Exhibit 10.4**FOUNDRY NETWORKS, INC.****1999 DIRECTORS’ STOCK OPTION PLAN****(as amended by the Board of Directors at its April 19, 2007 Meeting)**     1. **Purposes of the Plan****.**The purposes of this Directors’ Stock Option Plan are toattract and retain the best available personnel for service as Directors of the Company, to provideadditional incentive to the Outside Directors of the Company to serve as Directors, and toencourage their continued service on the Board.          All options granted hereunder shall be nonstatutory stock options.     2. **Definitions****.**As used herein, the following definitions shall apply:          (a) “**Board**” means the Board of Directors of the Company.          (b) **“****Change of Control****”**means a sale of all or substantially all of the Company’sassets, or any merger or consolidation of the Company with or into another corporation other than amerger or consolidation in which the holders of more than 50% of the shares of capital stock of theCompany outstanding immediately prior to such transaction continue to hold (either by the votingsecurities remaining outstanding or by their being converted into voting securities of thesurviving entity) more than 50% of the total voting power represented by the voting securities ofthe Company, or such surviving entity, outstanding immediately after such transaction.          (c) “**Code**” means the Internal Revenue Code of 1986, as amended.          (d) “**Common Stock**” means the Common Stock of the Company.          (e) “**Company**” means Foundry Networks, Inc., a Delaware corporation.          (f) “**Continuous Status as a Director**” means the absence of any interruption ortermination of service as a Director.          (g) **“****Corporate Transaction****”**means a dissolution or liquidation of the Company, a saleof all or substantially all of the Company’s assets, or a merger, consolidation or other capitalreorganization of the Company with or into another corporation.          (h) “**Director**” means a member of the Board.          (i) “**Employee**” means any person, including any officer or Director, employed by theCompany or any Parent or Subsidiary of the Company. The payment of a director’s fee by the Companyshall not be sufficient in and of itself to constitute “employment” by the Company.          (j) “**Exchange Act**” means the Securities Exchange Act of 1934, as amended.
 

 
          (k) “**Option**” means a stock option granted pursuant to the Plan. All options shall benonstatutory stock options (i.e., options that are not intended to qualify as incentive stockoptions under Section 422 of the Code).          (l) “**Optioned Stock**” means the Common Stock subject to an Option.          (m) “**Optionee**” means an Outside Director who receives an Option.          (n) “**Outside Director**” means a Director who is not an Employee.          (o) “**Parent**” means a “parent corporation,” whether now or hereafter existing, asdefined in Section 424(e) of the Code.          (p) “**Plan**” means this 1999 Directors’ Stock Option Plan.          (q) “**Share**” means a share of the Common Stock, as adjusted in accordance with Section11 of the Plan.          (r) “**Subsidiary**” means a “subsidiary corporation,” whether now or hereafter existing,as defined in Section 424(f) of the Code.     3. **Stock Subject to the Plan****.**Subject to the provisions of Section 11 of the Plan,the maximum aggregate number of Shares which may be optioned and sold under the Plan is 3,350,000Shares of Common Stock (the “Pool”). The Shares may be authorized, but unissued, orreacquired Common Stock.     If an Option should expire or become unexercisable for any reason without having beenexercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan hasbeen terminated, become available for future grant under the Plan. In addition, any Shares ofCommon Stock that are retained by the Company upon exercise of an Option in order to satisfy theexercise price for such Option, or any withholding taxes due with respect to such exercise, shallbe treated as not issued and shall continue to be available under the Plan. If Shares that wereacquired upon exercise of an Option are subsequently repurchased by the Company, such Shares shallnot in any event be returned to the Plan and shall not become available for future grant under thePlan.     4. **Administration of and Grants of Options under the Plan****.**          (a) **Administrator****.**Except as otherwise required herein, the Plan shall beadministered by the Board.          (b) **Procedure for Grants****.**All grants of Options hereunder shall be automatic andnondiscretionary and shall be made strictly in accordance with the following provisions:               (i) No person shall have any discretion to select which Outside Directors shall be grantedOptions or to determine the number of Shares to be covered by Options granted to Outside Directors.
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               (ii) Each Outside Director shall be automatically granted an Option to purchase 100,000 Shares(the “First Option”) on the date on which such person first becomes an Outside Director after theeffective date of this Plan, whether through election by the shareholders of the Company orappointment by the Board of Directors to fill a vacancy.               (iii) Each Outside Director, including an Outside Director who did not receive a First Optiongrant, shall be automatically granted an Option to purchase 40,000 Shares (the “Subsequent Option”)on the date of each Annual Meeting of the Company’s stockholders immediately following which suchOutside Director is serving on the Board, provided that, on such date, he or she shall have servedon the Board for at least six (6) months prior to the date of such Annual Meeting.               (iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof, in the event that agrant would cause the number of Shares subject to outstanding Options plus the number of Sharespreviously purchased upon exercise of Options to exceed the Pool, then each such automatic grantshall be for that number of Shares determined by dividing the total number of Shares remainingavailable for grant by the number of Outside Directors receiving an Option on the automatic grantdate. Any further grants shall then be deferred until such time, if any, as additional Sharesbecome available for grant under the Plan through action of the stockholders to increase the numberof Shares which may be issued under the Plan or through cancellation or expiration of Optionspreviously granted hereunder.               (v) Notwithstanding the provisions of subsections (ii) and (iii) hereof, any grant of anOption made before the Company has obtained stockholder approval of the Plan in accordance withSection 17 hereof shall be conditioned upon obtaining such stockholder approval of the Plan inaccordance with Section 17 hereof.               (vii) The terms of each option granted hereunder shall be as follows:                    (1) each option shall be exercisable only while the Outside Director remains a Director of theCompany, except as set forth in Section 9 below;                    (2) the exercise price per Share shall be 100% of the fair market value per Share on the dateof grant of each option, determined in accordance with Section 8 hereof;                    (3) each First Option shall become exercisable in installments cumulatively as to 25% of theShares subject to the option on the first anniversary of the date of grant of the option and as to1/48th of the Shares subject to the option on each monthly anniversary of the date ofgrant of the option thereafter; and                    (4) each Subsequent Option shall become exercisable in installments cumulatively as to1/24th of the Shares subject to the option on each monthly anniversary of the date ofgrant of the option.           (c) **Powers of the Board****.**Subject to the provisions and restrictions of the Plan, theBoard shall have the authority, in its discretion: (i) to determine, upon review of
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relevantinformation and in accordance with Section 8(b) of the Plan, the fair market value of the CommonStock; (ii) to determine the exercise price per Share of Options to be granted, which exerciseprice shall be determined in accordance with Section 8 of the Plan; (iii) to interpret the Plan;(iv) to prescribe, amend and rescind rules and regulations relating to the Plan; (v) to authorizeany person to execute on behalf of the Company any instrument required to effectuate the grant ofan Option previously granted hereunder; and (vi) to make all other determinations deemed necessaryor advisable for the administration of the Plan.               (d) **Effect of Board’s Decision****.**All decisions, determinations and interpretations ofthe Board shall be final and binding on all Optionees and any other holders of any Options grantedunder the Plan.               (e) **Suspension or Termination of Option****.**If the Chief Executive Officer or his or herdesignee reasonably believes that an Optionee has committed an act of misconduct, such officer maysuspend the Optionee’s right to exercise any option pending a determination by the Board (excludingthe Outside Director accused of such misconduct). If the Board (excluding the Outside Directoraccused of such misconduct) determines an Optionee has committed an act of embezzlement, fraud,dishonesty, nonpayment of an obligation owed to the Company, breach of fiduciary duty or deliberatedisregard of the Company rules resulting in loss, damage or injury to the Company, or if anOptionee makes an unauthorized disclosure of any Company trade secret or confidential information,engages in any conduct constituting unfair competition, induces any Company customer to breach acontract with the Company or induces any principal for whom the Company acts as agent to terminatesuch agency relationship, neither the Optionee nor his or her estate shall be entitled to exerciseany Option whatsoever. In making such determination, the Board of Directors (excluding the OutsideDirector accused of such misconduct) shall act fairly and shall give the Optionee an opportunity toappear and present evidence on Optionee’s behalf at a hearing before the Board or a committee ofthe Board.     5. **Eligibility****.**Options may be granted only to Outside Directors. All Options shallbe automatically granted in accordance with the terms set forth in Section 4(b) above. An OutsideDirector who has been granted an Option may, if he or she is otherwise eligible, be granted anadditional Option or Options in accordance with such provisions.     The Plan shall not confer upon any Optionee any right with respect to continuation of serviceas a Director or nomination to serve as a Director, nor shall it interfere in any way with anyrights which the Director or the Company may have to terminate his or her directorship at any time.     6. **Term of Plan; Effective Date****.**The Plan shall become effective on the effectivenessof the registration statement under the Securities Act of 1933, as amended, relating to theCompany’s initial public offering of securities. It shall continue in effect for a term of ten(10) years unless sooner terminated under Section 13 of the Plan.     7. **Term of Options****.**The term of each Option shall be ten (10) years from the date ofgrant thereof unless an Option terminates sooner pursuant to Section 9 below.
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     8. **Exercise Price and Consideration****.**          (a) **Exercise Price****.**The per Share exercise price for the Shares to be issued pursuantto exercise of an Option shall be 100% of the fair market value per Share on the date of grant ofthe Option.          (b) **Fair Market Value****.**The fair market value shall be determined by the Board;provided however that in the event the Common Stock is traded on the Nasdaq National Market orlisted on a stock exchange, the fair market value per Share shall be the closing sales price onsuch system or exchange on the date of grant of the Option (or, in the event that the Common Stockis not traded on such date, on the immediately preceding trading date), as reported in The WallStreet Journal, or if there is a public market for the Common Stock but the Common Stock is nottraded on the Nasdaq National Market or listed on a stock exchange, the fair market value per Shareshall be the mean of the bid and asked prices of the Common Stock in the over-the-counter market onthe date of grant, as reported in The Wall Street Journal (or, if not so reported, asotherwise reported by the National Association of Securities Dealers Automated Quotation (“Nasdaq”)System).          (c) **Form of Consideration****.**The consideration to be paid for the Shares to be issuedupon exercise of an Option shall consist entirely of cash, check, other Shares of Common Stockhaving a fair market value on the date of surrender equal to the aggregate exercise price of theShares as to which the Option shall be exercised (which, if acquired from the Company, shall havebeen held for at least six months), or any combination of such methods of payment and/or any otherconsideration or method of payment as shall be permitted under applicable corporate law.     9. **Exercise of Option****.**          (a) **Procedure for Exercise; Rights as a Stockholder****.**Any Option granted hereundershall be exercisable at such times as are set forth in Section 4(b) above; provided however that noOptions shall be exercisable prior to stockholder approval of the Plan in accordance with Section17 below has been obtained.               An Option may not be exercised for a fraction of a Share.               An Option shall be deemed to be exercised when written notice of such exercise has been givento the Company in accordance with the terms of the Option by the person entitled to exercise theOption and full payment for the Shares with respect to which the Option is exercised has beenreceived by the Company. Full payment may consist of any consideration and method of paymentallowable under Section 8(c) of the Plan. Until the issuance (as evidenced by the appropriateentry on the books of the Company or of a duly authorized transfer agent of the Company) of thestock certificate evidencing such Shares, no right to vote or receive dividends or any other rightsas a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise oftheOption. A share certificate for the number of Shares so acquired shall be issued to theOptionee as soon as practicable after exercise of the Option. No adjustment will be made for adividend or other right for which the record
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date is prior to the date the stock certificate isissued, except as provided in Section 11 of the Plan.               Exercise of an Option in any manner shall result in a decrease in the number of Shares whichthereafter may be available, both for purposes of the Plan and for sale under the Option, by thenumber of Shares as to which the Option is exercised.          (b) **Termination of Continuous Status as a Director****.**If an Outside Director ceases toserve as a Director, he or she may, but only within ninety (90) days after the date he or sheceases to be a Director of the Company, exercise his or her Option to the extent that he or she wasentitled to exercise it at the date of such termination. Notwithstanding the foregoing, in noevent may the Option be exercised after its term set forth in Section 7 has expired. To the extentthat such Outside Director was not entitled to exercise an Option at the date of such termination,or does not exercise such Option (to the extent he or she was entitled to exercise) within the timespecified above, the Option shall terminate and the Shares underlying the unexercised portion ofthe Option shall revert to the Plan.          (c) **Disability of Optionee****.**Notwithstanding Section 9(b) above, in the event aDirector is unable to continue his or her service as a Director with the Company as a result of hisor her total and permanent disability (as defined in Section 22(e)(3) of the Code), he or she may,but only within twelve (12) months from the date of such termination, exercise his or her Option tothe extent he or she was entitled to exercise it at the date of such termination. Notwithstandingthe foregoing, in no event may the Option be exercised after its term set forth in Section 7 hasexpired. To the extent that he or she was not entitled to exercise the Option at the date oftermination, or if he or she does not exercise such Option (to the extent he or she was entitled toexercise) within the time specified above, the Option shall terminate and the Shares underlying theunexercised portion of the Option shall revert to the Plan.          (d) **Death of Optionee****.**In the event of the death of an Optionee: (A) during the termof the Option who is, at the time of his or her death, a Director of the Company and who shall havebeen in Continuous Status as a Director since the date of grant of the Option, or (B) three (3)months after the termination of Continuous Status as a Director, the Option may be exercised, atany time within twelve (12) months following the date of death, by the Optionee’s estate or by aperson who acquired the right to exercise the Option by bequest or inheritance, but only to theextent of the right to exercise that had accrued at the date of death or the date of termination,as applicable. Notwithstanding the foregoing, in no event may the Option be exercised after itsterm set forth in Section 7 has expired. To the extent that an Optionee was not entitled toexercise the Option at the date of death or termination or if he or she does not exercise suchOption (to the extent he or she was entitled to exercise) within the time specified above, theOption shall terminate and the Shares underlying the unexercised portion of the Option shall revertto the Plan.     10. **Nontransferability of Options****.**The Option may not be sold, pledged, assigned,hypothecated, transferred or disposed of in any manner other than by will or by the laws of descentordistribution or pursuant to a qualified domestic relations order (as defined by the Code orthe rules thereunder). The designation of a beneficiary by an Optionee does not constitute a
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transfer. An Option may be exercised during the lifetime of an Optionee only by the Optionee or atransferee permitted by this Section.     11. **Adjustments Upon Changes in Capitalization; Corporate Transactions****.**          (a) **Adjustment****.**Subject to any required action by the stockholders of the Company,the number of shares of Common Stock covered by each outstanding Option, the number of Shares ofCommon Stock set forth in Sections 4(b)(ii), (iii) and (iv) above, and the number of Shares ofCommon Stock which have been authorized for issuance under the Plan but as to which no Options haveyet been granted or which have been returned to the Plan upon cancellation or expiration of anOption, as well as the price per Share of Common Stock covered by each such outstanding Option,shall be proportionately adjusted for any increase or decrease in the number of issued Shares ofCommon Stock resulting from a stock split, reverse stock split, stock dividend, combination orreclassification of the Common Stock (including any such change in the number of Shares of CommonStock effected in connection with a change in domicile of the Company) or any other increase ordecrease in the number of issued Shares of Common Stock effected without receipt of considerationby the Company; provided however that conversion of any convertible securities of the Company shallnot be deemed to have been “effected without receipt of consideration.” Such adjustment shall bemade by the Board, 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, orsecurities convertible into shares of stock of any class, shall affect, and no adjustment by reasonthereof shall be made with respect to, the number or price of shares of Common Stock subject to anOption.          (b) **Corporate Transactions; Change of Control****.**In the event of a CorporateTransaction, each outstanding Option shall be assumed or an equivalent option shall be substitutedby the successor corporation or a Parent or Subsidiary of such successor corporation, unless thesuccessor corporation does not agree to assume the outstanding Options or to substitute equivalentoptions, in which case the Options shall terminate upon the consummation of the transaction,provided however that in the event of a Change of Control, each Optionee shall have the right toexercise his or her Option as to all of the Optioned Stock, including Shares as to which the Optionwould not otherwise be exercisable, immediately prior to the consummation of such transaction.          For purposes of this Section 11(b), an Option shall be considered assumed, without limitation,if, at the time of issuance of the stock or other consideration upon such Corporate Transaction orChange of Control, each Optionee would be entitled to receive upon exercise of an Option the samenumber and kind of shares of stock or the same amount of property, cash or securities as theOptionee would have been entitled to receive upon the occurrence of such transaction if theOptionee had been, immediately prior to such transaction, the holder of the number of Shares ofCommon Stock covered by the Option at such time (after giving effect to any adjustments in thenumber of Shares covered by the Option as provided for in this Section 11); provided however thatif such consideration received in the transaction was not solely common stock of the successorcorporation or its Parent, the Administrator may, with the consent of the successor corporation,provide for theconsideration to be received upon
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exercise of the Option to be solely common stock of thesuccessor corporation or its Parent equal to the Fair Market Value of the per Share considerationreceived by holders of Common Stock in the transaction.          (c) **Certain Distributions****.**In the event of any distribution to the Company’sstockholders of securities of any other entity or other assets (other than dividends payable incash or stock of the Company) without receipt of consideration by the Company, the Administratormay, in its discretion, appropriately adjust the price per Share of Common Stock covered by eachoutstanding Option to reflect the effect of such distribution.     12. **Time of Granting Options****.**The date of grant of an Option shall, for all purposes,be the date determined in accordance with Section 4(b) hereof. Notice of the determination shallbe given to each Outside Director to whom an Option is so granted within a reasonable time afterthe date of such grant.     13. **Amendment and Termination of the Plan****.**          (a) **Amendment and Termination****.**The Board may amend or terminate the Plan from time totime in such respects as the Board may deem advisable; provided that, to the extent necessary anddesirable to comply with Rule 16b-3 under the Exchange Act (or any other applicable law orregulation), the Company shall obtain approval of the stockholders of the Company to Planamendments to the extent and in the manner required by such law or regulation.          (b) **Effect of Amendment or Termination****.**Any such amendment or termination of the Planthat would impair the rights of any Optionee shall not affect Options already granted to suchOptionee and such Options shall remain in full force and effect as if this Plan had not beenamended or terminated, unless mutually agreed otherwise between the Optionee and the Board, whichagreement must be in writing and signed by the Optionee and the Company.     14. **Conditions Upon Issuance of Shares****.**Notwithstanding any other provision of thePlan or any agreement entered into by the Company pursuant to the Plan, the Company shall not beobligated, and shall have no liability for failure, to issue or deliver any Shares under the Planunless such issuance or delivery would comply with the legal requirements relating to theadministration of stock option plans under applicable U.S. state corporate laws, U.S. federal andapplicable state securities laws, the Code, any stock exchange or Nasdaq rules or regulations towhich the Company may be subject and the applicable laws of any other country or jurisdiction whereOptions are granted under the Plan, as such laws, rules, regulations and requirements shall be inplace from time to time (the “Applicable Laws”). Such compliance shall be determined bythe Company in consultation with its legal counsel.          As a condition to the exercise of an Option, the Company may require the person exercisingsuch Option to represent and warrant at the time of any such exercise that the Shares are beingpurchased only for investment and without any present intention to sell or distribute such Sharesif, in the opinion of counsel for the Company, such a representation is required by law.
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     15. **Reservation of Shares****.**The Company, during the term of this Plan, will at alltimes reserve and keep available such number of Shares as shall be sufficient to satisfy therequirements of the Plan.     16. **Option Agreement****.**Options shall be evidenced by written option agreements in suchform as the Board shall approve.     17. **Stockholder Approval****.**If required by the Applicable Laws, continuance of the Planshall be subject to approval by the stockholders of the Company. Such stockholder approval shallbe obtained in the manner and to the degree required under the Applicable Laws.
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**FOUNDRY NETWORKS, INC.****1999 DIRECTORS’ STOCK OPTION PLAN****NOTICE OF STOCK OPTION GRANT**«Optionee»