exv10w3



 





Exhibit 10.3




FOUNDRY NETWORKS, INC.




1999 EMPLOYEE STOCK PURCHASE PLAN




AMENDED & RESTATED AS OF JUNE 5, 2007




     The following constitute the provisions of the 1999 Employee Stock Purchase Plan of Foundry
Networks, Inc.



     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. 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 shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the requirements of that section of the
Code.



     2. Definitions.



          (a) “Board” means the Board of Directors of the Company.




          (b) “Code” means the Internal Revenue Code of 1986, as amended.




          (c) “Common Stock” means the Common Stock of the Company.




          (d) “Company” means Foundry Networks, Inc., a Delaware corporation.




          (e) “Compensation” means total cash compensation received by an Employee from the
Company or a Designated Subsidiary. By way of illustration, but not limitation, Compensation
includes regular compensation such as salary, wages, overtime, shift differentials, bonuses,
commissions and incentive compensation, but excludes relocation, expense reimbursements, tuition or
other reimbursements and income realized as a result of participation in any stock option, stock
purchase, or similar plan of the Company or any Designated Subsidiary.




          (f) “Continuous Status as an Employee” means the absence of any interruption or
termination of service as an Employee. Continuous Status as an Employee shall not be considered
interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or
unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case
of transfers between locations of the Company or between the Company and its Designated
Subsidiaries.




          (g) “Contributions” means all amounts credited to the account of a participant
pursuant to the Plan.




 









 








          (h) “Corporate Transaction” means a sale of all or substantially all of the Company’s
assets, or a merger, consolidation or other capital reorganization of the Company with or into
another corporation.




          (i) “Designated Subsidiaries” means the Subsidiaries which have been designated by the
Board from time to time in its sole discretion as eligible to participate in the Plan; provided
however that the Board shall only have the discretion to designate Subsidiaries if the issuance of
options to such Subsidiary’s Employees pursuant to the Plan would not cause the Company to incur
adverse accounting charges.




          (j) “Employee” means any person, including an Officer, who is customarily employed for
at least twenty (20) hours per week and more than five (5) months in a calendar year by the Company
or one of its Designated Subsidiaries.




          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          (l) “Offering Date” means the first business day of each Offering Period of the Plan.




          (m) “Offering Period” means a period of twenty-four (24) months commencing on February
1 and August 1 of each year, except for the first Offering Period as set forth in Section 4(a).




          (n) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.




          (o) “Plan” means this Employee Stock Purchase Plan.




          (p) “Purchase Date” means the last day of each Purchase Period of the Plan.




          (q) “Purchase Period” means a period of six (6) months within an Offering Period,
except for the first Purchase Period as set forth in Section 4(b).




          (r) “Purchase Price” means with respect to a Purchase Period an amount equal to 85% of
the Fair Market Value (as defined in Section 7(b) below) of a Share of Common Stock on the Offering
Date or on the Purchase Date, whichever is lower; provided, however, that in the event (i) of any
increase in the number of Shares available for issuance under the Plan as a result of a
stockholder-approved amendment to the Plan, and (ii) all or a portion of such additional Shares are
to be issued with respect to one or more Offering Periods that are underway at the time of such
increase (“Additional Shares”), and (iii) the Fair Market Value of a Share of Common Stock
on the date of such increase (the “Approval Date Fair Market Value”) is higher than the
Fair Market Value on the Offering Date for any such Offering Period, then in such instance the
Purchase Price with respect to Additional Shares shall be 85% of the Approval Date Fair Market
Value or the Fair Market Value of a Share of Common Stock on the Purchase Date, whichever is lower.




 









 





          (s) “Share” means a share of Common Stock, as adjusted in accordance with Section 19
of the Plan.




          (t) “Subsidiary” means a corporation, domestic or foreign, of which not less than 50%
of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now
exists or is hereafter organized or acquired by the Company or a Subsidiary.




     3. Eligibility.



          (a) Any person who is an Employee as of the Offering Date of a given Offering Period shall be
eligible to participate in such Offering Period under the Plan, subject to the requirements of
Section 5(a) and the limitations imposed by Section 423(b) of the Code, provided however that
eligible Employees may not participate in more than one Offering Period at a time.




          (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted
an option under the Plan (i) if, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own
capital stock of the Company and/or hold outstanding options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option would permit his or her rights
to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of
the Company and its Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such stock (determined at
the time such option is granted) for each calendar year in which such option is outstanding at any
time.




     4. Offering Periods and Purchase Periods.



          (a) Offering Periods. The Plan shall be implemented by a series of Offering Periods
of twenty-four (24) months’ duration, with new Offering Periods commencing on or about February 1
and August 1 of each year (or at such other time or times as may be determined by the Board of
Directors). The first Offering Period shall commence on the beginning of the effective date of the
Registration Statement on Form S-1 for the initial public offering of the Company’s Common Stock
(the “IPO Date”) and continue until July 31, 2001. The Plan shall continue until
terminated in accordance with Section 19 hereof. The Board of Directors of the Company shall have
the power to change the duration and/or the frequency of Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least five (5) days prior to
the scheduled beginning of the first Offering Period to be affected.




          (b) Purchase Periods. Each Offering Period shall consist of four (4) consecutive
purchase periods of six (6) months’ duration. The last day of each Purchase Period shall be the
“Purchase Date” for such Purchase Period. A Purchase Period commencing on February 1
shall end on the next July 31. A Purchase Period commencing on August 1 shall end on the next
January 31. The first Purchase Period shall commence on the IPO Date and shall end on January 31,
2000. The Board of Directors of the Company shall have the power to change the duration and/or
frequency of Purchase Periods with respect to future purchases without




 









 







stockholder approval if such change is announced at least five (5) days prior to the scheduled
beginning of the first Purchase Period to be affected.




     5. Participation.



          (a) An eligible Employee may become a participant in the Plan by completing a subscription
agreement on the form provided by the Company and filing it with the Company’s payroll office prior
to the applicable Offering Date, unless a later time for filing the subscription agreement is set
by the Board for all eligible Employees with respect to a given Offering Period. The subscription
agreement shall set forth the percentage of the participant’s Compensation (subject to Section 6(a)
below) to be paid as Contributions pursuant to the Plan.




          (b) Payroll deductions shall commence on the first payroll following the Offering Date and
shall end on the last payroll paid on or prior to the last Purchase Period of the Offering Period
to which the subscription agreement is applicable, unless sooner terminated by the participant as
provided in Section 10.




     6. Method of Payment of Contributions.



          (a) A participant shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not less than one percent (1%) and not more than twenty percent (20%)
(or such greater percentage as the Board may establish from time to time before an Offering Date)
of such participant’s Compensation on each payday during the Offering Period. All payroll
deductions made by a participant shall be credited to his or her account under the Plan. A
participant may not make any additional payments into such account.




          (b) A participant may discontinue his or her participation in the Plan as provided in Section
10, or, on two occasions only during an Offering Period, may decrease, but not increase, the rate
of his or her payroll deductions with respect to the Offering Period by completing and filing with
the Company a new subscription agreement authorizing the decrease in the payroll deduction rate.
The change in rate shall be effective as of the beginning of the next Purchase Period following the
date of filing of the new subscription agreement, if the agreement is filed at least ten (10)
business days prior to such date and, if not, as of the beginning of the next succeeding Purchase
Period.




          (c) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) herein, a participant’s payroll deductions may be decreased during any
Purchase Period to 0%. Payroll deductions shall re-commence 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.




     7. Grant of Option.



          (a) 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 Purchase Date a number of Shares of
the Company’s Common Stock determined by dividing such




 









 







Employee’s Contributions accumulated prior to such Purchase Date and retained in the
participant’s account as of the Purchase Date by the applicable Purchase Price; provided however
that the maximum number of Shares an Employee may purchase during each Purchase Period shall be
5,000* Shares (subject to any adjustment pursuant to Section 19 below), and provided further that
such purchase shall be subject to the limitations set forth in Sections 3(b) and 13.




          (b) The fair market value of the Company’s Common Stock on a given date (the “Fair Market
Value”) shall be determined by the Board in its discretion based on the closing sales price of
the Common Stock for such date (or, in the event that the Common Stock is not traded on such date,
on the immediately preceding trading date), as reported by the National Association of Securities
Dealers Automated Quotation (Nasdaq) National Market or, if such price is not reported, the mean of
the bid and asked prices per share of the Common Stock as reported by Nasdaq or, in the event the
Common Stock is listed on a stock exchange, the Fair Market Value per share shall be the closing
sales price on such exchange on such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported in The Wall Street
Journal. For purposes of the Offering Date under the first Offering Period under the Plan, the
Fair Market Value of a share of the Common Stock of the Company shall be the Price to Public as set
forth in the final prospectus filed with the Securities and Exchange Commission pursuant to Rule
424 under the Securities Act of 1933, as amended.




     8. Exercise of Option. Unless a participant withdraws from the Plan as provided in
Section 10, his or her option for the purchase of Shares will be exercised automatically on each
Purchase Date of an Offering Period, and the maximum number of full Shares subject to the option
will be purchased at the applicable Purchase Price with the accumulated Contributions in his or her
account. No fractional Shares shall be issued. The Shares purchased upon exercise of an option
hereunder shall be deemed to be transferred to the participant on the Purchase Date. During his or
her lifetime, a participant’s option to purchase Shares hereunder is exercisable only by him or
her.



     9. Delivery. As promptly as practicable after each Purchase Date of each Offering
Period, the Company shall arrange the delivery to each participant, as appropriate, the Shares
purchased upon exercise of his or her option. 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 below. Any
other amounts left over in a participant’s account after a Purchase Date shall be returned to the
participant.



     10. Voluntary Withdrawal; Termination of Employment.



          (a) A participant may withdraw all but not less than all the Contributions credited to his or
her account under the Plan at any time prior to each Purchase Date by giving written notice to the
Company. All of the participant’s Contributions credited to his or her account will be paid to him
or her promptly after receipt of his or her notice of withdrawal and his or her option for the
current period will be automatically terminated, and no further Contributions for the purchase of
Shares will be made during the Offering Period.




 









 








          (b) Upon termination of the participant’s Continuous Status as an Employee prior to the
Purchase Date of an Offering Period for any reason, including retirement or death, the
Contributions credited to his or her account will be returned to him or her or, in the case of his
or her death, to the person or persons entitled thereto under Section 14, and his or her option
will be automatically terminated.




          (c) In the event an Employee fails to remain in Continuous Status as an Employee of the
Company for at least twenty (20) hours per week during the Offering Period in which the employee is
a participant, he or she will be deemed to have elected to withdraw from the Plan and the
Contributions credited to his or her account will be returned to him or her and his or her option
terminated.




          (d) A participant’s withdrawal from an offering will not have any effect upon his or her
eligibility to participate in a succeeding offering or in any similar plan which may hereafter be
adopted by the Company.




     11. Automatic Withdrawal. If the Fair Market Value of the Shares on any Purchase Date
of an Offering Period is less than the Fair Market Value of the Shares on the Offering Date for
such Offering Period, then every participant shall automatically (i) be withdrawn from such
Offering Period at the close of such Purchase Date and after the acquisition of Shares for such
Purchase Period, and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period.



     12. Interest. No interest shall accrue on the Contributions of a participant in the
Plan.



     13. Stock.



          (a) Subject to adjustment as provided in Section 19, the maximum number of Shares which shall
be made available for sale under the Plan shall be 1,500,000* Shares, plus an annual increase on
the first day of each of the Company’s fiscal years beginning in 2000 and ending in 2009 equal to
the lesser of (i) 1,500,000* Shares, (ii) two percent (2%) of the Shares outstanding on the last
day of the immediately preceding fiscal year, or (iii) such lesser number of Shares as is
determined by the Board. If the Board determines that, on a given Purchase Date, the number of
shares 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 Purchase
Date, the Board may in its sole discretion provide (x) that the Company shall make a pro rata
allocation of the Shares of Common Stock available for purchase on such Offering Date or Purchase
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 Purchase Date, and continue all Offering Periods then in effect, or (y) that the
Company shall make a pro rata allocation of the shares available for purchase on such Offering Date
or Purchase 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 Purchase Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20 below. The Company may make




 









 







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.




          (b) The participant shall have no interest or voting right in Shares covered by his or her
option until such option has been exercised.




          (c) Shares to be delivered to a participant under the Plan will be registered in the name of
the participant or in the name of the participant and his or her spouse.




     14. Administration. The Board, or a committee named by the Board, shall supervise and
administer the Plan and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to
construe and interpret the Plan, and to make all other determinations necessary or advisable for
the administration of the Plan.



     15. Designation of Beneficiary.



          (a) A participant may file a written designation of a beneficiary who is to receive any Shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to the end of a Purchase Period but prior to delivery to him or her of such Shares
and cash. In addition, a participant may file a written designation of a beneficiary who is to
receive any cash from the participant’s account under the Plan in the event of such participant’s
death prior to the Purchase Date of an Offering Period. 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 (and his or her spouse,
if any) at any time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the time of such
participant’s death, the Company shall deliver such 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.




     16. Transferability. Neither Contributions 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) 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 in accordance with Section 10.



     17. Use of Funds. All Contributions 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 Contributions.



 









 





     18. Reports. Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participating Employees at least annually, which statements
will set forth the amounts of Contributions, the per Share Purchase Price, the number of Shares
purchased and the remaining cash balance, if any.



     19. Adjustments Upon Changes in Capitalization; Corporate Transactions.



          (a) Adjustment. Subject to any required action by the stockholders of the Company,
the number of Shares covered by each option under the Plan which has not yet been exercised and the
number of Shares which have been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the “Reserves”), as well as the maximum number of shares
of Common Stock which may be purchased by a participant in a Purchase Period, the number of shares
of Common Stock set forth in Section 13(a)(i) above, and the price per Share 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 resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock (including
any such change in the number of Shares of Common Stock effected in connection with a change in
domicile of the Company), or any other increase or decrease in the number of Shares 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 Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issue 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 subject to an option.




          (b) Corporate Transactions. In the event of a dissolution or liquidation of the
Company, any Purchase Period and Offering Period then in progress will terminate immediately prior
to the consummation of such action, unless otherwise provided by the Board. In the event of a
Corporate Transaction, each option outstanding under the Plan shall be assumed or an equivalent
option shall be substituted by the successor corporation or a parent or Subsidiary of such
successor corporation. In the event that the successor corporation refuses to assume or substitute
for outstanding options, each Purchase Period and Offering Period then in progress shall be
shortened and a new Purchase Date shall be set (the “New Purchase Date”), as of which date
any Purchase Period and Offering Period then in progress will terminate. The New Purchase Date
shall be on or before the date of consummation of the transaction and the Board shall notify each
participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase
Date for his or her option has been changed to the New Purchase Date and that his or her option
will be exercised automatically on the New Purchase Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10. For purposes of this Section 19, an
option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of
issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option
under the Plan would be entitled to receive upon exercise of the option the same number and kind of
shares of stock or the same amount of property, cash or securities as such holder would have been
entitled to receive upon the occurrence of the transaction if the holder had been, immediately
prior to the transaction, the holder of the number




 









 







of Shares of Common Stock covered by the option at such time (after giving effect to any
adjustments in the number of Shares covered by the option as provided for in this Section 19);
provided however that if the consideration received in the transaction is not solely common stock
of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor corporation or its parent
equal in Fair Market Value to the per Share consideration received by holders of Common Stock in
the transaction.




     The Board may, if it so determines in the exercise of its sole discretion, also make provision
for adjusting the Reserves, as well as the price per Share of Common Stock covered by each
outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of Shares of its outstanding
Common Stock, and in the event of the Company’s being consolidated with or merged into any other
corporation.



     20. Amendment or Termination.



          (a) The Board may at any time and for any reason terminate or amend the Plan. Except as
provided in Section 19, no such termination of the Plan may affect options previously granted,
provided that the Plan or an Offering Period may be terminated by the Board on a Purchase Date or
by the Board’s setting a new Purchase Date with respect to an Offering Period and Purchase Period
then in progress if the Board determines that termination of the Plan and/or the Offering Period is
in the best interests of the Company and the stockholders or if continuation of the Plan and/or the
Offering Period would cause the Company to incur adverse accounting charges as a result of a change
after the effective date of the Plan in the generally accepted accounting rules applicable to the
Plan. Except as provided in Section 19 and in this Section 20, no amendment to the Plan shall make
any change in any option previously granted which adversely affects the rights of any participant.
In addition, to the extent necessary to comply with Rule 16b-3 under the Exchange Act, or under
Section 423 of the Code (or any successor rule or provision or any applicable law or regulation),
the Company shall obtain stockholder approval in such a manner and to such a degree as so required.




          (b) Without stockholder consent and without regard to whether any participant rights may be
considered to have been adversely affected, the Board (or its committee) shall be entitled to
change the Offering Periods and Purchase Periods, limit the frequency and/or number of changes in
the amount withheld during 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 Board (or its committee)
determines in its sole discretion advisable which are consistent with the Plan.




 









 








     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 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, applicable state securities laws 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; Effective Date. The Plan shall become effective upon the IPO Date.
It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20.



     24. Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to, and the purchase of Shares by, persons subject to Section 16 of the Exchange
Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to
contain, and such options shall contain, and the Shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.





 




			
	*	 	All share numbers have been adjusted for the two-for-one forward stock split of the Company’s
common stock in the form of a stock dividend effectuated on January 10, 2000.