Common use of Registration of Option Shares Clause in Contracts

Registration of Option Shares. Eleven million eight hundred thousand (11,800,000) shares of common stock issuable upon exercise of options under our 1996 Supplemental Plan have been registered under the Securities Act on registration statements on Form S-8 filed with the SEC. All the shares issuable upon exercise of all new options to be granted before the offer will be registered under the Securities Act. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable U.S. securities laws. Income Tax Consequences. ----------------------- You should refer to Sections 14 through 18 of this Offer to Exchange for a discussion of the income tax consequences on tax residents of the United States, France, Germany, Japan and the United Kingdom of the new options and the options tendered for exchange, as well as the consequences of accepting or rejecting the new options under this offer to exchange. If you are living or working in the United States, but are also subject to the tax laws in another country, you should be aware that there may be other tax and social insurance consequences which may apply to you; we strongly recommend that you consult with your own advisors to discuss the consequences to you of this transaction. Our statements in this Offer to Exchange concerning our 1996 Plan, 1996 Supplemental Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our 1996 Plan, 1996 Supplemental Plan, and the forms of option agreement under each of the plans. Please contact us at Pinnacle Systems, Inc., 280 North Bernardo Avenue, Mountain View, CA 94043, Attention: Melaxxx Xxxxx (xxxxxxxxx: (650) 237-1637) (e-mail: msherk@pinnaclesxx.xxx), xx xeceive a copy xx xxx 0000 Xlan, 1996 Sxxxxxxxxxxx Xxxx, xxx the forms of option agreements thereunder. We will promptly furnish you copies of these documents at our expense.

Registration of Option Shares. Eleven million eight hundred thousand (11,800,000) 36,599,505 shares of common stock issuable upon exercise of options under our 1996 Supplemental 1999 Plan have been registered under the Securities Act on registration statements on Form S-8 filed with the SEC. All the shares issuable upon exercise of all new options New Options to be granted before the offer will be registered under the Securities Act. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable U.S. securities laws. U.S. Federal Income Tax Consequences. ----------------------- ------------------------------------ You should refer to Sections Section 14 through 18 of this Offer to Exchange Replace for a discussion of the U.S. federal income tax consequences on tax residents of the United States, France, Germany, Japan and the United Kingdom of the new options New Options and the options tendered for exchangereplacement, as well as the consequences of accepting or rejecting the new options New Options under this offer to exchangereplace. If you are living or working in an eligible employee based outside of the United States, but are also subject to the tax laws in another country, you should be aware that there may be other refer to Sections 15 through 26 of this Offer to Replace for a discussion of income tax consequences of the New Options and social insurance consequences which may apply to you; we the options tendered for replacement in certain non-U.S. countries. We strongly recommend that you consult with your own tax advisors to discuss the tax and social insurance consequences to you of this transactiontransaction under the laws of the country in which you live and work. Our statements in this Offer to Exchange Replace concerning our 1996 Plan, 1996 Supplemental 1999 Plan and the new options New Options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our 1996 Plan, 1996 Supplemental 1999 Plan, and the forms of option agreement under each the 1999 Plan, which are attached as exhibits to the Schedule TO as filed with the SEC. The 1999 Plan, the forms of option agreement thereunder and the plansprospectus describing the 1999 Plan are attached as exhibits to this Schedule TO. Please contact us at Pinnacle Systems, Redback Networks Inc., 280 North Bernardo AvenueStock Administration, Mountain View000 Xxxxxx Xxx, CA 94043Xxx Xxxx, XX 00000, Attention: Melaxxx Xxxxx Xxxxx (xxxxxxxxxtelephone: 000-000-0000) or Xxx Xxxxxxxxx (650) 237telephone: 000-1637000-0000) (e-mail: msherk@pinnaclesxx.xxxxxxxx@xxxxxxx.xxx), xx xeceive a copy xx xxx 0000 Xlanto receive additional copies of our 1999 Plan, 1996 Sxxxxxxxxxxx Xxxx, xxx the forms of option agreements thereunderagreement thereunder and the prospectus relating to the 1999 Plan. We will promptly furnish you copies of these documents at our expense.

Registration of Option Shares. Eleven million eight hundred thousand (11,800,000) 36,599,505 shares of common stock issuable upon exercise of options under our 1996 Supplemental 1999 Plan have been registered under the Securities Act on registration statements on Form S-8 filed with the SEC. All the shares issuable upon exercise of all new options New Options to be granted before the offer will be registered under the Securities Act. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable U.S. securities laws. U.S. Federal Income Tax Consequences. ----------------------- ------------------------------------- You should refer to Sections Section 14 through 18 of this Offer to Exchange Replace for a discussion of the U.S. federal income tax consequences on tax residents of the United States, France, Germany, Japan and the United Kingdom of the new options New Options and the options tendered for exchangereplacement, as well as the consequences of accepting or rejecting the new options New Options under this offer to exchangereplace. If you are living or working in an eligible employee based outside of the United States, but are also subject to the tax laws in another country, you should be aware that there may be other refer to Sections 15 through 26 of this Offer to Replace for a discussion of income tax consequences of the New Options and social insurance consequences which may apply to you; we the options tendered for replacement in certain non-U.S. countries. We strongly recommend that you consult with your own tax advisors to discuss the tax and social insurance consequences to you of this transactiontransaction under the laws of the country in which you live and work. Our statements in this Offer to Exchange Replace concerning our 1996 Plan, 1996 Supplemental 1999 Plan and the new options New Options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our 1996 Plan, 1996 Supplemental 1999 Plan, and the forms of option agreement under each the 1999 Plan, which are attached as exhibits to the Schedule TO as filed with the SEC. The 1999 Plan, the forms of option agreement thereunder and the plansprospectus describing the 1999 Plan are attached as exhibits to this Schedule TO. Please contact us at Pinnacle Systems, Redback Networks Inc., 280 North Bernardo AvenueStock Administration, Mountain View250 Holger Way, San Jose, CA 9404395134, Attention: Melaxxx Xxxxx Cindi Fisse (xxxxxxxxxtelephoxx: 000-000-0000) xx Xxx Xxxxxxxxx (650) 237telephone: 000-1637000-0003) (e-mail: msherk@pinnaclesxx.xxxsxxxx@xxxxxxx.com), xx xeceive a copy xxxxxxx additional coxxxx xx xxx 0000 Xlan, 1996 Sxxxxxxxxxxx Xxxx1999 Plan, xxx xxxxx xx xxxxon agreement thereunder and the forms of option agreements thereunderprospectus relating to the 1999 Plan. We will promptly furnish you copies of these documents at our expense.

Registration of Option Shares. Eleven million eight hundred thousand (11,800,000) 1,000,000 shares of common stock issuable upon exercise of options under our 1996 Supplemental 1998 Stock Plan and 1,000,000 shares issuable upon exercise of options under our 1999 Nonstatutory Stock Option Plan have been registered under the Securities Act on registration statements on Form S-8 filed with the SEC. All the shares issuable upon exercise of all new options to be granted before pursuant to the offer will be registered under the Securities Act. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable U.S. securities laws. U.S. Federal Income Tax Consequences. ----------------------- ------------------------------------ You should refer to Sections 14 through 18 Section 17 of this Offer to Exchange for a discussion of the U.S. federal income tax consequences on tax residents of the United States, France, Germany, Japan and the United Kingdom of the new options and the options tendered for exchange, as well as the consequences of accepting or rejecting the new options under this offer to exchange. If you are living or working in the United States, but are We also subject to the tax laws in another country, you should be aware that there may be other tax and social insurance consequences which may apply to you; we strongly recommend that you consult with your own advisors tax advisor to discuss determine the tax and social insurance consequences to you of this transactiontransaction that apply to your individual circumstances. Our statements in this Offer to Exchange concerning our 1996 Plan, 1996 Supplemental 1998 Stock Plan and 1999 Nonstatutory Stock Option Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our 1996 Plan, 1996 Supplemental Plan, 1998 Stock Plan and 1999 Nonstatutory Stock Option Plan and the forms of option agreement under each of the plansthereunder. Please contact us at Pinnacle Tut Systems, Inc., 280 North Bernardo Avenue0000 Xxxx Xxx Xxxxxxx Xxxx., Mountain ViewXxxxxxxxxx, CA 94043Xxxxxxxxxx, Attention: Melaxxx Xxxxx 00000 (xxxxxxxxxtelephone: (650000) 237000-1637) (e-mail: msherk@pinnaclesxx.xxx0000), xx xeceive to receive a copy xx xxx 0000 Xlanof our 1998 Stock Plan, 1996 Sxxxxxxxxxxx Xxxx, xxx 1999 Nonstatutory Stock Option Plan and the forms form of option agreements thereunder. We will promptly furnish you copies of these documents at our expense.