Exhibit 10.1
ARUBA NETWORKS, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Amended and restated February 13, 2009)
     1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an “Employee Stock Purchase Plan” under
Section 423 of the Code. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a uniform and
nondiscriminatory basis consistent with the requirements of Section 423 of the
Code.
     2. Definitions.
          (a) “Administrator” shall mean the Board or any Committee designated
by the Board to administer the plan pursuant to Section 14.
          (b) “Board” shall mean the Board of Directors of the Company.
          (c) “Change in Control” means the occurrence of any of the following
events:
               (i) Any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) other than a Permitted Transferee (as defined in the
Company’s Amended and Restated Certificate of Incorporation) becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company’s then outstanding
voting securities; or
               (ii) The consummation of the sale or disposition by the Company
of all or substantially all of the Company’s assets; or
               (iii) A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” means directors who either (A) are
Directors as of the effective date of the Plan, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Directors at the time of such election or nomination (but will not include
an individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company);
or
               (iv) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at least
fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.

 

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          (d) “Code” shall mean the Internal Revenue Code of 1986, as amended.
Any reference to a section of the Code herein will be a reference to any
successor or amended section of the Code.
          (e) “Committee” means a committee of the Board appointed by the Board
in accordance with Section 14 hereof.
          (f) “Common Stock” shall mean the Common Stock of the Company.
          (g) “Company” shall mean Aruba Networks, Inc., a Delaware corporation.
          (h) “Compensation” shall mean all base straight time gross earnings,
commissions, overtime and shift premium, incentive compensation, and bonuses,
but exclusive of other compensation.
          (i) “Designated Subsidiary” shall mean any Subsidiary selected by the
Administrator as eligible to participate in the Plan.
          (j) “Director” shall mean a member of the Board.
          (k) “Eligible Employee” shall mean any individual who is a common law
employee of the Company or any Designated Subsidiary and whose customary
employment with the Company or Designated Subsidiary is at least fifteen
(15) hours per week and more than five (5) months in any calendar year. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 90 days and the individual’s
right to reemployment is not guaranteed either by statute or by contract, the
employment relationship shall be deemed to have terminated on the 91st day of
such leave.
          (l) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, including the rules and regulations promulgated thereunder.
          (m) “Exercise Date” shall mean the first Trading Day on or after
September 1 and March 1 of each year. The first Exercise Date under the Plan
will be the first Trading Day on or after September 1, 2007.
          (n) “Fair Market Value” shall mean, as of any date and unless the
Administrator determines otherwise, the value of Common Stock determined as
follows:
               (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
Global Market, the Nasdaq Global Select Market or the Nasdaq Capital Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

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               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or
               (iv) For purposes of the Offering Date of the first Offering
Period under the Plan, the Fair Market Value will be the initial price to the
public as set forth in the final prospectus included within the registration
statement on Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Common Stock (the “Registration Statement”).
          (o) “Offering Date” shall mean the first Trading Day of each Offering
Period.
          (p) “Offering Periods” shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after March 1 and
September 1 of each year and terminating on the first Trading Day on or after
the subsequent Offering Period commencement date approximately twenty-four (24)
months later; provided, however, that the first Offering Period under the Plan
shall commence with the first Trading Day on or after the date on which the
Securities and Exchange Commission declares the Company’s Registration Statement
on Form S-1 effective and end on the earlier of (i) the first trading day on or
after March 1, 2009 or (ii) twenty-seven (27) months from the beginning of the
first Offering Period; and provided, further, that the second Offering Period
under the Plan will commence on the first Trading Day on or after September 1,
2007. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.
          (q) “Plan” shall mean this Employee Stock Purchase Plan.
          (r) “Purchase Period” shall mean the period during an Offering Period
which shares of Common Stock may be purchased on a participant’s behalf in
accordance with the terms of the Plan. Unless and until the Administrator
provides otherwise, the Purchase Period shall mean the approximately six
(6) month period commencing on one Exercise Date and ending with the next
Exercise Date, except that the first Purchase Period of any Offering Period will
commence on the first day of the Offering Period and end with the next Exercise
Date; provided, however, that the first Purchase Period of the first Offering
Period will commence on the first day of such Offering Period and end on the
first Trading Day on or after September 1, 2007.
          (s) “Purchase Price” shall mean an amount equal to eighty-five percent
(85%) of the Fair Market Value of a share of Common Stock on the Offering Date
or on the Exercise Date, whichever is lower; provided however, that the Purchase
Price may be adjusted by the Administrator pursuant to Section 20.
          (t) “Subsidiary” shall mean a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Code.

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          (u) “Trading Day” shall mean a day on which the U.S. national stock
exchange upon which the Company Common Stock is listed is open for trading.
     3. Eligibility.
          (a) First Offering Period. Any individual who is an Eligible Employee
immediately prior to the first Offering Period shall be automatically enrolled
in the first Offering Period.
          (b) Subsequent Offering Periods. Any Eligible Employee on a given
Offering Date subsequent to the First Offering Period shall be eligible to
participate in the Plan.
          (c) Limitations. Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee shall be granted an option under the Plan
(i) to the extent that, immediately after the grant, such Eligible Employee (or
any other person whose stock would be attributed to such Eligible Employee
pursuant to Section 424(d) of the Code) would own capital stock of the Company
or any Subsidiary and/or hold outstanding options to purchase such stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of the capital stock of the Company or of any Subsidiary, or
(ii) to the extent that his or her rights to purchase stock under all employee
stock purchase plans of the Company and its Subsidiaries accrues at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the
fair market value of the shares at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
     4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after March 1 and September 1 of each year, or on such other
date as the Administrator shall determine; provided, however, that the first
Offering Period under the Plan shall commence with the first Trading Day on or
after the date on which the Securities and Exchange Commission declares the
Company’s Registration Statement on Form S-1 effective and end on the earlier of
(i) the first trading day on or after March 1, 2009 or (ii) twenty-seven
(27) months from the beginning of the first Offering Period; and provided,
further that the second Offering Period under the Plan will commence on the
first Trading Day on or after September 1, 2007. The Administrator shall have
the power to change the duration of Purchase Periods and/or Offering Periods
(including the commencement dates thereof) with respect to future purchase
periods or offerings without stockholder approval if such change is announced
prior to the scheduled beginning of the first Purchase Period or Offering
Period, as applicable, to be affected thereafter.
     5. Participation.
          (a) First Offering Period. An Eligible Employee shall be entitled to
continue to participate in the first Offering Period pursuant to Section 3(a)
only if such individual submits a subscription agreement authorizing payroll
deductions in a form determined by the Administrator (which may be similar to
the form attached hereto as Exhibit A) to the Company’s designated plan
administrator (i) no earlier than the effective date of the Form S-8
registration statement with respect to the issuance of Common Stock under this
Plan and (ii) no later than ten (10) business days following the effective date
of such S-8 registration statement (the “Enrollment Window”). An Eligible
Employee’s failure to submit the subscription agreement during the Enrollment
Window shall result in the automatic termination of such individual’s
participation in the Offering Period.

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          (b) Subsequent Offering Periods. An Eligible Employee may become a
participant in the Plan by completing a subscription agreement in a form and in
the timeframe determined by the Administrator (which may be similar to the form
attached hereto as Exhibit A) and filing it with the Company’s designated Plan
administrator prior to the applicable Offering Date (and within the timeframe
determined the Administrator).
     6. Payroll Deductions.
          (a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding fifteen percent (15%) of the
Compensation which he or she receives on each pay day during the Offering
Period. Unless the Administrator determines otherwise, should a pay day occur on
an Exercise Date for a Purchase Period, a participant shall have the payroll
deductions made on such day applied to his or her account under such Purchase
Period. A participant’s subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.
          (b) Payroll deductions for a participant shall commence on the first
pay day following the Offering Date and shall end on the last pay day in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof; provided,
however, that for the first Offering Period, payroll deductions shall commence
on the first pay day on or following the end of the Enrollment Window.
          (c) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
          (d) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Administrator may, in its discretion, limit the nature
and/or number of participation rate changes during any Purchase Period or
Offering Period. The change in rate shall be effective with the first full
payroll period following five (5) business days after the Company’s receipt of
the new subscription agreement unless the Company elects to process a given
change in participation more quickly.
          (e) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(c) hereof, a participant’s
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant’s subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.

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          (f) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company’s Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company’s or
its Subsidiary’s federal, state, or any other tax liability payable to any
authority, national insurance, social security or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock including, for the avoidance of doubt, any
liability to pay secondary Class 1 National Insurance Contributions for which an
agreement or election has been entered into under paragraph 3A or 3B of
Schedule 1 to the Social Security Contributions and Benefits act 1992. At any
time, the Company or its Subsidiary may, but shall not be obligated to, withhold
from the participant’s compensation the amount necessary for the Company or its
Subsidiary to meet applicable withholding obligations, including any withholding
required to make available to the Company or its Subsidiary any tax deductions
or benefits attributable to sale or early disposition of Common Stock by the
Eligible Employee.
     7. Grant of Option. On the Offering Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company’s Common
Stock determined by dividing such Eligible Employee’s payroll deductions
accumulated prior to such Exercise Date by the applicable Purchase Price;
provided that in no event shall an Eligible Employee be permitted to purchase
during each Purchase Period more than 3,000 shares of the Company’s Common Stock
(subject to any adjustment pursuant to Section 19), and provided further that
such purchase shall be subject to the limitations set forth in Sections 3(c) and
13 hereof. The Eligible Employee may accept the grant of such option by turning
in a completed Subscription Agreement (attached hereto as Exhibit A) to the
Company on or prior to an Offering Date, or with respect to the first Offering
Period, prior to the last day of the Enrollment Window. The Administrator may,
for future Offering Periods, increase or decrease, in its absolute discretion,
the maximum number of shares of the Company’s Common Stock an Eligible Employee
may purchase during each Purchase Period of an Offering Period. Exercise of the
option shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. The option shall expire on the last day
of the Offering Period.
     8. Exercise of Option.
          (a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to such option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account.  No fractional shares shall be purchased; any payroll deductions
accumulated in a participant’s account which are not sufficient to purchase a
full share shall be retained in the participant’s account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10.   Any other funds left over in a
participant’s account after the Exercise Date will be returned to the
participant.  During a participant’s lifetime, a participant’s option to
purchase shares hereunder is exercisable only by him or her
          (b) If the Administrator determines that, on a given Exercise Date,
the number of shares of Common Stock with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Offering Date of the applicable
Offering Period, or (ii) the number of shares available for sale under the Plan
on such Exercise Date, the Administrator may in its sole discretion provide that
the Company shall make a pro rata allocation of the shares of Common Stock
available for purchase on such Offering

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Date or Exercise Date, as applicable, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect or terminate all
Offering Periods then in effect pursuant to Section 20. The Company may make a
pro rata allocation of the shares available on the Offering Date of any
applicable Offering Period pursuant to the preceding sentence, notwithstanding
any authorization of additional shares for issuance under the Plan by the
Company’s stockholders subsequent to such Offering Date.
     9. Delivery. As soon as reasonably practicable after each Exercise Date on
which a purchase of shares of Common Stock occurs, the Company shall arrange the
delivery to each participant the shares purchased upon exercise of his or her
option in a form determined by the Administrator and pursuant to rules
established by the Administrator. No participant will have any voting, dividend,
or other stockholder rights with respect to shares of Common Stock subject to
any option granted under the Plan until such shares have been purchased and
delivered to the participant as provided in this Section 9.
     10. Withdrawal.
          (a) Under procedures established by the Administrator, a participant
may withdraw all but not less than all the payroll deductions credited to his or
her account and not yet used to exercise his or her option under the Plan at any
time by giving written notice to the Company in the form and manner and within
the timeframe determined by the Administrator (which may be similar to the form
attached as Exhibit B to this Plan). All of the participant’s payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant’s option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.
          (b) A participant’s withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
     11. Termination of Employment. Upon a participant’s ceasing to be an
Eligible Employee, for any reason, he or she shall be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to such participant’s
account during the Offering Period but not yet used to purchase shares of Common
Stock under the Plan shall be returned to such participant or, in the case of
his or her death, to the person or persons entitled thereto under Section 15,
and such participant’s option shall be automatically terminated.
     12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

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     13. Stock.
          (a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum aggregate number of Shares
that may issued under the Plan is one million (1,000,000) Shares plus an annual
increase to be added on the first day of the Company’s fiscal year beginning
with the Company’s 2008 fiscal year, equal to the lesser of (A) six million
(6,000,000) Shares, or (B) two percent (2%) of the outstanding Shares on the
last day of the immediately preceding Company fiscal year. The Shares may be
authorized, but unissued, or reacquired Common Stock.
          (b) Until the shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company), a participant shall only have the rights of an unsecured creditor with
respect to such shares, and no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to such shares.
          (c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
     14. Administration. The Administrator shall administer the Plan and shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. Every finding, decision and determination made by
the Administrator shall, to the full extent permitted by law, be final and
binding upon all parties. Notwithstanding any provision to the contrary in this
Plan, the Administrator may adopt rules or procedures relating to the operation
and administration of the Plan to accommodate the specific requirements of local
laws and procedures for jurisdictions outside of the United States. Without
limiting the generality of the foregoing, the Administrator is specifically
authorized to adopt rules and procedures regarding eligibility to participate,
the definition of Compensation, handling of payroll deductions, making of
contributions to the Plan (including, without limitation, in forms other than
payroll deductions), establishment of bank or trust accounts to hold payroll
deductions, payment of interest, conversion of local currency, obligations to
pay payroll tax, determination of beneficiary designation requirements,
withholding procedures and handling of stock certificates which vary with local
requirements.
     15. Designation of Beneficiary.
          (a) A participant may file a designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the participant’s
account under the Plan in the event of such participant’s death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
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 prior to
exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.
          (b) Such designation of beneficiary may be changed by the participant
at any time by notice in a form determined by the Administrator. 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

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participant’s death, the Company shall deliver such shares and/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 discretion, may deliver such shares and/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.
          (c) All beneficiary designations shall be in such form and manner as
the Administrator may designate from time to time.
     16. Transferability. Neither payroll deductions credited to a participant’s
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 15 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.
     17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions. Until
shares of Common Stock are issued, participants shall only have the rights of an
unsecured creditor.
     18. Reports. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Eligible
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
     19.  Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Change in Control.
          (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the maximum number of shares of the Company’s
Common Stock which shall be made available for sale under the Plan, the maximum
number of shares each participant may purchase each Purchase Period (pursuant to
Section 7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan which has not yet been exercised
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other change in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

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          (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The
New Exercise Date shall be before the date of the Company’s proposed dissolution
or liquidation. The Administrator shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant’s option has been changed to the New Exercise Date and
that the participant’s option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
          (c) Merger or Change in Control. In the event of a merger or Change in
Control, each outstanding option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the option, the Offering Period with respect to which
such option relates shall be shortened by setting a New Exercise Date and shall
end on the New Exercise Date. The New Exercise Date shall be before the date of
the Company’s proposed merger or Change in Control. The Administrator shall
notify each participant in writing prior to the New Exercise Date, that the
Exercise Date for the participant’s option has been changed to the New Exercise
Date and that the participant’s option shall be exercised automatically on the
New Exercise Date, unless prior to such date the participant has withdrawn from
the Offering Period as provided in Section 10 hereof.
     20. Amendment or Termination.
          (a) The Administrator may at any time and for any reason terminate,
suspend or amend the Plan or any part thereof, at any time and for any reason.
Except as provided in Section 19 and this Section 20 hereof, no amendment may
make any change in any option theretofore granted which adversely affects the
rights of any participant unless their consent is obtained. To the extent
necessary to comply with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain stockholder approval of any amendment in such a manner and
to such a degree as required.
          (b) Without stockholder approval and without regard to whether any
participant rights may be considered to have been “adversely affected,” the
Administrator shall be entitled to change the Purchase Periods, Offering
Periods, limit the frequency and/or number of changes in the amount withheld
during a Purchase Period or an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a participant in order
to adjust for delays or mistakes in the Company’s processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Administrator determines
in its sole discretion advisable which are consistent with the Plan.

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          (c) Without regard to whether any participant’s rights may be
considered to have been “adversely affected”, in the event the Administrator
determines that the ongoing operation of the Plan may result in unfavorable
financial accounting consequences, the Administrator may, in its discretion and,
to the extent necessary or desirable, modify or amend the Plan to reduce or
eliminate such accounting consequence including, but not limited to:
               (i) amending the Plan to conform with the safe harbor definition
under Statement of Financial Accounting Standards 123(R), including with respect
to an Offering Period underway at the time;
               (ii) increasing or otherwise altering the Purchase Price for any
Offering Period including an Offering Period underway at the time of the change
in Purchase Price;
               (iii) reducing the maximum percentage of Compensation a
participant may elect to set aside as payroll deductions;
               (iv) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Administrator action; and
               (v) reducing the number of shares that may be purchased upon
exercise of outstanding options.
Such modifications or amendments shall not require stockholder approval or the
consent of any Plan participants.
     21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form and manner specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.
     22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
          As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
     23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It will continue in effect for a term of twenty (20) years, unless sooner
terminated under Section 20 hereof.

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     24. Stockholder Approval. The Plan will be subject to the approval by
stockholders of the Company within twelve (12) months after the date the Plan is
adopted by the Board. Such stockholder approval will be obtained in the manner
and to the degree required under applicable law.
     25. Automatic Transfer to Low Price Offering Period. To the extent
permitted by applicable laws, regulations, or stock exchange rules, if the Fair
Market Value of the Common Stock on any Exercise Date in an Offering Period is
lower than the Fair Market Value of the Common Stock on the Offering Date of
such Offering Period, then all participants in such Offering Period will be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period.

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EXHIBIT A
ARUBA NETWORKS, INC.
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT

      ____ Original Application   Offering Date:_____         ____ Change in
Payroll Deduction Rate     ____ Change of Beneficiary(ies)    

1.                        hereby elects to participate in the Aruba Networks,
Inc. Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”) and
subscribes to purchase shares of the Company’s Common Stock in accordance with
this Subscription Agreement and the Employee Stock Purchase Plan.   2.   I
hereby authorize payroll deductions from each paycheck in the amount of ___% of
my Compensation on each pay day (from 0 to 10%) during the Offering Period in
accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)   3.   I understand that said payroll
deductions shall be accumulated for the purchase of shares of Common Stock at
the applicable Purchase Price determined in accordance with the Employee Stock
Purchase Plan. I understand that if I do not withdraw from an Offering Period,
any accumulated payroll deductions will be used to automatically exercise my
option and purchase Common Stock under the Employee Stock Purchase Plan.   4.  
I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan.   5.   Shares of Common Stock
purchased for me under the Employee Stock Purchase Plan should be issued in the
name(s) of (Eligible Employee or Eligible Employee and Spouse only).   6.   I
understand that if I dispose of any shares received by me pursuant to the Plan
within 2 years after the Offering Date (the first day of the Offering Period
during which I purchased such shares) or one year after the Exercise Date, I
will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess of the
fair market value of the shares at the time such shares were purchased by me
over the price which I paid for the shares. I hereby agree to notify the Company
in writing within 30 days after the date of any disposition of my shares and I
will make adequate provision for Federal, state or other tax withholding
obligations, if any, which arise upon the

 

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    disposition of the Common Stock. The Company may, but will not be obligated
to, withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time after
the expiration of the 2-year and 1-year holding periods, I understand that I
will be treated for federal income tax purposes as having received income only
at the time of such disposition, and that such income will be taxed as ordinary
income only to the extent of an amount equal to the lesser of (1) the excess of
the fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair market value
of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.   7.
  I hereby agree to be bound by the terms of the Employee Stock Purchase Plan.
The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.   8.   In the
event of my death, I hereby designate the following as my beneficiary(ies) to
receive all payments and shares due me under the Employee Stock Purchase Plan:

                 
NAME: (Please print) 
                   
 
  (First)   (Middle)   (Last)    

             
 
Relationship
     
 
 
           
 
Percentage Benefit
     
 
(Address)

                 
NAME: (please print) 
                   
 
  (First)   (Middle)   (Last)    

             
 
Relationship
     
 
 
           
 
Percentage of Benefit
     
 
(Address)

-2-

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Employee’s Social
       
Security Number:
       
 
 
 
   
Employee’s Address:
       
 
       
 
         
 
       
 
         
 
       

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

                 
Dated: 
               
 
 
     
 
Signature of Employee    
 
               
 
         
 
Spouse’s Signature (If beneficiary other than spouse)    

-3-

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EXHIBIT B
ARUBA NETWORKS, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
     The undersigned participant in the Offering Period of the Aruba Networks,
Inc. Employee Stock Purchase Plan that began on _____, ___ (the “Offering Date”)
hereby notifies the Company that he or she hereby withdraws from the Offering
Period. He or she hereby directs the Company to pay to the undersigned as
promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.

                  Name and Address of Participant:
 
                   
 
                 
 
                 
 
                Signature:
 
                 
 
                Date: