Document:

Filed by Bowne Pure Compliance

Exhibit
10.1

ARUBA NETWORKS, INC.

2007 EQUITY INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,

	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and

	 	•	 	to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Shares and/or Deferred Stock
Units.

2. Definitions. As used herein, the following definitions will apply:

(a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.

(b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Awards are, or will be, granted under
the Plan or a sub-plan or addendum hereto.

(c) “Award” means, individually or collectively, a grant under the Plan of Options,
SARs, Restricted Stock, Restricted Stock Units, Performance Shares or Deferred Stock Units.

(d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

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

 

 

 

(f) “Change in Control” means:

(i) for Awards granted prior to November 12, 2008 the occurrence of any of the following
events:

(1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company’s then outstanding voting securities; or

(2) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets;

(3) A change in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors”
means directors who either (A) are Directors as of the effective date of the Plan, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company); or

(4) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.

(ii) Notwithstanding the foregoing, for Awards granted on or after November 12, 2008,
Change in Control means the occurrence of any of the following events:

(1) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group (“Person”),
acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than fifty percent (50%) of the total voting power of the stock of the Company;
provided, however, that for purposes of this subsection 2(f)(ii)(1), the acquisition of additional
stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting
power of the stock of the Company will not be considered a Change in Control; or

(2) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control
of the Company which occurs on the date that a majority of members of the Board is replaced during
any twelve (12) month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or election. For
purposes of this clause (ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or

 

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(3) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in
the ownership of a substantial portion of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than fifty percent (50%) of
the total gross fair market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions; provided, however, that for purposes of this subsection 2(f)(ii)(3),
the following will not constitute a change in the ownership of a substantial portion of the
Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders
immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of
the Company (immediately before the asset transfer) in exchange for or with respect to the
Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of
which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding
stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting
power of which is owned, directly or indirectly, by a Person described in this
subsection 2(f)(ii)(3)(B)(3). For purposes of this subsection 2(f)(ii)(3), gross fair market value
means the value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

For purposes of this Section 2(f)(ii), persons will be considered to be acting as a group if
they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction shall not be deemed a Change in Control unless
the transaction qualifies as a change in control event within the meaning of Section 409A, as it
has been and may be amended from time to time, and any proposed, temporary or final Treasury
Regulations and Internal Revenue Service guidance thereunder that has been promulgated or may be
promulgated thereunder from time to time..

Further and for the avoidance of doubt, a transaction shall not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that shall be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.

(g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.

(h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(i) “Common Stock” means the common stock of the Company.

(j) “Company” means Aruba Networks, Inc., a Delaware corporation, or any successor
thereto.

(k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

(l) “Deferred Stock Unit” means a deferred stock unit Award granted to a Participant
pursuant to Section 11.

 

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(m) “Director” means a member of the Board.

(n) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time.

(o) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.

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

(q) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have lower exercise
prices and different terms), awards of a different type, and/or cash, (ii) Participants would have
the opportunity to transfer any outstanding Awards to a financial institution or other person or
entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is
reduced. The Administrator will determine the terms and conditions of any Exchange Program in its
sole discretion.

(r) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, Nasdaq Global Market or the
Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or
system on the day of determination (or, if the day of determination is not a market trading day, on
the first market trading day following the day of determination), as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and
low asked prices for the Common Stock on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

(iii) For purposes of any Awards granted on the Registration Date, the Fair Market Value will
be the initial price to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company’s Common Stock; or

(iv) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator.

(s) “Fiscal Year” means the fiscal year of the Company.

 

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(t) “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 and
which is expressly designated by the Administrator at the time of grant as an incentive stock
option.

(u) “Inside Director” means a Director who is an Employee.

(v) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

(w) “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.

(x) “Option” means a stock option granted pursuant to the Plan.

(y) “Optioned Stock” means the Common Stock subject to an Award.

(z) “Outside Director” means a Director who is not an Employee.

(aa) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code and the regulations thereunder.

(bb) “Participant” means the holder of an outstanding Award.

(cc) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.

(dd) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time (including the
continuation of employment or service), the achievement of target levels of performance, or the
occurrence of other events as determined by the Administrator.

(ee) “Plan” means this 2007 Equity Incentive Plan.

(ff) “Registration Date” means the effective date of the first registration statement
that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act,
with respect to any class of the Company’s securities.

(gg) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

(hh) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

 

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(ii) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

(jj) “Section 16(b)” means Section 16(b) of the Exchange Act.

(kk) “Service Provider” means an Employee, Director or Consultant.

(ll) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 15 of the Plan.

(mm) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with an Option, that pursuant to Section 9 is designated as a SAR.

(nn) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code and the regulations thereunder.

3. Stock Subject to the Plan.

(a) Stock Subject to the Plan. Subject to the provisions of Section 15 of the Plan,
the maximum aggregate number of Shares that may be issued under the Plan is (i) the number of
Shares which have been reserved but not issued under the Company’s 2002 Stock Plan (the “2002
Plan”) as of the Registration Date, up to a maximum of seven million (7,000,000) Shares, (ii) any
Shares returned to the 2002 Plan as a result of termination of options or repurchase of Shares
issued under such plan, up to a maximum of ten million (10,000,000) Shares, and (iii) an annual
increase to be added on the first day of the Company’s fiscal year beginning with the Company’s
2008 fiscal year, equal to the lesser of (A) fifteen million (15,000,000) Shares, or (B) five
percent (5%) of the outstanding Shares on the last day of the immediately preceding Company fiscal
year. The Shares may be authorized, but unissued, or reacquired Common Stock.

(b) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock, Restricted Stock Units, Performance Shares or Deferred Stock Units, is forfeited to or
repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or SARs the forfeited or repurchased Shares) which were subject thereto will become
available for future grant or sale under the Plan (unless the Plan has terminated). With respect
to SARs, only Shares actually issued pursuant to an SAR will cease to be available under the Plan;
all remaining Shares under SARs will remain available for future grant or sale under the Plan
(unless the Plan has terminated). Shares that have actually been issued under the Plan under any
Award will not be returned to the Plan and will not become available for future distribution under
the Plan; provided, however, that if Shares issued pursuant to awards of Restricted Stock,
Restricted Stock Units, Performance Shares or Deferred Stock Units are repurchased by the Company
or are forfeited to the Company due to their failure to vest, such Shares will become available for
future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the
minimum statutory withholding obligations related to an Award will become available for future
grant or sale under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided
in Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock
Options shall equal the aggregate Share number stated in Section 3(a), plus, to the extent
allowable under
Section 422 of the Code and the regulations thereunder, any Shares that become available for
issuance under the Plan under this Section 3(b).

 

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(c) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.

4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

(ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or
more “outside directors” within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine the number of Shares or equivalent units to be covered by each Award
granted hereunder;

(iv) to approve forms of Award Agreement for use under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the grant
date, the exercise price, the time or times when Awards may be exercised or earned (which may be
based on performance criteria), any vesting acceleration or waiver of forfeiture or repurchase
restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto,
based in each case on such factors as the Administrator will determine;

 

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(vi) to institute an Exchange Program;

(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws or qualifying for preferred tax treatment under applicable foreign tax laws;

(ix) to modify or amend each Award (subject to Section 20(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Awards longer than
is otherwise provided for in the Plan (subject to compliance with Code Section 409A);

(x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed
in Section 16;

(xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award; and

(xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.

5. Eligibility. Awards may be granted to Service Providers; provided, however that
Incentive Stock Options may be granted only to Employees.

6. Stock Options.

(a) Limitations. The Administrator will have complete discretion to determine the
number of Shares that will be subject to an Option granted to any Service Provider. Each Option
will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated
as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
will be determined as of the time the Option with respect to such Shares is granted.

 

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(b) Term of Option. The term of each Option will be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an
Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock
Option will be five (5) years from the date of grant or such shorter term as may be provided in the
Award Agreement.

(c) Option Exercise Price and Consideration.

(i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, subject to the following:

(1) In the case of an Incentive Stock Option

a) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.

b) granted to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

c) Notwithstanding the foregoing, Incentive Stock Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant pursuant to a transaction described in, and in a manner consistent with,
Section 424(a) of the Code.

(2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

(iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) other
Shares, provided Shares acquired directly or indirectly from the Company, (A) have been owned by
the Participant and not subject to substantial risk of forfeiture for more than six months on the
date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option will be exercised; (4) consideration received
by the Company under a broker-assisted or other cashless exercise program; (5) such other
consideration and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws; or (6) any combination of the foregoing methods of payment.

 

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(d) Exercise of Option.

(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such
form as the Administrator specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Optioned Stock, notwithstanding the exercise
of the Option. The Company will issue or cause to be issued (and which issuance may be in
electronic form) such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the Shares are issued,
except as provided in Section 15 of the Plan.

Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.

(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s death or Disability, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for three (3) months
following the Participant’s termination. Unless otherwise provided by the Administrator, if on the
date of termination the Participant is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option will revert to the Plan. If after termination the
Participant does not exercise his or her Option within the time specified by the Administrator, the
Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the
time specified herein, the Option will terminate, and the Shares covered by such Option will
revert to the Plan.

 

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(iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has
been designated prior to Participant’s death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the
Administrator, if at the time of death Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If
the Option is not so exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.

7. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.

(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.

(c) Transferability. Except as provided in this Section 7, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

(d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. The
Administrator may set restrictions based upon the achievement of Company-wide, departmental,
business unit, or individual goals (including, but not limited to, continued employment or service)
or any other basis determined by the Administrator in its discretion.

(e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.

 

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(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

(g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares unless the Administrator provides otherwise. If any
such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

(h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

8. Restricted Stock Units.

(a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, it shall advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

(b) Vesting Criteria and Other Terms. The Administrator shall set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, departmental, business unit, or
individual goals (including, but not limited to, continued employment or service), or any other
basis determined by the Administrator in its discretion.

(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant shall be entitled to receive a payout as specified in the Restricted Stock Unit Award
Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units,
the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be
met to receive a payout.

(d) Form and Timing of Payment. Payment of earned Restricted Stock Units shall be
made as soon as practicable after the date(s) set forth in the Restricted Stock Unit Award
Agreement. The Administrator may only settle earned Restricted Stock Units in Shares.

(e) Cancellation. On the date set forth in the Restricted Stock Unit Award Agreement,
all unearned Restricted Stock Units shall be forfeited to the Company.

 

-12-

 

9. Stock Appreciation Rights.

(a) Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be
granted to Service Providers at any time and from time to time as will be determined by the
Administrator, in its sole discretion.

(b) Number of Shares. The Administrator will have complete discretion to determine
the number of SARs granted to any Service Provider.

(c) Exercise Price and Other Terms. The per share exercise price for the Shares to be
issued pursuant to exercise of an SAR shall be determined by the Administrator and shall be no less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant, except
that Stock Appreciation Rights may be granted with a per Share exercise price of less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a
transaction described in, and in a manner consistent with, Section 424(a) of the Code and the
regulations thereunder. Otherwise the Administrator, subject to the provisions of the Plan, shall
have complete discretion to determine the terms and conditions of SARs granted under the Plan;
provided, however, that no SAR may have a term of more than ten (10) years from the date of grant.

(d) SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will
specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms
and conditions as the Administrator, in its sole discretion, will determine.

(e) Expiration of SARs. An SAR granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.
Notwithstanding the foregoing, the rules of Section 6(d) also will apply to SARs.

(f) Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

(ii) The number of Shares with respect to which the SAR is exercised.

The payment upon SAR exercise may only be in Shares of equivalent value (rounded down to the
nearest whole Share).

10. Performance Shares.

(a) Grant of Performance Shares. Subject to the terms and conditions of the Plan,
Performance Shares may be granted to Service Providers at any time as shall be determined by the
Administrator, in its sole discretion. The Administrator shall have complete discretion to
determine (i) the number of Shares subject to a Performance Share award granted to any Participant,
and (ii) the conditions that must be satisfied, which typically will be based principally or solely
on achievement of performance milestones but may include a service-based component, upon which is
conditioned the grant or vesting of Performance Shares. Performance Shares shall be granted in the
form of units to acquire Shares. Each such unit shall be the equivalent of one Share for purposes
of determining the number of Shares subject to an Award. Until the Shares are issued, no right to
vote or receive dividends or any other rights as a stockholder shall exist with respect to the
units to acquire Shares.

 

-13-

 

(b) Other Terms. The Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of Performance Shares granted under the
Plan. Performance Share grants shall be subject to the terms, conditions, and restrictions
determined by the Administrator at the time the stock is awarded, which may include such
performance-based milestones as are determined appropriate by the Administrator. The Administrator
may require the recipient to sign a Performance Shares Award Agreement as a condition of the award.
Any certificates representing the Shares of stock awarded shall bear such legends as shall be
determined by the Administrator.

(c) Performance Share Award Agreement. Each Performance Share grant shall be
evidenced by an Award Agreement that shall specify such other terms and conditions as the
Administrator, in its sole discretion, shall determine.

(d) Cancellation. On the date set forth in the Performance Share Award Agreement, all
unearned Performance Shares shall be forfeited to the Company.

11. Deferred Stock Units. Deferred Stock Units shall consist of a Restricted Stock,
Restricted Stock Unit or Performance Share Award that the Administrator, in its sole discretion
permits to be paid out in installments or on a deferred basis, in accordance with rules and
procedures established by the Administrator. Deferred Stock Units shall remain subject to the
claims of the Company’s general creditors until distributed to the Participant.

12. Formula Awards to Outside Directors.

(a) General. Outside Directors will be entitled to receive all types of Awards
(except Incentive Stock Options) under this Plan, including discretionary Awards not covered under
this Section 12. All grants of Awards to Outside Directors pursuant to this Section will be
automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance
with the following provisions:

(b) Type of Option. If Options are granted pursuant to this Section they will be
Nonstatutory Stock Options and, except as otherwise provided herein, will be subject to the other
terms and conditions of the Plan.

(c) No Discretion. No person will have any discretion to select which Outside
Directors will be granted Awards under this Section or to determine the number of Shares to be
covered by such Awards (except as provided in Sections 12(i) and 15).

(d) Initial Award. Each person who first becomes an Outside Director following the
Registration Date will be automatically granted an Option to purchase 50,000 Shares (the “Initial
Award”) on or about the date on which such person first becomes an Outside Director, whether
through election by the stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director, but who remains a
Director, will not receive an Initial Award.

 

-14-

 

(e) Annual Award. Each Outside Director who first becomes an Outside Director
following the Registration Date will be automatically granted an Option to purchase 15,000 Shares
(an “Annual Award”) on each date of the annual meeting of the stockholders of the Company beginning
in 2007, if as of such date, he or she will have served on the Board for at least the preceding six
(6) months. Each Outside Director who first became an Outside Director on or prior to
the Registration Date will be automatically granted an Annual Award on each date of the annual
meeting of the stockholders of the Company beginning in 2009, if as of such date, he or she will
have served on the Board for at least the preceding six (6) months.

(f) Committee Chair Award. On each date of the annual meeting of the stockholders of
the Company beginning in 2007, each Outside Director who is then serving as Chairman of a standing
committee of the Board (a “Committee Chair”) will automatically be granted an Option to purchase
10,000 Shares (a “Committee Chair Award”). An Outside Director shall be entitled to more than one
Option pursuant to this Section 12(f) to the extent that on the date of any applicable annual
meeting of the stockholders of the Company, he or she is the Committee Chair of more than one
standing committee of the Board. Each Option granted pursuant to this Section 12(f) shall be in
addition to any other Option(s) to which the Outside Director may be entitled under any other
subsection of Section 12.

(g) Committee Member Award. On each date of the annual meeting of the stockholders of
the Company beginning in 2007, each Outside Director who is then serving as a non-Chairman member
of a standing committee of the Board (a “Committee Member”) will automatically be granted an Option
to purchase 5,000 Shares (a “Committee Member Award”). An Outside Director shall be entitled to
more than one Option pursuant to this Section 12(g) to the extent that on the date of any
applicable annual meeting of the stockholders of the Company, he or she is a Committee Member of
more than one standing committee of the Board. Each Option granted pursuant to this Section 12(g)
shall be in addition to any other Option(s) to which the Outside Director may be entitled under any
other subsection of Section 12.

(h) Terms. The terms of each Award granted pursuant to this Section will be as
follows:

(i) The term of the Award will be seven (7) years.

(ii) The exercise price for Shares subject to Awards will be 100% of the Fair Market Value on
the grant date.

(iii) Subject to Section 15, each Award granted pursuant to this Section 12 will vest and
become exercisable as to 1/48th of the shares subject to the Award on each monthly
anniversary of the Award grant date (or on the last day of the month, if there is no corresponding
date), provided that the Participant continues to serve as a Director through each such date.

(i) Amendment. The Administrator in its discretion may change the number of Shares
subject to the Initial Awards, Annual Awards, Committee Chair Awards and Committee Member Awards.

13. Leaves of Absence/Transfers Between Locations. Unless the Administrator provides
otherwise or except as otherwise required by Applicable Laws, vesting of Awards granted hereunder
shall cease commencing on the first day of any unpaid leave of absence and shall only recommence
upon return to active service. A Service Provider will not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers between locations of the Company
or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no
such leave may exceed three (3) months (the “Maximum Leave Period”), unless
reemployment upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed,
then three (3) months following the day after the end of the Maximum Leave Period any Incentive
Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will
be treated for tax purposes as a Nonstatutory Stock Option.

 

-15-

 

14. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.

15. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

(a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
shall adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award, and the numerical Share limits in
Section 3 of the Plan and the number of Shares issuable pursuant to Options to be granted under
Section 12 of the Plan.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.

(c) Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines, including, without limitation,
that each Award be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. The Administrator shall not be
required to treat all Awards similarly in the transaction.

In the event that the successor corporation does not assume or substitute for the Award, the
Participant will fully vest in and have the right to exercise all of his or her outstanding Options
and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be
vested or exercisable, all restrictions on Restricted Stock, Restricted Stock Units, Performance
Shares and Deferred Stock Units will lapse, and, with respect to Awards with performance-based
vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred
percent (100%) on-target levels and all other terms and conditions met. In addition, if an Option
or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control, the
Administrator will notify the Participant in writing or electronically that the Option or Stock
Appreciation Right will be exercisable for a period of time determined by the Administrator in
its sole discretion, and the Option or Stock Appreciation Right will terminate upon the
expiration of such period.

 

-16-

 

For the purposes of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each Share subject to
the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Share or Deferred Stock Unit, for each Share subject to such Award, to be solely common
stock of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.

Notwithstanding anything in this Section 15(c) to the contrary, an Award that vests is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect the successor
corporation’s post-Change in Control corporate structure will not be deemed to invalidate an
otherwise valid Award assumption.

(d) Outside Director Awards. With respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following such assumption or substitution
the Participant’s status as a Director or a director of the successor corporation, as applicable,
is terminated other than upon a voluntary resignation by the Participant (unless such resignation
is at the request of the acquirer), then the Participant will fully vest in and have the right to
exercise Options and/or Stock Appreciation Rights as to all of the Optioned Stock, including Shares
as to which such Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock and Restricted Stock Units will lapse, and, with respect to Performance Shares,
all performance goals or other vesting criteria will be deemed achieved at one hundred percent
(100%) on-target levels and all other terms and conditions met.

16. Tax Withholding.

(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld, or (d) a combination of the foregoing. The Fair Market Value of the
Shares to be withheld or delivered will be determined as of the date that the taxes are required to
be withheld.

 

-17-

 

17. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

18. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

19. Term of Plan. Subject to Section 23 of the Plan, the Plan will become effective
upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless
terminated earlier under Section 20 of the Plan.

20. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

(b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.

21. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.

(b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

 

-18-

 

22. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

23. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

 

-19-Filed by Bowne Pure Compliance

Exhibit
10.2

ARUBA NETWORKS, INC.

2007 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Company’s 2007 Equity Incentive Plan (the “Plan”).

	 	 	 
	Name (the “Participant”):

	 	Name

You have been granted [SHARES_GRANTED] Restricted Stock Units. Each such Restricted
Stock Unit represents the right to receive one Share. No Shares will be issued with respect to the
Restricted Stock Units until the vesting conditions described below are satisfied. Additional
terms of this grant are as follows:

	 	 	 
	Date of Grant:

	 	Grant Effective Date
	 
	 	 
	Grant Number:

	 	Grant ID
	 
	 	 
	Vesting Schedule:

	 	[INSERT VESTING SCHEDULE.]

	 	 	 
	*	 	Important additional information on vesting and forfeiture of the Restricted Stock Units covered
by this grant is contained in the attached Restricted Stock Unit Agreement; please be sure to read
the entire agreement.

The Restricted Stock Units evidenced by this Notice of Grant is part of and subject in all
respects to the terms and conditions of the Plan (a copy of which has been made available to you by
the Company) and the attached Restricted Stock Unit Agreement (together with this Notice of Grant,
the “Agreement”).

By your signature to this Agreement, you represent and warrant that you are familiar with, and
agree to be bound by, the terms and provisions of the Plan and this Agreement. You further
represent and warrant that you have reviewed this Agreement and the Plan in their entirety, have
had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully
understand all provisions of the Plan and this Agreement.

You also agree (1) to accept as binding, conclusive and final all decisions or interpretations
of the Administrator upon any questions arising under the Plan or this Agreement and (2) to notify
the Company upon any change in the residence address indicated below (and any subsequent change).

Finally, if you have not previously done so with respect to a prior equity grant, you
represent that you have reviewed the Stock Trading Plan for Mandatory Sale of Shares to Cover Tax
Withholding Obligations (Exhibit B to this Agreement), which you must sign (in writing or
electronically) and return to the Company.

You acknowledge and agree that by submitting your acceptance on the E*TRADE online grant
acceptance page, it will act as your electronic signature to this Agreement and will result in a
contract between you and the Company with respect to this Award of Restricted Stock Units. You
may, if you prefer, sign and return to the Company a paper copy of this Agreement.

	 	 	 	 	 	 	 
	Participant:

	 	 	 	Aruba Networks, Inc.	 	 
	 

Name and Address

	 	 	 	 

	 	 

 

 

 

 EXHIBIT A

ARUBA NETWORKS, INC.

2007 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

1. Grant. The Company hereby grants to the Participant an award of Restricted Stock
Units (“RSUs”), as set forth in the Notice of Grant of Restricted Stock Units attached to (and part
of) this Restricted Stock Unit Agreement (together, the “Agreement” or the “Restricted Stock Unit
Agreement”) and subject to the terms and conditions in this Agreement and the Company’s 2007 Equity
Incentive Plan (the “Plan”). Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Unit Agreement.

2. Company’s Obligation. Each RSU represents the right to receive a Share on the
vesting date (or at such later time as indicated in this Agreement). Unless and until the RSUs
vest, the Participant will have no right to receive Shares under such RSUs. Prior to actual
distribution of Shares pursuant to any vested RSUs, such RSUs will represent an unsecured
obligation of the Company, payable (if at all) only from the general assets of the Company. When
the RSUs are paid out to the Participant, they will be paid out in whole Shares only and the
purchase price will be deemed paid by the Participant for each RSU through the past services
rendered by the Participant, and will be subject to the appropriate tax reporting and, if
applicable, appropriate tax withholding.

3. Vesting Schedule. Subject to paragraphs 4 and 5(b) and 5(c) and the terms of the
Plan, the RSUs awarded by this Agreement will vest in the Participant according to the vesting
schedule specified in the Notice of Grant, subject to Participant remaining a Service Provider
through each applicable vesting date.

4. Forfeiture upon Termination as Service Provider. Notwithstanding any contrary
provision of this Agreement or the Notice of Grant, if the Participant terminates service as a
Service Provider for any or no reason prior to vesting, the unvested RSUs awarded by this Agreement
will be forfeited at the time of such termination at no cost to the Company.

5. Payment after Vesting.

(a) Subject to paragraph 9, any RSUs that vest will be paid to the Participant (or in the
event of the Participant’s death, to his or her properly designated beneficiary or estate) in whole
Shares. Subject to the provisions of paragraphs 5(b) and 5(c), such vested RSUs shall be paid in
whole Shares as soon as practicable after vesting, but in each such case within the period ending
no later than the later of (i) the end of the calendar year that includes the vesting date or (ii)
the date that is the fifteenth (15th) day of the third (3rd) month following
the vesting date. In no event will the Participant be permitted, directly or indirectly, to
specify the taxable year of payment of any RSUs payable under this Agreement.

 

 

 

(b) Acceleration.

(i) Discretionary Acceleration. If the Administrator, in its discretion, accelerates
the vesting of the balance, or some lesser portion of the balance, of the unvested
RSUs, such RSUs will be considered as having vested as of the date specified by the
Administrator. Subject to the provisions of paragraph 4 , this paragraph 5 and paragraph 9, the
payment of such accelerated portion of the RSUs shall be made as soon as practicable after the new
vesting date, but, except as provided in this Agreement, in no event later than the later of (i)
the end of the calendar year that includes the vesting date or (ii) the date that is the fifteenth
(15th) day of the third (3rd) month following the applicable vesting date;
provided, however, if the Award is “deferred compensation” within the meaning of Section 409A, the
payment of such accelerated portion of the RSUs nevertheless shall be made at the same time or
times as if such RSUs had vested in accordance with the vesting schedule set forth in paragraph 3,
including any necessary application of the six-month delay provided for in paragraph 5(c) (whether
or not the Participant remains employed by the Company or a Parent or Subsidiary of the Company as
of such date(s)), unless an earlier payment date, in the judgment of the Administrator, would not
cause the Participant to incur an additional tax under Section 409A, in which case, payment of such
accelerated RSUs shall be made no later than the fifteenth (15th) day of the third
(3rd) month (and in all cases within ninety (90) days) following the earliest
permissible payment date that would not cause the Participant to incur an additional tax under
Section 409A (subject to paragraph 5(c) with respect to specified employees). Notwithstanding the
foregoing, any delay in payment pursuant to this paragraph 5(b)(i) will cease upon the
Participant’s death and such payment will be made as soon as practicable after the date of the
Participant’s death (and in all cases within ninety (90) days of such death).

(ii) Change in Control. Notwithstanding anything in the Plan or this Agreement to the
contrary, if the vesting of all or a portion of the RSUs accelerates pursuant to any plan,
agreement, resolutions or arrangement that provides for acceleration in the event of a change in
control that is not a “change in control” within the meaning of Section 409A, then the payment of
such accelerated portion of the RSUs will be made in accordance with the timing of payment rules
that apply to discretionary accelerations under paragraph 5(b)(i) of this Agreement. If the
vesting of all or a portion of the RSUs accelerates in the event of a Change in Control that is a
“change in control” within the meaning of Section 409A, then the payment of such accelerated RSUs
shall be paid no later than the date that is the fifteenth (15th) day of the third
(3rd) month (and in all cases within ninety (90) days) following the vesting date.

(c) Notwithstanding anything in the Plan or this Agreement to the contrary, if the vesting of
the balance, or some lesser portion of the balance, of the RSUs is accelerated in connection with
the Participant’s termination as a Service Provider, such accelerated RSUs will not be payable by
virtue of such acceleration until and unless the Participant has a “separation from service” within
the meaning of Section 409A. Further, and notwithstanding anything in the Plan or this Agreement
to the contrary, if any such accelerated RSUs would otherwise become payable upon a “separation
from service” within the meaning of Section 409A, and if (x) the Employee is a “specified employee”
within the meaning of Section 409A at the time of such “separation from service” (other than due to
the Employee’s death) and (y) the payment of such accelerated RSUs will result in the imposition of
additional tax under Section 409A if paid to Participant on or within the six (6) month period
following Participant’s “separation from service”, then, to the extent necessary to avoid the
imposition of such additional taxation, the payment of such accelerated RSUs otherwise payable to
Participant during such six (6) month period will accrue and will not be made until the date six
(6) months and one (1) day following
the date of Participant’s “separation from service”, unless the Participant dies following his
or her termination as a Service Provider, in which case, the RSUs will be paid in Shares as soon as
practicable following his or her death (and in all cases within ninety (90) days of Participant’s
death). It is the intent of this Agreement to comply with the requirements of Section 409A so that
none of the RSUs provided under this Agreement or Shares issuable thereunder will be subject to the
additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so
comply. Each payment and benefit payable under this Agreement is intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

-2-

 

6. Payments after Death. Any distribution or delivery to be made to the Participant
under this Agreement will, if the Participant is then deceased, be made to the administrator or
executor of the Participant’s estate. Any such administrator or executor must furnish the Company
with (a) written notice of his or her status as transferee and (b) evidence satisfactory to the
Company to establish the validity of the transfer and compliance with any laws or regulations
pertaining to said transfer.

7. Rights as Stockholder. Neither the Participant nor any person claiming under or
through the Participant will have any of the rights or privileges of a stockholder of the Company
in respect of any Shares deliverable hereunder unless and until certificates representing such
Shares (which may be in book entry form) will have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to the Participant or Participant’s
broker.

8. No Effect on Employment or Service. The Participant’s employment or service with
the Company and its Parent or Subsidiaries is on an at-will basis only. Accordingly, nothing in
this Agreement or the Plan shall confer upon the Participant any right to continue to be employed
by or in service with the Company or any Parent or Subsidiary or shall interfere with or restrict
in any way the rights of the Company or the employing Parent or Subsidiary, which are hereby
expressly reserved, to terminate or change the terms of the employment or service of the
Participant at any time for any reason whatsoever, with or without good cause or notice.

9. Tax Withholding. Until and unless the Administrator determines otherwise, on the
date or dates on which tax withholding obligations arise with respect to the RSUs (or as soon as
administratively practicable thereafter), a number of Shares sufficient to pay the minimum income,
employment and other applicable taxes required to be withheld with respect to the Shares (the
“Tax-Related Items”) will be sold pursuant to such procedures as the Administrator in its sole
discretion may specify from time to time; provided, however, that the Shares to be sold must have
vested pursuant to the terms of this Agreement and the Plan. The proceeds from such sale shall be
used to satisfy Participant’s tax withholding obligations (and any associated broker or other fees)
arising with respect to the RSUs. Only whole Shares will be sold to satisfy any tax withholding
obligations. The proceeds from the sale of Shares in excess of the tax withholding obligation (and
any associated broker or other fees) will be remitted to the Participant pursuant to such
procedures as the Administrator may specify from time to time. By accepting this Award,
Participant expressly consents to the sale of Shares to cover the tax withholding obligations (and
any associated broker or other fees) and agrees and acknowledges that Participant
may not satisfy such tax withholding obligations by any means other than such sale of Shares,
as set forth under this paragraph 9, unless required to do so by the Administrator or pursuant to
the Administrator’s express written consent.

 

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In addition, after consultation with the Company’s Compliance Officer (as defined in the
Company’s Insider Trading Policy), the Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may require the Participant to satisfy such tax
withholding obligations with respect to the Tax-Related Items, in whole or in part by one or more
of the following: (a) paying cash, (b) electing to have the Company withhold otherwise deliverable
Shares having a value equal to the minimum amount statutorily required to be withheld, (c)
delivering to the Company already vested and owned Shares having a value equal to the amount
required to be withheld, or (d) selling a sufficient number of such Shares otherwise deliverable to
the Participant through such means as the Administrator may determine in its sole discretion
(whether through a broker or otherwise) equal to the amount required to be withheld.
Notwithstanding any contrary provision of this Agreement, no Shares shall be distributed to the
Participant unless and until all Tax-Related Items have been withheld or otherwise satisfied with
respect to such Shares. If the Participant fails to make satisfactory arrangements for the payment
of any Tax-Related Items at the time any applicable Shares otherwise are scheduled to vest or tax
withholdings are otherwise due with respect to the RSUs, the Participant will permanently forfeit
such Shares and the Shares will be returned to the Plan at no cost. All income, employment and
other taxes related to the RSUs and any Shares delivered in payment thereof are the sole
responsibility of Participant.

10. Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:

(a) [INSERT APPLICABLE DEFINITIONS]

(b) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as
amended, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder, as each may be amended from time to time.

11. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company at 1344 Crossman Ave., Sunnyvale, CA 94089-1113,
Attn: Stock Administration, or at such other address as the Company may hereafter designate
in writing or electronically.

12. Grant is Not Transferable. This award of RSUs may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may be exercised during
the lifetime of Participant only by the Participant. The terms of the Plan and this Agreement
shall be binding upon the executors, administrators, heirs, successors and assigns of the
Participant. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of
this award of Restricted Sock Units, or any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process, this grant and the rights and
privileges conferred hereby immediately will become null and void.

13. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

 

-4-

 

14. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification of the Shares upon
any securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to the issuance of
Shares to the Participant (or his or her estate), such issuance will not occur unless and until
such listing, registration, qualification, consent or approval will have been effected or obtained
free of any conditions not acceptable to the Company. The Company will make all reasonable efforts
to meet the requirements of any such state or federal law or securities exchange and to obtain any
such consent or approval of any such governmental authority.

15. Plan Governs. This Agreement (including the Notice of Grant) is subject to all
terms and provisions of the Plan. Subject to Section 20(c) of the Plan, in the event of a conflict
between one or more provisions of this Agreement or the Notice of Grant and one or more provisions
of the Plan, the provisions of the Plan will govern.

16. Headings. Headings provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

17. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any RSUs have vested). All
actions taken and all interpretations and determinations made by the Administrator in good faith
will be final and binding upon Participant, the Company and all other interested persons. Neither
the Administrator nor any person acting on behalf of the Administrator will be personally liable
for any action, determination or interpretation made in good faith with respect to the Plan or this
Agreement.

18. Agreement Severable. In the event that any provision in this Agreement shall be
held invalid or unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining provisions of this
Agreement.

 

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19. Entire Agreement; Governing Law; Modifications. The Plan is incorporated herein
by reference. The Plan and this Agreement (including the Notice of Grant) constitute the entire
Agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof, and may not be modified adversely to the Participant’s interest except by means of a
writing signed by the Company and Participant. [IF APPLICABLE, ADD: For the avoidance of doubt,
this Agreement supersedes and replaces in its entirety any acceleration of vesting provisions
included in Participant’s offer letter from the Company and any other agreement between the Company
and Participant.] OR [Notwithstanding the foregoing, the acceleration of vesting provisions
included in [NAME OF AGREEMENT] shall apply to this Award of Restricted Stock Units; provided,
however, that for all purposes of such provisions, any definition of “change in control” or “change
of control” shall be deemed to mean a “Change in Control as defined in the Plan.] Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of the Participant, to comply with Section 409A or to otherwise avoid imposition of any additional
tax or income recognition under Section 409A prior to the actual payment of Shares pursuant to this
award of Restricted Stock Units. However, the Company makes no representation that this Award of
Restricted Stock Units is not subject to Section 409A nor makes any undertaking to preclude Section
409A from applying to this Award of Restricted Stock Units. This Agreement is governed by
California law except for that body of law pertaining to conflict of laws.

 

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EXHIBIT B

Stock Trading Plan

for Mandatory Sale of Shares to Cover Tax Withholding Obligations

I am adopting and entering into this stock trading plan (the “Sales Plan”) so that I may
receive the necessary proceeds to satisfy any requirements to pay the minimum income, employment
and other applicable taxes (collectively, “Taxes”) required to be withheld by the Company (or the
employing Parent or Subsidiary) on my behalf if and when such tax withholding obligations arise as
a result of the grant by the Company to me of any RSUs, shares of restricted stock or performance
shares. I dispel any inference that I am selling Shares on the basis of or while aware of material
nonpublic information or that such sales evidence my awareness of material nonpublic information or
information at variance with the Company’s statements to investors.

1. Recitals.

a. I intend for this Sales Plan to comply with the requirements of Rule 10b5-1(c)(1) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

b. I am establishing this Sales Plan in order to permit the orderly disposition of a portion
of the Shares that I acquired (or will acquire) pursuant to an award of RSUs, restricted stock or
performance shares (each, an “Equity Award”). The Shares are being sold pursuant to a mandatory
sale provision in the Agreement to provide the necessary proceeds to satisfy any Taxes if and when
any tax withholding obligations arise, as well any broker or other fees associated with such sales.
By adopting and entering into this Sales Plan, I agree and acknowledge that I may not satisfy such
Taxes and associated broker and other fees by any means other than the sale of Shares pursuant to
the terms and conditions of this Sales Plan. This Sales Plan will apply to the mandatory sale of
Shares under all future Equity Awards received by me from the Company.

2. Representations, Warranties and Covenants.

I hereby represent, warrant and covenant that:

a. I am not aware of any material nonpublic information concerning the Company or its
securities. I am entering into this Sales Plan in good faith and not as part of a plan or scheme
to evade compliance with the federal securities laws.

b. Once vested, the Shares to be sold under this Sales Plan shall be owned free and clear by
me and are not subject to any liens, security interests or other encumbrances or limitations on
disposition other than those imposed by Rule 144 under the Securities Act of 1933, as amended.

c. If I am an executive officer or director of the Company, I acknowledge that any filings
required under Section 16 of the Exchange Act are my sole responsibility.

d. I am aware that in order for this Sales Plan to constitute a plan pursuant to Rule
10b5-1(c) of the Exchange Act, I must not enter into or alter a corresponding or hedging
transaction with respect to the Shares.

 

 

 

3. Implementation of the Plan.

a. The Company has appointed or shall appoint a broker (the “Broker”) (or the Company may, in
its discretion, permit me to appoint a Broker) to sell Shares pursuant to the terms and conditions
set forth below.

b. The Broker is authorized to begin selling Shares pursuant to this Sales Plan commencing on
the date that the first Shares under the Equity Award vest. The Broker shall sell such number of
Shares as shall be required to satisfy (i) the applicable Taxes in accordance with my then current
applicable withholding rate and (ii) any associated broker or other fees.

c. I understand that the Broker may not be able to effect a sale due to a market disruption or
a legal, regulatory or contractual restriction applicable to the Broker or any other event or
circumstance (a “Blackout”). I also understand that even in the absence of a Blackout, the Broker
may be unable to effect sales consistent with ordinary principles of best execution, due to
insufficient volume of trading, or other market factors in effect on the date of a sale.

4. Termination. This Sales Plan shall terminate upon the last day of my service with the Company.
This Sales Plan may not be terminated, modified or amended at any time without the prior approval
of the Administrator or the Company’s Compliance Officer.

I acknowledge and agree that by submitting my acceptance on the E*TRADE online grant
acceptance page, it will act as my electronic signature to this Sales Plan and will result in a
contract between me and the Company with respect to this Sales Plan. I understand that I may, if I
prefer, sign and return to the Company a paper copy of this Sales Plan.

	 	 	 
	PARTICIPANT:
	 	 
	 
	 	 
	 

Signature

	 	 
	 
	 	 
	 

Print Name

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