Document:

F5 NETWORKS, INC.

                       2000 EMPLOYEE EQUITY INCENTIVE PLAN

                   ADOPTED BY BOARD OF DIRECTORS JULY 1, 2000
                         TERMINATION DATE: JUNE 30, 2010

1.   Purposes.
     --------

     (a) Eligible Stock Award Recipients.  The persons eligible to receive Stock
Awards are the  Employees  and  Consultants  of the Company and its  Affiliates;
provided that no individual  who is an Officer or Director of the Company may be
granted a Stock Award under the Plan.

     (b) Available  Stock Awards.  The purpose of the Plan is to provide a means
by which  eligible  recipients  of Stock Awards may be given an  opportunity  to
benefit from  increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Nonstatutory  Stock Options,  (ii) stock bonuses and
(iii) rights to acquire restricted stock.

     (c) General Purpose. The Company, by means of the Plan, seeks to retain the
services of the group of persons eligible to receive Stock Awards, to secure and
retain the services of new members of this group and to provide  incentives  for
such  persons to exert  maximum  efforts  for the success of the Company and its
Affiliates.

2.   Definitions.
     -----------

     (a) "Affiliate" means any parent  corporation or subsidiary  corporation of
the Company,  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 Internal Revenue Code of 1986, as amended.

     (d) "Committee" means a Committee appointed by the Board in accordance with
subsection 3(c).

     (e) "Common Stock" means the common stock of the Company.

     (f) "Company" means F5 Networks, Inc., a Washington corporation.

     (g) "Consultant" means any person,  including an advisor, who is engaged by
the Company or an Affiliate to render services other than as an Employee or as a
Director.

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     (h)  "Continuous  Service"  means that the  Participant's  service with the
Company  or  an  Affiliate,  whether  as  an  Employee  or  Consultant,  is  not
interrupted or terminated.  The  Participant's  Continuous  Service shall not be
deemed to have  terminated  merely  because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee or
Consultant  or a change in the entity  for which the  Participant  renders  such
service,   provided  that  there  is  no  interruption  or  termination  of  the
Participant's  Continuous  Service.  For  example,  a change in  status  from an
Employee of the Company to a Consultant of an Affiliate  will not  constitute an
interruption of Continuous Service.  The Board or the chief executive officer of
the Company,  in that party's sole discretion,  may determine whether Continuous
Service  shall be  considered  interrupted  in the case of any leave of  absence
approved  by that  party,  including  sick  leave,  military  leave or any other
personal leave.

     (i)  "Director"  means a member of the Board of  Directors  of the Company.

     (j)  "Disability"  means the  permanent  and total  disability  of a person
within the meaning of Section 22(e)(3) of the Code.

     (k)  "Employee"  means any person  employed by the Company or an Affiliate.

     (l) "Exchange Act" means the  Securities  Exchange Act of 1934, as amended.

     (m) "Fair  Market  Value"  means,  as of any date,  the value of the Common
Stock. If the Common Stock is listed on any established stock exchange or traded
on the NASDAQ  National Market or the NASDAQ  SmallCap  Market,  the Fair Market
Value of a share of Common Stock shall be the closing sales price for such stock
(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
Common Stock) on the day of determination or, if the day of determination is not
a market  trading day,  then on the last market  trading day prior to the day of
determination,  as reported in THE WALL STREET  JOURNAL or such other  source as
the Board deems  reliable.  In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.

     (n) "Nonstatutory  Stock Option" means an Option not intended to qualify as
an incentive  stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (o)  "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.

     (p) "Option"  means a  Nonstatutory  Stock Option  granted  pursuant to the
Plan.  Options  granted  under the Plan are not intended to be  incentive  stock
options  within  the  meaning  of  Section  422 of the Code and the  regulations
promulgated thereunder.

     (q) "Option Agreement" means a written agreement between the Company and an
Optionholder  evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

     (r) "Optionholder"  means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.

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     (s) "Participant"  means a person to whom a Stock Award is granted pursuant
to the Plan or, if applicable,  such other person who holds an outstanding Stock
Award.

     (t) "Plan" means this F5 Networks, Inc. 2000 Employee Incentive Plan.

     (u) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

     (v)  "Securities  Act"  means  the  Securities  Act of  1933,  as  amended.

     (w) "Stock  Award"  means any right  granted  under the Plan,  including an
Option, a stock bonus and a right to acquire restricted stock.

     (x) "Stock Award Agreement" means a written  agreement  between the Company
and a  holder  of a Stock  Award  evidencing  the  terms  and  conditions  of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

3.   Administration.
     --------------

     (a) Administration by Board. The Board shall administer the Plan unless and
until  the  Board  delegates  administration  to a  Committee,  as  provided  in
subsection 3(c).

     (b) Powers of Board. The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:

          (i) To determine from time to time which of the persons eligible under
the Plan shall be granted Stock  Awards;  when and how each Stock Award shall be
granted;  what type or combination of types of Stock Award shall be granted; the
provisions of each Stock Award granted (which need not be identical),  including
the time or times when a person shall be permitted to receive stock  pursuant to
a Stock  Award;  and the number of shares  with  respect to which a Stock  Award
shall be granted to each such person.

          (ii) To construe and interpret the Plan and Stock Awards 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 or in any Stock Award Agreement,
in a manner and to the extent it shall deem  necessary  or expedient to make the
Plan fully effective.

          (iii) To amend the Plan or a Stock Award as provided in Section 12.

          (iv)  Generally,  to exercise  such powers and to perform such acts as
the Board deems  necessary  or  expedient  to promote the best  interests of the
Company which are not in conflict with the provisions of the Plan.

     (c) Delegation to Committee.  The Board may delegate  administration of the
Plan to a Committee or Committees  of one or more members of the Board,  and the
term "Committee" shall apply to any person or persons to whom such authority has
been delegated.  If  administration  is delegated to a Committee,  the Committee

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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  any of the  administrative  powers the  Committee is authorized to
exercise (and  references  in this Plan to the Board shall  thereafter be to the
Committee  or  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) Share  Reserve.  Subject to the  provisions  of Section 11  relating to
adjustments  upon  changes in stock,  the stock that may be issued  pursuant  to
Stock Awards shall not exceed in the aggregate two million (2,000,000) shares of
Common Stock.

     (b) Reversion of Shares to the Share Reserve.  If any Stock Award shall for
any reason expire or otherwise  terminate,  in whole or in part,  without having
been  exercised  in full,  the stock not  acquired  under such Stock Award shall
revert to and again become  available for issuance under the Plan. The number of
shares of Common Stock that may be issued pursuant to Stock Awards, as specified
in  subsection  4(a),  shall  only be reduced  to  reflect  new shares  that are
actually delivered under the Plan. Therefore,  a stock-for-stock  exercise of an
Option shall result in only the net number of additional  shares of Common Stock
being counted against the share reserve.

     (c) Source of Shares.  The stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.

5.   Eligibility.
     -----------

     (a) Eligibility  for Specific Stock Awards.  Stock Awards may be granted to
Employees  and  Consultants,  but not to any  individual  who is an  Officer  or
Director of the Company.  In addition,  any  Employee  who is  represented  by a
collective bargaining representative shall be ineligible to receive Stock Awards
under the Plan,  except to the extent  specified  in the  collective  bargaining
agreement governing such Employee.

6.   Option Provisions.
     -----------------

     Each  Option  shall be in such  form  and  shall  contain  such  terms  and
conditions  as the Board  shall deem  appropriate.  The  provisions  of separate
Options  need  not  be  identical,   but  each  Option  shall  include  (through
incorporation of provisions  hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

     (a) Term. No Option shall be  exercisable  after the expiration of ten (10)
years from the date it was granted.

     (b) Exercise  Price.  The  exercise  price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the stock subject to
the Option on the date the Option is granted.

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<PAGE>

     (c)  Consideration.  The purchase  price of stock  acquired  pursuant to an
Option  shall be paid,  to the  extent  permitted  by  applicable  statutes  and
regulations,  either (i) in cash at the time the Option is  exercised or (ii) at
the  discretion  of the Board by (1)  delivery  to the  Company of other  Common
Stock,  (2)  according  to a deferred  payment or other  arrangement  (which may
include,  without  limiting the  generality of the  foregoing,  the use of other
Common  Stock)  with  the  Participant  or  (3)  in  any  other  form  of  legal
consideration that may be acceptable to the Board.

     In  the  case  of any  deferred  payment  arrangement,  interest  shall  be
compounded  at least  annually  and  shall be  charged  at the  minimum  rate of
interest  necessary to avoid the  treatment as  interest,  under any  applicable
provisions of the Code, of any amounts other than amounts  stated to be interest
under the deferred payment arrangement.

     (d)  Transferability  of an Option.  An Option shall be transferable to the
extent  provided  in the Option  Agreement.  If the Option  does not provide for
transferability,  then the Option shall not be transferable except by will or by
the laws of  descent  and  distribution  and  shall be  exercisable  during  the
lifetime  of the  Optionholder  only by the  Optionholder.  Notwithstanding  the
foregoing   provisions  of  this  subsection  6(d),  the  Optionholder  may,  by
delivering written notice to the Company, in a form satisfactory to the Company,
designate  a third  party  who,  in the event of the death of the  Optionholder,
shall thereafter be entitled to exercise the Option.

     (e) Vesting  Generally.  The total number of shares of Common Stock subject
to an Option  may,  but need  not,  vest and  therefore  become  exercisable  in
periodic  installments  which  may,  but need not,  be equal.  The Option may be
subject to such other terms and  conditions  on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem  appropriate.  The vesting  provisions of individual  Options may vary. The
provisions  of  this  subsection  6(e)  are  subject  to any  Option  provisions
governing the minimum number of shares as to which an option may be exercised.

     (f)  Termination  of  Continuous  Service.  In the event an  Optionholder's
Continuous  Service  terminates  (other  than upon the  Optionholder's  death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the  Optionholder was entitled to exercise it as of the date of termination) but
only  within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the  Optionholder's  Continuous  Service (or
such longer or shorter  period  specified in the Option  Agreement)  or (ii) the
expiration of the term of the Option as set forth in the Option  Agreement.  If,
after  termination,  the Optionholder does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate.

     (g) Extension of Termination Date. An  Optionholder's  Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder's  Continuous Service (other than upon the Optionholder's  death or
Disability)  would be  prohibited  at any time solely  because  the  issuance of
shares would violate the  registration  requirements  under the Securities  Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in subsection 6(a) or (ii) the expiration of a period of

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three (3) months after the termination of the Optionholder's  Continuous Service
during  which the  exercise  of the  Option  would not be in  violation  of such
registration requirements.

     (h) Disability of Optionholder.  In the event an Optionholder's  Continuous
Service   terminates  as  a  result  of  the  Optionholder's   Disability,   the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period  of time  ending  on the  earlier  of (i) the  date  twelve  (12)  months
following such  termination  (or such longer or shorter period  specified in the
Option  Agreement,  which,  for Options granted prior to the Listing Date, shall
not be less  than  six (6)  months)  or (ii) the  expiration  of the term of the
Option  as set  forth  in the  Option  Agreement.  If,  after  termination,  the
Optionholder  does not  exercise  his or her Option  within  the time  specified
herein, the Option shall terminate.

     (i) Death of Optionholder.  In the event (i) an  Optionholder's  Continuous
Service  terminates  as a  result  of  the  Optionholder's  death  or  (ii)  the
Optionholder  dies within the period (if any) specified in the Option  Agreement
after the  termination  of the  Optionholder's  Continuous  Service for a reason
other  than  death,  then  the  Option  may be  exercised  (to  the  extent  the
Optionholder was entitled to exercise the Option as of the date of death) by the
Optionholder's estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person  designated to exercise the option upon
the Optionholder's death pursuant to subsection 6(d), but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date of
death or (2) the  expiration  of the  term of such  Option  as set  forth in the
Option  Agreement.  If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

7.   Provisions of Stock Awards Other Than Options.
     ---------------------------------------------

     (a) Stock Bonus Awards.  Each stock bonus  agreement  shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate.
The terms and conditions of stock bonus agreements may change from time to time,
and the terms and  conditions  of separate  stock bonus  agreements  need not be
identical,  but each stock bonus agreement shall include (through  incorporation
of provisions  hereof by reference in the agreement or otherwise)  the substance
of each of the following provisions:

          (i) Consideration. A stock bonus shall be awarded in consideration for
past services actually rendered to the Company for its benefit.

          (ii)  Vesting.  Shares of Common Stock  awarded  under the stock bonus
agreement may, but need not, be subject to a share repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board.

          (iii) Termination of Participant's  Continuous Service. In the event a
Participant's  Continuous Service  terminates,  the Company may reacquire any or
all of the shares of Common Stock held by the Participant  which have not vested
as of the date of termination under the terms of the stock bonus agreement.

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<PAGE>

          (iv)  Transferability.  Rights to acquire shares under the stock bonus
agreement  shall be  transferable  by the  Participant  only upon such terms and
conditions  as are set forth in the stock  bonus  agreement,  as the Board shall
determine  in its  discretion,  so long as stock  awarded  under the stock bonus
agreement remains subject to the terms of the stock bonus agreement.

     (b) Restricted Stock Awards. Each restricted stock purchase agreement shall
be in such form and shall  contain such terms and  conditions as the Board shall
deem  appropriate.  The terms and  conditions of the  restricted  stock purchase
agreements  may  change  from  time to time,  and the terms  and  conditions  of
separate  restricted stock purchase  agreements need not be identical,  but each
restricted  stock purchase  agreement shall include  (through  incorporation  of
provisions  hereof by reference in the agreement or otherwise)  the substance of
each of the following provisions:

          (i) Purchase  Price.  The purchase price under each  restricted  stock
purchase  agreement  shall be such  amount  as the  Board  shall  determine  and
designate in such restricted stock purchase agreement.  The purchase price shall
not be less than one hundred  percent (100%) of the stock's Fair Market Value on
the date such award is made or at the time the purchase is consummated.

          (ii)  Consideration.  The purchase price of stock acquired pursuant to
the restricted stock purchase agreement shall be paid either: (i) in cash at the
time of purchase;  (ii) at the discretion of the Board,  according to a deferred
payment or other arrangement with the Participant; or (iii) in any other form of
legal consideration that may be acceptable to the Board in its discretion.

          (iii)  Vesting.  Shares of Common Stock  acquired under the restricted
stock  purchase  agreement  may, but need not, be subject to a share  repurchase
option in favor of the  Company  in  accordance  with a vesting  schedule  to be
determined by the Board.

          (iv) Termination of Participant's  Continuous  Service. In the event a
Participant's  Continuous  Service  terminates,  the Company may  repurchase  or
otherwise  reacquire  any or all of the  shares  of  Common  Stock  held  by the
Participant  which have not vested as of the date of termination under the terms
of the restricted stock purchase agreement.

          (v)  Transferability.  Rights to acquire  shares under the  restricted
stock purchase agreement shall be transferable by the Participant only upon such
terms  and  conditions  as are  set  forth  in  the  restricted  stock  purchase
agreement,  as the Board shall  determine  in its  discretion,  so long as stock
awarded under the restricted  stock purchase  agreement  remains  subject to the
terms of the restricted stock purchase agreement.

8.   Covenants of the Company.
     ------------------------

     (a)  Availability  of  Shares.  During the terms of the Stock  Awards,  the
Company  shall keep  available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.

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<PAGE>

     (b) Securities Law  Compliance.  The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock  Awards and to issue and sell shares of Common
Stock upon  exercise of the Stock  Awards.  If, after  reasonable  efforts,  the
Company is unable to obtain from any such  regulatory  commission  or agency the
authority  which counsel for the Company deems necessary for the lawful issuance
and sale of stock  under  the  Plan,  the  Company  shall be  relieved  from any
liability for failure to issue and sell stock upon exercise of such Stock Awards
unless and until such authority is obtained.

9.   Use of Proceeds From Stock.
     --------------------------

     Proceeds from the sale of stock  pursuant to Stock Awards shall  constitute
general funds of the Company.

10.  Miscellaneous.
     -------------

     (a) Acceleration of  Exercisability  and Vesting.  The Board shall have the
power to  accelerate  the time at which a Stock Award may first be  exercised or
the time during which a Stock Award or any part thereof will vest in  accordance
with the Plan,  notwithstanding  the  provisions  in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.

     (b) Shareholder Rights. No Participant shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares  subject to
such  Stock  Award  unless  and  until  such   Participant   has  satisfied  all
requirements for exercise of the Stock Award pursuant to its terms.

     (c) No  Employment  or Other  Service  Rights.  Nothing  in the Plan or any
instrument  executed or Stock Award granted  pursuant  thereto shall confer upon
any  Participant  or other holder of Stock Awards any right to continue to serve
the  Company or an  Affiliate  in the  capacity  in effect at the time the Stock
Award was granted or shall  affect the right of the Company or an  Affiliate  to
terminate (i) the  employment of an Employee with or without  notice and with or
without  cause,  (ii) the service of a Consultant  pursuant to the terms of such
Consultant's  agreement with the Company or an Affiliate or (iii) the service of
a Director  pursuant  to the  Bylaws of the  Company  or an  Affiliate,  and any
applicable  provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

     (d)  Investment  Assurances.  The Company may require a  Participant,  as a
condition of  exercising or acquiring  stock under any Stock Award,  (i) to give
written assurances satisfactory to the Company as to the Participant's knowledge
and expert  experience  in  financial  and business  matters  and/or to employ a
purchaser   representative   reasonably  satisfactory  to  the  Company  who  is
knowledgeable  and experienced in financial and business  matters and that he or

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<PAGE>

she  is  capable  of   evaluating,   alone  or  together   with  the   purchaser
representative,  the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is  acquiring  the stock  subject to the Stock Award for the  Participant's  own
account and not with any present intention of selling or otherwise  distributing
the stock. The foregoing requirements, and any assurances given pursuant to such
requirements,  shall be inoperative if (iii) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently  effective  registration  statement under the Securities Act or
(iv) as to any particular  requirement,  a determination  is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable  securities laws. The Company may, upon advice of counsel to the
Company,  place  legends  on stock  certificates  issued  under the Plan as such
counsel  deems  necessary  or  appropriate  in order to comply  with  applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

     (e) Withholding Obligations. To the extent provided by the terms of a Stock
Award  Agreement,  the Participant  may satisfy any federal,  state or local tax
withholding  obligation relating to the exercise or acquisition of stock under a
Stock Award by any of the following means (in addition to the Company's right to
withhold from any  compensation  paid to the Participant by the Company) or by a
combination of such means:  (i) tendering a cash payment;  (ii)  authorizing the
Company  to  withhold  shares  from the  shares of the  Common  Stock  otherwise
issuable to the  Participant as a result of the exercise or acquisition of stock
under the Stock Award; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock.

11.  Adjustments Upon Changes in Stock.
     ---------------------------------

     (a) Capitalization  Adjustments. If any change is made in the stock subject
to the Plan, or subject to any Stock Award, 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  securities  subject to the Plan  pursuant to
subsection 4(a) and the outstanding Stock Awards will be appropriately  adjusted
in the class(es)  and number of securities  and price per share of stock subject
to such outstanding Stock Awards. The Board, the determination of which shall be
final, binding and conclusive,  shall make such adjustments.  (The conversion of
any convertible  securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

     (b)  Change  in  Control--Dissolution  or  Liquidation.  In the  event of a
dissolution  or  liquidation  of the  Company,  then such Stock  Awards shall be
terminated if not exercised (if applicable) prior to such event.

     (c) Change in Control--Asset Sale, Merger, Consolidation or Reverse Merger.

          (i) In the event of (1) a sale of  substantially  all of the assets of
the  Company,  (2) a merger or  consolidation  in which the  Company  is not the
surviving  corporation  or (3) a  reverse  merger in which  the  Company  is the
surviving  corporation  but the shares of Common Stock  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  any  surviving

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<PAGE>

corporation or acquiring  corporation shall assume any Stock Awards  outstanding
under the Plan or shall substitute  similar stock awards  (including an award to
acquire  the same  consideration  paid to the  shareholders  in the  transaction
described in this subsection 11(c) for those outstanding under the Plan).

          (ii) For purposes of subsection 11(c) an Award shall be deemed assumed
if, following the change in control,  the Award confers the right to purchase in
accordance with its terms and conditions, for each share of Common Stock subject
to the Award  immediately  prior to the  change in  control,  the  consideration
(whether  stock,  cash or other  securities  or property) to which a holder of a
share of  Common  Stock on the  effective  date of the  change  in  control  was
entitled.

          (iii) In the event any surviving  corporation or acquiring corporation
refuses to assume such Stock Awards or to  substitute  similar  stock awards for
those  outstanding  under the Plan,  then with  respect to Stock  Awards held by
Participants whose Continuous Service has not terminated,  the vesting of 50% of
such Stock Awards (and, if  applicable,  the time during which such Stock Awards
may be  exercised)  shall be  accelerated  in full,  and the Stock  Awards shall
terminate  if not  exercised  (if  applicable)  at or prior to such event.  With
respect to any other Stock Awards  outstanding under the Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to such event.

12.  Amendment of the Plan and Stock Awards.
     --------------------------------------

     (a) Amendment of Plan.  The Board at any time,  and from time to time,  may
amend  the  Plan.  However,  except  as  provided  in  Section  11  relating  to
adjustments  upon  changes in stock,  no  amendment  shall be  effective  unless
approved by the shareholders of the Company to the extent  shareholder  approval
is  necessary  to  satisfy  the  requirements  of Rule  16b-3 or any  NASDAQ  or
securities exchange listing requirements.

     (b) Shareholder Approval. The Board may, in its sole discretion, submit any
amendment to the Plan for shareholder approval.

     (c) No  Impairment of Rights.  Rights under any Stock Award granted  before
amendment of the Plan shall not be impaired by any  amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

     (d)  Amendment  of Stock  Awards.  The Board at any time,  and from time to
time,  may amend the terms of any one or more Stock Awards;  provided,  however,
that the  rights  under  any  Stock  Award  shall  not be  impaired  by any such
amendment  unless (i) the Company  requests the consent of the  Participant  and
(ii) the Participant consents in writing.

13.  Termination or Suspension of the Plan.
     -------------------------------------

     (a) Plan Term.  The Board may  suspend or  terminate  the Plan at any time.
Unless sooner  terminated,  the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board. No Stock Awards
may be  granted  under  the  Plan  while  the Plan is  suspended  or after it is
terminated.

                                       10

<PAGE>

     (b) No Impairment of Rights.  Suspension or  termination  of the Plan shall
not impair rights and  obligations  under any Stock Award granted while the Plan
is in effect except with the written consent of the Participant.

14.  Effective Date of Plan.
     ----------------------

     The Plan shall become effective as determined by the Board.

15.  Choice of Law.
     -------------

     All questions  concerning the construction,  validity and interpretation of
this  Plan  shall be  governed  by the law of the State of  Washington,  without
regard to such states conflict of laws rules.

                                       11F5 NETWORKS, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

     THIS  NONQUALIFIED  STOCK OPTION  AGREEMENT (the  "Agreement")  is made and
entered  into as of October  23, 2000 (the "Grant  Date")  between F5  Networks,
Inc., a Washington corporation (the "Company") and Jeff Pancottine ("Holder").

     THE PARTIES AGREE AS FOLLOWS:

     1. Grant of Option;  Grant Date. The Company  hereby grants to Holder,  the
right (the  "Option") to purchase up to 200,000  shares of the Company's  Common
Stock (the "Option Shares"),  150,000 at a price per share of $33.00, and 50,000
at a price  per  share of  $30.00  (the  "Exercise  Price"),  on the  terms  and
conditions set forth in this  Agreement.  This Option is not intended to qualify
as an incentive stock option for purposes of Section 422 of the Code. The number
and kind of Option  Shares and the  Exercise  Price may be  adjusted  in certain
circumstances in accordance with the provisions of Section 9 below.

     2. Definitions.  For purposes of this Agreement,  the following terms shall
be defined as set forth below:

          2.1 Affiliate.  "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing.

          2.2  Board.  "Board"  means the  Board of  Directors  of the  Company.

          2.3 Code.  "Code" means the Internal Revenue Code of 1986, as amended.

          2.4  Common  Stock.  "Common  Stock"  means  the  common  stock of the
Company.

          2.5  Continuous  Service.  "Continuous  Service"  means that  Holder's
service with the Company or an Affiliate,  whether as an employee or consultant,
is not  interrupted  or  terminated.  Holder's  Continuous  Service shall not be
deemed to have  terminated  merely  because of a change in the capacity in which
Holder  renders  service  to the  Company  or an  Affiliate  as an  employee  or
consultant  or a change in the entity for which  Holder  renders  such  service,
provided that there is no  interruption  or termination  of Holder's  Continuous
Service.  For  example,  a change in status from an employee of the Company to a
consultant of an Affiliate  will not  constitute an  interruption  of Continuous
Service.  The Board, in its sole discretion,  may determine  whether  Continuous
Service  shall be  considered  interrupted  in the case of any leave of  absence
approved  by the  Board,  including  sick  leave,  military  leave or any  other
personal leave.

          2.6 Disability.  "Disability" means the permanent and total disability
of Holder within the meaning of Section 22(e)(3) of the Code.

<PAGE>

          2.7  Expiration  Date.  "Expiration  Date"  means  October  22,  2010.

          2.8 Fair Market Value.  "Fair Market Value" means, as of any date, the
value of the  Common  Stock.  If the Common  Stock is listed on any  established
stock exchange or traded on the NASDAQ  National  Market or the NASDAQ Small Cap
Market,  the Fair Market  Value of a share of Common  Stock shall be the closing
sales price for such stock (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 Common  Stock) on the day of  determination  or, if the
day of  determination  is not a market  trading  day,  then on the  last  market
trading  day prior to the day of  determination,  as reported in The Wall Street
Journal or such other source as the Board deems reliable. In the absence of such
markets for the Common Stock,  the Fair Market Value shall be determined in good
faith by the Board.

          2.9 Securities Act. "Securities Act" means the Securities Act of 1933,
as amended.

          2.10 Vesting Commencement Date. "Vesting Commencement Date" shall mean
Holder's first day of continuous service with the Company.

     3. Vesting.  Subject to the limitations  contained herein,  the Option will
vest and become  exercisable  with  respect  to 25% of the Option  Shares on the
first  anniversary  of the  Vesting  Commencement  Date and with  respect to the
remaining  Option  Shares in equal  monthly  installments  over the three  years
following the Vesting  Commencement Date;  provided that vesting will cease upon
the termination of Holder's Continuous Service.

     4. Method of Payment of the Exercise  Price.  Payment of the Exercise Price
is due in full upon exercise of all or any part of the Option.  Holder may elect
to make payment of the Exercise  Price in cash or by check or one or more of the
following  if the  Company,  in its sole  discretion  at the time the  Option is
exercised, is then offering such alternatives:

          (a) Provided that at the time of exercise the Common Stock is publicly
traded and quoted  regularly  in The Wall  Street  Journal,  then  pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
which,  prior to the issuance of Common Stock,  results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds (a "cashless
exercise").

          (b) Provided that at the time of exercise the Common Stock is publicly
traded and quoted  regularly  in The Wall  Street  Journal,  then by delivery of
already-owned  shares of Common Stock  (valued at their Fair Market Value on the
date of exercise) if (i) either Holder has held the already-owned shares for the
period required to avoid a charge to the Company's reported earnings  (generally
six  months) or Holder did not  acquire the  already-owned  shares,  directly or
indirectly from the Company and (ii) Holder owns the  already-owned  shares free
and clear of any liens, claims,  encumbrances or security interests.  "Delivery"
for these purposes, in the sole discretion of the Company at the time the Option
is exercised,  shall include delivery to the Company of Holder's  attestation of
ownership  of such shares of Common  Stock in a form  approved  by the  Company.

                                       2

<PAGE>

Notwithstanding the foregoing,  the Option may not be exercised by tender to the
Company of Common Stock to the extent such tender  would  constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Company's stock.

          (c) Provided  there has been a change in control  described in Section
9(c) and the surviving  corporation or acquiring  corporation  refuses to assume
the Option or to substitute a similar option for the Option, then by authorizing
the Company to withhold  shares  from the shares of the Common  Stock  otherwise
issuable to Holder as a result of the  exercise  of the Option.  Notwithstanding
the foregoing,  the Option may not be exercised by withholding  shares of Common
Stock to the  extent  such  withholding  would  constitute  a  violation  of the
provisions of any law, regulation or agreement restricting the redemption of the
Company's stock.

     5. Whole Shares. The Option may only be exercised for whole shares.

     6.  Securities  Law  Compliance.  Notwithstanding  anything to the contrary
contained  herein,  the Option may not be exercised  unless the shares  issuable
upon exercise of the Option are then registered  under the Securities Act or, if
such shares are not then so  registered,  the Company has  determined  that such
exercise and issuance would be exempt from the registration  requirements of the
Securities  Act.  The  exercise  of the  Option  must  also  comply  with  other
applicable laws and regulations  governing the Option, and the Option may not be
exercised if the Company  determines  that the exercise would not be in material
compliance with such laws and regulations.

     7. Term.  The term of the Option  commences  on the Grant Date and  expires
upon the earliest of the following:

          (a) three (3) months  after the  termination  of  Holder's  Continuous
Service for any reason other than death or  Disability,  provided that if during
any part of such three-month period the Option is not exercisable solely because
of the  condition  set forth in Section 6, the Option shall not expire until the
earlier of the Expiration  Date or until it shall have been  exercisable  for an
aggregate  period  of  three  (3)  months  after  the  termination  of  Holder's
Continuous Service;

          (b) twelve (12) months after the  termination  of Holder's  Continuous
Service due to Disability;

          (c) eighteen  (18) months after  Holder's  death if Holder dies either
during  Holder's  Continuous  Service or within three (3) months after  Holder's
Continuous Service terminates for reason other than Cause;

          (d) the Expiration Date; or

          (e) the tenth (10th) anniversary of the Grant Date.

                                       3

<PAGE>

     8. Exercise.

          (a) The vested portion of the Option may be exercised  during its term
by  delivering  a Notice of Exercise in the form  attached  hereto as Exhibit A,
together with the Exercise  Price (payable in the manner set forth in Section 4)
to the  Secretary  of the  Company,  or to such other  person as the Company may
designate,   during  regular  business  hours,  together  with  such  additional
documents as the Company may then require.

          (b) By  exercising  the Option,  Holder agrees that, as a condition to
any  exercise  of the  Option,  the  Company  may  require  Holder  to  enter an
arrangement  providing  for the  payment  by  Holder to the  Company  of any tax
withholding  obligation of the Company  arising by reason of (1) the exercise of
the Option or (2) the disposition of shares acquired upon such exercise.

     9. Adjustments Upon Changes in Stock.

          (a)  Capitalization  Adjustments.  If any change is made in the Common
Stock  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  number  of  Option  Shares  and  the  Exercise  Price  will  be
appropriately adjusted by the Board, whose determination shall be final, binding
and conclusive.  (The  conversion of any  convertible  securities of the Company
shall not be treated as a transaction  "without receipt of consideration" by the
Company.)

          (b) Change in Control--Dissolution  or Liquidation.  In the event of a
dissolution or liquidation of the Company, the Option shall be terminated if not
exercised (if applicable) prior to such event.

          (c) Change in Control--Asset  Sale,  Merger,  Consolidation or Reverse
Merger.

               (i) The Option will immediately vest 50% in the event of a change
in control of the Company  consisting of: (1) a sale of substantially all of the
assets of the Company, (2) a merger or consolidation in which the Company is not
the surviving  corporation  or (3) a reverse  merger in which the Company is the
surviving  corporation  but the shares of Common Stock  outstanding  immediately
preceding the merger are converted by virtue of the merger into other  property,
whether in the form of securities,  cash or otherwise.  If applicable,  the time
during which the Option may be exercised  shall also be accelerated in full. The
Option shall  terminate if not  exercised  (if  applicable)  at or prior to such
event, and any surviving  corporation or acquiring  corporation shall assume the
remaining unvested portion of the Option or shall substitute a similar Option.

                                       4
<PAGE>

               (ii) For purposes of  subsection  9(c) the Option shall be deemed
assumed if,  following  the change in control,  the Option  confers the right to
purchase, in accordance with its terms and conditions,  for each share of Common
Stock  subject to the Option  immediately  prior to the change in  control,  the
consideration  (whether stock,  cash or other securities or property) to which a
holder of a share of Common Stock on the effective date of the change in control
was entitled.

     10. Transferability.  The Option is not transferable,  except by will or by
the laws of descent and  distribution,  and is exercisable  during Holder's life
only by Holder.  Notwithstanding the foregoing,  by delivering written notice to
the Company, in a form satisfactory to the Company, Holder may designate a third
party who,  in the event of  Holder's  death,  shall  thereafter  be entitled to
exercise the Option.

     11. Not a Service Contract.  This Agreement is not an employment or service
contract,  and  nothing in this  Agreement  shall be deemed to create in any way
whatsoever  any  obligation  on  Holder's  part to continue in the employ of the
Company, or of the Company to continue Holder's employment. In addition, nothing
in this Agreement shall obligate the Company, its shareholders,  Board, officers
or employees to continue any  relationship  that Holder might have as a director
or consultant for the Company.

     12. Withholding Obligations.

          (a) At the time the Option is  exercised,  in whole or in part,  or at
any time  thereafter  as  requested  by the Company,  Holder  hereby  authorizes
withholding from payroll and any other amounts payable to Holder,  and otherwise
agrees  to make  adequate  provision  for  (including  by means  of a  "cashless
exercise"  pursuant to a program  developed under Regulation T as promulgated by
the Federal  Reserve  Board to the extent  permitted by the  Company),  any sums
required  to satisfy the  federal,  state,  local and  foreign  tax  withholding
obligations of the Company, which arise in connection with the Option.

          (b)  The  Option  is  not  exercisable   unless  the  tax  withholding
obligations of the Company are satisfied. Accordingly, Holder may not be able to
exercise the Option when desired even though the Option is vested.

     13. No Rights As A Shareholder.  The Option shall not entitle the Holder to
any cash dividend,  voting or other right of a shareholder  unless and until the
date of issuance of the shares that are the subject of the Option.

     14. Professional  Advice. The acceptance and exercise of the Option and the
sale  of  Option  Shares  has  consequences  under  federal  and  state  tax and
securities  laws which may vary depending upon the individual  circumstances  of
the Holder. Accordingly, Holder acknowledges that he has been advised to consult
his personal  legal and tax advisor in  connection  with this  Agreement and his
dealings  with  respect  to the Option and the  Option  Shares.  Holder  further

                                       5

<PAGE>

acknowledges  that the  Company has made no  warranties  or  representations  to
Holder with respect to the income tax  consequences of the grant and exercise of
the Option or the sale of the Option  Shares and Holder is in no manner  relying
on the Company or its representatives for an assessment of such consequences.

     15.  Assignment;  Binding  Effect.  Subject to the limitations set forth in
this Agreement, this Agreement shall be binding upon and inure to the benefit of
the executors,  administrators,  heirs, legal representatives, and successors of
the  parties  hereto;  provided,  however,  that  Holder  may not  assign any of
Holder's rights under this Agreement.

     16.  Damages.  Holder  shall be  liable  to the  Company  for all costs and
damages,  including  incidental  and  consequential  damages,  resulting  from a
disposition  of Option Shares which is not in conformity  with the provisions of
this Agreement.

     17.  Governing Law. This  Agreement  shall be governed by, and construed in
accordance  with, the laws of the State of Washington  excluding those laws that
direct the application of the laws of another jurisdiction.

     18.  Notices.  All notices and other  communications  under this  Agreement
shall be in  writing.  Unless  and until  Holder is  notified  in writing to the
contrary, all notices, communications, and documents directed to the Company and
related to the Agreement,  if not delivered by hand, shall be mailed,  addressed
as follows:

                           F5 Networks, Inc.
                           501 Elliott Ave West
                           Seattle, WA  98119

Unless  and until the  Company is  notified  in  writing  to the  contrary,  all
notices,  communications,  and documents intended for Holder and related to this
Agreement,  if not  delivered  by hand,  shall be mailed to Holder's  last known
address as shown on the Company's  books.  Notices and  communications  shall be
mailed by first class mail, postage prepaid. All mailings and deliveries related
to this Agreement  shall be deemed received when actually  received,  if by hand
delivery, and five (5) business days after mailing, if by mail.

     19.  Amendment of this  Agreement.  The Board at any time, and from time to
time, may amend the terms of this Agreement;  provided, however, that the rights
under this Agreement shall not be impaired by any such amendment  unless (i) the
Company requests the consent of the Holder and (ii) Holder consents in writing.

                                       6

<PAGE>

     IN WITNESS  WHEREOF,  the parties have executed this Option Agreement as of
the Effective Date.

                                 F5 NETWORKS, INC.

                                 By
                                    --------------------------------------------

                                 Title
                                       -----------------------------------------

Holder hereby  accepts and agrees to be bound by all of the terms and conditions
of this Agreement.

                                 Holder

                                 -----------------------------------------------
                                 Jeff Pancottine

                                       7

<PAGE>

                                    EXHIBIT A

                               NOTICE OF EXERCISE

                   (To be signed only upon exercise of Option)

To:      F5 Networks, Inc.
         501 Elliott Ave West
         Seattle, WA  98119

     The undersigned, the holder of an option to purchase shares of common stock
of F5 Networks,  Inc. pursuant to an Option Agreement dated as of __________ __,
____ (the "Option Agreement") hereby irrevocably elects to exercise the purchase
right represented by the Option Agreement for, and to purchase under that Option
Agreement,  __________  shares of Common  Stock and  herewith  makes  payment of
$_____________  for those shares and payment of $___________  for holder's share
of withholding and employment taxes resulting from such exercise.  Holder hereby
confirms the representations,  warranties and agreements set forth in the Option
Agreement.

     DATED: __________________, ____.

                                     HOLDER:

                                     By:
                                        ----------------------------------------
                                     Title:
                                           -------------------------------------

                                     ADDRESS:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

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