JUNIPER NETWORKS, INC. SEVERANCE AGREEMENT
EXHIBIT 10.4
JUNIPER NETWORKS, INC.
This Severance Agreement (the “Agreement”) is made and entered into by and between
(the “Employee”) and Juniper Networks, Inc., a Delaware Corporation (the “Company”),
effective as of , 2008 (the “Effective Date”).
RECITALS
The Compensation Committee believes that it is imperative to provide the Employee with certain
severance benefits upon certain terminations of employment. These benefits will provide the
Employee with enhanced financial security and incentive and encouragement to remain with the
Company.
Certain capitalized terms used in the Agreement are defined below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the later of (i) January 1,
2013 or (ii) if Employee is terminated involuntarily by Company without Cause prior to January 1,
2013, the date that all of the obligations of the parties hereto with respect to this Agreement
have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law, except as may
otherwise be specifically provided by applicable law or under the terms of any written formal
employment agreement or offer letter between the Company and the Employee (an “Employment
Agreement”). This Agreement does not constitute an agreement to employ Employee for any specific
time.
3. Severance Benefits.
(a) In the event the Employee is terminated involuntarily by Company without Cause, as defined
below, and provided the Employee executes and does not revoke a full release of claims with the
Company (in a form satisfactory to the Company and effective no later than March 15 of the year
following the year in which the termination occurs) (the “Release”), the Employee will be entitled
to receive the severance benefits set out in subsections (i) and (ii). For purposes of this
Agreement, “Cause” is defined as: (i) willfully engaging in gross misconduct that is demonstrably
injurious to Company; (ii) willful act or acts of dishonesty or malfeasance undertaken by the
individual; (iii) conviction of or a plea of nolo contendere to a felony; or (iv) willful and
continued refusal or failure to substantially perform duties with
Company (other than incapacity due to physical or mental illness); provided that the action or
conduct described in clause (iv) above will constitute “Cause” only if such failure continues after
the Company’s CEO, COO or Board of Directors has provided the individual with a written demand for
substantial performance setting forth in detail the specific respects in which it believes the
individual has willfully and not substantially performed the individual’s duties thereof and has
been provided a reasonable opportunity (to be not less than 30 days) to cure the same.
(i) A cash payment in a lump sum (less any withholding taxes) equal to (x) an amount equal to
six months of base salary (as in effect immediately prior to the termination) and (y) an amount
equal to half of the Employee’s annual target bonus (as in effect immediately prior to the
termination) for the fiscal year in which the termination occurs.
(ii) Company-paid continuation of Employee’s medical, dental, vision and life insurance (at
the coverage levels in effect immediately prior to Employee’s termination) for a period of six
months.
(b) Release Effectiveness. The receipt of any severance pursuant to Section 3(a) will
be subject to Employee signing and not revoking the Release and provided that such Release is
effective within sixty (60) days following the termination of employment. No severance pursuant to
such Section will be paid or provided until the Release becomes effective. In the event the
termination occurs at a time during the calendar year where it would be possible for the Release to
become effective in the calendar year following the calendar year in which the Employee’s
termination occurs, any severance that would be considered Deferred Compensation Separation
Benefits (as defined in Section 3(d)) will be paid on the first payroll date to occur during the
calendar year following the calendar year in which such termination occurs.
(c) Timing of Severance Payments. Any cash severance payment to which Employee is
entitled shall be paid by the Company to Employee in a single lump sum in cash on the Release’s
effective date.
(d) Change of Control Benefits. In the event the Employee receives severance and
other benefits pursuant to a change in control agreement that are greater than or equal to the
amounts payable hereunder, then the Employee shall not be entitled to receive severance or any
other benefits under this Agreement.
(e) Section 409A.
(i) Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified
employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”) at the
time of Employee’s termination (other than due to death) or resignation, then the severance payable
to Employee, if any, pursuant to this Agreement, when considered together with any other severance
payments or separation benefits that are considered deferred compensation under Section 409A
(together, the “Deferred Compensation Separation Benefits”) that are payable within the first six
(6) months following Employee’s termination of employment, will become payable on the first payroll
date that occurs on or after the date six
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(6) months and one (1) day following the date of Employee’s termination of employment. All
subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with
the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the
contrary, if Employee dies following his termination but prior to the six (6) month anniversary of
his termination, then any payments delayed in accordance with this paragraph will be payable in a
lump sum as soon as administratively practicable after the date of Employee’s death and all other
Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit. Each payment and benefit payable under this Agreement is
intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.
(ii) Any amount paid under this Agreement that satisfies the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute
Deferred Compensation Separation Benefits for purposes of clause (i) above.
(iii) Any amount paid under this Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury
Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation
Separation Benefits for purposes of clause (i) above. “Section 409A Limit” will mean the lesser of
two (2) times: (i) Employee’s annualized compensation based upon the annual rate of pay paid to
Employee during the Employee’s taxable year preceding the Employee’s taxable year of Employee’s
termination of employment as determined under, and with such adjustments as are set forth in,
Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with
respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which Employee’s employment is
terminated.
(iv) The foregoing provisions are intended to comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided hereunder will be subject to the
additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so
comply. The Company and Employee agree to work together in good faith to consider amendments to
this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to
avoid imposition of any additional tax or income recognition prior to actual payment to Employee
under Section 409A.
4. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 4(a) or which becomes bound by the terms of this Agreement by
operation of law. The term “Company” shall also include any direct or indirect that is majority
owned by Juniper Networks, Inc.
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(b) The Employee’s Successors. The terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
5. Notice. All notices and other communications required or permitted hereunder shall
be in writing, shall be effective when given, and shall in any event be deemed to be given upon
receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express
or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential
address and (ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10) days’
advance written notice to the other party pursuant to the provisions above.
6. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings
that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and
by an authorized officer of the Company (other than the Employee). No waiver by either party of
any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(c) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
(d) Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto and supersedes in their entirety all prior representations, understandings, undertakings or
agreements (whether oral or written and whether expressed or implied) of the parties with respect
to the subject matter hereof.
(e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California. The Superior Court of Santa
Xxxxx County and/or the United States District Court for the Northern District of California shall
have exclusive jurisdiction and venue over all controversies in connection with this Agreement.
(f) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
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(g) Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
| COMPANY | JUNIPER NETWORKS, INC. | |||
| By: | ||||
| Name: | ||||
| Title: | ||||
EMPLOYEE |
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| Name: | ||||
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