Document:

<PAGE>

                                                                    Exhibit 4.18

================================================================================

                               GUARANTEE AGREEMENT

                                 by and between

                       AMERICAN INTERNATIONAL GROUP, INC.,
                                  as Guarantor

                                       and

                              THE BANK OF NEW YORK,
                              as Guarantee Trustee

                                   relating to

                              AIG CAPITAL TRUST ( )

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

                         Dated as of ____________, ____

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

================================================================================

<PAGE>

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
Section of
Trust Indenture Act                                                                               Section of
of 1939, as amended                                                                           Guarantee Agreement
-------------------                                                                           -------------------
<S>                                                                                           <C>
310(a)..........................................................................................   4.1(a)

310(b)..........................................................................................   4.1(c), 2.8

310(c)..........................................................................................   Inapplicable

311(a)..........................................................................................   2.2(b)

311(b)..........................................................................................   2.2(b)

311(c)..........................................................................................   Inapplicable

312(a)..........................................................................................   2.2(a)

312(b)..........................................................................................   2.2(b)

312(c)..........................................................................................   2.2(c)

313.............................................................................................   2.3

314(a)..........................................................................................   2.4

314(b)..........................................................................................   Inapplicable

314(c)..........................................................................................   2.5

314(d)..........................................................................................   Inapplicable

314(e)..........................................................................................   1.1, 2.5, 3.2

314(f)..........................................................................................   2.1, 3.2

315(a)..........................................................................................   3.1(d)

315(b)..........................................................................................   2.7

315(c)..........................................................................................   3.1

315(d)..........................................................................................   3.1(d)

315(e)..........................................................................................   4.3

316(a)..........................................................................................   1.1, 2.6(a), 5.4

316(b)..........................................................................................   2.6(b)

316(c)..........................................................................................   8.2

317(a)..........................................................................................   Inapplicable

317(b)..........................................................................................   Inapplicable

318(a)..........................................................................................   2.1

318(b)..........................................................................................   2.1

318(c)..........................................................................................   2.1
</TABLE>

--------
*  This Cross-Reference Table does not, for any purpose, constitute part of the
   Guarantee Agreement and shall not affect the interpretation of any of its
   terms or provisions.

                                       -i-

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
<S>                                                                                                             <C>

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1         DEFINITIONS...............................................................................    1

                                 ARTICLE II

                             TRUST INDENTURE ACT

SECTION 2.1         TRUST INDENTURE ACT; APPLICATION..........................................................    5
SECTION 2.2         LIST OF HOLDERS...........................................................................    5
SECTION 2.3         REPORTS BY THE GUARANTEE TRUSTEE..........................................................    6
SECTION 2.4         PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.................................................    6
SECTION 2.5         EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..........................................    6
SECTION 2.6         EVENTS OF DEFAULT; WAIVER.................................................................    6
SECTION 2.7         EVENT OF DEFAULT; NOTICE..................................................................    6
SECTION 2.8         CONFLICTING INTERESTS.....................................................................    7

                                  ARTICLE III

              POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1         POWERS AND DUTIES OF THE GUARANTEE TRUSTEE................................................    7
SECTION 3.2         CERTAIN RIGHTS OF GUARANTEE TRUSTEE.......................................................    8
SECTION 3.3         COMPENSATION; INDEMNITY; FEES.............................................................   10

                                  ARTICLE IV

                               GUARANTEE TRUSTEE

SECTION 4.1         GUARANTEE TRUSTEE; ELIGIBILITY............................................................   11
SECTION 4.2         APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE.............................   11
SECTION 4.3         UNDERTAKING FOR COSTS.....................................................................   12

                                   ARTICLE V

                                   GUARANTEE

SECTION 5.1         GUARANTEE.................................................................................   13
SECTION 5.2         NATURE OF GUARANTEE.......................................................................   13
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                                                                                                             <C>
SECTION 5.3         CHANGES IN OBLIGATIONS AND AGREEMENTS RELATING THERETO; WAIVER OF CERTAIN NOTICES.........   13
SECTION 5.4         RIGHTS OF HOLDERS.........................................................................   14
SECTION 5.5         SUBROGATION...............................................................................   14
SECTION 5.6         NO WAIVER; CUMULATIVE RIGHTS..............................................................   14

                                  ARTICLE VI

                          COVENANTS AND SUBORDINATION

SECTION 6.1         SUBORDINATION.............................................................................   15
SECTION 6.2         PARI PASSU GUARANTEES.....................................................................   15

                                  ARTICLE VII

                                  TERMINATION

SECTION 7.1         TERMINATION...............................................................................   15

                                  ARTICLE VIII

                                 MISCELLANEOUS

SECTION 8.1         SUCCESSORS AND ASSIGNS....................................................................   16
SECTION 8.2         AMENDMENTS................................................................................   16
SECTION 8.3         NOTICES...................................................................................   16
SECTION 8.4         BENEFIT...................................................................................   17
SECTION 8.5         GOVERNING LAW.............................................................................   17
SECTION 8.6         COUNTERPARTS..............................................................................   17
</TABLE>

                                      -iii-

<PAGE>

         GUARANTEE AGREEMENT, dated as of ____________, ____, between AMERICAN
INTERNATIONAL GROUP, INC. a Delaware corporation (the "Guarantor" or "AIG"),
having its principal office at 70 Pine Street, New York, NY 10270, and THE BANK
OF NEW YORK, as trustee (the "Guarantee Trustee" or "The Bank of New York"), for
the benefit of the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of AIG CAPITAL TRUST ( ), a Delaware statutory
trust (the "Issuer Trust").

                 RECITALS OF THE GUARANTOR AND THE ISSUER TRUST

         WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of ____________, ____ (the "Trust Agreement"), among American International
Group, Inc., as Sponsor, The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee and the Administrators named therein,
the Issuer Trust is issuing $___________ aggregate Liquidation Amount (as
defined in the Trust Agreement) of its ___________ (liquidation amount $_____
per Capital Security) (the "Capital Securities"), representing preferred
undivided beneficial interests in the assets of the Issuer Trust and having the
terms set forth in the Trust Agreement; and

         WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Junior Subordinated Debentures (as defined in the Trust Agreement) of the
Guarantor, which Junior Subordinated Debentures will be deposited with The Bank
of New York, as Property Trustee under the Trust Agreement, as trust assets; and

         WHEREAS, as an incentive for the Holders to purchase Capital
Securities, the Guarantor desires unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

         NOW, THEREFORE, in consideration of the purchase of Capital Securities
by each Holder, which purchase the Guarantor hereby acknowledges shall benefit
the Guarantor, and intending to be legally bound hereby, the Guarantor executes
and delivers this Guarantee Agreement for the benefit of the Holders from time
to time of the Capital Securities.

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1       Definitions.

         Any capitalized term used herein but not defined shall have the meaning
ascribed to it in the Trust Agreement. For all purposes of this Guarantee
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:

                                       -1-

<PAGE>

         (a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;

         (b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

         (c) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";

         (d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;

         (e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Guarantee Agreement; and

         (f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "CAPITAL SECURITIES" has the meaning specified in the recitals to this
Guarantee Agreement.

         "COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.

         "CORPORATION" means a corporation, association, company, joint-stock
company, limited liability company or business trust.

         "EVENT OF DEFAULT" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement, and the continuance of such
default for five days, or (ii) a default by the Guarantor in any other
obligation hereunder, and the continuance of such default for a period of 30
days after there has been given, by registered or certified mail, to the
Guarantor by the Guarantee Trustee or to the Guarantor and the Guarantee Trustee
by the Holders of at least 25% in Liquidation Amount (as defined in the Trust
Agreement) of the Outstanding Capital Securities (as defined in the Trust
Agreement) a written notice specifying such default and requiring it to be
remedied.

                                       -2-

<PAGE>

         "GUARANTEE AGREEMENT" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.

         "GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available to make such Distributions at such time; (ii) the Redemption Price (as
defined in the Trust Agreement) with respect to any Capital Securities called
for redemption by the Issuer Trust, to the extent the Issuer Trust shall have
funds on hand available to pay such Redemption Price at such time; and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Issuer Trust, unless Junior Subordinated Debentures are distributed to the
Holders, the lesser of (a) the Liquidation Distribution (as defined in the Trust
Agreement) with respect to the Capital Securities, to the extent that the Issuer
Trust shall have funds on hand available to make such Liquidation Distribution
at such time, and (b) the amount of assets of the Issuer Trust remaining
available for distribution to Holders on liquidation of the Issuer.

         "GUARANTEE TRUSTEE" means The Bank of New York, solely in its capacity
as Guarantee Trustee and not in its individual capacity, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.

         "GUARANTOR" has the meaning specified in the preamble to of this
Guarantee Agreement.

         "HOLDER" means any Holder (as defined in the Trust Agreement) of any
Capital Securities; provided, however, that in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.

         "INDENTURE" means the Junior Subordinated Debt Indenture, dated as of
________,______, between American International Group, Inc. and The Bank of New
York, as trustee, as supplemented by the First Supplemental Junior Subordinated
Debt Indenture, dated as of ____, ____, and as may be further modified, amended
or supplemented from time to time relating to the issuance of the Junior
Subordinate Debentures.

         "ISSUER TRUST" has the meaning specified in the preamble to of this
Guarantee Agreement.

         "MAJORITY IN LIQUIDATION AMOUNT OF THE CAPITAL SECURITIES" means
Capital Securities representing 50% or more of the aggregate Liquidation Amount
(as defined in the Trust Agreement) of all Capital Securities then Outstanding
(as defined in the Trust Agreement).

         "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman, a
Vice Chairman, the President or a Vice President of the Guarantor, and by the
Treasurer, an Assistant

                                       -3-

<PAGE>

Treasurer, the Secretary or an Assistant Secretary of the Guarantor, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:

         (a)      a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;

         (b)      a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officers'
Certificate;

         (c)      a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

         (d)      a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.

         "PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or
political subdivision thereof, or any other entity of whatever nature.

         "SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

         "TRUST AGREEMENT" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this Guarantee Agreement was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

         "VICE PRESIDENT," when used with respect to a corporation, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."

                                       -4-

<PAGE>

                                   ARTICLE II

                               TRUST INDENTURE ACT

         SECTION 2.1       Trust Indenture Act; Application

         (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

         (b) If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Guarantee Agreement, the latter provision shall control.
If any provision of this Guarantee Agreement modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Guarantee Agreement as so modified or
to be excluded, as the case may be.

         (c) The application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Capital Securities as equity
securities representing undivided beneficial interests in the assets of the
Issuer Trust.

         SECTION 2.2       List of Holders.

         (a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually not later than March 31 and September 30 a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders as of the preceding March 16 or September 15, and
(ii) at such other times as the Guarantee Trustee may request in writing, within
30 days after the receipt by the Guarantor of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, in each case to the extent such information is in the
possession or control of the Guarantor. The Guarantee Trustee shall preserve, in
as current a form as is reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to the Guarantee Trustee as
provided in this Section 2.2(a) and the names and addresses of Holders received
by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may
destroy any list furnished to it as provided in this Section 2.2(a) upon receipt
of a new list so furnished.

         (b) The Guarantee Trustee shall comply with the requirements of Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

         (c) Every Holder agrees with the Guarantor and the Guarantee Trustee
that neither the Guarantor nor the Guarantee Trustee nor any agent of either of
them shall be held accountable by reason of any disclosure of information as to
names and addresses of Holders made pursuant to the Trust Indenture Act.

                                       -5-

<PAGE>

         SECTION 2.3       Reports by the Guarantee Trustee.

         The Guarantee Trustee shall transmit to Holders such reports concerning
the Guarantee Trustee and its actions under this Guarantee Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.

         A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Guarantee Trustee with each stock exchange upon which
any Capital Securities are listed, with the Commission and with the Guarantor.
The Guarantor will notify the Guarantee Trustee when any Capital Securities are
listed on any stock exchange.

         SECTION 2.4       Periodic Reports to the Guarantee Trustee.

         The Guarantor shall provide to the Guarantee Trustee, the Commission
and the Holders of such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314(a) of the Trust Indenture Act.

         SECTION 2.5       Evidence of Compliance with Conditions Precedent.

         The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

         SECTION 2.6      Events of Default; Waiver.

         (a) The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders of all the Capital
Securities, waive any past default or Event of Default and its consequences,
except a default in the payment of the Guarantee Payments. Upon such waiver, any
such default or Event of Default shall cease to exist, and any default or Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

         (b) The Holder of any Capital Security shall have the right, which is
absolute and unconditional, to receive the Guarantee Payments and to institute
suit for the enforcement of Guarantee Payments, and such rights shall not be
impaired without the consent of such Holder.

         SECTION 2.7       Event of Default; Notice.

         The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default known to the Guarantee Trustee, transmit by mail, first class
postage prepaid, to the Holders,

                                       -6-

<PAGE>

notice of any such Event of Default, unless such Event of Default has been cured
before the giving of such notice.

         SECTION 2.8       Conflicting Interests.

         If the Guarantee Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Guarantee Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Guarantee Agreement. To the extent permitted by such Act, the Guarantee Trustee
shall not be deemed to have a conflicting interest by virtue of being a trustee
under the Indenture or the Trust Agreement.

                                   ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         SECTION 3.1       Powers and Duties of the Guarantee Trustee.

         (a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer its
rights, powers, trusts and duties in this Guarantee Agreement to any Person
except to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee in accordance
with Section 4.2. The rights, powers, trusts and duties of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
in accordance with Section 4.2.

         (b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.

         (c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. The Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.

         (d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, its own bad faith or its own willful misconduct,
except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                                       -7-

<PAGE>

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee Agreement (including pursuant to Section
                  2.1), and the Guarantee Trustee shall not be liable except for
                  the performance of such duties and obligations as are
                  specifically set forth in this Guarantee Agreement; and

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee Agreement; but in the case
                  of any such certificates or opinions that by any provision
                  hereof or of the Trust Indenture Act are specifically required
                  to be furnished to the Guarantee Trustee, the Guarantee
                  Trustee shall be under a duty to examine the same to determine
                  whether or not they substantially conform to the requirements
                  of this Guarantee Agreement;

                  (ii) the Guarantee Trustee shall not be liable for any error
         of judgment made in good faith by an authorized officer of the
         Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
         was negligent in ascertaining the pertinent facts upon which such
         judgment was made;

                  (iii) the Guarantee Trustee shall not be liable with respect
         to any action taken or omitted to be taken by it in good faith in
         accordance with the direction of the Holders of not less than a
         Majority in Liquidation Amount of the Capital Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Guarantee Trustee, or exercising any trust or power
         conferred upon the Guarantee Trustee under this Guarantee Agreement;
         and

                  (iv) no provision of this Guarantee Agreement shall require
         the Guarantee Trustee to expend or risk its own funds or otherwise
         incur personal financial liability in the performance of any of its
         duties or in the exercise of any of its rights or powers, if the
         Guarantee Trustee shall have reasonable grounds for believing that the
         repayment of such funds or liability is not reasonably assured to it
         under the terms of this Guarantee Agreement or adequate indemnity
         against such risk or liability is not reasonably assured to it.

         SECTION 3.2       Certain Rights of Guarantee Trustee.

         (a) Subject to the provisions of Section 3.1:

                  (i) the Guarantee Trustee may conclusively rely and shall be
         fully protected in acting or refraining from acting upon any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, Capital Security
         certificate or

                                       -8-

<PAGE>

         other paper or document reasonably believed by it to be genuine and to
         have been signed, sent or presented by the proper party or parties;

                  (ii) any direction or act of the Guarantor contemplated by
         this Guarantee Agreement shall be sufficiently evidenced by an
         Officers' Certificate unless otherwise prescribed herein;

                  (iii) whenever, in the administration of this Guarantee
         Agreement, the Guarantee Trustee shall deem it desirable that a matter
         be proved or established before taking, suffering or omitting to take
         any action hereunder, the Guarantee Trustee (unless other evidence is
         herein specifically prescribed) may, in the absence of bad faith on its
         part, request and rely upon an Officers' Certificate which, upon
         receipt of such request from the Guarantee Trustee, shall be promptly
         delivered by the Guarantor;

                  (iv) the Guarantee Trustee may consult with legal counsel
         (which counsel may be counsel to the Guarantor or any of its
         Affiliates, and may include any of its employees), and the advice or
         opinion of such legal counsel with respect to legal matters shall be
         full and complete authorization and protection in respect of any action
         taken, suffered or omitted to be taken by it hereunder in good faith
         and in accordance with such advice or opinion. Such legal counsel may
         be legal counsel (which counsel may be counsel to the Guarantor or any
         of its Affiliates, and may include any of its employees) to the
         Guarantor or any of its Affiliates and may be one of its employees. The
         Guarantee Trustee shall have the right at any time to seek instructions
         concerning the administration of this Guarantee Agreement from any
         court of competent jurisdiction;

                  (v) the Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee
         Agreement at the request or direction of any Holder unless such Holder
         shall have provided to the Guarantee Trustee such reasonable security
         and indemnity as would satisfy a reasonable person in the position of
         the Guarantee Trustee against the costs, expenses and liabilities that
         might be incurred by it in complying with such request or direction;
         provided, that nothing contained in this Section 3.2(a)(v) shall be
         taken to relieve the Guarantee Trustee, upon the occurrence of an Event
         of Default, of its obligation to exercise the rights and powers vested
         in it by this Guarantee Agreement;

                  (vi) the Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, Capital Security certificate or other paper
         or document, but the Guarantee Trustee may make such further inquiry or
         investigation into such facts or matters as it may see fit;

                  (vii) the Guarantee Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through its agents or attorneys; provided that the Guarantee Trustee
         shall not be responsible for any negligence, bad faith

                                       -9-

<PAGE>

         or misconduct on the part of any such agent or attorney appointed with
         due care by it hereunder; and

                  (viii) whenever in the administration of this Guarantee
         Agreement the Guarantee Trustee shall deem it desirable to receive
         instructions with respect to enforcing any remedy or right or taking
         any other action hereunder, the Guarantee Trustee (A) may request
         instructions from the Holders, (B) may refrain from enforcing such
         remedy or right or taking such other action until such instructions are
         received and (C) shall be protected in acting in accordance with such
         instructions.

         (b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.

         SECTION 3.3       Compensation; Indemnity; Fees.

         The Guarantor agrees:

                  (a) to pay to the Guarantee Trustee from time to time such
reasonable compensation for all services rendered by it hereunder as may be
agreed in writing by the Guarantor and the Guarantee Trustee from time to time
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);

                  (b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with any provision of this Guarantee Agreement (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct; and

                  (c) to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability, claim, damage or expense incurred without
negligence, willful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. The provisions of this Section 3.3 shall survive the termination of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.

                                      -10-

<PAGE>

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

         SECTION 4.1       Guarantee Trustee; Eligibility.

         (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a Person that is eligible pursuant to the Trust
         Indenture Act to act as such and has a combined capital and surplus of
         at least $50,000,000, and shall be a corporation meeting the
         requirements of Section 310(a) of the Trust Indenture Act. If such
         corporation publishes reports of condition at least annually, pursuant
         to law or to the requirements of its supervising or examining
         authority, then, for the purposes of this Section 4.1 and to the extent
         permitted by the Trust Indenture Act, the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

         (b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2.

         (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

         SECTION 4.2       Appointment, Removal and Resignation of the Guarantee
Trustee.

         (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.

         (b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor and the retiring Guarantee Trustee.

         (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

                                      -11-

<PAGE>

         (d) In case of the appointment hereunder of a Successor Guarantee
Trustee, such Successor Guarantee Trustee so appointed shall execute,
acknowledge and deliver to the Guarantor and to the retiring Guarantee Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Guarantee Trustee shall become effective and such
Successor Guarantee Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Guarantee Trustee; but, on the request of the Guarantor or the Successor
Guarantee Trustee, such retiring Guarantee Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such Successor
Guarantee Trustee all the rights, powers and trusts of the retiring Guarantee
Trustee.

         (e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

         (f) If at any time:

                  (i) the Guarantee Trustee shall fail to comply with Section
         2.8 after written request therefor by the Guarantor or by any Holder
         who has been a bona fide Holder of a Capital Security for at least six
         months, or

                  (ii) the Guarantee Trustee shall cease to be eligible under
         Section 4.1 and shall fail to resign after written request therefor by
         the Guarantor or by any such Holder, or

                  (iii) the Guarantee Trustee shall become incapable of acting
         or shall be adjudged bankrupt or insolvent or a receiver of the
         Guarantee Trustee or of its property shall be appointed or any public
         officer shall take charge or control of the Guarantee Trustee or of its
         property or affairs for the purpose of rehabilitation, conservation or
         liquidation,

then, in any such case, (A) the Guarantor may remove the Guarantee Trustee, or
(B) subject to Section 4.3, any Holder who has been a bona fide Holder of a
Capital Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Guarantee Trustee and the appointment of a Successor Guarantee
Trustee.

         SECTION 4.3       Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Guarantee Agreement, or in any suit against the Guarantee Trustee for any action
taken, suffered or omitted by it as Guarantee Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess reasonable costs against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided that
neither this Section

                                      -12-

<PAGE>

nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Guarantor.

                                    ARTICLE V

                                    GUARANTEE

         SECTION 5.1       Guarantee.

         The Guarantor absolutely, unconditionally and irrevocably guarantees,
on a subordinated basis as set forth in Article VI, to the Holders the prompt
payment when due, subject to any applicable grace period, the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer
Trust). The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer Trust to pay such amounts to the Holders.

         SECTION 5.2       Nature of Guarantee.

         The Guarantor's obligations hereunder shall not be affected by any
circumstance relating to the Guarantee Payments that might constitute a legal or
equitable discharge of or defense to the Guarantor not available to the Issuer
Trust. The Guarantor agrees that the Holders may resort to the Guarantor for
payment of the Guarantee Payments whether or not the Holders shall have
proceeded against the Issuer Trust. The Holders shall not be obligated to file
any claim relating to the Guarantee Payments in the event that the Issuer Trust
becomes subject to a bankruptcy, reorganization or similar proceeding, and the
failure of the Holders to so file shall not affect the Guarantor's obligations
hereunder. This Guarantee shall remain in full force and effect and shall be
binding on the Guarantor, its successors and assigns until the Guarantee
Payments have been satisfied in full. In the event that any payment to the
Holders in respect of the Guarantee Payments is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to such Guarantee Payments as if such payments had not been made.
The Guarantor reserves the right to (a) set-off against any payment owing
hereunder any amounts owing by the Holders to the Issuer Trust and (b) assert
defenses which the Issuer Trust may have to payment of the Guarantee Payments
other than defenses arising from the bankruptcy or insolvency of the Issuer
Trust and other defenses expressly waived hereby.

         SECTION 5.3       Changes in Obligations and Agreements Relating
thereto; Waiver of Certain Notices.

         The Guarantor agrees that the Holders may at any time and from time to
time, either before or after the maturity thereof, without notice to or further
consent of the Guarantor, extend the time of payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Junior Subordinated Debentures as provided in the Indenture),

                                      -13-

<PAGE>

Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities, and may also make any agreement with the Issuer Trust or with any
other party to or person liable on any of the Guarantee Payments or interested
therein, in accordance with the Trust Agreement, for the extension, renewal,
payment, compromise, discharge or release thereof, in whole or in part, or for
any modification of the terms thereof or of any agreement between the Holders
and the Issuer Trust or any such other party or person, without in any way
impairing or affecting this Guarantee. The Guarantor waives notice of the
acceptance of this Guarantee and of the Guarantee Payments, presentment, demand
for payment, notice of dishonor and protest.

         SECTION 5.4       Rights of Holders.

         The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.

         SECTION 5.5       Subrogation.

         Upon payment in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement, the Guarantor shall be subrogated to
the rights of the Holders against the Issuer Trust in respect of such amounts
paid, and the Holders will be deemed to agree to take at the Guarantor's expense
such steps as the Guarantor may reasonably request to implement such
subrogation.

         SECTION 5.6       No Waiver; Cumulative Rights.

         No failure on the part of the Holders to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Holders of any right,
remedy or power hereunder preclude any other or future exercise of any right,
remedy or power. Each and every right, remedy and power hereby granted to the
Holders or allowed by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by the Holders at any time or from
time to time.

                                      -14-

<PAGE>

                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

         SECTION 6.1       Subordination.

         The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Junior Subordinated Debentures, and the provisions of Article
XIII of the Indenture will apply, mutatis mutandis, to the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder do not
constitute Senior Debt (as defined in the Indenture) of the Guarantor.

         SECTION 6.2       Pari Passu Guarantees.

         The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under (i) any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any Issuer Trust (as defined in the
Indenture), (ii) the Indenture and the Securities (as defined therein) issued
thereunder; (iii) the Expense Agreement (as defined in the Trust Agreement) and
any similar expense agreements entered into by the Guarantor in connection with
the offering of Capital Securities (as defined in the Indenture) by any Issuer
Trust (as defined in the Indenture), and (iv) any other security, guarantee or
other agreement or obligation that is expressly stated to rank pari passu with
the obligations of the Guarantor under this Guarantee Agreement or with any
obligation that ranks pari passu with the obligations of the Guarantor under
this Guarantee Agreement.

                                   ARTICLE VII

                                   TERMINATION

         SECTION 7.1       Termination.

         This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all Capital Securities, (ii) the distribution of Junior
Subordinated Debentures to the Holders in exchange for all of the Capital
Securities or (iii) full payment of the amounts payable in accordance with
Article IX of the Trust Agreement upon liquidation of the Issuer Trust.

                                      -15-

<PAGE>
                                  ARTICLE VIII

                                 MISCELLANEOUS

         SECTION 8.1       Successors and Assigns.

         All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.

         SECTION 8.2       Amendments.

         Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.

         SECTION 8.3       Notices.

         Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

         (a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number as the Guarantor may give
notice to the Guarantee Trustee and the Holders:

                  American International Group, Inc.
                  70 Pine Street
                  New York, NY 10270
                  Attention: Secretary

         (b) if given to the Guarantee Trustee, at the address or telecopy
number set forth below or such other address or telecopy number as the Guarantee
Trustee may give notice to the Guarantor and the Holders:

                  The Bank of New York
                  101 Barclay Street
                  New York, NY 10286
                  Attention: Corporate Trust Administration

                                      -16-

<PAGE>

         with a copy to:

                  AIG Capital Trust ( )
                  American International Group, Inc.
                  70 Pine Street
                  New York, NY 10270
                  Attention: Secretary

         (c) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.

         All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver. In any case where notice to a
Person is given by mail, neither the failure to mail such notice, nor any defect
in any notice so mailed, shall affect the sufficiency of such notice with
respect to any other Person.

         SECTION 8.4       Benefit.

         This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.

         SECTION 8.5       Governing Law.

         This Guarantee Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

         SECTION 8.6       Counterparts.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                      -17-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.

                                                AMERICAN INTERNATIONAL
                                                GROUP, INC., as Guarantor

                                                By: ____________________________
                                                Name:
                                                Title:

                                                THE BANK OF NEW YORK,
                                                as Guarantee Trustee

                                                By: ____________________________
                                                Name:
                                                Title:<PAGE>

EXHIBIT 10.22

                                F5 NETWORKS, INC.

                   MAGNIFIRE ACQUISITION EQUITY INCENTIVE PLAN

                              ADOPTED MAY 31, 2004
                         TERMINATION DATE: MAY 30, 2014

1.    PURPOSES.

      (a)   ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive
Stock Awards are those employees of MagniFire WebSystems, Inc. to whom F5
Networks, Inc. (the "Company") extends an offer of employment in connection with
its purchase of MagniFire.

      (b)   AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide an
inducement for employees of MagniFire WebSystems, Inc. to accept offers of
employment by the Company, and a means by which they may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

      (c)   GENERAL PURPOSE. The Company, by means of the Plan, seeks to induce
eligible recipients of Stock Awards to accept offers of employment from the
Company, to retain the services of these individuals and to provide an incentive
for them 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, (i) who is
engaged by the Company or an Affiliate to render services other than as an
Employee or as a Director or (ii) who is a member of the Board of Directors of
an Affiliate.

      (h)   "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director 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,
Consultant or Director 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 or a Director of the
Company 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)   "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to shareholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

<PAGE>

      (j)   "DIRECTOR" means a member of the Board of Directors of the Company.

      (k)   "DISABILITY" means (i) before the Listing Date, the inability of a
person, in the opinion of a qualified physician acceptable to the Company, to
perform the major duties of that person's position with the Company or an
Affiliate of the Company because of the sickness or injury of the person and
(ii) after the Listing Date, the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

      (l)   "EMPLOYEE" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.

      (m)   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

      (n)   "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:

            (i)   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.

            (ii)  In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

      (o)   "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

      (p)   "LISTING DATE" means the first date upon which the Common Stock is
listed (or approved for listing) upon notice of issuance on any securities
exchange or designated (or approved for designation) upon notice of issuance as
a national market security on an interdealer quotation system if such securities
exchange or interdealer quotation system has been certified in accordance with
the provisions of Section 25100(o) of the California Corporate Securities Law of
1968.

      (q)   "NON-EMPLOYEE DIRECTOR" means a Director of the Company who either
(i) is not a current Employee or Officer of the Company or its parent or a
subsidiary, does not receive compensation (directly or indirectly) from the
Company or its parent or a 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")), does not possess an interest
in any other transaction as to which disclosure would be required under Item
404(a) of Regulation S-K and is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

      (r)   "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.

      (s)   "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.

      (t)   "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

      (u)   "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.

      (v)   "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.

      (w)   "OUTSIDE DIRECTOR" means a Director of the Company who either (i) is
not a current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former

<PAGE>

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.

      (x)   "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.

      (y)   "PLAN" means this F5 Networks, Inc. 1998 Equity Incentive Plan.

      (z)   "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.

      (aa)  "SECURITIES ACT" means the Securities Act of 1933, as amended.

      (bb)  "STOCK AWARD" means any right granted under the Plan, including an
Option, a stock bonus and a right to acquire restricted stock.

      (cc)  "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.

      (dd)  "TEN PERCENT SHAREHOLDER" means a person who owns (or is deemed to
own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates.

3.    ADMINISTRATION.

      (a)   ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee or an administrator,
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.

            (i)   GENERAL. 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. The Board or the Committee may further delegate its authority and
responsibilities under the Plan to an Officer. However,

<PAGE>

if administration is delegated to an Officer, such Officer may grant Stock
Awards only within guidelines established by the Board or the Committee, and
only the Board or the Committee may make a Stock Award to an Officer or
Director. 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 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, or an Officer to whom authority has been delegated), 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.

            (ii)  COMMITTEE COMPOSITION. In the discretion of the Board, a
Committee may consist solely of two or more Outside Directors, in accordance
with Section 162(m) of the Code, and/or solely of two or more Non-Employee
Directors, in accordance with Rule 16b-3. Within the scope of such authority,
the Board or the Committee may (i) delegate to a committee of one or more
members of the Board who are not Outside Directors the authority to grant Stock
Awards to eligible persons who are either (1) not then Covered Employees and are
not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award or (2) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or) (ii) delegate
to a committee of one or more members of the Board who are not Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.

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 Four Hundred Fifteen Thousand
(415,000) 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. Incentive Stock Options may
be granted only to Employees. Stock Awards other than Incentive Stock Options
may be granted to Employees, Directors and Consultants.

      (b)   TEN PERCENT SHAREHOLDERS. No Ten Percent Shareholder shall be
eligible for the grant of an Incentive Stock Option unless the exercise price of
such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.

      (c)   SECTION 162(m) LIMITATION. Subject to the provisions of Section 11
relating to adjustments upon changes in stock, no employee shall be eligible to
be granted Options covering more than Two Hundred Thousand (200,000) shares of
the Common Stock during any calendar year. This subsection 5(c) shall not apply
prior to the Listing Date and, following the Listing Date, this subsection 5(c)
shall not apply until (i) the earliest of: (1) the first material modification
of the Plan (including any increase in the number of shares reserved for
issuance under the Plan in accordance with Section 4); (2) the issuance of all
of the shares of Common Stock reserved for issuance under the Plan; (3) the
expiration of the Plan; or (4) the first meeting of shareholders at which
Directors of the Company are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first
registration of an equity security under Section 12 of the Exchange Act; or (ii)
such other date required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder.

<PAGE>

6.    OPTION PROVISIONS.

      Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if a certificate is issued for shares purchased on exercise of an
Option, a separate certificate or certificates will be issued for shares
purchased on exercise of each type of Option. 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. Subject to the provisions of subsection 5(b) regarding Ten
Percent Shareholders, no Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

      (b)   EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Incentive Stock 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. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

      (c)   EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Nonstatutory Stock Option granted prior to the Listing Date shall
be not less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option granted on or after the Listing Date shall be not
less than fifty percent (50%) of the Fair Market Value of the stock subject to
the Option on the date the Option is granted. Notwithstanding the foregoing, a
Nonstatutory Stock Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

      (d)   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 at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) 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.
Notwithstanding the foregoing, no Officer or Director may pay the exercise price
of an Option by a deferred payment arrangement.

      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.

      (e)   TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive Stock
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(e), 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.

      (f)   TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory Stock
Option granted prior to the Listing Date shall be transferable to the extent
that transferability is both permitted by Section 260.140.41(d) of Title 10 of
the California Code of Regulations at the time the Option is granted and
provided for in the Option Agreement. A Nonstatutory Stock Option granted on or
after the Listing Date shall be transferable to the extent provided in the
Option Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock 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(f), 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.

      (g)   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

<PAGE>

Board may deem appropriate. The vesting provisions of individual Options may
vary. The provisions of this subsection 6(g) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.

      (h)   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, which, for
Options granted prior to the Listing Date, shall not be less than thirty (30)
days, unless such termination is for cause), 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.

      (i)   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
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.

      (j)   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.

      (k)   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(e) or 6(f), but only within
the period ending on the earlier of (1) the date eighteen (18) months following
the date of death (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 (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.

      (l)   RE-LOAD OPTIONS. Without in any way limiting the authority of the
Board to make or not to make grants of Options hereunder, the Board shall have
the authority (but not an obligation) to include as part of any Option Agreement
a provision entitling the Optionholder to a further Option (a "Re-Load Option")
in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Any such Re-Load Option shall (i) provide for a number of shares equal to the
number of shares surrendered as part or all of the exercise price of such
Option; (ii) have an expiration date which is the same as the expiration date of
the Option the exercise of which gave rise to such Re-Load Option; and (iii)
have an exercise price which is equal to one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option
shall be subject to the same exercise price and term provisions heretofore
described for Options under the Plan.

            Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the time of the grant
of the original Option; provided, however, that the designation of any Re-Load
Option as an Incentive Stock Option shall be subject to the one hundred thousand
dollars ($100,000) annual limitation on exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There
shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall
be subject to the availability of sufficient shares under subsection 4(a) and
the "Section 162(m) Limitation" on the grants of Options under subsection 5(c)
and shall be subject to such other terms and conditions as the Board may
determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.

<PAGE>

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. Subject to the "Repurchase Limitation" in subsection
10(g), 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. Subject to
the "Repurchase Limitation" in subsection 10(g), 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.

            (iv)  TRANSFERABILITY. For a stock bonus award made before the
Listing Date, rights to acquire shares under the stock bonus agreement shall not
be transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the
Participant. For a stock bonus award made on or after the Listing Date, 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. Subject to the provisions of subsection 5(b)
regarding Ten Percent Shareholders, 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. For restricted stock
awards, the purchase price shall not be less than fifty percent (50%) 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. Notwithstanding the foregoing, no Officer or Director may pay the
purchase price for restricted stock by a deferred payment arrangement.

            (iii) VESTING. Subject to the "Repurchase Limitation" in subsection
10(g), shares of Common Stock acquired under the restricted stock purchase
agreement must 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. Subject to
the "Repurchase Limitation" in subsection 10(g), 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. For a restricted stock award made before the
Listing Date, rights to acquire shares under the restricted stock purchase
agreement shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant
only by the Participant. For a restricted stock award made on or after the
Listing

<PAGE>

Date, 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.

      (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; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any stock issued or issuable pursuant to any such
Stock Award. 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)   INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.

      (e)   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 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 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

<PAGE>

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.

      (f)   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.

      (g)   REPURCHASE LIMITATION. The terms of any repurchase option shall be
specified in the Stock Award and may be either at Fair Market Value at the time
of repurchase or at the original purchase price. To the extent required by
Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of
Regulations, any repurchase option contained in a Stock Award granted prior to
the Listing Date to a Participant who is not an Officer, Director or Consultant
shall be upon the terms described below:

            (i)   FAIR MARKET VALUE. If the repurchase option gives the Company
the right to repurchase the shares upon termination of employment at not less
than the Fair Market Value of the shares to be purchased on the date of
termination of Continuous Service, then (i) the right to repurchase shall be
exercised for cash or cancellation of purchase money indebtedness for the shares
within ninety (90) days of termination of Continuous Service (or in the case of
shares issued upon exercise of Stock Awards after such date of termination,
within ninety (90) days after the date of the exercise) or such longer period as
may be agreed to by the Company and the Participant (for example, for purposes
of satisfying the requirements of Section 1202(c)(3) of the Code regarding
"qualified small business stock") and (ii) the right terminates when the shares
become publicly traded.

            (ii)  ORIGINAL PURCHASE PRICE. If the repurchase option gives the
Company the right to repurchase the shares upon termination of Continuous
Service at the original purchase price, then (i) the right to repurchase at the
original purchase price shall lapse at the rate of at least twenty percent (20%)
of the shares per year over five (5) years from the date the Stock Award is
granted (without respect to the date the Stock Award was exercised or became
exercisable) and (ii) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares within ninety (90)
days of termination of Continuous Service (or in the case of shares issued upon
exercise of Options after such date of termination, within ninety (90) days
after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code regarding "qualified small
business stock").

      (h)   CANCELLATION AND RE-GRANT OF OPTIONS.

            (i)   AUTHORITY TO REPRICE. Without the approval of the shareholders
of the Company, the Board shall not have the authority to effect, at any time
and from time to time, (i) the repricing of any outstanding Options under the
Plan and/or (ii) with the consent of any adversely affected holders of Options,
the cancellation of any outstanding Options under the Plan and the grant in
substitution therefore of new Options under the Plan covering the same or
different numbers of shares of Common Stock.

            (ii)  EFFECT OF REPRICING UNDER SECTION 162(m) OF THE CODE. Shares
subject to an Option which is amended or canceled in order to set a lower
exercise price per share shall continue to be counted against the maximum award
of Options permitted to be granted pursuant to subsection 5(c). The repricing of
an Option under this subsection 10(i) resulting in a reduction of the exercise
price shall be deemed to be a cancellation of the original Option and the grant
of a substitute Option; in the event of such repricing, both the original and
the substituted Options shall be counted against the maximum awards of Options
permitted to be granted pursuant to subsection 5(c). The provisions of this
subsection 10(i)(b) shall be applicable only to the extent required by Section
162(m) of the Code.

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,

<PAGE>

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 maximum number of securities subject to award to any
person pursuant to subsection 5(c), 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
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 Section 422 of the Code, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.

      (b)   SHAREHOLDER APPROVAL. The Board may, in its sole discretion, submit
any other amendment to the Plan for shareholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

      (c)   CONTEMPLATED AMENDMENTS. It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

      (d)   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.

      (e)   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.

<PAGE>

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 or approved by
the shareholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

      (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, but no Stock
Award shall be exercised (or, in the case of a stock bonus, shall be granted)
unless and until the Plan has been approved by the shareholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted 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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}]]