(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2006 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
WASHINGTON | 91-1714307 | |||
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No. |
) |
1
Item 1. | Business |
2
3
| SSL Acceleration using Secure Socket Layer (SSL) encryption to secure traffic between the server and the browser on an end users client device; | |
| Rate Shaping prioritizing transmissions according to preset rules that give precedence to different types of traffic; | |
| Compression reducing the volume of data transmitted to take maximum advantage of available bandwidth; | |
| TCP Optimization improving server efficiency by maintaining an open connection with a server during interactive sessions; | |
| IPv6 Translation enabling communication and interoperability between networked devices using IPv6, the newest version of the Internet Protocol, and those using the older version IPv4; | |
| Application Security protecting critical web applications from attacks such as Google hacking, cross-site scripting, and parameter tampering; | |
| Web Acceleration enhancing the performance of web applications over wide area networks by reducing latency, eliminating errors, and resolving other issues that slow delivery; | |
| WAN Optimization improving the performance of applications accessed over wide area network links by reducing the number of round trips required and ensuring maximum use of available bandwidth. | |
| Global Traffic Management ensuring high availability, maximum performance and global management for applications running across multiple, globally-dispersed data centers; | |
| Link Load Balancing monitoring availability and performance of multiple WAN connections and intelligently managing bi-directional traffic flows to ensure uninterrupted, optimized Internet access. |
4
5
6
7
8
9
10
11
12
35
66
55
President, Chief Executive Officer
and Director
48
Senior Vice President of Business
Operations
47
Senior Vice President of Worldwide
Sales
40
Senior Vice President of Marketing
42
Senior Vice President and Chief
Finance Officer
46
Senior Vice President and Chief
Accounting Officer
39
Senior Vice President of Product
Development and Chief Technology Officer
62
Director
55
Director
46
Director
64
Director
59
Chairman of the Board of Directors
58
Director
(1)
Member of the Audit Committee.
(2)
Member of the Compensation Committee.
(3)
Member of the Governance and Nominating Committee.
(4)
Member of the Special Committee.
13
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14
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Item 1A.
Risk
Factors
15
Table of Contents
16
Table of Contents
17
Table of Contents
18
Table of Contents
19
Table of Contents
20
Table of Contents
Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
21
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Item 3.
Legal
Proceedings
22
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Item 4.
Submission
of Matters to a Vote of Securities Holders
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Fiscal Year 2006
Fiscal Year 2005
High
Low
High
Low
$
58.50
$
39.50
$
49.79
$
30.47
$
74.00
$
56.20
$
59.12
$
41.25
$
72.93
$
42.22
$
54.01
$
41.30
$
60.85
$
40.55
$
51.25
$
35.34
23
Table of Contents
Item 6.
Selected
Financial Data
Years Ended September 30,
2006
2005
2004
2003
2002
(In thousands, except per share data)
$
304,878
$
219,603
$
126,169
$
84,197
$
82,566
89,171
61,807
45,021
31,698
25,700
394,049
281,410
171,190
115,895
108,266
63,619
48,990
28,406
17,843
20,557
24,534
16,194
10,993
9,132
10,238
88,153
65,184
39,399
26,975
30,795
305,896
216,226
131,791
88,920
77,471
127,478
89,866
66,446
54,897
53,673
49,171
31,516
24,438
19,455
19,110
39,109
25,486
15,761
12,210
16,203
3,274
215,758
146,868
106,645
86,562
92,260
90,138
69,358
25,146
2,358
(14,789
)
17,431
8,076
2,731
751
1,420
107,569
77,434
27,877
3,109
(13,369
)
41,564
30,532
(8,451
)
853
489
$
66,005
$
46,902
$
36,328
$
2,256
$
(13,858
)
$
1.64
$
1.26
$
1.09
$
0.09
$
(0.55
)
40,139
37,220
33,221
26,453
25,323
$
1.59
$
1.21
$
1.01
$
0.08
$
(0.55
)
41,510
38,761
35,961
27,175
25,323
$
374,173
$
236,181
$
140,501
$
44,878
$
80,333
3,929
3,871
6,243
6,000
6,000
118,003
128,834
81,792
34,132
1,346
729,511
537,739
360,593
148,173
126,289
13,416
9,964
6,228
1,735
1,315
616,458
460,167
307,745
110,429
93,685
24
Table of Contents
(1)
Amortization of unearned
compensation reported in fiscal years 2001 through fiscal 2004
has been reclassified to conform to the current years
presentation. Specifically, amounts have been attributed to the
respective categories within operating expenses.
(2)
The combined overall increase in
cash, cash equivalents, short-term and long-term investments in
fiscal 2004 was primarily due to the net proceeds of
$113.6 million received from the sale of our common stock
in a public offering in November 2003.
(3)
Restricted cash represents escrow
accounts established in connection with lease agreements for our
facilities.
(4)
In our
Form 10-K/A
No. 2 (filed on December 12, 2006), we restated our
consolidated financial statements for the years ended
September 30, 2005, 2004 and 2003, and the selected
consolidated financial data as of and for the years ended
September 30, 2005, 2004, 2003, 2002 and 2001. In addition,
we restated our consolidated financial statements for the
quarters ended December 31, 2005 and March 31, 2006 in
our Quarterly Reports on Form
10-Q/A
for
the quarters ended December 31, 2005 and March 31,
2006, each of which was filed on December 13, 2006. All
financial information included in this Annual Report on
Form 10-K
reflects our restatement.
25
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
Revenues.
The majority of our revenues are
derived from sales of our core products; BIG-IP Local Traffic
Manager; BIG-IP Global Traffic Manager; BIG-IP ISP Traffic
Manager; TrafficShield Application Firewall, and FirePass SSL
VPN servers. We also derive revenues from the sales of services
including annual maintenance contracts, installation, training
and consulting services. We carefully monitor the sales mix of
our revenues within each reporting period. We believe customer
acceptance rates of our new products and feature enhancements
are key indicators of future trends. We also consider overall
revenue concentration by customer and by geographic region as
additional indicators of current and future trends.
Cost of revenues and gross margins.
We strive
to control our cost of revenues and thereby maintain our gross
margins. Significant items impacting cost of revenues are
hardware costs paid to our contract manufacturers, third-party
software license fees, and amortization of developed technology,
personnel and overhead expenses. Our margins have remained
relatively stable over the past two years; however factors such
as sales price, product mix, inventory obsolescence, returns,
component price increases, and warranty costs could
significantly impact our gross margins from quarter to quarter
and represent the significant indicators we monitor on a regular
basis.
26
Table of Contents
Operating expenses.
Operating expenses are
substantially driven by personnel and related overhead expenses.
Existing headcount and future hiring plans are the predominant
factors in analyzing and forecasting future operating expense
trends. Other significant operating expenses that we monitor
include marketing and promotions, travel, professional fees,
computer costs related to the development of new products,
facilities and depreciation expenses.
Liquidity and cash flows.
Our financial
condition remains strong with significant cash and investments
and no long term debt. The increase in cash and investments
during the fiscal year 2006 was primarily due to net income from
operations, with operating activities providing cash of
$125.4 million. Capital expenditures during the fiscal year
2006 were comprised primarily of tenant improvements and
information technology infrastructure and equipment to support
the growth of our core business activities.
Balance sheet.
We view cash, short-term and
long-term investments, deferred revenue, accounts receivable
balances and days sales outstanding as important
indicators of our financial health. Deferred revenues continued
to increase due to the growth in the amount of annual
maintenance contracts purchased on new products and maintenance
renewal contracts related to our existing product installation
base. Our days sales outstanding for the fourth quarter of
fiscal 2006 was 51. We expect to maintain this metric going
forward.
27
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28
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands, except for percentages)
$
304,878
$
219,603
$
126,169
89,171
61,807
45,021
$
394,049
$
281,410
$
171,190
77.4
%
78.0
%
73.7
%
22.6
22.0
26.3
100.0
%
100.0
%
100.0
%
29
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands, except for percentages)
$
63,619
$
48,990
$
28,406
24,534
16,194
10,993
88,153
65,184
39,399
$
305,896
$
216,226
$
131,791
20.9
%
22.3
%
22.5
%
27.5
26.2
24.4
22.4
23.2
23.0
77.6
%
76.8
%
77.0
%
30
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands, except for percentages)
$
127,478
$
89,866
$
66,446
49,171
31,516
24,438
39,109
25,486
15,761
$
215,758
$
146,868
$
106,645
32.4
%
31.9
%
38.8
%
12.5
11.2
14.3
9.9
9.1
9.2
54.8
%
52.2
%
62.3
%
31
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands, except for percentages)
$
90,138
$
69,358
$
25,146
17,431
8,076
2,731
107,569
77,434
27,877
41,564
30,532
(8,451
)
$
66,005
$
46,902
$
36,328
22.9
%
24.6
%
14.7
%
4.4
2.9
1.6
27.3
27.5
16.3
10.5
10.8
(4.9
)
16.8
%
16.7
%
21.2
%
32
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands)
$
492,176
$
365,015
$
222,293
125,378
84,987
40,590
(204,409
)
(126,760
)
(164,713
)
65,145
68,867
138,468
33
Table of Contents
Payment Obligations by Year
2007
2008
2009
2010
2011
Thereafter
Total
(In thousands)
$
10,934
$
11,509
$
12,527
$
12,259
$
11,032
$
32,763
$
91,024
10,839
10,839
$
21,773
$
11,509
$
12,527
$
12,259
$
11,032
$
32,763
$
101,863
Item 7A.
Quantitative
and Qualitative Disclosure About Market Risk
34
Table of Contents
Maturing in
Three Months
Three Months
Greater Than
or Less
to One Year
One Year
Total
Fair Value
(In thousands, except for percentages)
$
7,852
$
$
$
7,852
$
7,852
4.6
%
$
122,805
$
213,621
$
$
336,426
$
336,426
4.4
%
3.8
%
$
$
$
118,003
$
118,003
$
118,003
4.1
%
$
298
$
$
$
298
$
298
2.5
%
$
89,015
$
95,299
$
$
184,314
$
184,314
2.6
%
2.3
%
$
$
$
128,834
$
128,834
$
128,834
3.1
%
$
16,363
$
$
$
16,363
$
16,363
1.1
%
$
64,410
$
51,190
$
$
115,600
$
115,600
1.3
%
1.8
%
$
$
$
81,792
$
81,792
$
81,792
2.0
%
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
Page
37
39
40
41
42
43
67
36
Table of Contents
37
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38
Table of Contents
September 30,
2006
2005
(In thousands)
$
37,746
$
51,867
336,427
184,314
62,750
41,703
5,763
2,699
4,682
4,175
15,607
9,906
462,975
294,664
3,929
3,871
29,951
16,158
118,003
128,834
18,657
36,212
81,701
49,677
14,295
8,323
$
729,511
$
537,739
$
13,174
$
7,668
31,583
23,931
54,880
36,009
99,637
67,608
7,976
6,650
5,440
3,314
13,416
9,964
521,791
431,897
(1,038
)
(1,430
)
95,705
29,700
616,458
460,167
$
729,511
$
537,739
39
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands, except per share data)
$
304,878
$
219,603
$
126,169
89,171
61,807
45,021
394,049
281,410
171,190
63,619
48,990
28,406
24,534
16,194
10,993
88,153
65,184
39,399
305,896
216,226
131,791
127,478
89,866
66,446
49,171
31,516
24,438
39,109
25,486
15,761
215,758
146,868
106,645
90,138
69,358
25,146
17,431
8,076
2,731
107,569
77,434
27,877
41,564
30,532
(8,451
)
$
66,005
$
46,902
$
36,328
$
1.64
$
1.26
$
1.09
40,139
37,220
33,221
$
1.59
$
1.21
$
1.01
41,510
38,761
35,961
40
Table of Contents
Accumulated
Other
Retained
Total
Common Stock
Unearned
Comprehensive
Earnings
Shareholders
Shares
Amount
Compensation
Income/(Loss)
(Deficit)
Equity
(In thousands)
27,403
$
165,321
$
(1,557
)
$
195
$
(53,530
)
$
110,429
2,032
22,349
22,349
162
2,579
2,579
5,175
113,636
113,636
21,925
21,925
468
(468
)
1,192
1,192
36,328
144
(837
)
35,635
34,772
$
326,278
$
(833
)
$
(498
)
$
(17,202
)
$
307,745
3,685
65,056
65,056
136
3,837
3,837
32,153
32,153
833
833
4,573
4,573
46,902
(161
)
(771
)
45,970
38,593
$
431,897
$
$
(1,430
)
$
29,700
$
460,167
1,747
38,701
38,701
136
5,488
5,488
302
20,887
20,887
24,818
24,818
66,005
(293
)
685
66,397
40,778
$
521,791
$
$
(1,038
)
$
95,705
$
616,458
41
Table of Contents
Years Ended September 30,
2006
2005
2004
(In thousands)
$
66,005
$
46,902
$
36,328
446
569
21
(3
)
24,818
5,406
1,192
67
1,419
1,189
11,585
6,797
5,355
18,946
(7,733
)
(33,886
)
32,153
21,685
(20,812
)
(20,456
)
(4,152
)
(2,997
)
(1,002
)
(928
)
(5,578
)
(3,604
)
(642
)
(957
)
(149
)
(630
)
13,088
13,426
6,303
20,767
11,259
8,758
125,378
84,987
40,590
(557,999
)
(407,533
)
(335,231
)
417,817
290,351
205,662
(49
)
2,369
(168
)
(2,259
)
(42,778
)
(395
)
(29,201
)
(21,400
)
(9,293
)
(5,775
)
(204,409
)
(126,760
)
(164,713
)
113,636
20,887
44,258
68,867
24,832
65,145
68,867
138,468
(13,886
)
27,094
14,345
(235
)
(128
)
205
51,867
24,901
10,351
$
37,746
$
51,867
$
24,901
$
1,500
$
792
$
706
42
Table of Contents
1.
Summary
of Significant Accounting Policies
43
Table of Contents
Years Ended
September 30,
2006
2005
$
2,610
$
2,486
3,153
213
$
5,763
$
2,699
44
Table of Contents
Years Ended
September 30,
2006
2005
$
29,802
$
19,344
7,026
5,326
16,118
8,772
52,946
33,442
(22,995
)
(17,284
)
$
29,951
$
16,158
45
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46
Table of Contents
Years Ended September 30
2006
2005
2004
$
1,565
$
1,062
$
827
1,825
2,233
923
(1,808
)
(1,730
)
(688
)
$
1,582
$
1,565
$
1,062
47
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48
Table of Contents
Stock Option Plan
Employee Stock Purchase Plan
Years Ended September 30,
Years Ended September 30,
2006
2005
2004
2006
2005
2004
4.86
%
3.53
%
3.19
%
4.90
%
2.72
%
1.14
%
6.3 years
2.7 years
2.2 years
0.5 years
0.5 years
0.5 years
51.07
%
68.17
%
59.05
%
45.35
%
52.48
%
50.18
%
Years Ended September 30,
2005
2004
$
46,902
$
36,328
833
1,192
7,161
19,356
$
40,574
$
18,164
$
1.26
$
1.09
$
1.09
$
0.55
$
1.21
$
1.01
$
1.05
$
0.51
49
Table of Contents
Years Ended September 30,
2006
2005
2004
$
66,005
$
46,902
$
36,328
40,139
37,220
33,221
1,371
1,541
2,740
41,510
38,761
35,961
$
1.64
$
1.26
$
1.09
$
1.59
$
1.21
$
1.01
50
Table of Contents
2.
Short-Term
and Long-Term Investments
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
83,619
$
$
(475
)
$
83,144
67,450
67,450
186,159
43
(369
)
185,833
$
337,228
$
43
$
(844
)
$
336,427
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
56,352
$
$
(275
)
$
56,077
45,500
45,500
83,061
1
(325
)
82,737
$
184,913
$
1
$
(600
)
$
184,314
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
10,823
$
22
$
(51
)
$
10,794
107,471
76
(338
)
107,209
$
118,294
$
98
$
(389
)
$
118,003
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
61,932
$
$
(1,007
)
$
60,925
68,497
(588
)
67,909
$
130,429
$
$
(1,595
)
$
128,834
Amortized
Cost
Fair Value
$
337,228
$
336,427
118,294
118,003
$
455,522
$
454,430
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Less Than 12 Months
12 Months of Greater
Total
Gross
Gross
Gross
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
$
10,771
$
13
$
57,843
$
522
$
68,613
$
536
106,142
119
66,913
589
173,055
708
$
116,913
$
132
$
124,756
$
1,111
$
241,668
$
1,244
3.
Business
Combinations
52
Table of Contents
$
3,448
1,497
2,341
8,589
31,975
$
47,850
$
(1,405
)
(229
)
(1,634
)
$
46,216
53
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$
895
152
76
625
81
5,000
25,488
$
32,317
$
(723
)
(1,069
)
(25
)
(1,817
)
$
30,500
54
Table of Contents
Year Ended
Year Ended
September 30,
September 30,
2005
2004
$
283,434
$
171,309
$
38,412
$
28,700
$
1.03
$
0.86
$
0.99
$
0.80
4.
Balance
Sheet Details
Years Ended
September 30,
2006
2005
$
249
$
521
10,159
5,367
3,887
2,435
$
14,295
$
8,323
$
3,447
$
3,098
$
2,265
$
1,598
$
10,408
Years Ended
September 30,
2006
2005
$
17,644
$
11,572
1,212
1,544
14
559
1,582
1,564
4,490
4,265
6,641
4,427
$
31,583
$
23,931
55
Table of Contents
Balance at
Balance at
September 30,
Additional
Cash Payments
September 30,
2005
Charges
and Write-offs
2006
$
559
$
$
(500
)
$
59
Balance at
Balance at
September 30,
Additional
Cash Payments
September 30,
2004
Charges
and Write-offs
2005
$
625
$
$
(66
)
$
559
Years Ended
September 30,
2006
2005
$
4,201
$
3,880
3,775
2,770
$
7,976
$
6,650
5.
Income
Taxes
Years Ended September 30,
2006
2005
2004
$
104,167
$
73,797
$
26,533
3,402
3,637
1,344
$
107,569
$
77,434
$
27,877
56
Table of Contents
Years Ended September 30,
2006
2005
2004
$
43,041
$
33,827
$
133
2,458
2,451
129
68
750
923
45,567
37,028
1,185
(4,371
)
(6,129
)
(9,034
)
(144
)
(653
)
(602
)
512
286
(4,003
)
(6,496
)
(9,636
)
$
41,564
$
30,532
$
(8,451
)
Years Ended September 30,
2006
2005
2004
$
37,649
$
27,102
$
9,757
2,468
1,874
706
(655
)
2,417
357
(830
)
(2,057
)
(1,397
)
2,932
3,845
(1,498
)
(2,649
)
(28,062
)
11,686
$
41,564
$
30,532
$
(8,451
)
57
Table of Contents
Years Ended September 30,
2006
2005
2004
$
6,054
$
25,002
$
26,427
860
915
810
1,442
1,140
690
248
417
210
9,113
6,097
2,248
1,079
462
838
8,643
7,631
5,552
27,439
41,664
36,775
(2,649
)
(4,100
)
(1,277
)
(2,506
)
$
23,339
$
40,387
$
31,620
58
Table of Contents
6.
Shareholders
Equity
59
Table of Contents
60
Table of Contents
Outstanding
Stock Units
721,184
(3,000
)
718,184
511,875
(302,135
)
(72,442
)
855,482
Options Outstanding
Weighted
Average
Number of
Exercise Price
Shares
per Share
7,507,829
17.92
2,230,515
24.79
(2,031,552
)
11.00
(353,232
)
26.07
7,353,560
21.52
224,100
43.73
(3,684,558
)
17.66
(297,786
)
34.08
3,595,316
$
25.82
73,500
51.08
(1,747,237
)
22.15
(104,661
)
40.91
1,816,918
$
29.50
61
Table of Contents
Options Outstanding
Options Exercisable
Weighted
Weighted
Average
Average
Weighted
Remaining
Exercise
Average
Number of
Contractual
Price
Number of
Price
Shares
Life (In Years)
per Share
Shares
per Share
429,083
5.33
$
10.68
425,474
$
10.66
403,695
7.53
$
21.48
113,593
$
19.75
377,443
7.29
$
25.18
280,665
$
25.45
368,251
6.20
$
38.78
215,850
$
38.83
238,446
5.36
$
69.48
195,466
$
71.78
1,816,918
6.41
$
29.50
1,231,048
$
29.51
Awards
Available for
Grant
1,178,733
(2,230,515
)
353,232
820,070
121,520
(945,284
)
300,786
1,582,081
1,059,103
(585,375
)
177,103
(29,606
)
621,225
62
Table of Contents
7.
Commitments
and Contingencies
Gross
Net
Lease
Sublease
Lease
Payments
Income
Payments
10,934
2,943
7,989
11,509
2,867
8,643
12,527
2,944
9,583
12,259
3,021
9,238
11,032
3,098
7,935
32,763
2,644
30,119
$
91,024
$
17,517
$
73,507
63
Table of Contents
8.
Employee
Benefit Plans
9.
Geographic
Sales and Significant Customers
Years Ended September 30,
2006
2005
2004
$
226,242
$
167,322
$
103,603
70,716
47,198
25,606
51,560
38,435
26,801
45,531
28,455
15,180
$
394,049
$
281,410
$
171,190
64
Table of Contents
10.
Subsequent
Events
11.
Quarterly
Results of Operations
Three Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2006
2006
2006
2005
2005(1)(3)
2005(3)
2005(3)
2004(3)
(Unaudited and in thousands)
$
86,320
$
77,192
$
72,775
$
68,591
$
62,762
$
57,112
$
53,332
$
46,397
25,397
22,937
21,341
19,496
17,845
15,952
14,398
13,612
111,717
100,129
94,116
88,087
80,607
73,064
67,730
60,009
17,716
15,869
15,441
14,593
13,886
12,752
11,822
10,530
7,065
6,649
5,846
4,974
4,572
4,312
3,915
3,395
24,781
22,518
21,287
19,567
18,458
17,064
15,737
13,925
86,936
77,611
72,829
68,520
62,149
56,000
51,993
46,084
65
Table of Contents
Three Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2006
2006
2006
2005
2005(1)(3)
2005(3)
2005(3)
2004(3)
(Unaudited and in thousands)
35,087
32,364
31,162
28,865
25,575
23,219
20,988
20,084
13,900
12,517
12,276
10,478
9,066
7,584
7,834
7,032
14,389
10,175
7,148
7,397
7,338
6,316
6,341
5,491
63,376
55,056
50,586
46,740
41,979
37,119
35,163
32,607
23,560
22,555
22,243
21,780
20,170
18,881
16,830
13,477
5,825
4,759
3,877
2,970
2,925
2,123
1,641
1,387
29,385
27,314
26,120
24,750
23,095
21,004
18,471
14,864
11,633
10,349
10,053
9,529
8,188
8,311
7,507
6,526
$
17,752
$
16,965
$
16,067
$
15,221
$
14,907
$
12,693
$
10,964
$
8,338
$
0.44
$
0.42
$
0.40
$
0.39
$
0.39
$
0.33
$
0.30
$
0.23
40,724
40,553
40,120
39,163
38,479
37,918
36,905
35,577
$
0.43
$
0.41
$
0.39
$
0.37
$
0.37
$
0.32
$
0.28
$
0.22
41,645
41,659
41,627
40,805
40,014
39,433
38,939
37,848
(1)
The Company adopted FAS 123R on July 1, 2005, and as a
result recognized $4.6 million of compensation expense
related to stock-based compensation charges included in
operating expenses in the fourth quarter of fiscal 2005.
(2)
The fourth quarter of fiscal 2006, includes general and
administrative expenses of $5.0 million, related to third
parties cost for legal, accounting, tax and other professional
services in connection with the Special Committee investigation
and related restatement described below.
(3)
In our Annual Report on
Form 10-K/A
No. 2 for fiscal year 2005 (filed on December 12,
2006), we restated our consolidated financial statements for the
years ended September 30, 2005, 2004 and 2003, and the
selected consolidated financial data as of and for the years
ended September 30, 2005, 2004, 2003, 2002 and 2001. In
addition, we restated our condensed consolidated financial
statements for the quarters ended December 31, 2005 and
March 31, 2006 in our Quarterly Reports on Form
10-Q/A
for
the quarters ended December 31, 2005 and March 31,
2006, each of which was filed on December 13, 2006. All
financial information included in this Annual Report on
Form 10-K
reflects our restatement.
Table of Contents
VALUATION AND QUALIFYING ACCOUNTS AND
RESERVES
Balance at
Charges to
Charges to
Balance
Beginning
Costs and
Other
at End
of Period
Expenses
Accounts
Deductions
of Period
(In thousands)
$
1,747
$
(854
)
$
$
7
$
900
$
1,222
$
920
$
921
$
(1,105
)
$
1,958
$
1,594
$
653
$
$
(500
)
$
1,747
$
1,567
$
766
$
626
$
(1,737
)
$
1,222
$
2,649
$
$
$
(2,649
)
$
$
1,524
$
150
$
$
(80
)
$
1,594
$
1,525
$
1,009
$
1,566
$
(2,533
)
$
1,567
$
30,711
$
$
$
(28,062
)
$
2,649
67
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
68
Table of Contents
Review and approval of all stock-based compensation awards by
the accounting and finance function.
Enhanced and standardized documentation required to be
maintained for the granting of all such stock-based compensation
awards.
Enhanced and standardized documentation required to be
maintained for the exercise and/or cancellation of all such
stock-based compensation awards.
A quarterly review and reconciliation of all such stock-based
compensation awards by the accounting and finance function.
Formal communication to all relevant personnel involved in the
stock-based compensation process regarding the importance of the
accounting and legal implications of the Companys
stock-based compensation process.
Item 9B.
Other
Information
69
Table of Contents
Item 10.
Directors
and Executive Officers of the Registrant
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions
Item 14.
Principal
Accountant Fees and Services
Item 15.
Exhibits
and Financial Statement Schedules
70
Table of Contents
By:
By:
Chief Executive Officer,
President, and Director (principal executive officer)
December 13, 2006
By:
Senior Vice President,
Chief Accounting Officer
(principal financial officer)
December 13, 2006
By:
Director
December 13, 2006
By:
Director
December 13, 2006
By:
Director
December 13, 2006
By:
Director
December 13, 2006
By:
Director
December 13, 2006
By:
Director
December 13, 2006
71
Table of Contents
Exhibit
2
.1
Agreement and Plan of Merger dated
as of May 31, 2004, by and among the Registrant, Fire5,
Inc., a wholly owned subsidiary of the Registrant, MagniFire
Websystems, Inc., and Lucent Venture Partners III LLC(1)
2
.2
Agreement and Plan of Merger,
dated September 6, 2005, among F5 Networks, Inc., Sparrow
Acquisition Corp., Swan Labs Corporation and the other parties
referred to therein.(2)
3
.1
Second Amended and Restated
Articles of Incorporation of the Registrant(3)
3
.2
Amended and Restated Bylaws of the
Registrant(3)
4
.1
Specimen Common Stock
Certificate(3)
10
.1
Amended and Restated Office Lease
Agreement dated April 3, 2000, between the Registrant and
401 Elliott West LLC(4)
10
.2
Sublease Agreement dated
March 30, 2001 between the Registrant and Cell
Therapeutics, Inc.(5)
10
.3
uRoam Acquisition Equity Incentive
Plan(6)
10
.4
Form of Indemnification Agreement
between the Registrant and each of its directors and certain of
its officers(3)
10
.5
1998 Equity Incentive Plan, as
amended(7)
10
.6
Form of Option Agreement under the
1998 Equity Incentive Plan(3)
10
.7
Amended and Restated
Directors Nonqualified Stock Option Plan(3)
10
.8
Form of Option Agreement under the
Amended and Restated Directors Nonqualified Stock Option
Plan(3)
10
.9
Amended and Restated 1996 Stock
Option Plan(3)
10
.10
Form of Option Agreement under the
Amended and Restated 1996 Stock Option Plan(3)
10
.11
1999 Non-Employee Directors
Stock Option Plan(3)
10
.12
Form of Option Agreement under
1999 Non-Employee Directors Stock Option Plan(3)
10
.13
NonQualified Stock Option
Agreement between John McAdam and the Registrant dated
July 24, 2000(8)
10
.14
2000 Employee Equity Incentive
Plan(9)
10
.15
Form of Option Agreement under the
2000 Equity Incentive Plan(10)
10
.16
NonQualified Stock Option
Agreement between M. Thomas Hull and the Registrant dated
October 20, 2003(11)
10
.17
1999 Employee Stock Purchase Plan,
as amended(12)
10
.18
MagniFire Acquisition Equity
Incentive Plan(13)
10
.19
NonQualified Stock Option
Agreement between Karl Triebes and the Registrant dated
August 16, 2004(13)
10
.20
Incentive Compensation Plan for
Executive Officers(13)
10
.21
2005 Equity Incentive Plan(14)
10
.22
Form of Restricted Stock Unit
agreement under the 2005 Equity Incentive Plan (with
acceleration upon change of control)(15)
10
.23
Form of Restricted Stock Unit
agreement under the 2005 Equity Incentive Plan (no acceleration
upon change of control)(15)
10
.24
Amendment to F5 Networks, Inc.
2005 Equity Incentive Plan Award Agreement, dated March 8,
2006, between the Registrant and John Rodriquez(16)
10
.25
Amendment to F5 Networks, Inc.
2005 Equity Incentive Plan Award Agreement, dated March 8,
2006, between the Registrant and Andy Reinland(16)
10
.26
Compensation arrangement for
current and future members to special committees of the
Registrants Board of Directors effective September 1,
2006(17)
72
Table of Contents
Exhibit
10
.27
Office Lease Agreement with Selig
Real Estate Holdings IIX, L.L.C. dated October 31,
2006(18)
10
.28*
First Amendment to Sublease
Agreement dated April 13, 2001 between the Registrant and
Cell Therapeutics, Inc.
10
.29*
Second Amendment to Sublease
Agreement dated March 6, 2002 between the Registrant and
Cell Therapeutics, Inc.
10
.30*
Third Amendment to Sublease
Agreement dated as of December 22, 2005 between the
Registrant and Cell Therapeutics, Inc.
21
.1*
Subsidiaries of the Registrant
23
.1*
Consent of PricewaterhouseCoopers
LLP, Independent Registered Public Accounting Firm
31
.1*
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2*
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
.1*
Certification Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
*
Filed herewith.
(1)
Incorporated by reference from Current Report on
Form 8-K
dated May 31, 2004 and filed with the SEC on June 2,
2004.
(2)
Incorporated by reference from Current Report on
Form 8-K
dated October 4, 2005 and filed with the SEC on
October 5, 2005.
(3)
Incorporated by reference from Registration Statement on
Form S-1,
File
No. 333-75817.
(4)
Incorporated by reference from Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2003.
(5)
Incorporated by reference from Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2001.
(6)
Incorporated by reference from Registration Statement on
Form S-8,
File
No. 333-109895.
(7)
Incorporated by reference from Registration Statement on
Form S-8,
File
No. 333-104169.
(8)
Incorporated by reference from Annual Report on
Form 10-K
for the year ended September 30, 2000.
(9)
Incorporated by reference from Registration Statement on
Form S-8,
File
No. 333-51878.
(10)
Incorporated by reference from Annual Report on
Form 10-K
for the year ended September 30, 2001.
(11)
Incorporated by reference from Registration Statement on
Form S-8,
File
No. 333-112022.
(12)
Incorporated by reference from Registration Statement on
Form S-8,
File
No. 333-116187.
(13)
Incorporated by reference from Annual Report on
Form 10-K
for the year ended September 30, 2004.
(14)
Incorporated by reference from Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2005.
(15)
Incorporated by reference from Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2005.
(16)
Incorporated by reference from Current Report on
Form 8-K
dated March 8, 2006 and filed with the SEC on
March 10, 2006.
(17)
Incorporated by reference from Current Report on
Form 8-K
dated September 1, 2006 and filed with the SEC on
September 5, 2006.
(18)
Incorporated by reference from Current Report on
Form 8-K
dated October 31, 2006 and filed with the SEC on
November 3, 2006.
73
EXHIBIT 10.28
FIRST AMENDMENT TO SUBLEASE AGREEMENT
This First Amendment ("Amendment") is dated for reference purposes April 13, 2001, and amends that certain Sublease Agreement dated March 30,2001 (the "Sublease") made by and between F5 Networks, Inc., a Washington corporation, as Sublandlord, and Cell Therapeutics, Inc., a Washington corporation, as Subtenant. The capitalized terms in this Amendment shall have the meaning given to those same terms in the Sublease, unless a different meaning has been provided herein.
NOW, THEREFORE, the parties hereby amend the Sublease as follows:
1. Security Deposit. The Sublease is hereby amended by deleting the second to the last sentence of Section 7. Sublandlord will apply the balance of the Subtenant's cash security deposit in the amount of sixty-five thousand eight hundred sixty-four dollars and seventy-nine cents ($65,864.79) deposited under the Prior Sublease (as defined in Section 2 of the Sublease) against the Base Rent due for the first month of the Term.
2. Letter of Credit. The amount of the letter of credit to be posted by Subtenant pursuant to Section 7 of the Sublease is hereby amended to be six hundred seventy thousand dollars ($670,000).
3. Use of Subleased Premises. Section 8 of the Sublease is deleted in its entirety and replaced with the following:
Subtenant may use the Sublease Premises for laboratory uses of the types generally permitted by institutional landlords of similar buildings of multi-tenant developments in the Seattle area, provided that Subtenant shall comply with any special restrictions or precautions imposed by Master Landlord.
4. Alterations. Section 10 of the Sublease is amended by adding the following new paragraph at the end of that Section:
Master Landlord may (and is expected to) require Sublandlord to post or arrange for the posting of a Letter of Credit securing restoration obligations under the Master Lease if the Subleased Premises are materially altered from their current improved state and Master Landlord requires that Sublandlord remove any proposed alterations to be installed by Subtenant pursuant to the terms of the Master Lease and the Master Landlord's Consent referenced in Section 14 below (the "Restoration Deposit"). Subtenant shall post the Restoration Deposit directly with Master Landlord. Sublandlord shall have no obligation to post the Restoration Deposit.
5. Conditions Precedent. Section 14 of the Sublease is hereby deleted in its entirety and replaced with the following:
This Sublease is conditioned upon Master Landlord consenting to this Sublease pursuant to the Landlor's Constent to Subleasing attached to this Amendment as Exhibit A (the "Master Landlord Consent"). If Master Landlord has not so consented to this Sublease within thirty (30) days after this Sublease has been signed by Sublandlord and Subtenant, then either party may terminate this Sublease by delivering written notice of termination to the other party.
6. Miscellaneous. In the event of any conflict between the terms of this Amendment and the Sublease, this Amendment shall control. The parties hereby ratify and confirm their obligations under the Sublease as amended by this Amendment. This Amendment, the Sublease, the exhibits attached to the Sublease and this Amendment, and the Master Lease constitute the entire agreement between Sublandlord and Subtenant with respect to the Subleased Premises, and may not be amended or altered except by written agreement executed by both parties. This Amendment may be executed in one or more counterparts; each signed counterpart shall be deemed an original and all counterparts together shall constitute a single, integrated agreement. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either party, the parties will confirm facsimile transmitted signatures by signing an original document.
IN WITNESS WHEREOF, the parties hereto hereby execute this Amendment as of day and year first above written.
SUBLANDLORD:
F5 Networks, Inc., a Washington
corporation
SUBTENANT:
Cell Therapeutics, Inc., a Washington
corporation
EX-10.29
SECOND AMENDMENT TO SUBLEASE AGREEMENT
This Second Amendment (the "Amendment") is dated for reference purposes this 6th day of March, 2002, and amends that certain Sublease Agreement dated March 30, 2001 made by and between F5 Networks, Inc., a Washington corporation, as Sublandlord, and Cell Therapeutics, Inc., a Washington corporation, as Subtenant, as previously amended by the First Amendment dated April 13, 2001 (collectively, "Sublease"). The capitalized terms in this Amendment shall have the meaning given to those same terms in the Sublease, unless a different meaning has been provided herein
NOW, THEREFORE, the parties hereby amend the Sublease as follows:
1. Area 2A. Effective July 15, 2002, the Subleased Premises shall include Area 2A, comprising 14,666 rentable square feet on the second floor. The Commencement Date for Area 2A shall be July 15,2002, and the Rent Commencement Date for Area 2A shall be August 1, 2002. Subtenant has had an opportunity to inspect Area 2A and accepts Area 2A in its current, "AS-IS" condition. All other terms and conditions of the Sublease shall apply to Area 2A the same as other portions of the Subleased Premises, including, but not limited to the Expiration Date.
2. Base Rent and Operating Expenses. The Base Rent for Area 2A shall be as stated in Section 3.1 (b) of the Sublease. Effective July 15, 2002 when Area 2A is included as part of the Premises, Subtenant will have leased the entire Building and Subtenant's proportionate share for purposes of calculating Additional Rent shall be 100%, all as provided in Section 3.2 of the Sublease.
3. Miscellaneous. In the event of any conflict between the terms of this Amendment and the Sublease, this Amendment shall control. The parties hereby ratify and confirm their obligations under the Sublease as amended by this Amendment. This Amendment and the Sublease constitute the entire agreement between Sublandlord and Subtenant with respect to the Subleased Premises, and may not be amended or altered except by written agreement executed by both parties. This Amendment may be executed in one or more counterparts, each signed counterpart shall be deemed an original, and all counterparts together shall constitute a single, integrated agreement. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either party, the parties will confirm facsimile transmitted signatures by signing an original document.
IN WITNESS WHEREOF, the parties have entered into this Amendment effective as of the date stated above.
SUBLANDLORD:
F5 Networks, Inc., a Washington
corporation
SUBTENANT:
Cell Therapeutics, Inc., a Washington
corporation
EXHIBIT 10.30
THIRD AMENDMENT TO SUBLEASE AGREEMENT
THIS THIRD AMENDMENT TO SUBLEASE AGREEMENT ("AGREEMENT"), dated for reference purposes December 22, 2005, is made by and between F5 Networks, Inc., a Washington corporation ("SUBLANDLORD"), and Cell Therapeutics, Inc., a Washington corporation ("SUBTENANT"). The capitalized terms in this Agreement shall have the meaning given to those same terms in the Sublease, unless a different meaning has been provided herein.
RECITALS
A. Sublandlord and Subtenant have entered into a certain Sublease Agreement dated March 30, 2001, as thereafter modified and supplemented by a First Amendment to Sublease Agreement dated April 13, 2001, a Second Amendment to Sublease Agreement dated March 6, 2002, a Letter Agreement Regarding Generator Use dated March 4, 2004, and a Closed Circuit TV Agreement entered into effective as of January 12, 2005, and amended effective as of April 29, 2005 (collectively, the "SUBLEASE").
B. The parties now desire to remove certain space from the Subleased Premises and return the same to the Sublandlord, and to otherwise modify the Sublease to reflect this contraction of the Subleased Premises, only as expressly provided for herein.
NOW, THEREFORE, for good and valuable consideration, the parties hereby amend the Sublease as follows:
1. Subleased Premises.
a. Effective January 16, 2006, there shall be removed from the Subleased Premises approximately 33,127 rentable square feet of space, consisting of 28,854 rentable square feet described as Area No. 2A and Area No. 2B in the Sublease, comprising the entire second floor of the Building, together with approximately 4,273 rentable square feet on the first floor of the Building located in Area 1A, the first floor space being depicted on Exhibit A hereto (collectively, the "DELETED SPACE"). After removal of the Deleted Space, the Subleased Premises shall be deemed to consist of 76,984 rentable square feet. The Deleted Space shall be delivered by Subtenant to Sublandlord no later than January 16, 2006, in a broom-clean, but otherwise "AS-IS," condition. Subtenant shall remove all furniture, office equipment and any other personal property, including all security cameras (subject to obtaining Master Landlord's consent to such removal), currently located within the Deleted Space. Sublandlord shall have the right to use, in common with others entitled thereto, Common Areas in the Building associated with or convenient for use of the Deleted Space.
b. Within the second floor space of the Deleted Space, Subtenant shall be permitted to place its wiring and cabling within those electrical closets, wiring closets and cabling rooms depicted on Exhibit B hereto in locations and quantities as reasonably determined by Sublandlord. Further, Sublandlord shall permit Subtenant access to the said closets/rooms to maintain, repair and inspect its wiring and cabling at reasonable times as requested by Subtenant upon reasonable notice to Sublandlord.
c. Sublandlord reserves the right to use cooperatively with Subtenant on a non-exclusive basis the Building loading dock for both shipping and receiving, as well as reasonable access through the Subleased Premises (the location to be reasonably determined by Subtenant) sufficient to transport office and construction equipment between the loading dock and the Building elevators.
d. Sublandlord reserves (i) the right of access in all stairways and elevators between those portions of the Building not within the Subleased Premises and the Building rooftop, (ii) the right to install and maintain additional mechanical equipment on the Building rooftop reasonably necessary to serve those portions of the Building not within the Subleased Premises, (iii) the right to use existing mechanical and electrical risers, shafts, sleeves and penetrations between Sublandlord's spaces within the Building and the Building rooftop, which right shall be shared with Subtenant.
e. Section 1 of the Sublease is hereby amended to reflect these changes contained in (a) - (c) above herein.
2. Base Rent. Section 3.1 of the Sublease is hereby amended to provide that, commencing April 1, 2006, annualized Base Rent for the Subleased Premises less the Deleted Space shall be as follows:
PERIOD ANNUALIZED BASE RENT (PER RSF) ------ ------------------------------ April 1, 2006 - December 31, 2006 $35.38 January 1, 2007 - March 31, 2007 $36.81 April 1, 2007 - December 31, 2007 $36.38 January 1, 2008 - March 31, 2008 $37.81 April 1, 2008 - December 31, 2008 $37.38 January 1, 2009 - March 31, 2009 $38.81 April 1, 2009 - December 31, 2009 $38.38 January 1, 2010 - March 31, 2010 $39.81 April 1, 2010 - December 31, 2010 $39.38 January 1, 2011 - March 31, 2011 $40.81 April 1, 2011 - December 31, 2011 $40.38 January 1, 2012 - March 31, 2012 $41.81 April 1, 2012 - July 31, 2012 $41.38 |
3. Operating Expenses. As a result of the deletion of the Deleted Space from the Subleased Premises, as provided for in Section 1 above herein, Subtenant's proportionate share of all Expenses, as defined in Section 4(c) of the Master Lease, shall be proportionately reduced commencing April 1, 2006. For purposes of calculating Subtenant's proportionate share of Expenses, the Subleased Premises shall be deemed to be 76,984 rentable square feet. Subtenant's proportionate share of Expenses separately allocated to
the Building shall be 69.91% (calculated by dividing the agreed area of the remaining Subleased Premises, namely 76,984 rentable square feet, by the total area of the Building, which is deemed to be 110,111 rentable square feet). Section 3.2 of the Sublease is hereby amended to reflect these changes.
4. Parking. Subtenant's entitlement to parking rights shall be proportionately
reduced to reflect the Subleased Premises as revised by Section 1 of this
Agreement. Because the Subleased Premises is reduced by 33,127 rentable
square feet, Subtenant's parking rights shall be reduced by 63 stalls.
Section 6 of the Sublease is hereby amended to reflect these changes.
5. Generator. Sublandlord shall at all times retain the right to replace the Generator so long as the replacement Generator is of sufficient capacity to continue to provide the power to Subtenant specified in the Sublease, and more particularly in the Letter Agreement dated March 4, 2004.
6. Brokers. Sublandlord has been represented by Washington Partners, Inc. in this transaction and Subtenant has been represented by C.B. Richard Ellis, Inc. Each party shall be separately responsible to its broker pursuant to separate agreements and shall indemnify and hold the other party harmless from any cost, expense or liability (including costs of suit and reasonable attorneys' fees) for any compensation, commission or fees claimed by any real estate broker or agent other than their respective brokers (identified above) in connection with this Agreement or its negotiation by reason of any act of the indemnifying party.
7. Notices. Subtenant's address for notice purposes, and Section 16 of the Sublease, hereby amended as follows:
Cell Therapeutics, Inc.
501 Elliott Avenue, Suite 400
Seattle, WA 98199
Attention: Dr. James Bianco
cc: Legal Affairs
8. Conditions Precedent. This Agreement is conditioned upon Master Landlord consenting to this Agreement pursuant to the Landlord's Consent to Subleasing attached to this Agreement as Exhibit C (the "MASTER LANDLORD CONSENT"). If Master Landlord has not so consented to this Agreement within thirty (30) days after this Agreement has been signed by Sublandlord and Subtenant, then either party may terminate this Agreement by delivering written notice of termination to the other party.
9. Miscellaneous. In the event of any conflict between the terms of this Agreement and the Sublease, this Agreement shall control. The parties hereby ratify and confirm their obligations under the Sublease as amended by this Agreement. This Agreement, the Sublease and all exhibits attached to the Sublease and this Agreement, and the Master Lease, constitute the entire agreement between Sublandlord and Subtenant with respect to the Subleased Premises, and may not be amended or altered except by written agreement
executed by both parties. This Agreement may be executed in one or more counterparts; each signed counterpart shall be deemed an original and all counterparts together shall constitute a single, integrated agreement. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either party, the parties will confirm facsimile-transmitted signatures by signing an original document.
IN WITNESS WHEREOF the parties hereto hereby execute this Third Amendment to Sublease Agreement as of the day and year first above written.
SUBLANDLORD SUBTENANT F5 NETWORKS, INC., CELL THERAPEUTICS, INC., a Washington corporation a Washington corporation By: By: --------------------------------- ------------------------------------ Printed Name: Printed Name: ----------------------- -------------------------- Title: Title: ------------------------------ --------------------------------- |
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that _____________________ is the person who appeared before me, and said person acknowledged that s/he signed this instrument, and on oath stated that s/he was authorized to execute the instrument and acknowledged it as the ________________________ of F5 NETWORKS, INC., to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
DATED: December ______, 2005
NOTARY PUBLIC in and for the State of
Washington, residing at _______________.
My commission expires: ________________.
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that _____________________ is the person who appeared before me, and said person acknowledged that s/he signed this instrument, and on oath stated that s/he was authorized to execute the instrument and acknowledged it as the ______________________________ of CELL THERAPEUTICS, INC., to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
DATED: December _____, 2005
NOTARY PUBLIC in and for the State of
Washington, residing at _______________.
My commission expires: ________________.
EXHIBIT A
Deleted First Floor Space
(FLOOR PLAN)
EXHIBIT B
Electrical Closets and Cabling Rooms
(FLOOR PLAN)
EXHIBIT C
Master Landlord Consent to Subleasing
To be attached.
.
.
.
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
NAME JURISDICTION OF ORGANIZATION ---------------------------------- ---------------------------- F5 Networks Australia Pty. Limited Australia F5 Networks SARL France F5 Networks GmbH Germany F5 Networks Hong Kong Limited Hong Kong F5 Networks Japan K.K. Japan F5 Networks Korea Ltd. Korea F5 Networks Singapore Pte Ltd Singapore F5 Networks Limited United Kingdom F5 RO, Inc. Washington, U.S.A. MagniFire Websystems, Inc. Delaware, U.S.A. Swan Labs Corporation California, U.S.A. |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File No.333-80177, 333-82249, 333-34570, 333-51878, 333-76272, 333-87618,333-102434, 333-104169, 333-109895, 333-112022, 333-116187, 333-122054 and 333-124092) of F5 Networks, Inc., of our report dated December 8, 2006, relating to the consolidated financial statements, financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
PricewaterhouseCoopers LLP
Seattle, Washington
December 13, 2006
EXHIBIT 31.1
CERTIFICATIONS
I, John McAdam, certify that:
1) I have reviewed this annual report on Form 10-K of F5 Networks, Inc.
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: December 13, 2006 /s/ JOHN MCADAM ------------------------------------- John McAdam Chief Executive Officer and President |
Exhibit 31.2
CERTIFICATIONS
I, John Rodriguez, certify that:
1) I have reviewed this annual report on Form 10-K of F5 Networks, Inc.
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: December 13, 2006 /s/ JOHN RODRIGUEZ ---------------------------------- John Rodriguez Senior Vice President, Chief Accounting Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of F5 Networks, Inc. (the "Company") on Form 10-K for the period ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, John McAdam, President and Chief Executive Officer and John Rodriguez, Senior Vice President and Chief Accounting Officer (principal financial officer) of the Company, certify, pursuant to 18 U.S.C. Section. 1350, as adopted pursuant to Section. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: December 13, 2006 /s/ JOHN MCADAM ---------------------------- John McAdam /s/ JOHN RODRIGUEZ ---------------------------- John Rodriguez |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to F5 Networks, Inc., and will be retained by F5 Networks, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.