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Number of | |||||||||
Shares of | |||||||||
Common Stock | Percent of | ||||||||
Beneficially | Common Stock | ||||||||
Name and Address(1) | Owned(2) | Outstanding(2) | |||||||
FMR Corp. and its affiliates(3) | 4,469,700 | 11.3 | % | ||||||
82 Devonshire Street | |||||||||
Boston, Massachusetts 02109 | |||||||||
Franklin Resources, Inc.(4) | 1,803,200 | 4.6 | % | ||||||
One Franklin Parkway, Building 920 | |||||||||
San Mateo, California 94403 | |||||||||
John McAdam(5) | 164,709 | * | |||||||
Tom Hull(6) | 38,750 | * | |||||||
Jeff Pancottine(7) | 2,738 | * | |||||||
Edward J. Eames(8) | 2,720 | * | |||||||
Karl Triebes(9) | 21,250 | * | |||||||
A. Gary Ames(10) | 5,000 | * | |||||||
Keith D. Grinstein(11) | 11,000 | * | |||||||
Karl D. Guelich(12) | 27,500 | * | |||||||
Alan J. Higginson(13) | 67,500 | * | |||||||
Rich Malone(14) | 30,000 | * | |||||||
Steven Coburn(15) | — | * | |||||||
All directors and executive officers as a group (14 people)(16) | 408,145 | 1.0 | % |
provide incentive compensation that is linked to the performance of | ||
establish incentives that relate to the | ||
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Column A | Column B | Column C | |||||||||||
Number of securities | |||||||||||||
remaining available for | |||||||||||||
Number of securities | future issuance under equity | ||||||||||||
to be issued upon | Weighted-average | compensation plans (total | |||||||||||
exercise of | exercise price of | securities authorized but | |||||||||||
outstanding options | outstanding options | unissued under the plans, | |||||||||||
Plan Category | and rights | and rights | less Column A) | ||||||||||
Equity compensation plans approved by security holders(1) | 3,488,408 | (2) | $ | 27.77 | (3) | 1,003,250 | (4) | ||||||
Equity compensation plans not approved by security holders(5) | 1,837,641 | $ | 23.97 | 55,853 | (6) | ||||||||
Total | 5,326,049 | $ | 25.83 | 1,059,103 | |||||||||
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ADC Telecommunications Inc. | Emulex Corp. | Quest Software | ||
ADTRAN Inc. | Finisar Corp. | Red Hat Inc. | ||
Avocent Corp. | Foundry Networks Inc. | Riverbed Technology | ||
BEA Systems Inc. | Henry (Jack) & Associates Inc. | SonicWALL Inc. | ||
Blue Coat Systems Inc. | Juniper Networks Inc. | Sonus Networks Inc. | ||
BMC Software Inc. | Level 3 Communications Inc. | Symantec Corp. | ||
CIENA Corp. | McAfee Inc. | Sybase Inc. | ||
Citrix Systems Inc. | Network Appliance Inc. | VeriSign Inc. | ||
Cogent Inc. | Progress Software Corp. | Websense Inc. | ||
Comverse Technology Inc. | QLogic Corp. |
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3COM | Intermec | Resmed | ||
Aspect Communications | Intersil | RF Micro Devices | ||
Avande | ITG | Samsung Austin Semiconductor | ||
BAE — NES | Itron | SEH America | ||
BAE — Information Technology | Kaiser Permantente-KPIT | Sensus Metering Systems | ||
BAE — National Security Solutions | Komag | SGI | ||
Brocade Communications Systems | Kronos | Skyworks Solutions | ||
Brooks Automation | Kulicke and Soffa | Spirent Communications | ||
Carl Zeiss Meditec | Leapfrog Enterprises | Sumco USA Phoenix | ||
Checkfree | Loral Space and Communications | SVB Financial Group | ||
Ciena | Meggitt-USA | Sybase | ||
Cognos | Mentor Graphics | Tekelec | ||
Coherent | Microchip Technology | THQ | ||
Conexant Systems | Misys Healthcare Systems | Tibco Software | ||
Cubic Corporation | Mitsubishi Digital Electronics America | Tokyo Electron US Holdings | ||
Cymer | National Instruments | Toshiba America Business Solutions | ||
Dresser Wayne | Navis | Toshiba America Medical System | ||
ECC | Navteq | Trend Micro | ||
Emdeon Business Services | NDS | Trimble Navigation | ||
Entegris | NEC-Electronics America | United Online | ||
Flir Systems | NetFlix | Varian Semiconductor Equipment | ||
Fujitsu America | Novell | Verigy US | ||
General Atomics | Omnivision Technologies | Viasat | ||
Harris Stratex Networks | Orbital Sciences | Vishay-Siliconix | ||
Hitachi High Technologies | Panduit | VMWare | ||
Holigic | Plantronics | Vonage | ||
Hutchinson Technology | Polycom | Welch Allyn | ||
Hyperion Solutions | Powerwave Technologies | Xerox International Partners | ||
Input/Output | Quantum | Zebra Technologies | ||
Integrated Device Technology | RCN |
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Affymetrix | Hand Held Products | PMC — Sierra Inc. | ||
Akamai Technologies | Hitachi Data Systems | Polycom | ||
Altiris Inc. | Hyperion Solutions | Progress Software | ||
Ansys Inc. | I2 Technologies | Quantum | ||
Aspect Software | Intermec | Radisys | ||
Aspen Technology | JDA Software Group | Red Hat Inc. | ||
Avid Technology | Keane, Inc. | SalesForce.com | ||
Axcelis Technologies | Lawson Softare | Silicon Graphics | ||
BEA Systems | Lenovo Group, LTD. | Silicon Laboratories | ||
Brocade Communications Systems | Lionbridge Technologies | Sonus Networks | ||
Brooks Automation | McAfee Inc. | Spirent Communications | ||
Cognos | Mentor Graphics | SPSS Inc. | ||
Comverse Technologies | Misys, PLC | Standard Microsystems | ||
Cymer | MKS Instruments | Sterling Commerce | ||
Doubleclick, Inc. | National Instruments | Stratus Technologies | ||
Extreme Networks | NavTeq | Sybase Inc. | ||
FEI Company | Nice Systems | Telecordia Technologies | ||
Foundry Networks | Novell | Tisco Software Inc. | ||
Flir Systems | Open Text Corp | Trimble Navigation | ||
Fujitsu America | Openwave Systems | Wind River Systems | ||
General Atomics | Parexel International | Zoran Group |
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Long Term Compensation | |||||||||||||||||||||||||||||
Annual Compensation | Awards | ||||||||||||||||||||||||||||
Other Annual | Securities | All Other | |||||||||||||||||||||||||||
Bonus(1) | Compensation | Restricted | Underlying | Compensation(2) | |||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | ($) | ($) | Stock Awards | Options (#) | ($) | ||||||||||||||||||||||
John McAdam | 2005 | $ | 467,470 | $ | 445,360 | $ | — | $ | 2,108,500 | (3) | — | $ | 789 | ||||||||||||||||
President and | 2004 | $ | 445,200 | $ | 449,402 | $ | — | — | 100,000 | $ | 789 | ||||||||||||||||||
Chief Executive Officer | 2003 | $ | 445,200 | $ | 386,911 | $ | — | — | 160,000 | $ | 789 | ||||||||||||||||||
Jeff Pancottine | 2005 | $ | 319,192 | $ | 243,282 | $ | — | $ | 843,400 | (4) | — | $ | 3,789 | ||||||||||||||||
Senior VP and General Manager, | 2004 | $ | 303,992 | $ | 245,180 | $ | — | — | 40,000 | $ | 3,789 | ||||||||||||||||||
Security Business Unit | 2003 | $ | 292,300 | $ | 202,525 | $ | — | — | 55,000 | $ | 3,789 | ||||||||||||||||||
Edward Eames | 2005 | $ | 252,428 | $ | 192,396 | $ | — | $ | 843,400 | (4) | — | $ | 3,789 | ||||||||||||||||
Senior VP of Business | 2004 | $ | 240,408 | $ | 194,141 | $ | — | — | 40,000 | $ | 3,789 | ||||||||||||||||||
Operations and Global Services | 2003 | $ | 222,600 | $ | 154,426 | $ | — | — | 55,000 | $ | 3,789 | ||||||||||||||||||
Tom Hull(5) | 2005 | $ | 259,992 | $ | 198,167 | $ | — | $ | 843,400 | (4) | — | $ | 3,789 | ||||||||||||||||
Senior VP of Worldwide Sales | 2004 | $ | 238,826 | $ | 194,858 | $ | — | — | 265,000 | $ | 6,173 | ||||||||||||||||||
2003 | — | — | — | — | — | — | |||||||||||||||||||||||
Karl Triebes(6) | 2005 | $ | 305,000 | $ | 190,544 | $ | — | $ | 843,400 | (4) | — | $ | 100,679 | ||||||||||||||||
Senior VP of Product Development | 2004 | $ | 27,763 | $ | 125,070 | (7) | $ | — | — | 300,000 | $ | — | |||||||||||||||||
and Chief Technology Officer | 2003 | — | — | — | — | — | — | ||||||||||||||||||||||
Former Officer: | |||||||||||||||||||||||||||||
Steve Coburn(8) | 2005 | $ | 278,343 | $ | 201,118 | $ | — | — | — | $ | 3,723 | ||||||||||||||||||
Former Senior VP and Chief | 2004 | $ | 276,680 | $ | 219,236 | $ | — | — | 40,000 | $ | 3,189 | ||||||||||||||||||
Financial Officer | 2003 | $ | 265,000 | $ | 181,093 | $ | — | — | 55,000 | $ | 3,189 |
Non-Equity | ||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||
Salary | Awards | Awards | Compensation | Compensation | Total | |||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(5) | ($)(6) | |||||||||||||||||||||
John McAdam, | 2008 | $ | 557,956 | $ | 6,273,355 | $ | 0 | $ | 436,565 | $ | 600 | $ | 7,268,476 | |||||||||||||||
President and Chief Executive Officer | 2007 | $ | 495,508 | $ | 4,822,443 | $ | 0 | $ | 420,283 | $ | 600 | $ | 5,738,834 | |||||||||||||||
John Rodriguez, | 2008 | $ | 213,529 | $ | 1,532,124 | $ | 0 | $ | 62,684 | $ | 4,600 | $ | 1,812,937 | |||||||||||||||
Senior VP and Chief Accounting Officer | 2007 | $ | 198,803 | $ | 1,300,671 | $ | 0 | $ | 63,233 | $ | 4,600 | $ | 1,567,307 | |||||||||||||||
Karl Triebes | 2008 | $ | 367,913 | $ | 1,551,908 | $ | 207,702 | $ | 180,094 | $ | 4,600 | $ | 2,312,217 | |||||||||||||||
Senior VP of Product Development and Chief Technical Officer | 2007 | $ | 342,698 | $ | 1,250,652 | $ | 480,493 | $ | 181,670 | $ | 4,600 | $ | 2,260,113 | |||||||||||||||
Edward J. Eames(4) | 2008 | $ | 303,723 | $ | 1,551,908 | $ | 0 | $ | 178,861 | $ | 4,600 | $ | 2,039,092 | |||||||||||||||
Senior VP of Business Operations | 2007 | — | — | — | — | — | — | |||||||||||||||||||||
Dan Matte | 2008 | $ | 241,214 | $ | 1,634,272 | $ | 0 | $ | 142,082 | $ | 4,600 | $ | 2,022,168 | |||||||||||||||
Senior VP of Marketing and Business Development | 2007 | $ | 209,633 | $ | 1,448,065 | $ | 0 | $ | 133,355 | $ | 4,600 | $ | 1,795,653 |
(1) | This column represents the dollar amount recognized for financial statement reporting purposes with respect to the fiscal | |
(2) | This column represents the dollar amount recognized for |
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(3) | This column represents the total cash incentive bonus paid to the Named Executive Officers in fiscal year 2008 under the Incentive Plan. 50% of the cash incentive bonus is based on the Company achieving target revenue for each quarter and 50% is based on the Company achieving target EBITDA for each quarter. In fiscal year 2008, the Company achieved 98.9% of the annual revenue target and 97.5% of the annual adjusted EBITDA target. As a result, the executive officers earned 98.2% of their target cash incentive bonus in fiscal year 2008. For additional information, see footnote (3) of the Grants of Plan-Based Awards for Fiscal 2008 Table |
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(4) | Mr. Eames was not a Named Executive Officer in fiscal year 2007. | |
(5) | Items in column are outlined in the following table: |
Company | Internet | |||||||||||
Contributions | Service | Total All Other | ||||||||||
Name | to 401(k) Plan | Stipend | Compensation ($) | |||||||||
John McAdam | $ | 0 | $ | 600 | $ | 600 | ||||||
John Rodriguez | $ | 4,000 | $ | 600 | $ | 4,600 | ||||||
Karl Triebes | $ | 4,000 | $ | 600 | $ | 4,600 | ||||||
Edward J. Eames | $ | 4,000 | $ | 600 | $ | 4,600 | ||||||
Dan Matte | $ | 4,000 | $ | 600 | $ | 4,600 |
(6) | The Company did not provide any discretionary bonus for the 2008 and 2007 fiscal years and does not have a pension or nonqualified deferred compensation plan. |
All Other | ||||||||||||||||||||||||||||||||||||||
Stock | ||||||||||||||||||||||||||||||||||||||
Awards: | Grant | |||||||||||||||||||||||||||||||||||||
Estimated Possible | Estimated Possible | Number | Date Fair | |||||||||||||||||||||||||||||||||||
Payouts Under Non-equity | Payouts Under Equity | of Shares | Value of | |||||||||||||||||||||||||||||||||||
Incentive Plan Awards(3) | Incentive Plan Awards(4) | of Stock | Stock | |||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Awards | |||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date | ($) | ($) | ($) | (#) | (#) | (#) | (#)(5) | ($/Sh)(6) | ||||||||||||||||||||||||||||
John McAdam | 8/1/2008(1) | 7/18/2008 | — | — | — | 50,138 | 57,300 | 64,463 | 57,300 | $ | 3,341,736 | |||||||||||||||||||||||||||
(2) | 11/21/2007 | $ | 355,555 | $ | 444,444 | N/A | — | — | — | — | — | |||||||||||||||||||||||||||
John Rodriguez | 8/1/2008(1) | 7/15/2008 | — | — | — | 14,700 | 16,800 | 18,900 | 16,800 | $ | 979,776 | |||||||||||||||||||||||||||
(2) | 11/21/2007 | $ | 51,053 | $ | 63,816 | N/A | — | — | — | — | — | |||||||||||||||||||||||||||
Karl Triebes | 8/1/2008(1) | 7/15/2008 | — | — | — | 14,700 | 16,800 | 18,900 | 16,800 | $ | 979,776 | |||||||||||||||||||||||||||
(2) | 11/21/2007 | $ | 146,674 | $ | 183,343 | N/A | — | — | — | — | — | |||||||||||||||||||||||||||
Edward J. Eames | 8/1/2008(1) | 7/15/2008 | — | — | — | 14,700 | 16,800 | 18,900 | 16,800 | $ | 979,776 | |||||||||||||||||||||||||||
(2) | 11/21/2007 | $ | 145,671 | $ | 182,089 | N/A | — | — | — | — | — | |||||||||||||||||||||||||||
Dan Matte | 8/1/2008(1) | 7/15/2008 | — | — | — | 14,700 | 16,800 | 18,900 | 16,800 | $ | 979,776 | |||||||||||||||||||||||||||
(2) | 11/21/2007 | $ | 115,718 | $ | 144,647 | N/A | — | — | — | — | — |
(1) | Restricted stock units granted under the 2005 Plan. No options were granted to the Named Executive Officers in fiscal year 2008. | |
(2) | Represents the | |
(3) | 50% of |
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(4) | Represents (i) 25% of the aggregate number of RSUs in the grant dated August 1, 2008 which are subject to the | |
(5) | Represents 50% of the aggregate number of RSUs in the grant dated August 1, 2008 which vest in equal quarterly increments over two years, until such | |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money | |||||||||||||||||||||||
Options at | Options at | |||||||||||||||||||||||
September 30, 2005 (#)(1) | September 30, 2005 ($)(2) | |||||||||||||||||||||||
Shares | Value | |||||||||||||||||||||||
Acquired on | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Name | Exercise (#) | ($)(3) | (#) | (#) | ($) | ($) | ||||||||||||||||||
John McAdam | 360,000 | $ | 11,742,600 | 245,000 | — | $ | 5,978,350 | $ | — | |||||||||||||||
Jeff Pancottine | 289,000 | $ | 6,705,743 | — | — | $ | — | $ | — | |||||||||||||||
Edward Eames | 264,936 | $ | 7,993,003 | 13,750 | — | $ | 396,413 | $ | — | |||||||||||||||
Tom Hull | 55,000 | $ | 1,788,050 | 92,812 | 117,188 | $ | 1,763,821 | $ | 2,317,979 | |||||||||||||||
Karl Triebes | 50,000 | $ | 892,000 | 31,250 | 218,750 | $ | 645,625 | $ | 4,519,375 | |||||||||||||||
Former Officer: | ||||||||||||||||||||||||
Steven Coburn | 265,000 | $ | 7,674,635 | — | — | $ | — | $ | — |
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Options Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||||
Equity | Plan | |||||||||||||||||||||||||||||||||||||
Incentive | Awards: | |||||||||||||||||||||||||||||||||||||
Plan | Market | |||||||||||||||||||||||||||||||||||||
Awards: | or Payout | |||||||||||||||||||||||||||||||||||||
Equity | Number of | Value of | ||||||||||||||||||||||||||||||||||||
Incentive | Unearned | Unearned | ||||||||||||||||||||||||||||||||||||
Plan | Market | Shares, | Shares, | |||||||||||||||||||||||||||||||||||
Awards: | Value of | Units or | Units or | |||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Shares or | Other | Other | ||||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares or | Units of | Rights | Rights | ||||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Stock That | That | That | ||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Stock That | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Expiration | Have Not | Vested | Vested | Vested | ||||||||||||||||||||||||||||||
Name | Grant Date | Exercisable | Unexercisable | Options (#) | Price ($) | Date | Vested (#) | ($)(5) | (#) | ($)(9) | ||||||||||||||||||||||||||||
John McAdam | — | — | — | N/A | $ | — | — | 94,800 | (2) | $2,216,424 | 85,392 | (6) | $ | 1,996,465 | ||||||||||||||||||||||||
John Rodriguez | — | — | — | N/A | $ | — | — | 26,650 | (3) | $623,077 | 24,768 | (7) | $ | 579,076 | ||||||||||||||||||||||||
Karl Triebes | 8/16/2004 | (1) | 113,000 | 0 | N/A | $ | 11.405 | 8/16/2014 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
— | — | — | N/A | $ | — | — | 26,900 | (4) | $628,922 | 24,830 | (8) | $ | 580,525 | |||||||||||||||||||||||||
Edward J. Eames | — | — | — | N/A | $ | — | — | 26,900 | (4) | $628,922 | 24,830 | (8) | $ | 580,525 | ||||||||||||||||||||||||
Dan Matte | — | — | — | N/A | $ | — | — | 26,900 | (4) | $628,922 | 24,830 | (8) | $ | 580,525 |
(1) | Option granted in connection with initial hiring to purchase up to 600,000 shares of Common Stock at a price per share of $11.405, 25% of which vested on the first anniversary date of the grant, with the balance vesting in equal monthly installments over the following three year period. | |
(2) | Comprised of |
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(3) | Comprised of the following equity awards dated (i) December 15, 2006 of which 2,500 RSUs vest in equal quarterly increments through November 1, 2008; (ii) August 1, 2007 of which 7,350 RSUs vest in equal quarterly increments through August 1, 2009; and (iii) August 1, 2008 of which 16,800 RSUs vest in equal quarterly increments through August 1, 2010 as set forth in footnote (5) to the Grants of Plan-Based Awards for Fiscal 2008 Table. | |
(4) | Comprised of the following equity awards dated (i) December 15, 2006 of which 2,750 RSUs vest in equal quarterly increments through November 1, 2008; (ii) August 1, 2007 of which 7,350 RSUs vest in equal quarterly increments through August 1, 2009; and (iii) August 1, 2008 of which 16,800 RSUs vest in equal quarterly increments through August 1, 2010 as set forth in footnote (5) to the Grants of Plan-Based Awards for Fiscal 2008 Table. | |
(5) | Calculated by multiplying the number of unvested RSUs held by the Named Executive Officer by the closing price of | |
(6) | Comprised of the following equity awards dated (i) December 15, 2006 of which 3,092 RSUs shall be fully vested on November 1, 2008 subject to the Company achieving specified performance criteria; (ii) August 1, 2007 of which 25,000 RSUs shall be fully vested on August 1, 2009 subject to the Company achieving specified performance criteria; and (iii) August 1, 2008 of which 57,300 RSUs shall vest during the period ending on August 1, 2010 as set forth in footnote (4) to the Grants of Plan-Based Awards for Fiscal 2008 Table, subject to the Company achieving specified performance criteria. | |
(7) | Comprised of the following equity awards dated (i) December 15, 2006 of which 618 RSUs shall be fully vested on November 1, 2008 subject to the Company achieving specified performance criteria; (ii) August 1, 2007 of which 7,350 shall be fully vested on August 1, 2009 subject to the Company achieving specified performance criteria; and (iii) August 1, 2008 of which 16,800 shall vest during the period ending on August 1, 2010 as set forth in footnote (4) to the Grants of Plan-Based Awards for Fiscal 2008 Table, subject to the Company achieving specified performance criteria. | |
(8) | Comprised of the following equity awards dated (i) December 15, 2006 of which 680 RSUs shall be fully vested on November 1, 2008 subject to the Company achieving specified performance criteria; (ii) August 1, 2007 of which 7,350 RSUs shall be fully vested on August 1, 2009 subject to the Company achieving specified performance criteria; and (iii) August 1, 2008 of which 16,800 RSUs shall vest during the period ending on August 1, 2010 as set forth in footnote (4) to the Grants of Plan-Based Awards for Fiscal 2008 Table, subject to the Company achieving specified performance criteria. | |
(9) | Calculated by multiplying the number of unearned RSUs that have not vested held by the |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||
Acquired on | on Exercise | Acquired on | on Vesting | |||||||||||||
Name | Exercise (#) | ($)(1) | Vesting (#) | ($)(2) | ||||||||||||
John McAdam | — | $ | — | 146,908 | $ | 4,117,004 | ||||||||||
John Rodriguez | — | $ | — | 40,332 | $ | 1,151,514 | ||||||||||
Karl Triebes | 25,000 | $ | 535,336 | 36,020 | $ | 1,012,482 | ||||||||||
Edward J. Eames | — | $ | — | 36,020 | $ | 1,012,482 | ||||||||||
Dan Matte | — | $ | — | 43,020 | $ | 1,215,167 |
(1) | Amount reflects the difference between the option exercise price and the market price of the Company’s common stock at the time of exercise multiplied by the number of | |
Amounts reflect the closing price of |
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RSU Vesting | ||||
Name | Acceleration(1) | |||
John McAdam | $ | 4,212,889 | ||
John Rodriguez | $ | 1,202,153 | ||
Karl Triebes | $ | 1,209,447 | ||
Edward J. Eames | $ | 1,209,447 | ||
Dan Matte | $ | 1,209,447 |
(1) |
Fees | ||||||||||||
Earned or | Stock | |||||||||||
Paid in Cash | Awards | Total | ||||||||||
Name(1) | ($)(2) | ($)(3) | ($) | |||||||||
A. Gary Ames | $ | 69,250 | $ | 197,236 | $ | 266,486 | ||||||
Deborah L. Bevier | $ | 64,750 | $ | 197,236 | $ | 261,986 | ||||||
Keith D. Grinstein | $ | 74,750 | $ | 197,236 | $ | 271,986 | ||||||
Karl D. Guelich | $ | 75,000 | $ | 197,236 | $ | 272,236 | ||||||
Alan J. Higginson | $ | 76,750 | $ | 197,236 | $ | 273,986 | ||||||
Rich Malone | $ | 26,192 | $ | 85,384 | $ | 111,576 | ||||||
Scott Thompson | $ | 40,382 | $ | 152,683 | $ | 193,065 |
(1) | John McAdam, the Company’s President and Chief Executive Officer is not included in this table as he is an employee of the Company |
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(2) | Represents the aggregate annual retainer, Board chair retainer, committee chair retainer, and board and committee meeting amounts. Non-employee directors of the Company are currently paid $40,000 annually for their services as members of the Board of Directors. Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees are paid an additional $15,000, $10,000 and $7,500, respectively, annually. The Chairman of the Board of Directors receives an additional $15,000 paid annually. In addition, the non-employee directors of the Company are paid $1,500 for each in-person board meeting and $750 for each telephonic board meeting attended. Members of the Standing Committees, as well as any special committee or ad hoc committee established by the Board of Directors, are paid $1,000 for each in-person committee meeting and $750 for each telephonic committee meeting attended. Directors receive cash fees in quarterly installments. The following table provides a breakdown of fees earned or paid in cash: |
Board and | ||||||||||||||||
Committee | ||||||||||||||||
Annual | Chair | Meeting | ||||||||||||||
Retainers | Fees | Fees | Total | |||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||
A. Gary Ames | $ | 40,000 | $ | 7,500 | $ | 21,750 | $ | 69,250 | ||||||||
Deborah L. Bevier | $ | 40,000 | — | $ | 24,750 | $ | 64,750 | |||||||||
Keith D. Grinstein | $ | 40,000 | $ | 10,000 | $ | 24,750 | $ | 74,750 | ||||||||
Karl D. Guelich | $ | 40,000 | $ | 15,000 | $ | 20,000 | $ | 75,000 | ||||||||
Alan J. Higginson | $ | 40,000 | $ | 15,000 | $ | 21,750 | $ | 76,750 | ||||||||
Rich Malone | $ | 17,692 | — | $ | 8,500 | $ | 26,192 | |||||||||
Scott Thompson | $ | 28,132 | — | $ | 12,250 | $ | 40,382 |
(3) | ||
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9/29/00 | 9/28/01 | 9/30/02 | 9/30/03 | 9/30/04 | 9/30/05 | |||||||||||||||||||
F5 Networks, Inc. | 100 | 27 | 22 | 57 | 90 | 128 | ||||||||||||||||||
Nasdaq Composite Index | 100 | 41 | 32 | 49 | 52 | 59 | ||||||||||||||||||
Nasdaq Computer Index | 100 | 32 | 24 | 39 | 39 | 45 |
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Years Ended | ||||||||
September 30, | ||||||||
Fee Category | 2005 | 2004 | ||||||
Audit Fees | $ | 917,536 | $ | 324,050 | ||||
Audit-Related Fees | 14,000 | 125,482 | ||||||
Tax Fees | 34,232 | 23,046 | ||||||
All Other Fees | — | — | ||||||
Total Fees | $ | 965,768 | $ | 472,578 | ||||
Years Ended September 30, | ||||||||
Fee Category | 2008 | 2007 | ||||||
Audit Fees | $ | 909,000 | $ | 693,000 | ||||
Audit-Related Fees | $ | 28,000 | $ | 126,000 | ||||
Tax Fees | $ | 73,000 | — | |||||
All Other Fees | — | — | ||||||
Total Fees | $ | 1,010,000 | $ | 819,000 |
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Number of | ||||||||
Shares of | ||||||||
Common Stock | Percent of | |||||||
Beneficially | Common Stock | |||||||
Name and Address(1) | Owned(2) | Outstanding(2) | ||||||
FMR Corp. and its affiliates(3) 82 Devonshire Street Boston, Massachusetts 02109 | 10,025,174 | 12.69 | ||||||
Turner Investment Partners, Inc.(4) 1205 Westlakes Drive, Suite 100 Berwyn, Pennsylvania 19312 | 6,219,081 | 7.87 | ||||||
HBK Investments L.P.(5) 300 Crescent Court, Suite 700 Dallas, Texas 75201 | 4,511,392 | 5.71 | ||||||
Franklin Resources, Inc.(6) One Franklin Parkway San Mateo, California 94403 | 4,353,440 | 5.51 | ||||||
John McAdam(7) | 328,377 | * | ||||||
John Rodriguez(8) | 52,901 | * | ||||||
Karl Triebes(9) | 116,938 | * | ||||||
Edward J. Eames(10) | 3,938 | * | ||||||
Dan Matte(11) | 12,141 | * | ||||||
A. Gary Ames(12) | 40,412 | * | ||||||
Deborah L. Bevier | 9,412 | * | ||||||
Karl D. Guelich(13) | 30,412 | * | ||||||
Alan J. Higginson(14) | 65,412 | * | ||||||
Scott Thompson | 1,632 | * | ||||||
All directors and executive officers as a group (13 people)(15) | 860,641 | 1.09 |
* | less than 1%. | |
(1) | Unless otherwise indicated, the address of each of the named individuals isc/o F5 Networks, Inc., 401 Elliott Avenue West, Seattle, Washington 98119. | |
(2) | Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has the right to acquire ownership within 60 days after January 8, 2009. Except as otherwise noted, each person or entity has sole voting and investment power with respect to the shares shown. | |
(3) | As reported by FMR Corp. (“FMR”) in a Schedule 13G/A filed on February 14, 2008. | |
(4) | As reported by Turner Investment Partners, Inc. in a Schedule 13G filed on November 10, 2008. | |
(5) | As reported by HBK Investments L.P., HBK Services LLC, HBK Partners II L.P., HBK Management LLC, and HBK Master Fund L.P. in a Schedule 13G filed on February 1, 2008. | |
(6) | As reported by Franklin Resources, Inc. in a Schedule 13G filed on February 4, 2008. | |
(7) | Includes 13,413 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. |
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(8) | Includes 3,938 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. | |
(9) | Includes 113,000 shares issuable upon exercise of options currently exercisable or exercisable within 60 days of January 8, 2009 and 3,938 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. | |
(10) | Includes 3,938 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. | |
(11) | Includes 3,939 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. | |
(12) | Includes 15,000 shares issuable upon exercise of options currently exercisable or exercisable within 60 days of January 8, 2009. | |
(13) | Includes 15,000 shares issuable upon exercise of options currently exercisable or exercisable within 60 days of January 8, 2009. | |
(14) | Includes 45,000 shares issuable upon exercise of options currently exercisable or exercisable within 60 days of January 8, 2009. | |
(15) | Includes 231,751 shares issuable upon exercise of options currently exercisable or exercisable within 60 days of January 8, 2009 and 48,703 shares of Common Stock underlying RSUs granted under the 2005 Plan that are issuable within 60 days of January 8, 2009. This does not include the shares of Common Stock underlying RSUs which are subject to future performance-based vesting as set forth in footnote (4) to the Grants of Plan-Based Awards in Fiscal 2008 Table. |
Column C | ||||||||||||
Number of | ||||||||||||
securities remaining | ||||||||||||
available for | ||||||||||||
Column A | future issuance | |||||||||||
Number of | under equity | |||||||||||
securities to | compensation plans | |||||||||||
be issued | Column B | (total securities | ||||||||||
upon exercise | Weighted-average exercise | authorized but | ||||||||||
of outstanding | price of | unissued under | ||||||||||
options and | outstanding options | the plans, | ||||||||||
Plan Category | rights | and rights | less Column A) | |||||||||
Equity compensation plans approved by security holders(1)(6) | 3,190,161 | (2) | $ | 20.81 | (3) | 2,977,406 | (4) | |||||
Equity compensation plans not approved by security holders(5)(7) | 1,641,829 | $ | 14.86 | 2,080,953 | ||||||||
Total(8) | 4,831,990 | $ | 17.43 | 5,058,359 | ||||||||
(1) | Consists of the F5 Networks, Inc. Amended and Restated 1996 Stock Option Plan (the “1996 Equity Incentive Plan”), the F5 Networks, Inc. Amended and Restated 1998 Equity Incentive Plan (the “1998 |
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Equity Incentive Plan”), and the 2005 Plan. No additional options may be granted under the 1996 Equity Incentive Plan or the 1998 Equity Incentive Plan. | ||
(2) | Includes 849,278 shares issuable upon vesting of outstanding options, 2,281,127 shares issuable upon vesting of outstanding RSUs granted under the 2005 Plan, and 59,756 shares issuable upon vesting of outstanding stock bonuses granted under the 1998 Equity Incentive Plan. | |
(3) | The weighted-average exercise price does not take into account the shares issuable upon vesting of outstanding RSUs or stock bonuses, which have no exercise price. | |
(4) | Includes 992,968 shares reserved for issuance under the ESPP. | |
(5) | Consists of the F5 Networks, Inc. 2000 Employee Equity Incentive Plan (the “2000 Equity Incentive Plan”), F5 Networks, Inc. uRoam Acquisition Equity Incentive Plan (the “uRoam Equity Incentive Plan”), F5 Networks, Inc. MagniFire Acquisition Equity Incentive Plan (the “MagniFire Equity Incentive Plan”), F5 Networks, Inc. Assumed Acopia Networks Inc. 2001 Stock Incentive Plan (the “Acopia 2001 Plan”), F5 Networks, Inc. Acopia Acquisition Equity Incentive Plan (the “Acopia Acquisition Plan”) and certain executive new hire grants. The material features of each of these equity compensation plans are set forth in note 6 in our financial statements, “Summary of Significant Accounting Policies — Shareholders’ Equity” included in our Annual Report to Shareholders onForm 10-K for the year ended September 30, 2008. As of the date of assumption of the Acopia 2001 Plan, there were options to purchase 426,821 shares outstanding under the Acopia 2001 Plan, with a weighted average exercise price of $18.94. The Company terminated the 2000 Equity Incentive Plan, Acopia 2001 Plan and the Acopia Acquisition Plan effective November 1, 2008 and no additional shares may be issued from those Plans. In addition, no additional options may be granted under the uRoam Equity Incentive Plan or the MagniFire Equity Incentive Plan. | |
(6) | As of January 8, 2009, for equity compensation plans approved by security holders, the number of securities to be issued upon exercise of outstanding options and rights totaled 2,788,878, which includes 816,800 shares issuable upon the vesting of outstanding options at a weighted-average exercise price of $21.44, and 1,972,078 shares issuable upon vesting of outstanding RSUs and stock bonuses granted under the 2005 Equity Incentive Plan and 1998 Equity Incentive Plan. As of January 8, 2009, the number of securities remaining available for future issuance under these equity compensation plans totaled 2,687,032, which includes 749,964 shares reserved for issuance under the ESPP and 1,937,068 shares reserved for issuance under the 2005 Plan. | |
(7) | As of January 8, 2009, for equity compensation plans not approved by security holders, the number of securities to be issued upon exercise of outstanding options and rights totaled 1,473,750, which includes 1,077,744 shares issuable upon the vesting of outstanding options at a weighted-average exercise price of $14.95, and 396,006 shares issuable upon vesting of RSUs granted under the Acopia 2001 Plan and the Acopia Acquisition Plan. As of January 8, 2009, there were no securities remaining available for future issuance in connection with new awards under the equity compensation plans not approved by security holders. | |
(8) | As of January 8, 2009, for all equity compensation plans, the number of securities to be issued upon exercise of outstanding options and rights totaled 4,262,628, which includes 1,894,544 shares issuable upon the vesting of outstanding options at a weighted-average exercise price of $17.75 and a weighted-average remaining contractual term of 4.46 years, and 2,368,084 shares issuable upon vesting of RSUs and stock bonuses. As of January 8, 2009, the number of securities remaining available for future issuance under all equity compensation plans totaled 2,687,032, which includes 749,964 shares reserved for issuance under the ESPP and 1,937,068 shares reserved for issuance under the 2005 Plan. |
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Name and Position | Dollar Value ($) | Number of Shares | ||||||
John McAdam, President and Chief Executive Officer | 13,061 | 679 | ||||||
John E. Rodriguez, Senior Vice President and Chief Accounting Officer | 14,439 | 724 | ||||||
Karl Triebes Senior VP of Product Development and Chief Technical Officer | — | — | ||||||
Edward J. Eames Senior VP of Business Operations | 14,391 | 609 | ||||||
Dan Matte Senior VP of Marketing and Business Development | 16,889 | 804 | ||||||
Executive Group | 73,882 | 3,562 | ||||||
Non-Executive Director Group | 0 | 0 | ||||||
Non-Executive Officer Employee Group | 10,633,757 | 469,242 |
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By Order of the Board of Directors ![]() Jeffrey A. Christianson Senior Vice President, General Counsel and Secretary
Appendix A F5 Networks, Inc. 2005 Equity Incentive Plan Adopted December 31, 2004 Original Approval By Shareholders February 24, 2005 Amended By Board of Directors on January 8, 2007, January 23, 2007, August 5, 2007 (to reflect two-for-one forward stock split effective August 20, 2007), and January 7, 2009 Termination Date: December 30, 2014
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the Employees, Directors and Consultants of the Company and its Affiliates. (b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Options and (ii) Stock Units. (c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.
(a) “Affiliate”means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. (b) “Applicable Laws” means the legal requirements relating to the administration of equity compensation plans, including under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any stock exchange rules or regulations and the applicable laws, rules and regulations of any other country or jurisdiction where Stock Awards are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time. (c) “Board” means the Board of Directors of the Company. (d) “Code”means the Internal Revenue Code of 1986, as amended. (e) “Committee”means a committee appointed by the Board in accordance with subsection 3(c). (f) “Common Stock” means the common stock of the Company. (g) “Company”means F5 Networks, Inc., a Washington corporation. (h) “Consultant”means any person, including an advisor, (i) who is engaged by the Company or an Affiliate to render services other than as an Employee or as a Director or (ii) who is a member of the Board of Directors of an Affiliate. (i) “Continuous Service”means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity among the Company or an Affiliate for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director of the Company will not constitute an interruption of Continuous Service. Subject to Section 6(e)(ii), the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. (j) “Covered Employee”means the chief executive officer and the four (4) other highest compensated officers of the Company for whom total compensation is required to be reported to shareholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. (k) “Director”means a member of the Board of Directors of the Company. (l) “Disability”means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. (m) “Employee”means any person employed by the Company or an Affiliate. Subject to the Applicable Laws, the determination of whether an individual (including a leased and temporary employees) is an Employee hereunder shall be made by the Board (or its Committee), in its sole discretion. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate. (n) “Exchange Act”means the Securities Exchange Act of 1934, as amended. (o) “Fair Market Value”means, as of any date, the value of the Common Stock determined as follows: (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market, the Fair Market Value of a Share shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or such other exchange or market with the greatest volume of trading in the Common Stock) on the day of determination or, if the day of determination is not a market trading day, then on the last market trading day prior to the day of determination, as reported in such source or sources as the Board deems reliable, or (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board. (p) “Independent Director”means a Director who qualifies as an “independent” director under applicable Nasdaq rules (or the rules of any exchange on which the Common Stock is then listed or approved for listing). (q) “Non-Employee Director”means a Director of the Company who either (i) is not a current Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) ofRegulation S-K promulgated pursuant to the Securities Act(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) ofRegulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) ofRegulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes ofRule 16b-3. (r) “Officer”means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. (s) “Option”means a nonstatutory stock option (meaning, an option not intended to qualify as an incentive stock option under Code Section 422) granted pursuant to the Plan. (t) “Outside Director”means a Director of the Company who either (i) is not a current Employee of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former Employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. (u) “Participant”means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.
(v) “Plan”means this F5 Networks, Inc. 2005 Equity Incentive Plan. (w) “Rule 16b-3”meansRule 16b-3 promulgated under the Exchange Act or any successor toRule 16b-3, as in effect from time to time. (x) “Securities Act”means the Securities Act of 1933, as amended. (y) “Share”means a share of the Common Stock, as adjusted in accordance with Section 11 below. (z) “Stock Award”means any right involving Shares granted under the Plan, including an Option or Stock Unit. (aa) “Stock Award Agreement”means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. (bb) “Stock Unit” means an award giving the right to receive Shares granted under Section 7 below.
(a) Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a Committee or an administrator, as provided in subsection 3(c). (b) Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: (i) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Awards shall be granted; the provisions, terms and conditions of each Stock Award granted (which need not be identical as among Participants or as among types of Stock Awards), including, without limitation: the time or times when a person shall be permitted to receive Shares pursuant to a Stock Award, the number of Shares with respect to which a Stock Award shall be granted to each such person, the exercise or purchase price (if any) of a Stock Award, the time or times when Stock Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata adjustment to vesting as a result of a Participant’s transitioning from full- to part-time service (or vice versa), and any other restriction (including forfeiture restriction), limitation or term of any Stock Award, based in each case on such factors as the Board, in its sole discretion, shall determine; provided, however, that such provisions, terms and conditions are not inconsistent with the terms of the Plan. (ii) In order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Stock Awards to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs. (iii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. (iv) To amend the Plan or a Stock Award as provided in Section 12. (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan. (c) Delegation to Committee. The Board may delegate administration of the Plan to a Committee or Committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. In the discretion of the Board, the Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code,and/or solely of two or more Non-Employee Directors, in accordance withRule 16b-3,and/or solely of two or more Independent
Directors under applicable Nasdaq (or other exchange) rules. The Board or the Committee may further delegate its authority and responsibilities under the Plan to an Officer. However, if administration is delegated to an Officer, such Officer may grant Stock Awards only within guidelines established by the Board or the Committee, and only the Board or the Committee may make a Stock Award to an Officer or Director. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee, or an Officer to whom authority has been delegated), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan, and unless otherwise specified by the Board shall retain any authority granted to a committee or individual hereunder unto itself. 4. Shares Subject to the Plan. (a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon changes in stock, the stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Twelve Million Four Hundred Thousand (12,400,000)1 Shares of Common Stock. (b) Section 162(m) Limitation on Share Numbers. No Employee shall be eligible to be granted Stock Awards covering more than Two Million (2,000,000) Shares during any fiscal year of the Company. (c) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the Shares not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. Further, if any previously-issued Shares are forfeited under the terms and conditions of the Stock Award, then any Shares so forfeited shall revert to and again become available for issuance under the Plan. The provisions of this Section 4(c) are qualified by Section 4(a) such that the total number of Shares issued and outstanding under the Plan at any time may not exceed the number set forth in Section 4(a) (as adjusted under Section 11). (d) Source of Shares. The stock subject to the Plan may be unissued Shares or reacquired Shares, bought on the market or otherwise.
Stock Awards may be granted to Employees, Directors and Consultants.
Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: (a) Term. No Option shall be exercisable after the expiration of ten (10) years from the date it was granted. (b) Exercise Price of an Option. The exercise price of each Option shall be at least equal to the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. (c) Consideration. The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash, check or wire transfer at the 1 As adjusted to reflect two-for-one forward stock split effective August 20, 2007
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option or subsequently by (1) by delivery to the Company of other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised, provided that in the case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned by the Participant for more than six (6) months on the date of surrender (or such other period as may be required to avoid the Company’s incurring an adverse accounting charge), (2) if, as of the date of exercise of an Option the Company then is permitting Employees to engage in a“same-day sale” cashless brokered exercise program involving one or more brokers, through such a program that complies with the Applicable Laws (including without limitation the requirements of Regulation T and other applicable regulations promulgated by the Federal Reserve Board) and that ensures prompt delivery to the Company of the amount required to pay the exercise price and any applicable withholding taxes, (3) in any other form of legal consideration that may be acceptable to the Board, or (4) any combination of the foregoing methods. In making its determination as to the type of consideration to accept, the Board shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Board may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise. (d) Transferability of an Option. The Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing provisions of this subsection 6(d), the Participant may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to exercise the Option. (e) Vesting. (i) Generally. The total number of Shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments which may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of Shares as to which an Option may be exercised. (ii) Leave of Absence. The Board (or any other party to whom such authority has been delegated, including under this Plan) shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence;provided, however,that in the absence of such determination, vesting of Options shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave. (f) Termination of Continuous Service. In the event a Participant’s Continuous Service terminates (other than upon the Participant’s death or Disability), the Participant may exercise his or her Option (to the extent that the Participant was vested in the Option Shares and entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Participant does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate. (g) Extension of Termination Date. Following the termination of the Participant’s Continuous Service (other than upon the Participant’s death or Disability), if the Participant would be prohibited at
any time solely because the issuance of Shares would violate the registration requirements under the Securities Act or violate any prohibition on trading on the basis of possession of material nonpublic information involving the Company and its business, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in subsection 6(a), or (ii) the expiration of a period of three (3) months after the termination of the Participant’s Continuous Service during which the exercise of the Option would not be in violation of such requirements. (h) Disability of Participant. In the event a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option (to the extent that the Participant was vested in the Option Shares and entitled to exercise the Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate. (i) Death of Participant. In the event (i) an Participant’s Continuous Service terminates as a result of the Participant’s death or (ii) the Participant dies within the period (if any) specified in the Option Agreement after the termination of the Participant’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Participant was vested in the Option Shares and entitled to exercise the Option as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Participant’s death pursuant to subsection 6(d), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate. (j) Exercise Generally. Options shall be considered exercised when the Company (or its authorized agent) receives (i) written or electronic notice from the person entitled to exercise the Option of intent to exercise a specific number of Shares, (ii) full payment or appropriate provision for payment in a form and method acceptable to the Board or Committee, for the Shares being exercised, and (iii) if applicable, payment or appropriate provision for payment of any withholding taxes due on exercise. An Option may not be exercised for a fraction of a Share. The Option may, at the discretion of the Board or Committee, include a provision whereby the Participant may elect to exercise the Option as to Shares that are not yet vested. Unvested Shares exercised in such manner may be subject to a Company repurchase right under Section 10(f) or such other restrictions or conditions as the Board or Committee may determine. (k) Administrator Discretion. Notwithstanding the provisions of this Section 6, the Board or the Committee shall have complete discretion exercisable at any time to (i) extend the period of time for which an Option is to remain exercisable, following the Participant’s termination of Continuous Service, but in no event beyond the expiration date for the Option, and (ii) permit the Option to be exercised, during the applicable post-termination exercise period, not only with respect to the number of Shares that were vested on the date of termination, cut also with respect to additional Shares on such terms and conditions as the Board or Committee may determine.
Each Stock Award Agreement reflecting the issuance of a Stock Unit shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of such agreements may change from time to time, and the terms and conditions of separate agreements need not be
identical, but each such agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: (a) Consideration. A Stock Unit may be awarded in consideration for such property or services as is permitted under Applicable Law, including for past services actually rendered to the Company or an Affiliate for its benefit. (b) Vesting; Restrictions. Shares of Common Stock awarded under the agreement reflecting a Stock Unit award may, but need not, be subject to a Share repurchase option, forfeiture restriction or other conditions in favor of the Company in accordance with a vesting or lapse schedule to be determined by the Board. (c) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous Service terminates, the Company may reacquire any or all of the Shares of Common Stock held by the Participant which have not vested or which are otherwise subject to forfeiture or other conditions as of the date of termination under the terms of the agreement. (d) Transferability. Rights to acquire Shares of Common Stock under a Stock Unit agreement shall not be transferable except by will or by the laws of descent and distribution, and Shares of Common Stock issued upon vesting of a Stock Unit shall be issuable during the lifetime of the Participant only to the Participant. Notwithstanding the foregoing provisions of this subsection 7(d), the Participant may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to receive Shares of Common Stock issued upon vesting of a Stock Unit.
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of Shares of Common Stock required to satisfy such Stock Awards. (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell Shares upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Stock Awards unless and until such authority is obtained.
Proceeds from the sale of stock pursuant to Stock Awards shall constitute general funds of the Company. The Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are granted Stock Awards hereunder, any such accounts will be used merely as a bookkeeping convenience. The Company shall not be required to segregate any asset which may at any time be represented by Stock Awards, nor shall this Plan be construed as providing for such segregation, nor shall the Company nor any party authorized to administer the Plan be deemed to be a trustee of stock or cash to be awarded under the Plan. Any liability of the Company to any Participant with respect to a Stock Award shall be based solely upon any contractual obligations which may be created by the Plan; no such obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor any party authorized to administer the Plan shall be required to give any security or bond for the performance of any obligation which may be created by this Plan.
(a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will
vest, become exercisable or be settled in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first vest, be exercised or be settled. (b) Shareholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Shares subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms. (c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or any Stock Award granted pursuant thereto shall confer upon any Participant or other holder of Stock Awards any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. (d) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Shares under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business mattersand/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring the stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if the issuance of the Shares upon the exercise or acquisition of stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act; or as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. (e) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Shares under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold Shares from the Shares otherwise issuable to the Participant as a result of the exercise or acquisition of stock under the Stock Award; or (iii) delivering to the Company owned and unencumbered Shares. (f) Stock Unit Repurchase Limitation. The terms of any repurchase option for a Stock Unit shall be specified in the Stock Award and may be at the Fair Market Value of the stock subject to the Stock Award at the time of repurchase, at the original price or on such terms and conditions as the Board may determine (and as shall be reflected in the Stock Award Agreement);provided howeverthat this Section 10(f) shall in no way limit the Company’s ability to adjust any Stock Award as provided under Section 11 below. (g) Cancellation and Re-Grant of Stock Awards. The Company may not reprice any outstanding Stock Awards under the Plan, including implement any program whereby outstanding Stock Awards will be cancelled and replaced with Stock Awards bearing a lower purchase or exercise price or exchanged for cash, without first obtaining the approval of the shareholders of the Company;provided howeverthat this Section 10(g) shall in no way limit the Company’s ability to adjust Stock Awards as provided under Section 11 below. (h) Interpretation of Plan and Stock Awards. In the event that any provision of the Plan or any Stock Award granted under the Plan is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal,
valid and enforceable, or otherwise deleted, and the remainder of the terms of the Planand/or Stock Award shall not be affected to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. All questions arising under the Plan or under any Stock Award shall be decided by the Board or the Committee in its or their total and absolute discretion and such decisions shall be final and binding on all parties. (i) Electronic Communication. Any document required to be delivered under the Plan, including under the Applicable Laws, may be delivered in writing or electronically. Signature may also be electronic if permitted by the Board or the Committee, and if permitted by Applicable Law. (j) Escrow of Shares. To enforce any restriction applicable to Shares issued under the Plan, the Board or the Committee may require a Participant or other holder of such Shares to deposit the certificates representing such Shares, with approved stock powers or other transfer instruments endorsed in blank, with the Company or an agent of the Company until the restrictions have lapsed. Such certificates (or other notations representing the Shares) may bear a legend or legends referencing the applicable restrictions.
(a) Capitalization Adjustments. If any change is made in the stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to subsection 4(b), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per Share of stock subject to such outstanding Stock Awards. The Board, the determination of which shall be final, binding and conclusive, shall make such adjustments. (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.) (b) Change in Control — Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then such Stock Awards shall be terminated if not exercised (if applicable) prior to such event. (c) Change in Control — Asset Sale, Merger, Consolidation or Reverse Merger or Acquisition of Stock. (i)In the event of (1) a sale of substantially all of the assets of the Company, or (2)��a merger or consolidation in which the Company is not the surviving corporation, or (3) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (4) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company,then any surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar awards (including with respect to a Stock Award an award to acquire the same consideration paid to the shareholders in the transaction described in this subsection 11(c) for those outstanding under the Plan). (ii)For purposes of subsection 11(c) a Stock Award shall be deemed assumed if, following the change in control, the Stock Award confers the right to purchase in accordance with its terms and conditions, for each share of Common Stock subject to the Stock Award immediately prior to the change in control, the consideration (whether stock, cash or other securities or property) to which a holder of a share of Common Stock on the effective date of the change in control was entitled. (iii)Subject to the provisions of any Stock Award Agreement, in the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of 50% of such Stock Awards (and, if applicable, the
time during which such Stock Awards may be exercised or settled) shall be accelerated in full, and the Stock Awards shall terminate if not exercised or settled (if applicable) at or prior to such event. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to such event. (iv)The Board shall at all times have the authority, in its sole discretion, to provide for additional or different vesting, exercisability, settlement or forfeiture conditions with respect to Stock Awards than that reflected in this Section 11(c),providedthat its determinations in this regard shall be reflected in the Stock Award Agreement (including in amendments thereto) issued to the affected Participant.
(a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 11 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy the requirements ofRule 16b-3 or any Nasdaq or securities exchange listing requirements. (b) Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code or any other Applicable Law. (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan shall not be materially impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing. (e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award shall not be materially impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.
(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated. (b) No Impairment of Rights. Suspension or termination of the Plan shall not materially impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the Participant.
The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.
All questions concerning the construction, validity and interpretation of this Plan shall be governed by the law of the State of Washington, without regard to such states conflict of laws rules.
Appendix B F5 NETWORKS, INC 1999 EMPLOYEE STOCK PURCHASE PLAN ORIGINALLY ADOPTED BY BOARD OF DIRECTORS APRIL 5, 1999 ORIGINALLY APPROVED BY SHAREHOLDERS MARCH 25, 1999 AMENDMENT ADOPTED BY BOARD OF DIRECTORS JANUARY 26, 2004 AMENDMENT ADOPTED BY SHAREHOLDERS APRIL 29, 2004 SECOND AMENDMENT ADOPTED BY BOARD OF DIRECTORS JANUARY 7, 2009 TERMINATION DATE: NONE
(a)The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Affiliates may be given an opportunity to purchase Shares of the Company. (b)The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. (c)The Company intends that the Rights to purchase Shares granted under the Plan be considered options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.
(a) “Affiliate”means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. (b) “Board”means the Board of Directors of the Company. (c) “Code”means the United States Internal Revenue Code of 1986, as amended. (d) “Committee”means a Committee appointed by the Board in accordance with subparagraph 3(c) of the Plan. (e) “Company”means F5 Networks, Inc., a Washington corporation. (f) “Director” means a member of the Board. (g) “Eligible Employee”means an Employee who meets the requirements set forth in the Offering for eligibility to participate in the Offering. (h) “Employee”means any person, including Officers and Directors, employed by the Company or an Affiliate of the Company. Neither service as a Director nor payment of a director’s fee shall be sufficient to constitute “employment” by the Company or the Affiliate. (i) “Employee Stock Purchase Plan”means a plan that grants rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code. (j) “Exchange Act”means the United States Securities Exchange Act of 1934, as amended. (k) “Fair Market Value”means the value of a security, as determined in good faith by the Board. If the security is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, then, except as otherwise provided in the Offering, the Fair Market Value of the security shall be the closing sales price (rounded up where necessary to the nearest whole cent) for such security (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the relevant security of the Company) on the trading day prior to the relevant determination date, as reported in The Wall Street Journal or such other source as the Board deems reliable.
(l) “Non-Employee Director”means a Director who either (i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S K promulgated pursuant to the Securities Act(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) ofRegulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) ofRegulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes ofRule 16b-3. (m) “Offering”means the grant of Rights to purchase Shares under the Plan to Eligible Employees. (n) “Offering Date”means a date selected by the Board for an Offering to commence. (o) “Outside Director”means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of the Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time, and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director, or (ii) is otherwise considered an ��outside director” for purposes of Section 162(m) of the Code. (p) “Participant”means an Eligible Employee who holds an outstanding Right granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Right granted under the Plan. (q) “Plan”means this F5 Networks, Inc. 1999 Employee Stock Purchase Plan. (r) “Purchase Date”means one or more dates established by the Board during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering. (s) “Right”means an option to purchase Shares granted pursuant to the Plan. (t) “Rule 16b-3”meansRule 16b-3 of the Exchange Act or any successor toRule 16b-3 as in effect with respect to the Company at the time discretion is being exercised regarding the Plan. (u) “Securities Act”means the United States Securities Act of 1933, as amended. (v) “Share”means a share of the common stock of the Company.
(a)The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subparagraph 3(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. (b)The Board (or the Committee) shall have the power, subject to, and within the limitations of, the express provisions of the Plan: (i) To determine when and how Rights to purchase Shares shall be granted and the provisions of each Offering of such Rights (which need not be identical). (ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. (iii)To construe and interpret the Plan and Rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. (iv) To amend the Plan as provided in paragraph 14.
(v)Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan. (c)The Board may delegate administration of the Plan to a Committee of the Board composed of two (2) or more members, all of the members of which Committee may be, in the discretion of the Board, Non-Employee Directorsand/or Outside Directors. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee of two (2) or more Outside Directors any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or such a subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.
(a)Subject to the provisions of paragraph 13 relating to adjustments upon changes in securities, the Shares that may be sold pursuant to Rights granted under the Plan shall not exceed in the aggregate six million (6,000,000)1 Shares. If any Right granted under the Plan shall for any reason terminate without having been exercised, the Shares not purchased under such Right shall again become available for the Plan. (b)The Shares subject to the Plan may be unissued Shares or Shares that have been bought on the open market at prevailing market prices or otherwise.
(a)The Board may from time to time grant or provide for the grant of Rights to purchase Shares of the Company under the Plan to Eligible Employees in an Offering on an Offering Date or Dates selected by the Board. Each Offering shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all Employees granted Rights to purchase Shares under the Plan shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in paragraphs 6 through 9, inclusive. (b)If a Participant has more than one Right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant will be deemed to apply to all of his or her Rights under the Plan, and (ii) an earlier-granted Right (or a Right with a lower exercise price, if two Rights have identical grant dates) will be exercised to the fullest possible extent before a later-granted Right (or a Right with a higher exercise price if two Rights have identical grant dates) will be exercised.
(a)Rights may be granted only to Employees of the Company or, as the Board may designated as provided in subparagraph 3(b), to Employees of an Affiliate. Except as provided in subparagraph 6(b), an Employee shall not be eligible to be granted Rights under the Plan unless, on the Offering Date, such Employee has been in the employ of the Company or the Affiliate, as the case may be, for such continuous period preceding such grant as the Board may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years. 1 As adjusted to reflect two-for-one forward stock split effective August 20 , 2007.
(b)The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Right under that Offering, which Right shall thereafter be deemed to be a part of that Offering. Such Right shall have the same characteristics as any Rights originally granted under that Offering, as described herein, except that: (i)the date on which such Right is granted shall be the “Offering Date” of such Right for all purposes, including determination of the exercise price of such Right; (ii)the period of the Offering with respect to such Right shall begin on its Offering Date and end coincident with the end of such Offering; and (iii)the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Right under that Offering. (c)No Employee shall be eligible for the grant of any Rights under the Plan if, immediately after any such Rights are granted, such Employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subparagraph 6(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding rights and options shall be treated as stock owned by such Employee. (d)An Eligible Employee may be granted Rights under the Plan only if such Rights, together with any other Rights granted under all Employee Stock Purchase Plans of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such Eligible Employee’s rights to purchase Shares of the Company or any Affiliate to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of the fair market value of such Shares (determined at the time such Rights are granted) for each calendar year in which such Rights are outstanding at any time. (e)The Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate.
(a)On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted the Right to purchase up to the number of Shares purchasable either: (i)with a percentage designated by the Board not exceeding fifteen percent (15%) of such Employee’s Earnings (as defined by the Board in each Offering) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering; or (ii)with a maximum dollar amount designated by the Board that, as the Board determines for a particular Offering, (1) shall be withheld, in whole or in part, from such Employee’s Earnings (as defined by the Board in each Offering) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offeringand/or (2) shall be contributed, in whole or in part, by such Employee during such period. (b)The Board shall establish one or more Purchase Dates during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering. (c)In connection with each Offering made under the Plan, the Board may specify a maximum amount of Shares that may be purchased by any Participant as well as a maximum aggregate amount of Shares that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a maximum aggregate amount of Shares which may be purchased by all Participants on any given Purchase Date under the Offering. If the aggregate purchase
of Shares upon exercise of Rights granted under the Offering would exceed any such maximum aggregate amount, the Board shall make a pro rata allocation of the Shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. (d)The purchase price of Shares acquired pursuant to Rights granted under the Plan shall be not less than the lesser of: (i)an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Offering Date; or (ii)an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Purchase Date.
(a)An Eligible Employee may become a Participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board of such Employee’s Earnings during the Offering (as defined in each Offering). The payroll deductions made for each Participant shall be credited to a bookkeeping account for such Participant under the Plan and either may be deposited with the general funds of the Company or may be deposited in a separate account in the name of, and for the benefit of, such Participant with a financial institution designated by the Company. To the extent provided in the Offering, a Participant may reduce (including to zero) or increase such payroll deductions. To the extent provided in the Offering, a Participant may begin such payroll deductions after the beginning of the Offering. A Participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the Participant has not already had the maximum permitted amount withheld during the Offering. (b)At any time during an Offering, a Participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board in the Offering. Upon such withdrawal from the Offering by a Participant, the Company shall distribute to such Participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the Participant) under the Offering, without interest unless otherwise specified in the Offering, and such Participant’s interest in that Offering shall be automatically terminated. A Participant’s withdrawal from an Offering will have no effect upon such Participant’s eligibility to participate in any other Offerings under the Plan but such Participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan. (c)Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating Employee’s employment with the Company or a designated Affiliate for any reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such terminated Employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the terminated Employee) under the Offering, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering. (d)Rights granted under the Plan shall not be transferable by a Participant otherwise than by will or the laws of descent and distribution, or by a beneficiary designation as provided in paragraph 15 and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such Rights are granted.
(a)On each Purchase Date specified therefor in the relevant Offering, each Participant’s accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of Shares up to the maximum amount of Shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional Shares shall be issued upon the exercise of Rights granted under the Plan unless specifically provided for in the Offering. (b)Unless otherwise specifically provided in the Offering, the amount, if any, of accumulated payroll deductions remaining in any Participant’s account after the purchase of Shares that is equal to the amount required to purchase one or more whole Shares on the final Purchase Date of the Offering shall be distributed in full to the Participant at the end of the Offering, without interest. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering. (c)No Rights granted under the Plan may be exercised to any extent unless the Shares to be issued upon such exercise under the Plan (including Rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no Rights granted under the Plan or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered and in such compliance, no Rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire Shares) shall be distributed to the Participants, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering.
(a)During the terms of the Rights granted under the Plan, the Company shall ensure that the amount of Shares required to satisfy such Rights are available. (b)The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell Shares upon exercise of the Rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Shares under the Plan, the Company shall be relieved from any liability for failure to issue and sell Shares upon exercise of such Rights unless and until such authority is obtained.
Proceeds from the sale of Shares pursuant to Rights granted under the Plan shall constitute general funds of the Company.
A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, Shares subject to Rights granted under the Plan unless and until the Participant’s Shares acquired upon exercise of Rights under the Plan are recorded in the books of the Company.
(a)If any change is made in the Shares subject to the Plan, or subject to any Right, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of Shares subject to the Plan pursuant to subparagraph 4(a), and the outstanding Rights will be appropriately adjusted in the class(es), number of Shares and purchase limits of such outstanding Rights. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction that does not involve the receipt of consideration by the Company.) (b)In the event of: (i) a dissolution, liquidation, or sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the Shares outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then: (1) any surviving or acquiring corporation shall assume Rights outstanding under the Plan or shall substitute similar rights (including a right to acquire the same consideration paid to Shareholders in the transaction described in this subparagraph 13(b)) for those outstanding under the Plan, or (2) in the event any surviving or acquiring corporation refuses to assume such Rights or to substitute similar rights for those outstanding under the Plan, then, as determined by the Board in its sole discretion such Rights may continue in full force and effect or the Participants’ accumulated payroll deductions (exclusive of any accumulated interest which cannot be applied toward the purchase of Shares under the terms of the Offering) may be used to purchase Shares immediately prior to the transaction described above under the ongoing Offering and the Participants’ Rights under the ongoing Offering thereafter terminated.
(a)The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 13 relating to adjustments upon changes in securities and except as to minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favorable tax, exchange control or regulatory treatment for Participants or the Company or any Affiliate, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary for the Plan to satisfy the requirements of Section 423 of the Code,Rule 16b-3 under the Exchange Act and any Nasdaq or other securities exchange listing requirements. Currently under the Code, shareholder approval within twelve (12) months before or after the adoption of the amendment is required where the amendment will: (i)Increase the amount of Shares reserved for Rights under the Plan; (ii)Modify the provisions as to eligibility for participation in the Plan to the extent such modification requires shareholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements ofRule 16b-3; or (iii)Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b 3. (b)It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide Employees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plansand/or to bring the Planand/or Rights granted under it into compliance therewith. (c)Rights and obligations under any Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Planand/or Rights granted under the Plan comply with the requirements of Section 423 of the Code.
(a)A Participant may file a written designation of a beneficiary who is to receive any Sharesand/or cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to the end of an Offering but prior to delivery to the Participant of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death during an Offering. (b)The Participant may change such designation of beneficiary at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such Sharesand/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such Sharesand/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(a)The Board in its discretion may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate at the time that all of the Shares subject to the Plan’s reserve, as increasedand/or adjusted from time to time, have been issued under the terms of the Plan. No Rights may be granted under the Plan while the Plan is suspended or after it is terminated. (b)Rights and obligations under any Rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Planand/or Rights granted under the Plan comply with the requirements of Section 423 of the Code.
The Plan shall become effective as determined by the Board, but no Rights granted under the Plan shall be exercised unless and until the Plan has been approved by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board, which date may be prior to the effective date set by the Board.
Directions to the Annual Meeting of Shareholders of F5 Networks, Inc. 333 Elliott Avenue Westï Seattle, Washington 98119ï(206) 272-5555 ![]() From Interstate 5 North and South:
From State Route 99 (Aurora Avenue) North:
From State Route 99 (Aurora Avenue) South:
Parking — 401 Elliott Avenue West, Seattle, WA 98119: Parking will be provided at 401 Elliott Avenue West. To get to the parking garage follow the driving directions above but continue on Elliott Avenue West for one more block to the light at W. Harrison Street and take a left. Proceed through the turnaround and park in the underground garage. Take any of the three elevators up to the first floor and walk south on Elliott Avenue West towards the 333 Elliott Avenue West building location. Bring your parking ticket for validation.
F5 NETWORKS, INC. ANNUAL MEETING OF SHAREHOLDERS March PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints (TO BE SIGNED ON REVERSE SIDE)
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
This proxy is revocable and when properly executed, will be voted in the manner directed by the undersigned shareholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” THE NOMINEE AND “FOR” PROPOSALS 2, 3 AND 4. NOTE: Please sign exactly as name(s) appear(s) hereon. When signing in a representative capacity, please give title.
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