incurred by Executive in connection with the performance of
Executive’s duties hereunder upon presentation of expense statements or
vouchers and such other supporting information as it may from time to time
request; provided that Executive complies with all applicable Company
procedures and practices relating to reimbursement of expenses in effect from
time to time. Executive agrees that all expenses must be submitted to the
Executive Vice President/Chief Financial Officer to be eligible for
reimbursement.

      6. Incapacity.

		
	            (a) If Executive is unable to perform his duties hereunder due to partial
or total disability or incapacity resulting from a mental or physical illness
or any similar cause, a determination that will be made at the sole discretion
of the Board of Directors, Executive shall be considered “Incapacitated.” In
the event Executive shall become Incapacitated, the Company will continue the
payment of Executive’s base salary at its then current rate for a period equal
to the period of time that Executive continues to be Incapacitated; provided
that, in no event shall the Company be required to continue the payment of
Executive’s base salary for more than one hundred eighty (180) days following
the date Executive first becomes Incapacitated. Upon becoming Incapacitated,
Executive shall also be entitled to receive those benefits to which Executive
may be entitled as a result of Executive’s participation under a death or
disability plan as an Executive of the Company, if any.
	 
	            (b) In the event Executive shall be Incapacitated for a period of more
than one hundred eighty (180) consecutive days or for a cumulative period of
more than

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	one hundred eighty (180) days during any twelve month period, Executive
shall be considered “Permanently Incapacitated,” and the Company shall have the
right to terminate Executive’s employment under this Agreement upon written
notice thereof to the Executive, in which event the Company shall have no
further liability or obligation to Executive for compensation or benefits
hereunder by reason of such termination. In the event that the Company does
not exercise such right of termination, the Company shall have no liability or
obligation to Executive for compensation or benefits hereunder during the
period of time that Executive is considered to be Long Term Incapacitated.

      7. Death. If Executive dies, Executive’s employment under this Agreement
shall automatically terminate and all payments hereunder shall cease on the
date of Executive’s death, except for those payments which were due at such
time, including any unpaid salary, expense reimbursements, or bonuses that are
owed, and the Company shall have no further obligations or liabilities
hereunder to Executive’s estate or legal representative or otherwise, except
under any death or disability plan in which Executive is a participant as an
Executive of the Company, if any. Any bonus that otherwise would have been due
to Executive at year end shall be prorated up to the time of Executive’s death.

      8. Termination of the Company’s Business. If the Company discontinues its
business for any reason, the Company may terminate Executive’s employment under
this Agreement on thirty (30) days prior written notice, and in such event the
Company shall have no further obligations or liabilities hereunder.

      9. Termination for Cause. The Company may terminate Executive’s
employment under this Agreement at any time for “cause.” For purposes of this
Agreement, “cause” shall be defined as:

		
	            (a) conviction in a court of law of any felony or crime involving
moral turpitude;
	 
	            (b) material violation of written policies of the Company;
	 
	            (b) violation of any reasonable direction from the Board of Directors of
the Company or excessive absenteeism which shall continue for a period of
thirty (30) days after written notice thereof is given of such violation or
absenteeism;
	 
	            (c) illegal acts (other than minor traffic violations), including
embezzlement or theft; or
	 
	            (d) breach by Executive of any provision of this Agreement, which breach
shall continue for a period of thirty (30) days after a written notice thereof
is given to Executive.

      In the event Executive is terminated for cause, all liabilities or
obligations of the Company to Executive, including without limitation, base
salary, benefits, and bonuses, shall cease at the time of such termination,
subject to the terms of any applicable benefit or compensation plan or option
agreement then in force.

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      10. Termination Without Cause.

		
	            (a) The Company may terminate Executive’s employment hereunder at any
time, for any reason, with or without cause, effective upon the date designated
by the Company upon not less than 45 days prior written notice to Executive.
	 
	            (b) In the event of a termination of Executive’s employment hereunder
pursuant to Section 10(a) hereof during the first six months of the Agreement,
Executive shall be entitled to receive all accrued but unpaid (as of the
effective date of such termination) base salary and bonuses, plus a liquidated
termination fee equal to Executive’s monthly salary times the number of months
remaining in the first twelve (12) months of the Agreement. All other
liabilities or obligations of the Company to Executive, including without
limitation, base salary, benefits and bonuses shall cease at the time of such
termination, subject to the terms of any benefit or compensation plan or option
agreement then in force and applicable to Executive. Except as specifically
set forth in this Section 10, the Company shall have no liability or obligation
hereunder by reason of such termination.
	 
	            (c) In the event of a termination of Executive’s employment hereunder
pursuant to Section 10(a) hereof after the first six months of the Agreement,
Executive shall be entitled to receive all accrued but unpaid (as of the
effective date of such termination) base salary and bonuses, plus a liquidated
termination fee equal to base salary for the number of months remaining in this
agreement. All other liabilities or obligations of the Company to Executive,
including without limitation, base salary, benefits and bonuses shall cease at
the time of such termination, subject to the terms of any benefit or
compensation plan or option agreement then in force and applicable to
Executive. Except as specifically set forth in this Section 10, the Company
shall have no liability or obligation hereunder by reason of such termination.

      11. Resignation. Executive may terminate the employment relationship at
any time for any reason by giving the Company written notice at least thirty
(30) days prior to the effective date of termination. Unless otherwise
provided herein, all compensation and benefits paid by the Company to Executive
shall cease upon his last day of employment; provided, however, that if
Executive terminates his employment due to a material breach of this Agreement
by the Company or due to a material reduction in the responsibilities or
reporting relationship of Executive, the Company will continue to pay
Executive’s base salary, bonus compensation, and medical benefits for the
greater of (i) the remaining term of the Agreement, or (ii) a period of six (6)
months from the effective date of termination, and Executive’s interest in any
stock options for which he has become eligible under the terms of the
applicable stock option agreement shall vest in accordance with the term of
that agreement.

      12. Company Property. All computer software and documentation,
advertising, sales, manufacturer’s and other materials or articles of
information, or other proprietary information of the Company, including without
limitation, data processing reports, customer sales analyses, invoices, price
lists or information, samples, or any other materials or data of any kind
furnished to Executive by the Company or developed

5

 by Executive on behalf of the Company or at the Company’s direction or for
the Company’s use or otherwise in connection with Executive’s employment
hereunder, are and shall remain the property of the Company. If the Company
requests the return of such materials at any time during Executive’s
employment, Executive shall immediately deliver the same, and Executive shall
also deliver the same immediately upon termination of Executive’s employment
hereunder.

      13. Noncompetition, Nonsolicitation, Trade Secrets, Etc. Executive agrees
to be bound by the Company’s non-competition, non-solicitation and
non-disclosure agreement attached hereto as Exhibit B.

      14. Executive further represents that he has fully disclosed to Bell South
the nature and extent of his employment with Visual Networks, as set forth in
this Agreement, and he agrees that on or before June 18, 2001, he shall obtain
from Bell South an express written agreement that it will not seek to enforce
any non-competition agreement or otherwise interfere with Executive’s
employment with the Company. In the event Executive is unable to obtain such
an agreement and present it to the Company on or before June 18, 2001, the
Company shall have no further obligations whatsoever under this Agreement.

      15. ARBITRATION. THE PARTIES AGREE THAT ANY CONTROVERSY, CLAIM, OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH THEREOF,
EXCEPT AS DISCUSSED HEREIN OR ARISING OUT OF OR RELATING TO THE EMPLOYMENT OF
EXECUTIVE, OR THE TERMINATION THEREOF, INCLUDING ANY STATUTORY OR COMMON LAW
CLAIMS UNDER FEDERAL, STATE, OR LOCAL LAW, INCLUDING ALL LAWS PROHIBITING
DISCRIMINATION IN THE WORKPLACE, SHALL BE RESOLVED BY ARBITRATION IN ROCKVILLE,
MARYLAND IN ACCORDANCE WITH THE EMPLOYMENT DISPUTE RESOLUTION RULES OF
JAMS/ENDISPUTE. THE PARTIES AGREE THAT ANY AWARD RENDERED BY THE ARBITRATOR
SHALL BE FINAL AND BINDING, AND THAT JUDGMENT UPON THE AWARD MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION THEREOF. THE PARTIES FURTHER ACKNOWLEDGE AND
AGREE THAT, DUE TO THE NATURE OF THE CONFIDENTIAL INFORMATION, TRADE SECRETS,
AND INTELLECTUAL PROPERTY BELONGING TO THE COMPANY TO WHICH EXECUTIVE HAS OR
WILL BE GIVEN ACCESS, AND THE LIKELIHOOD OF SIGNIFICANT HARM THAT THE COMPANY
WOULD SUFFER IN THE EVENT THAT SUCH INFORMATION WAS DISCLOSED TO THIRD PARTIES,
NOTHING IN THIS SECTION SHALL PRECLUDE THE COMPANY FROM GOING TO COURT TO SEEK
INJUNCTIVE RELIEF TO PREVENT EXECUTIVE FROM VIOLATING THE OBLIGATIONS
ESTABLISHED IN PARAGRAPH 13.

      16. Miscellaneous.

		
	            (a) Delay. Neither the failure nor any delay on the part of either party
to exercise any right, remedy, power, or privilege (collectively “Right”) under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any Right preclude any other or further exercise of the
same or of any other Right nor

6

		
	shall any waiver of any Right with respect to any occurrence be construed
as a waiver of such Right with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party asserted
to have granted such waiver.
	 
	            (b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance, and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Maryland,
notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom, or rule
of law requiring construction against the draftsman. The parties consent to
the exclusive jurisdiction of the federal and state courts located in Maryland.
	 
	 	      (c) Notices. All notices, requests, demands, and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made, and received only when personally
delivered or when deposited in the United States mails, first class postage
prepaid, addressed as set forth below:

		
	 	      (i) If to the Executive:

	 	Mr. Elton King

5950 Long Island Drive

Atlanta, GA 30328

		
	 	      (ii) If to the Company:

	 	Visual Networks, Inc.

2092 Gaither Road

Rockville, Maryland 20850

Attention: Board of Directors

		
	 	      With a copy to:

	 	Vice President of Human Resources

Visual Networks, Inc.

2092 Gaither Road

Rockville, Maryland 20850

Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.

		
	            (d) Binding Nature of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns and shall be
binding upon Executive, his heirs, and his legal representatives.

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	            (e) Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photocopy or facsimile of this Agreement, with all signatures
reproduced on one or more of its signature pages, shall be considered for all
purposes as if it were executed counterpart of this Agreement.
	 
	            (f) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of the may be invalid or unenforceable in whole
or in part.
	 
	            (g) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written. The express
terms hereof control and supersede any course of performance and/or usage of
the trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing signed by the parties
hereto.
	 
	            (h) Section Heading. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
	 
	            (i) Gender, Etc. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.

      IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.

	 	 
	 	/s/ Elton King

Elton King
	 
	 	VISUAL NETWORKS, INC
	 
	 	/s/ Peter J. Minihane

Peter J. Minihane

Executive Vice President, Chief

Financial Officer

8ex10-29

--------------------------------------------------------------------------------

Exhibit 10.29

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED IN A TRANSACTION NOT
INVOLVING ANY PUBLIC OFFERING AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.

VISUAL NETWORKS, INC.

Nonstatutory Stock Option Grant Agreement

      This Grant Agreement (the “Agreement") is entered into this 3rd day of
May, 2001 (the “Grant Date"), by and between VISUAL NETWORKS, INC., a Delaware
corporation (the “Company"), and ELTON KING (the “Optionee").

      In consideration of the premises, mutual covenants and agreements herein,
the Company and the Optionee agree as follows:

      1. Grant of Option. The Company hereby grants to the Optionee a
nonstatutory stock option to purchase from the Company, at a price of $3.92 per
share (the “Exercise Price"), One million (1,000,000) shares of Common Stock of
the Company, $0.01 par value per share (“Common Stock"), subject to the
provisions of this Agreement (the “Option"). The Option will expire at 5:00
p.m. Eastern Time on the last business day preceding the tenth anniversary of
the Grant Date (the “Expiration Date"), unless fully exercised or terminated
earlier.

2. Terminology.

		
	            (a) Except where the context otherwise requires, the term “Company” as
used herein includes Visual Networks, Inc. and its affiliates.
	 
	            (b) This Agreement will be administered by Compensation Committee of the
Board of Directors of the Company or by the full Board of Directors in its
discretion (each hereinafter referred to as the “Administrator").
	 
	            (c) The term “Fair Market Value” as used herein means, with respect to a
share of Common Stock for any purpose on a particular date, the value
determined by the Administrator in good faith. However, if the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
(the “Exchange Act”), “Fair Market Value” means, as applicable, (i) either the
closing price or the average of the high and low sale price on the relevant
date, as determined in the Administrator’s discretion, quoted on the New York
Stock Exchange, the American Stock Exchange, or the Nasdaq National Market;
(ii) the last sale price on the relevant date quoted on the Nasdaq SmallCap
Market; (iii) the average of the high bid and low asked prices on the relevant
date quoted on the Nasdaq OTC Bulletin Board Service or by the National
Quotation Bureau, Inc. or a comparable service as determined in the
Administrator’s discretion; or (iv) if the Common Stock is not quoted by any of
the above, the average of the closing bid and asked prices on the relevant date
furnished by a professional market maker for the Common Stock, or by such other
source, selected by the Administrator. If no public trading of the Common
Stock occurs on the relevant date, then Fair Market Value shall be determined
as of the next preceding date on which trading of the Common Stock does occur.
For all purposes under this Agreement, the term “relevant date” as used in this
Section 2(c) means either the date as of which Fair Market Value is to be
determined or the next preceding date on which public trading of the Common
Stock occurs, as determined in the Administrator’s discretion.

 

      3. Exercise of Option.

		
	            (a) Right to Exercise. Except as otherwise provided in this Agreement,
this Option may be exercised as to its vested portion at any time and from time
to time, in whole or in part, on or before the Expiration Date or earlier
termination of the Option. In the event of the Optionee’s death, disability,
or other termination of employment or service relationship, the exercisability
is governed by Section 4 below.
	 
	            (b) Vesting. The Option will become vested over thirty-six (36) months,
as follows; provided, however, that the Optionee is in the continuous employ of
or in a service relationship with the Company from the date the Optionee’s
employment with the Company commences (“Commencement Date”) through the
applicable date upon which vesting is scheduled to occur:

	 	(i)	 	20% of the Option shall be vested on the
Commencement Date, and
	 
	 	(ii)	 	2.666% of the Option shall become vested, on the
15th day of each month, over a thirty (30) month period that
commences January 15, 2002 (rounded down to the nearest whole
share each month, except for the thirtieth month, in which
case vesting is rounded up).

Unless the Option has earlier terminated, vesting of the Option will be
accelerated so that the outstanding unvested portion of the Option will become
100% vested immediately before the occurrence of a Change in Control in the
Company. For purposes of this Agreement, a “Change in Control of the Company”
shall occur or be deemed to have occurred only if:

		
	 	                  (1) any “person,” as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company), is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities;
	 
	 	                  (2) during any period of two consecutive years ending during the
term of the Plan, individuals who at the beginning of such period
constitute the Board of Directors of the Company, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect any transaction described in clause
(1), (3) or (4) of this Section 3(b)) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or whose nomination for election was previously so approved
(collectively, the “Disinterested Directors”), cease for any reason to
constitute a majority of the Board of Directors;
	 
	 	                  (3) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (ii) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no “person” (as herein above
defined) acquires more than 50% of the combined voting power of the
Company’s then outstanding securities; or

		
	 	                   (4) the stockholders of the Company approve a plan of complete
liquidation of the Company or the sale of all or substantially all of the
Company’s assets which, in either case, has not previously been approved
by a majority of the Disinterested Directors.

		
	            (c) Exercise Procedure. Subject to the conditions set forth in this
Agreement, this Option shall be exercised by delivery of written notice of
exercise on any business day to the Corporate Secretary of the Company in such
form as the Company may require from time to time. Such notice shall specify
the number of shares in respect of which the Option is being exercised and
shall be accompanied by full payment of the Exercise Price for such shares in
accordance with Section 3(d) of this Agreement. The exercise will be effective
upon receipt by the Corporate Secretary of the Company of such written notice
accompanied by the required payment or properly executed, irrevocable
instructions to effectuate a broker-assisted cashless exercise. The Option may
be exercised only in multiples of whole shares and may not be exercised at any
one time as to fewer than ten (10) shares (or such lesser number of shares as
to which the Option is then exercisable). No fractional shares will be issued
pursuant to this Option.
	 
	            (d) Method of Payment. Payment of the Exercise Price may be made by
delivery of cash, certified or cashier’s check, money order or other cash
equivalent acceptable to the Administrator in its discretion, a broker-assisted
cashless exercise in accordance with Regulation T of the Board of Governors of
the Federal Reserve System through a brokerage firm approved by the
Administrator, or a combination of the foregoing. In addition, payment of the
Exercise Price may be made by any of the following methods, or a combination
thereof, as determined by the Administrator in its discretion at the time of
exercise: (i) by tender (via actual delivery or attestation) to the Company of
other shares of Common Stock of the Company which have a Fair Market Value on
the date of tender equal to the Exercise Price, provided that such shares have
been owned by the Optionee for a period of at least six months free of any
substantial risk of forfeiture or were purchased on the open market without
assistance, direct or indirect, from the Company; or (ii) by any other method
approved by the Administrator.
	 
	            (e) Issuance of Shares upon Exercise. Upon due exercise of the Option, in
whole or in part, in accordance with the terms of this Agreement, the Company
will issue to the Optionee, the brokerage firm specified in the Optionee’s
delivery instructions pursuant to a broker-assisted cashless exercise, or such
other person exercising the Option, as the case may be, the number of shares of
Common Stock so paid for, in the form of fully paid and nonassessable stock and
will deliver certificates therefor as soon as practicable thereafter. The
stock certificates for any shares of Common Stock issued hereunder will, unless
such shares are registered or an exemption from registration is available under
applicable federal and state law, bear a legend restricting transferability of
such shares.

      4. Termination of Employment or Service.

		
	            (a) Exercise Period Following Cessation of Employment or Service
Relationship, In General. If the Optionee ceases to be employed by, or in a
service relationship with, the Company for any reason other than death, total
and permanent disability (as defined in Section 4(b) below) or discharge for
Cause (as defined in Section 4(d) below), (i) this Option will terminate
immediately upon such cessation to the extent it is unvested, and (ii) this
Option will be exercisable during the three (3) month period following such
cessation with respect its vested portion, but in no event after the Expiration
Date. Unless sooner terminated, this Option will terminate in its entirety
upon the expiration of such three (3) month period.
	 
	            (b) Disability of Optionee. Notwithstanding the provisions of Section
4(a) above, if the Optionee ceases his employment or service relationship with
the Company as a result of his or her total and permanent disability, (i) this
Option will terminate immediately upon such cessation to the extent it is
unvested, and (ii) this Option will be exercisable during the one (1) year
period following such

		
	cessation with respect to its vested portion, but in no event after the
Expiration Date. Unless sooner terminated, this Option will terminate in its
entirety upon the expiration of such (1) year period. For purposes of this
Agreement, “total and permanent disability” means the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve months. The Administrator may require such proof of total and permanent
disability as the Administrator in its sole discretion deems appropriate and
the Administrator’s good faith determination as to whether the Optionee is
totally and permanently disabled will be final and binding on all parties
concerned.
	 
	            (c) Death of Optionee. If the Optionee dies prior to the Expiration Date
or other termination of the Option, including if the Optionee dies during the
three (3) month period following termination of service for reasons other than
Cause, (i) this Option will terminate immediately upon the Optionee’s death to
the extent it is unvested, and (ii) this Option will be exercisable during the
one (1) year period following the date of death of the Optionee with respect to
its vested portion, but in no event after the Expiration Date, by the
Optionee’s executor, personal representative, or the person(s) to whom this
Option is transferred by will or the laws of descent and distribution. Unless
sooner terminated, this Option will terminate in its entirety upon the
expiration of such one (1) year period.
	 
	            (d) Cause. Notwithstanding anything to the contrary herein, this Option
will terminate in its entirety, regardless of whether the Option is vested in
whole or in part, immediately upon the Optionee’s discharge of employment or
service relationship for Cause or upon the Optionee’s commission of conduct
constituting Cause during any period following the cessation of employment or
service relationship during which the Option otherwise would be exercisable.
For purposes of this Agreement, “Cause” shall have the meaning set forth in the
employment agreement entered into between the Optionee and the Company, as the
same may be amended from time to time, and shall be determined in a manner
consistent with the procedure set forth therein.

      5. Adjustments and Business Combinations.

		
	            (a) Adjustments for Events Affecting Common Stock. In the event of
changes affecting the Company, the capitalization of the Company or the Common
Stock of the Company by reason of any stock dividend, spin-off, split-up,
recapitalization, merger, consolidation, business combination or exchange of
shares and the like, the Administrator will, in its discretion, make
appropriate adjustments to the number, kind and price of shares covered by this
Option, and will, in its discretion and without the consent of the Optionee,
make any other adjustments in this Option, including but not limited to
reducing the number of shares subject to the Option or providing or mandating
alternative settlement methods such as settlement of the Option in cash or in
shares of Common Stock or other securities of the Company or of any other
entity, or in any other matters which relate to the Option as the
Administrator, in its sole discretion, determines to be necessary or
appropriate.
	 
	            (b) Pooling of Interests Transaction. Notwithstanding anything in this
Agreement to the contrary and without the consent of the Optionee, the
Administrator, in its sole discretion, may make any modifications to the
Option, including but not limited to cancellation, forfeiture, surrender or
other termination of the Option in whole or in part, solely to the extent
necessary to facilitate any business combination that is authorized by the
Board to comply with requirements for treatment as a pooling of interests
transaction for accounting purposes under generally accepted accounting
principles.
	 
	            (c) Adjustments for Unusual Events. The Administrator is authorized to
make, in its discretion and without the consent of the Optionee, adjustments in
the terms and conditions of, and the criteria included in, the Option in
recognition of unusual or nonrecurring events affecting the Company, or the
financial statements of the Company or any affiliate, or of changes in
applicable laws, regulations,

		
	or accounting principles, whenever the Administrator determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Option.
	 
	            (d) Binding Nature of Adjustments. Adjustments under this Section 5 will
be made by the Administrator, whose determination as to what adjustments, if
any, will be made and the extent thereof will be final, binding and conclusive.
No fractional shares will be issued pursuant to this Option on account of any
such adjustments.

      6. Compliance with Securities Laws; Listing and Registration. If at any
time the Administrator determines that the delivery of Common Stock under this
Agreement is or may be unlawful under the laws of any applicable jurisdiction,
or federal or state securities laws, the right to exercise the Option or
receive shares of Common Stock pursuant to the Option shall be suspended until
the Administrator determines that such delivery is lawful. The Company shall
have no obligation to effect any registration or qualification of the Common
Stock under federal or state laws.

      The Company may require that the Optionee, as a condition to exercise of
the Option, and as a condition to the delivery of any share certificate, make
such written representations (including representations to the effect that such
person will not dispose of the Common Stock so acquired in violation of federal
or state securities laws) and furnish such information as may, in the opinion
of counsel for the Company, be appropriate to permit the Company to issue the
Common Stock in compliance with applicable federal and state securities laws.

      7. Investment Representations. The Optionee represents, warrants and
covenants that:

      (a) Any shares purchased upon exercise of this Option shall be acquired
for the Optionee’s account for investment only and not with a view to, or for
sale in connection with, any distribution of the shares in violation of the
Securities Act of 1933 (the “Securities Act") or any rule or regulation under
the Securities Act, and that he will not distribute the same in violation of
any state or federal law or regulation.

      (b) The Optionee has had such opportunity as he has deemed adequate to
obtain from representatives of the Company such information as is necessary to
permit the Optionee to evaluate the merits and risks of his investment in the
Company.

      (c) The Optionee is able to bear the economic risk of holding shares
acquired pursuant to the exercise of this Option for an indefinite period.

      (d) The Optionee understands that (i) the shares acquired pursuant to the
exercise of this Option will not be registered under the Securities Act or
under the securities laws of any state and are “restricted securities” within
the meaning of Rule 144 under the Securities Act; (ii) such shares cannot be
sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act, and such registration or qualification as
may be necessary under the securities laws of any state, or an exemption from
registration is then available; (iii) in any event, the exemption from
registration under Rule 144 will not be available for at least one year from
date of exercise and even then will not be available unless a public market
then exists for the Common Stock, adequate information concerning the Company
is then available to the public and other terms and conditions of Rule 144 are
complied with; and (iv) there is as of the date of this Agreement no
registration statement on file with the Securities and Exchange Commission with
respect to any stock of the Company covered by this Option and the Company has
no obligation or current intention to register any shares acquired pursuant to
the exercise of this Option under the Securities Act.

      By making payment upon exercise of this Option, the Optionee shall be
deemed to have reaffirmed, as of the date of such payment, the representations
made in this Section 7.

      8. Reservation of Shares. The Company will reserve and set apart and have
at all times, free from preemptive rights, a number of shares of authorized but
unissued Common Stock deliverable upon the exercise of this Option sufficient
to enable it at any time to fulfill all its obligations hereunder.

      9. Non-Guarantee of Employment or Consulting Relationship. Nothing in
this Agreement alters the at-will or other employment or consulting status of
the Optionee, nor is to be construed as a contract of employment or consulting
relationship between the Company and the Optionee, or as a contractual right of
Optionee to continue in the employ of, or in a consulting relationship with,
the Company, or as a limitation of the right of the Company to discharge the
Optionee at any time with or without cause or notice and whether or not such
discharge results in the failure of any portion of the Option to vest or any
other adverse effect on the Optionee’s interests under this Agreement.

      10. No Rights as a Stockholder. The Optionee will not have any of the
rights of a stockholder with respect to the shares of Common Stock that may be
issued upon the exercise of the Option until such shares of Common Stock have
been issued to him or her upon the due exercise of the Option. No adjustment
will be made for dividends or distributions or other rights for which the
record date is prior to the date such certificate or certificates are issued.

      11. Nonstatutory Nature of the Option. This Option is not intended to
qualify as an “incentive stock option” within the meaning of Code section 422,
and this Agreement will be so construed. The Optionee acknowledges that, upon
exercise of this Option, the Optionee will recognize taxable income in an
amount equal to the excess of the then Fair Market Value of the shares over the
Exercise Price and must comply with the provisions of Section 12 of this
Agreement with respect to any tax withholding obligations that arise as a
result of such exercise.

      12. Withholding of Taxes. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll or any other payment of any kind due
the Optionee and otherwise agrees to make adequate provision for foreign,
federal, state and local taxes required by law to be withheld, if any, which
arise in connection with the Option. The Company may require the Optionee to
make a cash payment to cover any withholding tax obligation as a condition of
exercise of the Option. If the Optionee does not make such payment when
requested, the Company may refuse to issue any stock certificate until
arrangements satisfactory to the Administrator for such payment have been made.

      The Company may, in its sole discretion, permit the Optionee to satisfy,
in whole or in part, any withholding tax obligation which may arise in
connection with the Option either by electing to have the Company withhold from
the shares to be issued upon exercise that number of shares, or by electing to
deliver to the Company already-owned shares, in either case having a Fair
Market Value equal to the amount necessary to satisfy the statutory minimum
withholding amount due.

      13. The Company’s Rights. The existence of this Option will not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of the
Company’s assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.

      14. Optionee. Whenever the word “Optionee” is used in any provision of
this Agreement under circumstances where the provision should logically be
construed, as determined by the Administrator, to apply to the estate, personal
representative or beneficiary to whom this Option may be transferred by will or
by the laws of descent and distribution, the word “Optionee” will be deemed to
include such person.

      15. Nontransferability of Option. This Option is nontransferable
otherwise than by will or the laws of descent and distribution and during the
lifetime of the Optionee, the Option may be exercised only by the Optionee or,
during the period the Optionee is under a legal disability, by the Optionee’s
guardian or legal representative. Except as provided above, the Option may not
be assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and will not be subject to
execution, attachment or similar process.

      16. Notices. All notices and other communications made or given pursuant
to this Agreement will be in writing and will be sufficiently made or given if
hand delivered or mailed by certified mail, addressed to the Optionee at the
address contained in the records of the Company, or addressed to the Company
for the attention of its Corporate Secretary at its principal office or, if the
receiving party consents in advance, transmitted and received via telecopy or
via such other electronic transmission mechanism as may be available to the
parties.

      17. Effect of Administrator’s Decision. All actions taken and decisions
and determinations made by the Administrator on all matters relating to this
Agreement pursuant to the powers vested in it hereunder shall be in the
Administrator’s sole and absolute discretion and shall be conclusive and
binding on all parties concerned, including the Optionee, the Company, its
stockholders, director and officers, and their respective successors in
interest.

      18. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the stock option granted hereunder. Any
oral or written agreements, representations, warranties, written inducements,
or other communications made prior to the execution of this Agreement with
respect to the stock option granted hereunder will be void and ineffective for
all purposes.

      19. Amendment. This Agreement may be amended from time to time by the
Administrator in its discretion; provided, however, that this Agreement may
not be modified in a manner that would have a materially adverse effect on the
Option as determined in the discretion of the Board of Directors, except as
provided in a written document signed by each of the parties hereto.

      20. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Maryland, other than the conflict of
laws principles thereof.

      23. Headings. The headings in this Agreement are for reference purposes
only and will not affect the meaning or interpretation of this Agreement.

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer as of the date first above written.

	 	 	 
			
VISUAL NETWORKS, INC.
	 
	By:		
/s/ Peter J. Minihane                          

Executive Vice President, Chief Financial Officer

The undersigned hereby acknowledges that he has carefully read this Agreement
and agrees to be bound by all of the provisions set forth herein.

	 	 
	 	OPTIONEE
	 
	 	/s/ Elton King                            
	 
	 	Date: May 3, 2001

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