EXHIBIT 10.23
FOUNDRY NETWORKS, INC.
2006 STOCK INCENTIVE PLAN
STOCK UNIT AGREEMENT
     This Stock Unit 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 Stock Units. Pursuant to the Plan, the Company hereby grants
to you, and you hereby accept from the Company, ______stock units, each of which
is a bookkeeping entry representing the equivalent in value of one (1) Share
(the “Restricted Stock Units”), on the terms and conditions set forth herein and
in the Plan.
     2. Vesting of Restricted Stock Units. So long as your Service continues,
the Restricted Stock Units shall vest in accordance with the following schedule:
one-third of the total number of Restricted Stock Units shall vest on ___,
200___(the one-year anniversary of the vesting commencement date) and one-third
of the total number of Restricted Stock Units shall vest on each one-year
anniversary thereafter.
     3. Termination of Service. In the event of the termination of your Service
for any reason, all unvested Restricted Stock Units shall be immediately
forfeited without consideration.
     4. Acceleration of Vesting. You agree that the Restricted Stock Units shall
not be subject to the acceleration of vesting provisions

 

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contained in your Change of Control Severance Agreement dated as of ___, or any
other agreement between you and the Company providing for acceleration of
vesting in connection with the acquisition of the Company by Brocade
Communication Systems, Inc. (“Brocade,” and such transaction, the “Merger”).
However, if your Service is terminated by the Company or Brocade in connection
with the Merger prior to the one year anniversary of the vesting commencement
date and you are a party to a Change of Control Severance Agreement with the
Company or any other agreement between you and the Company providing for
acceleration of vesting in connection with the Merger, then, upon any such
termination, the vesting of that number of Restricted Stock Units shall be
accelerated in an amount equal to (1) the total number of days elapsed from
July 21, 2008 through the date of such termination, divided by 365, multiplied
by (2) the number of Restricted Stock Units that would have vested one year
after the vesting commencement date.
     5. Settlement of Restricted Stock Units. Restricted Stock Units shall be
automatically settled in Shares upon vesting of such Restricted Stock Units,
provided that the Company shall have no obligation to issue Shares pursuant to
this Agreement unless and until you have satisfied any applicable tax
withholding obligations pursuant to Section 6 below and such issuance otherwise
complies with all applicable law. Prior to the time the Restricted Stock Units
are settled upon vesting, you will have no rights other than those of a general
creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company.
     Notwithstanding anything in the Plan or this Agreement to the contrary, if
you are a “specified employee” within the meaning of Section 409A at the time of
your termination, and the Restricted Stock Units, if any, that accelerate in
accordance with Section 4 above, when considered together with any other
severance payments or separation benefits may be considered deferred
compensation under Section 409A (together, the “Deferred Compensation Separation
Benefits”), then only that portion of the Deferred Compensation Separation
Benefits which do not exceed the Section 409A Limit may be made within the first
six (6) months following your termination of employment in accordance with the
payment schedule applicable to each payment or benefit. Any portion of the
Deferred Compensation Separation Benefits in excess of the Section 409A Limit
otherwise due to you on or within the six (6) month period

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following your termination will accrue during such six (6) month period and will
become payable in a lump sum payment on the date six (6) months and one (1) day
following the date of your termination of employment, unless you die during such
six (6) month period, in which case, such Deferred Compensation Separation
Benefits will be paid to your estate as soon as practicable following your
death, subject to Section 6. Notwithstanding the foregoing, if the payment of
any portion of the Deferred Compensation Separation Benefits during the first
six (6) months following your termination of employment would result in the
imposition of additional tax under Section 409A if paid to you on or within this
six (6) month period, all Deferred Compensation Separation Benefits will be
accrue during such six (6) month period and will become payable in a lump sum
payment on the date six (6) months and one (1) day following the date of your
termination of employment, unless you die during such six (6) month period, in
which case, such Deferred Compensation Separation Benefits will be paid to your
estate as soon as practicable following your death, subject to Section 6. All
subsequent Deferred Compensation Separation Benefits, if any, will be payable in
accordance with the payment schedule applicable to each payment or benefit. It
is the intent of this Agreement to comply with the requirements of Section 409A
so that none of the Restricted Stock Units provided hereunder will be subject to
the additional tax imposed under Section 409A, and any ambiguities herein will
be interpreted to so comply. For purposes of this Agreement, “Section 409A”
means Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and any proposed, temporary or final Treasury Regulations and Internal
Revenue Service guidance thereunder, as each may be amended from time to time.
For purposes of this Agreement, “Section 409A Limit” will mean the lesser of two
(2) times: (i) your annualized compensation based upon the annual rate of pay
paid to you during the Company’s taxable year preceding the Company’s taxable
year of your termination of employment as determined under Treasury
Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance
issued with respect thereto; or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which your employment is terminated.
     6. Withholding Taxes. You agree to make arrangements

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     satisfactory to the Company for the satisfaction of any applicable
withholding tax obligations that arise in connection with the Restricted Stock
Units which, at the sole discretion of the Committee, may include (i) having the
Company withhold Shares from the settlement of the Restricted Stock Units, or
(ii) any other arrangement approved by the Company, in either case, equal in
value to the amount necessary to satisfy any such withholding tax obligations.
The Company shall not be required to issue Shares pursuant to this Agreement
unless and until such obligations are satisfied.
     7. 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 RESTRICTED STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR
WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER
PENALTIES.
     8. Non-Transferability of Restricted Stock Units. The Restricted Stock
Units shall not be transferable other than by will or the laws of descent and
distribution. The designation of a beneficiary does not constitute a transfer.
The terms of this Agreement shall be binding upon your executors,
administrators, heirs, successors and assigns.
     9. Restriction on Transfer. Regardless of whether the transfer or issuance
of the Shares to be issued pursuant to the Restricted Stock Units have been
registered under the Securities Act or have 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 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.

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     10. Stock Certificate Restrictive Legends. Stock certificates evidencing
the Shares issued pursuant to the Restricted Stock Units may bear such
restrictive legends as the Company and the Company’s counsel deem necessary
under applicable law or pursuant to this Agreement.
     11. 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 Shares issued pursuant to the Restricted Stock Units may be conditioned upon
you making certain representations, warranties, and acknowledgments relating to
compliance with applicable securities laws.
     12. Voting and Other Rights. Subject to the terms of this Agreement, you
shall not have any voting rights or any other rights and privileges of a
stockholder of the Company unless and until the Restricted Stock Units are
settled upon vesting.
     13. No Employment Rights. Neither the Plan nor this Stock Unit 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.
     14. 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.
     15. 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

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party to enforce any rights under this Agreement shall not be construed as a
waiver of any rights of such party.
     16. 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.
     17. 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.
     18. 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.
     19. 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
Stock Units 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 Stock Units and the
underlying 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

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