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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Juniper Networks, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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[JUNIPER NETWORKS LOGO]
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
The 2001 Annual Meeting of Stockholders of Juniper Networks, Inc. will be
held on Wednesday, May 9, 2001 at 9:00 a.m. at The Historic Del Monte Building,
100 South Murphy Street, Third Floor, Sunnyvale, California 94086, to conduct
the following business:
1. Elect two directors for three-year terms;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2001; and
3. To consider such other business as may properly come before the
meeting.
Stockholders who owned shares of Juniper Networks common stock at the close
of business on March 19, 2001 are entitled to attend and vote at the meeting. A
complete list of the Company's stockholders will be available at the Company's
offices at 1194 North Mathilda Avenue, Sunnyvale, California 94089 prior to the
meeting.
By Order of the Board of Directors
Lisa C. Berry
Vice President, General Counsel and Secretary
This notice of meeting and proxy statement and accompanying proxy card are being
distributed on or about March 31, 2001.
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As a stockholder of Juniper Networks, Inc., you have a right to vote on certain
matters affecting the Company. This proxy statement describes the proposals you
are voting on this year. It contains important information for you to consider
when deciding how to vote so please read it carefully.
YOUR VOTE IS IMPORTANT.
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PROXY STATEMENT
QUESTIONS AND ANSWERS
Q: WHO CAN VOTE AT THE ANNUAL MEETING?
A: Stockholders who owned Juniper Networks common stock on March 19, 2001 may
attend and vote at the annual meeting. Each share is entitled to one vote.
There were 319,733,533 shares of Juniper Networks common stock outstanding
on March 19, 2001.
Q: WHY AM I RECEIVING THIS PROXY STATEMENT?
A: This proxy statement describes proposals on which we would like
stockholders to vote. It gives you information on these proposals, as well
as other information, so that you can make an informed decision.
Q: WHAT AM I VOTING ON?
A: We are asking you to vote on:
o the election of two directors; and
o the ratification of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31,
2001.
There is additional information appearing later in this proxy statement
relating to the nominees for election to the Board of Directors and the
ratification of Ernst & Young LLP.
Q: HOW DO I VOTE?
A: You may vote by any one of the four methods described below.
1. YOU MAY VOTE BY MAIL.
You do this by completing and signing your proxy card and mailing it in the
enclosed prepaid and addressed envelope. If you mark your voting
instructions on the proxy card your shares will be voted as you instruct.
If you do not mark your voting instructions on the proxy card, your shares
will be voted:
o FOR the two named nominees for directors, and
o FOR the ratification of the appointment of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending
December 31, 2001.
2. YOU MAY VOTE BY TELEPHONE.
You do this by following the "Vote by Telephone" instructions that came
with this proxy statement. If you vote by telephone, you do not need to
mail in your proxy card.
3. YOU MAY VOTE ON THE INTERNET.
You do this by following the "Vote by Internet" instructions that come with
this proxy statement. If you vote by Internet, you do not need to mail in
your proxy card.
4. YOU MAY VOTE IN PERSON AT THE MEETING.
We will pass out written ballots to anyone who would like to vote at the
meeting. However, if you hold your shares in street name, you must request
a proxy from your stockbroker in order to vote at the meeting. Holding
shares in "street name" means that your shares are held by the broker in
its name but in your account. This is not the same as shares that may be
described on your brokerage statements as in "safekeeping" - those shares
are in fact in your name.
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Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
A: It means that you have multiple accounts at the transfer agent or with
stockbrokers. Please complete and return all proxy cards to ensure that all
of your shares are voted.
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
A: You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
o signing another proxy card with a later date,
o voting by telephone or on the Internet (your latest telephone or
Internet vote is counted), or
o voting at the meeting.
Q: WILL MY SHARES BE VOTED IF I DO NOT RETURN MY PROXY CARD?
A: If your shares are held in street name, your brokerage firm, under certain
circumstances, may vote your shares.
Brokerage firms have authority to vote clients' unvoted shares on some
"routine" matters. If you do not give a proxy to vote your shares, your
brokerage firm may either:
o vote your shares on routine matters, or
o leave your shares unvoted.
When a brokerage firm votes its customers' unvoted shares on routine
matters, these shares are counted to determine if a quorum exists to
conduct business at the meeting. A brokerage firm cannot vote customers'
unvoted shares on non-routine matters. These shares are considered not
entitled to vote on non-routine matters, rather than as a vote against the
matters.
We encourage you to provide instructions to your brokerage firm by giving
your proxy. This ensures that your shares will be voted at the meeting.
You may have granted discretionary voting authority over your account to
your stockbroker.
Your stockbroker may be able to vote your shares depending on the terms of
the agreement you have with your stockbroker.
If you hold the shares in your own name, you must vote your shares either
by returning a proxy card, voting by telephone or on the Internet or by
voting in person at the meeting.
If you do not vote your shares by mail, telephone, Internet or in person,
your shares will not be counted.
Q: HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING?
A: To hold the meeting and conduct business, a majority of the Company's
outstanding shares as of March 19, 2001 must be present at the meeting.
This is called a quorum.
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Shares are counted as present at the meeting if the stockholder either:
o is present and votes in person at the meeting, or
o has properly submitted a proxy card, either by mail, telephone or
on the Internet.
Q: HOW MANY VOTES MUST THE NOMINEES HAVE TO BE ELECTED AS DIRECTORS?
A: The two nominees receiving the highest number of "FOR" votes will be
elected as directors. This number is called a plurality.
Q: HOW MANY VOTES MUST THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
AUDITORS RECEIVE?
A: To pass, the ratification of the independent auditors must receive "FOR"
votes from a majority of the shares present at the meeting in person or by
proxy.
Q: IS CUMULATIVE VOTING PERMITTED FOR THE ELECTION OF DIRECTORS?
A: In the election of directors, you may elect to cumulate your vote.
Cumulative voting will allow you to allocate, as you see fit, the total
number of votes equal to the number of director positions to be filled
multiplied by the number of shares held by you. For example, if you own
three shares of stock, you can allocate six "FOR" votes (3X2) to as few or
as many persons as you choose. Cumulative voting only applies to the
election of directors. If you choose to cumulate your votes, you will need
to make an explicit statement of your intent to do so, either by so
indicating in writing on the proxy card or by stating so when voting at the
annual meeting.
Q: HOW ARE VOTES COUNTED?
A: You may either vote "FOR" or "AGAINST" each nominee for director. You may
vote "FOR," "AGAINST" or "ABSTAIN" on the proposal to ratify the
appointment of the independent auditors.
If you abstain from voting on the ratification, it has the same effect as a
vote against.
If you give your proxy without voting instructions, your shares will be
counted as a vote FOR each nominee and FOR ratification of the appointment
of the independent auditors.
Q: WHO WILL COUNT THE VOTES?
A: Voting results are tabulated and certified by our transfer agent, Wells
Fargo Shareowner Services.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxies, ballots and voting tabulations identifying stockholders are kept
confidential and will not be disclosed except as may be necessary to meet
legal requirements.
Q: WHAT HAPPENS IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE MEETING?
A: The proxy card enables you to grant a proxy to those persons named as proxy
holders, Marcel Gani, the Company's Chief Financial Officer and Lisa C.
Berry, the Company's Vice President, General Counsel and Secretary, to vote
your shares at the meeting, as you have instructed them on the proxy card.
If an additional proposal is properly presented for a vote they will have
the discretion to vote your shares on such additional
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matters. If for some unforeseen reason any of our nominees is not available
as a candidate for director, the persons named as proxy holders will vote
your proxy for such other candidate or candidates as may be nominated by
the Board of Directors.
Even if you plan to attend the meeting, it is a good idea to complete and
return your proxy card before the meeting date.
Q: WHERE DO I FIND VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting. We will publish
the final result in our quarterly report on Form 10-Q for the second
quarter of fiscal year 2001.
Q: WHO PAYS FOR THE COST OF SOLICITING PROXIES?
A: Juniper Networks is using Skinner & Co., an outside proxy solicitation
firm, to solicit proxies this year at a cost of approximately $7,000. The
Company is paying the cost of distributing and soliciting proxies. As a
part of the process, Juniper Networks reimburses brokers, nominees,
fiduciaries and other custodians reasonable fees and expenses in forwarding
proxy materials to stockholders.
Q: HOW DO I SUBMIT A PROPOSAL TO BE INCLUDED IN THE PROXY?
A: If you want us to consider including a proposal in the proxy statement for
next year, you must deliver it to the Company's Corporate Secretary at our
principal executive offices no later than November 30, 2001. The Company's
bylaws contain specific procedural requirements regarding a stockholder's
ability to nominate a director or submit a proposal to be considered at a
meeting of stockholders. If you would like a copy of the procedures
contained in our bylaws, please contact: Corporate Secretary, Juniper
Networks, Inc., 1194 North Mathilda Avenue, Sunnyvale, CA 94089.
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STRUCTURE AND COMPENSATION OF THE BOARD OF DIRECTORS
NUMBER OF DIRECTORS AND TERMS
Our Board of Directors consists of seven authorized members. Two directors
are nominees for election this year. The remaining five directors will continue
to serve the terms described below.
The structure of our Board of Directors is that of a staggered board. The
directors are divided into three classes, Class I, Class II and Class III, with
each class being as nearly equal in number as possible with a three year term
for each class. Dr. Sindhu and Mr. Khosla are each Class II directors and have
been nominated for re-election as described herein. Mr. Hearst and Mr. Kramlich
are each Class III directors and will stand for re-election at the Company's
annual meeting of stockholders to be held in 2002. Mr. Kriens, Mr. Sclavos and
Mr. Stensrud are Class I directors and will stand for re-election at the
Company's annual meeting of stockholders to be held in 2003.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors held six regular meetings during 2000. Except for
Mr. Hearst, each director attended at least 75% of all board and applicable
committee meetings during 2000. The committees of the Board of Directors are
described in the table below. The Board of Directors does not have a nominating
committee or a committee serving a similar function; instead the Board of
Directors acts as a whole on such matters.
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COMMITTEE - MEMBERS FUNCTIONS OF THE COMMITTEE NUMBER OF MEETINGS - 2000
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Audit Committee:
o Please refer to the written charter 5
William R. Hearst III of the Audit Committee approved by the
Board of Directors and included in
C. Richard Kramlich Appendix A.
Stratton Sclavos
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Compensation Committee: o Reviews and recommends to the Board
of Directors the compensation of all
Vinod Khosla officers and directors, including stock 1
compensation and loans.
William R. Stensrud o Establishes and reviews general
policies relating to the compensation
and benefits of employees.
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DIRECTOR COMPENSATION
We do not currently compensate our directors in cash for their service as
members on the Board of Directors, although they are reimbursed for certain
expenses in connection with attendance at Board of Director and committee
meetings. Under our Amended and Restated 1996 Stock Plan, non-employee directors
are eligible to receive stock option grants at the discretion of the Board of
Directors or other administrator of the Amended and Restated 1996 Stock Plan.
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MEMBERS OF THE BOARD OF DIRECTORS
SCOTT KRIENS Mr. Kriens has served as President, Chief Executive Officer and
Chairman of the Board of Directors of Juniper Networks since October 1996. From
April 1986 to January 1996, Mr. Kriens served as Vice President of Sales and
Vice President of Operations at StrataCom, Inc., a telecommunications equipment
company, which he co-founded in 1986. Mr. Kriens received a B.A. in Economics
from California State University, Hayward. Mr. Kriens also serves on the boards
of directors of Equinix, Inc. and Verisign, Inc.
PRADEEP SINDHU Dr. Sindhu co-founded Juniper Networks in February 1996 and
served as Chief Executive Officer and Chairman of the Board of Directors until
September 1996. Since then, Dr. Sindhu has served as Vice Chairman of the Board
of Directors and Chief Technical Officer of Juniper Networks. From September
1984 to February 1991, Dr. Sindhu worked as a Member of the Research Staff, and
from March 1987 to February 1996, as the Principal Scientist, and from February
1994 to February 1996, as Distinguished Engineer at the Computer Science Lab,
Xerox Corporation, Palo Alto Research Center, a technology research center. Dr.
Sindhu holds a B.S.E.E. from the Indian Institute of Technology in Kanpur, an
M.S.E.E. from the University of Hawaii and a Masters in Computer Science and
Ph.D. in Computer Science from Carnegie-Mellon University.
WILLIAM R. HEARST III Mr. Hearst is a partner with Kleiner Perkins Caufield &
Byers, a venture capital firm located in Menlo Park, California. He has served
on the Board of Directors of Juniper Networks since February 1996. From May 1995
to August 1996, he was the Chief Executive Officer of At Home Corporation, a
high speed Internet access and consumer online services company. Mr. Hearst was
editor and publisher of the San Francisco Examiner from 1984 until 1995. Mr.
Hearst also serves on the boards of directors of Excite@Home, Hearst-Argyle
Television, RePlay Networks, Oblix, Inc., AllBusiness, Zaffire, Inc., Zing, The
Hearst Corporation, OnFiber and Applied Minds. He is a Fellow of the AAAS, a
Trustee of Carnegie Institution in Washington, D.C., and a Trustee of the
California Academy of Sciences. Mr. Hearst is a 1972 graduate of Harvard
University, holding an A.B. degree in Mathematics.
VINOD KHOSLA Mr. Khosla has been a General Partner with the venture capital firm
of Kleiner Perkins Caufield & Byers since February 1986. He has served on the
Board of Directors of Juniper Networks since February 1996. Mr. Khosla was a
co-founder of Daisy Systems Corporation, an electronic design automation
company, and the founding Chief Executive Officer of Sun Microsystems, Inc., a
computer and data networking company. Mr. Khosla also serves on the boards of
directors of Asera, Corio Inc., Redback Networks, Inc., QWEST Communications
International, Inc., Broadband Office, Inc., Cenix and Centrata. Mr. Khosla
holds a B.S.E.E. from the Indian Institute of Technology in New Delhi, an M.S.E.
from Carnegie-Mellon University, and an M.B.A. from the Stanford Graduate School
of Business.
C. RICHARD KRAMLICH Mr. Kramlich is the co-founder and has been a General
Partner of New Enterprise Associates, L.P., a venture capital fund, since 1978.
He has served on the Board of Directors of Juniper Networks since February 1996.
He also serves on the boards of directors of Zhone Technologies, Force 10
Networks, Financial Engines, InfoGear, Netsolve, Verticom, Visual EDGE, Com21,
Inc., Lumisys, Inc., the Chalone Wine Group and Silicon Graphics, Inc. Mr.
Kramlich holds a B.S. from Northwestern University and an M.B.A. from Harvard
Business School.
STRATTON SCLAVOS. Mr. Sclavos has been President and Chief Executive Officer of
VeriSign Inc. since July 1995. He has served on the Board of Directors of
Juniper Networks since May 2000. From October 1993 to June 1995, he was Vice
President, Worldwide Marketing and Sales of Taligent, Inc., a software
development company that was a joint venture among Apple Computer, Inc., IBM and
Hewlett-Packard. Prior to that time, he served in various sales, business
development and marketing capacities for GO Corporation, MIPS Computer Systems,
Inc. and Megatest Corporation. Mr. Sclavos also serves on the boards of
directors of Keynote Systems,
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Inc., Marimba, Inc. and SalesForce.com, Inc. Mr. Sclavos holds a B.S. degree in
Electrical and Computer Engineering from the University of California at Davis.
WILLIAM R. STENSRUD Mr. Stensrud has been a General Partner with the venture
capital firm of Enterprise Partners since January 1997. He has served on the
Board of Directors of Juniper Networks since October 1996. Mr. Stensrud was an
independent investor and turnaround executive from March 1996 to January 1997.
During this period, Mr. Stensrud served as President of Paradyne Corporation and
as a director of Paradyne Corporation, GlobeSpan Corporation and Paradyne
Partners LLP, all data networking companies. From January 1992 to July 1995, Mr.
Stensrud served as President and Chief Executive Officer of Primary Access
Corporation, a data networking company acquired by 3Com Corporation. From 1986
to 1992, Mr. Stensrud served as the Marketing Vice President of StrataCom, Inc.,
a telecommunications equipment company, which Mr. Stensrud co-founded. Mr.
Stensrud also serves on the boards of directors of Rhythms NetConnections
Corporation, Paradyne Corporation, Packeteer Corporation, Airfiber, Asian
Trading.com, Calient Networks, iAsia Works, LongBoard, Reflex Communications,
Solus Micro Technologies, Novera Optics, Alva and Alvesta. He holds a B.S.
degree in Electrical Engineering and Computer Science from Massachusetts
Institute of Technology.
PROPOSAL ONE
ELECTION OF DIRECTORS
There are two nominees for election to the Board of Directors this year.
The nominees for director this year are Pradeep Sindhu and Vinod Khosla. Each
nominee is presently a director of the Company and has served as a director
since 1996. Information regarding the business experience of each nominee is
provided below. The Company has a classified board of directors and Dr. Sindhu
and Mr. Khosla, if elected, will each serve a three year term until the
Company's annual meeting in 2004 and until their respective successors are
elected. Each of the nominees has consented to serve a new three-year term.
There are no family relationships among our executive officers and directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF
EACH OF THE FOLLOWING.
VOTE REQUIRED
The two persons receiving the highest number of votes represented by
outstanding shares of common stock present or represented by proxy and entitled
to vote will be elected.
PRADEEP SINDHU Dr. Sindhu co-founded Juniper Networks in February 1996 and
Director since February 1996 served as Chief Executive Officer and Chairman of the Board
Age 48 of Directors until September 1996. Since then, Dr. Sindhu
has served as Vice Chairman of the Board of Directors and
Chief Technical Officer of Juniper Networks. From September
1984 to February 1991, Dr. Sindhu worked as a Member of the
Research Staff, and from March 1987 to February 1996, as the
Principal Scientist, and from February 1994 to February
1996, as Distinguished Engineer at the Computer Science Lab,
Xerox Corporation, Palo Alto Research Center, a technology
research center. Dr. Sindhu holds a B.S.E.E. from the Indian
Institute of Technology in Kanpur, an M.S.E.E. from the
University of Hawaii and a Masters in Computer Science and
Ph.D. in Computer Science from Carnegie-Mellon University.
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VINOD KHOSLA Mr. Khosla has been a General Partner with the venture
Director since February 1996 capital firm of Kleiner Perkins Caufield & Byers since
Age 46 February 1986. Mr. Khosla was a co-founder of Daisy Systems
Corporation, an electronic design automation company, and
the founding Chief Executive Officer of Sun Microsystems,
Inc., a computer and data networking company. Mr. Khosla
also serves on the boards of Asera, Corio Inc., Redback
Networks, Inc., QWEST Communications International, Inc.,
Broadband Office, Inc., Cenix and Centrata. Mr. Khosla holds
a B.S.E.E. from the Indian Institute of Technology in New
Delhi, an M.S.E. from Carnegie-Mellon University, and an
M.B.A. from the Stanford Graduate School of Business.
Institute of Technology.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT AUDITORS
Subject to ratification by the stockholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the financial
statements of the Company for the current fiscal year. Fees paid to the
independent auditors were $237,000 for the audit of the consolidated financial
statements for the fiscal year ended December 31, 2000 and for the review of the
consolidated financial statements included in the Company's quarterly filings on
Form 10Q, $185,000 for audit-related services and $301,000 for non-audit
services. Audit related services generally include fees for statutory audits,
business acquisitions, accounting consultations and SEC registration statements.
Representatives of the firm of Ernst & Young LLP are expected to attend the
meeting, where they will be available to respond to questions and, if they
desire, to make a statement.
THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & Young LLP as the Company's
independent auditors for the 2001 fiscal year.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. The Audit Committee discussed with the Company's independent
auditors the overall scope and plans for the audit. The Audit Committee meets
with the independent auditors, with and without management present, to discuss
the results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Audit Committee held five meetings during fiscal year 2000.
In fulfilling its oversight responsibilities, the Audit Committee reviewed
with management the audited financial statements included in the Annual Report
on Form 10-K for the year ended December 31, 2000, including a discussion of the
acceptability and quality of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in the financial
statements.
The Audit Committee reviewed with the independent auditors, who are
primarily responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting principles,
their judgments as to the acceptability and quality of the Company's accounting
principles and such other matters as are required to be discussed with the
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Audit Committee under generally accepted auditing standards. The Audit Committee
has discussed with the independent auditors their independence from management
and the Company (including the matters in the written disclosures required by
the Independence Standards Board) and considered the compatibility of non-audit
services with the auditors' independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2000 for filing with the Securities and
Exchange Commission. The Audit Committee and the Board of Directors have also
recommended, subject to ratification by the stockholders, the selection of Ernst
& Young LLP as the Company's independent auditors.
MEMBERS OF THE AUDIT COMMITTEE
William R. Hearst III
C. Richard Kramlich
Stratton Sclavos
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 19, 2001 concerning
each beneficial owner of more than 5% of the Company's common stock. The number
of shares beneficially owned is determined under the rules of the Securities and
Exchange Commission, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which such owner has the sole or shared
voting power or investment power and also any shares that such owner has the
right to acquire as of May 19, 2001 (within 60 days of the record date of March
19, 2001) through the exercise of any stock option or other right. Unless
otherwise indicated, each person, has sole investment and voting power (or
shares such powers with his spouse) with respect to the shares set forth in the
following table.
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NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF CLASS
OWNERSHIP
- ------------------------------------------------- --------------------------------------- ---------------------
Kleiner Perkins Caufield & Byers VII, L.P.
2750 Sand Hill Road 25,987,503 shares (1) 8.2% (1)
Menlo Park, CA 94025
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FMR Corp.
82 Devonshire Street 21,336,896 shares (2) 6.7% (2)
Boston, MA 02109
- ------------------------------------------------- --------------------------------------- ---------------------
Scott Kriens
c/o Juniper Networks, Inc. 19,080,794 shares (3) 5.95% (3)
1194 North Mathilda Avenue
Sunnyvale, CA 94089
- ------------------------------------------------- --------------------------------------- ---------------------
- ---------------
(1) Based on information reported on Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2001. Kleiner Perkins Caufield & Byers
VII, L.P. ("KPCB VII") reports no sole voting or dispositive power, and
shared voting and dispositive power with respect to 25,987,503 shares.
(2) Based on information reported on Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2001. FMR Corp. reports sole voting
power with respect to 1,346,251 shares, no shared voting power, sole
dispositive power with respect to 21,336,896 shares and no shared
dispositive power.
(3) Includes 800,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Includes 18,243757 shares held in the
name of the Kriens 1996 Trust, of which Mr. Kriens and his spouse are the
trustees and 37,037 shares held in the name of the Kriens Family
Foundation.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 19, 2001 concerning
the security ownership of the executive officers and directors of the Company's
common stock. The number of shares beneficially owned is determined under the
rules of the Securities and Exchange Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which such owner has the
sole or shared voting power or investment power and also any shares that such
owner has the right to acquire as of May 19, 2001 (within 60 days of March 19,
2001) through the exercise of any stock option or other right. Unless otherwise
indicated, each person, has sole investment and voting power (or shares such
powers with his spouse) with respect to the shares set forth in the following
table.
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AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP CLASS(2)
- ------------------------------------------------- --------------------------------------- ---------------------
Scott Kriens (3)
Chairman, Chief Executive Officer and
President 19,080,794 shares 5.95%
- ------------------------------------------------- --------------------------------------- ---------------------
Pradeep Sindhu (4)
Vice Chairman, Chief Technical Officer 13,084,785 shares 4.09%
- ------------------------------------------------- --------------------------------------- ---------------------
Marcel Gani (5)
Chief Financial Officer 2,101,752 shares *
- ------------------------------------------------- --------------------------------------- ---------------------
Steven Haley (6)
Vice President Worldwide Sales 2,077,373 shares *
and Service
- ------------------------------------------------- --------------------------------------- ---------------------
Peter Wexler (7)
Vice President Engineering 3,539,938 shares 1.11%
- ------------------------------------------------- --------------------------------------- ---------------------
William R. Hearst III (8)
Director
c/o Kleiner Perkins Caulfield & Byers 27,044,542 shares 8.46%
2750 Sand Hill Road
Menlo Park, CA 94025
- ------------------------------------------------- --------------------------------------- ---------------------
Vinod Khosla (9)
Director
c/o Kleiner Perkins Caulfield & Byers 26,847,613 shares 8.40%
2750 Sand Hill Road
Menlo Park, CA 94025
- ------------------------------------------------- --------------------------------------- ---------------------
C. Richard Kramlich
Director
c/o New Enterprise Associates 457,096 shares *
2490 Sand Hill Road
Menlo Park, CA 94025
- ------------------------------------------------- --------------------------------------- ---------------------
Stratton Sclavos (10)
Director 48,000 shares *
VeriSign, Inc.
1350 Charleston Road
Mountain View, CA 94303
- ------------------------------------------------- --------------------------------------- ---------------------
William R. Stensrud (11)
Director
c/o Enterprise Partners 1,792,400 shares *
7979 Ivanhoe Avenue, Suite 550
La Jolla, CA 92037
- ------------------------------------------------- --------------------------------------- ---------------------
All Directors and Executive Officers as a
group (10 persons) (12) 70,086,790 shares 21.80%
- ------------------------------------------------- --------------------------------------- ---------------------
- ---------------
* Less than 1% of the outstanding shares of common stock.
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(1) Unless otherwise noted above, the address for each of the officers and
directors is c/o Juniper Networks, Inc., 1194 North Mathilda Avenue,
Sunnyvale, CA 94089.
(2) The percentages are calculated using 319,733,533 outstanding shares of the
Company's common stock on March 19, 2001 as adjusted pursuant to Rule
13d-3(d)(1)(i).
(3) Includes 800,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Includes 18,243,757 shares held in the
name of the Kriens 1996 Trust, of which Mr. Kriens and his spouse are the
trustees, and 37,037 shares held in the name of the Kriens Family
Foundation.
(4) Includes 480,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Also includes a total of 360,000 shares
held in custody for Dr. Sindhu's children pursuant to the California
Uniform Transfers to Minors Act, a total of 1,456,266 shares held in trusts
for the benefit of Dr. Sindhu and his spouse, and 6,867 shares held by Dr.
Sindhu's spouse.
(5) Includes 80,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Includes 2,017,990 shares held in the
name of the Gani 1995 Trust of which Mr. Gani and his spouse are the
trustees and 3,762 shares held directly.
(6) Includes 274,712 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Also includes 210,938 shares which as of
March 19, 2001 are subject to a right of repurchase by the Company.
Includes 1,493,061 shares held by the Russell Management Trust of which Mr.
Haley is the trustee, 106,000 shares held in the name of the Haley Family
Foundation, 37,506 shares held by Mr. Haley's spouse and a total of 162,000
shares held in trust for the benefit of Mr. Haley's children.
(7) Includes 86,120 shares which are subject to options that may be exercised
within 60 days of March 19, 2001.
(8) Includes 25,987,503 shares held by entities affiliated with Kleiner Perkins
Caufield & Byers VII, L.P. ("KPCB VII"). Mr. Hearst is a general partner of
Kleiner Perkins Caufield & Byers and is a Director of Juniper Networks. Mr.
Hearst disclaims beneficial ownership of shares held by KPCB VII, except to
the extent of his proportional interest arising from his partnership
interest in Kleiner Perkins Caufield & Byers.
(9) Includes 25,987,503 shares held by Kleiner Perkins Caufield & Byers VII,
L.P. ("KPCB VII"). Mr. Khosla is a general partner of Kleiner Perkins
Caufield & Byers and is a Director of Juniper Networks. Mr. Khosla
disclaims beneficial ownership of shares held by KPCB VII, except to the
extent of his proportional interest arising from his partnership interest
in Kleiner Perkins Caufield & Byers.
(10) Includes 40,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001.
(11) Includes 10,000 shares which are subject to options that may be exercised
within 60 days of March 19, 2001. Includes 1,596,000 shares held in a trust
as community property.
(12) Includes all shares referenced in Notes 3 through 11 above, except the
shares beneficially owned by KPCB VII are counted only once in this
calculation.
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EXECUTIVE COMPENSATION
The following table shows, for the last three fiscal years, compensation
information for the Company's Chief Executive Officer and the next four most
highly compensated executive officers. These officers are referred to herein as
Named Executive Officers.
SUMMARY COMPENSATION TABLE
--------------------------------------- -----------------------------------------------
ANNUAL COMPENSATION
COMPENSATION LONG-TERM COMPENSATION
---------- ---------------------------- ------------- -------------- ------------------
AWARDS
- ---------------------------------- --------- ----------- ----------- ---------------- ------------- -------------- -----------------
RESTRICTED SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS (1) COMPENSATION
- --------------------------------- --------- ----------- ----------- ----------------- ------------ -------------- ------------------
Scott Kriens 2000 $250,000 $114,000 ---(1) NA 400,000 $ ---
Chairman, Chief Executive 1999 170,000 5,000 ---(1) NA 1,800,000 ---
Officer and President 1998 170,000 --- $ 1,200(1) NA 7,470 ---
- --------------------------------- --------- ----------- ----------- ----------------- ------------ -------------- ------------------
Pradeep Sindhu 2000 $170,000 $ 48,936 ---(1) NA 100,000 $ ---
Vice Chairman and Chief 1999 145,000 12,425 ---(1) NA 1,080,000 ---
Technical Officer 1998 140,225 25,000 $ 1,004(1) NA 10,710 ---
- ---------------------------------- --------- ----------- ----------- ----------------- ------------ -------------- -----------------
Marcel Gani 2000 $170,000 $77,781 ---(1) NA 100,000 $ ---
Chief Financial Officer 1999 150,000 12,500 ---(1) NA 480,000 ---
1998 150,000 --- $ 1,133(1) NA 5,490 ---
- --------------------------------- --------- ----------- ----------- ----------------- ------------ -------------- ------------------
Steven Haley 2000 $175,000 $ --- ---(1) NA 100,000 $ 259,513(2)
Vice President Worldwide 1999 175,000 --- ---(1) NA 930,000 $ 284,203(2)
Sales and Service 1998 150,000 69,039 $ 1,133(1) NA 228,780 ---
- --------------------------------- --------- ----------- ----------- ----------------- ------------ -------------- ------------------
Peter Wexler 2000 $170,000 $54,688 ---(1) NA 100,000 $ ---
Vice President Engineering 1999 150,000 6,000 ---(1) NA 480,000 ---
1998 150,000 --- $ 1,133(1) NA 6,120 ---
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Consists of the standard employee benefit portion paid by the Company for
all employees for premiums for term life insurance. No amounts are reported
for 2000 or 1999 because they are less than the lesser of: (a) $50,000 or
(b) 10% of the total salary and bonus for each of the Named Executive
Officers.
(2) Consists of commissions.
STOCK OPTION GRANTS AND EXERCISES
The following tables set forth the stock options granted to the Named
Executive Officers under the Company's stock option plans and the options
exercised by such Named Executive Officers during the fiscal year ended December
31, 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Option/SAR Grant Table sets forth hypothetical gains or "option
spreads" for the options at the end of their respective ten-year terms, as
calculated in accordance with the rules of the Securities and Exchange
Commission. Each gain is based on an arbitrarily assumed annualized rate of
compound appreciation of the market price at the date of grant of 5% and 10%
from the
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date the option was granted to the end of the option term. Actual gains, if any,
on option exercises are dependent on the future performance of the Company's
common stock and overall market conditions.
- ------------------------------------------------------------------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NO. OF TOTAL OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED EXERCISE STOCK APPRECIATION FOR OPTION
UNDERLYING TO EMPLOYEES PRICE TERM (3)
OPTIONS DURING PER EXPIRATION ------------------------------------
NAME GRANTED PERIOD (1) SHARE (2) DATE 5% 10%
- ------------------------------------------------------------------------------------------------------------------------
Scott Kriens 400,000 (4) 2.27% $93.9375 12/21/10 $23,630,716 $59,884,873
- ------------------------------------------------------------------------------------------------------------------------
Pradeep Sindhu 100,000 (4) 0.57% $93.9375 12/21/10 $5,907,679 $14,971,218
- ------------------------------------------------------------------------------------------------------------------------
Marcel Gani 100,000 (4) 0.57% $93.9375 12/21/10 $5,907,679 $14,971,218
- ------------------------------------------------------------------------------------------------------------------------
Steven Haley 100,000 (4) 0.57% $93.9375 12/21/10 $5,907,679 $14,971,218
- ------------------------------------------------------------------------------------------------------------------------
Peter Wexler 100,000 (4) 0.57% $93.9375 12/21/10 $5,907,679 $14,971,218
- ------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Based on an aggregate of 17,658,669 options granted by the Company during
the fiscal year ended December 31, 2000, to employees, directors and
consultants, including the Named Executive Officers.
(2) Options are granted at fair market value on the date of grant.
(3) The potential realizable value is calculated based on (a) the ten year term
of the option at its time of grant; (b) the assumption that the closing
price for the common stock on the date of grant appreciates at the
indicated annual rate compounded annually for the entire term of the
option; and (c) the assumption that the option is exercised and sold on the
last day of its term for the appreciated stock price.
(4) The options vest in 24 equal monthly installments beginning January 1,
2003.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table shows stock option exercises and the value of
unexercised stock options held by the Named Executive Officers during the last
fiscal year.
- -------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2000 DECEMBER 31, 2000 (2)
ACQUIRED ON VALUE -----------------------------------------------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------------------
Scott Kriens -- -- 550,000 1,650,000 $52,639,565 $132,485,375
- -------------------------------------------------------------------------------------------------------------------------
Pradeep Sindhu -- -- 330,000 850,000 $31,583,739 $74,993,725
- -------------------------------------------------------------------------------------------------------------------------
Marcel Gani -- -- -- 580,000 -- $49,152,484
- -------------------------------------------------------------------------------------------------------------------------
Steven Haley 188,111 $20,653,560 113,463 892,496 $14,226,501 $64,334,061
- -------------------------------------------------------------------------------------------------------------------------
Peter Wexler -- -- 6,120 580,000 $ 769,802 $49,152,484
- -------------------------------------------------------------------------------------------------------------------------
- ---------------
(1) Based on the fair market value of our stock on the date of exercise, minus
the exercise price, multiplied by the number of shares issued upon
exercise.
(2) The value of in-the-money options is based on the closing price on December
29, 2000 of $126.0625 per share, minus the per share exercise price,
multiplied by the number of shares underlying the option.
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EMPLOYMENT AGREEMENTS
The Company entered into a change of control agreement with Mr. Kriens on
October 1, 1996, which provides that he will be entitled to base compensation
and benefit payments for a period of three months, in the event that his
employment is terminated in connection with a change of control of Juniper
Networks. Further, Mr. Kriens' restricted stock would be released from any
repurchase option and his stock options would become vested and exercisable as
to an additional amount equal to that amount which would have vested and become
exercisable had Mr. Kriens remained employed for a period of 18 months following
the change of control. If his employment continues following a change of
control, his stock options will be vested and exercisable at a rate 1.5 times
the rate otherwise set forth in the stock option agreement for a period of
twelve months following the change of control. Under the employment agreement,
Mr. Kriens is entitled to receive three months' base compensation and benefits,
regardless of whether there is a change of control, in the event that his
employment is involuntarily terminated. Upon involuntary termination, and
regardless of whether there has been a change of control, Mr. Kriens' restricted
stock and stock options would become immediately vested and exercisable as to an
additional amount equal to the number of stock options which would have become
vested and exercisable during the three-month period following the involuntary
termination had Mr. Kriens remained employed by the Company.
The Company entered into a change of control agreement with Mr. Gani in
February 1997, which provides that he will be entitled to receive base
compensation and benefits for a period of three months, in the event of
involuntary termination. In the event of a change of control at Juniper
Networks, the vesting of Mr. Gani's stock options will accelerate as to that
number of options equal to the number of shares that would vest over the next 30
months in accordance with the Company's standard vesting schedule or the balance
of his unvested stock, whichever amount is less.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee is comprised of two of the independent,
non-employee members of the Board of Directors, neither of whom have
interlocking relationships as defined by the Securities and Exchange Commission.
The Compensation Committee is responsible for setting and administering the
policies governing annual compensation of executive officers, considers their
performance and makes recommendations regarding their cash compensation and
stock options to the full Board of Directors. The Compensation Committee,
pursuant to its charter, periodically reviews the approach to executive
compensation and makes changes as competitive conditions and other circumstances
warrant.
COMPENSATION PHILOSOPHY
In June 1999, the Company completed the initial public offering of its
common stock and became a reporting company at that time. At the end of 1999,
the Compensation Committee reviewed the compensation of its executive officers
and determined that the Company needed to make adjustments to the compensation
to move away from a compensation structure reflective of a "start-up" company
and to more appropriately reflect the Company's size and value. The Compensation
Committee also recognized that in order for the Company to develop new products
and scale the business, the ability to attract, retain and reward executive
officers who will be able to operate effectively in a high growth, complex
environment is vital. In that regard, the Company must offer compensation that
(a) is competitive in the industry; (b) motivates executive officers to achieve
the Company's strategic business objectives; and (c) aligns the interests of
executive officers with the long-term interests of stockholders.
15
17
The Compensation Committee, in reviewing compensation for the upcoming
fiscal year, determined that it would continue implementation of its plan to
restructure the compensation for the executive officers over a finite period to
reflect the size and value of the Company, as well as to put in place a
compensation structure to attract, retain and reward executive officers.
The Company currently uses salary, a management incentive plan and stock
options to meet these requirements. For incentive-based compensation, the
Compensation Committee considers the desirability of structuring such
compensation arrangements so as to qualify for deductibility under Section
162(m) of the Internal Revenue Code. As the Compensation Committee applies this
compensation philosophy in determining appropriate executive compensation levels
and other compensation factors, the Compensation Committee reaches its decisions
with a view towards the Company's overall performance.
EXECUTIVE OFFICER COMPENSATION
The Compensation Committee's approach is predicated upon the philosophy
that a substantial portion of aggregate annual compensation for executive
officers should be contingent upon the Company's performance and an individual's
contribution to the Company's success in meeting certain critical objectives. In
addition, the Compensation Committee strives to align the interests of the
Company's executive officers with the long-term interests of stockholders
through stock option grants such that grants of stock options should relate the
performance of the executive to the market perception of the performance of the
Company.
The Company provides its executive officers with a compensation package
consisting of base salary, variable incentive pay and participation in benefit
plans generally available to other employees. The Compensation Committee
considers market information from published survey data provided to the
Compensation Committee by the Company's human resources staff. The market data
consists primarily of base salary and total cash compensation rates, as well as
incentive bonus and stock programs of other companies considered by the
Compensation Committee to be peers in the Company's industry.
BASE SALARY. Last year salaries for executive officers were increased to
begin to align them with salaries for comparable positions at comparable
companies in the industry or in industries that employ individuals with similar
skills and educational background as the Company's executive officers. For
fiscal 2001, the Compensation Committee determined that base salaries for the
executive officers would increase as part of the continued overall restructuring
of the compensation to reflect the size and value of the Company.
MANAGEMENT INCENTIVE PLAN. The Company has an incentive bonus plan which is
a percentage of base salary measured against the performance of the Company
relative to certain goals for profitability and individual performance of
certain key strategic objectives of the Company.
STOCK OPTION GRANTS. Grants of stock options to executive officers are
based upon each executive officer's relative position, responsibilities,
historical and expected contributions to the Company, and the executive
officer's existing stock ownership and previous option grants. Stock options are
granted at market price on the date of grant and will provide value to the
executive officers only when the price of the Company's Common Stock increases
over the exercise price.
16
18
CHIEF EXECUTIVE OFFICER COMPENSATION
Effective for fiscal year 2001, the base salary of Mr. Kriens was increased
from $250,000 to $275,000 with a target bonus percentage of 100% of base salary.
Mr. Kriens was also granted an option to purchase 400,000 shares of common stock
which vests monthly beginning January 1, 2003.
MEMBERS OF THE COMPENSATION COMMITTEE
Vinod Khosla
William R. Stensrud
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Company's Board of Directors or Compensation
Committee.
STOCK PERFORMANCE GRAPH
The following performance graph shows the seven-month cumulative total
stockholder return assuming the investment of $100 on June 25, 1999 (the date of
the Company's initial public offering) in each of Juniper Networks common stock,
the Nasdaq Composite Index and the Nasdaq Telecommunications Index. The
performance shown is not necessarily indicative of future performance.
COMPARISON OF 19-MONTH CUMULATIVE TOTAL RETURN AMONG
JUNIPER NETWORKS, INC.,
THE NASDAQ COMPOSITE INDEX AND
THE NASDAQ TELECOMMUNICATIONS INDEX
RELATIVE PERFORMANCE
DATE JNPR COMPOSITE TELECOMM
- ---- ---- --------- --------
6/25/99 $ 100.00 $100.00 $100.00
9/30/99 $ 184.14 $107.58 $ 94.64
12/31/99 $ 343.87 $159.42 $153.80
3/31/00 $ 799.69 $179.14 $166.92
6/30/00 $ 883.32 $155.37 $131.88
9/29/00 $1,328.59 $143.88 $110.56
12/29/00 $ 764.99 $ 96.78 $ 70.20
17
19
CERTAIN TRANSACTIONS
During our last fiscal year ending December 31, 2000, there has not been,
nor is there currently proposed, any transaction or series of similar
transactions to which we were or are to be a party in which the amount involved
exceeds $60,000, and in which any director, executive officer, holder of more
than 5% of our common stock or any member of the immediate family of any of
these people had or will have a direct or indirect material interest.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Juniper Networks believes that during 2000, all filings with the SEC by its
officers, directors and 10% stockholders complied with requirements for
reporting ownership and changes in ownership of Juniper Networks common stock
under Section 16(a) of the Securities Exchange Act of 1934, as amended; however
the Company determined that Mr. Stensrud inadvertently failed to report the
purchase of shares of the Company's Common Stock on his Form 4 for the month of
June 1999. Mr. Stensrud has filed an amended Form 4.
OTHER MATTERS
The Board of Directors knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the shares
they represent as the Board of Directors may recommend.
THE BOARD OF DIRECTORS
March 31, 2001
18
20
APPENDIX A
AUDIT COMMITTEE CHARTER OF THE BOARD OF DIRECTORS OF
JUNIPER NETWORKS, INC.
PURPOSE
The Audit Committee will make such examinations as are necessary to monitor the
corporate financial reporting and external audit requirements of Juniper
Networks, Inc. and its subsidiaries (the "Company"), to provide to the Board of
Directors the results of its examinations and recommendations derived therefrom,
to outline to the Board improvements made, or to be made, in internal accounting
controls, to nominate independent auditors, and to provide to the Board such
additional information and materials as it may deem necessary to make the Board
aware of significant financial matters that require Board attention.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
from time to time prescribe.
MEMBERSHIP
The Audit Committee will consist of at least three members of the Board, all of
whom shall be independent, financially literate, and at least one of which shall
have accounting or related financial management expertise, in accordance with
the rules of the Nasdaq National Market and the Securities and Exchange
Commission. The members of the Audit Committee will be appointed by and will
serve at the discretion of the Board of Directors.
RESPONSIBILITIES
The responsibilities of the Audit Committee shall include:
1. Reviewing on a continuing basis the adequacy of the Company's system of
internal controls.
2. Reviewing the independent auditors' proposed audit scope and approach.
3. Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements provided
to management by the independent auditors.
4. Reviewing the performance of the independent auditors and ensure that the
independent auditors are accountable to the Board of Directors, as
representatives of shareholders.
5. Recommending the appointment of independent auditors to the Board of
Directors.
6. Reviewing fee arrangements with the independent auditors.
7. Ensuring receipt from the independent auditors of a formal written
statement delineating between the auditor and the Company, consistent with
Independence Standards Board Standard 1, as well as actively engaging in a
dialog with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and independence
of the independent auditor.
19
21
8. Reviewing before release the audited financial statements and Management's
Discussion and Analysis in the Company's annual report on Form 10-K;
9. Reviewing before release the unaudited quarterly operating results in the
Company's quarterly earnings release;
10. Overseeing compliance with SEC requirements for disclosure of auditor's
services and audit committee members and activities;
11. Reviewing management's monitoring of compliance with the Company's
Standards of Business Conduct and with the Foreign Corrupt Practices Act;
12. Reviewing, in conjunction with counsel, any legal matters that could have a
significant impact on the Company's financial statements;
13. Providing oversight and review of the Company's asset management policies,
including an annual review of the Company's investment policies and
performance for cash and short-term investments;
14. If necessary, instituting special investigations and, if appropriate,
hiring special counsel or experts to assist;
15. Reviewing related party transactions for potential conflicts of interest;
16. Reviewing and reassessing the adequacy of this formal written charter on an
annual basis; and
17. Performing other oversight functions as requested by the full Board of
Directors.
In addition to the above responsibilities, the Audit Committee will undertake
such other duties as the Board of Directors delegates to it, and will report, at
least annually, to the Board regarding the Committee's examinations and
recommendations.
MEETINGS
The Audit Committee will meet at least one time each year. The Audit Committee
may establish its own schedule which it will provide to the Board of Directors
in advance.
The Audit Committee will meet separately with the Chief Executive Officer and
separately with the Chief Financial Officer of the Company at least annually to
review the financial affairs of the Company. The Audit Committee will meet with
the independent auditors of the Company, at such times as it deems appropriate,
to review the independent auditor's examination and management report.
REPORTS
The Audit Committee will record its summaries of recommendations to the Board in
written form which will be incorporated as a part of the minutes of the Board of
Directors meeting at which those recommendations are presented.
MINUTES
The Audit Committee will maintain written minutes of its meetings, which minutes
will be filed with the minutes of the meetings of the Board of Directors.
20
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DIRECTIONS TO THE HISTORIC DEL MONTE BUILDING
100 S. MURPHY AVE. #103
SUNNYVALE, CA 94086-6118
FROM HIGHWAY 101 NORTHBOUND OR SOUTHBOUND:
Exit Mathilda Avenue South. Proceed 1.5 miles to Washington Avenue. Turn left.
Go 3 blocks to Murphy Avenue and turn left.
The Historic Del Monte Building is at the end of the block on the right. (See
map)
"for parking" (See map for parking)
"The banquet office is on the rear of the building facing Sunnyvale Ave. Look
for the green awning that says "Banquet Office" and "
The elevator can be found at the rear entrance".
FROM HIGHWAY 280 NORTHBOUND:
Exit at De Anza Blvd and turn right. (De Anza Blvd. will become
Sunnyvale/Saratoga Rd.)
Proceed 2 miles to El Camino Real. Cross El Camino and drive to Washington
Avenue.
Turn right on Washington. Go 3 blocks to Murphy Avenue and turn left.
The Historic Del Monte Building is at the end of the block on the right. (See
map)
"for parking" (See map for parking)
"The banquet office is on the rear of the building facing Sunnyvale Ave. Look
for the green awning that says "Banquet Office" and "
The elevator can be found at the rear entrance".
FROM HIGHWAY 280 SOUTHBOUND:
Exit at De Anza Blvd. and turn left. (De Anza Blvd. will become
Sunnyvale/Saratoga Rd.)
Proceed 2 miles to El Camino Real. Cross El Camino and drive to Washington
Avenue.
Turn right on Washington. Go 3 blocks to Murphy Avenue and turn left.
The Historic Del Monte Building is at the end of the block on the right. (See
map)
"for parking" (See map for parking)
"The banquet office is on the rear of the building facing Sunnyvale Ave. Look
for the green awning that says "Banquet Office" and "
The elevator can be found at the rear entrance".
FROM HIGHWAY 880 NORTHBOUND OR SOUTHBOUND:
Exit at Highway 237 and drive to the Mathilda Exit. Turn left and drive 2 miles
to Washington Avenue.
Turn left. Go 3 blocks to Murphy Avenue and turn left.
The Historic Del Monte Building is at the end of the block on the right. (See
map)
"for parking" (See map for parking)
"The banquet office is on the rear of the building facing Sunnyvale Ave. Look
for the green awning that says "Banquet Office" and "
The elevator can be found at the rear entrance".
[MAP]
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JUNIPER NETWORKS, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 9, 2001
9:00 A.M.
THE HISTORIC DEL MONTE BUILDING
100 SOUTH MURPHY STREET
THIRD FLOOR
SUNNYVALE, CA 94086
- --------------------------------------------------------------------------------
JUNIPER NETWORKS, INC.
1194 N. MATHILDA AVENUE, SUNNYVALE, CA 94089 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON MAY 9, 2001.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
By signing the proxy, you revoke all prior proxies and appoint Marcel Gani and
Lisa C. Berry, and each of them, with full power of substitution, to vote your
shares on the matters shown on the reverse side and any other matters which may
come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
24
---------------
COMPANY #
CONTROL #
---------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. (ET) on May 8, 2001.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple instructions the voice provides you.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/JNPR/ -- QUICK *** EASY *** IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. (CT) on May 8, 2001.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Juniper Networks, Inc., c/o Shareowner
ServicesSM, P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of directors: [ ] Vote FOR [ ] Vote WITHHELD
01 Pradeep Sindhu all nominees from all nominees
02 Vinod Khosla (except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY ---------------------------------------
TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER(S) OF THE NOMINEE(S)
IN THE BOX PROVIDED TO THE RIGHT.) ---------------------------------------
2. Ratification of Ernst & Young LLP
as independent auditors [ ] For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ]
Indicate changes below: Date
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Signature(s) in Box
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appears on Proxy. If held in joint
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Trustees, administrators, etc.,
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Corporations should provide full
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