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                                                                    EXHIBIT 10.1

                             SOMANETICS CORPORATION
                            2005 STOCK INCENTIVE PLAN

1.    INTRODUCTION

      1.1   Purposes.

      The purposes of the Somanetics Corporation 2005 Stock Incentive Plan (this
"Plan") are (1) to align the interests of the Company's shareholders and the
recipients of awards under this Plan by increasing the proprietary interest of
such recipients in the Company's growth and success, (2) to advance the
interests of the Company by attracting and retaining officers, other employees,
non-employee directors, consultants, advisors, independent contractors and
agents and (3) to motivate such persons to act in the long-term best interests
of the Company and its shareholders.

      1.2   Definitions.

      "Agreement" shall mean the written agreement evidencing an award under
this Plan between the Company and the recipient of such award.

      "Board" shall mean the Board of Directors of the Company.

      "Change in Control" shall have the meaning set forth in Section 4.8(b).

      "Code" shall mean the Internal Revenue Code of 1986, as amended.

      "Committee" shall mean the Board or the committee designated by the Board
to perform any of the functions and duties of the Committee under the Plan.

      "Common Shares" shall mean the common shares, par value $.01 per share, of
the Company.

      "Company" shall mean Somanetics Corporation, a Michigan corporation, or
any successor to Somanetics Corporation.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Fair Market Value" shall mean the average of the high and low transaction
prices of a Common Share on The Nasdaq SmallCap Market on the date as of which
such value is being determined or, if the Common Shares are not listed on The
Nasdaq SmallCap, the average of the high and low transaction prices of a Common
Share on the principal market on which the Common Shares are traded on the date
as of which such value is being determined, or if there shall be no reported
transaction for such date, on the next preceding date for which a transaction
was reported; provided, however, that if Fair Market Value for any date cannot
be so determined, Fair Market Value shall be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its
discretion, shall at such time deem appropriate.

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      "Incentive Stock Option" shall mean an option to purchase Common Shares
that meets the requirements of Section 422 of the Code, or any successor
provision, and that is intended by the Committee to constitute an Incentive
Stock Option.

      "Incumbent Board" shall have the meaning set forth in Section 4.8(b)(2).

      "Mature Shares" shall mean previously-acquired Common Shares for which the
holder has good title, free and clear of all liens and encumbrances, and which
such holder either (1) has held for at least six months or (2) has purchased on
the open market.

      "Non Qualified Stock Option" shall mean an option to purchase Common
Shares that is not an Incentive Stock Option.

      "Outstanding Common Shares" shall have the meaning set forth in Section
4.8(b)(1).

      "Outstanding Voting Securities" shall have the meaning set forth in
Section 4.8(b)(1).

      "Person" shall have the meaning set forth in Section 4.8(b)(1).

      "Restricted Stock" shall mean Common Shares that are subject to a
Restriction Period.

      "Restricted Stock Award" shall mean an award of Restricted Stock under
this Plan.

      "Restricted Stock Unit" shall mean a right that entitles the holder to
receive, upon vesting, one Common Share (which may be Restricted Stock) or cash
in an amount equal to the Fair Market Value of one Common Share on the date of
vesting.

      "Restricted Stock Unit Award" shall mean an award of Restricted Stock
Units under this Plan.

      "Restriction Period" shall mean any period designated by the Committee
during which (1) the Common Shares subject to a Restricted Stock Award may not
be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award, or (2) the restrictions applicable to a Restricted Stock Unit Award shall
remain in effect.

      "Stock Award" shall mean a Restricted Stock Award or a Restricted Stock
Unit Award.

      "Subsidiary" shall mean any corporation, limited liability company,
partnership, joint venture or similar entity in which the Company owns, directly
or indirectly, an equity interest possessing more than 25% of the combined
voting power of the total outstanding equity interests of such entity.

      "Tax Date" shall have the meaning set forth in Section 4.5.

      "Ten Percent Holder" shall have the meaning set forth in Section 2.1(a).

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      1.3   Administration.

      This Plan shall be administered by the Committee. Any one or a combination
of the following awards may be made under this Plan to eligible persons: (1)
options to purchase Common Shares in the form of Incentive Stock Options or Non
Qualified Stock Options, and (2) Stock Awards in the form of Restricted Stock or
Restricted Stock Units. The Committee shall, subject to the terms of this Plan,
select eligible persons for participation in this Plan and determine the form,
amount and timing of each award to such persons and, if applicable, the number
of Common Shares and the number of Restricted Stock Units subject to such an
award, the exercise price associated with the award, the time and conditions of
exercise or settlement of the award and all other terms and conditions of the
award, including, without limitation, the form of the Agreement evidencing the
award. The Committee may, in its sole discretion and for any reason at any time,
subject to the requirements of Section 162(m) of the Code and the regulations
thereunder in the case of an award intended to be qualified performance-based
compensation, take action such that (1) all or any outstanding options shall
become exercisable in part or in full, or (2) all or a portion of the
Restriction Period applicable to any outstanding Restricted Stock Award or
Restricted Stock Unit Award shall lapse. The Committee shall, subject to the
terms of this Plan, interpret this Plan and its application and establish rules
and regulations it deems necessary or desirable for the administration of this
Plan and may impose, incidental to the grant of an award, conditions with
respect to the award, such as limiting competitive employment or other
activities. All such interpretations, rules, regulations and conditions shall be
final, binding and conclusive.

      The Committee may, subject to the applicable law (including Section 162(m)
of the Code and the regulations thereunder in the case of an award intended to
be qualified performance-based compensation), delegate some or all of its power
and authority under this Plan to the Chief Executive Officer or other executive
officer of the Company as the Committee deems appropriate.

      No member of the Board or Committee, and neither the Chief Executive
Officer nor any other executive officer to whom the Committee delegates any of
its power and authority under this Plan, shall be liable for any act, omission,
interpretation, construction or determination made in connection with this Plan
in good faith, and the members of the Board and the Committee and the Chief
Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in the Company's
Articles of Incorporation and/or Bylaws, and under any directors' and officers'
liability insurance that may be in effect from time to time.

      A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (1) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (2) acts approved in
writing by all of the members of the Committee without a meeting.

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      1.4   Eligibility.

      Participants in this Plan shall consist of such officers, other employees,
non-employee directors, consultants, advisors, independent contractors and
agents, and persons expected to become officers, other employees, non-employee
directors, consultants, advisors, independent contractors and agents, of the
Company or a Subsidiary as the Committee in its sole discretion may select from
time to time. For purposes of this Plan, references to employment shall also
mean an agency or independent contractor relationship and references to
employment by the Company shall also mean employment by a Subsidiary. The
Committee's selection of a person to participate in this Plan at any time shall
not require the Committee to select such person to participate in this Plan at
any other time.

      1.5   Shares Available.

            (a) Subject to adjustment as provided in Section 4.7, the number of
      Common Shares that shall be available for awards under this Plan shall be
      600,000.

            (b) The Committee may adopt reasonable counting procedures to ensure
      appropriate counting, avoid double counting (as, for example, in the case
      of substitute awards) and make adjustments if the number of Common Shares
      actually delivered differs from the number of shares previously counted in
      connection with an award. To the extent that Common Shares subject to an
      outstanding award granted under this Plan are not issued or delivered to
      the holder of the award or are returned to the Company by the holder of
      the award by reason of (1) the expiration, termination, cancellation or
      forfeiture of such award, (2) the settlement of such award in cash, or (3)
      the delivery or withholding of Common Shares to pay all or a portion of
      the exercise price of an award, if any, or to satisfy all or a portion of
      the tax withholding obligations relating to an award, then such Common
      Shares shall again be available under this Plan. This Section 1.5(b) shall
      apply to Incentive Stock Options only to the extent consistent with
      application Internal Revenue Service regulations relating to Incentive
      Stock Options under the Code.

            (c) Common Shares shall be made available from authorized and
      unissued Common Shares, or authorized and issued Common Shares reacquired
      and held as treasury shares or otherwise or a combination thereof.

            (d) To the extent necessary for an award to be qualified performance
      based compensation under Section 162(m) of the Code and the regulations
      thereunder, the maximum number of Common Shares with respect to which
      options may be granted during any calendar year to any person shall be
      300,000, subject to adjustment as provided in Section 4.7. All shares with
      respect to which an award is granted under this Plan shall be counted for
      purposes of the per-person share limitation of this Section 1.5(d),
      regardless of whether the recipient of the award does not realize the
      benefit of the award as a result of forfeiture, cancellation, expiration,
      termination or other event. If a stock option is modified after grant to
      reduce its exercise price, the modified stock option shall be treated as a
      newly granted stock option for purposes of this per-person share
      limitation, with the shares covered by both the original and the modified

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      grant counting against the number of available shares under this
      per-person share limitation.

2.    STOCK OPTIONS

      2.1   Stock Options.

      The Committee may, in its discretion, grant options to purchase Common
Shares to such eligible persons as may be selected by the Committee. Each
option, or portion thereof, that is not an Incentive Stock Option shall be a
Non-Qualified Stock Option. An Incentive Stock Option may not be granted to any
person who is not an employee of the Company or any subsidiary (as defined in
Section 424 of the Code). Each Incentive Stock Option shall be granted within
ten years of the date this Plan is adopted by the Board. To the extent that the
aggregate Fair Market Value (determined as of the date of grant) of Common
Shares with respect to which options designated as, or intended to be, Incentive
Stock Options are exercisable for the first time by a participant during any
calendar year (under this Plan or any other plan of the Company, or any parent
or subsidiary as defined in Section 424 of the Code) exceeds the maximum amount
(currently $100,000) established by the Code, such options shall constitute
Non-Qualified Stock Options.

      Options shall be subject to the following terms and conditions and shall
be subject to such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:

            (a) Number of Shares and Purchase Price. The number of Common Shares
      subject to an option and the purchase price per Common Share purchasable
      upon exercise of the option shall be determined by the Committee;
      provided, however, that the purchase price per Common Share purchasable
      upon exercise of an option shall not be less than 100% of the Fair Market
      Value of a Common Share on the date of grant of such option; provided
      further, that if an Incentive Stock Option shall be granted to any person
      who, at the time such option is granted, owns capital stock possessing
      more than ten percent of the total combined voting power of all classes of
      capital stock of the Company (or of any parent or subsidiary as defined in
      Section 424 of the Code) (a "Ten Percent Holder"), the purchase price per
      Common Share shall not be less than the minimum price (currently 110% of
      Fair Market Value) required by the Code in order for the option to
      constitute an Incentive Stock Option.

            (b) Exercise Period and Exercisability. The period during which an
      option may be exercised shall be determined by the Committee; provided,
      however, that no option shall be exercised later than ten years after its
      date of grant; provided further, that if an Incentive Stock Option shall
      be granted to a Ten Percent Holder, such option shall not be exercised
      later than five years after its date of grant. The Committee may, in its
      discretion, establish Performance Measures which shall be satisfied or met
      as a condition to the grant of an option or to the exercisability of all
      or a portion of an option. The Committee shall determine whether an option
      shall become exercisable in cumulative or non-cumulative installments and
      in part or in full at any time. An exercisable option, or portion thereof,
      may be exercised only with respect to whole Common Shares.

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            (c) Method of Exercise. An option may be exercised (1) by giving
      written notice to the Company specifying the number of whole Common Shares
      to be purchased and by accompanying such notice with payment therefor in
      full (or by arranging for such payment to the Company's satisfaction)
      either (A) in cash, (B) by delivery (either actual delivery or by
      attestation procedures established by the Company) of Mature Shares having
      an aggregate Fair Market Value, determined as of the date of exercise,
      equal to the aggregate purchase price payable by reason of such exercise,
      (C) except as may be prohibited by applicable law, in cash by a
      broker-dealer acceptable to the Company to whom the optionee has submitted
      irrevocable instructions to promptly deliver to the Company full payment
      for the Common Shares with respect to which the option is exercised from
      the proceeds of the stockbroker's sale of or loan against some or all of
      the Common Shares, or (D) any combination of the foregoing, in each case
      to the extent set forth in the Agreement relating to the option, and (2)
      by executing such documents as the Company may reasonably request. Any
      fraction of a Common Share which would be required to pay such purchase
      price shall be disregarded and the remaining amount due shall be paid in
      cash by the optionee. No certificate representing Common Shares shall be
      delivered until the full purchase price therefor and any withholding taxes
      thereon, as described in Section 4.5, have been paid (or arrangement made
      for such payment to the Company's satisfaction).

      2.2   Termination of Employment or Service.

      Subject to the requirements of the Code, all of the terms relating to the
exercise, cancellation, disposition or other treatment of an option upon a
termination of employment or service with the Company of the holder of such
option, whether by reason of disability, retirement, death or any other reason,
shall be determined by the Committee.

      2.3   No Repricing of Awards.

      Notwithstanding anything in this Plan to the contrary and subject to
Section 4.7, without the approval of shareholders, the Committee will not amend
or replace previously granted options in a transaction that constitutes a
"repricing," as such term is used in the Nasdaq Stock Market Marketplace Rules
and related interpretations or, if the Common Shares are not listed on The
Nasdaq Stock Market, in the rules of the principal market on which the Common
Shares are traded.

3.    STOCK AWARDS

      3.1   Stock Awards.

      The Committee may, in its discretion, grant Stock Awards to such eligible
persons as may be selected by the Committee. The Committee may grant Stock
Awards under this Plan independently, in lieu of, or in conjunction with, any
cash bonus award otherwise payable to an employee pursuant to any bonus or
incentive plan maintained by the Company from time to time.

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      3.2   Terms of Stock Awards.

      Stock Awards shall be subject to the following terms and conditions and
shall be subject to such additional terms and conditions, not inconsistent with
the terms of this Plan, as the Committee shall deem advisable.

            (a) Number of Shares and Other Terms. The number of Common Shares
      subject to a Restricted Stock Award or a Restricted Stock Unit Award, and
      the Restriction Period applicable to a Restricted Stock Award or a
      Restricted Stock Unit Award, shall be determined by the Committee.

            (b) Vesting and Forfeiture. The Agreement relating to a Restricted
      Stock Award or a Restricted Stock Unit Award shall provide, in the manner
      determined by the Committee, in its discretion, and subject to the
      provisions of this Plan, for the vesting of the Common Shares subject to
      such Restricted Stock Award or the vesting of such Restricted Stock Unit
      Award if the holder of such award remains continuously in the employment
      or service of the Company during the specified Restriction Period and for
      the forfeiture of all or a portion of the Common Shares subject to such
      Restricted Stock Award or the forfeiture of such Restricted Stock Unit
      Award if the holder of such award does not remain continuously in the
      employment or service of the Company during the specified Restriction
      Period.

            (c) Share Certificates. During the Restriction Period, a certificate
      or certificates representing a Restricted Stock Award may be registered in
      the holder's name or a nominee name at the discretion of the Company and
      may bear a legend, in addition to any legend which may be required
      pursuant to Section 4.6, indicating that the ownership of the Common
      Shares represented by such certificate is subject to the restrictions,
      terms and conditions of this Plan and the Agreement relating to the
      Restricted Stock Award. All certificates registered in the holder's name
      shall be deposited with the Company, together with stock powers or other
      instruments of assignment (including a power of attorney), each endorsed
      in blank with a guarantee of signature if deemed necessary or appropriate
      by the Company, which would permit transfer to the Company of all or a
      portion of the Common Shares subject to the Restricted Stock Award in the
      event such award is forfeited in whole or in part. Upon termination of any
      Restriction Period (and the satisfaction of any continuation of employment
      or service requirements) applicable to a Restricted Stock Award or to a
      Restricted Stock Unit Award payable in whole or in part in Common Shares,
      in each case subject to the Company's right to require payment of any
      taxes in accordance with Section 4.5, a certificate or certificates
      evidencing ownership of the requisite number of Common Shares shall be
      delivered to the holder of such award.

            (d) Rights with Respect to Restricted Stock Awards. Unless otherwise
      set forth in the Agreement relating to a Restricted Stock Award, and
      subject to the terms and conditions of a Restricted Stock Award, the
      holder of such award shall have all rights as a shareholder of the
      Company, including, but not limited to, voting rights, the right to
      receive dividends and the right to participate in any capital adjustment
      applicable to all holders of Common Shares; provided, however, that a
      distribution with respect to

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      Common Shares, other than a regular cash dividend, shall be deposited with
      the Company and shall be subject to the same restrictions as the Common
      Shares with respect to which such distribution was made.

            (e) Settlement of Vested Restricted Stock Unit Awards. The Agreement
      relating to a Restricted Stock Unit Award (1) shall specify whether such
      award may be settled in Common Shares (including Restricted Stock) or cash
      or a combination thereof and (2) may specify whether the holder thereof
      shall be entitled to receive, on a current or deferred basis, dividend
      equivalents, and, if determined by the Committee, interest on, or the
      deemed reinvestment of, any deferred dividend equivalents, with respect to
      the number of Common Shares subject to such award. Prior to the settlement
      of a Restricted Stock Unit Award in Common Shares, the holder of such
      award shall have no rights as a shareholder of the Company with respect to
      the Common Shares subject to such award.

      3.3   Termination of Employment or Service.

      All of the terms relating to the termination of the Restriction Period
relating to a Restricted Stock Award or a Restricted Stock Unit Award, or any
forfeiture and cancellation of such award upon a termination of employment or
service with the Company of the holder of such award, whether by reason of
disability, retirement, death or any other reason, shall be determined by the
Committee.

4.    GENERAL

      4.1   Effective Date and Term of Plan.

      This Plan shall be effective on the date the Board of Directors of the
Company adopts this Plan, provided that the shareholders of the Company approve
the Plan within 12 months after its adoption by the Board of Directors. This
Plan shall terminate ten years after its effective date, unless terminated
earlier by the Board. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination. If this Plan is not
approved by the shareholders of the Company, this Plan and any awards granted
under this Plan shall be null and void.

      4.2   Amendments.

      The Board may amend this Plan as it shall deem advisable, subject to any
requirement of shareholder approval required by applicable law, rule or
regulation, including Section 162(m) and Section 422 of the Code and the
regulations thereunder and any rule of The Nasdaq Stock Market or, if the Common
Shares are not listed on The Nasdaq Stock Market, any rule of the principal
market on which the Common Shares are then traded. No amendment may impair the
rights of a holder of an outstanding award without the consent of such holder.

      4.3   Agreement.

      Each award shall be evidenced by an Agreement executed by the Company and
the recipient of such award and, upon execution by each party and delivery of
the executed

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Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.

      4.4   Non-Transferability of Awards.

      Unless otherwise specified in the Agreement relating to an award, no award
shall be transferable other than by will, the laws of descent and distribution
or pursuant to beneficiary designation procedures approved by the Company.
Except to the extent permitted by the foregoing sentence or the Agreement
relating to an award, each award may be exercised or settled during the holder's
lifetime only by the holder or the holder's legal representative or similar
person. Except to the extent permitted by the second preceding sentence or the
Agreement relating to an award, no award may be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.
Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any such award, such award and all rights thereunder shall
immediately become null and void.

      4.5   Tax Withholding.

      The Company shall have the right to require, prior to the issuance or
delivery of any Common Shares or the payment of any cash pursuant to an award
made under this Plan, payment by the holder of such award of any Federal, state,
local or other taxes which may be required to be withheld or paid in connection
with such award. In the discretion of the Company (1) the Company may withhold
whole Common Shares which would otherwise be delivered to a holder, having an
aggregate Fair Market Value determined as of the date the obligation to withhold
or pay taxes arises in connection with an award (the "Tax Date"), or withhold an
amount of cash which would otherwise be payable to a holder, in the amount
necessary to satisfy any such obligation or (2) the holder may be permitted to
satisfy any such obligation by any of the following means: (A) a cash payment to
the Company, (B) delivery (either actual delivery or by attestation procedures
established by the Company) to the Company of Mature Shares having an aggregate
Fair Market Value, determined as of the Tax Date, equal to the amount necessary
to satisfy any such obligation, (C) in the case of the exercise of an option,
except as may be prohibited by applicable law, a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted irrevocable
instructions to promptly deliver to the Company an amount (in addition to the
option exercise price) equal to the withholding tax owing in respect of such
option exercised from the proceeds of the stockbroker's sale of or loan against
some or all of the Common Shares subject to the option, or (D) any combination
of the foregoing. Any fraction of a Common Share which would be required to
satisfy such an obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder.

      4.6   Restrictions on Shares.

      Each award made under this Plan shall be subject to the requirement that
if at any time the Company determines that the listing, registration or
qualification of the Common Shares subject to such award upon any securities
market or under any law, or the consent or approval of any governmental body, or
the taking of any other action is necessary or desirable as a condition of, or
in connection with, the exercise or settlement of such award or the delivery of
shares

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thereunder, such award shall not be exercised or settled and such shares shall
not be delivered unless such listing, registration, qualification, consent,
approval or other action shall have been effected or obtained, free of any
conditions not acceptable to the Company. The Company may require that
certificates evidencing Common Shares delivered pursuant to any award made under
this Plan bear a legend indicating that the sale, transfer or other disposition
thereof by the holder is prohibited except in compliance with the Securities Act
of 1933, as amended, and the rules and regulations thereunder.

      4.7   Adjustment.

      In the event of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Shares other than a regular cash dividend, the
number and class of securities available under this Plan, the number and class
of securities subject to each outstanding award, the purchase price per security
of each outstanding option, and the maximum number of securities with respect to
which awards may be granted in any calendar year to any person shall be
appropriately adjusted by the Committee, such adjustments to be made in the case
of outstanding options without an increase in the aggregate purchase price. The
decision of the Committee regarding any such adjustment shall be final, binding
and conclusive; provided, however, that no fractional shares shall be issued
pursuant to the Plan, no awards may be granted under the Plan with respect to
fractional shares, and any fractional shares resulting from such adjustments
shall be eliminated from any outstanding award.

      4.8   Change in Control.

            (a) Actions Upon A Change In Control. Notwithstanding any provision
      in this Plan, unless otherwise specified in the Agreement relating to an
      award, in the event of a Change in Control, in the Committee's discretion,
      either (1) (a) all outstanding options shall immediately become
      exercisable in full, (b) the Restriction Period applicable to any
      outstanding Restricted Stock Award or Restricted Stock Unit Award shall
      lapse, and (c) there shall be substituted for each Common Share available
      under this Plan, whether or not then subject to an outstanding award, the
      number and class of shares into which each outstanding Common Share shall
      be converted pursuant to such Change in Control, if any; provided that in
      the event of any such substitution, the purchase price per share in the
      case of an option shall be appropriately adjusted by the Committee (whose
      determination shall be final, binding and conclusive), such adjustments to
      be made in the case of outstanding options without an increase in the
      aggregate purchase price, or (2) each outstanding award shall be
      surrendered to the Company by the holder thereof, and each such award
      shall immediately be canceled by the Company, and the holder shall
      receive, within ten days of the occurrence of a Change in Control, a cash
      payment from the Company in an amount equal to (a) in the case of an
      option, the number of Common Shares then subject to such option,
      multiplied by the excess, if any, of the greater of (I) the highest per
      share price offered to shareholders of the Company in any transaction
      whereby the Change in Control takes place, or (II) the Fair Market Value
      of a Common Share on the date of occurrence of the Change in Control. over
      the purchase price per Common Share subject to the option, and (b) in the
      case of a Restricted Stock Award or

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      Restricted Stock Unit Award the number of Common Shares or the number of
      Restricted Stock Units, as the case may be, then subject to such award,
      multiplied by the greater of (A) the highest per share price offered to
      shareholders of the Company in any transaction whereby the Change in
      Control takes place or (B) the Fair Market Value of a Common Share on the
      date of occurrence of the Change in Control.

            (b)   "Change in Control" shall mean:

                  (1) the acquisition by any individual, entity or group (a
            "Person"), including any "person" within the meaning of Section
            13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
            within the meaning of Rule 13d-3 promulgated under the Exchange Act,
            of 40% or more of either (1) the then outstanding Common Shares of
            the Company (the "Outstanding Common Shares") or (2) the combined
            voting power of the then outstanding securities of the Company
            entitled to vote generally in the election of directors (the
            "Outstanding Voting Securities"); excluding, however, the following:
            (A) any acquisition directly from the Company (excluding any
            acquisition resulting from the exercise of an exercise, conversion
            or exchange privilege unless the security being so exercised,
            converted or exchanged was acquired directly from the Company), (B)
            any acquisition by the Company, (C) any acquisition by an employee
            benefit plan (or related trust) sponsored or maintained by the
            Company or any corporation controlled by the Company, or (D) any
            acquisition by any corporation pursuant to a transaction which
            complies with clauses (1), (2) and (3) of subsection (3) of this
            Section 4.8(b); provided further, that for purposes of clause (B),
            if any Person (other than the Company or any employee benefit plan
            (or related trust) sponsored or maintained by the Company or any
            corporation controlled by the Company) shall become the beneficial
            owner of 40% or more of the Outstanding Common Shares or 40% or more
            of the Outstanding Voting Securities by reason of an acquisition by
            the Company, and such Person shall, after such acquisition by the
            Company, become the beneficial owner of any additional Outstanding
            Common Shares or any additional Outstanding Voting Securities and
            such beneficial ownership is publicly announced, such additional
            beneficial ownership shall constitute a Change in Control;

                  (2) individuals who, as of the date hereof, constitute the
            Board (the "Incumbent Board") cease for any reason to constitute at
            least a majority of such Board; provided that any individual who
            becomes a director of the Company subsequent to the date hereof
            whose election, or nomination for election, by the Company's
            shareholders was approved by the vote of at least a majority of the
            directors then comprising the Incumbent Board shall be deemed a
            member of the Incumbent Board;

                  (3) the consummation of a reorganization, merger or
            consolidation, or sale or other disposition of all or substantially
            all of the assets, of the Company (a "Corporate Transaction");
            excluding, however, a Corporate Transaction pursuant to which (1)
            all or substantially all of the individuals or entities who are the
            beneficial owners, respectively, of the Outstanding Common Shares
            and the

                                       11

<PAGE>

            Outstanding Voting Securities immediately prior to such Corporate
            Transaction will beneficially own, directly or indirectly, more than
            60% of, respectively, the outstanding Common Shares, and the
            combined voting power of the outstanding securities entitled to vote
            generally in the election of directors, as the case may be, of the
            corporation resulting from such Corporate Transaction (including,
            without limitation, a corporation which as a result of such
            transaction owns the Company or all or substantially all of the
            Company's assets either directly or indirectly) in substantially the
            same proportions relative to each other as their ownership,
            immediately prior to such Corporate Transaction, of the Outstanding
            Common Shares and the Outstanding Voting Securities, as the case may
            be, (2) no Person (other than: the Company; any employee benefit
            plan (or related trust) sponsored or maintained by the Company or
            any corporation controlled by the Company; the corporation resulting
            from such Corporate Transaction; and any Person which beneficially
            owned, immediately prior to such Corporate Transaction, directly or
            indirectly, 40% or more of the Outstanding Common Shares or the
            Outstanding Voting Securities, as the case may be) will beneficially
            own, directly or indirectly, 40% or more of, respectively, the
            outstanding Common Shares of the corporation resulting from such
            Corporate Transaction or the combined voting power of the
            outstanding securities of such corporation entitled to vote
            generally in the election of directors and (3) individuals who were
            members of the Incumbent Board will constitute at least a majority
            of the members of the board of directors of the corporation
            resulting from such Corporate Transaction; or

                  (4) the consummation of a plan of complete liquidation or
            dissolution of the Company.

      4.9   Deferrals.

      The Committee may determine that the delivery of Common Shares or the
payment of cash, or a combination thereof, upon the exercise or settlement of
all or a portion of any award made under this Plan shall be deferred, or the
Committee may, in its sole discretion, approve deferral elections made by
holders of awards. Deferrals shall be for such periods and upon such terms as
the Committee may determine in its sole discretion.

      4.10  No Right of Participation, Employment or Service.

      No person shall have any right to participate in this Plan. Neither this
Plan nor any award made under this Plan shall confer upon any person any right
to continued employment by or service with the Company, any Subsidiary or any
affiliate of the Company or affect in any manner the right of the Company, any
Subsidiary or any affiliate of the Company to terminate the employment or
service of any person at any time without liability under this Plan.

      4.11  Rights as Shareholder.

      No person shall have any right as a shareholder of the Company with
respect to any Common Shares or other equity security of the Company which is
subject to an award under this

                                       12

<PAGE>

Plan unless and until such person becomes a shareholder of record with respect
to such Common Shares or equity security.

      4.12  Designation of Beneficiary.

      If permitted by the Company, a holder of an award may file with the
Committee a written designation of one or more persons as such holder's
beneficiary or beneficiaries (both primary and contingent) in the event of the
holder's death. To the extent an outstanding option granted under this Plan is
exercisable after the holder's death, such beneficiary or beneficiaries shall be
entitled to exercise such option pursuant to procedures prescribed by the
Committee.

      Each beneficiary designation shall become effective only when filed in
writing with the Committee during the holder's lifetime on a form prescribed by
the Committee. The spouse of a married holder domiciled in a community property
jurisdiction shall join in any designation of a beneficiary other than such
spouse. The filing with the Committee of a new beneficiary designation shall
cancel all previously filed beneficiary designations.

      If a holder fails to designate a beneficiary, or if all designated
beneficiaries of a holder predecease the holder, then each outstanding option
under this Plan held by such holder at the time of the holder's death, to the
extent then or thereafter exercisable, may be exercised by such holder's
executor, administrator, legal representative or similar person, or as otherwise
prescribed under the laws of descent and distribution.

      4.13  Governing Law.

      This Plan, each award under this Plan and the related Agreement, and all
determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the Code or the other laws of the United States, shall be
governed by the laws of the State of Michigan and construed in accordance
therewith without giving effect to principles of conflicts of laws.

      4.14  Foreign Employees.

      Without amending this Plan, the Committee may grant awards to eligible
persons who are subject to the laws of foreign countries or jurisdictions on
such terms and conditions different from those specified in this Plan as may in
the judgment of the Committee be necessary or desirable to foster and promote
achievement of the purposes of this Plan and, in furtherance of such purposes,
the Committee may make such modifications, amendments, procedures, subplans and
the like as may be necessary or advisable to comply with provisions of laws of
other countries or jurisdictions in which the Company or its Subsidiaries
operate or have employees.

      4.15  Section 409A of the Code.

      Notwithstanding any other provision of the Plan, no award under the Plan
shall have any terms or features (including, without limitation, terms or
features relating to the type of award, time of or events triggering vesting,
method of exercise or payment of withholding tax, method of settlement, form and
timing of consideration payable in settlement, or deferral or other elections),
whether at the time of grant or subsequent to the time of grant, that would
cause the award to be nonqualified deferred compensation that fails to comply
with the requirements under

                                       13

<PAGE>

Section 409A of the Code and the guidance and regulations issued thereunder.
Moreover, notwithstanding any other provision of the Plan, no action may be
taken by the Committee or the Board under or in respect of the Plan (including,
without limitation, Plan amendments under Section 4.2 or adjustments under
Section 4.7) that would cause the Plan or any award under the Plan to be a
nonqualified deferred compensation plan that fails to comply with the
requirements of Section 409A of the Code and the guidance and regulations issued
thereunder.

                                       14<PAGE>

                                                                    EXHIBIT 10.1

                                F5 NETWORKS, INC.

                           2005 EQUITY INCENTIVE PLAN

                            ADOPTED DECEMBER 31, 2004
                   APPROVED BY SHAREHOLDERS FEBRUARY 24, 2005
                       TERMINATION DATE: DECEMBER 30, 2014

1.    PURPOSES.

      (a) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive Stock
Awards are the Employees, Directors and Consultants of the Company and its
Affiliates.

      (b) AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a means
by which eligible recipients of Stock Awards may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Options and (ii) Stock Units.

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

2.    DEFINITIONS.

      (a) "AFFILIATE" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

      (b) "APPLICABLE LAWS" means the legal requirements relating to the
administration of equity compensation plans, including under applicable U.S.
state corporate laws, U.S. federal and applicable state securities laws, other
U.S. federal and state laws, the Code, any stock exchange rules or regulations
and the applicable laws, rules and regulations of any other country or
jurisdiction where Stock Awards are granted under the Plan, as such laws, rules,
regulations and requirements shall be in place from time to time.

      (c) "BOARD" means the Board of Directors of the Company.

      (d) "CODE" means the Internal Revenue Code of 1986, as amended.

      (e) "COMMITTEE" means a committee appointed by the Board in accordance
with subsection 3(c).

      (f) "COMMON STOCK" means the common stock of the Company.

<PAGE>

      (g) "COMPANY" means F5 Networks, Inc., a Washington corporation.

      (h) "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.

      (i) "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 among the Company or an
Affiliate 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. Subject to Section 6(e)(ii), 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.

      (j) "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.

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

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

      (m) "EMPLOYEE" means any person employed by the Company or an Affiliate.
Subject to the Applicable Laws, the determination of whether an individual
(including a leased and temporary employees) is an Employee hereunder shall be
made by the Board (or its Committee), in its sole discretion. 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.

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

      (o) "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, the Fair Market Value of a Share 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 such other exchange or market
with the greatest volume of trading in the Common

                                       2
<PAGE>

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 such source or sources as the Board deems
reliable, or

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

      (p) "INDEPENDENT DIRECTOR" means a Director who qualifies as an
"independent" director under applicable Nasdaq rules (or the rules of any
exchange on which the Common Stock is then listed or approved for listing).

      (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) "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.

      (s) "OPTION" means a nonstatutory stock option (meaning, an option not
intended to qualify as an incentive stock option under Code Section 422) granted
pursuant to the Plan.

      (t) "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 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.

      (u) "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.

      (v) "PLAN" means this F5 Networks, Inc. 2005 Equity Incentive Plan.

      (w) "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.

                                       3
<PAGE>

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

      (y)  "SHARE" means a share of the Common Stock, as adjusted in accordance
with Section 11 below.

      (z)  "STOCK AWARD" means any right involving Shares granted under the
Plan, including an Option or Stock Unit.

      (aa) "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.

      (bb) "STOCK UNIT" means an award giving the right to receive Shares
granted under Section 7 below.

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 Awards shall be granted; the
provisions, terms and conditions of each Stock Award granted (which need not be
identical as among Participants or as among types of Stock Awards), including,
without limitation: the time or times when a person shall be permitted to
receive Shares pursuant to a Stock Award, the number of Shares with respect to
which a Stock Award shall be granted to each such person, the exercise or
purchase price (if any) of a Stock Award, the time or times when Stock Awards
may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, any pro rata adjustment to
vesting as a result of a Participant's transitioning from full- to part-time
service (or vice versa), and any other restriction (including forfeiture
restriction), limitation or term of any Stock Award, based in each case on such
factors as the Board, in its sole discretion, shall determine; provided,
however, that such provisions, terms and conditions are not inconsistent with
the terms of the Plan.

          (ii) In order to fulfill the purposes of the Plan and without amending
the Plan, to modify grants of Stock Awards to Participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.

          (iii) 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

                                       4
<PAGE>

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.

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

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

      (c) DELEGATION TO COMMITTEE. The Board may delegate administration of the
Plan to a Committee or Committees of one or more members of the Board, and the
term "Committee" shall apply to any person or persons to whom such authority has
been delegated. In the discretion of the Board, the 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, and/or solely of two or more Independent Directors under applicable
Nasdaq (or other exchange) rules. The Board or the Committee may further
delegate its authority and responsibilities under the Plan to an Officer.
However, 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,
and unless otherwise specified by the Board shall retain any authority granted
to a committee or individual hereunder unto itself.

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 One Million Seven Hundred
Thousand (1,700,000) Shares of Common Stock.

      (b) SECTION 162(m) LIMITATION ON SHARE NUMBERS. No Employee shall be
eligible to be granted Stock Awards covering more than One Million (1,000,000)
Shares during any fiscal year of the Company.

      (c) 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 Shares not acquired under such Stock Award shall
revert to and again become available for issuance under the Plan. Further, if
any previously-issued Shares are forfeited under the terms and conditions of the
Stock Award, then any Shares so forfeited shall revert to and again become

                                       5
<PAGE>

available for issuance under the Plan. The provisions of this Section 4(c) are
qualified by Section 4(a) such that the total number of Shares issued and
outstanding under the Plan at any time may not exceed the number set forth in
Section 4(a) (as adjusted under Section 11).

      (d) SOURCE OF SHARES. The stock subject to the Plan may be unissued Shares
or reacquired Shares, bought on the market or otherwise.

5.    ELIGIBILITY. Stock Awards may be granted to Employees, Directors and
Consultants.

6.    OPTION PROVISIONS.

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

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

      (b) EXERCISE PRICE OF AN OPTION. The exercise price of each Option shall
be at least equal to the Fair Market Value of the stock subject to the Option on
the date the Option is granted. Notwithstanding the foregoing, an 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) 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, check or wire transfer 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 by (1) by delivery to the Company of other Shares
that have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option is exercised, provided that
in the case of Shares acquired, directly or indirectly, from the Company, such
Shares must have been owned by the Partcipant for more than six (6) months on
the date of surrender (or such other period as may be required to avoid the
Company's incurring an adverse accounting charge), (2) if, as of the date of
exercise of an Option the Company then is permitting Employees to engage in a
"same-day sale" cashless brokered exercise program involving one or more
brokers, through such a program that complies with the Applicable Laws
(including without limitation the requirements of Regulation T and other
applicable regulations promulgated by the Federal Reserve Board) and that
ensures prompt delivery to the Company of the amount required to pay the
exercise price and any applicable withholding taxes, (3) in any other form of
legal consideration that may be acceptable to the Board, or (4) any combination
of the foregoing methods. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company and the Board
may, in its sole discretion, refuse to accept a particular form of consideration
at the time of any Option exercise.

                                       6
<PAGE>

      (d) TRANSFERABILITY OF AN OPTION. The Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing provisions of this subsection 6(d), the
Participant 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 Participant, shall thereafter be entitled to exercise the Option.

      (e) VESTING.

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

          (ii) LEAVE OF ABSENCE. The Board (or any other party to whom such
authority has been delegated, including under this Plan) shall have the
discretion to determine whether and to what extent the vesting of Options shall
be tolled during any unpaid leave of absence; provided, however, that in the
absence of such determination, vesting of Options shall be tolled during any
such unpaid leave (unless otherwise required by the Applicable Laws). In the
event of military leave, vesting shall toll during any unpaid portion of such
leave, provided that, upon a Participant's returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall be
given vesting credit with respect to Options to the same extent as would have
applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave.

      (f) TERMINATION OF CONTINUOUS SERVICE. In the event a Participant's
Continuous Service terminates (other than upon the Participant's death or
Disability), the Participant may exercise his or her Option (to the extent that
the Participant was vested in the Option Shares and entitled to exercise such
Option 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
Participant's Continuous Service (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Participant does not
exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.

      (g) EXTENSION OF TERMINATION DATE. Following the termination of the
Participant's Continuous Service (other than upon the Participant's death or
Disability), if the Participant would be prohibited at any time solely because
the issuance of Shares would violate the registration requirements under the
Securities Act or violate any prohibition on trading on the basis of possession
of material nonpublic information involving the Company and its business,

                                       7
<PAGE>

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 Participant's Continuous
Service during which the exercise of the Option would not be in violation of
such requirements.

      (h) DISABILITY OF PARTICIPANT. In the event a Participant's Continuous
Service terminates as a result of the Participant's Disability, the Participant
may exercise his or her Option (to the extent that the Participant was vested in
the Option Shares and entitled to exercise the Option 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) or (ii) the expiration of the
term of the Option as set forth in the Option Agreement. If, after termination,
the Participant does not exercise his or her Option within the time specified
herein, the Option shall terminate.

      (i) DEATH OF PARTICIPANT. In the event (i) an Participant's Continuous
Service terminates as a result of the Participant's death or (ii) the
Participant dies within the period (if any) specified in the Option Agreement
after the termination of the Participant's Continuous Service for a reason other
than death, then the Option may be exercised (to the extent the Participant was
vested in the Option Shares and entitled to exercise the Option as of the date
of death) by the Participant'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 Participant's death pursuant to subsection 6(d),
but only within the period ending on the earlier of (1) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement) 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.

      (j) EXERCISE GENERALLY. Options shall be considered exercised when the
Company (or its authorized agent) receives (i) written or electronic notice from
the person entitled to exercise the Option of intent to exercise a specific
number of Shares, (ii) full payment or appropriate provision for payment in a
form and method acceptable to the Board or Committee, for the Shares being
exercised, and (iii) if applicable, payment or appropriate provision for payment
of any withholding taxes due on exercise. An Option may not be exercised for a
fraction of a Share. The Option may, at the discretion of the Board or
Committee, include a provision whereby the Participant may elect to exercise the
Option as to Shares that are not yet vested. Unvested Shares exercised in such
manner may be subject to a Company repurchase right under Section 10(f) or such
other restrictions or conditions as the Board or Committee may determine.

      (k) ADMINISTRATOR DISCRETION. Notwithstanding the provisions of this
Section 6, the Board or the Committee shall have complete discretion exercisable
at any time to (i) extend the period of time for which an Option is to remain
exercisable, following the Participant's termination of Continuous Service, but
in no event beyond the expiration date for the Option, and (ii) permit the
Option to be exercised, during the applicable post-termination exercise period,
not

                                       8
<PAGE>

only with respect to the number of Shares that were vested on the date of
termination, cut also with respect to additional Shares on such terms and
conditions as the Board or Committee may determine.

7.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

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

          (a) CONSIDERATION. A Stock Unit may be awarded in consideration for
such property or services as is permitted under Applicable Law, including for
past services actually rendered to the Company or an Affiliate for its benefit.

          (b) VESTING; RESTRICTIONS. Shares of Common Stock awarded under the
agreement reflecting a Stock Unit award may, but need not, be subject to a Share
repurchase option, forfeiture restriction or other conditions in favor of the
Company in accordance with a vesting or lapse schedule to be determined by the
Board.

          (c) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event a
Participant's Continuous Service terminates, the Company may reacquire any or
all of the Shares of Common Stock held by the Participant which have not vested
or which are otherwise subject to forfeiture or other conditions as of the date
of termination under the terms of the agreement.

          (d) TRANSFERABILITY. Rights to acquire Shares of Common Stock under a
Stock Unit agreement shall not be transferable except by will or by the laws of
descent and distribution, and Shares of Common Stock issued upon vesting of a
Stock Unit shall be issuable during the lifetime of the Participant only to the
Participant. Notwithstanding the foregoing provisions of this subsection 7(d),
the Participant 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 Participant, shall thereafter be entitled to receive Shares of
Common Stock issued upon vesting of a Stock Unit.

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 upon
exercise of the Stock Awards;

                                       9
<PAGE>

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; UNFUNDED PLAN.

      Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company. The Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are granted Stock
Awards hereunder, any such accounts will be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any asset which may
at any time be represented by Stock Awards, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor any party authorized
to administer the Plan be deemed to be a trustee of stock or cash to be awarded
under the Plan. Any liability of the Company to any Participant with respect to
a Stock Award shall be based solely upon any contractual obligations which may
be created by the Plan; no such obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any property of the Company.
Neither the Company nor any party authorized to administer the Plan shall be
required to give any security or bond for the performance of any obligation
which may be created by this Plan.

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, become
exercisable or be settled in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first vest, be
exercised or be settled.

      (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 any 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

                                       10
<PAGE>

Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

      (d) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Shares 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 Award has been registered under a then currently
effective registration statement under the Securities Act or (iv) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

      (e) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a
Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Shares
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 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.

      (f) REPURCHASE LIMITATION. The terms of any repurchase option shall be
specified in the Stock Award and may be at Fair Market Value at the time of
repurchase, at the original purchase price or on such other terms and conditions
as the Board may determine (and as shall be reflected in the Stock Award
Agreement).

                                       11
<PAGE>

      (g) CANCELLATION AND RE-GRANT OF OPTIONS. The Company may not reprice any
outstanding Stock Awards under the Plan, including implement any program whereby
outstanding Stock Awards will be cancelled and replaced with Stock Awards
bearing a lower purchase or exercise price, without first obtaining the approval
of the shareholders of the Company; provided however that this Section 10(g)
shall in no way limit the Company's ability to adjust Stock Awards as provided
under Section 11 below.

      (h) INTERPRETATION OF PLAN AND STOCK AWARDS. In the event that any
provision of the Plan or any Stock Award granted under the Plan is declared to
be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of the terms of the Plan and/or Stock Award shall not be affected
to the extent necessary to reform or delete such illegal, invalid or
unenforceable provision. All questions arising under the Plan or under any Stock
Award shall be decided by the Board or the Committee in its or their total and
absolute discretion and such decisions shall be final and binding on all
parties.

      (i) ELECTRONIC COMMUNICATION. Any document required to be delivered under
the Plan, including under the Applicable Laws, may be delivered in writing or
electronically. Signature may also be electronic if permitted by the Board or
the Committee, and if permitted by Applicable Law.

      (j) ESCROW OF SHARES. To enforce any restriction applicable to Shares
issued under the Plan, the Board or the Committee may require a Participant or
other holder of such Shares to deposit the certificates representing such
Shares, with approved stock powers or other transfer instruments endorsed in
blank, with the Company or an agent of the Company until the restrictions have
lapsed. Such certificates (or other notations representing the Shares) may bear
a legend or legends referencing the applicable restrictions.

11.   ADJUSTMENTS UPON CHANGES IN STOCK.

      (a) CAPITALIZATION ADJUSTMENTS. If any change is made in the stock subject
to the Plan, or subject to any Stock Award, without the receipt of consideration
by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan pursuant to
subsection 4(a) and the maximum number of securities subject to award to any
person pursuant to subsection 4(b), 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.)

                                       12
<PAGE>

      (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
OR ACQUISITION OF STOCK.

          (i) In the event of (1) a sale of substantially all of the assets of
the Company, or (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, or (4) the direct or
indirect acquisition (including by way of a tender or exchange offer) by any
person, or persons acting as a group, of beneficial ownership or a right to
acquire beneficial ownership of shares representing a majority of the voting
power of the then outstanding shares of capital stock of the Company, then any
surviving corporation or acquiring corporation shall assume any Stock Awards
outstanding under the Plan or shall substitute similar awards (including with
respect to a Stock Award 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) a Stock Award shall be deemed
assumed if, following the change in control, the Stock Award confers the right
to purchase in accordance with its terms and conditions, for each share of
Common Stock subject to the Stock 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) Subject to the provisions of any Stock Award Agreement, 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 or
settled) shall be accelerated in full, and the Stock Awards shall terminate if
not exercised or settled (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.

          (iv) The Board shall at all times have the authority, in its sole
discretion, to provide for additional or different vesting, exercisability,
settlement or forfeiture conditions with respect to Stock Awards than that
reflected in this Section 11(c), provided that its determinations in this regard
shall be reflected in the Stock Award Agreement (including in amendments
thereto) issued to the affected Participant.

                                       13
<PAGE>

12.   AMENDMENT OF THE PLAN AND STOCK AWARDS.

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

      (b) SHAREHOLDER APPROVAL. The Board may, in its sole discretion, submit
any 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 or any other Applicable Law.

      (d) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted before
amendment of the Plan shall not be materially 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 materially impaired by any
such amendment unless (i) the Company requests the consent of the Participant
and (ii) the Participant consents in writing.

13.   TERMINATION OR SUSPENSION OF THE PLAN.

      (a) PLAN TERM. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board 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 materially 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 unless and until the Plan has been approved by the
shareholders of the Company,

                                       14
<PAGE>

which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.

15.   GOVERNING 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.

                                       15
<PAGE>

                                        F5 NETWORKS, INC.
NOTICE OF GRANT OF STOCK                ID: 91-1714307
OPTIONS                                 c/o F5 Networks, Inc.
AND OPTION AGREEMENT                    401 Elliott Avenue West
                                        Seattle, WA 98119

                                                        OPTION NUMBER:
                                                        PLAN:

________________________________________________________________________________

Effective     , you have been granted a(n) Non-Qualified Stock Option to buy
     shares Networks, Inc.(the Company) stock at $     per share.

The total option price of the shares granted is $

Shares in each period will become fully vested on the date shown.

Shares       Vest Type            Full Vest            Expiration

________________________________________________________________________________

By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan and the Option Agreement, all of which are
attached and made a part of this document.

________________________________________________________________________________

___________________________________             ________________________________

F5 Networks, Inc.                               Date

___________________________________             ________________________________

                                                Date

                                                                        Date:
                                                                        Time:

<PAGE>

                                F5 NETWORKS, INC.
                   2005 EQUITY INCENTIVE PLAN AWARD AGREEMENT

THIS AWARD AGREEMENT (the "Agreement") is made and entered into as of
____________ ___, 20__ (the "Grant Date") between F5 Networks, Inc., a
Washington corporation (the "Company"), and _________________ ("Holder").

Pursuant to the terms of the 2005 Equity Incentive Plan (the "Plan") the Company
hereby awards to Employee an award (either a nonstatutory stock option to
purchase shares of the Company's Common Stock (an "Option") or stock units
representing the right to receive shares of the Company's Common Stock ("Stock
Units") as set forth in the Notice of Grant of Stock Options or Stock Units (the
"Grant Notice")) (the "Award") under the Plan on the terms and conditions as set
forth in this Agreement, the Grant Notice (which is incorporated herein by
reference) and the Plan (which is incorporated herein by reference). Capitalized
terms used but not defined in this Agreement shall have the meanings specified
in the Plan.

IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH BELOW, THE PARTIES AGREE AS
FOLLOWS:

      GRANT OF AWARD; GRANT DATE. THE COMPANY HEREBY GRANTS TO HOLDER, AN AWARD
TO PURCHASE (IN THE CASE OF AN OPTION) OR TO BE ISSUED (IN THE CASE OF STOCK
UNITS) THE TOTAL NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY AS SET FORTH IN
THE GRANT NOTICE (THE "AWARD SHARES") AT THE EXERCISE PRICE PER SHARE OF COMMON
STOCK (IN THE CASE OF AN OPTION) OR THE PURCHASE PRICE PER SHARE OF COMMON
STOCK, IF ANY, (IN THE CASE OF STOCK UNITS) SET FORTH IN THE GRANT NOTICE (THE
"AWARD PRICE"), ON THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT. THE
NUMBER AND KIND OF AWARD SHARES AND THE AWARD PRICE MAY BE ADJUSTED IN CERTAIN
CIRCUMSTANCES IN ACCORDANCE WITH SECTION 11 OF THE PLAN.

      VESTING AND EXERCISE OR SETTLEMENT OF STOCK.

          OPTIONS.

          (a) The Option will be exercisable during its term in accordance with
the vesting schedule set forth in the Grant Notice and with the applicable
provisions of the Plan and this Agreement.

          (b) The vested and exercisable portion of the Option may be exercised
during its term (as set forth in Section 6) by delivering a Notice of Exercise
in the form attached hereto as Exhibit A, together with the Award Price (payable
in the manner set forth in Section 3) to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

          (c) By exercising the Option, Holder agrees that, as a condition to
any exercise of the Option, the Company may require Holder to enter an
arrangement providing for the payment by

<PAGE>

Holder to the Company of any tax withholding obligation of the Company arising
by reason of (1) the exercise of the Option or (2) the disposition of shares
acquired upon such exercise.

          [(d) NOTWITHSTANDING THE VESTING PROVISIONS SET FORTH IN THE GRANT
NOTICE AND SECTION 11 OF THE PLAN, IN THE EVENT OF A CHANGE IN CONTROL
TRANSACTION AS DESCRIBED IN SECTION 11 OF THE PLAN IF THE SURVIVING CORPORATION
DOES NOT ASSUME THE AWARD OR SUBSTITUTE SIMILAR AWARDS FOR THE AWARD, THEN 100%
OF THE SHARES OF COMMON STOCK SUBJECT TO THE AWARD (AND IF APPLICABLE, THE TIME
DURING WHICH THE AWARD MAY BE EXERCISED OR SETTLED) SHALL BE ACCELERATED IN
FULL, AND THE AWARD SHALL TERMINATE IF NOT EXERCISED OR SETTLED AT OR PRIOR TO
THE CLOSING OF THE CHANGE IN CONTROL.]

          STOCK UNITS. ON EACH DATE THAT STOCK UNITS VEST (A "VESTING DATE"),
THE STOCK UNITS WILL BE SETTLED AS TO THE NUMBER OF SHARES VESTING ON SUCH
VESTING DATE, MEANING THAT THE COMPANY WILL (SUBJECT TO HOLDER'S OBLIGATIONS TO
PAY THE PAR VALUE OF THE SHARES AND TO SATISFY THE REQUIREMENTS OF SECTIONS 5
AND 9) ISSUE TO HOLDER THE NUMBER OF SHARES VESTING ON SUCH VESTING DATE AND THE
AWARD WILL THEREAFTER REMAIN IN EFFECT ONLY AS TO THE NUMBER OF UNVESTED SHARES
OF COMMON STOCK REMAINING SUBJECT THERETO. STOCK CERTIFICATES (THE
"CERTIFICATE") EVIDENCING THE CONVERSION OF STOCK UNITS INTO SHARES OF COMMON
STOCK WILL BE ISSUED AND REGISTERED IN HOLDER'S NAME AS OF EACH VESTING DATE ON
THE REGISTER OF SHAREHOLDERS OF THE COMPANY (THROUGH ITS TRANSFER AGENT). THE
CERTIFICATES REPRESENTING THE SHARES WILL BE DELIVERED TO HOLDER AS SOON AS
PRACTICABLE AFTER EACH VESTING DATE.

      METHOD OF PAYMENT OF THE AWARD PRICE. PAYMENT OF THE AWARD PRICE, IF ANY,
IS DUE IN FULL UPON EXERCISE (IN THE CASE OF AN OPTION) OR SETTLEMENT (IN THE
CASE OF STOCK UNITS) OF ALL OR ANY PART OF THE AWARD. HOLDER MAY ELECT TO MAKE
PAYMENT OF THE AWARD PRICE IN CASH OR BY CHECK OR WIRE TRANSFER OR IN THE CASE
OF OPTIONS BY ONE OR MORE OF THE FOLLOWING IF THE COMPANY, IN ITS SOLE
DISCRETION AT THE TIME THE AWARD IS EXERCISED, IS THEN OFFERING SUCH
ALTERNATIVES:

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

          (b) Provided that at the time of exercise the Common Stock is publicly
traded and quoted regularly in a source the Board deems reliable, then by
delivery of already-owned shares of Common Stock (valued at their Fair Market
Value on the date of exercise) if (i) either Holder has held the already-owned
shares for the period required to avoid a charge to the Company's reported
earnings (generally six months) or Holder did not acquire the already-owned
shares, directly or indirectly from the Company and (ii) Holder owns the
already-owned shares free and clear of any liens, claims, encumbrances or
security interests. "Delivery" for these purposes, in the sole discretion of the
Company at the time the Option is exercised, shall include delivery to the
Company of Holder's attestation of ownership of such shares of Common Stock in a
form approved by the Company. Notwithstanding the foregoing, the Award may not
be exercised by tender to the Company of Common Stock to the extent such tender
would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Company's stock.

                                       2
<PAGE>

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

      WHOLE SHARES. THE AWARD MAY ONLY BE EXERCISED OR SETTLED FOR WHOLE SHARES.

      SECURITIES LAW COMPLIANCE. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, THE AWARD MAY NOT BE EXERCISED OR SETTLED UNLESS THE SHARES
ISSUABLE UPON EXERCISE OR SETTLEMENT OF THE AWARD ARE THEN REGISTERED UNDER THE
SECURITIES ACT OR, IF SUCH SHARES ARE NOT THEN SO REGISTERED, THE COMPANY HAS
DETERMINED THAT SUCH EXERCISE AND ISSUANCE WOULD BE EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE EXERCISE OR SETTLEMENT OF THE AWARD MUST
ALSO COMPLY WITH OTHER APPLICABLE LAWS AND REGULATIONS GOVERNING THE AWARD, AND
THE AWARD MAY NOT BE EXERCISED OR SETTLED, AND THE COMPANY WILL HAVE NO
LIABILITY FOR FAILURE TO ISSUE SHARES OF COMMON STOCK UPON EXERCISE OF
SETTLEMENT OF THE AWARD, IF THE COMPANY DETERMINES THAT THE EXERCISE OR
SETTLEMENT WOULD NOT BE IN MATERIAL COMPLIANCE WITH SUCH LAWS AND REGULATIONS.

      TERM AND TERMINATION OF AWARD.

          OPTIONS. SUBJECT TO EARLIER TERMINATION AS REQUIRED UNDER SECTION 11
OF THE PLAN, THE TERM OF THE OPTION COMMENCES ON THE GRANT DATE AND EXPIRES UPON
THE earliest OF THE FOLLOWING:

          (a) three (3) months after the termination of Holder's Continuous
Service for any reason other than death or Disability, provided that if during
any part of such three-month period the Option is not exercisable solely because
of the condition set forth in Section 5, the Option shall not expire until the
earlier of the Expiration Date or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of Holder's
Continuous Service;

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

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

          (d) the Expiration Date; or

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

                                       3
<PAGE>

          STOCK UNITS. IN THE EVENT HOLDER'S CONTINUOUS SERVICE TERMINATES, ANY
STOCK UNITS AND THE SHARES OF COMMON STOCK SUBJECT THERETO (THAT HAVE NOT BEEN
ISSUED UPON SETTLEMENT) SHALL BE FORFEITED.

      TRANSFERABILITY. THE AWARD IS NOT TRANSFERABLE, EXCEPT BY WILL OR BY THE
LAWS OF DESCENT AND DISTRIBUTION. OPTIONS WILL BE EXERCISABLE DURING HOLDER'S
LIFE ONLY BY HOLDER. SHARES OF COMMON STOCK ISSUED UPON VESTING OF A STOCK UNIT
WILL BE ISSUABLE DURING HOLDER'S LIFE ONLY TO HOLDER. NOTWITHSTANDING THE
FOREGOING, BY DELIVERING WRITTEN NOTICE TO THE COMPANY, IN A FORM SATISFACTORY
TO THE COMPANY, HOLDER MAY DESIGNATE A THIRD PARTY WHO, IN THE EVENT OF HOLDER'S
DEATH, SHALL THEREAFTER BE ENTITLED TO EXERCISE THE OPTION OR RECEIVE SHARES OF
COMMON STOCK ISSUED UPON VESTING OF A STOCK UNIT.

      NOT A SERVICE CONTRACT. THIS AGREEMENT IS NOT AN EMPLOYMENT OR SERVICE
CONTRACT, AND NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO CREATE IN ANY WAY
WHATSOEVER ANY OBLIGATION ON HOLDER'S PART TO CONTINUE IN THE EMPLOY OF THE
COMPANY, OR OF THE COMPANY TO CONTINUE HOLDER'S EMPLOYMENT. IN ADDITION, NOTHING
IN THIS AGREEMENT SHALL OBLIGATE THE COMPANY, ITS SHAREHOLDERS, BOARD, OFFICERS
OR EMPLOYEES TO CONTINUE ANY RELATIONSHIP THAT HOLDER MIGHT HAVE AS A DIRECTOR
OR CONSULTANT FOR THE COMPANY.

      WITHHOLDING OBLIGATIONS.

          AT THE TIME THE OPTION IS EXERCISED, IN WHOLE OR IN PART, OR SHARES OF
COMMON STOCK ARE ISSUED UPON SETTLEMENT OF STOCK UNITS OR AT ANY TIME THEREAFTER
AS REQUESTED BY THE COMPANY, HOLDER HEREBY AUTHORIZES WITHHOLDING FROM PAYROLL
AND ANY OTHER AMOUNTS PAYABLE TO HOLDER, OR OTHERWISE AGREES TO MAKE ADEQUATE
PROVISION FOR (INCLUDING BY MEANS OF A "CASHLESS EXERCISE" PURSUANT TO A PROGRAM
DEVELOPED UNDER REGULATION T AS PROMULGATED BY THE FEDERAL RESERVE BOARD TO THE
EXTENT PERMITTED BY THE COMPANY), ANY SUMS REQUIRED TO SATISFY THE FEDERAL,
STATE, LOCAL AND FOREIGN TAX WITHHOLDING OBLIGATIONS OF THE COMPANY, WHICH ARISE
IN CONNECTION WITH THE AWARD.

          THE OPTION IS NOT EXERCISABLE AND SHARES OF COMMON STOCK ARE NOT
ISSUABLE UPON SETTLEMENT OF STOCK UNITS UNLESS THE TAX WITHHOLDING OBLIGATIONS
OF THE COMPANY ARE SATISFIED. ACCORDINGLY, HOLDER MAY NOT BE ABLE TO EXERCISE
THE OPTION OR RECEIVE SHARES OF COMMON STOCK UPON SETTLEMENT OF STOCK UNITS WHEN
DESIRED EVEN THOUGH THE AWARD IS VESTED.

      NO RIGHTS AS A SHAREHOLDER. THE AWARD SHALL NOT ENTITLE THE HOLDER TO ANY
CASH DIVIDEND, VOTING OR OTHER RIGHT OF A SHAREHOLDER UNLESS AND UNTIL THE DATE
OF ISSUANCE OF THE SHARES THAT ARE THE SUBJECT OF THE AWARD.

      PROFESSIONAL ADVICE. THE ACCEPTANCE AND EXERCISE OR SETTLEMENT OF THE
AWARD AND THE SALE OF AWARD SHARES HAS CONSEQUENCES UNDER FEDERAL AND STATE TAX
AND SECURITIES LAWS WHICH MAY VARY DEPENDING UPON THE INDIVIDUAL CIRCUMSTANCES
OF THE HOLDER. ACCORDINGLY,

                                       4
<PAGE>

HOLDER ACKNOWLEDGES THAT HE HAS BEEN ADVISED TO CONSULT HIS PERSONAL LEGAL AND
TAX ADVISOR IN CONNECTION WITH THIS AGREEMENT AND HOLDER'S DEALINGS WITH RESPECT
TO THE AWARD AND THE AWARD SHARES. HOLDER FURTHER ACKNOWLEDGES THAT THE COMPANY
HAS MADE NO WARRANTIES OR REPRESENTATIONS TO HOLDER WITH RESPECT TO THE INCOME
TAX CONSEQUENCES OF THE GRANT AND EXERCISE OR SETTLEMENT OF THE AWARD OR THE
SALE OF THE AWARD SHARES AND HOLDER IS IN NO MANNER RELYING ON THE COMPANY OR
ITS REPRESENTATIVES FOR AN ASSESSMENT OF SUCH CONSEQUENCES.

      ASSIGNMENT; BINDING EFFECT. HOLDER ACKNOWLEDGES RECEIPT OF A COPY OF THE
PLAN AND REPRESENTS THAT HOLDER IS FAMILIAR WITH THE TERMS AND PROVISIONS
THEREOF (AND HAS HAD AN OPPORTUNITY TO CONSULT COUNSEL REGARDING THE AWARD
TERMS), AND HEREBY ACCEPTS THIS AWARD AND AGREES TO BE BOUND BY ITS CONTRACTUAL
TERMS AS SET FORTH HEREIN AND IN THE PLAN. HOLDER HEREBY AGREES TO ACCEPT AS
BINDING, CONCLUSIVE AND FINAL ALL DECISIONS AND INTERPRETATIONS OF THE PLAN
BOARD OR COMPENSATION COMMITTEE REGARDING ANY QUESTIONS RELATING TO THE AWARD.
IN THE EVENT OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THE PLAN AND THE
TERMS AND PROVISIONS OF THE GRANT NOTICE AND THIS AGREEMENT, THE PLAN TERMS AND
PROVISIONS SHALL PREVAIL. THE AWARD, INCLUDING THE PLAN AND THE GRANT NOTICE,
CONSTITUTES THE ENTIRE AGREEMENT BETWEEN HOLDER AND THE COMPANY ON THE SUBJECT
MATTER HEREOF AND SUPERSEDES ALL PROPOSALS, WRITTEN OR ORAL, AND ALL OTHER
COMMUNICATIONS BETWEEN THE PARTIES RELATING TO SUCH SUBJECT MATTER. HOLDER MAY
NOT ASSIGN ANY OF HOLDER'S RIGHTS UNDER THIS AGREEMENT.

      DAMAGES. HOLDER SHALL BE LIABLE TO THE COMPANY FOR ALL COSTS AND DAMAGES,
INCLUDING INCIDENTAL AND CONSEQUENTIAL DAMAGES, RESULTING FROM A DISPOSITION OF
AWARD SHARES WHICH IS NOT IN CONFORMITY WITH THE PROVISIONS OF THIS AGREEMENT.

      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON EXCLUDING THOSE LAWS THAT
DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

      NOTICES. ALL NOTICES AND OTHER COMMUNICATIONS UNDER THIS AGREEMENT SHALL
BE IN WRITING. UNLESS AND UNTIL HOLDER IS NOTIFIED IN WRITING TO THE CONTRARY,
ALL NOTICES, COMMUNICATIONS, AND DOCUMENTS DIRECTED TO THE COMPANY AND RELATED
TO THE AGREEMENT, IF NOT DELIVERED BY HAND, SHALL BE MAILED, ADDRESSED AS
FOLLOWS:

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

                                       5
<PAGE>

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

      AMENDMENT OF THIS AGREEMENT. THE BOARD AT ANY TIME, AND FROM TIME TO TIME,
MAY AMEND THE TERMS OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE RIGHTS UNDER
THIS AGREEMENT SHALL NOT BE IMPAIRED BY ANY SUCH AMENDMENT UNLESS (I) THE
COMPANY REQUESTS THE CONSENT OF THE HOLDER AND (II) HOLDER CONSENTS IN WRITING.

      REPRESENTATIONS. UPON EXERCISE OR SETTLEMENT OF THE AWARD AND AS A
CONDITION TO SUCH EXERCISE OR SETTLEMENT OF THE AWARD, THE COMPANY MAY REQUIRE
THAT THE HOLDER MAKE THE FOLLOWING REPRESENTATIONS AND WARRANTIES: HOLDER IS
AWARE OF THE COMPANY'S BUSINESS AFFAIRS AND FINANCIAL CONDITION AND HAS ACQUIRED
SUFFICIENT INFORMATION ABOUT THE COMPANY TO REACH AN INFORMED AND KNOWLEDGEABLE
DECISION TO ACCEPT THE AWARD. HOLDER IS ACQUIRING THE AWARD AND THE AWARD SHARES
SUBJECT TO THE AWARD FOR INVESTMENT ONLY FOR HOLDER'S OWN ACCOUNT, AND NOT WITH
A VIEW, OR FOR RESALE IN CONNECTION WITH, ANY "DISTRIBUTION" THEREOF UNDER
APPLICABLE LAWS. HOLDER UNDERSTANDS THAT NEITHER THE AWARD NOR THE AWARD SHARES
HAVE BEEN REGISTERED IN ALL STATE JURISDICTIONS WITHIN THE UNITED STATES, AND
THAT THE EXEMPTION(S) FROM REGISTRATION RELIED UPON MAY DEPEND UPON HOLDER'S
INVESTMENT INTENT AS SET FORTH ABOVE. HOLDER FURTHER UNDERSTANDS THAT PRIOR TO
ANY RESALE BY HOLDER OF SUCH AWARD SHARES WITHOUT REGISTRATION THEREOF IN
RELEVANT STATE JURISDICTIONS, THE COMPANY MAY REQUIRE HOLDER TO FURNISH THE
COMPANY WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT HOLDER MAY
SELL OR TRANSFER SUCH AWARD SHARES PURSUANT TO AN AVAILABLE EXEMPTION UNDER
APPLICABLE LAW. HOLDER UNDERSTANDS THAT THE COMPANY IS UNDER NO OBLIGATION TO
ASSIST HOLDER IN THIS PROCESS BY REGISTERING THE AWARD SHARES IN ANY
JURISDICTION OR BY ENSURING THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
HOLDER FURTHER AGREES THAT AS A CONDITION TO EXERCISE OR SETTLEMENT OF THE
AWARD, THE COMPANY MAY REQUIRE HOLDER TO FURNISH CONTEMPORANEOUSLY DATED
REPRESENTATIONS SIMILAR TO THOSE SET FORTH IN THIS SECTION 17.

                                       6
<PAGE>

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

                                   F5 NETWORKS, INC.

                                   By _______________________________

                                   Title ____________________________

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

                                   __________________________________
                                   Holder

                                       7
<PAGE>

                                    EXHIBIT A

                               NOTICE OF EXERCISE

                   (To be signed only upon exercise of Option)

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

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

DATED: __________________, ____.

                                     HOLDER:
                                     _____________________________________

                                     By:__________________________________

                                     Title:_______________________________

                                     ADDRESS:

                                     _____________________________________
                                     _____________________________________
                                     _____________________________________

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