Riverbed Technology (RVBD)

Restricted Stock Units

In the first quarter of 2009, we granted RSUs covering 2.1 million shares of common stock to our employees under the 2006 Plan, which included performance-based RSUs to eligible executives covering 1.8 million shares of common stock and 0.3 million time-based RSUs. We expense the cost of RSUs, which is determined to be the fair market value of the shares of our common stock at the date of grant, ratably over the service period.

The number of performance-based RSUs that vest is variable based upon meeting certain annual performance targets, and require the eligible executives to be employed by us for up to three years from the date of grant. We estimated stock compensation expense for our performance share awards based on the probability-weighted estimate of achieving the annual performance target and only recognized expense for the portions of such awards estimated to be earned and vested. We accrued stock compensation expense of $0.2 million in operating expenses in the first quarter of 2009 in connection with the performance-based RSUs. Any change in the estimate of the number of performance-based RSUs to be earned will result in an adjustment to the cumulative compensation expense in the period of the change in estimate.

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RSUs generally vest over a period of three to four years from the date of grant. Until vested, RSUs do not have the voting rights of common stock and the shares underlying the awards are not considered issued and outstanding. As of March 31, 2009, total unrecognized compensation cost related to non-vested RSUs granted under SFAS No. 123(R) to employees and directors but not yet recognized was $17.8 million, net of estimated forfeitures of $3.9 million. This cost will be recognized over the remaining weighted-average service period. Amortization in the three months ended March 31, 2009 and 2008 was $1.0 million and zero, respectively.

As of March 31, 2009, 2,789,461 shares were available for grant under the 2006 Plan and the 2006 Director Plan. As of March 31, 2009, 1,123,975 shares were available for grant under the 2009 Plan.

Restricted Stock Units

In the first quarter of 2009, we granted RSUs covering 2.1 million shares of common stock to our employees under the 2006 Plan, which included performance-based RSUs to eligible executives covering 1.8 million shares of common stock and 0.3 million time-based RSUs. We expense the cost of RSUs, which is determined to be the fair market value of the shares of our common stock at the date of grant, ratably over the service period.

The number of performance-based RSUs that vest is variable based upon meeting certain annual performance targets, and require the eligible executives to be employed by us for up to three years from the date of grant. We estimated stock compensation expense for our performance share awards based on the probability-weighted estimate of achieving the annual performance target and only recognized expense for the portions of such awards estimated to be earned and vested. We accrued stock compensation expense of $0.2 million in operating expenses in the first quarter of 2009 in connection with the performance-based RSUs. Any change in the estimate of the number of performance-based RSUs to be earned will result in an adjustment to the cumulative compensation expense in the period of the change in estimate.

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RSUs generally vest over a period of three to four years from the date of grant. Until vested, RSUs do not have the voting rights of common stock and the shares underlying the awards are not considered issued and outstanding. As of March 31, 2009, total unrecognized compensation cost related to non-vested RSUs granted under SFAS No. 123(R) to employees and directors but not yet recognized was $17.8 million, net of estimated forfeitures of $3.9 million. This cost will be recognized over the remaining weighted-average service period. Amortization in the three months ended March 31, 2009 and 2008 was $1.0 million and zero, respectively.

As of March 31, 2009, 2,789,461 shares were available for grant under the 2006 Plan and the 2006 Director Plan. As of March 31, 2009, 1,123,975 shares were available for grant under the 2009 Plan.

ARTICLE 9. RESTRICTED STOCK UNITS.

9.1 Restricted Stock Unit Agreement. Each grant of RSUs under the Plan shall be evidenced by a Restricted Stock Unit Agreement between the recipient and the Company. Such RSUs shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various RSUs entered into under the Plan need not be identical.

9.2 Payment for Awards. To the extent that an Award is granted in the form of RSUs, no cash consideration shall be required of the Award recipients.

9.3 Vesting Conditions. Each Award of RSUs may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Agreement. The Committee may include among such conditions the

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requirement that the performance of the Company or a business unit of the Company for a specified period of one or more fiscal years equal or exceed a target determined in advance by the Committee. A Restricted Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. Acceleration of vesting may be required under Section 11.3.

9.4 Voting and Dividend Rights. The holders of RSUs shall have no voting rights. Prior to settlement or forfeiture, any RSU awarded under the Plan may, at the Committee’s discretion when granting the RSU carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Common Share while the RSU is outstanding. Settlement of dividend equivalents may be made in the form of cash, in the form of Common Shares, or in a combination of both. Prior to distribution, any dividend equivalents that are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach.

9.5 Form and Time of Settlement of Stock Units. Settlement of vested RSUs may be made in the form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Committee. The actual number of RSUs eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting RSUs into cash may include (without limitation) a method based on the average Fair Market Value of Common Shares over a series of trading days. Until an Award of RSUs is settled, the number of such RSUs shall be subject to adjustment pursuant to Article 11.

9.6 Death of Recipient. Any RSU Award that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a RSU Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any RSU Award that becomes payable after the recipient’s death shall be distributed to the recipient’s estate.

9.7 Creditors’ Rights. A holder of RSUs shall have no rights other than those of a general creditor of the Company. RSUs represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Unit Agreement.