Exhibit 10.16
FOUNDRY NETWORKS, INC.
2006 STOCK INCENTIVE PLAN
STOCK GRANT AGREEMENT
     This Stock Grant Agreement (the “Agreement”) is made and entered into as of
                    , 200___ by and between Foundry Networks, Inc., a Delaware
corporation (the “Company”), and                                         
pursuant to the Foundry Networks, Inc. 2006 Stock Incentive Plan (the “Plan”).
To the extent any capitalized terms used in this Agreement are not defined, they
shall have the meaning ascribed to them in the Plan, which is attached to, and
made a part of, this Agreement. In the event of a conflict between the terms and
provisions of the Plan and the terms and provisions of this Agreement, the Plan
terms and provisions shall prevail.
     In consideration of the mutual agreements herein contained and intending to
be legally bound hereby, the parties agree as follows:
     1. Restricted Shares. Pursuant to the Plan, the Company hereby transfers to
you, and you hereby accept from the Company, a Stock Grant Award consisting of
                                         Shares (the “Restricted Shares”), on
the terms and conditions set forth herein and in the Plan.
     2. Vesting of Restricted Shares. So long as your Service continues, the
Restricted Shares shall vest in accordance with the following schedule: 12.5% of
the total number of Restricted Shares shall vest on                     , 200___
(the 6-month anniversary of the vesting commencement date) and 1/48th of the
total number of Restricted Shares shall vest and become exercisable on each
monthly anniversary thereafter.
     3. Termination of Service. In the event of the termination of your Service
for any reason, all unvested Restricted Shares shall be immediately forfeited
without consideration. For purposes of facilitating the enforcement of the
provisions of this Section 3, you agree that the Company may issue stop-transfer
instructions on the Restricted Shares to the Company’s transfer agent, may
require that Restricted Shares be held by a broker designated by the Company, or
may otherwise hold the Restricted Shares in escrow, until the Restricted Shares
have vested and you have satisfied all applicable obligations with respect to
the Restricted Shares, including any applicable tax withholding obligations set
forth in Section 5 below. Any new, substituted or additional securities or other
property which is issued or distributed with respect to the unvested Restricted
Shares shall be subject to the same terms and conditions as are applicable to
the unvested Restricted Shares under this Agreement and the Plan.
     4. Election to Recognize Income in the Year of Grant. Under Section 83 of
the Code, the Fair Market Value of the Restricted Shares on the date the
Restricted Shares vest will be taxable as ordinary income at that time. You
understand and acknowledge that you may elect to be taxed at the time the
Restricted Shares are acquired in an amount equal to the Fair Market Value of
the Restricted Shares at that time, rather than the date the Restricted Shares
vest, by filing an election under Section 83(b) of the Code with the Internal
Revenue Service within 30 days after the date of this Agreement.

 

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YOU ACKNOWLEDGE AND AGREE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE
COMPANY’S RESPONSIBILITY, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b),
EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
YOUR BEHALF.
     5. Withholding Taxes. You agree to make arrangements satisfactory to the
Company for the satisfaction of any applicable withholding tax obligations that
arise in connection with the Restricted Shares which, at the sole discretion of
the Committee, may include (i) having the Company withhold Shares from the
Restricted Shares held in escrow, or (ii) tendering Shares to the Company, in
either case, equal in value to the amount necessary to satisfy any such
withholding tax obligation. The Company shall not be required to release the
Restricted Shares from the stop-transfer instructions or escrow unless and until
such obligations are satisfied.
     6. Tax Advice. You represent, warrant and acknowledge that the Company has
made no warranties or representations to you with respect to the income tax
consequences of the transactions contemplated by this Agreement, and you are in
no manner relying on the Company or the Company’s representatives for an
assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR
REGARDING ANY STOCK GRANT AWARD. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO
BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES.
     7. Non-Transferability of Restricted Shares. Restricted Shares which have
not vested pursuant to Section 2 above shall not be anticipated, assigned,
attached, garnished, optioned, transferred or made subject to any creditor’s
process, whether voluntarily or involuntarily or by the operation of law.
However, this Section 7 shall not preclude you from designating a beneficiary
who will receive any vested Restricted Shares in the event of the your death,
nor shall it preclude a transfer of vested Restricted Shares by will or by the
laws of descent and distribution.
     8. Restriction on Transfer. Regardless of whether the transfer or issuance
of the Restricted Shares has been registered under the Securities Act or has
been registered or qualified under the securities laws of any state, the Company
may impose additional restrictions upon the sale, pledge, or other transfer of
the Restricted Shares (including the placement of appropriate legends on stock
certificates and the issuance of stop-transfer instructions to the Company’s
transfer agent) if, in the judgment of the Company and the Company’s counsel,
such restrictions are necessary in order to achieve compliance with the
provisions of the Securities Act, the securities laws of any state, or any other
law.
     9. Stock Certificate Restrictive Legends. Stock certificates evidencing the
Restricted Shares may bear such restrictive legends as the Company and the
Company’s counsel deem necessary under applicable law or pursuant to this
Agreement.
     10. Representations, Warranties, Covenants, and Acknowledgments. You hereby
agree that in the event the Company and the Company’s counsel deem it necessary
or advisable in the exercise of their discretion, the transfer or issuance of
the

 

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Restricted Shares may be conditioned upon you making certain representations,
warranties, and acknowledgments relating to compliance with applicable
securities laws.
     11. Voting and Other Rights. Subject to the terms of this Agreement, you
shall have all the rights and privileges of a stockholder of the Company while
the Restricted Shares are held in escrow, including the right to vote and to
receive dividends (if any).
     12. No Employment Rights. Neither the Plan nor this Stock Grant Award shall
be deemed to give you a right to remain an Employee, Consultant or director of
the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents
and Subsidiaries and Affiliates reserve the right to terminate your Service at
any time, with or without cause, and for any reason, subject to applicable laws.
     13. Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient when delivered personally or sent by
telegram or fax or 48 hours after being deposited in the U.S. mail, as certified
or registered mail, with postage prepaid, and addressed to the Company at its
principal corporate offices and to you at the address maintained for you in the
Company’s records.
     14. Entire Agreement; Enforcement of Rights. This Agreement, together with
the Plan, sets forth the entire agreement and understanding of the parties
relating to the subject matter herein and therein and merges all prior
discussions between the parties. Except as contemplated under the Plan, no
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
     15. Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
     16. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of this Agreement shall be enforceable in accordance with its
terms.
     17. Successors and Assigns. The rights and benefits of this Agreement shall
inure to the benefit of, and be enforceable by the Company’s successors and
assigns. The rights and obligations of you under this Agreement may not be
assigned without the prior written consent of the Company.
     18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
*   *   *   *
(Signature Page Follows)

 

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
___ day of                     , 200_.

          FOUNDRY NETWORKS, INC.    
 
       
By:
       
 
 
 
(Signature)    
 
       
Name:
       
 
 
 
   
 
       
Title:
       
 
 
 
   
 
        RECIPIENT:    
 
             
 
       
By:
       
 
 
 
(Signature)    
 
        Address:    
 
 
 
   
 
             

          Telephone Number:    
 
 
 
   
 
        Email Address:    
 
 
 
   

I,                                         , spouse of                     ,
have read and hereby approve the foregoing Agreement. In consideration of the
Company’s granting my spouse the right to the Restricted Shares as set forth in
the Agreement, I hereby agree to be bound irrevocably by the Agreement and
further agree that any community property or other such interest that I may have
in the Restricted Shares shall hereby be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

       
 
Spouse of Recipient