Document:

FFIV 8-K EX 10.2 3.17.2015

F5 NETWORKS, INC 
2011 EMPLOYEE STOCK PURCHASE PLAN 
		
	1.
	PURPOSE. 

(a) The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Affiliates may be given an opportunity to purchase Shares of the Company. 
(b) The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. 
(c) The Company intends that the Rights to purchase Shares granted under the Plan be considered options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code. 
		
	2.
	DEFINITIONS. 

Certain terms used in the Plan have the meanings set forth in Appendix I. 
		
	3.
	ADMINISTRATION. 

(a) The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subparagraph 3(d). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. 
(b) The Board (or the Committee) shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 
(i) To determine when and how Rights to purchase Shares shall be granted and the provisions of each Offering of such Rights (which need not be identical). 
(ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. 
(iii) To construe and interpret the Plan and Rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 
(iv) To amend the Plan as provided in paragraph 14. 
(v) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan. 
(c) Without limitation on paragraph 3(b) and without amending the Plan, the Board (or the Committee) may grant rights or establish other procedures to provide benefits to Eligible Employees outside of the United States on such terms and conditions different from those specified in this Plan as may, in the judgment of the Board (or the Committee), be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable (i) to comply with provisions of the laws or regulations or conform to the requirements to operate the Plan in a qualified or tax or accounting advantageous manner in other countries or jurisdictions in which the Company or any other Employer may operate or have employees, (ii) to ensure the viability of the benefits from the Plan to Eligible Employees employed in such countries or jurisdictions and (iii) to meet the objectives of the Plan. 
(d) The Board may delegate administration of the Plan to a Committee of the Board composed of two (2) or more members, all of the members of which Committee may be, in the discretion of the Board, Non-Employee Directors and/or Outside Directors. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee of two (2) or more Outside Directors any of the administrative powers the Committee is authorized to exercise (and references 

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in this Plan to the Board shall thereafter be to the Committee or such a subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 
		
	4.
	SHARES SUBJECT TO THE PLAN. 

(a) Subject to the provisions of paragraph 13 relating to adjustments upon changes in securities, the Shares that may be sold pursuant to Rights granted under the Plan shall not exceed in the aggregate eight million (8,000,000) Shares. If any Right granted under the Plan shall for any reason terminate without having been exercised, the Shares not purchased under such Right shall again become available for the Plan. 
(b) The Shares subject to the Plan may be unissued Shares or Shares that have been bought on the open market at prevailing market prices or otherwise. 
		
	5.
	GRANT OF RIGHTS; OFFERING. 

(a) The Board may from time to time grant or provide for the grant of Rights to purchase Shares of the Company under the Plan to Eligible Employees in an Offering on an Offering Date or Dates selected by the Board. Each Offering shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all Employees granted Rights to purchase Shares under the Plan shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in paragraphs 6 through 9, inclusive. 
(b) If a Participant has more than one Right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant will be deemed to apply to all of his or her Rights under the Plan, and (ii) an earlier-granted Right (or a Right with a lower exercise price, if two Rights have identical grant dates) will be exercised to the fullest possible extent before a later-granted Right (or a Right with a higher exercise price if two Rights have identical grant dates) will be exercised. 
		
	6.
	ELIGIBILITY. 

(a) Rights may be granted only to Employees of the Company or, as the Board may designate as provided in subparagraph 3(b), to Employees of an Affiliate. Except as provided in subparagraph 6(b), an Employee shall not be eligible to be granted Rights under the Plan unless, on the Offering Date, such Employee has been in the employ of the Company or the Affiliate, as the case may be, for such continuous period preceding such grant as the Board may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years. 
 
(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Right under that Offering, which Right shall thereafter be deemed to be a part of that Offering. Such Right shall have the same characteristics as any Rights originally granted under that Offering, as described herein, except that: 
(i) the date on which such Right is granted shall be the “Offering Date” of such Right for all purposes, including determination of the exercise price of such Right; 
(ii) the period of the Offering with respect to such Right shall begin on its Offering Date and end coincident with the end of such Offering; and 
(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Right under that Offering. 
(c) No Employee shall be eligible for the grant of any Rights under the Plan if, immediately after any such Rights are granted, such Employee owns 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 Affiliate. For purposes of this subparagraph 6(c), the rules of Section 424(d) of the 

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Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding rights and options shall be treated as stock owned by such Employee. 
(d) An Eligible Employee may be granted Rights under the Plan only if such Rights, together with any other Rights granted under all Employee Stock Purchase Plans of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such Eligible Employee’s rights to purchase Shares of the Company or any Affiliate to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of the fair market value of such Shares (determined at the time such Rights are granted) for each calendar year in which such Rights are outstanding at any time. 
(e) The Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate. 
		
	7.
	RIGHTS; PURCHASE PRICE. 

(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted the Right to purchase up to the number of Shares purchasable either: 
(i) with a percentage designated by the Board not exceeding fifteen percent (15%) of such Employee’s Earnings (as defined by the Board in each Offering) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering; or 
(ii) with a maximum dollar amount designated by the Board that, as the Board determines for a particular Offering, (1) shall be withheld, in whole or in part, from such Employee’s Earnings (as defined by the Board in each Offering) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering and/or (2) shall be contributed, in whole or in part, by such Employee during such period. 
(b) The Board shall establish one or more Purchase Dates during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering. 
(c) In connection with each Offering made under the Plan, the Board may specify a maximum amount of Shares that may be purchased by any Participant as well as a maximum aggregate amount of Shares that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a maximum aggregate amount of Shares which may be purchased by all Participants on any given Purchase Date under the Offering. If the aggregate purchase of Shares upon exercise of Rights granted under the Offering would exceed any such maximum aggregate amount, the Board shall make a pro rata allocation of the Shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. Unless a different maximum amount of Shares that may be purchased by any Participant during an Offering is determined by the Board prior to the start of an Offering, the maximum amount of Shares that may be purchased by any Participant during an Offering is 10,000 Shares. 
(d) The purchase price of Shares acquired pursuant to Rights granted under the Plan shall be not less than the lesser of: 
(i) an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Offering Date; or 
(ii) an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Purchase Date. 
		
	8.
	PARTICIPATION; WITHDRAWAL; TERMINATION. 

(a) An Eligible Employee may become a Participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board of such Employee’s Earnings during the Offering (as defined in each Offering). The payroll deductions made for each Participant shall be credited to a bookkeeping account for such Participant under the Plan and either may be deposited with the general funds of the Company or may be deposited in a separate account in the name of, and for the benefit of, such Participant with a financial institution designated by the Company. To the extent provided in the Offering, a Participant may reduce (including to zero) or increase such payroll deductions. To the extent provided in the Offering, a Participant may begin such payroll deductions after the beginning of the Offering. A Participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the Participant has not already had the maximum permitted amount withheld during the Offering. 

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(b) At any time during an Offering, a Participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board in the Offering. Upon such withdrawal from the Offering by a Participant, the Company shall distribute to such Participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the Participant) under the Offering, without interest unless otherwise specified in the Offering, and such Participant’s interest in that Offering shall be automatically terminated. A Participant’s withdrawal from an Offering will have no effect upon such Participant’s eligibility to participate in any other Offerings under the Plan but such Participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan. 
(c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating Employee’s employment with the Company or a designated Affiliate for any reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such terminated Employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the terminated Employee) under the Offering, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering. 
 
(d) Rights granted under the Plan shall not be transferable by a Participant otherwise than by will or the laws of descent and distribution and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such Rights are granted. 
		
	9.
	EXERCISE. 

(a) On each Purchase Date specified therefor in the relevant Offering, each Participant’s accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of Shares up to the maximum amount of Shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional Shares shall be issued upon the exercise of Rights granted under the Plan unless specifically provided for in the Offering. 
(b) Unless otherwise specifically provided in the Offering, the amount, if any, of accumulated payroll deductions remaining in any Participant’s account after the purchase of Shares that is equal to the amount required to purchase one or more whole Shares on the final Purchase Date of the Offering shall be distributed in full to the Participant at the end of the Offering, without interest. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering. 
(c) No Rights granted under the Plan may be exercised to any extent unless the Shares to be issued upon such exercise under the Plan (including Rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no Rights granted under the Plan or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered and in such compliance, no Rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire Shares) shall be distributed to the Participants, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company’s general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subparagraph 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering. 

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10.    ISSUANCE OF SHARES. 
(a) If on a given Purchase Date, the number of Shares with respect to which Rights are to be exercised exceeds the number of Shares then available under the Plan, the Board shall make a pro rata allocation of the Shares remaining available under the Plan in as nearly a uniform manner as shall be practical and as it shall determine to be equitable. 
(b) If the Company is unable to obtain from any regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Shares under the Plan, the Company shall be relieved from any liability for failure to issue and sell Shares upon exercise of such Rights unless and until such authority is obtained. 
 
		
	11.
	USE OF PROCEEDS FROM SHARES. 

Proceeds from the sale of Shares pursuant to Rights granted under the Plan shall constitute general funds of the Company. 
		
	12.
	RIGHTS AS A SHAREHOLDER. 

A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, Shares subject to Rights granted under the Plan unless and until the Participant’s Shares acquired upon exercise of Rights under the Plan are issued. No adjustment will be made for dividends or other rights for which the record date is prior to the date of issuance. 
		
	13.
	ADJUSTMENTS UPON CHANGES IN SECURITIES. 

(a) If any change is made in the Shares subject to the Plan, or subject to any Right, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of Shares subject to the Plan pursuant to subparagraph 4(a), and the outstanding Rights will be appropriately adjusted in the class(es), number of Shares and purchase limits of such outstanding Rights. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction that does not involve the receipt of consideration by the Company.) 
(b) In the event of: (i) a dissolution, liquidation, or sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the Shares outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then: (1) any surviving or acquiring corporation shall assume Rights outstanding under the Plan or shall substitute similar rights (including a right to acquire the same consideration paid to Shareholders in the transaction described in this subparagraph 13(b)) for those outstanding under the Plan, or (2) in the event any surviving or acquiring corporation refuses to assume such Rights or to substitute similar rights for those outstanding under the Plan, then, as determined by the Board in its sole discretion such Rights may continue in full force and effect or the Participants’ accumulated payroll deductions (exclusive of any accumulated interest which cannot be applied toward the purchase of Shares under the terms of the Offering) may be used to purchase Shares immediately prior to the transaction described above under the ongoing Offering and the Participants’ Rights under the ongoing Offering thereafter terminated. 
		
	14.
	AMENDMENT OF THE PLAN. 

(a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 13 relating to adjustments upon changes in securities and except as to minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favorable tax, exchange control or regulatory treatment for Participants or the Company or any Affiliate, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary for the Plan to satisfy the requirements of Section 423 of the Code and any Nasdaq or other securities exchange listing requirements. Currently under the Code, shareholder approval within twelve (12) months before or after the adoption of the amendment is required where the amendment will: 
(i) Increase the amount of Shares reserved for Rights under the Plan; 
(ii) Modify the provisions as to eligibility for participation in the Plan to the extent such modification requires shareholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code; or 
 

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(iii) Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code. 
(b) It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plans and/or to bring the Plan and/or Rights granted under it into compliance therewith. 
(c) Rights and obligations under any Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Plan and/or Rights granted under the Plan comply with the requirements of Section 423 of the Code or are exempt from or comply with the requirements of Section 409A of the Code. 
		
	15.
	TERMINATION OR SUSPENSION OF THE PLAN. 

(a) The Board in its discretion may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate at the time that all of the Shares subject to the Plan’s reserve, as increased and/or adjusted from time to time, have been issued under the terms of the Plan. No Rights may be granted under the Plan while the Plan is suspended or after it is terminated. 
(b) Rights and obligations under any Rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Plan and/or Rights granted under the Plan comply with the requirements of Section 423 of the Code. 
		
	16.
	TREATMENT OF ELIGIBLE EMPLOYEES OUTSIDE OF THE UNITED STATES. 

Eligible Employees who are paid in foreign currency, and who contribute foreign currency to the Plan through contributions or payroll deductions will have such amounts converted to U.S. dollars. The exchange rate and method for such conversion will be determined as prescribed by the Board or Committee. In no event will any procedure implemented for dealing with exchange rate fluctuations that may occur during an Offering result in a purchase price below the purchase price permitted under subparagraph 6(d) of the Plan. Each Eligible Employee shall bear the risk of any currency exchange fluctuations (if applicable) between the date on which any Eligible Employee amounts are converted to U.S. dollars and the Purchase Date. 
		
	17.
	WITHHOLDING. 

The Employer shall have the power and the right to (a) deduct, withhold or cause the sale of Shares purchased pursuant to an Offering under the Plan to obtain, (b) deduct or withhold from any other compensation to the Participant, or (c) require a Participant to remit to the Employer, an amount sufficient to satisfy Federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan. 
		
	18.
	SECTION 409A. 

Rights under the Plan are intended to be exempt from the application of Section 409A of the Code and the Plan is intended to be interpreted consistent with such intention. Notwithstanding the foregoing, neither the Company nor the Board shall have any liability to any Participant or any other party if the Rights under the Plan are not exempt from or compliant with Section 409A of the Code. 
 
		
	19.
	NO RIGHT OF EMPLOYMENT. 

Neither the grant nor the exercise of any Right under the Plan nor anything in this Plan shall impose upon the Company or any other Employer any obligation to employ or continue to employ any Eligible Employee. The right of the Company or any other Employer to terminate any Employee shall not be diminished or affected because any Rights have been granted to such Employee. 
		
	20.
	OBLIGATION TO MAINTAIN SHARES WITH BROKER. 

Without limitation on the Participant’s or former Participant’s ability to sell, transfer, or otherwise makes a disposition of Shares purchased pursuant to an Offering under the Plan and without limitation on paragraph 3, Participants and former Participants must maintain any Shares purchased pursuant to an Offering under the Plan at the broker designated by the Committee unless the Committee determines otherwise. 

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	21.
	EFFECTIVE DATE AND HISTORY OF PLAN. 

The 1999 Employee Stock Purchase Plan was originally adopted by the Board and approved by shareholders in 1999 and subsequently amended as set forth on Appendix II. The 2011 Employee Stock Purchase Plan is an amendment and restatement of the 1999 Employee Stock Purchase Plan, as amended. 
 

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APPENDIX I 
DEFINITIONS 
(a) “Affiliate” means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 
(b) “Board” means the Board of Directors of the Company. 
(c) “Code” means the United States Internal Revenue Code of 1986, as amended. 
(d) “Committee” means a Committee appointed by the Board in accordance with subparagraph 3(d) of the Plan. 
(e) “Company” means F5 Networks, Inc., a Washington corporation. 
(f) “Director” means a member of the Board. 
(g) “Earnings” means, unless otherwise determined by the Board, cash compensation actually paid to an Eligible Employee during the specified period. 
(h) “Eligible Employee” means an Employee who meets the requirements set forth in the Offering for eligibility to participate in the Offering. 
(i) “Employee” means any person, including Officers and Directors, employed by the Company or an Affiliate of the Company. Neither service as a Director nor payment of a director’s fee shall be sufficient to constitute “employment” by the Company or the Affiliate. 
(j) “Employee Stock Purchase Plan” means a plan that grants rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code. 
(k) “Employer” means the Company and the Affiliates designated from time to time pursuant to subparagraph 3(b) of the plan to participate in the Plan. 
(l) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 
(m) “Fair Market Value” means the value of a security, as determined in good faith by the Board. If the security is listed on any established stock exchange, then, except as otherwise provided in the Offering, the Fair Market Value of the security shall be the closing sales price (rounded up where necessary to the nearest whole cent) for such security (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the relevant security of the Company) on the trading day prior to the relevant determination date, as reported in The Wall Street Journal or such other source as the Board deems reliable. 
(n) “Non-Employee Director” means a Director who either (i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)) and does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3. 
(o) “Offering” means the grant of Rights to purchase Shares under the Plan to Eligible Employees. 
 
(p) “Offering Date” means a date selected by the Board for an Offering to commence. 
(q) “Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of the Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time, and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. 

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(r) “Participant” means an Eligible Employee who holds an outstanding Right granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Right granted under the Plan. 
(s) “Plan” means this F5 Networks, Inc. 2011 Employee Stock Purchase Plan. 
(t) “Purchase Date” means one or more dates established by the Board during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering. 
(u) “Right” means an option to purchase Shares granted pursuant to the Plan. 
(v) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3 as in effect with respect to the Company at the time discretion is being exercised regarding the Plan. 
(w) “Securities Act” means the United States Securities Act of 1933, as amended. 
(x) “Share” means a share of the common stock of the Company. 
 

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APPENDIX II 
 
	
		
	HISTORY:
	ORIGINALLY ADOPTED BY BOARD OF DIRECTORS APRIL 5, 1999

	 
	ORIGINALLY APPROVED BY SHAREHOLDERS MAY, 1999 AMENDMENT ADOPTED BY BOARD OF DIRECTORS JANUARY 26, 2004

	 
	AMENDMENT ADOPTED BY SHAREHOLDERS APRIL 29, 2004

	 
	SECOND AMENDMENT ADOPTED BY BOARD OF DIRECTORS JANUARY 7, 2009

	 
	SECOND AMENDMENT ADOPTED BY SHAREHOLDERS MARCH 12, 2009

	 
	AMENDMENT ADOPTED BY BOARD OF DIRECTORS SEPTEMBER 9, 2010

	 
	AMENDMENT AND RESTATEMENT ADOPTED BY BOARD OF DIRECTORS JULY 14, 2011

	 
	AMENDMENT AND RESTATEMENT ADOPTED BY BOARD OF DIRECTORS JANUARY 5, 2015

	 
	AMENDMENT AND RESTATEMENT ADOPTED BY SHAREHOLDERS MARCH 12, 2015

 
	
			
	 
	TERMINATION DATE: 
	NONE

10Exhibit 4.2

 

FORM OF 

 

SECOND SUPPLEMENTAL
INDENTURE

 

among

 

ARLINGTON ASSET INVESTMENT
CORP.,

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION,

 

as Original Trustee

 

and

 

THE BANK OF NEW YORK
MELLON, 

 

as Series Trustee

 

Dated as of March 18,
2015

 

    	 

    	 

    

 

SECOND SUPPLEMENTAL
INDENTURE

 

THIS SECOND SUPPLEMENTAL INDENTURE (this
“Second Supplemental Indenture”), dated as of March 18, 2015, is entered into among Arlington Asset Investment
Corp., a Virginia corporation (the “Company”), Wells Fargo Bank, National Association, as trustee (the “Original
Trustee”), and The Bank of New York Mellon, as trustee of the series of Securities established by this Second Supplemental
Indenture (the “Series Trustee”). All capitalized terms used herein shall have the meaning set forth in the
Base Indenture (as defined below).

 

RECITALS OF THE COMPANY

 

The Company and the Original Trustee executed
and delivered an Indenture, dated as of May 1, 2013, as amended by the First Supplemental Indenture, dated as of May 1, 2013 (as
so amended, the “Base Indenture” and, as amended and supplemented by this Second Supplemental Indenture, the “Indenture”),
to provide for the issuance by the Company from time to time of the Company’s unsecured debentures, notes or other evidences
of indebtedness (the “Securities”), to be issued in one or more series as provided in the Indenture.

 

The Company desires to establish and provide
for the issuance by the Company of a series of Securities designated as its 6.750% Senior Notes due 2025 (including any Additional
Notes, as defined herein, except as the context otherwise requires, the “Notes”).

 

Sections 901(5), 901(7) and 901(9) of the
Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or
more indentures supplemental to the Base Indenture to (i) change or eliminate any of the provisions of the Indenture when there
is no Security Outstanding of any series created prior to the execution of the supplemental indenture that is entitled to the benefit
of such provision, (ii) establish the form or terms of Securities of any series as permitted by Section 201 and Section 301 of
the Base Indenture, and (iii) to make any other change that shall not adversely affect the interests of the Holders of Securities
of any series in any material respect.

 

The Company is entering into this Second
Supplemental Indenture with the Original Trustee and the Series Trustee to evidence and provide for the acceptance of appointment
thereunder by a trustee with respect to the series of Securities hereby established, to add to or change any of the provisions
of the Base Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than
one Trustee, and to make certain amendments to the Base Indenture pursuant to Section 901(8) of the Base Indenture to permit the
appointment of the Series Trustee as Trustee for the series of Securities hereby established.

 

The Company has requested that the Original
Trustee enter into this Second Supplemental Indenture in connection with (i) the foregoing amendments, and (ii) the Company’s
appointing the Series Trustee with all the rights, powers, trusts and duties of the Original Trustee with respect to, and only
with respect to, the series of Securities hereby established.

 

    	2

    	 

    

 

Additional Securities of other series hereafter
established, except as may be limited in the Base Indenture as at the time supplemented and modified, may be issued from time to
time pursuant to the Indenture as at the time supplemented and modified.

 

The Company desires to establish the form
and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of
the Holders of the Notes.

 

The Company has duly authorized the execution
and delivery of this Second Supplemental Indenture to provide for the issuance of the Notes and has done all acts and things necessary
to make this Second Supplemental Indenture a valid, binding, and legal obligation of the Company, in accordance with its terms.

 

NOW, THEREFORE, for and in consideration
of the premises and for other good and valuable consideration expressed herein, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:

 

ARTICLE I

 

TERMS OF THE NOTES

 

Section 1.01. The following terms
relating to the Notes are hereby established:

 

(a)The Notes shall constitute a series
of Securities having the title “6.750% Senior Notes due 2025.” The Notes shall bear a CUSIP number of 041356502 and
an ISIN number of US0413565021.

 

(b)The aggregate principal amount of
the Notes that may be initially authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906, 1107 or 1305
of the Base Indenture, and except for any Securities that, pursuant to Section 303 of the Base Indenture, are deemed never to have
been authenticated and delivered under the Indenture) shall be $35,300,000. Under a Board Resolution or supplemental indenture
to the Base Indenture, the Company may, without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional
Notes”) in an unlimited amount in one or more issuances from time to time, having the same ranking and the same interest
rate, maturity and other terms and conditions as the Notes, except for issue date and, if applicable, the issue price, the initial
interest payment date and the initial interest accrual date applicable thereto, either of which may differ from the respective
terms of the previously issued Notes. Any Additional Notes and the existing Notes will constitute, and otherwise be treated as,
a single series under the Indenture. All references to Notes herein shall include the Additional Notes unless the context otherwise
requires. If Additional Notes are not fungible with any preexisting Notes for U.S. federal income tax purposes, as applicable,
as determined by the Company, such Additional Notes may have a separate CUSIP number from any preexisting Notes.

 

(c)The Company Order for the authentication
and delivery of the Notes initially authenticated and delivered under the Indenture may set forth procedures acceptable to the
Trustee for the issuance of Additional Notes and determining the terms of particular Notes, such as date of issuance and date from
which interest shall accrue.

 

    	3

    	 

    

 

(d)The entire outstanding principal
of the Notes shall be payable on March 15, 2025.

 

(e)The rate at which the Notes shall
bear interest shall be 6.750% per annum (the “Applicable Interest Rate”). The date from which interest shall accrue
on the Notes shall be March 18, 2015, or the most recent Interest Payment Date to which interest has been paid or provided for;
the Interest Payment Dates for the Notes shall be March 15, June 15, September 15 and December 15 of each year, commencing June
15, 2015; the initial interest period will be the period from and including March 18, 2015, to, but excluding, the initial Interest
Payment Date, and the subsequent interest periods will be the periods from and including an Interest Payment Date to, but excluding,
the next Interest Payment Date or the Stated Maturity, as the case may be; the interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date, will be paid to the Person in whose name the Note (or one or more Predecessor Securities)
is registered in the Trustee’s records at the close of business on the Regular Record Date for such interest, which shall
be the date that is 15 calendar days (whether or not a Business Day) immediately preceding such Interest Payment Date. Payment
of principal of and any such interest on the Notes will be made at the Corporate Trust Office of the Trustee in New York in such
coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. Interest on the Notes will be computed on the basis of
a 360-day year consisting of twelve 30-day months.

 

(f)The principal of and interest on
the Notes shall be payable at, any Notes that are Registered Securities may be surrendered for registration of transfer or exchange
at, and notices or demands to or upon the Company in respect of the Notes and this Indenture may be served at, the Corporate Trust
Office of the Trustee in New York, New York.

 

(g)The Notes shall be initially issuable
in global form (each such Note, a “Global Note”). The Global Notes and the Trustee’s certificate of authentication
thereon shall be substantially in the form of Exhibit A to this Second Supplemental Indenture. Each Global Note shall represent
the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the
Security Registrar, in accordance with Sections 203 and 305 of the Base Indenture.

 

(h)The depositary for such Global Notes
(the “Depositary”) shall be The Depository Trust Company, New York, New York. The initial Security Registrar and Paying
Agent with respect to the Global Notes shall be the Trustee.

 

(i)The Notes shall be defeasible pursuant
to Section 1402 or Section 1403 of the Base Indenture.

 

    	4

    	 

    

 

(j)The Notes shall be redeemable pursuant
to Section 1101 of the Base Indenture and as follows:

 

(i)The Notes will be redeemable
in whole or in part at any time or from time to time, at the option of the Company, on or after March 15, 2018, at a redemption
price equal to 100% of the outstanding principal amount of the Notes being redeemed plus accrued and unpaid interest to, but excluding,
the date of redemption.

 

(ii)Notice of redemption shall
be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery or, in case
of Global Notes, transmitted in accordance with the Depositary’s procedures, to each Holder of the Notes to be redeemed,
not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the Holder’s address appearing in
the Security Register. All notices of redemption shall contain the information set forth in Section 1104 of the Base Indenture.

 

(iii)Any exercise of the Company’s
option to redeem the Notes will be done in compliance with the Indenture.

 

(iv)If the Company elects
to redeem only a portion of the Notes, the Trustee will determine the method for selecting the particular Notes to be redeemed
in accordance with Section 1103 of the Base Indenture; provided that in the case of Global Notes, beneficial interests therein
will be selected for redemption by the Depositary in accordance with its standard procedures therefor.

 

(v)Unless the Company defaults
in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Notes called for redemption
hereunder.

 

(k)The Notes shall not be subject to
any sinking fund pursuant to Section 1201 of the Base Indenture.

 

(l)The Notes shall be issuable in denominations
of $25.00 and integral multiples of $25.00 in excess thereof.

 

(m)Holders of the Notes will not have
the option to have the Notes repaid prior to the Stated Maturity.

 

ARTICLE II

 

DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION

 

Section 2.01. For the benefit of
the Holders of the Notes but no other series of Securities hereafter established under the Indenture, Section 101 of the Base Indenture
shall be amended by adding the following defined terms thereto in appropriate alphabetical sequence, as follows:

 

“‘Exchange Act’
means the Securities Exchange Act of 1934, as amended, and any statute successor thereto.”

 

    	5

    	 

    

 

“‘GAAP’ means generally
accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, the opinions and pronouncements of the Public Company Accounting Oversight
Board and the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting profession in the United States, which are in effect from
time to time.”

 

Section 2.02. The definitions contained
in this Section 2.02 shall supersede and replace the definitions of the same terms contained in Section 101 of the Base Indenture,
and such amendment shall be effective solely with respect to the Notes and not with respect to any other series of Securities issued
thereunder.

 

“‘Corporate Trust
Office’ means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally
administered, at which the principal of and interest on the Notes shall be payable and any Notes may be surrendered for registration
of transfer or exchange, and at which notices or demands to or upon the Company in respect of the Notes and this Indenture may
be served, which office at the date hereof is located at 101 Barclay Street, New York, New York 10286.”

 

Section 2.03. The provisions of this
Section 2.03 shall supersede and replace Section 105 of the Base Indenture, and such amendment shall be effective solely with respect
to the Notes and not with respect to any other series of Securities issued thereunder.

 

“Section 105. Notices,
etc., to Trustee and Company.

 

Any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with,

 

(1) The Trustee by any Holder
or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Finance, or

 

(2) The Company by the Trustee
or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first
paragraph of this Indenture, Attention: Brian Bowers, or at any other address previously furnished in writing to the Trustee
by the Company.

 

The Trustee agrees to accept and
act upon instructions or directions pursuant to this Indenture sent by unsecured e mail, facsimile transmission or other similar
unsecured electronic methods; provided, however, that (a) the party providing such electronic instructions or directions, subsequent
to the transmission thereof, shall provide the originally executed instructions or directions to the Trustee in a timely manner
and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing
such instructions or directions. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly
from the Trustee’s reliance upon and compliance with such instructions or directions notwithstanding such instructions or
directions conflict or are inconsistent with a subsequent written instruction or direction or if the subsequent written instruction
or direction is never received. The party providing instructions or directions by unsecured email, facsimile transmission or other
similar unsecured electronic methods, as aforesaid, agrees to assume all risks arising out of the use of such electronic methods
to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized
instructions, and the risk of interception and misuse by third parties.”

 

    	6

    	 

    

 

Section 2.04. The provisions of this
Section 2.04 shall be added as Section 114 of the Base Indenture, and such amendment shall be effective solely with respect to
the Notes and not with respect to any other series of Securities issued thereunder.

 

“Section 114.  Waiver
of Trial by Jury.

 

EACH OF THE COMPANY AND THE TRUSTEE,
AND EACH HOLDER OF A NOTE BY ITS ACCEPTANCE HEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY.”

 

Section 2.05. The provisions of this
Section 2.05 shall be added as Section 602(13) of the Base Indenture, and such amendment shall be effective solely with respect
to the Notes and not with respect to any other series of Securities issued thereunder.

 

“(13)The Trustee may
request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by
any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate
previously delivered and not superseded.”

 

Section 2.06. The following provisions
of this Section 2.06 shall supersede and replace the provisions of the first paragraph of Section 1103 of the Base Indenture and
such amendment shall be effective with respect to the Notes and not with respect to any other series of Securities issued thereunder.

 

“If
less than all the Securities of any series issued on the same day with the same terms are to be redeemed, the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities
of such series issued on such date with the same terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination
for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series; provided, that if the Notes are represented
by one or more global Securities, beneficial interests in the Notes will be selected for redemption by the depositary therefor
in accordance with its standard procedures therefor.”

 

    	7

    	 

    

 

ARTICLE III

 

EVENTS OF DEFAULT

 

Section 3.01. In the case of an Event
of Default under clauses (6) or (7) of Section 501 of the Base Indenture, the principal of, and accrued and unpaid interest on,
all Notes will automatically become immediately due and payable.

 

ARTICLE IV

 

MEETINGS OF HOLDERS
OF SECURITIES

 

Section 4.01. For the benefit of
the Holders of the Notes but no other series of Securities under the Indenture, Section 1505 of the Base Indenture shall be amended
by replacing clause (3) thereof with the following:

 

“(3)At any meeting of
Holders, each Holder of a Security of such series or proxy shall be entitled to one vote for each $25.00 principal amount of the
Outstanding Securities of such series held or represented by such Holder; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.”

 

ARTICLE V

 

AMENDMENTS TO BASE
INDENTURE

 

Section 5.01. The definition contained
in this Section 5.01 shall supersede and replace the definition of the same term contained in Section 101 of the Base Indenture,
and such amendment shall be effective for every series of Securities issued thereunder, except as may be provided otherwise in
a subsequent supplemental indenture to the Base Indenture.

 

“ ‘Trustee’
means the Person named as the ‘Trustee’ in the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture or until a Trustee for a series of Securities shall have become
such pursuant to Section 301(24) of this Indenture, and thereafter “Trustee” shall mean or include each Person who
is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect
to the Securities of any series shall mean the Trustee with respect to Securities of that series.”

 

    	8

    	 

    

 

Section 5.02. Section 301(23) of
the Base Indenture is hereby amended by deleting the word “and” at the end thereof, by renumbering Section 301(24)
as Section 301(25) and by inserting the following clause after Section 301(23):

 

“(24)if other than the
Person named as the ‘Trustee’ in the first paragraph of this instrument (or a successor to such Person pursuant to
the applicable provisions of this Indenture) (for purposes of this clause (24), herein called the “Original Trustee”),
the identity of a Trustee for the Securities of the series (a “Series Trustee”), and if not the Series Trustee, the
identity of each Security Registrar, Paying Agent or Authenticating Agent with respect to such Securities, and such additions or
changes to any provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood, anything contained herein or in any Board Resolution, Officers’
Certificate or supplemental indenture to the contrary notwithstanding, that (i) nothing herein shall constitute such Trustees co-trustees
of the same trust, (ii) each such Trustee shall be a trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee, (iii) the Series Trustee shall have all the rights, powers, trusts and
duties of the Original Trustee with respect to, and only with respect to, the Securities of the series, (iv) the Original Trustee
shall have no rights, powers, trusts and duties with respect to the Securities of the series, (v) no Trustee hereunder shall have
any liability for any acts or omissions of any other Trustee hereunder and (vi) no appointment of a Series Trustee shall become
effective until the acceptance of the appointment by the Series Trustee in writing; and”

 

The preceding provisions of this Section
5.02 shall be effective for every series of Securities issued thereunder, except as may be provided otherwise in a subsequent supplemental
indenture to the Base Indenture.

 

Section 5.03. The following provisions
of this Section 5.03 shall be deemed to be included in Article III of the Base Indenture as Section 311 thereof, and such amendment
shall be effective for every series of Securities issued thereunder, except as may be provided otherwise in a subsequent supplemental
indenture to the Base Indenture.

 

“Section 311. CUSIP and
ISIN Numbers

 

The Company in issuing the Securities
may use CUSIP and/or ISIN numbers (if then generally in use), and, if so, the Trustee shall indicate the respective CUSIP or ISIN
numbers of the Securities in notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice
of redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers. The Company shall advise the Trustee as promptly
as practicable in writing of any change in the CUSIP or ISIN numbers.”

 

Section 5.04. The following provisions
of this Section 5.04 shall supersede and replace the provisions of Section 601 of the Base Indenture, and such amendment shall
be effective for every series of Securities issued thereunder, except as may be provided otherwise in a subsequent supplemental
indenture to the Base Indenture.

 

    	9

    	 

    

 

“Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit in the manner and
to the extent provided in TIA Section 313(c), notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium
or Make-Whole Amount, if any) or interest on or any Additional Amounts with respect to any Security of such series, or in the payment
of any sinking fund installment with respect to the Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as it in good faith determines that the withholding of such notice is in the best interests of the Holders
of the Securities and coupons of such series; and provided further that in the case of any default or breach of the character specified
in Section 501(4) with respect to the Securities and coupons of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which
is, or after notice or lapse of time or both would become, an Event of Default with respect to the Securities of such series.”

 

Section 5.05. The following provisions
of this Section 5.05 shall supersede and replace the provisions of Section 602(11) of the Base Indenture, and such amendment shall
be effective for every series of Securities issued thereunder, except as may be provided otherwise in a subsequent supplemental
indenture to the Base Indenture.

 

“(11)the Trustee shall
not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities and this Indenture; and”

 

Section 5.06. The following provisions
of this Section 5.06 shall supersede and replace the provisions of clauses (1) and (2) of Section 703 of the Base Indenture, and
such amendment shall be effective for every series of Securities issued thereunder, except as may be provided otherwise in a subsequent
supplemental indenture to the Base Indenture.

 

“(1) file with the Trustee
and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may
be required pursuant to the TIA at the times and in the manner provided pursuant to the TIA; provided that any such information,
documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 30 days after the same was filed with the Commission; and

 

(2)notify the Trustee in writing
of the listing of any Securities on any securities exchange or any delistings thereof. Delivery of such reports, information and
documents by the Company to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).”

 

    	10

    	 

    

 

ARTICLE VI

 

THE SERIES TRUSTEE

 

Section 6.01. Pursuant to the Indenture,
the Company hereby appoints the Series Trustee as Trustee under the Indenture with respect to, and only with respect to, the Notes,
and by execution hereof the Series Trustee accepts such appointment. Pursuant to the Indenture, all the rights, powers, trusts
and duties of the Original Trustee under the Indenture shall be vested in the Series Trustee with respect to the Notes, there shall
continue to be vested in the Original Trustee all of its rights, powers, trusts and duties as Trustee under the Indenture with
respect to all of the series of Securities as to which it has served and continues to serve as Trustee, and the Original Trustee
shall have no rights, powers, trusts and duties with respect to the Notes.

 

Section 6.02. The Series Trustee
hereby represents that it is qualified and eligible under the provisions of Section 607 of the Indenture and the provisions of
the TIA to accept its appointment as Trustee with respect to the Notes under the Indenture and hereby accepts the appointment as
such Trustee.

 

Section 6.03. Neither the Original
Trustee nor the Series Trustee assumes any duties, responsibilities or liabilities by reason of this Second Supplemental Indenture
other than as set forth in the Indenture and, in carrying out its responsibilities hereunder, each shall have all of the rights,
powers, privileges, protections, duties and immunities which it possesses under the Indenture. The Original Trustee and the Series
Trustee shall not constitute co-trustees of the same trust, and each of the Original Trustee and the Series Trustee shall be trustee
of a trust or trusts under the Indenture separate and apart from any trust or trusts under the Indenture administered by the other
trustee. The Original Trustee shall have no liability for any acts or omissions of the Series Trustee and the Series Trustee shall
have no liability for any acts or omissions of the Original Trustee.

 

References in this
Second Supplemental Indenture to sections of the Indenture that require or permit actions by the Original Trustee with respect
to Securities of the series established hereby shall be deemed to require or permit actions only by the Series Trustee and the
Original Trustee shall have no responsibility therefor.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01. This Second Supplemental
Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York without regard
to conflicts of laws principles thereof (except for Sections 5-1401 and 5-1402 of the New York General Obligations Law). This Second
Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of the Indenture and
shall, to the extent applicable, be governed by such provisions.

 

    	11

    	 

    

 

Section 7.02. In case any provision
in this Second Supplemental Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 7.03. This Second Supplemental
Indenture may be executed in counterparts, each of which will be an original, but such counterparts will together constitute but
one and the same Second Supplemental Indenture. The exchange of copies of this Second Supplemental Indenture and of signature pages
by facsimile, .pdf transmission, email or other electronic means shall constitute effective execution and delivery of this Second
Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, .pdf transmission, email or
other electronic means shall be deemed to be their original signatures for all purposes.

 

Section 7.04. The Base Indenture,
as supplemented and amended by this Second Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture
and this Second Supplemental Indenture shall be read, taken and construed as one and the same instrument with respect to the Notes.
All provisions included in this Second Supplemental Indenture supersede any conflicting provisions included in the Base Indenture
with respect to the Notes, unless not permitted by law.

 

Section 7.05. The provisions of this
Second Supplemental Indenture shall become effective as of the date hereof.

 

Section 7.06. The recitals contained
herein and in the Notes shall be taken as the statements of the Company, and the Original Trustee and the Series Trustee assume
no responsibility for their correctness. The Original Trustee and the Series Trustee make no representations as to the validity
or sufficiency of this Second Supplemental Indenture or the Notes, except that the Original Trustee and the Series Trustee each
represents that it is duly authorized to execute and deliver this Second Supplemental Indenture, authenticate, in case of the Series
Trustee, the Notes and perform its obligations hereunder. The Original Trustee and the Series Trustee shall not be accountable
for the use or application by the Company of the Notes or the proceeds thereof.

 

[Signature page follows]

 

 

    	12

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Second Supplemental Indenture to be duly executed as of the date first above written.

 

	 	ARLINGTON ASSET INVESTMENT CORP.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Original Trustee, solely with respect to Articles V, VI and VII hereof.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	THE BANK OF NEW YORK MELLON,  as Series Trustee
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 

 

Second Supplemental Indenture

 

    	 

    	 

    

 

Exhibit A –
Form of Global Note

 

THIS GLOBAL SECURITY IS HELD BY OR ON BEHALF
OF THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE HOLDERS
OF BENEFICIAL INTERESTS HEREIN, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
ANY SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 305 OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF ANY ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
(AND ANY PAYMENT IS MADE TO SUCH ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN INTEREST
HEREIN. 

 

Arlington Asset Investment
Corp.

 

	
        

        No. 1
	
        

        $

         

        CUSIP No. 041356502

         

        ISIN No. US0413565021

 

6.750% Senior Note due
2025

 

    	1

    	 

    

 

Arlington Asset Investment Corp., a corporation
duly organized and existing under the laws of the Commonwealth of Virginia (the “Company”, which term includes any
successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of U.S. DOLLARS (U.S.$ ) on March 15, 2025, and to pay interest thereon from March 18,
2015 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on March 15,
June 15, September 15 and December 15 in each year, commencing June 15, 2015, at the rate of 6.750% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close
of business on the Regular Record Date for such interest, which shall be the date that is 15 calendar days (whether or not a Business
Day) immediately preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security
is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be mailed to Holders of Securities of this series not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in
said Indenture. This Security may be issued as part of a series.

 

Payment of the principal of and any such
interest on this Security will be made at the Corporate Trust Office of the Trustee in New York in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and private debts.

 

Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.

 

Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

 

[Signature page follows]

 

 

    	2

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

Dated:

 

	 	ARLINGTON ASSET INVESTMENT CORP.
	 	 	 
	 	By:  	 
	 	Name:	 
	 	Title:	 

 

	Attest:	 
	 	 	 
	By:  	 	 
	Name:  	 	 
	Title:	 	 

 

TRUSTEE’S CERTIFICATE
OF AUTHENTICATION

 

This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

Dated:

 

	 	The Bank of New York Mellon, as Trustee
	 	 	 
	 	By:  	 
	 	Authorized Signatory

 

    	3

    	 

    

 

Arlington Asset Investment
Corp.

6.750% Senior Note due
2025

 

This Security is one of a duly authorized
issue of senior debt securities of the Company (the “Securities”), issued and to be issued in one or more series under
an Indenture, dated as of May 1, 2013, as amended by the First Supplemental Indenture, dated as of May 1, 2013 (as so amended,
the “Base Indenture”), between the Company and Wells Fargo Bank, National Association, as Trustee (the “Original
Trustee”, which term includes any successor to the Original Trustee under the Base Indenture), and as further amended by
the Second Supplemental Indenture relating to the Securities of this series, dated as of March 18, 2015, by and among the Company,
the Original Trustee and The Bank of New York Mellon, as Series Trustee (the “Trustee”, which term includes any successor
Trustee under the Indenture (as defined below)) (the “Second Supplemental Indenture”; the Second Supplemental Indenture
and the Base Indenture collectively are herein called the “Indenture”).and reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee ,
and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. In
the event of any conflict between the Base Indenture and the Second Supplemental Indenture, the Second Supplemental Indenture shall
govern and control.

 

This Security is one of the series designated
on the face hereof, initially limited in aggregate principal amount to $35,300,000. Under a Board Resolution or supplemental indenture
to the Base Indenture, the Company may, without the consent of the Holders of Securities, issue additional Securities of this series
(herein called in any such case “Additional Securities”) in an unlimited amount in one or more issuances from time
to time having the same ranking and the same interest rate, maturity and other terms and conditions as the Securities, except for
issue date and, if applicable, the issue price and the initial interest payment date and the initial interest accrued date applicable
thereto, either of which may differ from the respective terms of the previously issued Securities. Any Additional Securities and
the existing Securities of this series will constitute a single series under the Indenture and all references to the relevant Securities
herein shall include the Additional Securities unless the context otherwise requires. The aggregate amount of outstanding Securities
represented hereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.

 

The Securities of this series are subject
to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after March 15, 2018, at
a redemption price equal to 100% of the outstanding principal amount of the Securities of this series to be redeemed plus accrued
and unpaid interest to the date of redemption.

 

Notice of redemption shall be given in writing
and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery or transmitted, to each Holder of
the Securities of this series to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date,
at the Holder’s address appearing in the Security Register. All notices of redemption shall contain the information set forth
in Section 1104 of the Base Indenture.

 

    	4

    	 

    

 

Any exercise of the Company’s option
to redeem the Securities of this series will be done in compliance with the Indenture.

 

If the Company elects to redeem only a portion
of the Securities of this series, the Trustee will determine the method for selecting the particular Securities of this series
to be redeemed, in accordance with the Indenture. In the event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.

 

Unless the Company defaults in payment of
the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities of this series called for
redemption.

 

Holders of Securities of this series do
not have the option to have such Securities repaid prior to March 15, 2025.

 

The Indenture contains provisions for defeasance
at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to
this Security, in each case upon compliance with certain conditions set forth in the Indenture.

 

If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in
the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions
of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture
or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less
than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of
any payment of principal hereof or interest hereon on or after the respective due dates expressed or provided for herein.

 

    	5

    	 

    

 

No reference herein to the Indenture and
no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable
only in registered form without coupons in denominations of $25.00 and any integral multiples of $25.00 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder
surrendering the same.

 

No service charge shall be made for any
such registration of transfer or exchange, but the Company or Trustee may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

The Indenture and this Security shall be
governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles thereof
(except for Sections 5-1401 and 5-1402 of the New York General Obligations Law).

 

    	6

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