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EXHIBIT 4.2
FOUNDRY NETWORKS, INC.
2000 NON-EXECUTIVE STOCK OPTION PLAN
NOTICE OF STOCK OPTION GRANT
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((Optionee))
((OptioneeAddress))
((OptioneeAddress))
You have been granted a nonstatutory stock option to purchase Common Stock
of Foundry Networks, Inc. (the "Company") as follows:
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Date of Grant ((GrantDate))
Vesting Commencement Date ((VestingStartDate))
Exercise Price per Share ((ExercisePrice))
Total Number of Shares Granted ((SharesGranted))
Total Exercise Price ((TotalExercisePrice))
Expiration Date ((ExpirDate))
Vesting Schedule This Option may be exercised, in whole
or in part, in accordance with the
following schedule:
((VestingSchedule))
By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 2000 Non-Executive Stock Option Plan and the
Nonstatutory Stock Option Agreement, all of which are attached and made a part
of this document.
OPTIONEE: FOUNDRY NETWORKS, INC.
_____________________________ By:_____________________________
Signature
_____________________________ Title:__________________________
Print Name
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FOUNDRY NETWORKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
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1. Grant of Option. The Board of Directors of the Company hereby grants
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to the Optionee named in the Notice of Stock Option Grant attached as Part I of
this Agreement (the "Optionee"), an option (the "Option") to purchase a number
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of Shares, as set forth in the Notice of Stock Option Grant, at the exercise
price per share set forth in the Notice of Stock Option Grant (the "Exercise
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Price"'), subject to the terms and conditions of the 2000 Non-Executive Stock
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Option Plan (the "Plan"), which is incorporated herein by reference.
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(Capitalized terms not defined herein shall have the meanings ascribed to such
terms in the Plan.) In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Nonstatutory Stock Option
Agreement, the terms and conditions of the Plan shall prevail.
2. Exercise of Option.
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(a) Right to Exercise. This Option is exercisable during its term in
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accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
and the applicable provisions of the Plan and this Nonstatutory Stock Option
Agreement. In the event of Optionee's death, disability or other termination of
Optionee's employment or consulting relationship, the exercisability of the
Option is governed by the applicable provisions of the Plan and this
Nonstatutory Stock Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivering
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to the Company a written notice of exercise (in the form attached as Exhibit A
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or in any other form of notice approved by the Plan Administrator) which shall
state Optionee's election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the holder's investment intent with respect to such Shares
as may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered to the Company
by such means as are determined by the Plan Administrator in its discretion to
constitute adequate delivery. The written notice shall be accompanied by
payment of the Exercise Price. This Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the Exercise Price.
As a condition to the exercise of this Option and as further set forth
in Section 10 of the Plan, Optionee agrees to make adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the vesting or exercise of the Option, or disposition of Shares, whether by
withholding, direct payment to the Company, or otherwise.
The Company is not obligated, and will have no liability for failure,
to issue or deliver any Shares upon exercise of the Option unless such issuance
or delivery would comply with the Applicable Laws, with such compliance
determined by the Company in consultation with its legal counsel. This Option
may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 221 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
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by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash;
(b) check; or
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(c) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price.
4. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee or a
transferee permitted by Section 12 of the Plan. The terms of the Plan and this
Nonstatutory Stock Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option may be exercised only within the term set
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out in the Notice of Stock Option Grant, and may be exercised during such term
only in accordance with the Plan (with special reference made to Section 9 of
the Plan) and the terms of this Nonstatutory Stock Option Agreement, including
the Notice of Grant.
6. No Additional Employment Rights. Optionee understands and agrees that
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the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an Employee or Consultant at the will of the Company (not through
the act of being hired, being granted this Option or acquiring Shares under this
Agreement) and that the grant of the Option is not as consideration for services
you rendered to the Company prior to your Vesting Commencement Date. Optionee
further acknowledges and agrees that nothing in this Agreement, nor in the Plan
which is incorporated in this Nonstatutory Stock Option Agreement by reference,
shall confer upon Optionee any right with respect to continuation as an Employee
or Consultant with the Company, nor shall it interfere in any way with his or
her right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.
7. Termination Period. This Option may be exercised for 3 months after
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termination of Optionee's Continuous Service Status, or such longer period as
may be applicable upon death or disability of Optionee as provided in the Plan,
but in no event later than the Expiration Date as provided above. Optionee is
responsible for keeping track of these exercise periods following termination
for any reason of his or her service relationship with the Company. The Company
will not provide further notice of such periods.
8. Tax Consequences. Set forth below is a brief summary of certain
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federal tax consequences relating to this Option under the law in effect as of
the date of grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, DOES NOT ADDRESS
STATE AND LOCAL TAX CONSEQUENCES, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option. Since this Option does not qualify as an
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incentive stock option under Section 422 of the Code, the Optionee may incur
regular federal income tax liability upon exercise. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the fair market value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If Optionee
is an Employee of the Company, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
(b) Disposition of Shares. If the Optionee holds the Option Shares
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for more than one year, gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes. The long-
term capital gain will be taxed for federal income tax at a maximum rate of 20%.
9. Effect of Agreement. Optionee acknowledges receipt of a copy of the
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Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan. Optionee agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a
conflict between the terms and
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provisions of the Plan and the terms and provisions of the Notice and this
Agreement, the Plan terms and provisions shall prevail. The Option, including
the Plan, constitutes the entire agreement between Optionee 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.
Acceptance of the terms of the Option is reflected by Optionee's signature on
the Notice of Grant.
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EXHIBIT A
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NOTICE OF EXERCISE
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To: Foundry Networks, Inc.
Attn: Stock Option Administrator
Subject: Notice of Intention to Exercise Stock Option
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This is official notice that the undersigned ("Optionee") intends to
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exercise Optionee's option to purchase __________ shares of Foundry Networks,
Inc. Common Stock, under and pursuant to the Company's 2000 Non-Executive Stock
Option Plan and the Nonstatutory Stock Option Agreement dated _______________,
as follows:
Grant Number:__________________________________
Date of Purchase:______________________________
Number of Shares:______________________________
Purchase Price:________________________________
Method of Payment of
Purchase Price:________________________________
Social Security No.:___________________________
The shares should be issued as follows:
Name:_________________________________
Address:______________________________
______________________________
Signed:_______________________________
Date:_________________________________
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