0001095811-01-505624.txt : 20011019
0001095811-01-505624.hdr.sgml : 20011019
ACCESSION NUMBER: 0001095811-01-505624
CONFORMED SUBMISSION TYPE: SC TO-I/A
PUBLIC DOCUMENT COUNT: 10
FILED AS OF DATE: 20011016
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: JUNIPER NETWORKS INC
CENTRAL INDEX KEY: 0001043604
STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576]
IRS NUMBER: 770422528
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-I/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-57757
FILM NUMBER: 1760146
BUSINESS ADDRESS:
STREET 1: 1194 NORTH MATHILDA AVE
CITY: SUNNYVALE
STATE: CA
ZIP: 94089
BUSINESS PHONE: 6505268000
MAIL ADDRESS:
STREET 1: 1194 NORTH MATHILDA AVE
CITY: SUNNYVALE
STATE: CA
ZIP: 94089
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: JUNIPER NETWORKS INC
CENTRAL INDEX KEY: 0001043604
STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576]
IRS NUMBER: 770422528
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-I/A
BUSINESS ADDRESS:
STREET 1: 1194 NORTH MATHILDA AVE
CITY: SUNNYVALE
STATE: CA
ZIP: 94089
BUSINESS PHONE: 6505268000
MAIL ADDRESS:
STREET 1: 1194 NORTH MATHILDA AVE
CITY: SUNNYVALE
STATE: CA
ZIP: 94089
SC TO-I/A
1
f75930a1scto-ia.txt
AMENDMENT NO 1 TO SCHEDULE TO-I
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
SCHEDULE TO
(RULE 13E-4)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
-----------------
JUNIPER NETWORKS, INC.
(NAME OF SUBJECT COMPANY (ISSUER) AND FILING PERSON (OFFEROR))
-----------------
OPTIONS TO PURCHASE COMMON STOCK, PAR VALUE $0.00001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
-----------------
48203R 10 4
(CUSIP NUMBER OF CLASS OF SECURITIES)
(UNDERLYING COMMON STOCK)
-----------------
LISA C. BERRY
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
JUNIPER NETWORKS, INC.
1194 NORTH MATHILDA AVENUE
SUNNYVALE, CALIFORNIA 94089
(408) 745-2384
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF FILING PERSON)
-----------------
CALCULATION OF FILING FEE
================================================================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE
================================================================================
$158,587,808 $31,717
================================================================================
* Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase 39,916,827 shares of common stock of Juniper
Networks, Inc. having an aggregate value of $158,587,808 as of September 18,
2001 will be acquired in connection with this offer. The aggregate value of such
options was calculated based on the Black-Scholes option pricing model. The
amount of the filing fee, calculated in accordance with Rule 0-11(b) of the
Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the
value of the transaction.
[X] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE
0-11(a)(2)AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS
PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: $31,717
Form or Registration No.: Schedule TO-I
Filing party: Juniper Networks, Inc.
Date filed: September 28, 2001
[ ] CHECK BOX IF THE FILING RELATES SOLELY TO PRELIMINARY COMMUNICATIONS MADE
BEFORE THE COMMENCEMENT OF A TENDER OFFER.
Check the appropriate boxes to designate any transactions to which the statement
relates:
[ ] THIRD-PARTY TENDER OFFER SUBJECT TO RULE 14D-1.
[X] ISSUER TENDER OFFER SUBJECT TO RULE 13E-4.
[ ] GOING-PRIVATE TRANSACTION SUBJECT TO RULE 13E-3.
[ ] AMENDMENT TO SCHEDULE 13D UNDER RULE 13D-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
WE HAVE NOT COMMENCED THE OFFER TO WHICH THIS SCHEDULE PERTAINS. THIS SCHEDULE
THEREFORE REMAINS SUBJECT TO COMPLETION AND CHANGE. A COMPLETED SCHEDULE TO WILL
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WHEN WE COMMENCE THE OFFER.
THE TERMS AND CONDITIONS OF THE OFFER ARE SUBJECT TO CHANGE PRIOR TO OR DURING
THE OFFERING PERIOD. YOU SHOULD READ THE COMPLETED SCHEDULE TO WHEN IT IS
AVAILABLE BECAUSE IT CONTAINS IMPORTANT INFORMATION. THE SCHEDULE TO AND OTHER
FILED DOCUMENTS CAN BE OBTAINED WITHOUT CHARGE AT THE SEC'S WEBSITE AT
WWW.SEC.GOV.
Introductory Statement
This Amendment No. 1 (this "Amendment") amends and supplements the Tender Offer
Statement on Schedule TO (the "Schedule TO") filed with the Securities and
Exchange Commission (the "Commission") on September 28, 2001 relating to our
offer to exchange certain options to purchase our common stock, par value
$0.00001 per share, upon the terms and subject to the conditions described in
the Offer to Exchange filed herewith.
2
ITEM 12. EXHIBITS.
(a)(1) Offer to Exchange dated October __, 2001
(a)(2)* Form of Email to Employees
(a)(3) Juniper Networks, Inc. Annual Report on Form 10-K for its
fiscal year ended December 31, 2000, filed with the
Securities and Exchange Commission (the "Commission") on
March 27, 2001, is incorporated herein by reference.
(a)(4) Juniper Networks, Inc. Quarterly Report on Form 10-Q for its
fiscal quarter ended June 30, 2001, filed with the
Commission on August 6, 2001, is incorporated herein by
reference.
(a)(5) Form of Website Welcome Page
(a)(6) Form of Website Election Form
(a)(7) Form of Website Election Confirmation
(a)(8) Form of Website Thank You Page (Participate)
(a)(9) Form of Website Thank You Page (Decline)
(a)(10) Form of Email Confirmation (Participate)
(a)(11) Form of Email Confirmation (Decline)
(a)(12) Form of Website Q&A
(a)(13) Form of Website Exchange Offer Overview+
(b) Not applicable
(d)(1) Juniper Networks, Inc. 2000 Nonstatutory Stock Option Plan,
as amended, is incorporated herein by reference to the
Company's registration statement on form S-8 filed with the
Commission on March 29, 2001.
(d)(2) Juniper Networks, Inc. Amended and Restated 1996 Stock Plan,
as amended, is incorporated herein by reference to the
Company's registration statement on Form S-8 filed with the
Commission on March 29, 2001.
(g) Not applicable.
(h) Not applicable.
------------------
* To be filed by amendment
+ Previously filed Schedule TO-C
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in his Schedule TO is true, complete and correct.
JUNIPER NETWORKS, INC.
/s/ Marcel Gani
-----------------------------------
Marcel Gani
Chief Financial Officer
Date: October 16, 2001
3
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(a)(1) Offer to Exchange dated October __, 2001
(a)(2)* Form of Email to Employees
(a)(3) Juniper Networks, Inc. Annual Report on Form 10-K for its
fiscal year ended December 31, 2000, filed with the
Securities and Exchange Commission (the "Commission") on
March 27, 2001, is incorporated herein by reference.
(a)(4) Juniper Networks, Inc. Quarterly Report on Form 10-Q for its
fiscal quarter ended June 30, 2001, filed with the
Commission on August 6, 2001, is incorporated herein by
reference.
(a)(5) Form of Website Welcome Page
(a)(6) Form of Website Election Form
(a)(7) Form of Website Election Confirmation
(a)(8) Form of Website Thank You Page (Participate)
(a)(9) Form of Website Thank You Page (Decline)
(a)(10) Form of Email Confirmation (Participate)
(a)(11) Form of Email Confirmation (Decline)
(a)(12) Form of Website Q&A
(a)(13) Form of Website Exchange Offer Overview+
(b) Not applicable
(d)(1) Juniper Networks, Inc. 2000 Nonstatutory Stock Option Plan,
as amended, is incorporated herein by reference to the
Company's registration statement on form S-8 filed with the
Commission on March 29, 2001.
(d)(2) Juniper Networks, Inc. Amended and Restated 1996 Stock Plan,
as amended, is incorporated herein by reference to the
Company's registration statement on Form S-8 filed with the
Commission on March 29, 2001.
(g) Not applicable.
(h) Not applicable.
------------------
* To be filed by amendment
+ Previously filed Schedule TO-C
4
EX-99.(A)(1)
3
f75930a1ex99-a1.txt
EXHIBIT 99.(A)(1)
Exhibit (a)(1)
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 24, 2001)*
PRELIMINARY - SUBJECT TO COMPLETION
WE HAVE NOT COMMENCED THE OFFER TO WHICH THIS SCHEDULE PERTAINS. THIS SCHEDULE
THEREFORE REMAINS SUBJECT TO COMPLETION AND CHANGE. A COMPLETED SCHEDULE TO WILL
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WHEN WE COMMENCE THE OFFER.
THE TERMS AND CONDITIONS OF THE OFFER ARE SUBJECT TO CHANGE PRIOR TO OR DURING
THE OFFERING PERIOD. YOU SHOULD READ THE COMPLETED SCHEDULE TO WHEN IT IS
AVAILABLE BECAUSE IT CONTAINS IMPORTANT INFORMATION. THE SCHEDULE TO AND OTHER
FILED DOCUMENTS CAN BE OBTAINED WITHOUT CHARGE AT THE SECURITIES AND EXCHANGE
COMMISSION WEBSITE AT WWW.SEC.GOV.
JUNIPER NETWORKS, INC.
OFFER TO EXCHANGE CERTAIN OUTSTANDING OPTIONS FOR REPLACEMENT OPTIONS
UNDER THE 2000 NONSTATUTORY STOCK OPTION PLAN AND THE AMENDED AND
RESTATED 1996 STOCK PLAN
THIS OFFER AND THE RIGHT TO WITHDRAW FROM THIS OFFER EXPIRES AT 10:00 P.M.,
PACIFIC TIME, ON OCTOBER __, 2001, UNLESS WE EXTEND THIS OFFER
_____________, 2001
* This Supplement constitutes part of the Section 10(a) prospectuses dated
September 24, 2001 relating to the Juniper Networks, Inc. 2000 Nonstatutory
Stock Option Plan and the Amended and Restated 1996 Stock Plan.
PRELIMINARY - SUBJECT TO COMPLETION
JUNIPER NETWORKS, INC.
OFFER TO EXCHANGE CERTAIN OUTSTANDING OPTIONS FOR REPLACEMENT OPTIONS
UNDER THE 2000 NONSTATUTORY STOCK OPTION PLAN AND THE AMENDED AND
RESTATED 1996
STOCK PLAN
THIS OFFER AND THE RIGHT TO WITHDRAW FROM THIS OFFER EXPIRES AT 10:00 P.M.,
PACIFIC TIME, ON __________, 2001,
UNLESS WE EXTEND THIS OFFER
_____________, 2001
Juniper Networks, Inc. (Juniper Networks) is offering eligible employees
the opportunity to exchange certain outstanding options to purchase shares of
Juniper Networks common stock for new options which we will, at the discretion
of our Board of Directors (or a committee appointed by the Board of Directors),
grant under either the Juniper Networks, Inc. 2000 Nonstatutory Stock Option
Plan as may be amended from time to time (2000 Plan) or the Juniper Networks,
Inc. Amended and Restated 1996 Stock Plan, as amended and as may be amended from
time to time (1996 Plan; the 2000 Plan and the 1996 Plan are sometimes referred
to together as the Option Plans). We are making the offer upon the terms and
conditions described in this Offer to Exchange and the attached Summary of Terms
(which together, as they may be amended from time to time, constitute the
Offer). This Offer is not conditioned upon a minimum number of Eligible Options
being exchanged. This Offer is subject to conditions that we describe in Section
6 of this Offer to Exchange.
We are offering our employees, including our executive officers (See
Schedule A to this Offer for more information about our executive officers) the
opportunity to exchange certain outstanding options that have an exercise price
that greater than or equal to $10.00 and are not specifically excluded (Eligible
Options) for a replacement option to purchase shares of our common stock
(Replacement Options). If you accept this Offer and tender Eligible Options for
exchange, those option grants you may have received in two 50% increments, the
first in April 2001 at a price of $29.19 and the second in July 2001 at a price
of $24.53 (Formula Grants) will be cancelled in their entirety as a condition to
exchanging Eligible Options for Replacement Options. Further, if you wish to
accept this Offer and tender Eligible Options for exchange then, except for
those option grants cancelled as described in the preceding sentence, you must
exchange all of those options that were granted within the period that is six
months prior to the Expiration Date. The Replacement Options will be granted on
a date which is at least six months and one day after the Expiration Date
(Replacement Option Grant Date).
Each eligible employee who accepts the Offer will receive one or more
Replacement Options for the same number of shares subject to options tendered in
the exchange. Subject to the terms and conditions of this Offer, the Replacement
Options will be granted on a date which is at least six months and one day after
the date we cancel the options accepted for exchange. Assuming we do not extend
the Expiration Date, we presently expect to grant the Replacement Options no
earlier than ___________, 2002. The Offer is presently scheduled to expire on
___________, 2001 (Expiration Date), and we expect to cancel options on
_________, 2001, or promptly thereafter (Cancellation Date). Since we presently
expect to cancel all tendered options on _________, 2001, this means that if you
participate in the Offer, you will be required to tender all options granted to
you since _________, 2001. The Offer is not conditioned on a minimum number of
options being tendered. Participation in the offer is completely voluntary. The
Offer is subject to conditions that we describe in Section 6 of this Offer.
You may participate in the Offer if you are an employee of Juniper
Networks, Inc. or one of its subsidiaries and have an Eligible Option. Please
note that in order to receive a new option pursuant to this
ii
Offer, you must continue to be an eligible employee through the date on which
the Replacement Options are granted, which will be at least six months and one
day after the Cancellation Date.
If you tender Eligible Options for exchange as described in the Offer,
and we accept your tendered Eligible Options, then, subject to the terms of the
Offer, we will grant you the Replacement Options under and subject to the terms
of either the 2000 Plan or the 1996 Plan, at the discretion of our Board of
Directors (or a committee appointed by the Board of Directors).
The exercise price per share of the new options will be 100% of the fair
market value of Juniper Networks common stock, as determined by the closing
price reported on Nasdaq on the the Replacement Option Grant Date.
The Replacement Options for all Eligible Options exchanged except Bonus
Stock Option Grants and Patent Option Grants (described below) will have a
vesting schedule that is based on the date of the oldest Eligible Option
exchanged. We will issue one Replacement Option for the total number of shares
subject to option exchanged by the employee (except for the Bonus Stock Option
Grants and Patent Option Grants) and the vesting schedule for that Replacement
Option will be based on the grant date of the oldest Eligible Option exchanged,
as follows:
- If the oldest Eligible Option exchanged has a grant date in 1999, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 24 months.
- If the oldest Eligible Option exchanged has a grant date between
January 1, 2000 and June 30, 2000, the Replacement Option will be 25%
vested as of the date of grant of the Replacement Option and the
remaining 75% vests monthly over 28 months.
- If the oldest Eligible Option exchanged has a grant date between July
1, 2000 and December 31, 2000, the Replacement Option will be 25% vested
as of the date of grant of the Replacement Option and the remaining 75%
vests monthly over 32 months.
- If the oldest Eligible Option exchanged has a grant date in 2001, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 36 months.
The Replacement Option for the Eligible Options that are Bonus Stock
Option Grants (Replacement Bonus Grant) will be granted separately and will vest
in accordance with the vesting schedule of the exchanged Bonus Stock Option
Grant. On the date of grant of the Replacement Bonus Grant, all of those shares
that would have been fully vested on the Cancellation Date will be fully vested
and those that would have vested during the period between the Cancellation Date
and the date of grant of Replacement Bonus Grant also will be fully vested. The
remaining unvested shares will have a vesting schedule that is equivalent to the
vesting schedule that would have been in place had the cancelled option remained
in place.
Any Eligible Option that was granted to an employee in connection with
the Company's patent program (Patent Option Grant) that is tendered in the Offer
will be replaced with a separate Replacement Option (Replacement Patent Grant)
that will vest in accordance with the original vesting schedule of the exchanged
Patent Option Grant. On the date of grant of the Replacement Patent Grant, all
of those shares that would have been fully vested on the Cancellation Date will
be fully vested and those that would have vested during the period between the
Cancellation Date and the date of grant of Replacement Patent Grant also will be
fully vested. The remaining unvested shares will have a vesting schedule that is
equivalent to the vesting schedule that would have been in place had the
cancelled option remained in place.
iii
ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR
OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD
TENDER YOUR ELIGIBLE OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION
WHETHER TO TENDER YOUR ELIGIBLE OPTIONS.
WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON
STOCK BEFORE DECIDING WHETHER TO ELECT TO EXCHANGE YOUR ELIGIBLE OPTIONS.
Shares of our common stock are quoted on Nasdaq under the symbol "JNPR".
On September 21, 2001, the closing price of our common stock as reported on
Nasdaq was $11.10 per share.
You should direct questions about this Offer or requests for assistance
in completing the related documentation to Lisa Berry, Vice President, General
Counsel and Secretary at Juniper Networks, Inc., 1194 North Mathilda Avenue,
Sunnyvale, California 94089, (408) 745-2384.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS OFFER. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
iv
IMPORTANT
IF YOU WISH TO TENDER YOUR ELIGIBLE OPTIONS FOR EXCHANGE, YOU MUST
COMPLETE THE ONLINE ELECTION FORM FOUND ON OUR INTERNAL WEBSITE CREATED FOR THIS
OFFER (HTTP://___________________________) AND SUBMIT IT IN ACCORDANCE WITH ITS
INSTRUCTIONS BEFORE 10:00 P.M., PACIFIC TIME, ON ___________, 2001, OR A LATER
DATE IF WE EXTEND THE OFFER. If you do not submit the online Election Form by
_______ 2001, or a later date if we extend the Offer, we will treat your failure
to submit the online Election Form as a rejection of the Offer.
We are not making the Offer to and we will not accept any tender of
Eligible Options in any jurisdiction in which the Offer or the acceptance of any
tender of Eligible Options would not be in compliance with the laws of that
jurisdiction. However, we may, at our discretion, take any actions necessary for
us to make the Offer to the employees in such jurisdiction.
WE CANNOT GUARANTEE THAT THE REPLACEMENT OPTIONS WILL HAVE A LOWER
EXERCISE PRICE THAN THE ELIGIBLE OPTIONS. The decision to accept the Offer is an
individual one that should be based on a variety of factors, and you should
consult your personal advisors if you have questions about your financial or tax
situation. The information about this Offer is limited to this document, the
attached Summary of Terms and the Tender Offer Statement on Schedule TO.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR ELIGIBLE OPTIONS PURSUANT TO
THE OFFER. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE
ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND
REPRESENTATIONS CONTAINED IN THIS DOCUMENT, THE ATTACHED SUMMARY OF TERMS AND
THE TENDER OFFER STATEMENT ON SCHEDULE TO. IF ANYONE MAKES ANY RECOMMENDATION OR
REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT
RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.
v
TABLE OF CONTENTS
SUMMARY OF TERMS ..................................................................................................... 1
THE OFFER ............................................................................................................ 8
1. Number of Options; Expiration Date ........................................................................... 8
2. Purpose of the Offer ......................................................................................... 9
3. Procedures ................................................................................................... 10
4. Change in Election; Withdrawal Rights ........................................................................ 11
5. Acceptance of Eligible Options for Exchange and Cancellation and Issuance
of Replacement Options ...................................................................................... 11
6. Conditions of the Offer ...................................................................................... 11
7. Price Range of Common Stock .................................................................................. 13
8. Source and Amount of Consideration; Terms of Replacement Options ............................................. 13
9. Interests of Directors and Officers; Transactions and Arrangements Involving
the Eligible Options ........................................................................................ 16
10. Status of Eligible Options Acquired by Us in the Offer ...................................................... 16
11. Legal Matters; Regulatory Approvals ......................................................................... 17
12. Material U.S. Federal Income Tax Consequences ............................................................... 17
13. Material Tax Consequences for Employees Who are Tax Residents in Australia .................................. 18
14. Material Tax Consequences for Employees Who are Tax Residents in Austria .................................... 18
15. Material Tax Consequences for Employees Who are Tax Residents in Belgium .................................... 19
16. Material Tax Consequences for Employees Who are Tax Residents in Brazil ..................................... 19
17. Material Tax Consequences for Employees Who are Tax Residents in Canada ..................................... 19
18. Material Tax Consequences for Employees Who are Tax Residents in China ...................................... 20
19. Material Tax Consequences for Employees Who are Tax Residents in Denmark .................................... 20
20. Material Tax Consequences for Employees Who are Tax Residents in Finland .................................... 20
21. Material Tax Consequences for Employees Who are Tax Residents in France .................................... 21
22. Material Tax Consequences for Employees Who are Tax Residents in Germany .................................... 21
23. Material Tax Consequences for Employees Who are Tax Residents in Hong Kong .................................. 21
24. Material Tax Consequences for Employees Who are Tax Residents in India ...................................... 21
25. Material Tax Consequences for Employees Who are Tax Residents in Ireland .................................... 22
26. Material Tax Consequences for Employees Who are Tax Residents in Italy ...................................... 22
27. Material Tax Consequences for Employees Who are Tax Residents in Japan ..................................... 22
28. Material Tax Consequences for Employees Who are Tax Residents in Korea ...................................... 23
29. Material Tax Consequences for Employees Who are Tax Residents in Malaysia ................................... 23
30. Material Tax Consequences for Employees Who are Tax Residents in Mexico ..................................... 23
31. Material Tax Consequences for Employees Who are Tax Residents in The Netherlands ............................. 23
32. Material Tax Consequences for Employees Who are Tax Residents in Singapore ................................... 24
33. Material Tax Consequences for Employees Who are Tax Residents in Spain ....................................... 24
34. Material Tax Consequences for Employees Who are Tax Residents in Sweden ...................................... 24
35. Material Tax Consequences for Employees Who are Tax Residents in Switzerland ................................. 24
36. Material Tax Consequences for Employees Who are Tax Residents in Taiwan ...................................... 25
37. Material Tax Consequences for Employees Who are Tax Residents in United Kingdom .............................. 25
38. Extension of the Offer; Termination; Amendment ............................................................... 25
39. Fees and Expenses ............................................................................................ 26
40. Information Concerning Juniper Networks ...................................................................... 27
41. Miscellaneous ................................................................................................ 28
SCHEDULE A Information about our Directors and Executive Officers ............................................... 29
vi
SUMMARY TERM SHEET
The following are answers to some of the questions that you may have about the
Offer. We urge you to read carefully the remainder of this Offer to Exchange
because it contains additional important information. In addition, we urge you
to review the information in our annual report on Form 10-K for the year ended
December 31, 2000, our quarterly report on Form 10-Q for the quarter ended June
30, 2001, and the proxy statement distributed in connection with our 2001 annual
meeting, as those documents contain important financial and other information
about us. We have included page references to the relevant sections of the Offer
where you can find a more complete description of the topics in this summary.
WHAT IS THE STOCK OPTION EXCHANGE PROGRAM?
Our Stock Option Exchange Program (that we also call the Offer) is a voluntary
program permitting eligible employees to cancel certain underwater stock options
(Eligible Options) and exchange them for replacement options covering the same
number of shares (Replacement Options). The Replacement Options will be granted
no earlier than _________________, 2002 or a later date if we extend the Offer
(Replacement Option Grant Date), and will have an exercise price that will be
determined when they are granted.
WHY ARE WE OFFERING THE STOCK OPTION EXCHANGE PROGRAM?
We are offering the Stock Option Exchange Program because of the decline in the
price of our common stock in recent months. We recognize that the exercise price
of the majority of outstanding options to purchase our common stock are
currently higher than the price of our common stock as reported on Nasdaq, which
has reduced the potential value of your options and our stock option program to
you. (See Section 2.)
Many of our outstanding options, whether or not they are currently exercisable,
have exercise prices that are significantly higher than the current market price
of our common stock. For this reason, we believe these options have little or no
current value as an incentive to retain and motivate employees, and are unlikely
to be exercised in the foreseeable future. By making this Offer we intend to
provide our employees with the benefit of holding options that over time may
have a greater potential to increase in value, and thereby create better
incentives for our employees to remain with us and contribute to the attainment
of our business and financial objectives and the creation of value for all of
our stockholders. (See Section 2.)
Your participation in this Offer is voluntary, and we will allow you to either
keep your current Eligible Options at their current exercise price with their
existing vesting schedules or cancel those Eligible Options in exchange for
Replacement Options for the same number of shares as your Eligible Options that
you exchanged with an adjusted vesting schedule, which will be granted on the
Replacement Option Grant Date. (See Section 5.)
WHAT IS AN UNDERWATER STOCK OPTION?
An "underwater" stock option is an option with an exercise price that is higher
than the current common stock price as reported, in the case of our common
stock, on Nasdaq.
WHAT OPTIONS MAY I EXCHANGE AS PART OF THIS PROGRAM?
We are offering to exchange all stock options with and exercise price of $10.00
or more that are currently outstanding under our 2000 Nonstatutory Stock Option
Plan and the Amended and Restated 1996 Stock Plan, excluding the formula-based
options you may have been granted in two 50% increments, the first in
1
April 2001 at a price of $29.19 and the second in July 2001 at a price of 24.53
(Formula Grants). (See Section 1.)
ARE THERE CONDITIONS TO THE OFFER?
The Offer is subject to a number of conditions, including the conditions
described in Section 6. However, the Offer is not conditioned on a minimum
number of employees accepting the Offer or a minimum number of Eligible Options
being exchanged. (See Section 6.)
ARE THERE ANY ELIGIBILITY REQUIREMENTS I MUST SATISFY IN ORDER TO RECEIVE THE
REPLACEMENT OPTIONS?
You must be one of our employees or an employee of one of our subsidiaries on
the Expiration Date, and you must remain continuously employed through the
Replacement Option Grant Date.
If you are not an employee on the Expiration Date, you will not be eligible to
exchange any Eligible Options and any election you may have made will not be
accepted by us. If your employment with us is terminated as part of any
announced reduction in force, you will fall in this category.
If you do not remain an employee through the Replacement Option Grant Date and
your Eligible Options were cancelled under this Offer, you will not be granted
Replacement Options and your cancelled options will not be reinstated. (See
Section 5.)
HOW DOES THE OFFER WORK?
On or before the Expiration Date, you may decide to exchange any one or all of
your Eligible Options for Replacement Options, which will be granted on the
Replacement Option Grant Date. If you wish to accept the Offer and tender
Eligible Options for exchange, and you received formula option grants in two 50%
increments, the first in April 2001 at a price of $29.19 and the second in July
2001 at a price of $24.53 (Formula Grants), those grants are required, as
condition to exchanging Eligible Options for a Replacement Option, to be
cancelled in their entirety. Further, if you accept this Offer and tender
Eligible Options for exchange then, except for those option grants cancelled as
described in the preceding sentence, you must exchange all of those options that
were granted within the period that is six months prior to the Cancellation
Date. The Replacement Options will be granted on a date which is at least six
months and one day after the Expiration Date (Replacement Option Grant Date).
Your Replacement Options will represent the same number of shares as the total
of each Eligible Option that you exchanged. The number of shares to be granted
under your Replacement Options will be adjusted for any stock split, stock
dividend, recapitalization or similar transaction that may occur between the
Expiration Date and the Replacement Option Grant Date. (See Section 5.)
WHAT IF MY ELIGIBLE OPTIONS ARE NOT CURRENTLY VESTED? CAN I EXCHANGE THEM?
Yes. Your Eligible Options do not need to be vested in order for you to
participate in the Offer.
IF I ELECT TO EXCHANGE MY ELIGIBLE OPTIONS, DO I HAVE TO EXCHANGE ALL OF MY
ELIGIBLE OPTIONS OR CAN I JUST EXCHANGE SOME OF THEM?
If you have more than one Eligible Option, then you may exchange any or all of
them. You cannot exchange part of any particular Eligible Option and keep the
balance; you must exchange all unexercised shares that are subject to each
particular Eligible Option. In all cases, if you exchange any of your Eligible
Options, you must exchange all of your options granted six months before the
Cancellation Date and any Formula Grants will be cancelled in their entirety.
(See Section 1.)
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WHEN WILL I RECEIVE MY REPLACEMENT OPTIONS?
You will receive your Replacement Options on the Replacement Option Grant Date,
which is expected to be no earlier than ___________, 2002, or a later date if we
extend the Offer. (See Section 5.)
WHY WON'T I RECEIVE MY REPLACEMENT OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE
OF THE OFFER?
In order to avoid very negative accounting consequences that can result from
stock option exchanges, we cannot grant Replacement Options for at least six
months and one day after the Expiration Date, which is expected to be
__________, 2002, or a later date if we extend the Offer. Therefore, you will
not receive your Replacement Options until the Replacement Option Grant Date,
which is expected to be no earlier than________, 2002 or a later date if we
extend the Offer. Any other options to be granted to you by us prior to the
Replacement Option Grant Date will also be deferred until the Replacement Option
Grant Date. (See Section 10.)
HOW WILL MY REPLACEMENT OPTIONS VEST?
The Replacement Options for all Eligible Options exchanged, except Bonus Stock
Option Grants and Patent Option Grants (described below), will have a vesting
schedule that is based on the grant date of the oldest Eligible Option
exchanged. We will issue one Replacement Option for the total number of shares
subject to option exchanged by the employee (except for the Bonus Stock Option
Grants and Patent Option Grants) and the vesting schedule for the Replacement
Option will be based on the grant date of the oldest Eligible Option exchanged,
as follows:
- If the oldest Eligible Option exchanged has a grant date in 1999, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 24 months.
- If the oldest Eligible Option exchanged has a grant date between
January 1, 2000 and June 30, 2000, the Replacement Option will be 25%
vested as of the date of grant of the Replacement Option and the
remaining 75% vests monthly over 28 months.
- If the oldest Eligible Option exchanged has a grant date between July
1, 2000 and December 31, 2000, the Replacement Option will be 25% vested
as of the date of grant of the Replacement Option and the remaining 75%
vests monthly over 32 months.
- If the oldest Eligible Option exchanged has a grant date in 2001, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 36 months.
Bonus Stock Option Grants
The Replacement Option for the Eligible Options that are Bonus Stock
Option Grants (Replacement Bonus Grant) will be granted separately and will vest
in accordance with the vesting schedule of the exchanged Bonus Stock Option
Grant. On the date of grant of the Replacement Bonus Grant, all of those shares
that would have been fully vested on the Cancellation Date will be fully vested
and those that would have vested during the period between the Cancellation Date
and the date of grant of Replacement Bonus Grant also will be fully vested. The
remaining unvested shares will have a vesting schedule that is equivalent to the
vesting schedule that would have been in place had the cancelled option remained
in place.
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Patent Option Grants
Any Eligible Option that was granted to an employee in connection with
the Company's patent program (Patent Option Grant) that is tendered in the Offer
will be replaced with a separate Replacement Option (Replacement Patent Grant)
that will vest in accordance with the original vesting schedule of the exchanged
Patent Option Grant. On the date of grant of the Replacement Patent Grant, all
of those shares that would have been fully vested on the Cancellation Date will
be fully vested and those that would have vested during the period between the
Cancellation Date and the date of grant of Replacement Patent Grant also will be
fully vested. The remaining unvested shares will have a vesting schedule that is
equivalent to the vesting schedule that would have been in place had the
cancelled option remained in place. (See Section 8.)
WHAT IS THE EXERCISE PRICE FOR THE REPLACEMENT OPTIONS?
The exercise price of your Replacement Options will be the fair market value of
our common stock on the Replacement Option Grant Date, which is expected to be
no earlier than ___________, 2002, or a later date if we extend the Offer, which
will be the closing price of our common stock as reported on Nasdaq on that
date. WE CANNOT GUARANTEE THAT THE REPLACEMENT OPTIONS WILL HAVE A LOWER
EXERCISE PRICE THAN THE ELIGIBLE OPTIONS YOU EXCHANGED. Therefore, we recommend
that you obtain current market quotations for our common stock before deciding
whether to participate in the Offer and exchange your Eligible Options. (See
Section 8.)
HOW LONG IS THE OPTION TERM OF THE REPLACEMENT OPTIONS?
All Replacement Options will have our standard option term of ten years from the
date of grant. (See Section 8.)
WHAT IF MY EMPLOYMENT IS TERMINATED AFTER THE DATE THAT MY ELIGIBLE OPTIONS ARE
CANCELLED?
If your employment with us is terminated after your Eligible Options are
cancelled and before the Replacement Option Grant Date, you will forfeit the
Eligible Options you cancelled, and you will not receive any Replacement
Options. (See Section 1.)
THIS OFFER DOES NOT CHANGE THE "AT-WILL" NATURE OF YOUR EMPLOYMENT WITH US, AND
YOUR EMPLOYMENT MAY BE TERMINATED BY US OR BY YOU AT ANY TIME, INCLUDING PRIOR
TO THE REPLACEMENT OPTION GRANT DATE, FOR ANY REASON, WITH OR WITHOUT CAUSE.
IF I EXCHANGE MY ELIGIBLE OPTIONS, HOW MANY SHARES WILL I RECEIVE UNDER MY
REPLACEMENT OPTIONS?
This is a share-for-share Stock Option Exchange Program, so for each share
covered by the Eligible Options you exchange, you will receive one share under
the Replacement Options. However, the number of shares covered by your
Replacement Options will be adjusted for any stock split, stock dividend,
recapitalization or similar transaction that may occur between the Expiration
Date and the Replacement Option Grant Date. (See Section 1.)
I HAVE MORE THAN ONE ELIGIBLE OPTION. DO I HAVE TO EXCHANGE ALL OF THEM IN ORDER
TO PARTICIPATE?
No. You may exchange one or more of your Eligible Options or none at all.
However, if you tender any Eligible Options, the Formula Grants will be
cancelled in their entirety and any options granted during the six months prior
to the date your Eligible Options are cancelled will automatically be exchanged,
and
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Replacement Options will be granted for them if you elect to exchange any other
Eligible Option. If you choose not to exchange any of your Eligible Options,
then no options will be exchanged. (See Section 2.)
CAN I EXCHANGE A PORTION OF AN UNEXERCISED ELIGIBLE OPTION?
No. If you elect to exchange an Eligible Option, you must exchange all
unexercised shares covered by that Eligible Option.
CAN I EXCHANGE THE REMAINING PORTION OF AN ELIGIBLE OPTION THAT I HAVE PARTIALLY
EXERCISED?
Yes. However, only unexercised shares covered by an Eligible Option may be
exchanged if you elect to exchange a partially exercised Eligible Option. (See
Section 1.)
IF I ELECT TO EXCHANGE ONE OR MORE OF MY ELIGIBLE OPTIONS AS PART OF THE OFFER,
ARE ANY OTHER OPTIONS AFFECTED?
Yes. If you participate in the Offer, the Formula Grants will be cancelled in
their entirety and any options granted during the six months prior to the date
your Eligible Options are cancelled will automatically be exchanged and
Replacement Options will be granted for them. (See Section 1.)
WILL MY PARTICIPATION AFFECT MY RECEIPT OF ANY OTHER OPTION?
Yes. If you participate in the Offer then you will not be able to receive any
option grants during the period prior to the Replacement Option Grant Date. (See
Section 10.)
WHAT IF I'M TO BE GIVEN AN OPTION IN CONNECTION WITH A FUTURE PROMOTION?
If your promotion occurs prior to the Replacement Option Grant Date and you
elected to exchange any Eligible Options under this Offer, the promotional
option will be deferred until the Replacement Option Grant Date. (See Section
10.)
HOW LONG WILL THIS OFFER REMAIN OPEN?
Presently, the Offer is scheduled to remain open until 10:00 p.m., Pacific Time,
on the Expiration Date, which is expected to be _________, 2001, or a later date
if we extend Offer. We have no plans to extend the Offer beyond _____________,
2001. However, if we do extend the Offer, you will be notified of the extension.
If we extend the Offer, we will announce the extension no later than 12:00 p.m.,
Pacific Time, on ___________, 2001. (See Sections 1 and 38.)
IF THE OFFER IS EXTENDED, HOW DOES THE EXTENSION IMPACT THE DATE ON WHICH MY
REPLACEMENT OPTIONS WILL BE GRANTED?
If we extend the Offer, the Replacement Option Grant Date will be extended to a
day that is at least six months and one day after the extended Expiration Date.
WILL MY REPLACEMENT OPTIONS BE INCENTIVE STOCK OPTIONS OR NONQUALIFIED STOCK
OPTIONS?
All Replacement Options will be non-qualified stock options. (See Section 8.)
5
WILL I HAVE TO PAY TAXES IF I TENDER MY OPTIONS IN THE OFFER?
If you exchange any Eligible Options in the Offer, you will not be required
under current U.S. law to recognize income for U.S. federal income tax purposes
at the time of the tender or upon our acceptance and cancellation of the
options. In addition, the grant of the Replacement Options is not a taxable
event under current U.S. law, and you will not be required under current U.S.
law to recognize income for U.S. federal income tax purposes at the time of
grant. (See Section 12.)
All option holders, including those subject to taxation in a foreign
jurisdiction, whether by reason of nationality, residence or otherwise, should
consult with their own personal tax advisors as to the tax consequences of their
participation in the Offer. Tax consequences may vary depending on each
individual participant's circumstances. We have distributed with this Offer
short summaries of some of those consequences with respect to those countries
where our non-U.S. employees are located. If you are an employee located outside
the United States, you should review the relevant summary, and you should
consult your individual tax advisor before deciding whether or not to
participate in the Offer. (See Sections 13 through 37.)
WHAT HAPPENS IF JUNIPER NETWORKS MERGES INTO OR IS ACQUIRED BY ANOTHER COMPANY?
If we merge into or are acquired by another company prior to the expiration of
the Offer, you may withdraw your tendered options and have all the rights
afforded you to acquire our common stock under the terms of those options.
If we are merged into another entity after your tendered options are accepted
for exchange and cancelled but before the Replacement Options are granted, the
surviving corporation would automatically assume our obligations with respect to
the Offer. The Replacement Options would be options to purchase shares of the
surviving corporation. The number of shares would be equal to the number of our
shares that you would have received upon exercise of your options multiplied by
the exchange ratio that was used in the transaction. The exercise price would be
based on the market price of the surviving corporation's stock. If we are
acquired and become a subsidiary of the acquiring corporation after your
tendered options are accepted for exchange and cancelled but before the
Replacement Options are granted, the obligations of Juniper Networks in
connection with the Offer would not be automatically assumed by the acquiring
corporation. While we would seek to make provision for tendering option holders
in the acquisition agreement, we cannot guarantee what, if any, provision would
be made. As a result, we cannot guarantee that any Replacement Options would be
granted in the event of such an acquisition.
If we merge into or are acquired by another company after the grant of the
Replacement Options, those options may be assumed by the merged company or the
acquiring company, in which event they would continue to vest in accordance with
the vesting schedule in effect for them prior to the acquisition. If the
Replacement Options are not assumed, they would terminate at the effective time
of the acquisition. (See Section 8.)
WHAT DO I NEED TO DO TO EXCHANGE MY ELIGIBLE OPTIONS?
To exchange your Eligible Options, you must complete and submit the online
Election Form found on our internal website
(http://_____________________________) by 10:00 p.m., Pacific Time, on the
Expiration Date, which is expected to be ______________, 2001, or a later date
if we extend the Offer. We may reject any Eligible Options if we determine the
Election Form is not properly completed or to the extent that we determine it
would be unlawful to accept the Eligible Options. (See Section 3.)
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WHAT IS THE DEADLINE TO ELECT TO PARTICIPATE IN THE OFFER?
You must submit your online Election Form by 10:00 p.m., Pacific Time, on the
Expiration Date, which is expected to be _________, 2001, or a later date if we
extend the Offer. Although we do not currently intend to do so, we may, in our
discretion, extend the Offer at any time. If we extend the Offer, we will
announce the extension no later than 12:00 p.m., Pacific Time, on _________,
2001. (See Sections 3 and 38.)
CAN I CHANGE MY ELECTION? HOW OFTEN?
Yes. You can change your election as many times as you like by revising and
resubmitting your online Election Form prior to the deadline. However, the last
Election Form you submit prior to the deadline will be the Election Form that
governs your election. (See Section 4.)
WHAT WILL HAPPEN IF I DON'T TURN IN MY FORM BY THE DEADLINE?
If you miss this deadline, you cannot participate in the Offer. THERE CAN BE NO
EXCEPTIONS TO THIS DEADLINE.
WHAT IF I DON'T ACCEPT THIS OFFER?
This Offer is completely voluntary. You do not have to participate, and there
are no penalties for the electing not to participate in this Offer. If you elect
not to participate in the Offer, none of your options will be exchanged or
cancelled.
WHERE DO I GO IF I HAVE ADDITIONAL QUESTIONS ABOUT THIS OFFER?
Please send your questions to Stock Administration. You can submit your
questions through the website we created for this Offer. We will review these
questions periodically throughout the exchange period and add the appropriate
questions and answers to the Questions and Answers section of the internal
website. You can also contact Lisa Berry or Brienne Taloff by email or by
telephone.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR ELIGIBLE OPTIONS PURSUANT TO
THE OFFER. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE
ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND
REPRESENTATIONS CONTAINED IN THIS DOCUMENT, THE ATTACHED SUMMARY OF TERMS AND
THE TENDER OFFER STATEMENT ON SCHEDULE TO. IF ANYONE MAKES ANY RECOMMENDATION OR
REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT
RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.
7
THE OFFER
1. NUMBER OF OPTIONS; EXPIRATION DATE.
We are offering our employees, including our executive officers (See
Schedule A to this Offer for more information about our executive officers), the
opportunity to exchange certain outstanding options that have an exercise price
greater than or equal to $10.00 and are not specifically excluded (Eligible
Options) for a replacement option to purchase shares of our common stock
(Replacement Options). If you accept this Offer and tender Eligible Options for
exchange, those option grants you may have received in two 50% increments, the
first in April 2001 at a price of $29.19 and the second in July 2001 at a price
of $24.53 (Formula Grants) shall be cancelled in their entirety as a condition
to exchanging Eligible Options for a Replacement Option. Further, if you wish to
accept this Offer and tender Eligible Options for exchange then, except for
those option grants cancelled as described in the preceding sentence, you MUST
exchange all of those options that were granted within the period that is six
months prior to the Expiration Date. The Replacement Options will be granted on
a date which is at least six months and one day after the Expiration Date
(Replacement Option Grant Date). The total number of Eligible Options subject to
this Offer is ______________.
Our Offer is subject to the terms and conditions described in this Offer
and the attached Summary of Terms. We will only accept Eligible Options that are
properly exchanged and not validly withdrawn in accordance with Section 4 of
this Offer before the Offer expires on the Expiration Date.
Your Replacement Options will represent the same number of shares as the
aggregate number of shares represented by each Eligible Option that you
exchange. The number of shares to be represented by the Replacement Options will
be adjusted for any stock split, stock dividend, recapitalization or similar
transaction that may occur between the Expiration Date and the Replacement
Option Grant Date. IF, FOR ANY REASON, YOU ARE NOT EMPLOYED BY US OR ONE OF OUR
SUBSIDIARIES ON THE REPLACEMENT OPTION GRANT DATE, YOU WILL NOT RECEIVE ANY
REPLACEMENT OPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR ELIGIBLE
OPTIONS THAT HAVE BEEN EXCHANGED AND CANCELLED. IF YOUR EMPLOYMENT WITH US OR
ONE OF OUR SUBSIDIARIES TERMINATED AFTER YOU TENDERED YOUR OPTIONS BUT PRIOR TO
THE EXPIRATION DATE, YOU ARE NOT ELIGIBLE TO PARTICIPATE IN THE OFFER.
PARTICIPATION IN THIS OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN
EMPLOYED BY US OR ANY OF OUR SUBSIDIARIES. All Replacement Options will be
issued under either the 2000 Plan or the 1996 Plan.
The term Expiration Date of this Offer is 10:00 p.m., Pacific Time, on
__________, 2001, unless we, in our discretion, extend the Offer. If we extend
the Offer, the term Expiration Date will refer to the latest time and date at
which the Offer expires. See Section 38 for a description of our rights to
extend, delay, terminate and amend the Offer.
We will publish a notice if we decide to take any of the following
actions:
- increase or decrease what we will give you in exchange for your
Eligible Options;
- increase or decrease the number of Eligible Options to be exchanged in
the Offer; or
- extend or terminate the Offer.
If the Offer is scheduled to expire within ten business days from the date we
notify you of such an increase or decrease, we also intend to extend the Offer
for a period of ten business days after the date the notice is published.
8
A business day means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight.
2. PURPOSE OF THE OFFER.
We are making this Offer because of the decline in the price of our
common stock in recent months. We recognize that the exercise price of the
majority of outstanding options to purchase our common stock are currently
higher than the price of our common stock as reported on Nasdaq, which has
reduced the potential value of your options and our stock option program to you.
Many of our outstanding options, whether or not they are currently
exercisable, have exercise prices that are significantly higher than the current
market price of our common stock. For this reason, we believe these options have
little or no current value as an incentive to retain and motivate employees, and
are unlikely to be exercised in the foreseeable future. By making this Offer we
intend to provide our employees with the benefit of holding options that over
time may have a greater potential to increase in value, and thereby create
better incentives for our employees to remain with us and contribute to the
attainment of our business and financial objectives and the creation of value
for all of our stockholders. The Eligible Options that are cancelled as part of
this Offer will go back into the pool of options available for grant under
either the 2000 Plan or the 1996 Plan depending on which plan they were
originally granted from.
Your participation in this Offer is voluntary, and we will allow you to
either keep your current Eligible Options at their current exercise price with
their existing vesting schedules or cancel those Eligible Options in exchange
for a Replacement Option for the same number of shares as your Eligible Options
that you exchanged with an adjusted vesting schedule, which will be granted on
the Replacement Option Grant Date.
We continually evaluate and explore strategic opportunities as they
arise, including business combination transactions, strategic partnerships,
capital infusions, and the purchase or sale of assets. At any given time we may
be engaged in discussions or negotiations with respect to various corporate
transactions. We also grant options in the ordinary course of business to our
current and new employees, including our executive officers, as well as provide
them with the opportunity to make periodic purchases of our common stock
pursuant to the formula provisions of our Employee Stock Purchase Plan. Our
employees, including our executive officers, from time to time acquire or
dispose of our securities. Subject to the foregoing, and except as otherwise
disclosed in this Offer or in our filings with the SEC, we presently have no
plans or proposals that relate to or would result in:
(a) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving us or any of our
subsidiaries;
(b) any purchase, sale or transfer of a material amount of our
assets or the assets of any of our subsidiaries;
(c) any material change in our present dividend rate or policy, or
our indebtedness or capitalization;
(d) any change in our present board of directors or management,
including a change in the number or term of directors or to fill
any existing board vacancies or to change any executive
officer's material terms of employment;
(e) any other material change in our corporate structure or
business;
(f) our common stock not being authorized for quotation in an
automated quotation system operated by a national securities
association;
9
(g) our common stock becoming eligible for termination of
registration pursuant to the Section 12(g)(4) Securities
Exchange Act;
(h) the suspension of our obligation to file reports pursuant to
Section 15(d) of the Securities Exchange Act;
(i) the acquisition by any person of any of our securities or the
disposition of any of our securities; or
(j) any change in our articles of incorporation or bylaws, or any
actions which may impede the acquisition of control of us by any
person
WE CANNOT GUARANTEE THAT THE REPLACEMENT OPTIONS WILL HAVE A LOWER EXERCISE
PRICE THAN THE ELIGIBLE OPTIONS. NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER YOUR OPTIONS, NOR HAVE WE
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. YOU ARE URGED TO EVALUATE
CAREFULLY ALL OF THE INFORMATION IN THE OFFER TO EXCHANGE AND TO CONSULT YOUR
OWN INVESTMENT, LEGAL AND TAX ADVISORS. YOU MUST MAKE YOUR OWN DECISION WHETHER
TO TENDER YOUR OPTIONS FOR EXCHANGE TAKING INTO ACCOUNT YOUR OWN PERSONAL
CIRCUMSTANCES AND PREFERENCES.
3. PROCEDURES FOR TENDERING OPTIONS.
Making Your Election. To make your election to accept or reject this
Offer, you must submit the online Election Form before the Expiration Date. Your
Election Form must be received by us no later than 10:00 p.m., Pacific Time, on
the Expiration Date. The online Election Form is found on our internal website
established for this Offer at http://_________________________. The Election
Form is submitted on that website. The delivery of the Election Forms and any
other required documents are at the sole risk of the employee. Delivery will be
deemed made only when actually received by us.
Determination of Validity; Rejection of Eligible Options; Waiver of
Defects; No Obligation to Give Notice of Defects. We will determine, in our
discretion, all questions as to the number of shares subject to Eligible Options
and the validity, form, eligibility (including time of receipt) and acceptance
of Election Forms. Neither we nor any other person is obligated to give notice
of any defects or irregularities in any Election Form, and no one will be liable
for failing to give such notice. Our determination of these matters will be
final and binding on all parties. We may reject any or all Election Forms or
Eligible Options that are exchanged to the extent that we determine they were
not properly executed or delivered or to the extent that we determine it is
unlawful to accept the Eligible Options that are exchanged. Otherwise, we will
accept properly and timely Eligible Options that are exchanged and are not
validly withdrawn. We may waive any of the conditions of the Offer or any defect
or irregularity in any Election Form with respect to any particular Eligible
Options or any particular option holder. No Eligible Options will be accepted
for exchange until all defects or irregularities have been cured by the option
holder exchanging the Eligible Options or waived by us. Neither we nor any other
person is obligated to give notice of any defects or irregularities involved in
the exchange of any Eligible Options and no one will be liable for failing to
give notice of any defects or irregularities.
Our Acceptance Constitutes An Agreement. If you elect to exchange your
Eligible Options and you exchange your Eligible Options according to the
procedures described above, you will have accepted the Offer. Our acceptance of
Eligible Options that are properly exchanged will form a binding agreement
between us and you on the terms and subject to the conditions of this Offer.
Subject to our rights to extend, terminate and amend the Offer, we
currently expect that we will accept promptly after the Expiration Date of the
Offer all properly Eligible Options that are exchanged and
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have not been validly withdrawn. See Sections 6 and 38 for information
concerning our rights to extend, terminate and amend the Offer.
4. CHANGE IN ELECTION; WITHDRAWAL RIGHTS.
You may only change your election by following the procedures described
in this Section 4. We will only accept your Notice of Change in Election Form if
it is submitted via email through the website set up for this purpose.
You may change your election at any time before 10:00 p.m., Pacific Time, on the
Expiration Date.
To change your election, you must re-submit the online Election Form located at
http://___________________________ before the Expiration Date. The last online
Election Form submitted by you prior to the Expiration Date will be treated by
us as your final election with respect to the Offer.
You may withdraw your tendered options at any time during which this
Offer remains open by indicating such withdrawal at http:\\ _______________. We
currently expect the Offer to expire at ________ p.m., Pacific Time, on
___________, 2001. If the Offer is extended by us beyond that time, you may
withdraw your tendered options at any time until the extended Expiration Date of
the Offer by indicating such withdrawal at http:\\ _______________. In addition,
unless we accept your tendered options for exchange before 12:00 midnight,
Pacific Time, on ________, 2001, you may withdraw your tendered options at any
time thereafter until they are accepted and cancelled.
5. ACCEPTANCE OF ELIGIBLE OPTIONS FOR EXCHANGE AND CANCELLATION AND ISSUANCE OF
REPLACEMENT OPTIONS.
On the terms and subject to the conditions of this Offer and as promptly
as practicable following the Expiration Date, we will timely accept the Eligible
Options for exchange and cancel all Eligible Options properly exchanged and not
validly withdrawn before the Expiration Date. The Replacement Options will be
granted no earlier than _______________, 2002, or at a later date if the Offer
is extended, with vesting of the Replacement Options beginning effective on the
date of grant.
Your Replacement Options will represent the same number of shares as the
aggregate number of shares represented by each Eligible Option that you
exchange. The number of shares to be represented by the Replacement Options will
be adjusted for any stock split, stock dividend, recapitalization or similar
transaction that may occur between the Expiration Date and the Replacement
Option Grant Date. If you are not employed by us or one of our subsidiaries on
the Expiration Date, then you are not eligible to participate in this Offer. If
you are an employee of ours or one of our subsidiaries as of the Expiration Date
but are not employed continuously by us or one of our subsidiaries through the
Replacement Option Grant Date, you will not be eligible to receive Replacement
Options.
We will notify you on or prior to the Expiration Date if we reject your
election to exchange your Eligible Options. Unless you are notified of a
rejection, you may assume that, immediately following the Expiration Date, your
properly executed and delivered Election Form and your tendered Eligible Options
have been accepted.
6. CONDITIONS OF THE OFFER.
At any time on or before the Expiration Date, we may terminate or amend
the Offer, or postpone our acceptance and cancellation of any Eligible Options
that you elect to exchange, if we determine that any event has occurred that, in
our reasonable judgment, makes it inadvisable for us to proceed with the Offer
or to accept and cancel Eligible Options that you elect to exchange. Examples
of such events are listed below:
(a) any action or proceeding by any government agency, authority or
tribunal or any other person, domestic or foreign, is threatened or pending
before any court, authority, agency or tribunal that directly or indirectly
challenges the making of the Offer, the acquisition of some or all of the
Eligible Options, the issuance of Replacement Options, or otherwise relates to
the Offer or that, in our reasonable judgment,
11
could materially and adversely affect our business, condition (financial or
otherwise), income, operations or prospects or materially impair the benefits we
believe we will receive from the Offer; any action is threatened, pending or
taken, or any approval is withheld, by any court or any authority, agency,
tribunal or any person that, in our reasonable judgment, would or might directly
or indirectly:
(i) make it illegal for us to accept some or all of the Eligible Options
or to issue some or all of the Replacement Options or otherwise restrict
or prohibit consummation of the Offer or otherwise relates to the Offer;
(ii) delay or restrict our ability, or render us unable, to accept the
Eligible Options for exchange and cancellation or to issue Replacement
Options for some or all of the exchanged Eligible Options;
(iii) materially impair the benefits we believe we will receive from the
Offer as set forth in Section 2 (Purpose of the Offer); or
(iv) materially and adversely affect our business, condition (financial
or other), income, operations or prospects;
(b) there is:
(i) any general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market; or
(ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, whether or not
mandatory;
(c) another person publicly makes or proposes a tender or exchange offer
for some or all of our common stock, or an offer to merge with or acquire us, or
we learn that:
(i) any person, entity or "group," within the meaning of Section
13(d)(3) of the Securities Exchange Act, has acquired or proposed to
acquire beneficial ownership of more than five percent of the
outstanding shares of our common stock, or any new group shall have been
formed that beneficially owns more than five percent of the outstanding
shares of our common stock, other than any such person, entity or group
that has filed a Schedule 13D or Schedule 13G with the SEC on or before
the Expiration Date;
(ii) any such person, entity or group that has filed a Schedule 13D or
Schedule 13G with the SEC on or before the Expiration Date has acquired
or proposed to acquire beneficial ownership of an additional two percent
or more of the outstanding shares of our Common Stock; or
(iii) any person, entity or group shall have filed a Notification and
Report Form under the Hart- Scott-Rodino Antitrust Improvements Act of
1976 or made a public announcement that it intends to acquire us or any
of our assets or securities; or
(d) any change or changes occur in our business, condition (financial or
other), assets, income, operations, prospects or stock ownership that, in our
reasonable judgment, is or may be material to us.
The conditions to the Offer are for our benefit. We may assert them in
our discretion before the Expiration Date and we may waive them at any time and
from time to time prior to the expiration of the Offer, whether or not we waive
any other condition to the Offer.
Our failure to exercise any of these rights is not a waiver of any of
these rights. The waiver of any of these rights with respect to particular facts
and circumstances is not a waiver with respect to any other facts and
circumstances. Any determination we make concerning the events described in this
Section 6 will be final and binding upon everyone.
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7. PRICE RANGE OF COMMON STOCK UNDERLYING OPTIONS.
The Eligible Options to be exchanged pursuant to this Offer are not publicly
traded. However, upon exercise of an option that we granted, the option holder
becomes an owner of our common stock. Our common stock is quoted on Nasdaq under
the symbol "JNPR." The following table shows, for the periods indicated, the
high and low sales prices per share of our common stock as reported on Nasdaq.
Quarter ended High Low
------------- ------ ------
Fiscal Year 2001 July 1, 2001 - to date 31.86 9.85
June 30, 2001 69.50 27.86
March 31, 2001 140.56 35.95
Fiscal Year 2000 December 31, 2000 243.00 93.94
September 30, 2000 230.50 127.00
June 30, 2000 147.94 74.00
March 31, 2000 153.50 51.29
Fiscal Year 1999 December 31, 1999 59.08 30.35
September 30, 1999 37.83 20.83
As of September 21, 2001, the last reported sale price of our common stock, as
reported by Nasdaq, was $11.10 per share.
WE CANNOT GUARANTEE THAT THE REPLACEMENT OPTIONS WILL HAVE A LOWER EXERCISE
PRICE THAN THE ELIGIBLE OPTIONS. We recommend that you obtain current market
quotations for our common stock before deciding whether to elect to exchange
your Eligible Options.
8. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF REPLACEMENT OPTIONS.
Consideration. Your Replacement Options will represent the same number
of shares as the aggregate number of shares represented by each Eligible Option
that you exchange. The number of shares to be represented by the Replacement
Options will be adjusted for any stock split, stock dividend, recapitalization
or similar transaction that may occur between the Expiration Date and the
Replacement Option Grant Date.
If we receive and accept the exchange of all outstanding options, we
will grant Replacement Options to purchase a total of approximately
_________________ shares of our common stock. The common stock issuable upon
exercise of the Replacement Options would equal approximately ______% of the
total shares of our common stock outstanding as of ___________, 2001.
Merger or Acquisition. If we merge into or are acquired by another
company prior to the expiration of the Offer, you may withdraw your tendered
options and have all the rights afforded you to acquire our common stock under
the terms of those options. If we are merged into another entity after your
tendered options are accepted for exchange and cancelled but before the
Replacement Options are granted, the surviving corporation would automatically
assume our obligations with respect to the Offer. The Replacement Options would
be options to purchase shares of the surviving corporation. The number of shares
would be equal to the number of our shares that you would have received upon
exercise of your options multiplied by the exchange ratio that was used in the
transaction. The exercise price would be based on the market price of the
surviving corporation's stock.
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If we are acquired and become a subsidiary of the acquiring corporation
after your tendered options are accepted for exchange and cancelled but before
the Replacement Options are granted, the obligations of Juniper Networks in
connection with the Offer would not be automatically assumed by the acquiring
corporation. While we would seek to make provision for tendering option holders
in the acquisition agreement, we cannot guarantee what, if any, provision would
be made. As a result, we cannot guarantee that any Replacement Options would be
granted in the event of such an acquisition.
If we merge into or are acquired by another company after the grant of
the Replacement Options, those options may be assumed by the merged company or
the acquiring company, in which event they would continue to vest in accordance
with the vesting schedule in effect for them prior to the acquisition. If the
Replacement Options are not assumed, they would terminate at the effective time
of the acquisition.
Terms of Replacement Options. All Replacement Options will be
nonqualified stock options issued under either the 2000 Plan or the 1996 Plan
depending on the plan from which the Eligible Options were originally issued to
the extent possible. The issuance of Replacement Options under this Offer will
not create any contractual or other right of the recipients to receive any
future grants of options or benefits in lieu of options.
Information regarding the Option Plans may be found in the S-8
Registration Statements and related Prospectuses prepared in connection with
each of the Option Plans. Please contact Stock Administration to request copies
of the Option Plans and related prospectuses. Copies will be provided promptly
and at our expense.
General. The 2000 Plan, was adopted in July 2000. The 1996 Plan was
originally adopted in June 1996 and was amended and restated in April 1999. As
of September 21, 2001, there were 11,669,260 shares of common stock available
for issuance under the 2000 Plan and 29,329,238 shares of common stock available
for issuance under the 1996 Plan.
Administration. Our Board of Directors administers the Option Plans,
unless it has delegated administration to a committee. Our Board of Directors
has the authority to construe, interpret and amend the Option Plans.
Term. Each Replacement Option will have a term that expires at 11:59
p.m., Pacific Time, on the day prior to the ten-year anniversary of the
Replacement Option Grant Date.
Time of Exercise. Generally, you may exercise the vested portion of a
Replacement Option at any time. However, if your employment with us or one of
our subsidiaries terminates, the time in which you may exercise the vested
portion of your Replacement Option will be shortened. If your employment with us
or one of our subsidiaries terminates for any reason other than your death or
permanent disability, you must exercise the vested portion of your Replacement
Option within 30 days following your termination date. If your employment with
us or one of our subsidiaries terminates as a result of your permanent
disability, you must exercise the vested portion of your Replacement Option
within 90 days following your termination date. If your employment with us or
one of our subsidiaries terminates as a result of your death, your estate or
beneficiaries must exercise the vested portion of your Replacement Option within
90 days following your termination date. However, under no circumstances may you
exercise the Replacement Options after the expiration of the term of such
option.
Exercise Price. The Replacement Options will have an exercise price
equal to: (a) for employees in the United States or members of our Board of
Directors, the closing price of our common stock as reported on Nasdaq on the
day prior to the Replacement Option Grant Date, or (b) if required by applicable
law in countries outside the United States, an average of the closing prices of
our common stock as reported on Nasdaq for a number of days (generally not
exceeding 20) prior to the Replacement Option Grant Date. WE CANNOT GUARANTEE
THAT THE REPLACEMENT OPTIONS WILL HAVE A LOWER EXERCISE
14
PRICE THAN THE ELIGIBLE OPTIONS. We recommend that you obtain current market
quotations for our common stock before deciding whether to elect to exchange
your options.
Vesting and Exercise. Our Board of Directors has the authority to
determine the time or times at which options granted under the Option Plans may
be exercised. If you receive a Replacement Option and are continuously employed
by us or one of our subsidiaries, your Replacement Option will vest as follows:
The Replacement Options for all Eligible Options exchanged except those
Bonus Stock Option Grants (described below) will have a vesting schedule that is
based on the date of the oldest Eligible Option exchanged. We will issue one
Replacement Option for the total number of shares subject to option exchanged by
the employee (except for the Bonus Stock Option Grants) and the vesting schedule
for that Replacement Option will be based on the oldest Eligible Option
exchanged.
- If the oldest Eligible Option exchanged has a grant date in 1999, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 24 months.
- If the oldest Eligible Option exchanged has a grant date between
January 1, 2000 and June 30, 2000, the Replacement Option will be 25%
vested as of the date of grant of the Replacement Option and the
remaining 75% vests monthly over 28 months.
- If the oldest Eligible Option exchanged has a grant date between July
1, 2000 and December 31, 2000, the Replacement Option will be 25% vested
as of the date of grant of the Replacement Option and the remaining 75%
vests monthly over 32 months.
- If the oldest Eligible Option exchanged has a grant date in 2001, the
Replacement Option will be 25% vested as of the date of grant of the
Replacement Option and the remaining 75% vests monthly over 36 months.
The Replacement Options for the Eligible Options that are Bonus Stock
Option Grants (Replacement Bonus Grant) will be granted separately and will vest
in accordance with the vesting schedule of the exchanged Bonus Stock Option
Grant. On the date of grant of the Replacement Bonus Grant, all of those shares
that would have been fully vested on the Cancellation Date will be fully vested
and those that would have vested during the period between the Cancellation Date
and the date of grant of Replacement Bonus Grant also will be fully vested. The
remaining unvested shares will have a vesting schedule that is equivalent to the
vesting schedule that would have been in place had the cancelled option remained
in place.
Any Eligible Option that was granted to an employee in connection with
the Company's patent program (Patent Option Grant) that is tendered in the Offer
will be replaced with a separate Replacement Option (Replacement Patent Grant)
that will vest in accordance with the original vesting schedule of the exchanged
Patent Option Grant. On the date of grant of the Replacement Patent Grant, all
of those shares that would have been fully vested on the Cancellation Date will
be fully vested and those that would have vested during the period between the
Cancellation Date and the date of grant of Replacement Patent Grant also will be
fully vested. The remaining unvested shares will have a vesting schedule that is
equivalent to the vesting schedule that would have been in place had the
cancelled option remained in place. (See Section 8.)
Tax Consequences. You should refer to Section 12 for a discussion of the
material U.S. federal income tax consequences of the Replacement Options and
Sections 13 through 37 for a discussion of the material tax consequences
associated with Replacement Options in those countries outside the U.S. where
you are employed. If you are an employee based outside of the United States, you
may want to consult with your own tax advisor to determine the tax and social
insurance contribution consequences of this transaction under the laws of the
country in which you live and work.
15
Termination of Employment. IF, FOR ANY REASON, YOU ARE NOT EMPLOYED BY
US OR ONE OF OUR SUBSIDIARIES FROM THE EXPIRATION DATE THROUGH THE REPLACEMENT
OPTION GRANT DATE, YOU WILL NOT RECEIVE ANY REPLACEMENT OPTIONS OR ANY OTHER
CONSIDERATION IN EXCHANGE FOR YOUR ELIGIBLE OPTIONS THAT HAVE BEEN EXCHANGED. IF
YOUR EMPLOYMENT WITH US OR ONE OF OUR SUBSIDIARIES TERMINATED AFTER YOU TENDERED
YOUR OPTIONS BUT PRIOR TO THE EXPIRATION DATE, YOU ARE NOT ELIGIBLE TO
PARTICIPATE IN THE OFFER. PARTICIPATION IN THIS OFFER DOES NOT CONFER UPON YOU
THE RIGHT TO REMAIN EMPLOYED BY US OR ANY OF OUR SUBSIDIARIES. This means that
if you die or quit, with or without good reason, or we terminate your
employment, with our without cause, prior to the Replacement Option Grant Date
and after the Expiration Date, you will not receive anything for the Eligible
Options that you exchanged and we cancelled.
Registration of Options Shares. All shares of common stock issuable upon
exercise of options under the Option Plans, including the shares that will be
issuable upon exercise of all Replacement Options, have been registered under
the Securities Act of 1933 on a Registration Statement on Form S-8 filed with
the SEC. Unless you are considered an "affiliate" of ours, you will be able to
sell your Replacement Option shares free of any transfer restrictions under
applicable securities laws.
Our statements in this Offer concerning the Option Plans are merely
summaries and do not purport to be complete. These statements are subject to,
and are qualified in their entirety by reference to, all provisions of the 2000
Plan and the 1996 Plan, each of which is filed as an exhibit to the Tender Offer
Statement on Schedule TO, of which this Offer to Exchange is a part. See Section
8 for a discussion on how to obtain copies of the Option Plans.
9. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS INVOLVING
THE ELIGIBLE OPTIONS.
A list of our directors and executive officers is attached to this Offer as
Schedule A. As of ____________ our directors and executive officers (10 persons)
as a group held options outstanding under the 1996 Plan to purchase a total of
______________ shares of our common stock. This represented approximately ____%,
of the shares subject to all options outstanding under the Option Plans as of
that date. Eligible Options held by executive officers may be exchanged in this
Offer.
During the past 60 days, we have granted options to purchase ____________ shares
of our common stock with exercise prices per share of $_______. Of the options
granted during this period, none were granted to the executive officers listed
above. During the past 60 days, individuals have exercised options to acquire
________ shares of our common stock with exercise prices per share ranging from
$_____ to $_____.
Except for the foregoing, neither we, nor, to the best of our knowledge,
any of our directors or executive officers, nor any affiliates of ours, engaged
in transactions involving options to purchase our common stock during the past
60 days. In addition, except as otherwise described above, neither we nor, to
our knowledge, any of our executive officers or directors are a party to any
agreement, arrangement or understanding with respect to any options to purchase
our common stock.
10. STATUS OF ELIGIBLE OPTIONS ACQUIRED BY US IN THE OFFER.
Many of our option holders hold options with exercise prices
significantly higher than the current market price of our common stock. We
believe it is in our best interest to offer these option holders an opportunity
to more effectively participate in the potential growth in our stock price. We
could accomplish this goal by repricing existing options, which would enable
option holders to immediately receive replacement options with a lower exercise
price. However, the repriced options would be subject to variable accounting,
which would require us to record additional compensation expense each quarter
until the repriced options were exercised, canceled or expired.
16
We believe that we can accomplish our goals of providing option holders
with the benefit of choosing whether they want to receive options that over time
may have greater potential to increase in value than the Eligible Options held
by the option holders, without incurring additional current or future
compensation expense because:
- we will not grant any Replacement Options until a day that is at least
six months and one day after the date that we accept and cancel Eligible
Options tendered for exchange;
- the exercise price of the Replacement Options will equal the fair
market value equal to the closing price of our Common Stock as reported
on Nasdaq on the Replacement Options Grant Date;
- we will require any option holder who tenders Eligible Options in the
Offer to tender all Eligible Options that he or she received during the
six months immediately prior to the Cancellation Date; and
- we will defer the grant of any other options to which an option holder
who tendered Eligible Options in the Offer may be entitled until the
Replacement Option Grant Date.
Eligible Options that have been granted under the Option Plans and that
we acquire in connection with the Offer will be cancelled and the shares of
common stock that may be purchased under those Eligible Options will be returned
to the pool of shares available for grants of new awards or options under the
Option Plans without further stockholder action, except as required by
applicable law or Nasdaq rules or any other securities quotation system or any
stock exchange on which our common stock is then quoted or listed.
11. LEGAL MATTERS; REGULATORY APPROVALS.
We are not aware of any license or regulatory permit that appears to be
material to our business that might be adversely affected by the Offer, or of
any approval or other action by any government or regulatory authority or agency
that is required for the acquisition or ownership of the Eligible Options as
described in the Offer. If any other approval or action should be required, we
presently intend to seek the approval or take the action. This could require us
to delay the acceptance of any Eligible Options that you elect to exchange. We
cannot assure you that we would be able to obtain any required approval or take
any other required action. Our failure to obtain any required approval or take
any required action might result in harm to our business. Our obligation under
the Offer to accept exchanged Eligible Options and to issue Replacement Options
is subject to conditions, including the conditions described in Section 6.
12. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES.
The following is a general summary of the material U.S. federal income
tax consequences of the exchange of Eligible Options under the Offer. This
discussion is based on the Internal Revenue Code of 1986, as amended, and
regulations thereunder as of the date of the Offer, all of which may change,
possibly on a retroactive basis. This summary does not discuss all of the tax
consequences that may be relevant to you in light of your particular
circumstances, nor is it intended to apply in all respects to all categories of
option holders. In addition, this discussion does not address any aspect of
foreign, state or local income taxation or any other form of taxation that may
be applicable to an option holder.
If you exchange outstanding incentive or nonqualified stock options for
Replacement Options, you will not be required to recognize income for federal
income tax purposes at the time of the exchange. We believe that the exchange
will be treated as a non-taxable exchange.
At the Replacement Option Grant Date, you will not be required to
recognize additional income for federal income tax purposes. The grant of
Replacement Options is not recognized as taxable income.
17
We recommend that you consult your own tax advisor with respect to the
federal, state, local and foreign tax consequences of participating in the
Offer.
13. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN AUSTRALIA.
The following is a general summary of the tax consequences of the
exchange of options under the Offer for Australian tax residents. This
discussion is based on Australian tax law as of the date of the Offer, which is
subject to change, possibly on a retroactive basis. This summary does not
discuss all of the tax consequences that may be relevant to you in light of your
particular circumstances, nor is it intended to be applicable in all respects to
all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS SHOULD OBTAIN
PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
Tax Treatment of Old Options
If, on the original grant, you did NOT elect to be taxed at grant, when
you elect to exchange your Eligible Options, this could give rise to a taxable
event because the "cessation time" in relation to the options has occurred (you
are deemed to have disposed of the options when you relinquish your rights to
the Eligible Options exchanged). The amount to be included in assessable income
is the difference between the amount of consideration received on disposal (in
this case on relinquishing the old options) and the amount paid for acquiring
the options. However, if the new options do not have an inherent discount, the
Australian Taxation Office has ruled their "value" for these purposes is zero,
so no tax should arise.
If, on the original award, you DID elect to be taxed at grant, then when
you elect to exchange your Eligible Options, this could give rise to capital
gains tax "sale". The amount to be included in assessable income is the
difference between the value of the Replacement Options and the taxed amount at
grant (where options are taxed at grant, a statutory valuation applies). If the
new options do not have an inherent discount, the Australian Taxation Office has
ruled their "value" for these purposes is zero, so the "sale" may produce a
capital loss equal to the taxed value at grant. This loss can be deducted
against taxable capital gains, or carried forward for deduction against future
taxable capital gains.
Tax Treatment of New Options
The new options will not be granted under an employee share scheme; they
will be deemed to be granted because you were a holder of the Eligible Options.
You are receiving the Replacement Options in exchange for relinquishing the
Eligible Options, so you should not be taxed when you receive the Replacement
Options. Nor should you be taxed when you exercise the new options to acquire
shares. If there is no inherent discount "at grant," the Australian Taxation
Office has ruled their "value" for these purposes is zero, so there should be no
tax implication on grant or exercise of the Replacement Options. The Replacement
Options are subject to capital gains tax in Australia when they (or the shares
acquired through exercising the options) are disposed of. If you sell those
shares, you may be taxed on the difference between the sales proceeds and the
exercise price. If you sell the shares at least 12 months after purchase, only
one-half of the gain should be taxable.
14. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN AUSTRIA.
The following is a summary description of the Austrian income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Austrian tax code and related interpretations as of
the date of this Offer, all of which are subject to change, possibly on a
retroactive basis. This summary does not discuss all of the tax consequences
that may be relevant to you in light of your particular circumstances, nor is it
intended to be applicable in all respects to all categories of option holders.
ALL INTERNATIONAL OPTION HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE
REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
18
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates. You may also recognize taxable capital
gains on the sale of your shares.
15. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN BELGIUM.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances, but is merely intended to
alert you to some of the tax information you may want to consider in making your
decision. You have paid tax or owe tax in connection with options previously
granted to you. To the extent that you choose to tender your Eligible Options in
exchange for Replacement Options in accordance with the terms of the Offer, you
may be subject to tax on any Replacement Options granted to you. The tax which
you paid upon the grant of your Eligible Options cannot be credited against any
taxes that may be payable if you are granted any Replacement Options. ALL
INTERNATIONAL OPTION HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE
REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
16. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN BRAZIL.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances. It is a general summary for
employees who are tax residents in Brazil of the tax consequences of the
exchange of Eligible Options for Replacement Options under the Offer. This
discussion is based on the Brazilian tax law as of the date of the Offer, which
is subject to change, possibly on a retroactive basis. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
You should not be taxed when the Replacement Option is granted. Nor
should you be subject to tax when you exercise the option. When you sell the
shares, you may or may not realize a capital gain.
17. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN CANADA.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances, but is merely intended to
alert you to some of the tax information you may want to consider in making your
decision. ALL INTERNATIONAL OPTION HOLDERS SHOULD CONSIDER OBTAINING
PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
Generally, the grant of Replacement Options should not be a taxable
event under the Income Tax Act (Canada). However, this position is not certain
with respect to Eligible Options which you tender for exchange and cancellation
in accordance with the terms of the Offer. Although we do not believe there will
be a taxable event on the exchange, it is possible that if the stock price drops
between the time of the cancellation of Eligible Options and the grant of
Replacement Options, the value of the Replacement Options would be required to
be included in your income. Additionally, on the subsequent exercise of the
Replacement Options and on the subsequent disposition of the underlying shares,
you may not be able to include the amount previously included in income and
taxed in the cost basis of the Replacement Options for the purpose of
calculating tax on the option "spread" and also may not be able to include this
amount in the cost basis of the shares acquired upon the exercise of the
Replacement Options for the purpose of calculating any capital gains or losses
arising on the disposition of such shares.
19
18. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN CHINA.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances. It is a general summary for
employees who are tax residents in China of the tax consequences of the exchange
of Eligible Options for Replacement Options under the Offer. This discussion is
based on the Chinese tax law as of the date of the Offer, which is subject to
change, possibly on a retroactive basis. ALL INTERNATIONAL OPTION HOLDERS SHOULD
CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF FOREIGN
TAX LAWS.
Due to exchange control and securities law restrictions in the People's
Republic of China, the terms of any Replacement Options will be modified. You
will only be able to exercise your Replacement Options using the full cashless
exercise method whereby the options are exercised without remitting any cash.
You will not be entitled to receive and hold shares of our stock when you
exercise your options and Replacement Options. Under the cashless exercise
method of exercise, the broker will immediately sell all of the shares that you
are entitled to purchase. You will receive the cash proceeds from the sale,
minus the exercise price and any taxes, withholding obligations, commissions and
brokers' fees associated with the transaction.
19. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN DENMARK.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances, but is merely intended to
alert you to some of the tax information you may want to consider in making your
decision.
To the extent that your Eligible Options were granted under the tax laws
in effect prior to January 1, 2001, you may have already paid tax or be required
to pay tax on your Eligible Options. In addition, the surrender of your Eligible
Options in accordance with the Offer may be viewed as an exercise that will
trigger additional tax liability on the value of the Replacement Options granted
to you calculated in accordance with the statutory formula. It is our
understanding that the amount of any taxes paid or payable on account of the
Eligible Options would not be recoverable and could not be credited against any
future tax you will be required to pay in connection with any Replacement
Options granted to you pursuant to the terms of the Offer; however, the tax
payable on account of the surrendered Eligible Option may result in a reduction
of the tax payable on the exercise of the Replacement Options and the sale of
shares acquired upon the exercise of the Replacement Options. ALL INTERNATIONAL
OPTION HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
20. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN FINLAND.
The following is a summary description of the Finnish income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Finnish tax code and related interpretations as of
the date of this Offer, all of which are subject to change, possibly on a
retroactive basis. This summary does not discuss all of the tax consequences
that may be relevant to you in light of your particular circumstances, nor is it
intended to be applicable in all respects to all categories of option holders.
ALL INTERNATIONAL OPTION HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE
REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates. You may also recognize taxable capital
gains on the sale of your shares.
20
21. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN FRANCE.
The following is a general summary of the income tax and social
contributions consequences of the exchange of options under the offer for French
tax residents. This discussion is based on French tax law as of the date of the
Offer, which is subject to change, possibly on a retroactive basis. This summary
does not discuss all of the tax consequences that may be relevant to you in
light of your particular circumstances, nor is it intended to be applicable in
all respects to all categories of option holders. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
Neither the 1996 Plan nor the 2000 Plan qualify for French tax purposes
and therefore the favorable tax and social treatment will not apply. You should
not be subject to tax when the Replacement Option is granted. When you exercise
the Replacement Option, you may be subject to tax on the spread gain equal to
the difference between the option price and the fair market value of stock
acquired on the exercise date.
22. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN GERMANY.
The following is a summary description of the German income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the German tax law as of the date of this Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
23. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN HONG KONG.
The following is a summary description of the Hong Kong income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Hong Kong tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
24. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN INDIA.
This summary does not discuss all of the tax consequences that may be
relevant to you in your particular circumstances. It is a general summary for
employees who are tax residents in India of the tax consequences of the exchange
of Eligible Options for Replacement Options under the Offer. This
21
discussion is based on the Indian tax law as of the date of the Offer, which is
subject to change, possibly on a retroactive basis. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
Due to exchange control restrictions in India, the terms of any
Replacement Options will be modified. You will only be able to exercise your
Replacement Options through the full cashless exercise method whereby the
options are exercised without remitting any cash. You will not be entitled to
receive and hold shares of our stock when you exercise your Replacement Options.
Under the cashless exercise method of exercise, the broker will sell all of the
shares that you are entitled to purchase. You will receive the cash proceeds
from the sale, minus the exercise price and any taxes, withholding obligations,
commissions and brokers' fees associated with the transaction.
25. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN IRELAND.
The following is a summary description of the Irish income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Irish tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
The cancellation of your Eligible Options and grant of Replacement
Options pursuant to the Offer should not be a taxable event to you. Because the
Replacement Option will be at fair market value, the option exchange program
should not give rise to a taxable event for you.
26. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN ITALY.
The following is a summary description of the Italian income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Italian tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
Employees who are residents of Italy who exchange Eligible Options for
Replacement Options should not be required to recognize income for Italian
income tax purposes at the time of the exchange. We believe that the exchange
will be treated as a non-taxable exchange for Italian income tax purposes. At
the date of grant of the Replacement Options employees who are residents of
Italy should not be required to recognize income for Italian income tax
purposes. The grant of Replacement Options should not be recognized as taxable
income for Italian income tax purposes.
27. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN JAPAN.
The following is a summary description of the Japanese income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Japanese tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
22
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
28. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN KOREA.
The following is a summary description of the Korean income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Korean tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
You should not be taxed when the Replacement Option is granted. Nor
should you be subject to tax when the Replacement Option vests. Upon the
exercise of the Replacement Option, you may be deemed to receive taxable income
in the amount of the difference between the fair market value of the stock at
the time of exercise and the stock option price.
29. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN MALAYSIA.
The following is a summary description of the Malaysian income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Malaysian tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
The Replacement Options may be treated as new grants. Generally, you
will recognize income at the date of grant; however, because the fair market
value of the underlying shares at the date of grant is the same as the exercise
price, it appears that there should be no tax liability on the grant of the new
option. Please be advised that there is no well-established tax treatment of
stock options in Malaysia.
30. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN MEXICO.
The following is a summary description of the Mexican income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Mexican tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
23
31. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN THE
NETHERLANDS.
The following is a summary description of The Netherlands income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on The Netherlands tax law as of the date of the Offer, all
of which are subject to change, possibly on a retroactive basis. This summary
does not discuss all of the tax consequences that may be relevant to you in
light of your particular circumstances, nor is it intended to be applicable in
all respects to all categories of option holders. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
Under current law effective December 28, 2000, you should not realize
taxable income upon the grant of a Replacement Option. However, you may
recognize taxable income at the time of vesting of an option unless you elect to
be taxed at the time of option exercise and such an election is submitted to the
tax authorities prior to the first vesting on your options. With such an
election, you should be subject to tax at option exercise on the difference
between the exercise price of the option and the fair market value of the shares
subject to the option on the date of exercise. You should be taxed at applicable
marginal income tax rates.
32. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN SINGAPORE.
The following is a summary description of the Singaporean income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Singaporean tax law as of the date of the Offer, all
of which are subject to change, possibly on a retroactive basis. This summary
does not discuss all of the tax consequences that may be relevant to you in
light of your particular circumstances, nor is it intended to be applicable in
all respects to all categories of option holders. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
33. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN SPAIN.
The following is a summary description of the Spanish income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Spanish tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
You should not be taxed when the Replacement Option is granted. When you
exercise the option, you may be subject to income tax on the difference between
the fair market value of the shares on the date of exercise and the exercise
price.
34. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN SWEDEN.
The following is a summary description of the Swedish income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Swedish tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor
24
is it intended to be applicable in all respects to all categories of option
holders. ALL INTERNATIONAL OPTION HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL
ADVICE REGARDING THE APPLICABILITY OF FOREIGN TAX LAWS.
You should not be taxed when the Replacement Option is granted. When you
exercise the option, you may be subject to income tax on the difference between
the fair market value of the shares on the date of exercise and the exercise
price. The income recognized would be considered regular salary to you, subject
to taxation at your marginal tax rate.
35. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN
SWITZERLAND.
The following is a summary description of the Swiss income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Swiss tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
The general rule in Switzerland is that your options are taxable at
grant, then any tax paid on the Eligible Options now relinquished would not be
refunded and, since you would have to pay tax on the Replacement Options, you
would be subject to double taxation. The taxable amount at the grant of the new
options is then based on the fair market value of the options, which is
calculated in accordance with a formula.
36. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN TAIWAN.
The following is a summary description of the Taiwanese income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the Taiwanese tax law as of the date of the Offer, all of
which are subject to change, possibly on a retroactive basis. This summary does
not discuss all of the tax consequences that may be relevant to you in light of
your particular circumstances, nor is it intended to be applicable in all
respects to all categories of option holders. ALL INTERNATIONAL OPTION HOLDERS
SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE APPLICABILITY OF
FOREIGN TAX LAWS.
Under current law, you should not realize taxable income upon the grant
of a Replacement Option. However, at option exercise, the difference between the
exercise price of the option and the fair market value of the shares subject to
the option on the date of exercise may be compensation income taxable at
applicable marginal income tax rates.
37. MATERIAL TAX CONSEQUENCES FOR EMPLOYEES WHO ARE TAX RESIDENTS IN UNITED
KINGDOM.
The following is a summary description of the United Kingdom income tax
consequences of the exchange of Eligible Options pursuant to the Offer. This
discussion is based on the United Kingdom tax law as of the date of the Offer,
all of which are subject to change, possibly on a retroactive basis. This
summary does not discuss all of the tax consequences that may be relevant to you
in light of your particular circumstances, nor is it intended to be applicable
in all respects to all categories of option holders. ALL INTERNATIONAL OPTION
HOLDERS SHOULD CONSIDER OBTAINING PROFESSIONAL ADVICE REGARDING THE
APPLICABILITY OF FOREIGN TAX LAWS.
25
Options granted under the Option Plans, including the Replacement
Options, may be subject to tax at option exercise. At that time, the difference
between the exercise price of the option and the fair market value of the shares
subject to the option on the date of exercise would be compensation income
taxable at applicable marginal income tax rates.
38. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.
We may at any time, and from time to time, extend the period of time
during which the Offer is open and delay accepting any Eligible Options tendered
for exchange by announcing the extension and giving oral or written notice of
the extension to the option holders.
Prior to the Expiration Date, in order to terminate or amend the Offer,
we may postpone accepting and canceling any Eligible Options if any of the
conditions specified in Section 6 occur. In order to postpone accepting or
canceling, we must announce the postponement and give oral or written notice of
the postponement to the option holders. Our right to delay accepting and
canceling Eligible Options may be limited by Rule 13e-4(f)(5) under the
Securities Exchange Act, which requires that we pay the consideration offered or
return the surrendered options promptly after we terminate or withdraw the
Offer.
As long as we comply with any applicable laws, we may amend the Offer in
any way, including decreasing or increasing the consideration offered in the
Offer to option holders or by decreasing or increasing the number of Eligible
Options to be exchanged or surrendered in the Offer.
We may amend the Offer at any time by announcing the amendment. If we
extend the length of time during which the Offer is open, the amendment must be
issued no later than 12:00 p.m., Pacific Time, on the next business day after
the last previously scheduled or announced Expiration Date. Any announcement
relating to the Offer will be sent promptly to option holders in a manner
reasonably designed to inform option holders of the change.
If we materially change the terms of the Offer or the information about
the Offer, or if we waive a material condition of the Offer, we may extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the
Securities Exchange Act. Under these rules, the minimum period an Offer must
remain open following material changes in the terms of the Offer or information
about the Offer, other than a change in price or a change in percentage of
securities sought, will depend on the facts and circumstances. We will publish a
notice if we decide to take any of the following actions:
- increase or decrease what we will give you in exchange for your
Eligible Options;
- increase or decrease the number of Eligible Options to be
exchanged in the Offer; or
- extend or terminate the Offer.
If the Offer is scheduled to expire within ten business days from the
date we notify you of such an increase or decrease, we intend to extend the
Offer for a period of ten business days after the date the notice is published.
26
39. FEES AND EXPENSES.
We will not pay any fees or commissions to any broker, dealer or other person
asking holders of Eligible Options to exchange such Eligible Options pursuant to
this Offer.
40. INFORMATION CONCERNING JUNIPER NETWORKS.
We are a leading provider of purpose-built Internet infrastructure
solutions that meet the scalability, performance, density and compatibility
requirements of rapidly evolving, optically-enabled Internet Protocol networks.
Unlike conventional routers, originally developed for enterprise applications
and increasingly inadequate for service provider use in public networks, our
products are specifically designed, or purpose-built, for service provider
networks and to accommodate the size and scope of the Internet. Our next
generation Internet backbone routers offer our customers increased reliability,
performance, scalability, interoperability and flexibility, and reduced
complexity and cost compared to current alternatives. Our products combine high
performance ASIC-based packet forwarding technology, the features of our JUNOS
Internet software and an Internet-optimized architecture into a purpose-built
solution for the service provider market.
We are incorporated in Delaware. Our principal executive offices are
located at 1194 North Mathilda Avenue, Sunnyvale, CA 94089, and our telephone
number at that address is (408) 745-2000.
The following table sets forth selected consolidated financial
operating data for Juniper Networks, Inc. The selected historical statement of
operations data for the years ended December 31, 1999 and 2000 and the selected
historical balance sheet data as of December 31, 1999 and 2000 have been derived
from the consolidated financial statements included in our Annual Report on Form
10-K for the year ended December 31, 2000 that have been audited by Ernst &
Young LLP, independent auditors. The selected historical statement of operations
data for the six months ended June 30, 2000 and 2001 and the selected historical
balance sheet data as of June 30, 2001 have been derived from the unaudited
condensed consolidated financial statements included in our Quarterly Report on
Form 10-Q for the period ended June 30, 2001. The information presented below
should be read together with the complete financial statements and the notes
related thereto as well as the section of these reports entitled Management's
Discussion and Analysis of Financial Condition and Results of Operations. We
have presented the following data in thousands, except per share data.
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------- --------------------------
1999 2000 2000 2001
---------- ----------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenues ........................ $ 102,606 $ 673,501 $ 176,914 $ 534,286
Operating income (loss) ............. (14,620) 194,089 26,428 77,765
Net income (loss) ................... $ (9,034) $ 147,916 $ 27,688 $ 21,435
========== ========== ========== ==========
Net income (loss) per share:
Basic ............................... $ (0.05) $ 0.49 $ 0.09 $ 0.07
========== ========== ========== ==========
Diluted ............................. $ (0.05) $ 0.43 $ 0.08 $ 0.06
========== ========== ========== ==========
Shares used in computing net income
(loss) per share (1):
Basic ............................... 189,322 304,381 298,712 316,883
========== ========== ========== ==========
Diluted ............................. 189,322 347,858 346,102 343,563
========== ========== ========== ==========
OTHER DATA:
Ratio of earnings to fixed charges .. -- 4.8 1.6 3.0
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term
investments ....................... $ 345,958 $1,144,743 $1,007,368
Working capital ..................... 322,170 1,132,139 916,232
Total current assets ................ 377,833 1,348,547 1,175,975
Total long-term assets .............. 135,545 754,582 1,075,764
Total assets ........................ 513,378 2,103,129 2,251,739
Total current liabilities ........... 55,663 216,408 259,743
Total long-term liabilities ......... -- 1,156,719 1,150,000
Total stockholders' equity .......... 457,715 730,002 841,996
Book value per share ................ $ 2.62
With respect to the Offer, we have filed a Tender Offer Statement on
Schedule TO with the SEC, of which this Offer to Exchange is a part. This Offer
to Exchange does not contain all of the information contained in the Schedule TO
and the exhibits to the Schedule TO. We recommend that you review the Schedule
TO, including its exhibits, before making a decision on whether to tender your
options.
We recommend that you review the following materials that we have filed
with the SEC before making a decision on whether to exchange your options:
(a) our Annual Report on Form 10-K for our fiscal year ended December
31, 2000, filed with the SEC on March 27, 2001;
(b) our Proxy Statement for our 2001 Annual Meeting of Stockholders,
filed with the SEC on March 28, 2001; and
(d) the description of our Common Stock included in our Registration
Statement on Form 8-A filed with the SEC on June 11, 1999.
The SEC file number for these filings is 0-26339. These filings, our
other annual, quarterly and current reports, our proxy statements and our other
SEC filings may be examined, and copies may be obtained, at the following SEC
public reference rooms:
450 Fifth Street, N.W. 500 West Madison Street
Room 1024 Suite 1400
Washington, D.C. 20549 Chicago, Illinois 60661
You may obtain information on the operation of the public reference
rooms by calling the SEC at 1-800-SEC-0330.
Our SEC filings are also available to the public on the SEC's website at
http://www.sec.gov.
Our common stock is quoted on the Nasdaq National Market under the
symbol "JNPR," and our SEC filings can be read at the following Nasdaq address:
Nasdaq Operations
1735 K Street, N.W.
Washington, D.C. 20006
We will also provide each employee or member of our Board of Directors,
upon their written or oral request and without charge, a copy of this Offer to
Exchange or any or all of the documents to which we have referred you, other
than exhibits to these documents (unless the exhibits are specifically
incorporated by reference into the documents). Requests should be directed to:
Juniper Networks, Inc.
Attn: Investor Relations
1194 North Mathilda Avenue
Sunnyvale, CA 94089
27
or by telephoning us at (408) 745-2000 between the hours of 9:00 a.m. and 5:00
p.m., Pacific Time.
As you read the documents listed in this Section 40, you may find some
inconsistencies in information from one document to another. Should you find
inconsistencies between the documents, or between a document and this Offer, you
should rely on the statements made in the most recent document.
The information contained in this Offer to Exchange about us should be
read together with the information contained in the documents to which we have
referred you.
41. MISCELLANEOUS.
This Offer and our SEC reports referred to above include forward-looking
statements. These forward-looking statements involve risks and uncertainties.
More information about factors that potentially could affect our financial
results is included in our filings with the SEC, including our Annual Report on
10-K for the year ended December 31, 2000, our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2001 and our Proxy Statement for the 2001 Annual
Meeting of Stockholders.
The safe harbor for forward-looking statements contained in the
Securities Litigation Reform Act of 1995 protects companies from liability for
their forward-looking statements if they comply with the requirements of the
act. The act does not provide this protection for transactions such as the
Offer, to the extent it constitutes a tender offer, and may not be available for
our forward-looking statements contained in this Offer to Exchange.
If at any time we become aware of any jurisdiction where the making of
this Offer violates the law, we will make a good faith effort to comply with the
law. If, we cannot comply with the law, the Offer will not be made to, nor will
exchanges be accepted from or on behalf of, the option holders residing in that
jurisdiction.
Our Board of Directors recognizes that the decision to accept or reject
this Offer is an individual one that should be based on a variety of factors and
you should consult your personal advisors if you have questions about your
financial or tax situation. The information about this Offer from us is limited
to this document, the attached Summary of Terms and the Tender Offer Statement
on Schedule TO.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS PURSUANT TO THE
OFFER. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND
REPRESENTATIONS CONTAINED IN THIS DOCUMENT, THE ATTACHED SUMMARY OF TERMS AND
THE TENDER OFFER STATEMENT ON SCHEDULE TO. IF ANYONE MAKES ANY RECOMMENDATION OR
REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT
RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.
Juniper Networks, Inc. October __, 2001
28
SCHEDULE A
INFORMATION ABOUT OUR DIRECTORS AND
EXECUTIVE OFFICERS
Our directors and executive officers and their positions and offices as
of September 24, 2001, are set forth in the following table:
NAME POSITION AND OFFICES HELD
---- -------------------------
Scott Kriens...................... Chairman of the Board, President and Chief Executive OfFICER
Pradeep Sindhu.................... Vice Chairman of the Board and Chief Technology Officer
Marcel Gani....................... Chief Financial Officer
Peter Wexler...................... Vice President, Engineering
Christopher J. Hurst.............. Vice President, Worldwide Sales and Service
William R. Hearst III............. Director
Vinod Khosla...................... Director
C. Richard Kramlich............... Director
Stratton Sclavos.................. Director
William R. Stensrud............... Director
The address of each director and executive officer is: c\o Juniper
Networks, Inc., 1194 North Mathilda Avenue, Sunnyvale, California 94089.
29
EX-99.(A)(5)
4
f75930a1ex99-a5.txt
EX-99.(A)(5)
EXHIBIT (a)(5)
[JUNIPER NETWORKS LOGO]
STOCK OPTION EXCHANGE PROGRAM
Follow the links below for information on the program and to make your
elections.
o OPTION EXCHANGE PROGRAM INFO: Read/download the official document
filed with the SEC: [link to Offer to Exchange]
o Q&A: Questions and answers to some common questions: [link to Q&A]
o OVERVIEW OF THE PROGRAM: [link to overview]
o [link to SCHWAB "OPTIONCENTER"]: View your option summary at Schwab
OptionCenter.
o [link to "Ask a question"]: Email a question regarding the program.
IF YOU ARE CONSIDERING PARTICIPATING IN THE EXCHANGE PROGRAM, CLICK: [link to
Election Form]
OTHERWISE CLICK: [exit]
WHEN YOU CLICK A BUTTON, YOU WILL BE PROMPTED TO LOGIN.
PLEASE USE YOUR JNPR USERID AND PASSWORD (ALSO USED FOR PEOPLESOFT, WEBMAIL AND
WINDOWS.)
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT WWW.SEC.GOV. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.
EX-99.(A)(6)
5
f75930a1ex99-a6.txt
EXHIBIT 99.(A)(6)
EXHIBIT (a)(6)
[JUNIPER NETWORKS LOGO]
STOCK OPTION EXCHANGE FORM FOR [EMPLOYEE NAME]
o If you want to participate, click the box next to the option you want to
exchange
o If you make a mistake or change your mind, click the box again to remove
the election
o When you are finished making your election, click "Submit"
o You can change your election as many times as you want before the deadline
Select grants to exchange (NOTE: ONLY ELIGIBLE OPTIONS ARE LISTED)
DATE ISSUED NUMBER OF OUTSTANDING SHARES PRICE
[option grant information]
When you have made your selections, click here: [Submit]
DEADLINE FOR SUBMISSION: 10 p.m. Pacific Time, ____________, 2001.
CURRENT DATE/TIME: _________________________
IF YOU ELECT TO PARTICIPATE IN THE OPTION EXCHANGE PROGRAM, ANY OPTIONS GRANTED
TO YOU WITHIN SIX MONTHS PRIOR TO THE DEADLINE (OTHER THAN FORMULA GRANTS) WILL
AUTOMATICALLY BE EXCHANGED REGARDLESS OF WHETHER YOU CHECKED THE BOX FOR THOSE
GRANTS.
IF YOU DON'T WANT TO EXCHANGE ANY OPTIONS, CLICK HERE: [I do not wish to
participate]
LINKS:
o [Option Exchange Program Info]
o [Q&A]
o [Ask a question]
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT WWW.SEC.GOV. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.
EX-99.(A)(7)
6
f75930a1ex99-a7.txt
EXHIBIT 99.(A)(7)
EXHIBIT (a)(7)
[JUNIPER NETWORKS LOGO]
CONFIRM YOUR SELECTIONS
This is what you have submitted:
Summary for [Employee Name]
____________ shares Granted __________ Price ______ EXCHANGE
TOTAL SELECTED FOR
EXCHANGE: ____________ shares
PLEASE NOTE - THESE ITEMS LISTED ABOVE ONLY REFLECT THOSE OPTION GRANTS YOU
SPECIFICALLY SELECTED FOR EXCHANGE. SINCE YOU HAVE ELECTED TO PARTICIPATE IN
THE OPTION EXCHANGE PROGRAM, ANY OTHER OPTIONS GRANTED TO YOU WITHIN 6 MONTHS
PRIOR TO THE DEADLINE (OTHER THAN FORMULA GRANTS) WILL AUTOMATICALLY BE
EXCHANGED REGARDLESS OF WHETHER YOU CHECKED THE BOX FOR THOSE GRANTS.
DEADLINE FOR SUBMISSION: 10 p.m. Pacific Time, _______________, 2001.
CURRENT DATE/TIME: ________________________
If this is correct, click: [Confirm]
If this isn't correct, click: [Return to Election Form]
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT WWW.SEC.GOV. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.
EX-99.(A)(8)
7
f75930a1ex99-a8.txt
EXHIBIT 99.(A)(8)
EXHIBIT (a)(8)
[JUNIPER NETWORKS LOGO]
THANK YOU [EMPLOYEE NAME]
You have chosen to participate in the Stock Option Exchange Program. YOU WILL
RECEIVE AN EMAIL CONFIRMING YOUR DECISION. You should print and save the email
for your records.
You can change your selection at any time before the deadline; simply return to
the Stock Option Exchange Page.
PLEASE NOTE - ON YOUR CONFIRMATION YOU WILL ONLY SEE THE OPTIONS FOR WHICH YOU
SPECIFICALLY CHECKED A BOX, BUT BECAUSE YOU HAVE ELECTED TO PARTICIPATE IN THE
OPTION EXCHANGE PROGRAM, ANY OPTIONS GRANTED TO YOU WITHIN SIX MONTHS PRIOR TO
THE DEADLINE (OTHER THAN FORMULA GRANTS) WILL AUTOMATICALLY BE EXCHANGED
REGARDLESS OF WHETHER YOU CHECKED THE BOX FOR THOSE GRANTS.
DEADLINE FOR SUBMISSION: 10 p.m. Pacific Time, ________________, 2001.
CURRENT DATE/TIME: ________________________
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT WWW.SEC.GOV. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.
EX-99.(A)(9)
8
f75930a1ex99-a9.txt
EXHIBIT 99.(A)(9)
EXHIBIT (a)(9)
[JUNIPER NETWORKS LOGO]
THANK YOU [EMPLOYEE NAME]
You have chosen NOT TO PARTICIPATE in the Stock Option Exchange Program. YOU
WILL RECEIVE AN EMAIL CONFIRMING YOUR DECISION. You should print and save the
email for your records.
You can change your selection at any time before the deadline; simply return to
the Stock Option Exchange Page.
DEADLINE FOR SUBMISSION: 10 p.m. Pacific Time, _________________, 2001.
CURRENT DATE/TIME: ________________________
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT WWW.SEC.GOV. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.
EX-99.(A)(10)
9
f75930a1ex99-a10.txt
EXHIBIT 99.(A)(10)
EXHIBIT (a)(10)
[Employee Name]
BELOW IS A SUMMARY OF YOUR ELECTION IN THE STOCK OPTION EXCHANGE PROGRAM:
(election recorded: [date] [time] Pacific Time)
You have elected to exchange the following option grants:
Shares Grant date Price
Total: _______ shares
PLEASE NOTE - THE ITEMS LISTED ABOVE ONLY REFLECT THOSE OPTION GRANTS YOU
SPECIFICALLY SELECTED FOR EXCHANGE. SINCE YOU HAVE ELECTED TO PARTICIPATE IN THE
OPTION EXCHANGE PROGRAM, ANY OTHER OPTIONS GRANTED TO YOU WITHIN SIX MONTHS
PRIOR TO THE DEADLINE WILL AUTOMATICALLY BE EXCHANGED REGARDLESS OF WHETHER YOU
CHECKED THE BOX FOR THOSE GRANTS.
Assuming that you are otherwise eligible to receive a Replacement Option on the
Replacement Option Grant Date (you have been continuously employed by the
company since making your valid election to participate in the Offer), you will
receive a Replacement Option grant equal to the number of shares you validly
tendered PLUS that amount equal to the number of shares for which you have
received option grants within six months prior to the Expiration Date (excluding
Formula Grants), which are being AUTOMATICALLY exchanged as described in the
preceding paragraph.
Thank you. Please save this email for your records.
YOU MAY CHANGE YOUR ELECTION AS MANY TIMES AS YOU WISH PRIOR TO THE DEADLINE.
DEADLINE FOR ELECTIONS: 10:00 P.M. PACIFIC TIME, _________ __, 2001.
TO CHANGE YOUR ELECTION, LOG ON TO THE STOCK OPTION EXCHANGE WEBSITE AT
http://__________________________________, AND INDICATE YOUR NEW CHOICES.
EX-99.(A)(11)
10
f75930a1ex99-a11.txt
EXHIBIT 99.(A)(11)
EXHIBIT (a)(11)
[Employee Name]
BELOW IS A SUMMARY OF YOUR ELECTION IN THE STOCK OPTION EXCHANGE PROGRAM:
You have elected not to participate. No options will be exchanged.
Thank you. Please save this email for your records.
YOU MAY CHANGE YOUR ELECTION AS MANY TIMES AS YOU WISH PRIOR TO THE DEADLINE.
DEADLINE FOR ELECTIONS: 10:00 P.M. PACIFIC TIME, ________ __, 2001.
TO CHANGE YOUR ELECTION, LOG ON TO THE STOCK OPTION EXCHANGE WEBSITE AT
http://__________________________________, AND INDICATE YOUR NEW CHOICES.
EX-99.(A)(12)
11
f75930a1ex99-a12.txt
EXHIBIT 99.(A)(12)
EXHIBIT (a)(12)
[JUNIPER LOGO] STOCK OPTION EXCHANGE PROGRAM
FREQUENTLY ASKED QUESTIONS
The following section is designed to assist you with some of the more common
questions people have in evaluating whether or not to participate in the
exchange program.
WHAT IS THE STOCK OPTION EXCHANGE PROGRAM?
Our Stock Option Exchange Program (also called the "offer") is a voluntary
program permitting employees to cancel eligible stock options ("Eligible
Options") and exchange them for replacement options covering the same
number of shares ( "Replacement Options") that will be granted on a future
date.
WHY ARE WE OFFERING THE STOCK OPTION EXCHANGE PROGRAM?
We are offering the Stock Option Exchange Program because of the decline in
the price of our common stock in recent months. We recognize that the
exercise price of the majority of outstanding options to purchase our
common stock is currently higher than the price of our common stock as
reported on Nasdaq, which has reduced the potential value of your options
and our stock option program to you. This undermines the purpose of our
stock option program, which was designed to be a valuable benefit to you
and to reward you for your contributions to our long-term business success.
Therefore, we are offering you the opportunity to participate in this Stock
Option Exchange Program. Your participation in this offer is voluntary, and
we will allow you to either keep your outstanding Eligible Options at their
current exercise price or cancel those Eligible Options in exchange for a
Replacement Option for the same number of shares as covered by the Eligible
Options that you exchanged.
ARE THERE CONDITIONS TO THE OFFER?
The offer is subject to a number of conditions that are described in the
Offer Document. However, the offer is not conditioned on a minimum number
of optionholders accepting the offer or a minimum number of options being
exchanged.
HOW DOES THE OFFER WORK?
On or before the expiration date of the offer (called the "Expiration
Date"), you may decide to exchange any one or all of your Eligible Options
for Replacement Options. Your Replacement Options will represent the same
number of shares as each Eligible Option that you exchanged. The number of
Replacement Options you are granted will be adjusted for any stock splits,
stock dividends, recapitalizations or similar transactions that may occur
between the Expiration
Date and the Replacement Option grant date. If you elect to exchange any of
your Eligible Options: (i) the formula-based options granted in 50%
increments on April 4, 2001 and July 11, 2001 (that we call the "Formula
Grants") will automatically be cancelled; and (ii) all other options
granted to you during the six months prior to the Expiration Date will
automatically be exchanged and Replacement Options will be granted for
those Eligible Options, as well as the other Eligible Options that you
elect to exchange in the offer.
HOW DO I KNOW WHAT I HAVE?
You can see your grant information online at Charles Schwab & Co.
OptionCenter. Go to www.schwab.com/optioncenter and click on the yellow bar
in the middle of the page that says "Login to Schwab OptionCenter." (Note
that if you click on the "Login" tab in the upper lefthand corner of the
page you will go back to the brokerage account side where any shares that
you own would be and you won't see your options information). From there
you'll get to a login screen where you input your account number and
password (default password is the last four digits of your SSN. You will be
prompted to change that password the first time you log in). The first time
you log in you will have to click through some online agreements. From
there you'll get to a summary page and will see a row of tabs across the
page. If you click on "All Options" you should see your grant information.
Note that Schwab's system splits up vested vs. unvested options so you will
see two line items for every option that has vested shares.
HOW DO I KNOW WHICH OPTIONS I HAVE ARE "ELIGIBLE OPTIONS"?
When you go to the online Election Form, only Eligible Options will be
listed. Formula Grants and options with a price lower than $10 are not
eligible for the offer.
WHAT IF MY ELIGIBLE OPTIONS ARE NOT YET VESTED? CAN I EXCHANGE THEM?
Yes. Your Eligible Options do not need to be vested in order for you to
participate in the offer.
WHY DO I HAVE TO GIVE UP MY FORMULA GRANTS IF I EXCHANGE ANY OTHER ELIGIBLE
OPTIONS?
The purpose of the Formula Grants was to incentivize people holding
underwater stock options. The number of options granted in the Formula
Grants was based on each person's hire-date and strike price on their
initial option grant. As a result, people who had higher strike prices
generally received more options in the Formula Grant than people who had
been with the company longer, but had much lower strike prices.
If Formula Grants were eligible for the offer, it would mean that some
people who have been with the company for a shorter time would have more
shares than people who have been with the company longer, even though
everyone
who participates in the offer will have the same strike price after the
Replacement Options are granted. This obviously unfair result led
management to conclude that the Formula Grants should be cancelled for
anyone who elects to participate in the offer.
IF I DO NOT EXCHANGE ANY OF MY OPTIONS, DO I GET TO KEEP MY FORMULA GRANTS?
Yes. If you elect not to participate in the exchange, you may keep all of
your current options.
I HAVE MORE THAN ONE ELIGIBLE OPTION GRANT. DO I HAVE TO EXCHANGE ALL OF THEM IN
ORDER TO PARTICIPATE IN THE OFFER?
No. You may exchange one or more of your Eligible Options or none at all.
However, if you elect to exchange any Eligible Option: (i) your Formula
Grants will automatically be cancelled; and (ii) any other options granted
during the six months prior to the date your Eligible Options are cancelled
will automatically be exchanged and Replacement Options will be granted for
them. If you choose not to exchange any of your Eligible Options, then no
options will be exchanged.
CAN I EXCHANGE A PORTION OF A PARTICULAR GRANT?
No. For any particular option grant, you must either exchange or hold the
entire grant.
CAN I EXCHANGE THE UNEXERCISED PORTION OF AN ELIGIBLE OPTION THAT I HAVE
PARTIALLY EXERCISED?
The offer pertains ONLY to outstanding options -- that is -- options that
have not been exercised; however, an unexercised portion of a grant that
has been partially exercised is eligible for the offer.
DO I NEED TO DO ANYTHING IF I DON'T WANT TO PARTICIPATE?
If you don't want to participate in the offer, please go to the online
Election Form and click the button that says "I do not want to participate". You
will receive an email confirming your decision. You may change your mind any
time and as many times as you want to BEFORE the deadline. You will receive a
confirming email each time you change your election.
WHAT IS THE VESTING SCHEDULE FOR THE REPLACEMENT OPTIONS?
All of the Replacement Option grants will be vested 25% on the date of
grant. The vesting schedule for remaining 75% of the Replacement Option
grant is determined based on the grant date of the oldest Eligible Option
that you decide to exchange. The table below shows the vesting periods.
---------------------------------------------------------------------------
If the oldest Eligible Option
tendered has a grant date Vesting Schedule of Replacement Grant
---------------------------------------------------------------------------
in 1999 25% vested as of the date of new grant
and 1/24 of the remainder (75%) monthly
over 24 months after the grant date
---------------------------------------------------------------------------
between January 1, 2000 25% vested as of the date of new grant
and June 30, 2000 and 1/28 of the remainder (75%) monthly
over 28 months after the grant date
---------------------------------------------------------------------------
between July 1, 2000 and 25% vested as of the date of new grant
December 31, 2000 and 1/32 of the remainder (75%) monthly
over 32 months after the grant date
---------------------------------------------------------------------------
in 2001 25% vested as of the date of new grant
and 1/36 of the remainder (75%) monthly
over 36 months after the grant date
---------------------------------------------------------------------------
WILL I GET SEPARATE GRANTS FOR EACH OPTION I ELECT TO CANCEL?
No. You will get one Replacement Option grant that will be for the
aggregate number of shares covered by the Eligible Options that you
exchanged.
WHAT HAPPENS TO THE OPTIONS I'VE ALREADY EXERCISED?
Options that you have already exercised are no longer "options" but rather
are shares that you now own outright. Shares are not eligible for the
offer.
ARE THERE ANY TAX CONSEQUENCES OF THE EXCHANGE PROGRAM?
The Offer Document contains a summary of the expected tax consequences in
the U.S. and abroad. These summaries are provided to give you a general
sense of the possible tax effect to you if you decide to participate in the
offer and are for your convenience only. The company STRONGLY recommends
that you consult your own tax professional regarding actual tax
consequences and ways in which applicable taxes can be minimized.
WILL THE NEW GRANTS BE ISOS?
No. All Replacement Options will be nonstatutory stock options, also known
as "Non-quals" or "NSOs".
WHAT IF I'M ON VACATION AT THE END OF THE TENDER PERIOD AND MISS THE DEADLINE?
Unfortunately, the deadline for making your election is NOT FLEXIBLE. We
are required by federal law to close the offer exactly when we say we will,
with NO EXCEPTIONS FOR ANY REASON. For that reason, you are encouraged to
not wait until the last moment to make your election.
HOW CAN I CONFIRM YOU RECEIVED MY ELECTION?
When you make your election online, you will be provided with a
confirmation that you should print out and keep for your records.
CAN I CHANGE MY ELECTION? HOW OFTEN?
Yes. You can change your election at any time by revising and resubmitting
your online Election Form prior to the deadline. There is no limit to the
number of times you can change your election prior to the deadline.
However, the last Election Form you submit prior to the deadline will be
the election that governs your election. You will receive a confirming
email each time you submit an election.
HOW CAN I BE SURE THAT THE COMPANY WILL GRANT ME REPLACEMENT OPTIONS?
In general, the company's acceptance of your tender of your Eligible
Options constitutes an agreement to grant you Replacement Options in the
future. PLEASE REMEMBER, however, that there are situations in which you
would not receive a Replacement Option grant -- for example, if you resign
or are terminated prior to the grant of the Replacement Options. There are
other similar situations and you should read the Offer Document carefully
and completely to learn more about them.
ON WHAT DATE WILL THE REPLACEMENT OPTIONS BE GRANTED?
In order to avoid very negative accounting consequences associated with
stock option repricings, we cannot grant any Replacement Options earlier
than six months and one day after the Expiration Date, which is expected to
be __________, unless we extend the offer. Therefore, the Replacement
Options will be granted on a date not earlier than 6 months and one day
after the Expiration Date.
WHAT IF THE COMPANY IS ACQUIRED BEFORE THE REPLACEMENT OPTIONS ARE GRANTED?
If we merge with or are acquired by another entity between the Expiration
Date and Replacement Option grant date, there is no guarantee that the
acquiring entity will abide by the terms of the offer. Even if the
acquiring entity did honor the offer, the type of security and the number
of shares covered by each Replacement Option would be determined by the
acquisition agreement between us and the acquiror and the ratio in which
our common stock may convert into an acquiror's common stock (or other
consideration) in an acquisition transaction. This means that if the
company is acquired or merges with another entity, you may receive an
option to acquire more or fewer shares of the acquiror's common stock (or
another security) than the number of shares of our common stock that you
would have received a Replacement Option for if no acquisition had
occurred. It is also VERY IMPORTANT to understand that because employees
are employed "at-will" (meaning that they can be terminated
at any time, with or without cause), an acquiring entity could terminate
employees and have no obligation under the offer with respect to those
employees.
WHAT IF I AM TERMINATED OR RESIGN BEFORE THE REPLACEMENT OPTIONS ARE GRANTED?
In order to be eligible for the offer, you must be employed by the company
at the Expiration Date and be holding Eligible Options. In order to receive
Replacement Options, you must remain continuously employed by the company
until the Replacement Option is granted. If you are terminated, resign or
otherwise leave the company at any time prior to the grant of the
Replacement Options, you will not be eligible to receive a Replacement
Option grant.
WHAT IF I GET PROMOTED DURING THE 6 MONTH PERIOD?
If you participate in the exchange offer, the company is unable to grant
you any options for any reason prior to the grant of the Replacement
Options. If your promotion occurs prior to the Replacement Option grant
date and you elected to exchange any Eligible Options under this offer, any
promotional option will be deferred until the Replacement Option Grant
Date.
WHAT WILL THE EXERCISE PRICE BE ON MY NEW OPTIONS?
The exercise price of the Replacement Options will be the closing price of
our stock on the date that the Stock Option Committee grants the
Replacement Options.
WHAT IF THE STOCK PRICE AFTER THE 6 MONTH PERIOD IS HIGHER THAN THE EXERCISE
PRICE FOR THE OPTIONS I SURRENDERED? CAN I HAVE MY ORIGINAL OPTIONS BACK?
There is no ability to "change your mind" for any reason -- even if the
stock price is higher. You should carefully consider this, and all other
risks set forth in the Offer Document, when deciding whether or not to
participate in the exchange offer.
WHAT IF I AM GETTING A DIVORCE? DOES MY SPOUSE NEED TO DO ANYTHING IF I WANT TO
PARTICIPATE IN THE OFFER?
If you in the process of getting an divorce, it is possible that your
spouse may have some kind of an ownership interest in your Eligible
Options. Although Juniper Networks will not require it, you should consider
getting some kind of letter or other documentation indicating that your
spouse has agreed to your participation in the Offer. We recommend that you
discuss this matter with the attorney that is advising you in the divorce
process regarding what may be advisable for you in connection with the
Offer.
WHAT DO YOU THINK I SHOULD DO?
Although the management of the company worked very hard to develop this
exchange program and it has been approved by the Board of Directors of the
company, the company does not make any recommendation with respect to any
person's decision to participate in the exchange program. The facts and
circumstances are different for each employee and each employee should make
a fully considered, careful determination as to whether the exchange
program makes sense in his or her particular case.
WHERE DO I GO IF I HAVE ADDITIONAL QUESTIONS ABOUT THIS OFFER?
Please send your questions to Lisa Berry or Brienne Taloff. We will review
these questions periodically throughout the exchange period and add the
appropriate questions and answers to the Questions and Answers section of
the internal website.
THIS PROGRAM AND THE INFORMATION PROVIDED ON THIS WEBSITE ARE SUBJECT TO AND
GOVERNED BY THE OFFER TO EXCHANGE OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK
FILED BY US WITH THE SECURITIES AND EXCHANGE COMMISSION, ALONG WITH OTHER
MATERIALS. THOSE MATERIALS ARE AVAILABLE FREE OF CHARGE, EITHER FROM THE COMPANY
OR AT THE SEC WEBSITE AT www.sec.gov. THESE MATERIALS ARE IMPORTANT AND YOU ARE
URGED TO READ THEM CAREFULLY.