A10 Networks, Inc. (Form: 10-Q, Received: 08/04/2014 16:14:22)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36343

A10 NETWORKS, INC.

(Exact Name of Registrant as Specified in its Charter)



Delaware		20-1446869
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
3 West Plumeria Drive San Jose, California		95134
(Address of Principal Executive Offices)		(Zip Code)

(408) 325-8668

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	¨		Accelerated filer	¨

Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of July 25, 2014 the number of outstanding shares of the registrant’s common stock, par value $0.00001 per share, was 59,813,356 .

TABLE OF CONTENTS

Insert Title Here

	Page
PART I. FINANCIAL INFORMATION	2
Item 1. Condensed Consolidated Financial Statements (unaudited):	2
Condensed Consolidated Balance Sheets As of June 30, 2014 and December 31, 2013	2
Condensed Consolidated Statements of Operations For the Three and Six Months Ended June 30, 2014 and 2013	3
Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2014 and 2013	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	29
PART II. OTHER INFORMATION	30
Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	50
Signatures	51
Exhibit Index	52

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except par value)



	June 30, 2014			December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	112,101		$	20,793
Accounts receivable, net of allowances of $2,462 and $2,738 as of June 30, 2014 and December 31, 2013	40,455			37,704
Inventory	18,541			17,166
Prepaid expenses and other current assets	4,370			3,056
Total current assets	175,467			78,719
Property and equipment, net	11,945			9,801
Other long-term assets	4,784			5,274
Total Assets	$	192,196		$	93,794
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	10,805		$	9,228
Accrued liabilities	19,645			15,514
Accrued litigation expenses	1,368			10,407
Deferred revenue, current	31,315			28,448
Total current liabilities	63,133			63,597
Revolving credit facility	—			20,000
Deferred revenue, long-term	14,527			12,784
Other long-term liabilities	2,162			6,118
Total Liabilities	79,822			102,499
Commitments and contingencies (Note 5)
Redeemable convertible preferred stock, no par value—no shares authorized, issued or outstanding as of June 30, 2014; 115 shares authorized, 80 shares issued and outstanding with aggregate liquidation preference of $80,000 as of December 31, 2013	—			81,426
Convertible preferred stock, $0.00001 — 100,000 shares authorized and no shares issued and outstanding as of June 30, 2014; no par value —30,569 shares authorized, issued and outstanding with aggregate liquidation preference of $42,884 as of December 31, 2013	—			44,749
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, par value $0.00001 — 500,000 and 65,600 shares authorized as of June 30, 2014 and December 31, 2013; 59,768 and 10,032 shares issued and outstanding as of June 30, 2014 and December 31, 2013	1			—
Additional paid-in capital	265,836			12,185
Accumulated deficit	(153,463		)	(147,065		)
Total Stockholders' Equity (Deficit)	112,374			(134,880		)
Total Liabilities, Redeemable Convertible Preferred Stock, Convertible Preferred Stock And Stockholders' Equity (Deficit)	$	192,196		$	93,794

See accompanying notes to the condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue:
Products	$	34,122		$	23,064		$	70,539		$	46,333
Services	11,010			7,067			20,338			13,379
Total revenue	45,132			30,131			90,877			59,712
Cost of revenue:
Products	7,410			4,894			14,837			9,800
Services	2,930			2,020			5,556			3,718
Total cost of revenue	10,340			6,914			20,393			13,518
Gross profit	34,792			23,217			70,484			46,194
Operating expenses:
Sales and marketing	23,975			15,723			45,538			31,312
Research and development	11,869			8,336			23,074			16,108
General and administrative	5,531			3,697			10,894			7,527
Litigation expense (benefit)	(5,859		)	4,800			(4,013		)	8,204
Total operating expenses	35,516			32,556			75,493			63,151
Loss from operations	(724		)	(9,339		)	(5,009		)	(16,957		)
Other income (expense), net:
Interest expense	(125		)	(33		)	(712		)	(46		)
Interest income and other income (expense), net	(138		)	(683		)	(163		)	(1,364		)
Total other income (expense), net	(263		)	(716		)	(875		)	(1,410		)
Loss before provision for income taxes	(987		)	(10,055		)	(5,884		)	(18,367		)
Provision for income taxes	309			158			514			379
Net loss	$	(1,296	)	$	(10,213	)	$	(6,398	)	$	(18,746	)
Accretion of redeemable convertible preferred stock dividend	—			(33		)	(1,150		)	(33		)
Net loss attributable to common stockholders	$	(1,296	)	$	(10,246	)	$	(7,548	)	$	(18,779	)
Net loss per share attributable to common stockholders:
Basic	$	(0.02	)	$	(1.12	)	$	(0.21	)	$	(2.07	)
Diluted	$	(0.02	)	$	(1.12	)	$	(0.21	)	$	(2.07	)
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic	59,711			9,144			36,712			9,075
Diluted	59,711			9,144			36,712			9,075

See accompanying notes to condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)



	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities:
Net loss	$	(6,398	)	$	(18,746	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,738			3,151
Stock-based compensation	4,776			1,727
Gain on settlement of contractual liability (Note 3)	(6,993		)	—
Provision for doubtful accounts and sales returns	59			458
Fixed assets disposal loss	106			15
Unrealized foreign exchange gain	(226		)	(43		)
Changes in operating assets and liabilities:
Accounts receivable, net	(2,644		)	320
Inventory	(4,265		)	(2,797		)
Prepaid expenses and other current assets	(3,070		)	618
Accounts payable	2,105			(1,533		)
Accrued liabilities	3,632			1,263
Accrued litigation expenses	(6,119		)	(1,445		)
Deferred revenue	4,610			2,862
Other	(29		)	124
Net cash used in operating activities	(9,718		)	(14,026		)
Cash flows from investing activities:
Purchases of property and equipment	(3,791		)	(1,903		)
Net cash used in investing activities	(3,791		)	(1,903		)
Cash flows from financing activities:
Proceeds from initial public offering, net of offering costs	122,312			—
Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs	—			49,479
Proceeds from revolving credit facility	—			10,000
Principal payments on revolving credit facility	(20,000		)	(10,000		)
Principal payments on term loan	—			(539		)
Proceeds from exercise of convertible preferred stock warrants	—			813
Proceeds from exercise of common stock options, net of repurchases of common stock	2,658			829
Other	(153		)	(148		)
Net cash provided by financing activities	104,817			50,434
Net increase in cash and cash equivalents	91,308			34,505
Cash and cash equivalents—beginning of period	20,793			23,867
Cash and cash equivalents—end of period	$	112,101		$	58,372
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Inventory transfers to property and equipment	$	2,891		$	2,592
Costs related to the initial public offering included in accounts payable and accrued liabilities	$	1,424		$	—
Accretion of Series D redeemable convertible preferred stock	$	1,150		$	33
Reclassification of the convertible preferred stock warrant liability to additional paid-in capital upon the exercise of the convertible preferred stock warrants	$	—		$	2,199
Purchases of property and equipment included in accounts payable and accrued liabilities	$	655		$	195
Vesting of early exercised stock options	$	243		$	286

See accompanying notes to condensed consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

A10 Networks, Inc. (together with our subsidiaries, the “Company”, “we”, “our” or “us”) was incorporated in the State of California in 2004 and subsequently reincorporated in the State of Delaware in March 2014.

Our solutions enable enterprises, service providers, Web giants and government organizations to accelerate, secure and optimize the performance of their data center applications and networks. We currently offer three software based advanced application networking solutions. These are Application Delivery Controllers, or ADCs, to optimize data center performance; Carrier Grade Network Address Translation, or CGN, to provide address and protocol translation services for service provider networks; and a Distributed Denial of Service Threat Protection System, or TPS, for network-wide security protection. We deliver these solutions both on optimized hardware appliances and as virtual appliances across our Thunder Series and AX Series product families.

Initial Public Offering

In March 2014 , we completed our initial public offering (“IPO”), whereby 12,500,000 shares of common stock were sold to the public at a price per share of $15.00 . We sold 9,000,000 common shares and selling stockholders sold 3,500,000 common shares. In April 2014, our underwriters exercised an overallotment available to them and an additional 345,000 shares were sold by our selling stockholders bringing the total shares sold to 12,845,000 for this offering. The total gross proceeds from the offering were $192.7 million . After deducting underwriting discounts and commissions, offering expenses payable by us, and net proceeds received by the selling stockholders, the estimated aggregate net proceeds was $120.2 million . Upon the closing of the initial public offering, all shares of our outstanding redeemable convertible preferred stock and convertible preferred stock converted into 39,997,114 shares of common stock.

Reverse Stock Split

On March 6, 2014, we effected a 1-for-3.75 reverse stock split of our common stock and convertible preferred stock (collectively referred to as “Capital Stock”). Shares of our Series D redeemable convertible preferred stock were not subject to the split but instead the conversion price of the Series D redeemable convertible preferred stock was adjusted proportionally to reflect the split of the common stock issued upon conversion of the Series D redeemable convertible preferred stock. On March 6, 2014 (i) each 3.75 shares of outstanding Capital Stock was combined into 1 share of Capital Stock; (ii) the number of shares of Capital Stock for which each outstanding option to purchase Capital Stock is exercisable was proportionately reduced on a 1-for-3.75 basis; (iii) the exercise price of each such outstanding option was proportionately increased on a 1-for-3.75 basis; (iv) each 3.75 shares of authorized Capital Stock was reduced to 1 share of Capital Stock; and (v) the conversion price of the Series D redeemable convertible preferred stock was adjusted from $2.2628 to $8.4855 . All of the share and per share amounts have been adjusted, on a retroactive basis, to reflect this 1-for-3.75 reverse stock split.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of A10 Networks, Inc., and our wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

We had no comprehensive income (loss) other than our net income (loss), hence our comprehensive income (loss) is the same as the net income (loss) for all periods presented. Pursuant to the accounting guidance provided by Accounting Standard Codification ("ASC") 220 Comprehensive Income, we did not present statements of comprehensive income (loss) for the periods presented .

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and following the requirements of the Securities and Exchange Commission (“SEC”), for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of our financial information. The results of operations for the three months and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other interim period or for any other future year. The balance sheet

as of December 31, 2013 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2013 included in our prospectus filed with the SEC on March 21, 2014 pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Those estimates and assumptions affect revenue recognition and deferred revenue, allowance for doubtful accounts, valuation of inventory, contingencies and litigation, and determination of fair value of stock-based compensation. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates.

Summary of Significant Accounting Policies

There have been no changes to the significant accounting policies described in the prospectus that have had a material impact on our condensed consolidated financial statements and related notes.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents and accounts receivable. Our cash and cash equivalents are invested in high-credit quality financial instruments with banks and financial institutions. Management believes that the financial institutions that hold our cash and cash equivalents are financially sound and, accordingly, are subject to minimal credit risk. Such deposits may be in excess of insured limits provided on such deposits.

Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations of our customers to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history, limiting the credit extended and review of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support accounts receivable. We have recorded an allowance for doubtful accounts for those receivables that we have determined not to be collectible.

Significant customers, including distribution channel partners and direct customers, are those which represent more than 10% of our total revenues for each period presented, or our gross accounts receivable balance as of each respective balance sheet date.

Revenues from our significant customers as a percentage of our total revenues for the three and six months ended June 30, 2014 and 2013 are follows:



	Three Months Ended June 30,		Six Months Ended June 30,
Customers	2014	2013	2014	2013
Customer A	*	*	14%	*
Customer B	*	25%	10%	26%
Customer C	10%	*	*	*

* represents less than 10% of total revenues

As of June 30, 2014, another customer represented 20% of our total gross accounts receivable. No other customers accounted for 10% or more our total accounts receivable for the periods presented.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists . ASU 2013-11 provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. This new standard requires the netting of unrecognized tax benefits (“UTBs”) against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. We adopted ASU-2013-11 on January 1, 2014, and the adoption did not have a material impact on our consolidated financial statements since ASU-2013-11 only impacts financial statement disclosure requirements for unrecognized tax benefits.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides new guidance on the recognition of revenue and states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this accounting standard update on our consolidated financial position or results of operations.

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2014, as compared to the recent accounting pronouncements described in our prospectus filed with SEC on March 21, 2014, that are of significance or potential significance to us.

2. Fair Value Measurements

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, preferred stock warrants and debt. Cash equivalents are stated at amortized cost, which approximates fair value as of the balance sheet dates, due to the short period of time to maturity. Accounts receivable, accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The carrying amount of our revolving credit facility approximates the fair value as the stated interest rate approximates market rates currently available to us.

As of June 30, 2014 and December 31, 2013, our financial instruments consist of highly liquid money market funds which are classified as Level I assets in the fair value hierarchy as these instruments are valued using quoted market price for identical assets in an active market. We had no assets or liabilities classified within Level 2 or Level 3 as of June 30, 2014 and December 31, 2013 and there were no transfers of instruments between Level 1, Level 2 and Level 3 regarding fair value measurement during the six months ended June 30, 2014.

The following table sets forth the fair value of our financial assets measured on a recurring basis by level within the fair value hierarchy (in thousands):



	June 30, 2014				December 31, 2013
	Level 1		Total		Level 1		Total
Financial Assets
Money market funds	$	104,048	$	104,048	$	14,029	$	14,029

We did not have realized gains or losses for the three and six months ended June 30, 2014 or 2013 related to our financial assets.

3. Balance Sheets Components

Inventory

Components of inventory as of June 30, 2014 and December 31, 2013 are shown below (in thousands):



	June 30, 2014		December 31, 2013
Raw materials	$	10,542	$	10,625
Finished goods	7,999		6,541
Total inventory	$	18,541	$	17,166

Property and Equipment, Net

Components of property and equipment, net as of June 30, 2014 and December 31, 2013 are shown below (in thousands):



	June 30, 2014			December 31, 2013
Equipment	$	26,853		$	21,188
Software	2,748			2,479
Leasehold improvements	1,756			1,325
Furniture and fixtures	858			777
Construction in progress	269			123
Property and equipment, gross	32,484			25,892
Less: accumulated depreciation and amortization	(20,539		)	(16,091		)
Total property and equipment, net	$	11,945		$	9,801

Depreciation and amortization on our property and equipment for the three and six months ended June 30, 2014 was $2.5 million and $4.7 million . Depreciation and amortization on our property and equipment for the three and six months ended June 30, 2013 was $1.7 million and $3.1 million .

Deferred Revenue

Deferred revenue as of June 30, 2014 and December 31, 2013 consists of the following (in thousands):



	June 30, 2014			December 31, 2013
Deferred revenue:
Products	$	2,175		$	3,170
Services	43,667			38,062
Total deferred revenue	45,842			41,232
Less: current portion	(31,315		)	(28,448		)
Long-term portion	$	14,527		$	12,784

Accrued Liabilities

Accrued liabilities as of June 30, 2014 and December 31, 2013 consists of the following (in thousands):



	June 30, 2014		December 31, 2013
Accrued compensation and benefits	$	11,745	$	9,015
Accrued tax liabilities	3,234		2,156
Other	4,666		4,343
Total accrued liabilities	$	19,645	$	15,514

Settlement of Contractual Liability

In May 2014, we reached a settlement agreement with one of our legal service providers which resulted in the reduction of a previously accrued contractual liability that totaled $12.0 million . We made a payment of $5.0 million in accordance with the terms of the settlement agreement and recorded a $7.0 million benefit to litigation expense during the three months ended June 30, 2014.

4. Credit Facility

In September 2013, we entered into a credit agreement with Royal Bank of Canada, JPMorgan Chase Bank, N.A. and Bank of America, N.A. as lenders. The credit agreement provides a three year $35.0 million revolving credit facility, which includes a maximum $10.0 million letter of credit facility. In March 2014, we repaid the $20.0 million outstanding borrowing under this credit facility. As of June 30, 2014, we have no outstanding borrowings under this credit facility.

Our obligations under the credit agreement are secured by a security interest on substantially all of our assets, including our intellectual property. The credit agreement contains customary financial and non-financial covenants, and are described in Note 5, Debt , in the Notes to Consolidated Financial Statements of our final prospectus filed with the SEC on March 21, 2014. We were in compliance with all financial and nonfinancial covenants under the revolving credit facility as of June 30, 2014.

At our option, the revolving credit facility bears interest at a rate per annum based on either (i) an alternate base rate plus a margin ranging from 1.75% to 2.50% depending on our total leverage ratio, or (ii) the London interbank offered rate, or LIBOR, based on one, two, three or six month interest periods plus a margin ranging from 2.75% to 3.50% depending on our total leverage ratio. The alternate base rate is equal to the greatest of (i) the Royal Bank of Canada’s prime rate, (ii) the federal funds rate plus a margin equal to 0.50% and (iii) the Eurodollar rate for a one month interest period plus a margin equal to 1.00% .

In addition, we incurred $1.0 million of debt issuance costs that were directly attributable to the issuance of this revolving credit facility which will be amortized to interest expense over the three-year term of this credit facility. As of June 30, 2014, the unamortized debt issuance costs of $0.7 million were included within other assets in our condensed consolidated balance sheets. We are also required to pay quarterly facility fees of 0.45% per annum on the average daily unused portion of the revolving credit facility.

5. Commitments and Contingencies

Legal Proceedings

From time to time, we may be party or subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to intellectual property matters. Some of these proceedings involve claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed, we have not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, if any, the matters do not relate to a probable loss and/or amounts are not reasonably estimated. Although we believe that we have a strong defense for the litigation proceedings described below, there are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges that could have a material adverse effect on our results of operations, financial position, or cash flows. In addition, the resolution of any future intellectual property litigation may require us to make royalty payments and/or settlement payments, which could adversely affect gross margin and operating expenses in future periods.

Radware v. A10

In May 2013, Radware, Ltd., and Radware, Inc. (collectively, “Radware”) filed suit against us in the United States District Court for the Northern District of California (the "Court"), asserting that our AX Series and EX Series products infringe three of Radware’s U.S. patents. Radware has also asserted similar claims against F5 Networks, Inc. (“F5”). We responded to the complaint on June 24, 2013. In June 2014, the Court granted-in-part and denied-in-part A10’s motion for summary judgment of non-infringement and denied A10’s motion for summary judgment of invalidity. No trial date has been set and the parties are in the process of conducting discovery.

Parallel v. A10

In November 2013, Parallel Networks, LLC (“Parallel Networks”), which we believe is a non-practicing patent holding company, filed a lawsuit against us in the United States District Court for the District of Delaware. In the lawsuit, Parallel Networks alleges that our AX and Thunder series products infringe two of their U.S. patents. Parallel Networks is seeking injunctive relief, damages and attorneys’ fees and costs. Parallel Networks has asserted similar claims against other companies, including Array Networks, Inc., Barracuda Networks, Inc., Brocade Communications Systems, Inc., Cisco Systems, Inc., Citrix Systems, Inc., F5, Radware, Ltd., Riverbed Technology, Inc. and SAP AG. The separate trials for each defendant in these related actions are set to commence in June 2016 in accordance with an order to be set forth in a trial sequencing conference.

These matters are in the early stages, but we intend to vigorously defend the lawsuits. We are unable to reasonably estimate a possible loss or range of possible loss if any, in regards to these matters; therefore, no litigation reserve has been recorded in the accompanying consolidated balance sheet.

Lease Obligations and Other Commitments

We lease various operating spaces in California, Asia, and Europe under noncancelable operating lease arrangements that expire on various dates through January 2016. These arrangements require us to pay certain operating expenses, such as taxes, repairs, and insurance and contain renewal and escalation clauses.

We have entered into agreements with some of our customers that contain indemnification provisions in the event of claims alleging that our products infringe the intellectual property rights of a third party. Other guarantees or indemnification arrangements include guarantees of product and service performance and standby letters of credit for lease facilities and corporate credit cards. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantees and indemnification arrangements have not had any significant impact on our consolidated financial statements to date.

6. Equity Award Plans

Equity Incentive Plans

2008 Plans

We adopted the 2008 Stock Option Plan (the "2008 Plan") for the purpose of granting stock-based awards to eligible service providers, which included our employees, directors, and consultants as well as employees and consultants of our subsidiaries. Stock options granted under the 2008 Plan were either incentive stock options (“ISOs”) or nonstatutory stock options (“NSOs”). With the establishment of the 2014 Equity Incentive Plan (the "2014 Plan") in March 2014, we terminated the 2008 Plan. Upon such termination, we ceased granting any awards under the 2008 Plan.

2014 Equity Incentive Plan

The 2014 Plan was adopted by our board of directors and approved by our stockholders in March 2014. The 2014 Plan was effective as of the business day immediately prior to the effectiveness of our registration statement for our initial public offering. The 2014 Plan replaced the 2008 Plan. Our 2014 Plan provides for the granting of stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), stock appreciation rights, performance units and performance shares to our employees, directors and consultants, and our subsidiary corporations’ employees and consultants.

A total of 7,700,000 shares of our common stock are reserved for issuance pursuant to the 2014 Plan. On the first day of each fiscal year, starting with January 1, 2015, the number of shares in the reserve will increase by the lesser of (i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding fiscal year, or (iii) such other amount as determined by our board of directors. As of June 30, 2014 , we have granted 553,123 stock options and 102,265 RSUs under the 2014 Plan to our employees and consultants, we have 7,070,532 shares available for future grant.

Vesting periods of awards granted under the 2014 Plan are determined by the board of directors or other committees responsible for administering the 2014 Plan (the "Plan Administrators"). The Plan Administrators determine the contractual terms of awards granted under the 2014 Plan, provided that incentive stock options and stock appreciation rights granted expire no more than ten years from the grant date. In the case of an incentive stock option granted to an employee, who at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock, the exercise price shall be no less than 110% of the fair value per share on the date of grant, and expire five years from the date of grant, and for incentive stock options granted to any other employee, and nonstatutory stock options and stock appreciation rights granted to employees, directors or consultants, the per share exercise price shall be no less than 100% of the fair value per share on the date of grant.

Recipients of RSAs generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the Plan Administrators provide otherwise.

RSUs granted under the 2014 Plan may be subject to vesting criteria which may be based on achievement of corporate or individual goals, including but not limited to continued services, applicable laws or any other basis that the Plan Administrators determine.

Performance units have an initial dollar value established by the Plan Administrators on or before the grant date. Performance shares will have an initial value equal to the fair market value of a share on the date of grant. The Plan Administrators will establish, at their discretion, (and may subsequently reduce or waive) performance goals or other vesting provisions, which depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants.

2014 Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan (the "2014 ESPP") was adopted by our board of directors and approved by our stockholders in March 2014 and was effective as of the business day immediately prior to the effectiveness of our registration statement for our initial public offering.

As of June 30, 2014, a total of 1,600,000 shares of our common stock are available for purchase under the 2014 ESPP On the first day of each fiscal year, starting with January 1, 2015, the number of shares in the reserve will increase by the least of (i) 3,500,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by our board of directors or other committee administering the 2014 ESPP.

The 2014 ESPP permits eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the exercise date that occurs at the end of a purchase period. Each offering period will be approximately twenty-four months in duration, starting on the first trading day on or after May 21 and November 21 of each year, except for the first offering period, which commenced on March 21, 2014 and will end on the last trading day on or before May 20, 2016. Each offering period generally consists of four purchase periods and each purchase period will begin after one exercise date and end with the next exercise date approximately six months later, except that the first purchase period of an offering period will begin on the enrollment date of each offering period and end on the next exercise date. If the fair market value of our common stock on the exercise date is less than the fair market value on the first trading day of the offering period, participants will be withdrawn from the then‑current offering period following their purchase of shares on the purchase date and automatically will be enrolled in the immediately following offering period. Participants may purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to purchase limits of 1,500 shares during each six month purchase period or $25,000 worth of stock for each calendar year.

Stock Option Activity

The following table summarizes our stock option activity and related information as of and for the six months ended June 30, 2014 (in thousands, except for years and per share amounts):



	Number of Shares Underlying Outstanding Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2013	9,971		$	4.14	7.9	$	58,515
Granted	1,264		$	13.36
Exercised	(1,050	)	$	2.54
Canceled	(444	)	$	5.71
Outstanding as of June 30, 2014	9,741		$	5.44	7.8	$	77,371
Vested and expected to vest as of June 30, 2014	9,284		$	5.27	7.7	$	75,244
Vested and exercisable as of June 30, 2014	4,697		$	2.73	6.5	$	49,664

The following table provides information pertaining to our stock options for the six months ended June 30, 2014 and 2013 (in thousands, except weighted-average fair values):



	Six Months Ended June 30,
	2014		2013
Total fair value of options granted	$	7,536	$	3,300
Weighted average fair value of options granted	$	5.96	$	2.59
Intrinsic value of options exercised	$	8,818	$	1,111

The aggregate intrinsic value represents the difference between our estimated fair value of our common stock, prior to the IPO, or the closing stock price of our common stock, following the IPO, compared to the exercise price of the outstanding, in-the-money options.

Restricted Stock Units Activity

The following table summarizes restricted stock units activity under all of our equity incentive plans for the six months ended June 30, 2014 (in thousands, except for weighted average grant date fair value):



	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2013	—	$	—
Granted	102	13.15
Released	—	—
Canceled	—	—
Outstanding as of June 30, 2014	102	$	13.15

Valuation Assumptions

We use the Black-Scholes valuation model to determine the fair value of stock options and ESPP. The Black-Scholes model requires the input of highly subjective assumptions, which are summarized in the table below for the three and six months ended June 30, 2014 and 2013:



	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Stock Options: *
Expected term (in years)	5.50	n/a	5.50	6.08
Risk-free interest rate	1.73%	n/a	1.73%	1.12%
Expected volatility	45%	n/a	47%	46%
Dividend rate	—%	n/a	—%	—%
ESPP: **
Expected term (in years)	1.4	n/a	1.4	n/a
Risk-free interest rate	0.24%	n/a	0.24%	n/a
Expected volatility	31%	n/a	31%	n/a
Dividend rate	—%	n/a	—%	n/a

* We did not grant stock options during the three months ended June 30, 2013

** We did not have an ESPP plan prior to the adoption of our 2014 ESPP plan in March 2014.

Stock-based Compensation

The total stock-based compensation recognized for stock-based awards granted under the 2014 Plan, the 2008 Plan, the 2004 Plan and the 2014 ESPP for the three and six months ended June 30, 2014 and 2013 are as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Cost of revenue	$	216	$	32	$	301	$	64
Sales and marketing	1,457		471		2,341		945
Research and development	944		268		1,407		529
General and administrative	389		93		727		189
Total stock-based compensation	$	3,006	$	864	$	4,776	$	1,727

At June 30, 2014 , total compensation expense related to unvested share-based awards granted to employees under our stock plans but not yet recognized was $17.5 million , net of estimated forfeitures. This expense is expected to be amortized on a straight-line basis over a weighted-average period of 2.9 years.

7. Earnings Per Share

For periods presented prior to the IPO, basic and diluted net income (loss) per common share is computed using the two-class method required for participating securities. Concurrent with the closing of the IPO in March 2014, all shares of outstanding preferred stock converted into shares of our common stock. Following the date of the IPO, the two-class method was no longer required. We currently have one outstanding class of securities.

The following table sets forth the computation of our basic and diluted net income (loss) per share (in thousands, except per share data):



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net loss attributable to common stockholders	$	(1,296	)	$	(10,246	)	$	(7,548	)	$	(18,779	)
Weighted-average shares outstanding used in computing basic and diluted net loss per share	59,711			9,144			36,712			9,075
Net loss attributable to common stockholders, basic and diluted	$	(0.02	)	$	(1.12	)	$	(0.21	)	$	(2.07	)

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive (in thousands):



	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Convertible preferred stock (on an as if converted basis)	—	30,828	—	30,611
Stock options and restricted stock units	9,994	7,833	9,965	7,695
Common stock subject to repurchase	311	348	311	377
Convertible preferred stock warrants	—	—	—	89
	10,305	39,009	10,276	38,772

8. Income Taxes

We recorded income tax expense of $0.3 million and $0.5 million for the three and six months ended June 30, 2014 , which was primarily comprised of state and foreign taxes. We recorded income tax expense of $0.2 million and $0.4 million for the three and six months ended June 30, 2013, which was primarily comprised of state and foreign taxes. The provision for income taxes for these periods was determined using the annual effective tax rate method by excluding the entities that are not expected to realize tax benefit from the operating losses. As a result, and excluding the impact of discrete tax events during the quarter, the provision for income taxes was at a higher consolidated effective rate than would have resulted if all entities were profitable or if losses produced tax benefits.

We believe it is more likely than not that our federal and state net deferred tax assets will not be fully realized. Accordingly, we maintain a valuation allowance against all of its net deferred tax assets as of June 30, 2014 and December 31, 2013 . We will continue to maintain a full valuation allowance against our net federal, state and certain foreign deferred tax assets until there is sufficient evidence to support recoverability of its deferred tax assets.

We had $2.3 million and $1.8 million of unrecognized tax benefits as of June 30, 2014 and December 31, 2013. We do not anticipate a material change to our unrecognized tax benefits over the next twelve months. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business.

Accrued interest and penalties related to unrecognized tax benefits are recognized as part of our income tax provision in condensed consolidated statements of operations. All tax years remain open and are subject to future examinations by federal, state and foreign tax authorities. We are not under examination in any jurisdiction.

9. Segment Information

Our chief operating decision maker is our Chief Executive Officer who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. Accordingly, we have a single reportable segment and operating segment structure.

The following table represents revenues by geographic areas based on customers' location, as determined by their ship to addresses (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
United States	$	26,215	$	10,303	$	44,428	$	20,876
Japan	8,471		11,644		25,775		24,042
Asia Pacific, excluding Japan	4,370		3,522		8,675		6,068
EMEA	3,925		3,276		8,065		4,929
Other	2,151		1,386		3,934		3,797
Total revenue	$	45,132	$	30,131	$	90,877	$	59,712

No other country outside of the United States and Japan comprised 10% or greater of our revenue for the three months ended June 30, 2014 and 2013 .

Geographical information relating to our long-lived assets which include property and equipment, net and intangible assets, net as of June 30, 2014 and December 31, 2013 was as follows (in thousands):



	June 30, 2014		December 31, 2013
United States	$	10,605	$	8,599
Japan	380		572
Asia Pacific, excluding Japan	1,920		1,657
EMEA	106		34
Total property and equipment, net and intangible assets, net	$	13,011	$	10,862

10. Related-Party Transactions

An affiliate of one of our significant stockholders is also acting as a reseller of our products. During the three and six months ended June 30, 2014, we recognized $0.6 million and $1.1 million total revenue from this reseller. During the three and six months ended June 30, 2013, we recognized $1.6 million and $2.6 million total revenue from this reseller.

We had gross accounts receivable of $0.1 million from this reseller as of June 30, 2014 and December 31, 2013.


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan” “expect,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.

These forward-looking statements include, but are not limited to, statements concerning the following:


•	our ability to maintain an adequate rate of revenue growth;


•	our business plan and our ability to effectively manage our growth;


•	costs associated with defending intellectual property infringement and other claims;


•	our ability to attract and retain end-customers;


•	our ability to further penetrate our existing customer base;


•	our ability to displace existing products in established markets;


•	our ability to expand our leadership position in next-generation application delivery and server load balancing solutions;


•	our ability to timely and effectively scale and adapt our existing technology;


•	our ability to innovate new products and bring them to market in a timely manner;


•	our ability to expand internationally;


•	the effects of increased competition in our market and our ability to compete effectively;


•	the effects of seasonal trends on our results of operations;


•	our expectations concerning relationships with third parties;


•	the attraction and retention of qualified employees and key personnel;


•	our ability to maintain, protect, and enhance our brand and intellectual property; and


•	future acquisitions of or investments in complementary companies, products, services or technologies.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.

Overview

We are a leading provider of application networking technologies. Our solutions enable service providers, enterprises, Web giants and government organizations to accelerate, secure and optimize the performance of their data center applications and networks. Our products are built on our Advanced Core Operating System, or ACOS, platform of advanced network technologies, which is designed to enable our products to deliver substantially greater performance and security relative to prior generation application networking products. Our software based ACOS architecture also provides the flexibility that enables us to expand our business to offer additional products to solve a growing array of networking and security challenges arising from increased Internet cloud and mobile computing.

We currently offer three software based advanced application networking solutions. These are Application Delivery Controllers, or ADCs, to optimize data center performance, Carrier Grade Network Address Translation, or CGN, to provide address and protocol translation services for service provider networks, and a Distributed Denial of Service Threat Protection System, or TPS, for network-wide security protection. We deliver these solutions both on optimized hardware appliances and as virtual appliances across our Thunder Series and AX Series product families.

We derive revenue from sales of products and related support services. Products revenue is generated primarily by sales of hardware appliances with perpetual licenses to our embedded software solutions. We generate services revenue primarily from sales of maintenance and support. End-customers predominantly purchase maintenance and support in conjunction with purchases of our products.

We sell our products globally to service providers and enterprises that depend on data center applications and networks to generate revenue and manage operations efficiently. Our end-customers operate in a variety of industries, including telecommunications, technology, industrial, retail, financial and education. Since inception, our customer base has grown rapidly. As of June 30, 2014, we had sold products to more than 3,300 customers across 68 countries, including three of the top four United States wireless carriers, seven of the top ten United States cable service providers, and the top three wireless carriers in Japan, in addition to other global enterprises, Web giants and governmental organizations.

We sell substantially all of our solutions through our high-touch sales organization as well as distribution channel partners, including distributors, value added resellers and system integrators, and fulfill nearly all orders globally through such partners. We believe this sales approach allows us to obtain the benefits of channel distribution, such as expanding our market coverage, while still maintaining face-to-face relationships with our end-customers. We outsource the manufacturing of our hardware products to original design manufacturers. We perform quality assurance and testing at our San Jose, California facilities, as well as at our manufacturers’ locations. We warehouse and deliver the majority of our products out of our San Jose warehouse. We also outsource warehousing and delivery to a third-party logistics provider in some regions.

During the six months ended June 30, 2014, 49% of our total revenue was generated from the United States, 28% from Japan, and 23% from other geographical regions. During the year ended December 31, 2013, 48% of our total revenue was generated from the United States, 28% from Japan and 24% from other geographical regions.

As a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue comes from a limited number of large end-customers, including service providers, in any period. During the six months ended June 30, 2014 and years ended December 31, 2013 and 2012, purchases from our ten largest end-customers accounted for approximately 47%, 43% and 49% of our total revenue. The composition of the group of these ten largest end-customers changes from period to period, but often includes service providers, who accounted for approximately 48%, 47% and 53% of our total revenue during the six months ended June 30, 2014 and years ended December 31, 2013 and 2012. Sales to these large end-customers have typically been characterized by large but irregular purchases with long sales cycles. The timing of these purchases and the delivery of the purchased product is difficult to predict. As a consequence, any acceleration or delay in anticipated product purchases by or deliveries to our largest end-customers could materially impact our revenue and operating results in any quarterly period and cause our quarterly revenue and operating results to fluctuate from quarter to quarter and also be difficult to predict.

We believe our revenue during the six months ended June 30, 2013 was affected by the issuance of injunctions related to our now settled litigation with Brocade Communications Systems, Inc. Although such injunctions did not prevent us from selling our redesigned products, certain customers informed us that they would not purchase any of our products until we settled the dispute. Total revenue for the six months ended June 30, 2014 was $90.9 million , a 52.2% increase from the same period in the prior year.

We intend to continue to invest for long-term growth. We have invested and expect to continue to invest heavily in our product development efforts to deliver new products and additional features in our current products to address customer needs. In addition, we expect to continue to expand our global sales and marketing organizations, expand our distribution channel partner programs and increase awareness of our solutions on a global basis. Additionally we will be investing in general and administration resources to meet the requirements to operate as a public company. Our investments in growth in these areas may affect short-term profitability.

Key Components of Our Results of Operations and Financial Condition

Revenue

Our products revenue consists of revenue from sales of our hardware appliances upon which our software is installed. Such software includes our ACOS software platform plus one of our ADC, CGN or TPS solutions. Purchase of a hardware appliance includes a perpetual license to the included software. We recognize products revenue at the time of shipment, provided that all other revenue recognition criteria have been met. As a percentage of revenue, our products revenue may vary from quarter to quarter based on, among other things, the timing of orders and delivery of products, cyclicality and seasonality, changes in currency exchange rates and the impact of significant transactions with unique terms and conditions.

We generate services revenue from sales of post contract support, or PCS, which is bundled with sales of products and professional services. We offer tiered PCS services under renewable, fee-based PCS contracts, primarily including technical support, hardware repair and replacement parts, and software upgrades on a when-and-if-released basis. We recognize services revenue ratably over the term of the PCS contract, which is typically one year, but can be up to five years. In absolute dollars, we expect our services revenue to increase as we expand our installed base.

Cost of Revenue

Cost of products revenue is comprised primarily of the cost of third-party manufacturing services and cost of component inventory for the hardware component of our products. Cost of products revenue also includes warehouse personnel costs, shipping costs, inventory write-downs, certain allocated facilities and information technology infrastructure costs, and expenses associated with logistics and quality control.

Cost of services revenue is comprised primarily of personnel costs for our technical support, training and professional service teams. Cost of services revenue also includes the costs of inventory used to provide hardware replacements to end-customers under PCS contracts and certain allocated facilities and information technology infrastructure costs.

Gross Margin

Gross margin may vary and be unpredictable from quarter to quarter based on a variety of factors. These may include the mix of revenue from each of our regions, the mix of our products sold within a period, discounts provided to customers, discounts on early sales of new products to gain market penetration, inventory write-downs and international currency exchange rates. As to currency, our sales are generally denominated in U.S. dollars, however, in Japan they are denominated in the Japanese yen. Changes in the exchange rates between the U.S. dollar and Japanese yen will therefore affect our revenue and gross margin. Any of the factors noted above can generate either a positive or negative impact on gross margin as compared to another period.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development, general and administrative and litigation. The largest component of our operating expenses, excluding litigation, is personnel costs which consist of wages, benefits, bonuses, and, with respect to sales and marketing expenses, sales commissions. Personnel costs also include stock-based compensation and travel expenses. We expect personnel costs to continue to increase in absolute dollars as we hire new employees to continue to grow our business.

Sales and Marketing

Sales and marketing expenses are our largest functional category of total operating expense. These expenses primarily consist of personnel costs related to our employees engaged in sales and marketing activities. Sales and marketing expenses also include the cost of marketing programs, trade shows, consulting services, promotional materials, demonstration equipment, depreciation and certain allocated facilities and information technology infrastructure costs. We expect our sales and marketing expenses to continue to increase in absolute dollars as we increase the size of our sales and marketing organization and expand into new countries.

Research and Development

Research and development efforts are focused on new product development and on developing additional functionality for our existing products. These expenses consist of personnel costs, and to a lesser extent, prototype materials, depreciation and certain allocated facilities and information technology infrastructure costs. We expense research and development costs as incurred. We expect our research and development expenses to increase in absolute dollars as we continue to develop new products and enhance our existing products.

General and Administrative

General and administrative expenses consist primarily of personnel costs, professional fees and facility costs. General and administrative personnel costs include executive, finance, human resources, information technology, facility and legal (excluding litigation) related expenses. Professional fees consist primarily of fees for outside accounting, tax, legal, recruiting and other administrative services. We expect our general and administrative expenses to increase in absolute dollars in connection with the completion of our initial public offering due to the additional legal, accounting, insurance, investor relations and other costs that we will incur as a public company, as well as other costs associated with growing our business.

Litigation Expense (Benefit)

Litigation expense (benefit) is comprised of legal expenses incurred related to litigation and charges for litigation reserves. Legal expenses consist of professional fees incurred in defending ourselves against litigation matters and are expensed as incurred when professional services are provided. The litigation reserve consists of accruals we make for estimated losses in pending legal proceedings. Changes in the reserve are made as we change our estimates or make payments in damages or settlement.

Other Income (Expense), Net

Interest Expense

Interest expense consists primarily of interest expense on our debt obligations. At June 30, 2014, we have no outstanding balances on our credit facility. We expect to incur commitment fees associated with the undrawn balance of our credit facility. At such time we choose to draw down on the credit facility we would reduce the commitment fees accrued and increase the interest on outstanding balances.

Interest Income and Other Income (Expense), Net

Interest income consists primarily of interest income earned on our cash and cash equivalents balances. Other income (expense) consists primarily of foreign currency exchange gains and losses and, through February 2013, fair value adjustments related to then-outstanding warrants to purchase our convertible preferred stock. Foreign currency exchange gains and losses relate to transactions and asset and liability balances denominated in currencies other than the U.S. dollar. We expect our foreign currency gains and losses to continue to fluctuate in the future due to changes in foreign currency exchange rates.

Provision for Income Taxes

Provision for income taxes currently consists of taxes from state and foreign jurisdictions. For federal and state tax purposes, we maintain a valuation allowance against all of our net deferred tax assets. We will continue to maintain a full valuation allowance against our net federal and state deferred tax assets until there is sufficient evidence to support recoverability of our deferred tax assets. As a result, the provision for income taxes primarily relates to state and foreign taxes.

Results of Operations

The following tables provide a summary of our consolidated statements of operations for the three and six months ended June 30, 2014 and 2013 as derived from our condensed consolidated financial statements included in Part I Financial Information in this Quarterly Report on Form 10-Q (in thousands, except for percentages).



	Three Months Ended June 30,
	2014					2013					Increase (Decrease)
	Amount			Percent of Total Revenues		Amount			Percent of Total Revenues		Amount			Percent
Revenue:
Products	$	34,122		75.6	%	$	23,064		76.5	%	$	11,058		47.9	%
Services	11,010			24.4		7,067			23.5		3,943			55.8
Total revenue	45,132			100.0		30,131			100.0		15,001			49.8
Cost of revenue:
Products	7,410			16.4		4,894			16.2		2,516			51.4
Services	2,930			6.5		2,020			6.7		910			45.0
Total cost of revenue	10,340			22.9		6,914			22.9		3,426			49.6
Gross profit	34,792			77.1		23,217			77.1		11,575			49.9
Operating expenses:
Sales and marketing	23,975			53.1		15,723			52.2		8,252			52.5
Research and development	11,869			26.3		8,336			27.7		3,533			42.4
General and administrative	5,531			12.3		3,697			12.3		1,834			49.6
Litigation expense (benefit)	(5,859		)	(13.0	)	4,800			15.9		(10,659		)	(222.1	)
Total operating expenses	35,516			78.7		32,556			108.0		2,960			9.1
Loss from operations	(724		)	(1.6	)	(9,339		)	(31.0	)	8,615			92.2
Other income (expense), net:
Interest expense	(125		)	(0.3	)	(33		)	(0.1	)	(92		)	(278.8	)
Interest income and other income (expense), net	(138		)	(0.3	)	(683		)	(2.3	)	545			79.8
Total other income (expense), net	(263		)	(0.6	)	(716		)	(2.4	)	453			63.3
Loss before provision for income taxes	(987		)	(2.2	)	(10,055		)	(33.4	)	9,068			90.2
Provision for income taxes	309			0.7		158			0.5		151			95.6
Net loss	$	(1,296	)	(2.9	)%	$	(10,213	)	(33.9	)%	$	8,917		87.3	%



	Six Months Ended June 30,
	2014					2013					Increase (Decrease)
	Amount			Percent of Total Revenues		Amount			Percent of Total Revenues		Amount			Percent
Revenue:
Products	$	70,539		77.6	%	$	46,333		77.6	%	$	24,206		52.2	%
Services	20,338			22.4		13,379			22.4		6,959			52.0
Total revenue	90,877			100.0		59,712			100.0		31,165			52.2
Cost of revenue:
Products	14,837			16.3		9,800			16.4		5,037			51.4
Services	5,556			6.1		3,718			6.2		1,838			49.4
Total cost of revenue	20,393			22.4		13,518			22.6		6,875			50.9
Gross profit	70,484			77.6		46,194			77.4		24,290			52.6
Operating expenses:
Sales and marketing	45,538			50.1		31,312			52.4		14,226			45.4
Research and development	23,074			25.4		16,108			27.0		6,966			43.2
General and administrative	10,894			12.0		7,527			12.6		3,367			44.7
Litigation expense (benefit)	(4,013		)	(4.4	)	8,204			13.7		(12,217		)	(148.9	)
Total operating expenses	75,493			83.1		63,151			105.8		12,342			19.5
Loss from operations	(5,009		)	(5.5	)	(16,957		)	(28.4	)	11,948			70.5
Other income (expense), net:
Interest expense	(712		)	(0.8	)	(46		)	(0.1	)	(666		)	(1,447.8	)
Interest income and other income (expense), net	(163		)	(0.2	)	(1,364		)	(2.3	)	1,201			88.0
Total other income (expense), net	(875		)	(1.0	)	(1,410		)	(2.4	)	535			37.9
Loss before provision for income taxes	(5,884		)	(6.5	)	(18,367		)	(30.8	)	12,483			68.0
Provision for income taxes	514			0.6		379			0.6		135			35.6
Net loss	$	(6,398	)	(7.0	)%	$	(18,746	)	(31.4	)%	$	12,348		65.9	%

Comparison of the Three and Six Months Ended June 30, 2014 and 2013

Revenue

A summary of our total revenues for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except for percentages):



	Three Months Ended June 30,				Increase (Decrease)
	2014		2013		Amount			Percent
Revenue:
Products	$	34,122	$	23,064	$	11,058		47.9	%
Services	11,010		7,067		3,943			55.8
Total revenue	$	45,132	$	30,131	$	15,001		49.8	%
Revenue by geographic location:
United States	$	26,215	$	10,303	$	15,912		154.4	%
Japan	8,471		11,644		(3,173		)	(27.3	)
Asia Pacific, excluding Japan	4,370		3,522		848			24.1
EMEA	3,925		3,276		649			19.8
Other	2,151		1,386		765			55.2
Total revenue	$	45,132	$	30,131	$	15,001		49.8	%



	Six Months Ended June 30,				Increase (Decrease)
	2014		2013		Amount		Percent
Revenue:
Products	$	70,539	$	46,333	$	24,206	52.2	%
Services	20,338		13,379		6,959		52.0
Total revenue	$	90,877	$	59,712	$	31,165	52.2	%
Revenue by geographic location:
United States	$	44,428	$	20,876	$	23,552	112.8	%
Japan	25,775		24,042		1,733		7.2
Asia Pacific, excluding Japan	8,675		6,068		2,607		43.0
EMEA	8,065		4,929		3,136		63.6
Other	3,934		3,797		137		3.6
Total revenue	$	90,877	$	59,712	$	31,165	52.2	%

Total revenue increased $15.0 million in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 which consisted of $11.1 million increase in products revenue and a $3.9 million increase in services revenue. Total revenue increased $31.2 million in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 which consisted of a $24.2 million increase in products revenue and a $7.0 million increase in services revenue.

The increase in products revenue during the three and six months ended June 30, 2014 was primarily driven by a rise in sales of our products primarily due to greater adoption of our solutions to new and existing customers which we believe benefited from the absence of the negative effect of the injunction issued in January 2013 related to the now settled Brocade litigation. The injunction did not prevent us from shipping our redesigned products in January 2013, but at that time, some customers informed us they would not purchase our products until after settlement of the litigation, which occurred in May 2013. In addition, there has been a rapid adoption of our Thunder series products introduced in Q3 2013 which accounted for the majority of products revenue in the three and six months ended June 30, 2014. Our Thunder series of products include our ADC, CGN and TPS product lines.

The increase in services revenue in the three and six months ended June 30, 2014 was related to the increase in PCS sales in connection with our increasing installed customer base. Over 95% of our end-customers purchase one of our maintenance service products when purchasing our hardware products. During the three months ended June 30, 2014, services revenue recognized from our installed base with existing contracts prior to April 1, 2014 grew by 60% as compared to revenue

generated from our installed base with existing contracts prior to April 1, 2013 during the three months ended June 30, 2013. During the six months ended June 30, 2014, services revenue recognized from our installed base of existing contracts prior to 2014 grew by 53% as compared to revenue generated from our installed base of existing contracts prior to 2013 during the six months ended June 30, 2013.

During the three months ended June 30, 2014, 58% , or $26.2 million of total revenue was generated from the United States and 19% , or $8.5 million of total revenue was generated from Japan. Revenue from the United States grew by 154% in the three months ended June 30, 2014 as compared to the three months ended June 30, 2013. We continue to see growth in our Asia Pacific, excluding Japan and EMEA regions with revenue increasing by 24% to $4.4 million and 20% to $3.9 million during the three months ended June 30, 2014 as compared to the same period in the prior year. These revenue increases were offset by a 27% , or a $3.2 million decrease in total revenue from Japan due to a broad-based slow down and delay in service provider purchases in the region during the three months ended June 30, 2014 compared to the same period in 2013.

During the six months ended June 30, 2014, 49% , or $44.4 million of total revenue was generated from the United States and 28% , or $25.8 million of total revenue was generated from Japan. Revenue from the United States grew by 113% in the six months ended June 30, 2014 as compared to the six months ended June 30, 2013 as the negative effects of the now settled Brocade litigation during the prior period has subsided. We continue to see growth in our EMEA and Asia Pacific, excluding Japan regions with revenue increasing by 64% to $8.1 million and 43% to $8.7 million during the six months ended June 30, 2014 as compared to the same period in the prior year. This increase was primarily due to our efforts to expand our presence in regions outside the United States. Revenue from our Japan region increased by 7% for the six months ended June 30, 2014 as compared to the same period in the prior period as a result of a 40% increase in sales during the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 offset by a 27% decrease in sales in the region during the three months ended June 30, 2014 as compared to the same period in 2013. These fluctuations were a result of a broad-based slow down and delay in service provider purchases in the region.

We believe these growth rates are attributable to the overall adoption of our solutions and as a result of investments in sales and marketing activities in these regions.

Cost of Revenue, Gross Profit and Gross Margin

Cost of revenue

A summary of our cost of revenues for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except for percentages):



	Three Months Ended June 30,				Increase (Decrease)
	2014		2013		Amount		Percent
Cost of revenue:
Products	$	7,410	$	4,894	$	2,516	51.4	%
Services	2,930		2,020		910		45.0
Total cost of revenue	$	10,340	$	6,914	$	3,426	49.6	%



	Six Months Ended June 30,				Increase (Decrease)
	2014		2013		Amount		Percent
Cost of revenue:
Products	$	14,837	$	9,800	$	5,037	51.4	%
Services	5,556		3,718		1,838		49.4
Total cost of revenue	$	20,393	$	13,518	$	6,875	50.9	%

Gross Margin

A summary of gross profit and gross margin for the three and six months ended June 30, 2014 and 2013 is as follows: (in thousands, except for gross margins):



	Three Months Ended June 30,
	2014				2013				Increase (Decrease)
	Amount		Gross Margin		Amount		Gross Margin		Amount		Gross Margin
Gross profit:
Products	$	26,712	78.3	%	$	18,170	78.8	%	$	8,542	(0.5	)%
Services	8,080		73.4		5,047		71.4		3,033		2.0
Total gross profit	$	34,792	77.1	%	$	23,217	77.1	%	$	11,575	—	%



	Six Months Ended June 30,
	2014				2013				Increase (Decrease)
	Amount		Gross Margin		Amount		Gross Margin		Amount		Gross Margin
Gross profit:
Products	$	55,702	79.0	%	$	36,533	78.8	%	$	19,169	0.2	%
Services	14,782		72.7		9,661		72.2		5,121		0.5
Total gross profit	$	70,484	77.6	%	$	46,194	77.4	%	$	24,290	0.2	%

Products gross margin decreased 0.5 percentage points in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 primarily due to an unfavorable shift in our geographical sales mix. During the three months ended June 30, 2013 higher sales volumes were from geographic regions with generally higher gross margins compared to the three months ended June 30, 2014. This was offset to a lesser extent by improved efficiencies in our warehouse and logistics operations.

Products gross margin increased 0.2 percentage points in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily due to improved efficiencies in our warehousing and logistics operations and partially offset by the impact of a shift in sales mix away from geographic regions with generally higher gross margins.

Services gross margin increased 2.0 percentage points in the three months ended June 30, 2014 compared to the three months ended June 30, 2013, as a result of a 56% growth in services revenue and partially offset by the impact of a 45% increase in cost of services. Services gross margin increased 0.5 percentage points in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 as a result of a 52% growth in services revenue partially offset by the impact of a 49% increase in cost of services. Our customer support, training, and professional services headcount increased by 57% from June 30, 2013 to June 30, 2014. Our cost of services increased primarily as a result of our investment to expand our service and support group in anticipation of future growth in our installed base.

Operating Expenses

A summary of our operating expenses for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except for percentages):



	Three Months Ended June 30,					Increase (Decrease)
	2014			2013		Amount			Percent
Operating expenses:
Sales and marketing	$	23,975		$	15,723	$	8,252		52.5	%
Research and development	11,869			8,336		3,533			42.4
General and administrative	5,531			3,697		1,834			49.6
Litigation expense (benefit)	(5,859		)	4,800		(10,659		)	(222.1	)
Total operating expenses	$	35,516		$	32,556	$	2,960		9.1	%



	Six Months Ended June 30,					Increase (Decrease)
	2014			2013		Amount			Percent
Operating expenses:
Sales and marketing	$	45,538		$	31,312	$	14,226		45.4	%
Research and development	23,074			16,108		6,966			43.2
General and administrative	10,894			7,527		3,367			44.7
Litigation expense (benefit)	(4,013		)	8,204		(12,217		)	(148.9	)
Total operating expenses	$	75,493		$	63,151	$	12,342		19.5	%

Sales and Marketing

Sales and marketing expenses increased $8.3 million in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 primarily attributable to $5.8 million increase in personnel and related costs, which includes a $1.0 million increase in stock-based compensation, as a result of a 32% increase in sales and marketing headcount from June 30, 2013 to June 30, 2014. The increase was also attributable to a $0.6 million increase in marketing and promotion costs associated with advertising and trade shows, $0.6 million increase in professional fees, and $0.5 million in travel costs as we increased our sales and marketing efforts to grow our revenue. Depreciation expense allocated to sales and marketing departments also increased by $0.4 million as a result of higher headcount and increased activity in product demonstration equipment to customers.

Sales and marketing expenses increased $14.2 million in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily attributable to $9.5 million increase in personnel and related costs, which includes a $1.4 million increase in stock-based compensation primarily as a result of the above mentioned 32% increase in sales and marketing headcount. The increase was also attributable to a $1.4 million increase in marketing and promotion costs associated with advertising and trade shows, $0.9 million in travel costs and $0.9 million increase in professional fees, as we increased our sales and marketing efforts to grow our revenue. Depreciation expense allocated to sales and marketing departments also increased by $0.9 million as a result of higher headcount and increased activity in product demonstration equipment to customers.

Research and Development

Research and development expenses increased $3.5 million in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 primarily attributable to a $2.9 million increase in personnel and related costs, which includes a $0.7 million increase in stock-based compensation. The increases in personnel costs primarily resulted from a 26% increase in research and development headcount from June 30, 2013 to June 30, 2014, as we continued our efforts to develop new products and additional functionality for our existing products. The increases in research and development expense also reflected a $0.3 million increase in depreciation and allocated facilities and information technology infrastructure costs in the three months ended June 30, 2014 compared to the same period in 2013.

Research and development expense increased $7.0 million in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily attributed to a $5.4 million increase in personnel and related costs, which includes a $0.9 million increase in stock-based compensation. The increases in personnel costs primarily resulted from the 26% headcount increase as discussed above. The increases in research and development expense also reflected a $0.8 million increase in professional services fees largely attributable to certification fees on our new products and a $0.6 million increase in depreciation and allocated facilities and information technology infrastructure costs in the six months ended June 30, 2014 compared to the same period in 2013.

General and Administrative

General and administrative expenses increased $1.8 million in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 primarily attributable to a $0.8 million increase in personnel related costs which includes a $0.3 million increase in stock-based compensation. The increase in personnel related costs was a result of an increase to our general and administrative headcount of 27% from June 30, 2013 to June 30, 2014. In addition, office related expenses increased by $0.5 million for the three months ended June 30, 2014 compared to the same period in the prior year primarily due to increased costs associated with being a public company. Professional services costs increased by $0.4 million in the three

months ended June 30, 2014 compared to the same periods in 2013 primarily related to increased general legal fees and consultant fees in connection with scaling our organization to support increased business activity.

General and administrative expenses increased $3.4 million from the six months ended June 30, 2013 to the six months ended June 30, 2014 primarily attributed to a $1.5 million increase in personnel related costs which includes a $0.5 million increase in stock-based compensation. The increase in personnel related costs was a result of our general and administrative headcount increase of 27% from June 30, 2013 to June 30, 2014. In addition, office related expenses increased by $1.0 million for the six months ended June 30, 2014 compared to the same period in the prior year primarily due to increased costs associated with being a public company and professional services costs increased by $0.6 million in the six months ended June 30, 2014 compared to the same periods in 2013 primarily related to increased general legal fees and consultant fees in connection with scaling our organization to support increased business activity.

Litigation Expense (Benefit)

Litigation expense (benefit) was a benefit of $(5.9) million and $(4.0) million for the three and six months ended June 30, 2014 as compared to an expense of $4.8 million and $8.2 million for the same periods in the prior year. The benefit for the three and six months ended June 30, 2014 was comprised of a benefit of $7.0 million offset by normal recurring litigation expense of $1.1 million and $3.0 million. The litigation benefit was the result of a settlement agreement with one of our legal services providers which resulted in the reduction of a previously accrued contractual liability of $7.0 million. The decrease of $3.7 million and $5.2 million in recurring litigation expense for the three and six months ended June 30, 2014 was primarily due to the finalization of litigation with Brocade in May 2013 and no similar significant litigation matters in 2014. These decreases were partially offset by additional costs related to litigation with Radware and Parallel Networks.

Interest Expense

Interest expense increased $0.1 million in the three months ended June 30, 2014 compared to the three months ended June 30, 2013, primarily due to interest expense related to our revolving credit facility. Interest expense increased $0.7 million in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 was due primarily to the $0.3 million contingent payment due upon completion of the initial public offering to a lender and $0.4 million of interest expense related to our revolving credit facility.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net, decreased $0.5 million and $1.2 million from the three and six months ended June 30, 2013 to the three and six months ended June 30, 2014 primarily due to the decline in foreign currency exchange losses arising from transactions denominated in Japanese yen, which was relatively stable during the three and six months ended June 30, 2014 as compared to the same periods in the prior year.

Provision for Income Taxes

We recorded an income tax provision of $0.3 million and $0.5 million for the three months ended June 30, 2014 which is primarily the result of taxes in foreign jurisdictions. We recorded an income tax provision of $0.2 million and $0.4 million for the three and six months ended June 30, 2013 which is primarily the result of taxes in foreign jurisdictions. We maintain a valuation allowance on federal and state deferred tax assets as we do not believe it is more likely than not that said deferred tax assets will be realized. We will continue to maintain a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance.

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through private placements of our convertible preferred stock, debt financings and cash flows derived from the sale of our products and PCS contracts. As of June 30, 2014, cash and cash equivalents were $112.1 million , including $1.9 million held outside the United States in our foreign subsidiaries. We currently do not have any plans to repatriate our earnings from our foreign operations. As of June 30, 2014, we had working capital of $112.3 million , an accumulated deficit of $153.5 million and a total stockholders' equity of $112.4 million .

In March 2014, we completed our initial public offering, whereby we sold 12,500,000 common shares at $15.00 per share (3,500,000 of which were offered by selling stockholders) and received net cash proceeds of $122.3 million after underwriting discounts and commissions and offering expenses during the six months ended June 30, 2014. We plan to continue to invest for long-term growth and anticipate our investment will continue to increase in absolute dollars. We believe that our existing cash and cash equivalents and our cash inflow from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced product and service offerings and the continuing market acceptance of our products. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.

As we invest in the growth of our business, we expect to incur additional $4.6 million in capital expenditures in the remainder of 2014 due to recurring investments in computer hardware and software. In addition, as described in the section "Legal Proceedings" we are currently involved in ongoing litigation related to our intellectual property. Any adverse settlements or judgments in any of this litigation could have a material adverse impact on our results of operations, cash balances and cash flows in the period in which such events occur.

Credit Agreement

In September 2013, we entered into a credit agreement with Royal Bank of Canada, acting as administrative agent and lender, and JPMorgan Chase Bank, N.A. and Bank of America, N.A. as lenders. The credit agreement provides a three year $35.0 million revolving credit facility, which includes a maximum $10.0 million letter of credit facility. As of December 31, 2013, we had outstanding borrowings under the revolving credit facility of $20.0 million, which was paid in March 2014. The revolving credit facility matures on September 30, 2016.

Our obligations under the credit agreement are secured by a security interest on substantially all of our assets, including our intellectual property. The credit agreement contains customary non-financial covenants, and also requires us to comply with financial covenants. One financial covenant requires us to maintain a total leverage ratio, which is defined as total consolidated debt to the trailing four quarters. Adjusted EBITDA (defined as earnings before interest expense, tax expense, depreciation, amortization and stock-based compensation, adjusted for certain other non-cash or non-recurring income or expenses such as specified litigation settlement payments and litigation expenses). In addition, we must maintain a minimum amount of liquidity based on our unrestricted cash and availability under the revolving credit facility. The covenant requires us to maintain a minimum liquidity of $25.0 million provided that at least $10.0 million of such liquidity comprised of unrestricted cash and cash equivalents. The credit agreement includes customary events of default which, if triggered, could result in the acceleration of our obligations under the revolving credit facility, the termination of any obligation by the lenders to extend further credit and the right of the lenders exercise their remedies as a secured creditor and foreclose upon the collateral securing our obligation under the credit agreement; however, we also have the ability, in certain instances, to cure non-compliance with the financial covenants through qualified equity contributions by certain holders of our equity. Currently, the agreement for our revolving credit facility contains restrictions on our ability to pay dividends. As of June 30, 2014, we had no outstanding balance on our credit facility and were in compliance with our covenants.

Statements of Cash Flows

The following table summarizes our cash flows related activities for the six months ended June 30, 2014 and 2013 (in thousands):



	Six Months Ended June 30,
	2014			2013
Cash provided by (used in):
Operating activities	$	(9,718	)	$	(14,026	)
Investing activities	(3,791		)	(1,903		)
Financing activities	104,817			50,434
Net increase in cash and cash equivalents	$	91,308		$	34,505

Cash Flows from Operating Activities

Our cash used in operating activities is driven primarily by sales of our products and, to a lesser extent, by up-front payments from end-customers under PCS contracts. Our primary uses of cash from operating activities have been for personnel-related expenditures, manufacturing costs, marketing and promotional expenses, costs related to our facilities and litigation expenses. Our cash flows from operating activities will continue to be affected principally by the extent to which we increase spending on personnel and sales and marketing activities, our working capital requirements, and litigation expenses.

During the six months ended June 30, 2014, cash used in operating activities was $9.7 million , consisting of a net loss of $6.4 million and a $5.8 million increase in net operating assets and liabilities offset by non-cash charges of $2.5 million . Our non-cash charges consisted primarily of depreciation and amortization of $4.7 million and stock-based compensation of $4.8 million , partially offset by a $7.0 million gain on settlement of contractual liability. The change in our net operating assets and liabilities was primarily due to a $6.1 million decrease in accrued litigation expenses, a $4.3 million increase in inventory, a $3.1 million increase in prepaid expenses and other current assets and $2.6 million increase in accounts receivable, partially offset by a $5.7 million increase in accounts payable and accrued liabilities and a $4.6 million increase in deferred revenue. The decrease in accrued litigation costs was primarily due to the $5.0 million payment we made under the term of a settlement of contractual liability we reached with one of our legal services providers in May 2014. The increase in inventory and prepaid and other current assets was associated with our business growth. The increase in accounts receivable was primarily due to the timing of billing and cash collection, as a higher portion of the June 30, 2014 outstanding accounts receivable were billed during the latter half of the quarter compared to December 31, 2013 outstanding accounts receivable. The increase in accounts payable and accrued liabilities were primarily attributable to increased business activity level and the timing of vendor invoice payments. The increase in deferred revenue was due to billings of support contracts with service terms that are typically one year.

During the six months ended June 30, 2013, cash used in operating activities was $14.0 million , consisting of a net loss of $18.7 million and $0.6 million decrease in our net operating assets and liabilities partially offset by $5.3 million in non-cash charges. Our non-cash charges primarily consisted of $3.2 million in depreciation and amortization, $1.7 million stock-based compensation and $0.5 million of provisions for doubtful accounts and sales returns. The decrease in our net operating assets and liabilities primarily consisted of a $2.8 million increase in inventory and a $1.4 million increase in accrued litigation expenses, partially offset by a $2.9 million increase in deferred revenues, a $0.6 million decrease in prepaid expenses and a $0.3 million decrease in accounts receivable. The increases in inventory and deferred revenue balances were largely attributable to our business growth. The increase in accrued litigation expenses was largely attributed to the Brocade litigation matter which was settled in May 2013.

Cash Flows from Investing Activities

During the six months ended June 30, 2014 and 2013, cash used in investing activities was $3.8 million and $1.9 million primarily for purchases of equipment.

Cash Flows from Financing Activities

During the six months ended June 30, 2014, cash provided by financing activities was $104.8 million , primarily consisting of $122.3 million in net proceeds from the issuance of our common stock to outside investors in our IPO, and $2.7 million from exercise of common stock options, partially offset by a $20.0 million payment of our revolving credit facility.

During the six months ended June 30, 2013, cash provided by financing activities was $50.4 million , primarily consisting of $49.5 million in aggregated net proceeds from the issuance of our Series D redeemable convertible preferred stock, $0.8 million in proceeds from exercise of Series C convertible preferred stock warrants and $0.8 million from exercise of common stock options, net of repurchase of common stock, partially offset by a $0.5 million principal payments on our term loan.

Contractual Obligations

In September 2013, we entered into a credit agreement with Royal Bank of Canada, JPMorgan Chase Bank, N.A. and Bank of America, N.A. as lenders. The credit agreement provides a three year $35.0 million revolving credit facility, which includes a maximum $10.0 million letter of credit facility. As of December 31, 2013, we had outstanding borrowings under the revolving credit facility of $20.0 million, which was repaid in March 2014. We have no outstanding borrowings under this credit facility as of June 30, 2014.

Off-Balance Sheet Arrangements

As of June 30, 2014, we did not have any relationships with any unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

There were no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2014 as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our final prospectus filed with the SEC on March 21, 2014, except for the determination of fair value of our common stock, which was used in the estimating the fair value of stock-based awards at grant date. Prior to our IPO in March 2014, our stock was not publicly traded, therefore we estimated the fair value of our common stock as discussed in the prospectus. Following our IPO, we established a policy of using the closing sale price per share of our common stock as quoted on the New York Stock Exchange on the grant date for purposes of determining the exercise price per share of our options to purchase common stock.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

The functional currency of our foreign subsidiaries is the U.S. dollar. At the end of each reporting period, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to remeasurement are

recorded in interest income and other income (expense), net in the Consolidated Statements of Operations. A significant fluctuation in the exchange rates between our subsidiaries' local currencies, especially the Japanese yen and the Euro, and the U.S. dollar could have adverse impact to our consolidated financial position and results of operations.

For the six months ended June 30, 2014, we recorded a $0.2 million foreign exchange loss as other income (expense), net in our Condensed Consolidated Statement of Operations. The effect of a hypothetical 10% change in our exchange rate for the six months ended June 30, 2014 would not have a significant impact on our operating loss.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents and our indebtedness. Our cash and cash equivalents are held in cash deposits and money market funds with maturities of less than 90 days from the date of purchase. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of the interest rates in the United States. However, because of the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not be expected to have a material impact on our consolidated financial statements.

Our exposure to interest rates risk relates to our revolving credit facility with variable interest rate, where an increase in interest rate may result in higher borrowing costs. Since we have no outstanding borrowings under our credit facility as of June 30, 2014, the effect of a hypothetical 10% change in interest rate would not have a significant impact on our interest expense.


ITEM 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2014. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2014, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Securities and Exchange Act of 1934, as amended, that occurred during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We have been and are currently involved in various legal proceedings, the outcomes of which are not within our complete control or may not be known for prolonged periods of time. Management is required to assess the probability of loss and amount of such loss, if any, in preparing our consolidated financial statements. We evaluate the likelihood of a potential loss from legal proceedings to which we are a party. We record a liability for such claims when a loss is deemed probable and the amount can be reasonably estimated. Significant judgment may be required in the determination of both probability and whether an exposure is reasonably estimable. Our judgments are subjective based on the status of the legal proceedings, the merits of our defenses and consultation with in-house and outside legal counsel. As additional information becomes available, we reassess the potential liability related to pending claims and may revise our estimates. Due to the inherent uncertainties of the legal processes in the multiple jurisdictions in which we operate, our judgments may be materially different than the actual outcomes, which could have material adverse effects on our business, financial conditions and results of operations.

Additional information with respect to this Item may be found in Note 5. Commitments and Contingencies , in the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated into this Item 1 by reference.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this report, and in our other public filings including our prospectus filed on March 21, 2014. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. If any of the following risks occur, our business, financial condition, operating results, and prospects could be materially harmed. In that event, the trading price of our common stock could decline, perhaps significantly.

If we do not successfully anticipate market needs and opportunities or if the market does not continue to adopt our application networking products, our business, financial condition and results of operations could be significantly harmed.

The application networking market is rapidly evolving and difficult to predict. Technologies, customer requirements, security threats and industry standards are constantly changing. As a result, we must anticipate future market needs and opportunities and then develop new products or enhancements to our current products that are designed to address those needs and opportunities, and we may not be successful in doing so.

Even if we are able to anticipate, develop and commercially introduce new products and enhancements that address the market’s needs and opportunities, there can be no assurance that new products or enhancements will achieve widespread market acceptance. For example, organizations that use other conventional or first-generation application networking products for their needs may believe that these products are sufficient. In addition, as we launch new product offerings, organizations may not believe that such new product offerings offer any additional benefits as compared to the existing application networking products that they currently use. Accordingly, organizations may continue allocating their IT budgets for conventional or first-generation application networking products and may not adopt our products, regardless of whether our products can offer superior performance or security.

If we fail to anticipate market needs and opportunities or if the market does not continue to adopt our application networking products, then market acceptance and sales of our current and future application networking products could be substantially decreased or delayed, we could lose customers, and our revenue may not grow or may decline. Any of such events would significantly harm our business, financial condition and results of operations.

Our success depends on our timely development of new products and features to address rapid technological changes and evolving customer requirements. If we are unable to timely develop new products and features that adequately address these changes and requirements, our business and operating results could be adversely affected.

Changes in application software technologies, data center and communications hardware, networking software and operating systems, and industry standards, as well as our end-customers’ continuing business growth, result in evolving application networking needs and requirements. Our continued success depends on our ability to identify and develop in a timely manner new products and new features for our existing products that meet these needs and requirements.

Our future plans include significant investments in research and development and related product opportunities. Developing our products and related enhancements is time-consuming and expensive. We have made significant investments in our research and development team in order to address these product development needs. Our investments in research and development may not result in significant design and performance improvements or marketable products or features, or may result in products that are more expensive than anticipated. We may take longer to generate revenue, or generate less revenue,

than we anticipate from our new products and product enhancements. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position.

If we are unable to develop new products and features to address technological changes and new customer requirements in the application networking market or if our investments in research and development do not yield the expected benefits in a timely manner, our business and operating results could be adversely affected.

We have experienced net losses in recent periods, anticipate increasing our operating expenses in the future and may not achieve or maintain profitability in the future. If we cannot achieve or maintain profitability, our financial performance will be harmed and our business may suffer.

We experienced net losses for the years ended December 31, 2012 and 2013, and six months ended June 30, 2014. Although we experienced revenue growth over these same periods and had achieved profitability in prior year periods, we may not be able to sustain or increase our revenue growth or achieve profitability in the future or on a consistent basis. During 2013 and six months ended June 30, 2014, we have invested in our sales, marketing and research and development teams in order to develop, market and sell our products. We expect to continue to invest significantly in these areas in the future. As a result of these increased expenditures, we will have to generate and sustain increased revenue, manage our cost structure and avoid significant liabilities to achieve future profitability. In particular, in 2012 and 2013, we incurred substantial expenses associated with defending ourselves in separate litigation matters involving Brocade Communications Systems, Inc. and Radware Ltd. and in our settlement of the Brocade litigation. As a public company, we will also incur significant accounting, legal and other expenses that we did not incur as a private company.

Revenue growth may slow or decline, and we may incur significant losses in the future for a number of possible reasons, including our inability to develop products that achieve market acceptance, general economic conditions, increasing competition, decreased growth in the markets in which we operate, or our failure for any reason to capitalize on growth opportunities. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods. If these losses exceed our expectations or our revenue growth expectations are not met in future periods, our financial performance will be harmed and our stock price could be volatile or decline.

Our operating results are likely to vary significantly from period to period and may be unpredictable, which could cause the trading price of our common stock to decline.

Our operating results – in particular, revenue, margins and operating expenses – have fluctuated in the past, and we expect this will continue, which makes it difficult for us to predict our future operating results. The timing and size of sales of our products are highly variable and difficult to predict and can result in significant fluctuations in our revenue from period to period. This is particularly true of sales to our largest end-customers, such as service providers, Web giants and governmental organizations, who typically make large and concentrated purchases and for whom sales cycles can be long, as a result of their complex networks and data centers. Our quarterly results may vary significantly based on when these large end-customers place orders with us.

Our operating results may also fluctuate due to a number of other factors, many of which are outside of our control and may be difficult to predict. In addition to other risks listed in this “Risk Factors” section, factors that may affect our operating results include:


•	fluctuations in purchases from, or loss of, large customers;


•	the budgeting cycles and purchasing practices of end-customers;


•	our ability to attract and retain new end-customers;


•	changes in demand for our products and services, including seasonal variations in customer spending patterns or cyclical fluctuations in our markets;


•	our reliance on shipments at the end of our quarters;


•	variations in product mix or geographic locations of our sales, which can affect the revenue we realize for those sales;


•	the timing and success of new product and service introductions by us or our competitors;


•	our ability to increase the size of our distribution channel and to maintain relationships with important distribution channel partners;


•	the effect of currency exchange rates on our revenue and expenses;


•	the cost and potential outcomes of existing and future litigation;


•	the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our competitors;


•	changes in the growth rate of the application networking market or changes in market needs;


•	inventory write downs, which may be necessary for our older products when our new products are launched and adopted by our end-customers; and


•	our third-party manufacturers’ and component suppliers’ capacity to meet our product demand forecasts on a timely basis, or at all.

Any one of the factors above or the cumulative effect of some of these factors may result in significant fluctuations in our financial and other operating results. This variability and unpredictability could result in our failure to meet our or our investors’ or securities analysts’ revenue, margin or other operating results expectations for a particular period, resulting in a decline in the trading price of our common stock.

Reliance on shipments at the end of the quarter could cause our revenue for the applicable period to fall below expected levels.

As a result of end-customer buying patterns and the efforts of our sales force and distribution channel partners to meet or exceed their sales objectives, we have historically received a substantial portion of purchase orders and generated a substantial portion of revenue during the last few weeks of each quarter. We can recognize such revenue in the quarter received, however, only if all of the requirements of revenue recognition, especially shipment, are met by the end of the quarter. In addition, any significant interruption in our information technology systems, which manage critical functions such as order processing, revenue recognition, financial forecasts, inventory and supply chain management, could result in delayed order fulfillment and thus decreased revenue for that quarter. If expected revenue at the end of any quarter is delayed for any reason, including the failure of anticipated purchase orders to materialize, our third-party manufacturers’ inability to manufacture and ship products prior to quarter-end to fulfill purchase orders received near the end of the quarter, our failure to manage inventory to meet demand, our inability to release new products on schedule, any failure of our systems related to order review and processing, or any delays in shipments or achieving specified acceptance criteria, our revenue for that quarter could fall below our, or our investors’ or securities analysts’ expectations, resulting in a decline in the trading price of our common stock.

A limited number of our end-customers, including service providers, make large and concentrated purchases that comprise a significant portion of our revenue. Any loss or delay of expected purchases by our largest end-customers could adversely affect our operating results.

As a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue in any period comes from a limited number of large end-customers, including service providers. For example, NTT DoCoMo, Inc., through a reseller, accounted for approximately 32% of our total revenue during the year ended December 31, 2012, approximately 13% of our total revenue during the year ended December 31, 2013 and 8% of our total revenue during the six months ended June 30, 2014. In addition, during the years ended December 31, 2012 and 2013, and six months ended June 30, 2014, purchases from our ten largest end-customers accounted for approximately 49%, 43% and 47% of our total revenue. The composition of the group of these ten largest end-customers changes from period to period, but often includes service providers, who accounted for approximately 53%, 47% and 48% of our total revenue during the years ended December 31, 2012 and 2013, and six months ended June 30, 2014.

Sales to these large end-customers have typically been characterized by large but irregular purchases with long initial sales cycles. After initial deployment, subsequent purchases of our products typically have a more compressed sales cycle. The timing of these purchases and of the requested delivery of the purchased product is difficult to predict. As a consequence, any acceleration or delay in anticipated product purchases by or requested deliveries to our largest end-customers could materially affect our revenue and operating results in any quarter and cause our quarterly revenue and operating results to fluctuate from quarter to quarter.

We cannot provide any assurance that we will be able to sustain or increase our revenue from our largest end-customers nor that we will be able to offset any absence of significant purchases by our largest end-customers in any particular period with purchases by new or existing end-customers in that or a subsequent period. We expect that sales of our products to a limited number of end-customers will continue to contribute materially to our revenue for the foreseeable future. The loss of, or a significant delay or reduction in purchases by, a small number of end-customers could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

We have been and are a party to litigation and claims regarding intellectual property rights, resolution of which has been and may in the future be time-consuming, expensive and adverse to us, as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.

Our industry is characterized by the existence of a large number of patents and by increasingly frequent claims and related litigation based on allegations of infringement or other violations of patent and other intellectual property rights. In the ordinary course of our business, we have been and are involved in disputes and licensing discussions with others regarding their patents and other claimed intellectual property and proprietary rights. Intellectual property infringement and misappropriation lawsuits and other claims are subject to inherent uncertainties due to the complexity of the technical and legal issues involved, and we cannot be certain that we will be successful in defending ourselves against such claims or in concluding licenses on reasonable terms or at all.

We currently have fewer issued patents than our major competitors, and therefore may not be able to utilize our patent portfolio effectively to assert defenses or counterclaims in response to patent infringement claims or litigation brought against us by third parties. Further, litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenue and against which our potential patents may provide little or no deterrence. In addition, many potential litigants have the capability to dedicate substantially greater resources than we can to enforce their intellectual property rights and to defend claims that may be brought against them. We expect that infringement claims may increase as the numbers of product types and the number of competitors in our market increases. Also, to the extent we gain greater visibility, market exposure and competitive success, we face a higher risk of being the subject of intellectual property infringement claims.

If we are found in the future to infringe the proprietary rights of others, or if we otherwise settle such claims, we could be compelled to pay damages or royalties and either obtain a license to those intellectual property rights or alter our products such that they no longer infringe. Any license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly, time-consuming or impractical. Alternatively, we could also become subject to an injunction or other court order that could prevent us from offering our products. Any of these claims, regardless of their merit, may be time-consuming, result in costly litigation and diversion of technical and management personnel, or require us to cease using infringing technology, develop non-infringing technology or enter into royalty or licensing agreements.

Many of our commercial agreements require us to indemnify our end-customers, distributors and resellers for certain third-party intellectual property infringement actions related to our technology, which may require us to defend or otherwise become involved in such infringement claims, and we could incur liabilities in excess of the amounts we have received for the relevant products and/or services from our end-customers, distributors or resellers. These types of claims could harm our relationships with our end-customers, distributors and resellers, may deter future end-customers from purchasing our products or could expose us to litigation for these claims. Even if we are not a party to any litigation between an end-customer, distributor or reseller, on the one hand, and a third party, on the other hand, an adverse outcome in any such litigation could make it more difficult for us to defend our intellectual property rights in any subsequent litigation in which we are a named party.

We have in the past been involved in two litigation matters with F5 Networks, Inc., a litigation matter with Allegro Software Development, Inc. and a litigation matter with Brocade, all of which have since settled. As part of the settlement with Brocade, we made a significant cash payment to Brocade, granted a license to Brocade to use all of our issued, pending and future patents, and received and granted certain covenants not to sue. We are currently party to two litigation matters. In May 2013, Radware filed suit against us for patent infringement in the United States District Court for the Northern District of California, alleging that our AX and EX Series products infringe three Radware patents. In November 2013, Parallel Networks, LLC, which we believe is a patent holding company, filed a lawsuit against us in the United States District Court for the District of Delaware alleging that our AX and Thunder series products infringe two of their patents. These plaintiffs are seeking injunctive relief, damages, costs and, in the case of the Radware lawsuit, attorneys’ fees. While we intend to defend ourselves vigorously against the allegations in these lawsuits, these litigation matters, regardless of the outcome, could result in significant costs and diversion of our management’s efforts.

We may not be able to adequately protect our intellectual property, and if we are unable to do so, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights.

We rely on a combination of patent, copyright, trademark and trade secret laws, and contractual restrictions on disclosure of confidential and proprietary information, to protect our intellectual property. We cannot be certain that the intellectual property we decide to protect will be desirable or necessary to our competitors or will ultimately have commercial value, or that we will be the first to seek protection for the intellectual property we attempt to protect.

We also rely in part on confidentiality and/or assignment agreements with our technology partners, employees, consultants, advisors and others. We did not, however, obtain general employee confidentiality and assignment agreements from certain former employees who worked with us prior to July 2010, although we did receive specific assignments from each of these employees who was an inventor of any technologies that we patented. These protections and agreements may not effectively prevent disclosure of our confidential information and may not provide an adequate remedy in the event of

unauthorized disclosure. In addition, others may independently discover our trade secrets and intellectual property information we thought to be proprietary, and in these cases we would not be able to assert any trade secret rights against those parties. Despite our efforts to protect our intellectual property, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property or technology. Monitoring unauthorized use of our intellectual property is difficult and expensive. We have not made such monitoring a priority to date and will not likely make this a priority in the future. We cannot be certain that the steps we have taken or will take will prevent misappropriation of our technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States.

If we fail to protect our intellectual property adequately, our competitors might gain access to our technology, and our business might be harmed. In addition, even if we protect our intellectual property, we may need to license it to competitors, which could also be harmful. For example, we have already licensed all of our issued patents, pending applications, and future patents and patent applications that we may acquire, obtain, apply for or have a right to license to Brocade until May 2025, for the life of each such patent. In addition, we might incur significant expenses in defending our intellectual property rights. Any of our patents, copyrights, trademarks or other intellectual property rights could be challenged by others or invalidated through administrative process or litigation.

We may in the future initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not resolved in our favor, could result in significant expense to us and divert the efforts of our management and technical personnel, as well as cause other claims to be made against us, which might adversely affect our business, operating results and financial condition.

In addition, on March 20, 2014, we received a letter from an attorney on behalf of an individual who claims that he is entitled to between 1.6 and 2.6 million shares of our common stock.

The individual alleges that prior to the incorporation of our company he had been promised founders’ shares in a different corporation. The individual also alleges that our Chief Executive Officer and founder, Lee Chen, who was involved with this different entity for a short period of time in mid-2004 before our founding, was the CEO and controlling stockholder of such other entity and that Mr. Chen breached his fiduciary duty to such entity and its stockholders. The individual further alleges that Mr. Chen misappropriated intellectual property and diverted employees and investors from that entity to us. On the basis of these allegations, this individual claims he is entitled to shares of our common stock. The individual also alleges that we knowingly aided and abetted Mr. Chen in such alleged actions. To our knowledge, this individual had not raised any of these allegations or made any equity ownership claims to us prior to our receipt of the email on March 20th.

Based on our preliminary review of the allegations in the letter, we and Mr. Chen believe that the claims are without merit and are not likely to have a material adverse effect on us. However, there can be no assurances with respect to the outcome of these allegations. No lawsuit has been filed, and if a lawsuit is filed, we and Mr. Chen intend to defend against these claims vigorously.

We face intense competition in our market, especially from larger, well-established companies, and we may lack sufficient financial or other resources to maintain or improve our competitive position.

The application networking market is intensely competitive, and we expect competition to increase in the future. To the extent that we sell our solutions in adjacent markets, we expect to face intense competition in those markets as well. We believe that our main competitors fall into three categories:


•	Companies that sell products in the traditional ADC market. In the ADC market, we compete against other companies that are well established in this market, including F5 Networks, Inc., Brocade, Cisco Systems, Inc., Citrix Systems, Inc., and Radware Ltd.;


•	Companies that sell CGN products. Our purpose-built CGN solution competes primarily against products originally designed for other networking purposes, such as edge routers and security appliances from vendors such as Alcatel-Lucent USA Inc., Cisco Systems, Inc. and Juniper Networks, Inc.,; and


•	Companies that sell traditional DDoS mitigation products. We are a new entrant into the DDoS market and first publicly launched our DDoS detection and mitigation solution, TPS, in January 2014. We believe our principal competitors in this market are Arbor Networks, Inc., a subsidiary of Danaher Corporation, and Radware.

Many of our competitors are substantially larger and have greater financial, technical, research and development, sales and marketing, manufacturing, distribution and other resources and greater name recognition. In addition, some of our larger competitors have broader products offerings and could leverage their customer relationships based on their other products. Potential customers who have purchased products from our competitors in the past may also prefer to continue to purchase from these competitors rather than change to a new supplier regardless of the performance, price or features of the respective products. We could also face competition from new market entrants, which may include our current technology partners. As we

continue to expand globally, we may also see new competitors in different geographic regions. Such current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources.

Many of our existing and potential competitors enjoy substantial competitive advantages, such as:


•	longer operating histories;


•	the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services at a greater range of prices;


•	the ability to incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through selling at zero or negative margins, product bundling or closed technology platforms;


•	broader distribution and established relationships with distribution channel partners in a greater number of worldwide locations;


•	access to larger end-customer bases;


•	the ability to use their greater financial resources to attract our research and development engineers as well as other employees of ours;


•	larger intellectual property portfolios; and


•	the ability to bundle competitive offerings with other products and services.

Our ability to compete will depend upon our ability to provide a better solution than our competitors at a competitive price. We may be required to make substantial additional investments in research and development, marketing and sales in order to respond to competition, and there is no assurance that these investments will achieve any returns for us or that we will be able to compete successfully in the future. We also expect increased competition if our market continues to expand. Moreover, conditions in our market could change rapidly and significantly as a result of technological advancements or other factors.

In addition, current or potential competitors may be acquired by third parties that have greater resources available. As a result of these acquisitions, our current or potential competitors might take advantage of the greater resources of the larger organization to compete more vigorously or broadly with us. In addition, continued industry consolidation might adversely impact end-customers’ perceptions of the viability of smaller and even medium-sized networking companies and, consequently, end-customers’ willingness to purchase from companies like us.

As a result, increased competition could lead to fewer end-customer orders, price reductions, reduced margins and loss of market share.

Some of our large end-customers demand favorable terms and conditions from their vendors and may request price concessions. As we seek to sell more products to these end-customers, we may agree to terms and conditions that may have an adverse effect on our business.

Some of our large end-customers have significant purchasing power and, accordingly, have requested from us and received more favorable terms and conditions, including lower prices than we typically provide. As we seek to sell products to this class of end-customer, we may agree to these terms and conditions, which may include terms that reduce our gross margin and have an adverse effect on our business.

If we are unable to attract new end-customers, sell additional products to our existing end-customers or achieve the anticipated benefits from our investment in additional sales personnel and resources, our revenue may decline, and our gross margin will be adversely affected.

To maintain and increase our revenue, we must continually add new end-customers and sell additional products to existing end-customers. The rate at which new and existing end-customers purchase solutions depends on a number of factors, including some outside of our control, such as general economic conditions. If our efforts to sell our solutions to new end-customers and additional solutions to our existing end-customers are not successful, our business and operating results will suffer.

In recent periods, we have been adding personnel and other resources to our sales and marketing functions, as we focus on growing our business, entering new markets and increasing our market share. We expect to incur significant additional expenses by hiring additional sales personnel and expanding our international operations in order to seek revenue growth. The return on these and future investments may be lower, or may be realized more slowly, than we expect, if realized at all. If we do not achieve the benefits anticipated from these investments, or if the achievement of these benefits is delayed, our growth rates will decline, and our gross margin would likely be adversely affected.

Our gross margin may fluctuate from period to period based on the mix of products sold, the geographic location of our customers, price discounts offered, required inventory write downs and current exchange rate fluctuations.

Our gross margin may fluctuate from period to period in response to a number of factors, such as the mix of our products sold and the geographic locations of our sales. Our products tend to have varying gross margins in different geographic regions. We also may offer pricing discounts from time to time as part of a targeted sales campaign or as a result of pricing pressure from our competitors. In addition, our larger end-customers may negotiate pricing discounts in connection with large orders they place with us. The sale of our products at discounted prices could have a negative impact on our gross margin. We also must manage our inventory of existing products when we introduce new products. For example, in the fourth quarter of 2013, our gross margin decreased to 74% due primarily to geographical mix and selling some end-of-life product at low margins. If we are unable to sell the remaining inventory of our older products prior to or following the launch of such new product offerings, we may be forced to write down inventory for such older products, which could also negatively affect our gross margin. Our gross margin may also vary based on international currency exchange rates. In general, our sales are denominated in U.S. dollars; however, in Japan they are denominated in Japanese yen. Changes in the exchange rate between the U.S. dollar and the Japanese yen may therefore affect our actual revenue and gross margin.

We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the United States, and we are therefore subject to a number of risks that could adversely affect these international sources of our revenue.

A significant portion of our revenue is generated in international markets, including Japan, Western Europe, China, Taiwan and South Korea. During years ended December 31, 2012 and 2013, and six months ended June 30, 2014, approximately 64%, 52% and 51% of our total revenue was generated from customers located outside of the United States. As a result, we must hire and train experienced personnel to staff and manage our foreign operations. To the extent that we experience difficulties in recruiting, training, managing and retaining an international staff, and specifically sales management and sales personnel, we may experience difficulties in sales productivity in foreign markets. We also seek to enter into distributor and reseller relationships with companies in certain international markets where we do not have a local presence. If we are not able to maintain successful distributor relationships internationally or recruit additional companies to enter into distributor relationships, our future success in these international markets could be limited. Business practices in the international markets that we serve may differ from those in the United States and may require us in the future to include terms in customer contracts other than our standard terms. To the extent that we may enter into customer contracts in the future that include non-standard terms, our operating results may be adversely impacted.

We have a significant presence in international markets and plan to continue to expand our international operations, which exposes us to a number of risks that could affect our future growth.

Our sales team is comprised of field sales and inside sales personnel who are organized by geography and maintain sales presence in 27 countries, including in the following countries and regions: United States, Western Europe, Japan, China, Taiwan and South Korea. We expect to continue to increase our sales headcount in all markets, particularly in markets where we currently do not have a sales presence. As we continue to expand our international sales and operations, we are subject to a number of risks, including the following:


•	greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;


•	increased expenses incurred in establishing and maintaining office space and equipment for our international operations;


•	greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;


•	general economic and political conditions in these foreign markets;


•	economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe;


•	management communication and integration problems resulting from cultural and geographic dispersion;


•	risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;


•	greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;


•	the uncertainty of protection for intellectual property rights in some countries;


•	greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices; and


•	heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements.

Because of our worldwide operations, we are also subject to risks associated with compliance with applicable anticorruption laws. One such applicable anticorruption law is the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits U.S. companies and their employees and intermediaries from making payments to foreign officials for the purpose of obtaining or keeping business, securing an advantage, or directing business to another, and requires public companies to maintain accurate books and records and a system of internal accounting controls. Under the FCPA, U.S. companies may be held liable for actions taken by directors, officers, employees, agents, or other strategic or local partners or representatives. As such, if we or our intermediaries, such as channel partners and distributors, fail to comply with the requirements of the FCPA or similar legislation, governmental authorities in the United States and elsewhere could seek to impose civil and/or criminal fines and penalties which could have a material adverse effect on our business, operating results and financial condition.

We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations.

Our consolidated results of operations, financial position and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Historically, the majority of our revenue contracts are denominated in U.S. dollars, with the most significant exception being Japan, where we invoice primarily in the Japanese yen. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in North America and Japan. Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations that can affect our operating income. For example, a hypothetical 10% adverse movement in the exchange rate between the U.S. dollar and the Japanese yen would have resulted in a $3.2 million decrease in our total revenue and a $2.1 million decrease in our operating income for the year ended December 31, 2013, and a hypothetical 10% favorable movement in the exchange rate between the U.S. dollar and the Japanese yen would have resulted in a $3.5 million increase in our total revenue and a $2.1 million increase in operating income for the year ended December 31, 2013. As exchange rates vary, our operating income may differ from expectations. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative instruments.

Our success depends on our key personnel and our ability to hire, retain and motivate qualified product development, sales, marketing and finance personnel.

Our success depends to a significant degree upon the continued contributions of our key management, product development, sales, marketing and finance personnel, many of whom may be difficult to replace. The complexity of our products, their integration into existing networks and ongoing support of our products requires us to retain highly trained professional services, customer support and sales personnel with specific expertise related to our business. Competition for qualified professional services, customer support and sales personnel in our industry is intense, because of the limited number of people available with the necessary technical skills and understanding of our products. We may not be successful in attracting, integrating, or retaining qualified personnel to fulfill our current or future needs, nor may we be successful in keeping the qualified personnel we currently have. Our ability to hire and retain these personnel may be adversely affected by volatility or reductions in the price of our common stock, since these employees are generally granted equity-based awards. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited, or that they have divulged proprietary or other confidential information, or that their former employers own their inventions or other work product.

Our future performance also depends on the continued services and continuing contributions of our senior management to execute on our business plan and to identify and pursue new opportunities and product innovations. In particular, Lee Chen, our founder and Chief Executive Officer, and Rajkumar Jalan, our Chief Technology Officer, are critical to the development of our technology and the future vision and strategic direction of our company. The loss of services of senior management could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition, and operating results.

As a result of becoming a public company, we are obligated to implement and maintain effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or our internal control over financial reporting may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We will be required, pursuant to the Exchange Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of the initial public offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as, for the second year beginning after the date of the initial public offering, a statement that our auditors have issued an attestation report on our management’s assessment of our internal controls.

We are currently evaluating our internal controls, identifying and remediating deficiencies in those internal controls and documenting the results of our evaluation, testing and remediation. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting that we are unable to remediate before the end of the same fiscal year in which the material weakness is identified, we will be unable to assert that our internal control over financial reporting is effective. If we are unable to conclude that our internal control over financial reporting is effective, if our auditors are unable to attest to management’s report on the effectiveness of our internal control over financial reporting, or if we are required to restate our financial statements as a result of ineffective internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline.

As a public company, we will be required to disclose material changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company as defined in the JOBS Act, if we take advantage of the exemptions contained in the JOBS Act. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

We currently have significant deficiencies in our internal control over financial reporting. Failure to properly remediate these significant deficiencies could impair our ability to comply with the accounting and reporting requirements applicable to public companies.

We currently have “significant deficiencies” (as defined in Auditing Standard No. 2 of the Public Company Accounting Oversight Board) in our internal control over financial reporting relating to our inadequate design of the financial closing and reporting process. We did not maintain financial close process and procedures that were adequately designed, documented and executed to support the accurate and timely reporting of our financial results. Specifically, during 2013, we did not maintain effective controls in relation to reviews of account reconciliations and the tax provision. Although we are taking steps to strengthen our accounting staff and internal controls and plan to take additional measures to remediate the underlying causes of these significant deficiencies, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating these significant deficiencies. If we are unable to successfully remediate these significant deficiencies, it could harm our operating results, cause us to fail to meet our SEC reporting obligations or applicable stock exchange listing requirements on a timely basis, cause our stock price to be adversely affected or result in inaccurate financial reporting or material misstatements in our annual or interim financial statements.

If we are not able to maintain and enhance our brand and reputation, our business and operating results may be harmed in tangible or intangible ways.

We believe that maintaining and enhancing our brand and reputation are critical to our relationships with, and our ability to attract, new end-customers, technology partners and employees. The successful promotion of our brand will depend largely upon our ability to continue to develop, offer and maintain high-quality products and services, our marketing and public relations efforts, and our ability to differentiate our products and services successfully from those of our competitors. Our brand promotion activities may not be successful and may not yield increased revenue. In addition, extension of our brand to products and uses different from our traditional products and services may dilute our brand, particularly if we fail to maintain the quality of products and services in these new areas. We have in the past, and may in the future, become involved in litigation that could negatively affect our brand. If we do not successfully maintain and enhance our brand and reputation, our growth rate may decline, we may have reduced pricing power relative to competitors with stronger brands or reputations, and we could lose end-customers or technology partners, all of which would harm our business, operating results and financial condition.

Adverse general economic conditions or reduced information technology spending may adversely impact our business.

A substantial portion of our business depends on the demand for information technology by large enterprises and service providers, the overall economic health of our current and prospective end-customers and the continued growth and evolution of the Internet. The timing of the purchase of our products is often discretionary and may involve a significant commitment of capital and other resources. The recent financial recession resulted in a significant weakening of the economy in

the United States and Europe and of the global economy, more limited availability of credit, a reduction in business confidence and activity, deficit-driven austerity measures that continue to affect governments and educational institutions, and other difficulties that may affect one or more of the industries to which we sell our products and services. If economic conditions in the United States, Europe and other key markets for our products continue to remain uncertain or deteriorate further, many end-customers may delay or reduce their IT spending. This could result in reductions in sales of our products and services, longer sales cycles, slower adoption of new technologies and increased price competition. Any of these events would likely harm our business, operating results and financial condition. In addition, there can be no assurance that IT spending levels will increase following any recovery.

We are dependent on third-party manufacturers, and changes to those relationships, expected or unexpected, may result in delays or disruptions that could harm our business.

We outsource the manufacturing of our hardware components to third-party original design manufacturers who assemble these hardware components to our specifications. Our primary manufacturers are Lanner Electronics, Inc. and AEWIN Technologies Co., Ltd., each of which is located in Taiwan. Our reliance on these third-party manufacturers reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs, and product supply and timing. Any manufacturing disruption at these manufacturers could severely impair our ability to fulfill orders. Our reliance on outsourced manufacturers also may create the potential for infringement or misappropriation of our intellectual property rights or confidential information. If we are unable to manage our relationships with these manufacturers effectively, or if these manufacturers suffer delays or disruptions for any reason, experience increased manufacturing lead-times, experience capacity constraints or quality control problems in their manufacturing operations, or fail to meet our future requirements for timely delivery, our ability to ship products to our end-customers would be severely impaired, and our business and operating results would be seriously harmed.

These manufacturers typically fulfill our supply requirements on the basis of individual orders. We do not have long-term contracts with our manufacturers that guarantee capacity, the continuation of particular pricing terms, or the extension of credit limits. Accordingly, they are not obligated to continue to fulfill our supply requirements, which could result in supply shortages, and the prices we are charged for manufacturing services could be increased on short notice. In addition, our orders may represent a relatively small percentage of the overall orders received by our manufacturers from their customers. As a result, fulfilling our orders may not be considered a priority by one or more of our manufacturers in the event the manufacturer is constrained in its ability to fulfill all of its customer obligations in a timely manner.

Although the services required to manufacture our hardware components may be readily available from a number of established manufacturers, it is time-consuming and costly to qualify and implement such relationships. If we are required to change manufacturers, whether due to an interruption in one of our manufacturers’ businesses, quality control problems or otherwise, or if we are required to engage additional manufacturers, our ability to meet our scheduled product deliveries to our customers could be adversely affected, which could cause the loss of sales to existing or potential customers, delayed revenue or an increase in our costs that could adversely affect our gross margin.

Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers.

Our products incorporate key components, including certain integrated circuits, that our third-party manufacturers purchase on our behalf from a limited number of suppliers, including some sole-source providers. In addition, the lead times associated with these and other components of our products can be lengthy and preclude rapid changes in quantities and delivery schedules. Moreover, long-term supply and maintenance obligations to our end-customers increase the duration for which specific components are required, which may further increase the risk we may incur component shortages or the cost of carrying inventory. If we are unable to obtain a sufficient quantity of these components in a timely manner for any reason, sales and/or shipments of our products could be delayed or halted, which would seriously affect present and future sales and cause damage to end-customer relationships, which would, in turn, adversely affect our business, financial condition and results of operations.

In addition, our component suppliers change their selling prices frequently in response to market trends, including industry-wide increases in demand, and because we do not necessarily have contracts with these suppliers, we are susceptible to price fluctuations related to raw materials and components. If we are unable to pass component price increases along to our end-customers or maintain stable pricing, our gross margin and operating results could be negatively impacted. Furthermore, poor quality in sole-sourced components or certain other components in our products could also result in lost sales or lost sales opportunities. If the quality of such components does not meet our standards or our end-customers’ requirements, if we are unable to obtain components from our existing suppliers on commercially reasonable terms, or if any of our sole source providers cease to continue to manufacture such components or to remain in business, we could be forced to redesign our products and qualify new components from alternate suppliers. The development of alternate sources for those components can

be time-consuming, difficult and costly, and we may not be able to develop alternate or second sources in a timely manner. Even if we are able to locate alternate sources of supply, we could be forced to pay for expedited shipments of such components or our products at dramatically increased costs.

If our products fail to protect against malicious attacks and our end-customers experience security breaches, our reputation and business could be harmed, and our operating results could be adversely impacted.

Defects may cause our products to be vulnerable to security attacks or cause them to fail to help secure networks. Data thieves are increasingly sophisticated, often affiliated with organized crime and operate large-scale and complex automated attacks. In addition, the techniques they use to access or sabotage networks change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques and provide a solution in time to protect our end-customers’ networks. If we fail to identify and respond to new and increasingly complex methods of attack and to update our products to detect or prevent such threats in time to protect our end-customers’ critical business data, our business, operating results and reputation could suffer.

In addition, an actual or perceived security breach or theft of sensitive data of one of our end-customers, regardless of whether the breach is attributable to the failure of our products or services, could adversely affect the market’s perception of our security products. Despite our best efforts, there is no guarantee that our products will be free of flaws or vulnerabilities, and even if we discover these weaknesses we may not be able to correct them promptly, if at all. Our end-customers may also misuse our products, which could result in a breach or theft of business data.

Undetected software or hardware errors may harm our business and results of operations.

Our products may contain undetected errors or defects when first introduced or as new versions are released. We have experienced these errors or defects in the past in connection with new products and product upgrades. We expect that these errors or defects will be found from time to time in new or enhanced products after commencement of commercial distribution. These problems may cause us to incur significant warranty and repair costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems. We may also be subject to liability claims for damages related to product errors or defects. While we carry insurance policies covering this type of liability, these policies may not provide sufficient protection should a claim be asserted. A material product liability claim may harm our business and results of operations.

Any errors, defects or vulnerabilities in our products could result in:


•	expenditures of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors and defects or to address and eliminate vulnerabilities;


•	loss of existing or potential end-customers or distribution channel partners;


•	delayed or lost revenue;


•	delay or failure to attain market acceptance;


•	indemnification obligations under our agreements with resellers, distributors and/or end-customers;


•	an increase in warranty claims compared with our historical experience or an increased cost of servicing warranty claims, either of which would adversely affect our gross margin; and


•	litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.

Our use of open source software in our products could negatively affect our ability to sell our products and subject us to possible litigation.

We incorporate open source software such as the Linux operating system kernel into our products. We recently implemented a formal open source use policy, including written guidelines for use of open source software and business processes for approval of that use. We have developed and implemented our open source policies according to industry practice; however, best practices in this area are subject to change, because there is little reported case law on the interpretation of material terms of many open source licenses. We are in the process of reviewing our open source use and our compliance with open source licenses and implementing remediation and changes necessary to comply with the open source licenses related thereto. We cannot guarantee that our use of open source software has been, and will be, managed effectively for our intended business purposes and/or compliant with applicable open source licenses. We may face legal action by third parties seeking to enforce their intellectual property rights related to our use of such open source software. Failure to adequately manage open source license compliance and our use of open source software may result in unanticipated obligations regarding our products and services, such as a requirement that we license proprietary portions of our products or services on unfavorable terms, that we make available source code for modifications or derivative works we created based upon, incorporating or using open source software, that we license such modifications or derivative works under the terms of the particular open source

license and/or that we redesign the affected products or services, which could result, for example, in a loss of intellectual property rights, or delay in providing our products and services. From time to time, there have been claims against companies that distribute or use third-party open source software in their products and services, asserting that the open source software or its combination with the products or services infringes third parties’ patents or copyrights, or that the companies’ distribution or use of the open source software does not comply with the terms of the applicable open source licenses. Use of certain open source software can lead to greater risks than use of warranted third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of such open source software. From time to time, there have been claims against companies that use open source software in their products, challenging the ownership of rights in such open source software. As a result, we could also be subject to suits by parties claiming ownership of rights in what we believe to be open source software and so challenging our right to use such software in our products. If any such claims were asserted against us, we could be required to incur significant legal expenses defending against such a claim. Further, if our defenses to such a claim were not successful, we could be, for example, subject to significant damages, be required to seek licenses from third parties in order to continue offering our products and services without infringing such third party’s intellectual property rights, be required to re-engineer such products and services, or be required to discontinue making available such products and services if re-engineering cannot be accomplished on a timely or successful basis. The need to engage in these or other remedies could increase our costs or otherwise adversely affect our business, operating results and financial condition.

Our products must interoperate with operating systems, software applications and hardware that are developed by others and if we are unable to devote the necessary resources to ensure that our products interoperate with such software and hardware, we may fail to increase, or we may lose market share and we may experience a weakening demand for our products.

Our products must interoperate with our end-customers’ existing infrastructure, specifically their networks, servers, software and operating systems, which may be manufactured by a wide variety of vendors and original equipment manufacturers. As a result, when problems occur in a network, it may be difficult to identify the source of the problem. The occurrence of software or hardware problems, whether caused by our products or another vendor’s products, may result in the delay or loss of market acceptance of our products. In addition, when new or updated versions of our end-customers’ software operating systems or applications are introduced, we must sometimes develop updated versions of our software so that our products will interoperate properly. We may not accomplish these development efforts quickly, cost-effectively or at all. These development efforts require capital investment and the devotion of engineering resources. If we fail to maintain compatibility with these applications, our end-customers may not be able to adequately utilize our products, and we may, among other consequences, fail to increase, or we may lose market share and experience a weakening in demand for our products, which would adversely affect our business, operating results and financial condition.

We license technology from third parties, and our inability to maintain those licenses could harm our business.

Many of our products include proprietary technologies licensed from third parties. In the future, it may be necessary to renew licenses for third party technology or obtain new licenses for other technology. These third party licenses may not be available to us on acceptable terms, if at all. As a result, we could also face delays or be unable to make changes to our products until equivalent technology can be identified, licensed or developed and integrated with our products. Such delays or an inability to make changes to our products, if it were to occur, could adversely affect our business, operating results and financial condition. The inability to obtain certain licenses to third-party technology, or litigation regarding the interpretation or enforcement of license agreements and related intellectual property issues, could have a material adverse effect on our business, operating results and financial condition.

Failure to prevent excess inventories or inventory shortages could result in decreased revenue and gross margin and harm our business.

We purchase products from our manufacturers outside of, and in advance of, reseller or end-customer orders, which we hold in inventory and resell. We place orders with our manufacturers based on our forecasts of our end-customers’ requirements and forecasts provided by our distribution channel partners. These forecasts are based on multiple assumptions, each of which might cause our estimates to be inaccurate, affecting our ability to provide products to our customers. There is a risk we may be unable to sell excess products ordered from our manufacturers. Inventory levels in excess of customer demand may result in obsolete inventory and inventory write-downs. For example, we incurred inventory write downs of $2.6 million for 2013 as a result of end-customers’ decisions to purchase our new product offering rather than our existing product offerings as originally expected. The sale of excess inventory at discounted prices could impair our brand image and have an adverse effect on our financial condition and results of operations. Conversely, if we underestimate demand for our products or if our manufacturers fail to supply products we require at the time we need them, we may experience inventory shortages. Inventory shortages might delay shipments to resellers, distributors and customers and cause us to lose sales. These shortages may diminish the loyalty of our distribution channel partners or customers.

The difficulty in forecasting demand also makes it difficult to estimate our future financial condition and results of operations from period to period. A failure to accurately predict the level of demand for our products could adversely affect our net revenue and net income, and we are unlikely to forecast such effects with any certainty in advance.

Our sales cycles can be long and unpredictable, primarily due to the complexity of our end-customers’ networks and data centers and the length of their budget cycles. As a result, our sales and revenue are difficult to predict and may vary substantially from period to period, which may cause our operating results to fluctuate significantly.

The timing of our sales is difficult to predict because of the length and unpredictability of our products’ sales cycles. A sales cycle is the period between initial contact with a prospective end-customer and any sale of our products. Our sales cycle, in particular to our large end-customers, may be lengthy due to the complexity of their networks and data centers. Because of this complexity, prospective end-customers generally consider a number of factors over an extended period of time before committing to purchase our products. End-customers often view the purchase of our products as a significant and strategic decision that can have important implications on their existing networks and data centers and, as a result, require considerable time to evaluate, test and qualify our products prior to making a purchase decision and placing an order to ensure that our products will successfully interoperate with our end-customers’ complex network and data centers. Additionally, the budgetary decisions at these entities can be lengthy and require multiple organization reviews. The length of time that end-customers devote to their evaluation of our products and decision making process varies significantly. The length of our products’ sales cycles typically ranges from three to 12 months but can be longer for our large end-customers.

For all of these reasons, it is difficult to predict whether a sale will be completed or the particular fiscal period in which a sale will be completed, both of which contribute to the uncertainty of our future operating results. If our sales cycles lengthen, our revenue could be lower than expected, which would have an adverse impact on our operating results and could cause our stock price to decline.

Our ability to sell our products is highly dependent on the quality of our support and services offerings, and our failure to offer high-quality support could have a material adverse effect on our business, revenue and results of operations.

We believe that our ability to provide consistent, high quality customer service and technical support is a key factor in attracting and retaining end-customers of all sizes and is critical to the deployment of our products. When support is purchased our end-customers depend on our support organization to provide a broad range of support services, including on-site technical support, 24-hour support and shipment of replacement parts on an expedited basis. If our support organization or our distribution channel partners do not assist our end-customers in deploying our products effectively, succeed in helping our end-customers resolve post-deployment issues quickly, or provide ongoing support, it could adversely affect our ability to sell our products to existing end-customers and could harm our reputation with potential end-customers. We currently have technical support centers in the United States, Japan, China and the Netherlands. As we continue to expand our operations internationally, our support organization will face additional challenges, including those associated with delivering support, training and documentation in languages other than English.

We typically sell our products with maintenance and support as part of the initial purchase, and a substantial portion of our support revenue comes from renewals of maintenance and support contracts. Our end-customers have no obligation to renew their maintenance and support contracts after the expiration of the initial period. If we are unable to provide high quality support, our end-customers may elect not to renew their maintenance and support contracts or to reduce the product quantity under their maintenance and support contracts, thereby reducing our future revenue from maintenance and support contracts.

Our failure or the failure of our distribution channel partners to maintain high-quality support and services could have a material and adverse effect on our business, revenue and operating results.

We depend on growth in markets relating to network security, management and analysis, and lack of growth or contraction in one or more of these markets could have a material adverse effect on our results of operations and financial condition.

Demand for our products is linked to, among other things, growth in the size and complexity of network infrastructures and the demand for networking technologies addressing the security, management and analysis of such infrastructures. These markets are dynamic and evolving. Our future financial performance will depend in large part on continued growth in the number of organizations investing in their network infrastructure and the amount they commit to such investments. If this demand declines, our results of operations and financial condition would be materially and adversely affected. Segments of the network infrastructure industry have in the past experienced significant economic downturns. Furthermore, the market for network infrastructure may not continue to grow at historic rates, or at all. The occurrence of any of these factors in the markets relating to network security, management and analysis could materially and adversely affect our results of operations and financial condition.

Our revenue growth rate in recent periods may not be indicative of our future performance.

You should not consider our revenue growth rate in recent periods as indicative of our future performance. We have recently experienced revenue growth rates of 32%, 18% and 52% in 2012 and 2013 and the six month ended June 30, 2014. We may not achieve similar revenue growth rates in future periods. You should not rely on our revenue for any prior quarterly or annual periods as any indication of our future revenue or revenue growth. If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability.

Our business and operations have experienced rapid growth in recent periods, and if we do not effectively manage any future growth or are unable to improve our controls, systems and processes, our operating results will be adversely affected.

In recent periods, we have significantly increased the number of our employees and independent contractors. As we hire new employees and independent contractors and expand into new locations outside the United States, we are required to comply with varying local laws for each of these new locations. We anticipate that further expansion of our infrastructure and headcount will be required. Our rapid growth has placed, and will continue to place, a significant strain on our administrative and operational infrastructure and financial resources. Our ability to manage our operations and growth across multiple countries will require us to continue to refine our operational, financial and management controls, human resource policies, and reporting systems and processes.

We need to continue to improve our internal systems, processes, and controls to effectively manage our operations and growth. We may not be able to successfully implement improvements to these systems, processes and controls in an efficient or timely manner. In addition, our systems and processes may not prevent or detect all errors, omissions, or fraud. We may experience difficulties in managing improvements to our systems, processes, and controls or in connection with third-party software, which could impair our ability to provide products or services to our customers in a timely manner, causing us to lose customers, limit us to smaller deployments of our products, increase our technical support costs, or damage our reputation and brand. Our failure to improve our systems and processes, or their failure to operate in the intended manner, may result in our inability to manage the growth of our business and to accurately forecast our revenue, expenses, and earnings, or to prevent certain losses, any of which may harm our business and results of operations.

We may not be able to sustain or develop new distributor and reseller relationships, and a reduction or delay in sales to significant distribution channel partners could hurt our business.

We sell our products and services through multiple distribution channels in the United States and internationally. We may not be able to increase our number of distributor or reseller relationships or maintain our existing relationships. Recruiting and retaining qualified distribution channel partners and training them on our technologies requires significant time and resources. These distribution channel partners may also market, sell and support products and services that are competitive with ours and may devote more resources to the marketing, sales and support of such competitive products. Our sales channel structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of our distribution channel partners misrepresent the functionality of our products or services to end-customers or violate laws or our corporate policies. If we are unable to establish or maintain our sales channels or if our distribution channel partners are unable to adapt to our future sales focus and needs, our business and results of operations will be harmed.

The terms of our credit facility could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.

Our credit facility contains a number of restrictive covenants that impose operating and financial restrictions on us, including restrictions on our ability to take actions that may be in our best interests. Our credit facility requires us to satisfy specified financial covenants. In the past, we were not in compliance with one of the covenants on one occasion and were able to obtain a waiver from our lenders regarding the non-compliance. Our ability to meet those financial covenants can be affected by events beyond our control, and we may not be able to continue to meet those covenants or obtain waivers if we fail to meet a covenant. Upon the occurrence of an event of default, our lenders could elect to declare all amounts outstanding under the credit facility to be immediately due and payable and terminate all commitments to extend further credit. If our lenders accelerate the repayment, if any, we may not have sufficient funds to repay our existing debt. If we were unable to repay those amounts, our lenders could proceed against the collateral granted to them to secure such indebtedness. We have pledged substantially all of our assets, including our intellectual property, as collateral under the credit facility. As of June 30, 2014, we had no outstanding balance on our credit facility and were in compliance with the facility covenants.

Our sales to governmental organizations are subject to a number of challenges and risks.

We sell to governmental organization end-customers. Sales to governmental organizations are subject to a number of challenges and risks. Selling to governmental organizations can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. We have not yet received security clearance from the United States government, which prevents us from being able to sell directly for certain governmental uses. There can be no assurance that such clearance will be obtained, and failure to do so may adversely affect

our operating results. Governmental organization demand and payment for our products may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products. Governmental organizations may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such termination may adversely impact our future operating results.

Failure to comply with governmental laws and regulations could harm our business.

Our business is subject to regulation by various federal, state, local and foreign governmental entities, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and financial condition.

We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.

Our products are subject to U.S. export controls and may be exported outside the United States only with the required level of export license or through an export license exception because we incorporate encryption technology into our products. In addition, various countries regulate the import of certain encryption technology and have enacted laws that could limit our ability to distribute our products or our end-customers’ ability to implement our products in those countries. Changes in our products or changes in export and import regulations may create delays in the introduction of our products in international markets, prevent our end-customers with international operations from deploying our products throughout their global systems or, in some cases, prevent the export or import of our products to certain countries altogether. Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations or change in the countries, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential end-customers with international operations. Any decreased use of our products or limitation on our ability to export or sell our products would likely adversely affect our business, operating results and financial condition.

We discovered that we inadvertently reported incorrect information to the U.S. Census Bureau when reporting certain exports, although the underlying exports were authorized under the Export Administration Regulations. We implemented corrective actions and filed a Voluntary Self Disclosure with the U.S. Census Bureau regarding these technical violations. We do not believe the potential imposition of any fines by the Census Bureau would be material to us. However, there can be no assurances that any such fines or penalties would not be material, and if such fine or penalties were material, they could harm our operating results or financial condition.

We are subject to various environmental laws and regulations that could impose substantial costs upon us.

Our company must comply with local, state, federal, and international environmental laws and regulations in the countries in which we do business. We are also subject to laws, which restrict certain hazardous substances, including lead, used in the construction of our products, such as the European Union Restriction on the Use of Hazardous Substances in electrical and electronic equipment directive. We are also subject to the European Union Directive, known as the Waste Electrical and Electronic Equipment Directive, or WEEE Directive, which requires producers of certain electrical and electronic equipment to properly label products, register as a WEEE producer, and provide for the collection, disposal, and recycling of waste electronic products. Failure to comply with these environmental directives and other environmental laws could result in the imposition of fines and penalties, inability to sell covered products in certain countries, the loss of revenues, or subject us to third-party property damage or personal injury claims, or require us to incur investigation, remediation or engineering costs. Our operations and products will be affected by future environmental laws and regulations, but we cannot predict the ultimate impact of any such future laws and regulations at this time .

Our products must conform to industry standards in order to be accepted by end-customers in our markets.

Generally, our products comprise only a part of a data center. The servers, network, software and other components and systems of a data center must comply with established industry standards in order to interoperate and function efficiently together. We depend on companies that provide other components of the servers and systems in a data center to support prevailing industry standards. Often, these companies are significantly larger and more influential in driving industry standards than we are. Some industry standards may not be widely adopted or implemented uniformly, and competing standards may

emerge that may be preferred by our end-customers. If larger companies do not support the same industry standards that we do, or if competing standards emerge, market acceptance of our products could be adversely affected and we may need to incur substantial costs to conform our products to such standards, which could harm our business, operating results and financial condition.

We are dependent on various information technology systems, and failures of or interruptions to those systems could harm our business.

Many of our business processes depend upon our information technology systems, the systems and processes of third parties, and on interfaces with the systems of third parties. If those systems fail or are interrupted, or if our ability to connect to or interact with one or more networks is interrupted, our processes may function at a diminished level or not at all. This would harm our ability to ship products, and our financial results may be harmed.

In addition, reconfiguring or upgrading our information technology systems or other business processes in response to changing business needs may be time-consuming and costly and is subject to risks of delay or failed deployment. To the extent this impacts our ability to react timely to specific market or business opportunities, our financial results may be harmed.

Future acquisitions we may undertake may not result in the financial and strategic goals that are contemplated at the time of the transaction.

We may make acquisitions of complementary companies, products or technologies. With respect to any other future acquisitions we may undertake, we may find that the acquired businesses, products or technologies do not further our business strategy as expected, that we paid more than what the assets are later worth or that economic conditions change, all of which may generate future impairment charges. Any future acquisitions may be viewed negatively by customers, financial markets or investors. There may be difficulty integrating the operations and personnel of an acquired business, and we may have difficulty retaining the key personnel of an acquired business. We may have difficulty in integrating acquired technologies or products with our existing product lines. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. Our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically and culturally diverse locations. We may have difficulty maintaining uniform standards, controls, procedures and policies across locations. We may experience significant problems or liabilities associated with product quality, technology and other matters.

Our inability to successfully operate and integrate future acquisitions appropriately, effectively and in a timely manner, or to retain key personnel of any acquired business, could have a material adverse effect on our revenue, gross margin and expenses.

Our ability to use our net operating loss carryforwards may be subject to limitation and may result in increased future tax liability to us.

Generally, a change of more than 50% in the ownership of a corporation’s stock, by value, over a three-year period constitutes an ownership change for U.S. federal income tax purposes. An ownership change may limit a company’s ability to use its net operating loss carryforwards attributable to the period prior to such change. In the event we have undergone an ownership change under Section 382 of the Internal Revenue Code, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liability to us.

Our business is subject to the risks of warranty claims, product returns, product liability, and product defects.

Real or perceived errors, failures or bugs in our products could result in claims by end-customers for losses that they sustain. If end-customers make these types of claims, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem. Historically, the amount of warranty claims has not been significant, but there are no assurances that the amount of such claims will not be material in the future. Liability provisions in our standard terms and conditions of sale, and those of our resellers and distributors, may not be enforceable under some circumstances or may not fully or effectively protect us from customer claims and related liabilities and costs, including indemnification obligations under our agreements with resellers, distributors or end-customers. The sale and support of our products also entail the risk of product liability claims. We maintain insurance to protect against certain types of claims associated with the use of our products, but our insurance coverage may not adequately cover any such claims. In addition, even claims that ultimately are unsuccessful could result in expenditures of funds in connection with litigation and divert management’s time and other resources.

We are exposed to the credit risk of our distribution channel partners and end-customers, which could result in material losses and negatively impact our operating results.

Most of our sales are on an open credit basis, with typical payment terms ranging from 30 to 90 days depending on local customs or conditions that exist in the sale location. If any of the distribution channel partners or end-

customers responsible for a significant portion of our revenue becomes insolvent or suffers a deterioration in its financial or business condition and is unable to pay for our products, our results of operations could be harmed.

Concentration of ownership among our existing executive officers, a small number of stockholders, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

Our executive officers and directors, together with entities affiliated with these individuals and stockholders who own greater than 5% of our outstanding common stock, hold 46.7% and 41.5% of our outstanding common stock after the initial public offering, based on the number of shares outstanding as of December 31, 2013 and June 30, 2014. Accordingly, these stockholders, acting together, have significant influence over the election of our directors, over whether matters requiring stockholder approval are approved or disapproved and over our affairs in general. The interests of these stockholders could conflict with your interests. These stockholders may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their investments, even though such transactions might involve risks to you. In addition, this concentration of ownership could have the effect of delaying or preventing a liquidity event such as a merger or liquidation of our company.

We may need to raise additional funds in future private or public offerings, and such funds may not be available on acceptable terms, if at all. If we do raise additional funds, existing stockholders will suffer dilution.

We may need to raise additional funds in private or public offerings, and these funds may not be available to us when we need them or on acceptable terms, if at all. If we raise additional funds through further issuances of equity or convertible debt securities, you could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our then-existing capital stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we cannot raise additional funds when we need them, our business and prospects could fail or be materially and adversely affected.

The price of our common stock may be volatile, and the value of your investment could decline.

Technology stocks have historically experienced high levels of volatility. The trading price of our common stock following the initial public offering may fluctuate substantially. Following the completion of the initial public offering, the market price of our common stock may be higher or lower than the price you pay in the offering, depending on many factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:


•	announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;


•	price and volume fluctuations in the overall stock market from time to time;


•	significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;


•	fluctuations in the trading volume of our shares or the size of our public float;


•	actual or anticipated changes or fluctuations in our results of operations;


•	whether our results of operations meet the expectations of securities analysts or investors;


•	actual or anticipated changes in the expectations of investors or securities analysts;


•	litigation or investigations involving us, our industry, or both;


•	regulatory developments in the United States, foreign countries or both;


•	general economic conditions and trends;


•	major catastrophic events;


•	sales of large blocks of our common stock; or


•	departures of key personnel.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile,

we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, results of operations and financial condition.

Sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.

Sales of a substantial number of shares of our common stock in the public market after the initial public offering, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

Upon release of the underwriters’ lockup from our initial public offering, which is currently scheduled to expire on September 17, 2014, approximately 5,500,000 vested and exercisable options to purchase our common stock, will be eligible for sale, in addition to the 59,768,405 common shares outstanding as of June 30, 2014, subject in some cases to volume and other restrictions of Rules 144 and 701 under the Securities Act of 1933, as amended, as well as our insider trading policy. In addition, holders of up to approximately 36,152,114 shares of our common stock, or 60.5% of our total outstanding common stock, based on shares outstanding as of June 30, 2014, will be entitled to rights with respect to registration of these shares under the Securities Act pursuant to an investors’ rights agreement. If these holders of our common stock, by exercising their registration rights, sell a large number of shares, they could adversely affect the market price for our common stock. If we file a registration statement for the purposes of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may be impaired. Sales of substantial amounts of our common stock in the public market following the release of the lock-up or otherwise, or the perception that these sales could occur, could cause the market price of our common stock to decline.

We are an emerging growth company, and any decision on our part to comply only with certain reduced disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirement applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years following the completion of the initial public offering. We will remain an emerging growth company until the earliest of: (a) the last day of the year (i) following the fifth anniversary of the completion of the initial public offering, (ii) in which we have total annual gross revenue of at least $1.0 billion, or (iii) in which we qualify as a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this accommodation allowing for delayed adoption of new or revised accounting standards, and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

The requirements of being a public company will increase costs and may divert management attention.

As a reporting company, we will incur increased legal, accounting and other expenses, including costs associated with SEC reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the SEC. In addition, our management team will also have to adapt to the requirements of being a reporting company. The expenses incurred for reporting and corporate governance purposes are significant. We expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. Additionally, implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, may also cause us to incur additional costs and subject us to risks if we are unable to fully comply. For instance, the SEC adopted new disclosure requirements in 2012 as part of implementation of the Dodd-Frank Act regarding the

use of conflict minerals mined from the Democratic Republic of Congo and adjoining countries and procedures regarding a manufacturer’s efforts to prevent the sourcing of such conflict minerals. The implementation of these requirements could adversely affect our costs and our relationships with customers and suppliers. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

The increased costs associated with operating as a reporting company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline .

The market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts should cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which would cause our share price or trading volume to decline.

Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment.

Our restated certificate of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management. These provisions include:


•	a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;


•	the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preference and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;


•	the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;


•	a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;


•	the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our Chief Executive Officer, our secretary, or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

•

the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;


•	the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and


•	advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or not to propose matters to be acted upon at a stockholders’ meeting, which may discourage or

deter a potential acquirer from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.

Proceeds received from the sale of our capital stock may be used for general corporate purposes, and we may not use such proceeds effectively.

We completed our public offering in March 2014. The principal purposes of the initial public offering were to raise additional capital, to create a public market for our common stock and to facilitate our future access to the public equity markets. We have not yet determined the specific allocation of the net proceeds that we received in the initial public offering. Rather, we intend to use the net proceeds that we received in the initial public offering primarily for general corporate purposes, including working capital, sales and marketing activities, research and development activities, general and administrative matters and capital expenditures, and we may use a portion of the net proceeds for the acquisition of, or investment in, business products, services or technologies that complement our business. Accordingly, our management will have broad discretion over the specific use of the net proceeds that we receive in the initial public offering and might not be able to obtain a significant return, if any, on investment of these net proceeds. We cannot assure you that we will use such proceeds effectively. If we do not use the net proceeds that we received in the initial public offering effectively, our business, results of operations and financial condition could be harmed.

Our business is subject to the risks of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by man-made problems such as acts of war and terrorism.

A significant natural disaster, such as an earthquake, fire, a flood, or significant power outage could have a material adverse impact on our business, operating results, and financial condition. Our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity. In addition, our two primary manufacturers are located in Taiwan, which is near major earthquake fault lines and subject to typhoons during certain times of the year. In the event of a major earthquake or typhoon, or other natural or man-made disaster, our manufacturers in Taiwan may face business interruptions, which may impact quality assurance, product costs, and product supply and timing. In the event our or our service providers’ information technology systems or manufacturing or logistics abilities are hindered by any of the events discussed above, shipments could be delayed, resulting in missed financial targets, such as revenue and shipment targets, and our operations could be disrupted, for the affected quarter or quarters. In addition, cyber security attacks, acts of war or terrorism, or other geo-political unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers, partners, or end-customers or the economy as a whole. Any disruption in the business of our supply chain, manufacturers, logistics providers, partners or end-customers that impacts sales at the end of a quarter could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be further increased if the disaster recovery plans for us and our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of our products, our business, financial condition and operating results would be adversely affected.

We do not intend to pay dividends for the foreseeable future.

We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. In addition, our revolving credit facility currently restrict our ability to pay dividends while this facility remains outstanding. As a result, you may only receive a return on your investment in our common stock if the value of our common stock increases.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sale of Unregistered Securities

Since April 1, 2014, we issued the following unregistered securities:

a. Preferred Stock Issuances

None

b. Option and Common Stock Issuances

None

Use of Proceeds for Public Offering of Common Stock

On March 21, 2014, our Registration Statement on Form S-1 (File No. 194015) was declared effective by the SEC for our IPO of common stock, pursuant to which we sold an aggregate of 12,500,000 shares of our common stock at a public offering price of $15.00 per share, for aggregate gross proceeds of $187,500,000, of which selling stockholders sold 3,500,000 common shares for aggregated gross proceeds of $52,500,000.

In April 2014, our underwriters exercised an overallotment available to them and an additional 345,000 shares were sold by our selling stockholders which increased the total shares sold to 12,845,000 and aggregated gross proceeds to $192,675,000 for this offering.

On March 31, 2014, we paid the $20 million outstanding loan balance under the $35 million revolving credit facility. The remainder of the net offering proceeds have been invested in money market funds. There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on March 21, 2014 pursuant to Rule 424(b).

ITEM 3. Defaults Upon Senior Securities

Not applicable

ITEM 4. Mine Safety Disclosures

Not applicable

ITEM 5. Other Information

None.

ITEM 6. Exhibits

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	A10 NETWORKS, INC.

Date: August 4, 2014



	By: /s/ Lee Chen
	Lee Chen
	Chief Executive Officer and President (Principal Executive Officer)

Date: August 4, 2014



	By: /s/ Greg Straughn
	Greg Straughn
	Chief Financial Officer (Principal Accounting and Financial Officer)

EXHIBIT INDEX



Exhibit Number		Description
10.1	+	Ninth Amendment to Reseller Agreement, executed on April 22, 2014, by and between the Registrant and NEC Corporation.
10.2	++	Form of Stock Option Agreement pursuant to the 2008 Stock Plan
10.3	++	Form of Stock Option Agreement - Early Exercise pursuant to the 2008 Stock Plan
10.4	++	Form of Stock Option Agreement pursuant to the 2014 Equity Incentive Plan
10.5	++	Form of Restricted Stock Unit Agreement pursuant to the 2014 Equity Incentive Plan
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1	*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.2	*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS	**	XBRL Instant Document
101.SCH	**	XBRL Taxonomy Extension Schema Document
101.CAL	**	XBRL Extension Calculation Linkbase Document
101.DEF	**	XBRL Extension Definition Linkbase Document
101.LAB	**	XBRL Extension Labels Linkbase Document
101.PRE	**	XBRL Extension Presentation Linkbase Document


+	Portions of this exhibit have been omitted pending a determination by the Securities and Exchange Commission as to whether these portions should be granted confidential treatment.

++ Management contract or compensatory plan or arrangement

The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10‑Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of A10 Networks, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10‑Q, irrespective of any general incorporation language contained in such filing.


**	XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Exchange Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under this section.

Exhibit 10.1

CONFIDENTIALTREATMENT REQUESTED

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION

A10 AND RESELLER CONFIDENTIAL

NINTH AMENDMENT
TO RESELLER AGREEMENT

This Ninth Amendment (the “ Ninth Amendment ”), dated as of March 27, 2014, is made in respect of that certain Reseller Agreement between A10 Networks, Inc. (“ A10 Networks ”) and NEC Corporation (“ NEC ” or “ Reseller ”) dated April 2, 2009 (the “ Agreement ”). Capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Agreement.

WHEREAS the parties entered into the Agreement to appoint NEC as a non-exclusive reseller of A10 Networks’ Products for the territory of Japan;

WHEREAS the parties desire to amend the Agreement within this said Ninth Amendment to Agreement;

NOW THEREFORE, in consideration of the mutual covenants and promises set forth herein and for other good and valuable consideration, the receipt of which both parties hereby acknowledge, A10 Networks and Reseller agree as follows:


I.	Amendment of the Agreement . Reseller and A10 Networks hereby agree to amend the Agreement as follows:

The following service plan outside the scope of the Service Plan limited to Section 1 through Section 9 of Reseller Agreement Exhibit B is added:

A10 Networks Special Service Plan for NTT docomo sp-mode

1. Service Plan for post support.


1.1	Additional support fee shall be mutually agreed by Reseller and A10 Networks. This additional support fee is [***] from April 1, 2014 through September 30, 2014.


1.2	Service Plan is between A10 Networks and Reseller. Resellers are responsible for selling their own service contract to End Users, and Reseller must be the primary contact to End Users. End Users should not contact A10 Networks directly.


1.3	Service Plan is limited to units of products that are mutually agreed by Reseller and A10 Network based on the attachment named Units of products for post support. In case there is any change, it has to be notified to A10 Networks in advance and required to have agreement.


1.4	Priority issue is defined here as the customer’s production network is down or there is continuous serious impact to the customer’s business operations and it is obvious that A10 Networks’ product is the cause of a problem. For example, continuous reload/reboot, unsuccessful HA failover, and significant packet loss.


1.5	In occurrence of multiple priority issues at the same time, A10 Networks will make best effort to resolve each issue in sequential manner.

*** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

A10 AND RESELLER CONFIDENTIAL


1.6	A10 Networks shall provide 8 hour-support from 9:30-17:30 (except Saturdays, Sundays, public holidays and the year-end through New Year holidays) via phone and email in occurrence of priority issue.


1.7	Priority issue will take fast escalation path with commercially reasonable best effort.

2. FR (Change Request, New Feature)


2.1	Statement of Work (SOW)

SOW will be written specifically for each feature. The development fee will depend on feature requirements, feature complexity, system and hardware implications and time line. For the SOW, the averaged software development and testing cost to base on is [***]/engineer per day.

3. Reseller Requirement

The obligation of A10 Networks to provide Service Plan is subject to Reseller’s fulfillment of the following conditions. Reseller understands and agrees that part or all of Service Plan may not be provided by A10 Networks to Reseller, as a result of Reseller not being able to fulfillment any one of the following conditions.


3.1	Reseller shall maintain adequate amount of spare units, and evaluation units of Product, to support End Users.


3.2	Reseller shall provide first level support to End User or sub-reseller, and isolate the problem to a point where it can be identified as a problem of the Product, before reporting the problem to A10 Networks.

3.3

Reseller shall cooperate with A10 Networks in providing necessary information, including but not limited to detailed problem description, replication procedure, network diagram, and End User environment, necessary for A 10 Networks to perform Service Plan. For RMA, Reseller is to provide the Product serial number of End User Product, and the serial number of the Reseller spare unit the End User Product is to replace.


3.4	Reseller shall maintain adequate qualified technical personnel, including support engineers to perform basic hardware and software configuration and troubleshooting, and perform remedial hardware maintenance of Product. Reseller representative contacting Al 0 Networks TAC must be trained and qualified by A10 Networks.


II.	Ninth Amendment Miscellaneous . As expressly amended hereby, the Agreement shall continue in full force and effect in accordance with the provisions hereof and thereof, and

shall constitute the entire agreement between the parties hereto with respect to the subject matter contained herein and therein. The Agreement may only be further amended in writing signed by both the parties thereto. This Ninth Amendment shall be governed by and construed in

*** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

A10 AND RESELLER CONFIDENTIAL

accordance with the laws of the state of California, the United States of America. The United Nation Convention on Contracts for the International Sale of Goods does not apply to this Ninth Amendment, the Agreement or any services, software or goods provided in connection herewith or therewith. This Ninth Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one and the same instrument.

[Signature page follows.]

*** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

A10 AND RESELLER CONFIDENTIAL

IN WITNESS WHEREOF, the parties hereto have caused this Ninth Amendment to be executed by their duly authorized officers as of the day and year first above written.

A10 Networks, Inc.

By: /s/ Robert Cochran

Name: Robert Cochran

Title: Vice President Legal & Corporate Collaboration

Date: 4/22/2014

NEC Corporation

By: /s/ Akira Hashimoto

Name: Akira Hashimoto

Title: Senior Manager

Date: Mar, 27, 2014

A10 AND RESELLER CONFIDENTIAL

Attachment — Units of Products for service

1. Scope of service plan:

Units of Products are listed serial numbers below and its RMA replacement.



Usage	NW ID	Quantity
LB	NW ID- BRA Model Serial Numbers	[***]
LB	NW ID- EXT Model Serial Numbers	[***]
LSN	NW ID- BRA Model Serial Numbers	[***]
Total		[***]

Definition of NW-ID

• BRA- Web Redirector, NAT Redirector, LSN

• EXO- NAT Redirector

• EXT- External LB


2.	Any series number changes by RMA replacement from April 1, 2014 to September 30, 2014 shall be notified to A10 Networks in order to receive post-support and pro-active support.

*** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Exhibit 10.2

ATTACHMENT A

A10 NETWORKS, INC.

2008 Stock Plan

STOCK OPTION AGREEMENT

A10 Networks, Inc. (the "Company") hereby grants an option (the “Option”) to purchase shares of its Common Stock (“Shares”) to the optionee named below on the terms and conditions set forth in this cover sheet, the Company’s 2008 Stock Plan, and all exhibits attached hereto (together, the “Stock Option Agreement"):



Grant Number:	«Grant_No»
Date of Grant	«Grant_Date»
Vesting Commencement Date	«VCD»
Exercise Price Per Share	US$«Price»
Total Number of Shares Granted	«Shares»
Type of Option	x Incentive Stock Option
	__ Nonqualified Stock Option
Expiration Date	«Term_Date»

Exercise and Vesting Schedule :

The Option granted hereunder may be exercised, in whole or in part, based on the vesting schedule as set forth below.

[INSERT VESTING SCHEDULE]

By signing this cover sheet, you agree that this Stock Option Agreement is subject to the terms and conditions of this cover sheet, the 2008 Stock Plan and Exhibits A-C, which are attached hereto and made a part of this document.



OPTIONEE:		A10 NETWORKS, INC.
		a California corporation
		/s/ Greg Straughn
«First» «Last»		Greg Straughn, CFO

EXHIBIT A

STOCK OPTION AGREEMENT

Type of Option

The type of option which you have been granted is designated on the cover sheet. If designated as an Incentive Stock Option, the Option is intended to be an incentive stock option under section 422 of the United States Internal Revenue Code (the "Code") and will be interpreted accordingly.

Capitalized terms used but not otherwise defined in this Stock Option Agreement shall have the meanings given to them in the Plan.

Vesting

You may exercise the Option during its term in accordance with the exercise schedule set out in the cover sheet and the applicable provisions of the Plan and this Stock Option Agreement. In the event of your death, Disability or other termination of status as a Service Provider, the exercisability of the option is governed by the applicable provisions of the Plan and this Stock Option Agreement.

Term

The Option may be exercised only within the term set out in the cover sheet, and may be exercised during such term only in accordance with the Plan and this Stock Option Agreement. Notwithstanding any post-termination exercise period set forth in this Stock Option Agreement, the Option will expire on the Expiration Date shown on the cover sheet, which is the day before the 10th anniversary of the Date of Grant. It may expire earlier if your status as a Service Provider terminates, as described below.

Regular Termination

In the event of the termination of your status as a Service Provider for any reason other than death or Disability, you may, to the extent otherwise so entitled at the date of such termination, exercise the Option within 90 days after your termination. To the extent that you were not entitled to exercise the Option at the date of such termination, or if you do not exercise the Option within the 90-day period specified above, the Option will terminate.

Death

If your status as Service Provider terminates because of your death, the Option may be exercised at any time within twelve (12) months following the date of death by your estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Option was exercisable as of the date of your death.

Disability

If your status as Service Provider terminates because of your Disability, you may, but only within six (6) months from the date of such termination, exercise the Option to the extent that the Option was exercisable as of the date of such termination.

Status as Service Provider

A-1

if any) and will not be extended by any notice period ( e.g ., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Option (including whether you may still be considered to be providing services while on a leave of absence).

Further, no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from the termination of your status as a Service Provider (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of the Option to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or any Parent or Subsidiary, waive your ability, if any, to bring any such claim, and release the Company and any Parent or Subsidiary from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim.

Restrictions on Exercise

The Company will not permit you to exercise the Option if the issuance of Shares at that time would violate any applicable law or regulation. Further, notwithstanding any other provision of the Plan or this Stock Option Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares issuable upon exercise of the Option prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the United States Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, you agree that the Company shall have unilateral authority to amend the Plan and this Stock Option Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Notice of Exercise

Form of Payment

Your Notice of Exercise must be accompanied by payment of the aggregate purchase price plus any applicable Tax-Related Items (as defined below) as to all Shares you wish to purchase. Payment of the purchase price and any applicable Tax-Related Items shall be by cash or personal check.

Tax Withholding

You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”) the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax‑related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of

A-2

any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result.

Prior to the relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. If you fail to make satisfactory arrangements for the payment of any required Tax-Related Items hereunder at the time of the Option exercise, you acknowledge and agree that the Company may refuse to honor the exercise and refuse to deliver the Shares if such amounts are not delivered at the time of exercise together with the purchase price.

To the extent determined appropriate by the Company in its discretion, the Company shall have the right (but not the obligation) to satisfy any Tax-Related Items by withholding from any cash compensation due to you and/or reducing the number of Shares otherwise deliverable to you upon exercise of the Option. Further, if you are subject to Tax-Related Items in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

No Advice Regarding Participation

The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, the exercise of the Option or the sale of any Shares acquired upon exercise of the Option. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Representations

If the Shares you intend to purchase have not been registered under the United States Securities Act of 1933, as amended, at the time the Option is exercised, the Company may require you to (i) deliver to the Company your Investment Representation Statement (attached as Exhibit B), which may contain, among other things, an agreement to refrain from sales of the Shares for up to 180 days immediately following an underwritten initial public offering, and (ii) read the applicable rules of the Commissioner of Corporations of California attached to such Investment Representation Statement, if applicable.

Right of First Refusal

In the event that you propose to sell, pledge or otherwise transfer to a third party any Shares acquired under this Stock Option Agreement, or any interest in such Shares, the Company shall have the "Right of First Refusal" with respect to all (and not less than all) of such Shares. If you desire to transfer any Shares acquired under this Stock Option Agreement, you must give a written notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee. The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the notice by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the notice was received by the Company.

If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the notice, you may, not later than three (3) months following receipt of the notice by the Company, conclude a transfer of the Shares on the terms and conditions described in the notice. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares within 30 days after the date when the Company received the notice. The Company's Right of First Refusal shall terminate in the event that Stock is listed on an established stock exchange or is quoted regularly on the Nasdaq National Market.

A-3

Transfer of Option

Prior to your death, only you may exercise the Option. You cannot transfer or assign the Option. For instance, you may not sell the Option or use it as security for a loan. If you attempt to transfer or assign the Option, the Option will immediately become invalid. You may, however, dispose of the Option in your will.

Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse or former spouse, nor is the Company obligated to recognize such individual's interest in the Option in any other way.

No Employment Rights

Neither the Option grant, this Stock Option Agreement or your participation in the Plan shall create a right to employment or be interpreted as forming an employment or service contract with the Company, the Employer or any Parent or Subsidiary, and shall not interfere with the ability of the Company, the Employer or any Parent or Subsidiary, as applicable, to terminate your employment or service relationship (if any) at any time and for any reason.

Nature of Grant

In accepting the Option, you acknowledge, understand and agree that: (1) the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time to the extent permitted by the Plan; (2) the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past; (3) all decisions with respect to future option or other grants, if any, will be at the sole discretion of the Company; (4) you are voluntarily participating in the Plan; (5) the Option and any Shares acquired under the Plan are not intended to replace any pension rights or compensation; (5) the Option and any Shares acquired under the Plan and the income and value of same, are not part of normal or expected compensation for any purpose; (6) the future value of the Shares underlying the Option is unknown, indeterminable, and cannot be predicted with certainty; (7) if the underlying Shares do not increase in value, the Option will have no value; (8) if you exercise the Option and acquire Shares, the value of such Shares may increase or decrease in value, even below the exercise price; (9) unless otherwise provided in the Plan or this Stock Option Agreement, or by the Company in its discretion, the Option and the benefits evidenced by this Stock Option Agreement do not create any entitlement to have the Option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares of the Company; and (10) neither the Company, the Employer nor any Parent or Subsidiary shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Option or of any amounts due to you pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon exercise.

Shareholder Rights

Neither you, your estate nor your heirs, shall have any rights as a shareholder of the Company until a certificate for your option Shares has been issued. No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan.

Adjustments

In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of Shares covered by the Option and the exercise price per share may be adjusted pursuant to the Plan. In the event of the proposed dissolution or liquidation of the Company, or of a merger in which the successor corporation does not agree to assume the Option or substitute an equivalent option, the Board shall notify you at least thirty (30) days prior to such proposed action. To the extent it has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action.

A-4

Legends

All certificates representing the Shares issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends:

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE."

"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."

Governing Law; Venue

This Stock Option Agreement will be interpreted and enforced under the laws of the State of California without regard to its conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Stock Option Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Santa Clara, California or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed.

Data Privacy

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Stock Option Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and any Parent or Subsidiary for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, and details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.

You understand that Data may be transferred to a broker or stock plan service provider selected by the Company either now or in the future for purposes of assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than your country. You may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.

A-5

writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you options or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Electronic Delivery and Acceptance

The Company may, in its sole discretion, decide to deliver any documents related to your current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

Severability

The provisions of this Stock Option Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

Imposition of Other Requirements

The Company reserves the right to impose other requirements on your participation in the Plan, on the Option and on any Shares purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

Waiver

You acknowledge that a waiver by the Company of breach of any provision of this Stock Option Agreement shall not operate or be construed as a waiver of any other provision of this Stock Option Agreement, or of any subsequent breach by you or any other optionee.

The Plan and Other Agreements

The text of the Plan is incorporated into this Stock Option Agreement by reference. This Stock Option Agreement (along with all exhibits and attachments) and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded.

By signing the cover sheet of this Stock Option Agreement, you agree to all of the terms and conditions described in the Stock Option Agreement, including any exhibits or attachments hereto, and in the Plan.

A-6

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT



OPTIONEE:	«First» «Last»
OPTIONEE:	A10 NETWORKS, INC.
OPTIONEE	COMMON STOCK
AMOUNT:
DATE:

In connection with the purchase of the above-listed Securities, the undersigned Optionee represents to the Company the following:

(a) Optionee 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 acquire the securities. Optionee is acquiring these securities for investment for Optionee's own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the United States Securities Act of 1933, as amended (the "Securities Act").

(b) Optionee acknowledges and understands that the securities constitute "restricted securities" under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee's investment intent as expressed herein. In this connection, Optionee understands that, in the view of the United States Securities and Exchange Commission (the “SEC”), the statutory basis for such exemption may be unavailable if Optionee's representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the securities. Optionee understands that the certificate evidencing the securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company, a legend prohibiting their transfer without the consent of the Commissioner of Corporations of the State of California and any other legend required under applicable state securities laws.

(c) Optionee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of "restricted securities" acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of exercise of the Option by the Optionee, such exercise will be exempt from registration under the Securities Act. In the event the Company later becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), ninety (90) days thereafter the securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including among other things: (1) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Exchange Act); and, in the case of an affiliate, (2) the availability of certain public information about the Company, and the amount of securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), if applicable.

B-1

In the event that the Company does not qualify under Rule 701 at the time of exercise of the Option, then the securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires among other things: (1) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than two years, (2) the availability of certain public information about the Company, (3) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Exchange Act), and (4) the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable.

(d) Optionee agrees, in connection with the Company's initial underwritten public offering of the Company's securities, (1) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock of the Company held by Optionee (other than those shares included in the registration) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company's securities for one hundred eighty (180) days from the effective date of such registration, and (2) further agrees to execute any agreement reflecting (1) above as may be requested by the underwriters at the time of the public offering; provided however that the officers and directors of the Company who own stock in the Company also agree to such restrictions.

(e) Optionee further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A of the Securities Act, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the SEC has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event.

(f) Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities without the consent of the Commissioner of Corporations of California. Optionee has read the applicable Commissioner's Rules with respect to such restriction, a copy of which is attached.



		Signature of Optionee

		Date:

B-2

EXHIBIT C

NOTICE OF EXERCISE

A10 NETWORKS, INC.

3 West Plumeria Drive

San Jose, CA 95134

Attention: Chief Financial Officer

1. Exercise of Option . Effective as of today, ___________, 20__, the undersigned (" Optionee ") hereby elects to exercise Optionee's option to purchase _________ shares of Common Stock (the "Shares") of A10 NETWORKS, Inc. (the "Company") under and pursuant to the 2008 Stock Plan (the "Plan") and the Stock Option Agreement dated «Grant_Date» (the " Option Agreement ").

2. Representations of Optionee . Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement, including all exhibits attached thereto, and agrees to abide by and be bound by their terms and conditions.

3. Rights as Shareholder . Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the optioned Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 12 of the Plan. Thereafter, Optionee shall enjoy rights as a shareholder until such time as Optionee disposes of the Shares.

4. Company's Right of First Refusal . Optionee understands and acknowledges that the Shares are subject to certain right of first refusal provisions under the terms of the Plan and Option Agreement.

5. Tax Consultation . Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

6. Restrictive Legends and Stop‑Transfer Orders .

(A) Legends . Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by state or federal securities laws:

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.

C-1

FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE."

(B) Stop‑Transfer Notices . Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(C) Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

7. Successors and Assigns . The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

8. Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by Optionee or by the Company forthwith to the Company's Board of Directors or the committee thereof that administers the Plan, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Board or committee shall be final and binding on the Company and on Optionee.

9. Governing Law; Severability . This Agreement shall be governed by and construed in accordance with the laws of the State of California excluding that body of law pertaining to conflicts of law. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

10. Notices . Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party.

11. Further Instruments . The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

12. Delivery of Payment . Optionee herewith delivers to the Company the full Exercise Price for the Shares plus any applicable Tax-Related Items (as described in Exhibit A).

13. Entire Agreement . The Plan and Notice of Grant/Option Agreement are incorporated herein by reference. This Notice, the Plan, the Option Agreement (along with all other exhibits and attachments to the Option Agreement that are executed and delivered along with this Notice, if any) and the Investment Representation Statement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and is governed by California law except for that body of law pertaining to conflict of laws.

C-2



Submitted by:			Accepted by:
OPTIONEE:			A10 NETWORKS, INC.
			a California corporation
«First» «Last»			By
			Its



(address)			(address)

C-3

Exhibit 10.3

ATTACHMENT A

A10 NETWORKS, INC.

2008 Stock Plan

STOCK OPTION AGREEMENT - EARLY EXERCISE



Grant Number:	«Grant_No»
Date of Grant	«Grant_Date»
Vesting Commencement Date	«VCD»
Exercise Price Per Share	US$«Price»
Total Number of Shares Granted	«Shares»
Type of Option	x Incentive Stock Option
	__ Nonqualified Stock Option
Expiration Date	«Term_Date»

Exercise and Vesting Schedule :

The Option granted hereunder may be exercised, in whole or in part, based on the vesting schedule as set forth below.

[INSERT VESTING SCHEDULE]

By signing this cover sheet, you agree that this Stock Option Agreement is subject to the terms and conditions of this cover sheet, the 2008 Stock Plan and Exhibits A-D, which are attached hereto and made a part of this document.



OPTIONEE:		A10 NETWORKS, INC.
		a California corporation
		/s/ Greg Straughn
«First» «Last»		Greg Straughn, CFO

EXHIBIT A

STOCK OPTION AGREEMENT

Type of Option

Capitalized terms used but not otherwise defined in this Stock Option Agreement shall have the meanings given to them in the Plan.

Vesting

Early Exercise with Restricted Stock Purchase Agreement

Notwithstanding the vesting schedule described in the coversheet or the provisions of the foregoing paragraph, you may exercise this Option during its term at any time as to shares that have not vested (the "Unvested Shares"), provided that at the time of such exercise you deliver to the Company, in addition to the other exercise documentation required hereby, an executed copy of the Restricted Stock Purchase Agreement attached as Exhibit D, along with its attachments, as applicable (the "Restricted Stock Agreement"), whereby, among other things, you agree to grant to the Company certain repurchase rights, at cost, with respect to the Unvested Shares, as more fully set forth therein, which repurchase rights shall lapse over time with respect to the Unvested Shares in accordance with the vesting schedule set forth on the coversheet (an "Early Exercise with Repurchase Agreement").

Term

Regular Termination

Death

A-1

Disability

Status as Service Provider

For purposes of the Option, your status as a Service Provider will be considered terminated for purposes of vesting and any post-termination exercise period as of the date you are no longer actively providing services to the Company or a Parent or Subsidiary (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) and will not be extended by any notice period ( e.g ., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Option (including whether you may still be considered to be providing services while on a leave of absence).

Restrictions on Exercise

Notice of Exercise

When you wish to exercise the Option, you must notify the Company by filing the proper "Notice of Exercise" form (attached hereto as Exhibit C) at the address given on the form. Your notice must specify how many Shares you wish to purchase. The notice will be effective when it is received by the Company. If someone else wants to exercise the Option after your death, that person must prove to the Company's satisfaction that he or she is entitled to do so. In the event of an Early Exercise with Repurchase Agreement, you must also execute and deliver the Restricted Stock Purchase Agreement in the form attached hereto as Exhibit D, along with Exhibits D-2, D-3 and D-4.

A-2

Form of Payment

Tax Withholding

No Advice Regarding Participation

Representations

Right of First Refusal

A-3

Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the notice by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the notice was received by the Company.

Transfer of Option

No Employment Rights

Nature of Grant

Shareholder Rights

A-4

Adjustments

Legends

All certificates representing the Shares issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends:

Governing Law; Venue

Data Privacy

A-5

You may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.

You authorize the Company, the Company’s designated broker or stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you options or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Electronic Delivery and Acceptance

Severability

Imposition of Other Requirements

Waiver

The Plan and Other Agreements

A-6

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT



OPTIONEE:	«First» «Last»
OPTIONEE:	A10 NETWORKS, INC.
OPTIONEE	COMMON STOCK
AMOUNT:
DATE:

In connection with the purchase of the above-listed Securities, the undersigned Optionee represents to the Company the following:

B-1

other things: (1) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than two years, (2) the availability of certain public information about the Company, (3) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Exchange Act), and (4) the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable.



		Signature of Optionee

		Date:________________, ____

B-2

EXHIBIT C

NOTICE OF EXERCISE

A10 NETWORKS, INC.

3 West Plumeria Drive

San Jose, CA 95134

Attention: Chief Financial Officer

4. Company's Right of First Refusal . Optionee understands and acknowledges that the Shares are subject to certain right of first refusal provisions under the terms of the Plan and Option Agreement.

6. Restrictive Legends and Stop‑Transfer Orders .

REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE."

11. Further Instruments . The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

12. Delivery of Payment . Optionee herewith delivers to the Company the full Exercise Price for the Shares plus any applicable Tax-Related Items (as described in Exhibit A).

B-2



Submitted by:			Accepted by:
OPTIONEE:			A10 NETWORKS, INC.
			a California corporation
«First» «Last»			By
			Its



(address)			(address)

B-3

EXHIBIT D

A10 NETWORKS, INC.

2008 Stock Plan

RESTRICTED STOCK PURCHASE AGREEMENT

THIS AGREEMENT is made between «First» «Last» (the "Purchaser") and A10 Networks, Inc., a California corporation (the "Company") as of __________________, 20__.

RECITALS

(1) Pursuant to the exercise of the stock option (grant number «Grant_No») granted to Purchaser under the Company's 2008 Stock Plan (the "Plan") and pursuant to the Stock Option Agreement (the "Option Agreement") dated «Grant_Date» by and between the Company and Purchaser with respect to such grant, which Plan and Option Agreement are hereby incorporated by reference, Purchaser has elected to purchase _________ of those shares which have not become vested under the vesting schedule set forth in the Option Agreement (the "Unvested Shares"). The Unvested Shares and the shares subject to the Option Agreement which have become vested are sometimes collectively referred to herein as the "Shares".

(2) As a condition to Purchaser's election to exercise the Option as to the Unvested Shares, Purchase hereby executes and delivers this Restricted Stock Purchase Agreement, which sets forth certain rights and obligations of the parties with respect to the Unvested Shares acquired upon exercise of the Option.

1. Repurchase Option .

(a) If Purchaser's status as an Employee, Consultant or director, as applicable, is terminated for any or no reason, including for cause or without cause, death or disability, the Company shall have the right and option to purchase from Purchaser, or Purchaser's personal representative, as the case may be, all or any portion of the Purchaser’s Then-Unvested Shares (as defined below) as of the date of such termination at the original exercise price paid by the Purchaser for such Shares (the "Repurchase Option"), which repurchase price may be paid in cash, by cancellation of indebtedness under the Note, or a combination. The term "Then-Unvested Shares" as used herein shall mean that portion of the Unvested Shares that remain unvested on such termination date in accordance with the vesting provisions set forth in the Option Agreement.

(b) Upon the occurrence of a termination, the Company may exercise its Repurchase Option by delivering personally or by registered mail, to Purchaser (or his transferee or legal representative, as the case may be), within ninety (90) days of the termination, a notice in writing indicating the Company's intention to exercise the Repurchase Option and setting forth a date for closing not later than thirty (30) days from the mailing of such notice. The closing shall take place at the Company's office. At the closing, the holder of the certificates for the Then-Unvested Shares being transferred shall deliver the stock certificate or certificates evidencing the Then-Unvested Shares, and the Company shall deliver the purchase price therefor.

(c) At its option, the Company may elect to make payment for the Then-Unvested Shares to a bank selected by the Company. The Company shall avail itself of this option by a notice in writing to Purchaser stating the name and address of the bank, date of closing, and waiving the closing at the Company's office.

(d) If the Company does not elect to exercise the Repurchase Option conferred above by giving the requisite notice within ninety (90) days following the termination, the Repurchase Option shall terminate.

(e) The Repurchase Option shall terminate in accordance with the vesting schedule in Optionee's Option Agreement.

2. Transferability of the Shares; Escrow .

(a) Purchaser hereby authorizes and directs the secretary of the Company, or such other person designated by the Company, to transfer the Then-Unvested Shares as to which the Repurchase Option has been exercised from Purchaser to the Company.

(b) To insure the availability for delivery of Purchaser's Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option under Section 1, Purchaser hereby appoints the secretary, or any other person designated by the Company as escrow agent, as its attorney-in-fact to sell, assign and transfer unto the Company, such Unvested Shares, if any, repurchased by the Company pursuant to the Repurchase Option and shall, upon execution of this Agreement, deliver and deposit with the secretary of the Company, or such other person designated by the Company, the share certificates representing the Unvested Shares, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit D-2 . The Unvested Shares and stock assignment shall be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser attached as Exhibit D-3 hereto, until the Company exercises its purchase right as provided in Section 1, until such Unvested Shares are vested, or until such time as this Agreement no longer is in effect. As a further condition to the Company's obligations under this Agreement, the spouse of the Purchaser, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit D-4 . Upon vesting of the Unvested Shares (and, if applicable, the Note is paid in full), the escrow agent shall promptly upon written request, or periodically without written request, deliver to the Purchaser the certificate or certificates representing such Shares in the escrow agent's possession belonging to the Purchaser, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement.

(c) The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment.

(d) Purchaser shall not sell, transfer, pledge, hypothecate or otherwise dispose of any of the Unvested Shares which remain subject to the Company’s Repurchase Option. Notwithstanding the foregoing, upon prior written consent of the Company (which consent shall not be unreasonably withheld), the Purchaser may assign or transfer Unvested Shares for family planning, tax planning or estate planning, or other such purposes, provided the transferee agrees to be bound by all obligations of the Purchaser, and the Company is reasonably secure that such obligations remain enforceable against the transferee.

(e) Transfer or sale of the Shares is subject to restrictions on transfer imposed by any applicable state and federal securities laws. Any transferee shall hold such Shares subject to all the provisions hereof and the Exercise Notice executed by the Purchaser with respect to any Unvested Shares purchased by Purchaser and shall acknowledge the same by signing a copy of this Agreement.

3. Ownership, Voting Rights, Duties . This Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Purchaser, except as specifically provided herein.

4. Legends . The share certificate evidencing the Shares issued hereunder may be endorsed with the legend substantially to the following effect (in addition to any legend required under applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

5. Adjustment for Stock Split . All references to the number of Shares and the purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement.

6. Notices . Notices required hereunder shall be given in person or by registered mail to the address of Purchaser shown on the records of the Company, and to the Company at their respective principal executive offices.

7. Survival of Terms . This Agreement shall apply to and bind Purchaser and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.

8. Section 83(b) Election . Purchaser hereby acknowledges that he or she has been informed that, with respect to the exercise of an Option for unvested Shares, an election may be filed by the Purchaser with the Internal Revenue Service, within 30 days of the purchase of the Shares, electing pursuant to Section 83(b) of the Code to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase. In the case of a Nonstatutory Stock Option, this will result in a recognition of taxable income to the Purchaser on the date of exercise, measured by the excess, if any, of the fair market value of the Shares, at the time the Option is exercised over the purchase price for the Shares. Absent such an election, taxable income will be measured and recognized by Purchaser at the time or times on which the Company's Repurchase Option lapses. In the case of an Incentive Stock Option, such an election will result in a recognition of income to the Purchaser for alternative minimum tax purposes on the date of exercise, measured by the excess, if any, of the fair market value of the Shares, at the time the option is exercised, over the purchase price for the Shares. Absent such an election, alternative minimum taxable income will be measured and recognized by Purchaser at the time or times on which the Company's Repurchase Option lapses. Purchaser is strongly encouraged to seek the advice of his or her own tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election under Section 83(b) of the Code. A form of Election under Section 83(b) is attached hereto as Exhibit D-5 for reference.

PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER'S BEHALF.

9 Standoff Agreement . Purchaser agrees, in connection with the Company's initial public offering of its equity securities, and upon request of the Company or the underwriters managing such offering, not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any shares of Stock (other than those included in the registration, if any) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as may be requested by the Company or such underwriters; provided, that the officers and directors of the Company who own stock of the Company also agree to such restrictions.

10. Representations . Purchaser has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Purchaser understands that he (and not the Company) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

11. Governing Law . This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of California.

Purchaser represents that he has read this Agreement and is familiar with its terms and provisions. Purchaser hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Agreement.

IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth above.



		"COMPANY"
		A10 NETWORKS, INC.
		By:

		Title:

		" PURCHASER "

		Signature

		Printed Name

		Soc. Sec. No.

		Address :

Exhibit D-2

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, «First» «Last», hereby sell, assign and transfer unto A10 Networks, Inc. ___________________________________________ (__________) shares of the Common Stock of A10 Networks, Inc. standing in my name of the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted Stock Purchase Agreement by and between A10 Networks, Inc. and the undersigned dated ______________, _____.



Dated:

		Signature:
		«First» «Last»

INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its "repurchase option," as set forth in the Agreement, without requiring additional signatures on the part of the Purchaser.

Exhibit D-3

JOINT ESCROW INSTRUCTIONS

, 20__

Robert D. Cochran, Esq.

Corporate Secretary

A10 Networks, Inc.

3 West Plumeria Drive

San Jose, CA 95134

Dear Secretary:

As Escrow Agent for both A10 Networks, Inc. (the "Company"), and the undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Purchase Agreement ("Agreement") between the Company and the undersigned, in accordance with the following instructions:

1. In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the "Company") exercises the Company's repurchase option set forth in the Agreement, the Company shall give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

2. At the closing, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the purchase price (by cash, a check, cancellation of indebtedness, if applicable, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company's repurchase option.

3. Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser's attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you.

4. Upon written request of the Purchaser, but no more than once per calendar year, unless the Company's repurchase option has been exercised, you will deliver to Purchaser a certificate or certificates representing so many shares of stock as are not then subject to the Company's repurchase option. Within 120 days after cessation of Purchaser's continuous employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Purchaser a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company's repurchase option.

5 If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder.

6 Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

7 You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be

genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

8 You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

9 You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

10 You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

11 You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.

12 Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each the Company. In the event of any such termination, the Company shall have the right, in its sole discretion, to appoint a successor Escrow Agent.

13 If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

14 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

15 Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following addresses or at such other addresses as a party may designate by ten days' advance written notice to each of the other parties hereto.



COMPANY:		A10 Networks, Inc.
		3 West Plumeria Drive
		San Jose, CA 95134
		Attention: Chief Financial Officer

PURCHASER




ESCROW AGENT:		Robert D. Cochran, Esq.
		Corporate Secretary
		A10 Networks, Inc.
		3 West Plumeria Drive
		San Jose, CA 95134

16 By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.

17 This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

18 These Joint Escrow Instructions shall be governed by the internal substantive laws, but not the choice of law rules, of California.



		A10 NETWORKS, INC.

		Greg Straughn, CFO

		PURCHASER

		«First» «Last»

		ESCROW AGENT

		Robert D. Cochran

Exhibit D-4

CONSENT OF SPOUSE

I, ____________________, spouse of «First» «Last», have read and approve the foregoing Agreement. In consideration of granting of the right to my spouse to purchase shares of A10 Networks, Inc., as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.



Dated:


		Signature of Spouse

Exhibit D-5

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Sections 55 and 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income or alternative minimum taxable income, as the case may be, for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer's receipt of the property described below:


1.	The name, address, taxpayer identification number and taxable year of the undersigned are as follows:



Name of Taxpayer:	«First» «Last»
Name of Spouse:

Address:


Tax I.D. No. of Taxpayer:
Tax I.D. No. of Spouse:
Taxable year:


2.	The property with respect to which the election is made is described as follows: shares (the "Shares") of the Common Stock of A10 Networks, Inc., a California corporation (the "Company").

3. The date on which the property was transferred is: , ____.

4. The property is subject to the following restrictions:

The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such agreement.


5.	The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:

$______________________.


6.	The amount (if any) paid for such property is:

$______________________.

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner .



Dated:
		Taxpayer: «First» «Last»
Dated:
		Spouse of Taxpayer

Exhibit 10.4

A10 NETWORKS, INC.

2014 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the A10 Networks, Inc. 2014 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Stock Option Agreement, including the Notice of Stock Option Grant (the “Notice of Grant”), and Terms and Conditions of Stock Option Grant attached hereto as Exhibit A , the Appendix to Stock Option Agreement attached hereto as Exhibit B (the “Appendix”) and any other exhibits attached hereto (collectively, the “Award Agreement”).



NOTICE OF RESTRICTED STOCK UNIT GRANT
Name ("Participant"):
Address:

A10 Networks, Inc. (the “Company”) has granted Participant an option (the “Option”) to purchase shares of the Company’s Common Stock (“Shares”), subject to the terms and conditions of the Plan and the Award Agreement, as follows:



Grant Number
Date of Grant
Vesting Commencement Date
Vesting Commencement Date
Number of Shares Granted
Exercise Price per Share	$
Total Exercise Price	$
Type of Option	________Incentive Stock Option
	________Incentive Stock Option
Term/Expiration Date

- 1 -

Vesting Schedule :

Subject to Section 2 of the Terms and Conditions of Stock Option Grant or any provision regarding accelerated vesting set forth below or in the Plan, the Option will be exercisable, in whole or in part, in accordance with the following schedule:

[INSERT VESTING SCHEDULE]

Termination Period :

The Option will be exercisable for three (3) months after Participant ceases to be a Service Provider (as described in Section 2 of the Terms and Conditions of Stock Option Grant), unless such termination is due to Participant’s death or Disability, in which case the Option will be exercisable for twelve (12) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may the Option be exercised after the Term/Expiration Date as provided above and may be subject to earlier termination as provided in Section 14 of the Plan.

By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that the Option is granted under and governed by the terms and conditions of the Plan and the Award Agreement, including all exhibits hereto, all of which are made a part of this document. Participant has reviewed the Plan and the Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and the Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and the Award Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below.



PARTICIPANT:			A10 NETWORKS, INC.
Signature			By

Print Name			Print Name

Address:			Title

- 2 -

EXHIBIT A

TERMS AND CONDITIONS OF STOCK OPTION GRANT

Capitalized terms used but not defined in this Exhibit A shall have the same meanings assigned to them in the Plan and/or the Notice of Grant .

1. Grant . The Company hereby grants to the individual named in the Notice of Grant (“Participant”) an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to all of the terms and conditions in this Stock Option Agreement, including the Notice of Grant, these Terms and Conditions of Stock Option Grant (the “Option Terms”), the Appendix to the Stock Option Agreement attached hereto as Exhibit B (the “Appendix”) and any other exhibits attached hereto (the Notice of Grant, the Option Terms, the Appendix and any other exhibits attached hereto are referred to collectively herein as the “Award Agreement”), and the Plan, which is incorporated herein by reference. Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Award Agreement, the terms and conditions of the Plan will prevail.

(a) If Participant is a United States (“U.S.”) taxpayer, the Option will be designated as either an Incentive Stock Option (“ISO”) or a Nonstatutory Stock Option (“NSO”). If designated in the Notice of Grant as an ISO, the Option is intended to qualify as an ISO under Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, if the Option is intended to be an ISO, to the extent that it exceeds the $100,000 rule of Code Section 422(d), it will be treated as an NSO. Further, if for any reason the Option (or portion thereof) will not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan. In no event will the Administrator, the Company or any Parent or Subsidiary of the Company, or any of their respective employees or directors, have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.

(a) If Participant is a non-U.S. taxpayer, the Option will be designated as an NSO.

2. Vesting Schedule .

(a) Except as provided in this Section 2 or Section 3, the Option awarded by the Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Shares scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of the Award Agreement, unless Participant will have been continuously a Service Provider (as described in Section 2(b) below) from the Date of Grant until the date such vesting occurs.

(b) For purposes of the Option, Participant’s status as a Service Provider will be considered terminated as of the date that Participant is no longer actively providing services to the Company or any Parent or Subsidiary of the Company (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or providing services, or the terms of Participant’s employment or service agreement, if any), and unless otherwise expressly provided in the Award Agreement or determined by the Administrator, Participant’s right to vest in the Option under the Plan, if any, will terminate as of such date and will not be extended by any notice period ( e.g ., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or providing services, or the terms of Participant’s employment or service agreement, if any). The Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Option (including whether Participant may still be considered to be providing services while on a leave of absence).

3. Administrator Discretion . The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Option at any time, subject to the terms of the Plan. If so accelerated, such Option will be considered as having vested as of the date specified by the Administrator.

- 1 -

4. Exercise of Option .

(a) Right to Exercise . The Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of the Award Agreement. The period (if any) during which Participant may exercise the Option after Participant ceases to be a Service Provider will commence on the date Participant ceases to actively provide services to the Company or a Parent or Subsidiary of the Company and will not be extended by any notice period mandated under employment laws in the jurisdiction where Participant is employed or providing services, or the terms of Participant’s employment or service agreement, if any; the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Option (including whether Participant may still be considered to be providing services while on a leave of absence).

(b) Method of Exercise . The Option is exercisable by delivery of an exercise notice (the “Exercise Notice”) in the form attached as Exhibit C or in a manner and pursuant to such procedures as the Administrator may determine, which will state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan and the Award Agreement. The Exercise Notice must be completed by Participant and delivered to the Company and must be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares and any Tax-Related Items (as defined in Section 6(a)) or evidence of arrangement for payment of such Tax-Related Items. The Option will be deemed to be exercised upon receipt by the Company of such fully-executed Exercise Notice accompanied by the aggregate Exercise Price and payment to satisfy or evidence of arrangements to satisfy all Tax-Related Items.

5. Method of Payment . Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant:

(a) cash;

(b) check;

(c) consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or

(d) if Participant is a U.S. Service Provider, surrender of other Shares which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares and any Tax-Related Items, provided that accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse accounting consequences to the Company.

6. Taxes .

(a) Responsibility for Taxes . Notwithstanding any contrary provision of the Award Agreement, no certificate representing the Exercised Shares will be issued to Participant unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”) which the Company or the Parent or Subsidiary employing or retaining Participant (the “Employer”) determines must be withheld with respect to the Option or the Exercised Shares. In this regard, Participant acknowledges and agrees that:

(i) Participant is ultimately responsible for all Tax-Related Items and Participant’s liability for Tax-Related Items may exceed the amount withheld by the Company and/or the Employer, if any;

(ii) the Company and/or the Employer make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired upon exercise of the Option and the receipt of any dividends;

- 2 -

(iii) the Company and/or the Employer do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result;

(iv) the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction i f Participant is subject to tax in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable; and

(v) the Company may refuse to honor the Option exercise and refuse to deliver any Shares pursuant to such exercise if Participant fails to make satisfactory arrangements for the payment of any Tax-Related Items hereunder at the time of exercise.

(b) Withholding of Taxes . Prior to the exercise of the Option, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment obligations of Tax-Related Items of the Company and/or the Employer. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or more of the following methods:

(i) withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer;

(ii) withholding from proceeds of the sale of Shares acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization) without further consent from Participant;

(iii) withholding otherwise deliverable Shares with a Fair Market Value equal to the minimum amount of Tax-Related Items that the Company and/or the Employer is required to withhold; and/or

(iv) if Participant is a U.S. taxpayer, by surrender of other shares of Company common stock with a Fair Market Value equal to the amount of any Tax Related Items.

Alternatively, or in addition to the withholding methods above, if permissible under Applicable Laws, the Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require Participant to satisfy his or her obligations for Tax-Related Items, in whole or in part (without limitation) by delivery of cash or check to the Company or the Employer.

Depending on the method of withholding, the Company may withhold or account for Tax-Related Items by considering maximum or minimum applicable rates. If withholding is performed from proceeds from the sale of Shares acquired upon exercise of the Option, the Company may withhold or account for Tax-Related Items by considering maximum applicable rates, in which case Participant will receive a cash refund of any over-withheld amount not remitted to applicable tax authorities on Participant’s behalf and Participant will have no entitlement to receive the equivalent amount in Shares. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant is deemed to have been issued the full number of Shares subject to the portion of the Option that was exercised, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

(c) Notice of Disqualifying Disposition of ISO Shares . If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant will immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to U.S. federal income tax withholding by the Company on the compensation income recognized by Participant.

(d) Code Section 409A . Under Code Section 409A, an option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per share exercise price that is determined by the U.S. Internal Revenue Service (the “IRS”) to be less than the fair market value of a share subject to such option on the date of grant (a “Discount Option”) may be considered “deferred

- 3 -

compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional twenty percent (20%) U.S. federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state income, penalty and interest charges to Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share Exercise Price of the Option equals or exceeds the Fair Market Value of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share Exercise Price that was less than the Fair Market Value of a Share on the Date of Grant, Participant will be solely responsible for Participant’s costs related to such a determination.

7. Rights as Stockholder . Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

8. No Guarantee of Continued Service . PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE OPTION PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER OF THE COMPANY OR A PARENT OR SUBSIDIARY OF THE COMPANY AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THE AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY OR ANY PARENT OR SUBSIDIARY OF THE COMPANY TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

9. Nature of Grant . In accepting the Option, Participant acknowledges, understands and agrees that:

(a) the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;

(b) all decisions with respect to future option or other grants, if any, will be at the sole discretion of the Company;

(d) the Option and any Shares acquired under the Plan, and the income and value of the same, are not intended to replace any pension rights or compensation;

(e) the Option and any Shares acquired under the Plan, and the income and value of the same, are not part of Participant’s normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or payments or welfare benefits or similar payments;

(f) the future value of the Shares underlying the Option is unknown, indeterminable, and cannot be predicted with certainty;

(g) if the underlying Shares do not increase in value, the Option will have no value;

(h) if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease in value, even below the Exercise Price;

- 4 -

(i) unless otherwise provided in the Plan or by the Company in its discretion, the Option and the benefits evidenced by the Award Agreement do not create any entitlement to have the Option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(j) in addition to subsections (a) through (i) above, the following provisions will also apply if Participant is a Service Provider outside the U.S.:

(i) the Option and the Shares subject to the Option, and the income and value from same, are not part of Participant’s normal or expected compensation or salary for any purpose;

(ii) none of the Company, the Employer, or any Parent or Subsidiary of the Company shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the U.S. dollar that may affect the value of the Option or of any amounts due to Participant pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon exercise;

(iii) no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from the termination of Participant’s status as a Service Provider (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is a Service Provider, or the terms of Participant’s employment or service agreement, if any), and in consideration of the grant of the Option to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, the Employer, or any Parent or Subsidiary of the Company, waives his or her ability, if any, to bring any such claim, and releases the Company, the Employer, and any Parent or Subsidiary of the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim.

10. No Advice Regarding Grant . The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant should consult with his or her personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

11. Data Privacy . Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in the Award Agreement and any other Option grant materials (“Data”) by and among, as applicable, the Employer, the Company and any Parent or Subsidiary of the Company for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data may include certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor.

Participant understands that Data will be transferred to E*TRADE Financial Services, Inc., or such other stock plan service provider as may be selected by the Company in the future (the “Designated Broker”), which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of Data may be located in the U.S. or elsewhere, and that a recipient’s country of operation (e.g., the U.S.) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the U.S., he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant authorizes the Company, the Designated Broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that if he or she resides outside the U.S., he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human

- 5 -

resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider and career with the Employer will not be adversely affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant options or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.

12. Address for Notices . Any notice to be given to the Company under the terms of the Award Agreement will be addressed to the Company at A10 Networks, Inc., 3 West Plumeria Drive, San Jose, CA 95134 , or at such other address as the Company may hereafter designate in writing.

13. Non-transferability of Option . The Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.

14. Successors and Assigns . The Company may assign any of its rights under the Award Agreement to single or multiple assignees, and the Award Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, the Award Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Participant under the Award Agreement may only be assigned with the prior written consent of the Company.

15. Additional Conditions to Issuance of Shares . If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any U.S. federal, state, local or foreign law, the tax code and related regulations or under the rulings or regulations of the U.S. Securities and Exchange Commission (the “SEC”) or any other governmental regulatory body or the clearance, consent or approval of the SEC or any other governmental regulatory authority is necessary or desirable as a condition to the purchase by, or issuance of Shares, to Participant (or his or her estate) hereunder, such purchase or issuance will not occur unless and until such listing, registration, qualification, rule compliance, clearance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Subject to the terms of the Award Agreement and the Plan, the Company shall not be required to issue any certificate or certificates for Shares hereunder prior to the lapse of such reasonable period of time following the date of exercise of the Option as the Administrator may establish from time to time for reasons of administrative convenience.

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

17. Electronic Delivery and Acceptance . The Company may, in its sole discretion, decide to deliver any documents related to the Option or any future awards that may be granted under the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or a third party designated by the Company.

- 6 -

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

19. Modifications to the Award Agreement . The Plan is established voluntarily by the Company, it is discretionary in nature, and the Company, in its discretion, may elect to terminate, suspend or modify the terms of the Plan at any time, to the extent permitted by the Plan. Participant agrees to be bound by such termination, suspension or modification regardless of whether notice if given to Participant of such event. The Company reserves the right to revise the Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection with the Option. Further, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to execute any additional agreements or undertakings that may be necessary to accomplish the foregoing. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by Participant and a duly authorized officer of the Company.

20. Waiver . Participant acknowledges that a waiver by the Company of breach of any provision of the Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach by Participant or any other Participant.

21. Governing Law and Venue . The Award Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under the Option or the Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California , and agree that such litigation will be conducted in the courts of Santa Clara County, California, or the U.S. federal courts for the Northern District of California, and no other courts, where the Option is made and/or to be performed.

22. Language . If Participant has received the Award Agreement or any other document related to the Option or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

23. Captions . Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of the Award Agreement.

24. Appendix . Notwithstanding any provision of the Award Agreement, the Option grant shall be subject to any additional terms and conditions for Participant’s country set forth in the Appendix. Moreover, if Participant relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the application of such terms and conditions to Participant is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of the Award Agreement.

25. Insider Trading . By participating in the Plan, Participant agrees to comply with the Company’s policy on insider trading (to the extent that it is applicable to Participant). Further, Participant acknowledges that Participant’s country of residence may also have laws or regulations governing insider trading and that such laws or regulations may impose additional restrictions on Participant’s ability to participate in the Plan ( e.g. , acquiring or selling Shares) and that Participant is solely responsible for complying with such laws or regulations.

- 7 -

EXHIBIT B

APPENDIX TO STOCK OPTION AGREEMENT

Terms and Conditions

This Appendix includes additional terms and conditions that govern Participant’s participation in the Plan if Participant works and/or resides in one of the countries listed below. If Participant is a citizen or resident of a country other than the one in which Participant is currently working (or is considered as such for local law purposes), or Participant transfers employment or residence to a different country after the Option is granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will apply to Participant.

Capitalized terms used but not defined in this Appendix shall have the same meanings assigned to them in the Plan, the Notice of Grant or the Option Terms.

Notifications

This Appendix also includes information regarding certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of February 2014. Such laws are often complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information noted herein as the only source of information relating to the consequences of participation in the Plan because the information may be out-of-date at the time Participant exercises the Option or sells any Shares acquired upon such exercise.

In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to his or her individual situation.

If Participant is a citizen or resident of a country other than the one in which Participant is currently working (or is considered as such for local law purposes), or if Participant relocates to a different country after the Option is granted, the notifications contained in this Appendix may not be applicable to Participant in the same manner.

- 1 -

ARGENTINA

Terms and Conditions

Method of Payment . The following provision replaces Section 5 of the Option Terms ( Method of Payment ) and supplements Section 6 ( Taxes ):

Notwithstanding any provision of the Plan to the contrary, payment of the aggregate Exercise Price and any Tax-Related Items withholding may only be made pursuant to a formal cashless exercise program adopted by the Company in connection with the Plan. The Company reserves the right to provide Participant with additional methods of payment in the future depending on the development of local law.

Notifications

Securities Law Notice . Neither the Option nor the underlying Shares are publicly offered or listed on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmental authority.

Exchange Control Information . Following the sale of Shares and/or the receipt of dividends, Participant may be subject to certain restrictions in bringing such funds back into Argentina. The Argentine bank handling the transaction may request certain documentation in connection with the request to transfer such proceeds into Argentina ( e.g. , evidence of the sale, proof of the source of the funds used to purchase such Shares, etc.) and, under certain circumstances, may require that 30% of the amount transferred into Argentina be placed in a non-interest bearing dollar deposit account for a holding period of 365 days.

Participant is solely responsible for complying with applicable Argentine exchange control rules that may apply in connection with Participant’s participation in the Plan and/or the transfer of cash proceeds into Argentina. Prior to transferring cash proceeds into Argentina, Participant should consult with his or her local bank and/or exchange control advisor to confirm what will be required by the bank because interpretations of the applicable Central Bank regulations vary by bank and exchange control rules and regulations are subject to change without notice.

Tax Reporting Obligation . Shares acquired under the Plan and held by the Participant on December 31 ^st of each year must be reported on the Participant’s annual tax return for that year.

AUSTRALIA

Terms and Conditions

Exercise of Option . The following provision supplements Section 2 ( Vesting Schedule ) and Section 4(a) ( Right to Exercise ) of the Option Terms:

Notwithstanding any provision of the Plan or the Award Agreement, the Option shall not vest nor be exercisable until the earlier of the date on which (i) the shares of Common Stock underlying the Option are publicly traded, quoted or listed on a recognized exchange or normal securities market and are no longer subject to a market stand-off or lock-up period, (ii) the Option vests (in full or part) and is exercisable by reason of a Change in Control as determined by the Administrator (the "Liquidity Date"). Participant must maintain his or her status as a Service Provider through each date on the Vesting Schedule in the Notice of Grant and through the Liquidity Date in order to vest in any portion of the Option. Should the Liquidity Date occur after any of the vesting dates set forth in the Vesting Schedule set forth in the Notice of Grant, Participant will receive a credit for any vesting that would have occurred under the Vesting Schedule once the Liquidity Date occurs and will continue to vest in accordance with the Vesting Schedule thereafter to the extent that Participant’s status as a Service Provider has not terminated.

Furthermore, notwithstanding the vesting of any portion of the Option on the Liquidity Date or any vesting date thereafter, Participant will not be permitted to exercise any vested portion of the Option on any given vesting date unless and until the

- 2 -

Fair Market Value of the Shares underlying the Option exceeds the Exercise Price for the Option (i) as of such vesting date, and (ii) for the 10 consecutive trading days immediately preceding such vesting date. In the event that any portion of the vested Option is not exercisable on the vesting date as a result of the immediately preceding sentence, then the Option will not be exercisable until such date that is the first trading day following the first period of 10 consecutive trading days on which the Fair Market Value per share underlying the Option has exceeded the per-share Exercise Price for the Option. For the sake of clarity, this paragraph will not apply if the vesting of any portion of the Option on a Liquidity Date is as a result of a Change in Control.

Finally, notwithstanding the Term/Expiration Date set forth in the Notice of Grant, the Option shall automatically expire in the event that the Option has not vested and become exercisable pursuant to the preceding paragraphs within six years and 11 months following the Date of Grant.

Notifications

Securities Law Notice . If Participant acquires Shares under the Plan and offers such Shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. Participant should consult with his or her personal legal advisor before making any such offer in Australia.

BRAZIL

Terms and Conditions

Compliance with Law . Participant agrees to comply with applicable Brazilian laws and is responsible for paying any and all applicable Tax-Related Items associated with the Participant’s participation in the Plan.

Notifications

Exchange Control Information . In order to remit funds out of Brazil for purposes of exercising the Option, Participant should remit such funds to the U.S. through a Brazilian commercial bank. The Brazilian commercial bank handling the transaction may request information about the nature of the remittance and may require Participant to provide supporting documentation to the bank in support of the request.

The foregoing requirements will not apply to Participant if Participant exercises the Option using a cashless method of exercise.

Foreign Asset Reporting . A Brazilian resident is required to submit annually a declaration of assets and rights (including Shares acquired under the Plan) held outside of Brazil if the aggregate value of such assets exceeds a threshold amount that is established annually by the Central Bank. Participant is advised to consult with his or her personal legal advisor to determine whether he or she will be subject to this reporting requirement.

CANADA

Terms and Conditions

Vesting Schedule and Termination Period . The following provision replaces Section 2(b) of the Option Terms:

For purposes of the Option, Participant’s status as a Service Provider will be considered terminated for purposes of vesting and post-termination exercise period (if any) shall begin as of the last day on which the Participant is actively employed by the Employer, and shall not include or be extended by any period following such day during which Participant is in receipt of or eligible to receive any notice of termination, pay in lieu of notice of termination, severance pay or any other payments or damages, whether arising under statute, contract or at common law.

Notifications

- 3 -

Securities Law Notice . The sale or other disposal of Shares acquired through the Plan should take place through the Designated Broker outside of Canada through the facilities of a stock exchange on which the Shares are listed ( i.e ., the New York Stock Exchange).

Foreign Assets Reporting . Foreign property must be reported on form T1135 (Foreign Income Verification Statement) if the total fair market value of such foreign property exceeds C$100,000 at any time during the year. Foreign property includes any Shares acquired upon exercise of the Option and may also include unvested or vested/unexercised portions of the Option. The form T1135 is required for every year during which Participant’s foreign property exceeds C$100,000 and must be filed at the same time Participant files his or her annual tax return. Participant should speak with his or her personal tax advisor to determine the scope of foreign property that must be considered for purposes of this requirement .

CHINA

Terms and Conditions

The following terms and conditions will be applicable to Participant to the extent that the Company, in its discretion, determines that Participant’s participation in the Plan will be subject to exchange control restrictions in the People’s Republic of China (“ PRC ”), as implemented by the PRC State Administration of Foreign Exchange (“ SAFE ”) .

Exercise of Option . The following provision supplements Section 4(a) of the Option Terms ( Right to Exercise ):

Notwithstanding anything to the contrary in the Award Agreement, the Option may not be exercised until such time as all necessary approvals from SAFE have been received under applicable exchange control rules with respect to options granted under the Plan, as determined by the Company in its sole discretion.

Method of Payment . The following provision replaces Section 5 of the Option Terms ( Method of Payment ):

Notwithstanding any provision of the Plan to the contrary, payment of the aggregate Exercise Price may only be made pursuant to a formal cashless exercise program adopted by the Company in connection with the Plan. In this regard, Participant will be required to pay the aggregate Exercise Price through the Designated Broker using a cashless “sell-all” method of exercise, pursuant to which all Shares subject to the exercised portion of the Option will be sold immediately upon exercise and the proceeds of sale, less the Exercise Price, any Tax-Related Items and broker’s fees or commissions, will be remitted to Participant in accordance with any applicable exchange control laws and regulations including, but not limited to, the restrictions set forth in this Appendix for China below under “Exchange Control Restrictions.” The Company reserves the right to provide Participant with additional methods of payment in the future depending on the development of local law.

Exchange Control Restrictions . By accepting the Option, Participant understands and agrees that that he or she will be required to immediately repatriate to the PRC all proceeds due to Participant under the Plan, including any Share sale proceeds from the cashless exercise of the Option. Participant understands that such repatriation will need to be effected through a special exchange control account established by the Company or a Subsidiary of the Company in the PRC, and Participant hereby consents and agrees that the proceeds may be transferred to such special account prior to being delivered to the Participant.

Participant understands that the proceeds may be paid to Participant in U.S. dollars or in local currency, at the Company’s discretion. If the proceeds are paid in U.S. dollars, Participant understands that he or she will be required to set up a U.S. dollar bank account in the PRC so that the proceeds may be deposited into this account. If the proceeds are paid in local currency, Participant acknowledges that neither the Company nor any Parent or Subsidiary of the Company is under an obligation to secure any particular currency conversion rate and that the Company (or a Subsidiary of the Company) may face delays in converting the proceeds to local currency due to exchange control requirements in the PRC. Participant agrees to bear any currency fluctuation risk between the time the Shares are sold and the time the proceeds are converted into local currency and distributed to Participant. Participant further agrees to comply with any other requirements that may be imposed by the Company in the future to facilitate compliance with PRC exchange control requirements.

- 4 -

FRANCE

Term and Conditions

Language Consent . By accepting the Option, Participant confirms having read and understood the documents relating to this grant (the Plan, the Award Agreement and the Appendix) which were provided in English language. Participant accepts the terms of these documents accordingly.

En acceptant l’attribution, Participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan, de cette convention et cette Annexe) qui ont été communiqués en langue anglaise. Participant accepte les termes en connaissance de cause.

Notifications

Exchange Control Information . If Participant maintains a foreign bank account, Participant is required to report such account to the French tax authorities on his or her annual tax return.

GERMANY

Notifications

Exchange Control Information . Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank ( Bundesbank ). In case of payments in connection with securities (including proceeds realized upon the sale of Shares), the report must be filed electronically by the 5th day of the month following the month in which the payment was received. The form of report (“ Allgemeine Meldeportal Statistik ”) can be accessed via the Bundesbank’s website (www.bundesbank.de) and is available in both German and English.

HONG KONG

Terms and Conditions

Sale of Shares . Participant agrees that, in the event that any portion of the Option becomes vested and is exercisable prior to the six-month anniversary of the Date of Grant, Participant will not sell any Shares acquired upon exercise of the Option prior to the six-month anniversary of the Date of Grant.

Notifications

Securities Law Notice . WARNING: The Option and any Shares acquired upon exercise of the Option do not constitute a public offering of securities under Hong Kong law and are available only to eligible Service Providers of the Company or a Parent or Subsidiary of the Company. The Award Agreement, including the Appendix, the Plan and any other incidental communication materials distributed to Participant in connection with the Option (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong, (ii) have not been reviewed by any regulatory authority in Hong Kong, and (iii) are intended only for the personal use of each eligible Service Provider of the Company or a Parent or Subsidiary of the Company and may not be distributed to any other person. If Participant has any questions regarding the contents of the Award Agreement, including this Appendix, the Plan or any other incidental communication materials distributed to Participant in connection with the Option, Participant should obtain independent professional advice.

- 5 -

INDIA

Terms and Conditions

Method of Payment . The following provision replaces Section 5 of the Option Terms ( Method of Payment ) and supplements Section 6 ( Taxes ):

Notwithstanding any provision of the Plan to the contrary, payment of the aggregate Exercise Price and any Tax-Related Items withholding may only be made pursuant to a formal cashless exercise program adopted by the Company in connection with the Plan. In this regard, Participant will be required to pay the aggregate Exercise Price and any Tax-Related Items withholding through the Designated Broker using a cashless “sell-all” method of exercise, pursuant to which all Shares subject to the exercised portion of the Option will be sold immediately upon exercise and the proceeds of sale, less the Exercise Price, any Tax-Related Items and broker’s fees or commissions, will be remitted to Participant. The Company reserves the right to provide Participant with additional methods of payment in the future depending on the development of local law.

Notifications

Exchange Control Information . Proceeds from the sale of Shares and any dividends received in relation to the Shares must be repatriated to India within ninety (90) days after receipt. Participant should maintain any foreign inward remittance certificate received from the bank where the foreign currency is deposited in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is Participant’s responsibility to comply with applicable exchange control laws in India.

Foreign Assets Reporting . Foreign bank accounts and any foreign financial assets (including Shares held outside India) must be declared by Indian taxpayers in their annual tax return. Participant is responsible for complying with this reporting obligation to the extent applicable and should confer with Participant’s personal legal advisor in this regard.

ISRAEL

Terms and Conditions

Nature of Award . By accepting the Option, Participant understands and agrees that the Option is offered subject to and in accordance with the Sub-Plan for Israeli Taxpayers to the Plan (the “Israeli Subplan”) and is intended to be a 102 Capital Gains Track Grant (as defined in the Israeli Subplan). Notwithstanding the foregoing, the Company does not undertake to maintain the qualified status of the Option and Participant acknowledges that he or she will not be entitled to damages of any nature whatsoever if the Option becomes disqualified and no longer qualifies as a 102 Capital Gains Track Grant. In the event of any inconsistencies between the Israeli Subplan, the Award Agreement and/or the Plan, the terms of the Israeli Subplan will govern.

Further, to the extent requested by the Company or the Employer, Participant agrees to execute any letter or other agreement in connection with the grant of the Option or any future option granted under the Israeli Subplan. If Participant fails to comply with such request, the Option may not qualify as a 102 Capital Gains Track Grant.

Method of Exercising . Notwithstanding any provision of the Award Agreement or the Plan to the contrary, Participant may not exercise the Option using a cashless “sell-to-cover” method of exercise, whereby Participant directs the Designated Broker to sell some (but not all) of the Shares subject to the exercised portion of the Option and deliver to the Company the amount of the sale proceeds to pay the Exercise Price and any Tax-Related Items, unless expressly authorized by the Company to do so. The Company reserves the right to provide Participant with this method of payment in the future.

Trust Arrangement . Participant acknowledges and agrees that the Option and any Shares issued upon exercise of the Option (and not immediately sold) will be subject to a supervisory trust arrangement with the Company’s designated trustee in Israel, ESOP Management and Trust Company Ltd. (the “Trustee”) in accordance with the terms of the trust agreement

- 6 -

between the Company and the Trustee. Participant further agrees that such Shares will be subject to the Required Holding Period (as defined in the Israeli Subplan), which shall be 24 months from the Date of Grant. The Company may, in its sole discretion, replace the Trustee from time to time and instruct the transfer of all options and Shares held and/or administered by such Trustee at such time to its successor and the provisions of this Award Agreement shall apply to the new Trustee mutatis mutandis .

Restriction on Sale . Participant acknowledges that any Shares underlying the Option may not be sold prior to the expiration of the Required Holding Period in order to qualify for tax treatment under the 102 Capital Gains Track. Accordingly, Participant agrees not to dispose of (or request the Trustee to dispose of) any such Shares prior to the expiration of the Required Holding Period. For purposes of this Appendix for Israel, “dispose” shall mean any sale (including by means of a cashless exercise), transfer or other disposal of the Shares by Participant (including by means of an instruction by Participant to the Designated Broker) or the Trustee, including a release of such Shares from the Trustee to Participant.

Tax-Related Items . The following provision supplements Section 6 of the Option Terms ( Taxes ):

The fair market value of the Options on the date of grant (as computed in accordance with the provisions relating to the 102 Capital Gains Track) shall be subject to taxation in Israel in accordance with ordinary income tax principles. Moreover, in the event that Participant disposes of any Shares underlying the Option prior to the expiration of the Required Holding Period, Participant acknowledges and agrees that any additional gains from the sale of such Shares will not qualify for tax treatment under the 102 Capital Gains Track and will be subject to taxation in Israel in accordance with ordinary income tax principles. Further, Participant acknowledges and agrees that he or she will be liable for the Employer’s component of payments to the Israeli National Insurance Institute (to the extent such payments by the Employer are required).

Participant further agrees that the Trustee may act on behalf of the Company or the Employer, as applicable, to satisfy any obligation to withhold Tax-Related Items applicable to Participant in connection with the Option granted under the Israeli Subplan.

ITALY

Terms and Conditions

Method of Payment . The following provision replaces Section 5 of the Option Terms ( Method of Payment ) and supplements Section 6 ( Taxes ):

Notwithstanding any provision of the Plan to the contrary, payment of the aggregate Exercise Price and any Tax-Related Items withholding may only be made pursuant to a formal cashless exercise program adopted by the Company in connection with the Plan. In this regard, Participant will be required to pay the aggregate Exercise Price and any Tax-Related Items withholding through the Designated Broker using a cashless “sell-all” method of exercise, pursuant to which all Shares subject to the exercised portion of the Option will be sold immediately upon exercise and the proceeds of sale, less the Exercise Price, any Tax-Related Items and broker’s fees or commissions, will be remitted to Participant. The Company reserves the right to provide Participant with additional methods of payment in the future depending on the development of local law.

Data Privacy . The following provision replaces Section 11 of the Option Terms ( Data Privacy ):

Participant understands that the Company and any Parent or Subsidiary of the Company may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any Parent or Subsidiary, details of all options or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in Participant’s favor (“Data”), and that the Company and the Employer will process said data for the exclusive purpose of managing and administering Participant’s participation the Plan and complying with applicable laws, regulations and EU Community legislation.

- 7 -

Participant understands that providing the Company with Data is mandatory for compliance with laws and is necessary for the performance of the Plan and that Participant’s denial to provide Data would make it impossible for the Company to perform its contractual obligations and may affect Participant’s ability to participate in the Plan. Participant understands that Data will not be publicized, but it may be accessible by the Employer as the Privacy Representative of the Company and within the Employer’s organization by its internal and external personnel in charge of processing, and by E*TRADE Financial Services, Inc., or such other stock plan service provider as may be selected by the Company in the future (the “Designated Broker”).

The updated list of Processors and of the subjects to which Data are communicated will remain available upon request from the Employer. Furthermore, Data may be transferred to banks, other financial institutions or brokers involved in the management and administration of the Plan. Participant understands that Data may also be transferred to the independent registered public accounting firm engaged by the Company, and also to the legitimate addressees under applicable laws. Participant further understands that the Company or any Parent or Subsidiary of the Company will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of Participant’s participation in the Plan, and that the Company or any Parent or Subsidiary of the Company may each further transfer Data to third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Personal Data to the Designated Broker or other third party with whom Participant may elect to deposit any Shares acquired under the Plan or any proceeds from the sale of such Shares. Such recipients may receive, possess, use, retain and transfer Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan. Participant understands that these recipients may be acting as Controllers, Processors or persons in charge of processing, as the case may be, according to applicable privacy laws, and that they may be located in or outside the European Economic Area, such as in the U.S. or elsewhere, in countries that do not provide an adequate level of data protection as intended under Italian privacy law.

Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Participant’s Data as soon as it has accomplished all the necessary legal obligations connected with the management and administration of the Plan.

Participant understands that Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.

The processing activity, including communication, the transfer of Data abroad, including outside of the European Economic Area, as specified herein and pursuant to applicable laws and regulations, does not require Participant’s consent thereto as the processing is necessary to performance of law and contractual obligations related to implementation, administration and management of the Plan. Participant understands that, pursuant to section 7 of the Legislative Decree no. 196/2003, Participant has the right at any moment to, including, but not limited to, obtain confirmation that Data exists or not, access, verify its contents, origin and accuracy, delete, update, integrate, correct, block or stop, for legitimate reason, the Data processing. To exercise privacy rights, Participant should contact the Employer. Furthermore, Participant is aware that Data will not be used for direct marketing purposes. In addition, Data provided can be reviewed and questions or complaints can be addressed by contacting Participant’s human resources department.

Plan Document Acknowledgement . Participant acknowledges that Participant has read and specifically and expressly approves the Notice of Grant and the following sections of the Option Terms: Section 1 ( Grant ); Section 2 ( Vesting Schedule ); Section 4 ( Exercise of Option ); Section 5 ( Method of Payment ); Section 6 ( Taxes ); Section 8 ( No Guarantee of Continued Service ); Section 9 ( Nature of Grant ); Section 17 ( Electronic Delivery and Acceptance ); Section 19 ( Modifications to the Award Agreement ); Section 21 ( Governing Law and Venue ); Section 22 ( Language ); Section 24 ( Appendix ); and the Data Privacy provision above in this Appendix for Italy.

- 8 -

Notifications

Exchange Control Information . Italian residents who, at any time during the fiscal year, hold foreign financial assets (including cash and Shares) which may generate income taxable in Italy are required to report these assets on their annual tax returns (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form if no tax return is due. These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions.

JAPAN

Notifications

Exchange Control Information . If Participant acquires Shares valued at more than ¥100,000,000 in a single transaction, Participant must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within 20 days of the acquisition of the Shares.

In addition, if Participant pays more than ¥30,000,000 in a single transaction for the purchase of Shares when Participant exercises the Option, Participant must file a Payment Report with the Ministry of Finance through the Bank of Japan within 20 days of the date that the payment is made. The precise reporting requirements vary depending on whether or not the relevant payment is made through a bank in Japan.

Please note that a Payment Report is required independently from a Securities Acquisition Report; therefore, Participant must file both a Payment Report and a Securities Acquisition Report if the total amount that Participant pays in a single transaction for exercising the Option and purchasing Shares exceeds ¥100,000,000.

Foreign Assets Reporting . Japanese residents are required to report details of any assets held outside of Japan as of December 31, including Shares acquired under the Plan, to the extent such assets have a total net fair market value exceeding ¥50,000,000. Such report will be due by March 15 each year. Participant is responsible for complying with this reporting obligation if applicable to Participant and should consult his or her personal tax advisor in this regard.

KOREA

Notifications

Exchange Control Information . If Participant remits funds out of Korea to purchase Shares under the Plan, the remittance must be “confirmed” by a foreign exchange bank in Korea. This is an automatic procedure, i.e. , the bank does not need to “approve” the remittance, and it should take no more than a single day to process. Participant likely will need to present to the bank processing the transaction the following supporting documents evidencing the nature of the remittance: (i) the Notice of Grant and the Award Agreement; (ii) the Plan; and (iii) Participant’s certificate of employment. This confirmation is not necessary for cashless exercises since there is no remittance out of Korea.

In addition, if Participant realizes US$500,000 or more from the sale of Shares in a single transaction, Korean exchange laws require Participant to repatriate the proceeds to Korea within eighteen (18) months of the sale.

Foreign Assets Reporting . Korean residents must declare all foreign financial accounts ( e.g. , non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 1 billion (or an equivalent amount in foreign currency). Participant should consult with his or her personal tax advisor to determine how to value his or her foreign accounts for purposes of this reporting requirement and whether he is she is required to file a report with respect to such accounts.

- 9 -

MALAYSIA

Notifications

Director Notification Obligation . If Participant is director of a Subsidiary or affiliate in Malaysia, Participant is subject to certain notification requirements under the Malaysian Companies Act. Among these requirements is an obligation to notify such Malaysian Subsidiary in writing when Participant receives or disposes of an interest ( e.g. , the Option or Shares) in the Company or any related company. Such notifications must be made within 14 days of receiving or disposing of any interest in the Company or any related company.

MEXICO

Terms and Conditions

The following provisions supplement the Section 8 ( No Guarantee of Continued Service ) and Section 9 ( Nature of Grant ) of the Option Terms:

Modification . By accepting the Option, Participant understands and agrees that any modification of the Plan or the Award Agreement or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s status as a Service Provider.

Policy Statement . The Option grant the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

The Company, with offices at 3 West Plumeria Drive, San Jose, CA 95134, U.S.A., is solely responsible for the administration of the Plan, and participation in the Plan and the grant of the Option does not, in any way, establish an employment relationship between Participant and the Company since Participant is participating in the Plan on a wholly-commercial basis. Based on the foregoing, Participant expressly acknowledges that the Plan and the benefits that Participant may derive from participation in the Plan do not establish any rights between Participant and the Company and do not form part of any service contract between Participant and the Company or any Parent or Subsidiary of the Company. Further, Participant agrees that any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s employment or service contract, if applicable.

Plan Document Acknowledgment . By accepting the Option, Participant acknowledges that the he or she has received copies of the Plan, has reviewed the Plan and the Award Agreement in their entirety, and fully understands and accepts all provisions of the Plan and the Award Agreement.

In addition, Participant further acknowledges that he or she has read and specifically and expressly approves the terms and conditions contained in Section 8 ( No Guarantee of Continued Service ) and Section 9 ( Nature of Grant ) of the Option Terms, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly-discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company, the Employer and any Parent or Subsidiary of the Company are not responsible for any decrease in the value of the Shares acquired upon exercise of the Option.

Finally, Participant hereby declares that he or she does not reserve any action or right to bring any claim against the Company (or any Parent or Subsidiary of the Company) for any compensation or damages as a result of Participant’s participation in the Plan and therefore grants a full and broad release to the Company and any Parent or Subsidiary of the Company with respect to any claim that may arise under the Plan.

Spanish Translation

Las siguientes consideraciones complementan las secciones “Inexistencia de Derechos Laborales” y “Naturaleza del Otorgamiento” del Acuerdo de Otorgamiento de Acciones:

- 10 -

Modificación: Al aceptar la Opción, el Participante acepta y reconoce que cualquier modificación del Plan o del Acuerdo de Otorgamiento de Acciones o su terminación, no constituirá un cambio o disminución de los términos y condiciones del estatus del Participante como Proveedor o Prestador de Servicios.

Declaración de Política: El otorgamiento de la Opción que la Compañía realiza bajo este Plan es unilateral y discrecional y, por lo tanto, la Compañía se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier momento sin responsabilidad alguna.

La Compañía, con oficinas en 3 West Plumeria Drive, San José, California, 95134, E.E.U.U., es la única responsable de la administración del Plan y de la participación en el mismo, y el otorgamiento de la Opción no establece de forma alguna, una relación de trabajo entre el Participante y la Compañía, toda vez que su participación en el Plan es completamente comercial. De acuerdo a lo anterior, el Participante expresamente reconoce que el Plan y los beneficios derivados de su participación en el mismo no constituyen ni generan derecho alguno entre el Participante y la Compañía, ni tampoco formarán parte de ningún contrato de servicios entre el Participante y la Compañía o cualquier matriz o Subsidiaria. Asimismo, usted acuerda que cualquier modificación al Plan o a su terminación no generarán un cambio o impedimento en los términos y condiciones derivados de su contrato de servicios.

Reconocimiento del Documento del Plan. Al aceptar la Opción, el Participante reconoce que ha recibido copias del Plan, que ha revisado las mismas al igual que la totalidad del Acuerdo de Otorgamiento de Acciones y que ha entendido y aceptado completamente todas las disposiciones contenidas en el Plan y en el Acuerdo de Otorgamiento de Acciones.

Adicionalmente, el Participante reconoce que ha leído, y que aprueba específica y expresamente los términos y condiciones contenidos en la sección 8 (No garantía de Continuación de Servicios) y la sección 9 (Naturaleza del Otorgamiento) del Acuerdo de Otorgamiento de Acciones, en el cual se encuentra claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en en el mismo es ofrecida por la Compañía de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Compañía, cualquier matriz y/o cualquier Subsidiaria no son responsables por cualquier disminución en el valor de las Acciones adquiridas a través del ejercicio de la Opción.

Finalmente, el Participante declara que no se reserva acción o derecho alguno para interponer una demanda en contra de la Compañía por compensación, daño o perjuicio alguno como resultado de su participación en el Plan y, en consecuencia otorga el más amplio finiquito en favor del Empleador, la Compañía, cualquier matriz y/o Subsidiaria con respecto a cualquier demanda que pudiera originarse en virtud de los Plan.

NETHERLANDS

Notifications

SAUDI ARABIA

Notifications

Securities Law Notice . The Company currently does not allow grants to or exercises of Options by Participants who are present in Saudi Arabia. The Company reserves the right to allow grants and exercises in the future should circumstances change.

- 11 -

SINGAPORE

Notifications

Securities Law Notice . The grant of the Option is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying Shares being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the Option is subject to section 257 of the SFA and that Participant will not be able to make any subsequent sale of the Shares in Singapore, or any offer or subsequent sale of the Shares in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.

Director Notification Obligation . If Participant is a director, associate director, or shadow director of a Singapore Subsidiary, Participant is subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singaporean Subsidiary in writing when Participant receives an interest ( e.g ., the Option, Shares) in the Company or any related company. In addition, Participant must notify the Singapore Subsidiary when Participant sells Shares of the Company or any related company (including when Participant sells Shares acquired under the Plan). These notifications must be made within two business days of acquiring or disposing of any interest in the Company or any related company. In addition, a notification must be made of Participant’s interests in the Company or any related company within two business days of becoming a director.

SPAIN

Terms and Conditions

Nature of Grant . This provision supplements Section 9 of the Option Terms ( Nature of Grant ):

By accepting the Option, Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan.

Participant understands that the Company has unilaterally, gratuitously and discretionally decided to grant options under the Plan to individuals who may be Service Providers of the Company or its Parent or Subsidiaries throughout the world. This decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or any Parent or Subsidiary of the Company other than as expressly set forth in the Award Agreement. Consequently, Participant understands that the Option is granted on the assumption and condition that the Option and any Shares issued upon exercise of the Option are not a part of any employment or service contract (either with the Company or any Parent or Subsidiary of the Company) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever.

Further, Participant understands and agrees that, unless otherwise expressly provided for by the Company or set forth in the Plan or the Award Agreement, the Option will be cancelled without entitlement to any Shares underlying the Option if Participant’s status as a Service Provider is terminated for any reason, including, but not limited to: resignation, retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, or under Article 10.3 of Royal Decree 1382/1985. The Company, in its sole discretion, shall determine the date when Participant’s status as a Service Provider has terminated for purposes of the Option.

In addition, Participant understands that this grant would not be made to Participant but for the assumptions and conditions referred to above; thus, Participant acknowledges and freely accepts that, should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of, or right to, the Option shall be null and void.

- 12 -

Notifications

Securities Law Notice . The Option described in the Award Agreement does not qualify under Spanish regulations as a security. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of the Option. The Award Agreement has not been, nor will it be, registered with the Comisión Nacional del Mercado de Valores , and does not constitute a public offering prospectus.

Foreign Property Reporting . To the extent that Participant holds rights or assets ( e.g. , Shares, cash, etc.) in a bank or brokerage account outside of Spain with a value in excess of €50,000 per type of right or asset as of December 31 each year, Participant is required to report information on such rights and assets on his or her tax return for such year. Shares acquired under the Plan constitute securities for purposes of this requirement, but the Option (whether vested or unvested) is not considered an asset or right for purposes of this requirement.

If applicable, Participant must report the assets or rights on Form 720 by no later than March 31 following the end of the relevant year. After such assets or rights are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported assets or rights increases by more than €20,000. Failure to comply with this reporting requirement may result in penalties to Participant. Accordingly, Participant should consult with his or her personal tax and legal advisors to ensure that Participant is properly complying with his or her reporting obligations.

Foreign Asset and Account Reporting . Spanish residents are required to electronically declare to the Bank of Spain any securities accounts (including brokerage accounts held abroad), as well as the securities held in such accounts, if the value of the transactions for all such accounts during the prior tax year or the balances in such accounts as of December 31 of the prior tax year exceeds €1,000,000.

Share Reporting Requirement . In the event that Participant acquires Shares under the Plan, Participant must declare such acquisition to the Spanish Dirección General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Economy and Competitiveness. Participant must also declare ownership of any Shares o by filing a Form D-6 with the Directorate of Foreign Transactions each January while such Shares are owned. In addition, the sale of Shares must also be declared on Form D-6 filed with the DGCI in January, unless the sale proceeds exceed the applicable threshold (currently €1,502,530), in which case, the filing is due within one month after the sale.

SWEDEN

There are no country specific provisions.

TAIWAN

Notifications

Exchange Control Information . Participant may acquire and remit foreign currency (including funds to purchase or proceeds from the sale of Shares) into and out of Taiwan up to US$5 million per year without submission of supporting documentation. If the transaction amount is TWD$500,000 or more in a single transaction, Participant is required to submit a foreign exchange transaction form and if the transaction amount is US$500,000 or more in a single transaction, Participant may be required to provide supporting documentation to the satisfaction of the remitting bank. Participant should consult his or her personal legal advisor prior to exercising the Option and purchasing Shares and subsequently selling any Shares acquired under the Plan. Participant is personally responsible for complying with exchange control restrictions in Taiwan.

- 13 -

THAILAND

Notifications

Exchange Control Information . If Participant remits funds out of Thailand in order to exercise the Option, Participant must remit such funds through a commercial bank in Thailand.

Further, if Participant realizes US$50,000 or more in a single transaction from the sale of Shares or the payment of dividends, Participant is required to repatriate the cash proceeds to Thailand immediately following the receipt of such proceeds and to then either convert such repatriated proceeds into Thai Baht or deposit the proceeds into a foreign currency account opened with any commercial bank in Thailand within 360 days of repatriation. Further, for repatriated amounts of US$50,000 or more, Participant must specifically report the inward remittance to the Bank of Thailand on a Foreign Exchange Transaction Form. Participant is personally responsible for complying with exchange control restrictions in Thailand.

UNITED ARAB EMIRATES

There are no country-specific provisions.

UNITED KINGDOM

Terms and Conditions

Joint Election for Transfer of Liability for Employer National Insurance Contributions . The following provision supplements Section 6 of the Option Terms ( Taxes ):

As a condition of participation in the Plan and the exercise of the Option, Participant agrees to accept any liability for secondary Class 1 National Insurance contributions (“NICs”) that may be payable by the Company or the Employer in connection with the Option and any event giving rise to Tax-Related Items (the “Employer NICs”). The Employer NICs may be collected by the Company or the Employer using any of the methods described in the Plan or the Award Agreement.

Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer (a “Joint Election”), the form of such Joint Election being formally approved by Her Majesty’s Revenue and Customs (“HMRC”), and any other consent or elections required to accomplish the transfer of the Employer NICs liability to Participant. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of Participant’s Joint Election. If Participant does not complete the Joint Election prior to exercise of the Option, or if approval of the Joint Election is withdrawn by HMRC and a new Joint Election is not entered into, the Option shall become null and void and may not be exercised, without any liability to the Company, the Employer or any Parent or Subsidiary of the Company.

Tax Withholding . The following provision supplements Section 6 of the Option Terms ( Taxes ):

Participant agrees that the Company and/or the Employer may calculate the income tax to be withheld and accounted for by reference to the maximum applicable rates, without prejudice to any right that Participant may have to recover any overpayment from HMRC.

If payment or withholding of Participant’s income tax liability is not made within 90 days after the end of the U.K. tax year (April 6 - April 5) in which the event giving rise to such income tax liability occurs or such other period specified in Section 222(1)(c) of ITEPA 2003 (the “Due Date”), the amount of any uncollected income tax will constitute a loan owed by Participant to the Employer, effective on the Due Date. Participant agrees that the loan will bear interest at the then-current Official Rate of HMRC, it will be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the means referred to in the Plan or the Award Agreement.

- 14 -

Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of and subject to Section 13(k) of the Exchange Act), Participant will not be eligible for such a loan to cover the income tax due and the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and employee NICs may be payable. Participant will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company and/or the Employer (as appropriate) for the value of any employee NICs due on this additional benefit, which may be recovered from Participant by the Company or the Employer at any time thereafter by any of the means referred to in the Plan or the Award Agreement.

- 15 -

EXHIBIT C

A10 NETWORKS, INC.

2014 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

A10 Networks, Inc.

3 W. Plumeria Dr.

San Jose, CA 95134

Attention: Stock Administration

1. Exercise of Option . Effective as of today, ________________, _____, the undersigned (“Participant”) hereby elects to purchase ______________ shares (the “Shares”) of the Common Stock of A10 Networks, Inc. (the “Company”) under and pursuant to the 2014 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement, including the Notice of Stock Option Grant (the “Notice of Grant”), the Terms and Conditions of Stock Option Grant (the “Option Terms”) attached as Exhibit A and the Appendix to the Stock Option Agreement attached ass Exhibit B (the “Appendix”) (collectively, the “Award Agreement”), dated ________. The purchase price for the Shares will be $_____________, as required by the Notice of Grant.

2. Delivery of Payment . Participant herewith delivers to the Company the full purchase price of the Shares and any Tax-Related Items (or evidence of arrangements to satisfy any Tax-Related Items, as defined in Section 6 of the Option Terms) to be paid in connection with the exercise of the Option.

3. Representations of Participant . Participant acknowledges that Participant has received, read and understood the Plan and the Award Agreement and agrees to abide by and be bound by their terms and conditions.

4. Rights as Stockholder . Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to the Option, notwithstanding the exercise of the Option. The Shares so acquired will be issued to Participant as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 14 of the Plan.

5. Tax Consultation . Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.

6. Entire Agreement; Governing Law and Venue . The Plan and Award Agreement are incorporated herein by reference. This Exercise Notice and the Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. For purposes of litigating any dispute that arises under the Option or the Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California , and agree that such litigation will be conducted in the courts of Santa Clara County, California, or the U.S. federal courts for the Northern District of California, and no other courts, where the Option is made and/or to be performed.

- 1 -



Submitted by:			Accepted by:
PARTICIPANT:			A10 NETWORKS, INC.
Signature			By

Print Name			Print Name

Address:			Title

			Date Received

- 2 -

Exhibit 10.5

A10 NETWORKS, INC.

2014 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Unless otherwise defined herein, the terms defined in the A10 Networks, Inc. 2014 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Unit Agreement (the “Award Agreement”), which includes the Notice of Restricted Stock Unit Grant (the “Notice of Grant”), the Terms and Conditions of Restricted Stock Unit Grant attached hereto as Exhibit A (the “Restricted Stock Unit Terms”) and the Appendix to Restricted Stock Unit Agreement attached hereto as Exhibit B (the “Appendix”).



NOTICE OF RESTRICTED STOCK UNIT GRANT
Participant Name:
Employee ID:
Address:

Participant has been granted the right to receive an Award of Restricted Stock Units over shares of the Company’s Common Stock (“Shares”), subject to the terms and conditions of the Plan and the Award Agreement, as follows:



Grant Number
Date of Grant
Vesting Commencement Date
Vesting Commencement Date

Vesting Schedule :

Subject to Section 3 of the Restricted Stock Unit Terms or any acceleration provisions contained in the Plan or set forth below, the Restricted Stock Units will vest in accordance with the following schedule:

[ INSERT VESTING SCHEDULE ]

In the event Participant ceases to be a Service Provider (as described in Section 3 of the Restricted Stock Unit Terms) for any or no reason before Participant vests in the Restricted Stock Units, the Restricted Stock Units and Participant’s right to acquire any Shares hereunder will immediately terminate.

By Participant’s signature and the signature of the representative of the Company below, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and the Award Agreement, which are made a part of this document. By accepting this Award, Participant expressly consents to the sale of Shares to cover the Tax Withholding Obligations (and any associated broker or other fees) and agrees and acknowledges that Participant may not satisfy them by any means other than such

-1-

sale of Shares, unless required to do so by the Administrator or pursuant to the Administrator’s express written consent. Participant has reviewed the Plan and Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Award Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below.



PARTICIPANT:			A10 NETWORKS, INC.
Signature			By

Print Name			Print Name

Residence Address:			Title

-2-

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT

Capitalized terms used but not defined in this Exhibit A shall have the same meanings assigned to them in the Plan and/or the Notice of Grant .

1. Grant . The Company hereby grants to the individual named in the Notice of Grant (“Participant”) an Award of Restricted Stock Units, subject to all of the terms and conditions of the Plan, which is incorporated herein by reference, and the terms and conditions of the Award Agreement, which includes the Notice of Grant, the Restricted Stock Unit Terms and the Appendix. Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Award Agreement, the terms and conditions of the Plan will prevail.

2. Company’s Obligation to Pay . Each Restricted Stock Unit represents the right to receive one Share on the date it vests. Unless and until the Restricted Stock Units vest in the manner set forth in Section 3 or 4, Participant will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. Any Restricted Stock Units that vest in accordance with Section 3 or 4 will be paid to Participant (or, in the event of Participant’s death, will be distributed as described in Section 6) in whole Shares, subject to Participant satisfying any obligations for Tax-Related Items (as defined in Section 7). Subject to the provisions of Section 4, such vested Restricted Stock Units shall be paid in whole Shares as soon as practicable after vesting, but in each such case within sixty (60) days following the vesting date. In no event will Participant be permitted, directly or indirectly, to specify the taxable year of the payment of any Restricted Stock Units payable under the Award Agreement.

3. Vesting Schedule . Except as provided in Section 4, and subject to Section 5, the Restricted Stock Units awarded by the Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Restricted Stock Units scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of the Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.

For purposes of the Restricted Stock Units, Participant’s status as a Service Provider will be considered terminated as of the date that Participant is no longer actively providing services to the Company or any Parent or Subsidiary of the Company (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or providing services, or the terms of Participant’s employment or service agreement, if any), and unless otherwise expressly provided in the Award Agreement or determined by the Administrator, Participant’s right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period ( e.g ., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or providing services, or the terms of Participant’s employment or service agreement, if any). The Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Restricted Stock Units (including whether Participant may still be considered to be providing services while on a leave of absence).

-3-

4. Administrator Discretion . The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Administrator. If Participant is a United States (“U.S.”) taxpayer, the payment of Shares vesting pursuant to this Section 4 shall in all cases be paid at a time or in a manner that is exempt from, or complies with, Section 409A. The prior sentence may be superseded in a future agreement or amendment to the Award Agreement only by direct and specific reference to such sentence.

Notwithstanding anything in the Plan or the Award Agreement or any other agreement (whether entered into before, on or after the Date of Grant) to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to Participant’s death , and if (x) Participant is a U.S. taxpayer and a “specified employee” within the meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless Participant dies following his or her termination as a Service Provider, in which case, the Restricted Stock Units will be paid out as described in Section 6 as soon as practicable following his or her death. It is the intent of the Award Agreement that it and all payments and benefits to U.S. taxpayers hereunder be exempt from, or comply with, the requirements of Section 409A so that none of the Restricted Stock Units provided under the Award Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under the Award Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). For purposes of the Award Agreement, “Section 409A” means Section 409A of the Code, and any final U.S. Treasury Regulations and U.S. Internal Revenue Service guidance thereunder, as each may be amended from time to time.

5. Forfeiture upon Termination of Status as a Service Provider . Notwithstanding any contrary provision of the Award Agreement, the balance of the Restricted Stock Units that have not vested as of the time of Participant’s termination as a Service Provider, for any or no reason, will be immediately forfeited, and Participant’s right to acquire any Shares hereunder will immediately terminate.

6. Death of Participant . Any distribution or delivery to be made to Participant under the Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

Notwithstanding the foregoing, if Participant is a Service Provider outside the United States, Participant will not be permitted to designate a beneficiary, and in the event of Participant’s death, any distribution or delivery to be made to Participant under the Award Agreement will be made to Participant’s legal heirs or representatives.

7. Taxes .

(a) Responsibility for Taxes . Notwithstanding any contrary provision of the Award Agreement, no certificate representing the Shares will be issued to Participant unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”) which the Company or the Parent or Subsidiary employing or retaining Participant (the “Employer”) determines must be withheld with respect to the Restricted Stock Units or any Shares issued upon vesting. In this regard, Participant acknowledges and agrees that:

-4-

(i) Participant is ultimately responsible for all Tax-Related Items and Participant’s liability for Tax-Related Items may exceed the amount withheld by the Company and/or the Employer, if any;

(ii) the Company and/or the Employer make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired upon vesting of the Restricted Stock Units and the receipt of any dividends;

(iii) the Company and/or the Employer do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result;

(iv) the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction if Participant is subject to tax in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable; and

(v) if Participant fails to make satisfactory arrangements for the payment of any Tax-Related Items at the time any applicable Restricted Stock Units otherwise are scheduled to vest pursuant to Section 3 or 4 or, if later, at the time any Tax-Related Items related to Restricted Stock Units otherwise are due, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company.

(b) Withholding of Taxes . Prior to the vesting of the Restricted Stock Units, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment obligations of Tax-Related Items of the Company and/or the Employer (the “Tax Withholding Obligations”). In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by Shares being sold on Participant’s behalf at the prevailing market price pursuant to such procedures as the Company may specify from time to time, including through a broker-assisted arrangement (it being understood that the Shares to be sold must have vested pursuant to the terms of this Agreement and the Plan). The proceeds from the sale will be used to satisfy the Tax Withholding Obligations (and any associated broker or other fees) arising with respect to Participant’s Restricted Stock Units. Only whole Shares will be sold to satisfy any Tax Withholding Obligations. Any proceeds from the sale of Shares in excess of the Tax Withholding Obligations (and any associated broker or other fees) will be paid to Participant in accordance with procedures the Company may specify from time to time, such as by considering maximum applicable rates, in which case Participant will receive a cash refund of any over-withheld amount not remitted to applicable tax authorities on Participant’s behalf and Participant will have no entitlement to receive the equivalent amount in Shares. By accepting this Award, Participant expressly consents to the sale of Shares to cover the Tax Withholding Obligations (and any associated broker or other fees) and agrees and acknowledges that Participant may not satisfy them by any means other than such sale of Shares, unless required to do so by the Administrator or pursuant to the Administrator’s express written consent.

If the Administrator determines that Participant cannot satisfy the Tax Withholding Obligations through the procedure set forth in the immediately preceding sentence, then the Administrator may permit Participant to satisfy the Tax Withholding Obligations by (i) delivery of cash or check to the Company or the Employer, (ii) withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer, (iii) withholding Shares otherwise issuable upon vesting of the Restricted Stock Units with a Fair Market Value equal to the minimum amount of any Tax-Related Items required to be withheld, or (iv) such other means as the Administrator deems appropriate.

Depending on the method of withholding, the Company may withhold or account for Tax-Related Items by considering maximum or minimum applicable rates. If the Tax Withholding Obligations are satisfied by withholding in Shares, for tax purposes, Participant is deemed to have been issued the full number of Shares subject to the vested

-5-

Restricted Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

8. Rights as Stockholder . Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

9. No Guarantee of Continued Service . PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER OF THE COMPANY OR A PARENT OR SUBSIDIARY OF THE COMPANY AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THE AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY OR ANY PARENT OR SUBSIDIARY OF THE COMPANY TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

10. Nature of Grant . In accepting the grant of the Restricted Stock Units, Participant acknowledges, understands and agrees that:

(a) the grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

(b) all decisions with respect to future grants of Restricted Stock Units or other grants, if any, will be at the sole discretion of the Company;

(d) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of the same, are not intended to replace any pension rights or compensation;

(e) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of the same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or payments or welfare benefits or similar payments;

(f) the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

(g) unless otherwise provided in the Plan or by the Company in its discretion, the Restricted Stock Units and the benefits evidenced by the Award Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(h) in addition to subsections (a) through (h) above, the following provisions will also apply if Participant is a Service Provider outside the U.S.:

-6-

(i) the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value from same, are not part of normal or expected compensation or salary for any purpose;

(ii) none of the Company, the Employer or any Parent or Subsidiary of the Company shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the U.S. dollar that may affect the value of the Restricted Stock Units or of any amounts due to Participant pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement; and

(iii) no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from the termination of Participant’s status as a Service Provider (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is a Service Provider, or the terms of Participant’s employment or service agreement, if any), and in consideration of the grant of the Restricted Stock Units to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, the Employer, or any Parent or Subsidiary of the Company, waives his or her ability, if any, to bring any such claim, and releases the Company, the Employer, and any Parent or Subsidiary of the Company from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim.

11. No Advice Regarding Grant . The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant should consult with his or her own personal tax, legal and financial advisors regarding the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Award Agreement and all other aspects of Participant’s participation in the Plan before taking any action related to the Plan.

12. Data Privacy . Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in the Award Agreement and any other Restricted Stock Unit grant materials (“Data”) by and among, as applicable, the Employer, the Company and any Parent or Subsidiary of the Company for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

Participant understands that Data may include certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor.

-7-

she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider and career with the Employer will not be adversely affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.

Finally, upon request of the Company or the Employer, Participant agrees to provide an executed data privacy consent form to the Employer or the Company (or any other agreements or consents that may be required by the Employer or the Company) that the Company and/or the Employer may deem necessary to obtain under the data privacy laws in Participant’s country, either now or in the future. Participant understands that he or she will not be able to participate in the Plan if he or she fails to execute any such consent or agreement. Address for Notices . Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company at A10 Networks, Inc., 3 West Plumeria Drive, San Jose, CA 95134, or at such other address as the Company may hereafter designate in writing.

13. Non-transferability of Award . Except to the limited extent provided in Section 7, this grant of Restricted Stock Units and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

14. Successors and Assigns . The Company may assign any of its rights under the Award Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, the Award Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Participant under this Agreement may only be assigned with the prior written consent of the Company.

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

16. Additional Conditions to Issuance of Shares . If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any U.S. federal, state, local or foreign law, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate) hereunder, such issuance will not occur unless and until such listing, registration, qualification, rule compliance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Where the Company determines that the delivery of the payment of any Shares will violate federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation. The Company will make all reasonable efforts to meet the requirements of any such U.S. federal, state, local or foreign law or securities exchange and to obtain any such consent or approval of any such governmental authority or securities exchange.

17. Plan Governs . This Award Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of the Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.

18. Interpretation . The Administrator will have the power to interpret the Plan and the Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons.

-8-

No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Award Agreement.

19. Electronic Delivery and Acceptance . The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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

21. Modifications to the Award Agreement . The Plan is established voluntarily by the Company, it is discretionary in nature, and the Company, in its discretion, may elect to terminate, suspend or modify the terms of the Plan at any time, to the extent permitted by the Plan. Participant agrees to be bound by such termination, suspension or modification regardless of whether notice is given to Participant of such event. The Company reserves the right to revise the Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Restricted Stock Units. Further, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to execute any additional agreements or undertakings that may be necessary to accomplish the foregoing. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by Participant and a duly authorized officer of the Company.

22. Waiver . Participant acknowledges that a waiver by the Company of breach of any provision of the Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach by Participant or any other Participant.

23. Governing Law and Venue . This Award Agreement will be governed by the laws of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under the Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California , and agree that such litigation will be conducted in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Restricted Stock Unit Award is made and/or to be performed.

24. Language . If Participant has received the Award Agreement or any other document related to the Restricted Stock Units or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

25. Captions . Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of the Award Agreement.

26. Appendix . Notwithstanding any provision of the Award Agreement, the Restricted Stock Unit Award shall be subject to any additional terms and conditions for Participant’s country set forth in the Appendix. Moreover, if Participant relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant to the extent the Company determines that the application of such terms and conditions to Participant is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of the Award Agreement.

27. Insider Trading . By participating in the Plan, Participant agrees to comply with the Company’s policy on insider trading (to the extent that it is applicable to Participant). Further, Participant acknowledges that Participant’s country of residence may also have laws or regulations governing insider trading and that such laws or

-9-

regulations may impose additional restrictions on Participant’s ability to participate in the Plan ( e.g. , acquiring or selling Shares) and that Participant is solely responsible for complying with such laws or regulations.

28. Entire Agreement . The Plan is incorporated herein by reference. The Plan and the Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. Participant expressly warrants that he or she is not accepting the Award Agreement in reliance on any promises, representations, or inducements other than those contained herein.

-10-

EXHIBIT B

APPENDIX TO RESTRICTED STOCK UNIT AGREEMENT

Terms and Conditions

This Appendix includes additional terms and conditions that govern Participant’s participation in the Plan if Participant works and/or resides in one of the countries listed below. If Participant is a citizen or resident of a country other than the one in which Participant is currently working (or is considered as such for local law purposes), or Participant transfers employment or residence to a different country after the Restricted Stock Units are granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will apply to Participant.

Capitalized terms used but not defined in this Appendix shall have the same meanings assigned to them in the Plan, the Notice of Grant or the Restricted Stock Unit Terms.

Notifications

This Appendix also includes information regarding certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of February 2014. Such laws are often complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information noted herein as the only source of information relating to the consequences of participation in the Plan because the information may be out-of-date at the time Restricted Stock Units vest or Participant sells any Shares acquired upon vesting.

If Participant is a citizen or resident of a country other than the one in which Participant is currently working (or is considered as such for local law purposes), or if Participant relocates to a different country after the Restricted Stock Units are granted, the notifications contained in this Appendix may not be applicable to Participant in the same manner.

-11-

ARGENTINA

Terms and Conditions

Labor Law Acknowledgement . This provision supplements Section 10 of the Restricted Stock Unit Terms:

In accepting the grant of Restricted Stock Units, Participant acknowledges and agrees that the grant of Restricted Stock Units is made by the Company (not the Employer) in its sole discretion and that the value of the Restricted Stock Units or any Shares acquired under the Plan shall not constitute salary or wages for any purpose under Argentine labor law, including, but not limited to, the calculation of (i) any labor benefits including, without limitation, vacation pay, thirteenth salary, compensation in lieu of notice, annual bonus, disability, and leave of absence payments, etc., or (ii) any termination or severance indemnities or similar payments.

If, notwithstanding the foregoing, any benefits under the Plan are considered as salary or wages for any purpose under Argentine labor law, Participant acknowledges and agrees that such benefits shall not accrue more frequently than on each vesting date.

Notifications

Securities Law Notice . Neither the Restricted Stock Units nor the underlying Shares are publicly offered or listed on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmental authority.

Exchange Control Information . Following the sale of Shares and/or the receipt of dividends, Participant may be subject to certain restrictions in bringing such funds back into Argentina. The Argentine bank handling the transaction may request certain documentation in connection with the request to transfer such proceeds into Argentina ( e.g. , evidence of the sale, etc.) and, under certain circumstances, may require that 30% of the amount transferred into Argentina be placed in a non-interest bearing dollar deposit account for a holding period of 365 days.

Tax Reporting Obligation . Shares acquired under the Plan and held by the Participant on December 31st of each year must be reported on the Participant’s annual tax return for that year.

AUSTRALIA

Notifications

-12-

BELGIUM

Foreign Asset and Account Reporting . If Participant is a Belgian resident, Participant will be required to report any securities ( e.g. , shares of Common Stock) or bank accounts held outside of Belgium on his or her annual tax return.

BRAZIL

Terms and Conditions

Compliance with Law . Participant must comply with applicable Brazilian laws and is responsible for paying any and all applicable Tax-Related Items associated with Participant’s participation in the Plan.

Notifications

Foreign Asset Reporting . A Brazilian resident is required to submit annually a declaration of assets and rights (including Shares acquired under the Plan) held outside of Brazil if the aggregate value of such assets exceeds a threshold that is established annually by the Central Bank. Participant should consult with his or her personal legal advisor to determine whether he or she will be subject to this reporting requirement.

CANADA

Terms and Conditions

Form of Settlement . Notwithstanding any discretion contained in the Plan or anything to the contrary in the Award Agreement, the Restricted Stock Units are payable in Shares only.

Vesting Schedule and Termination Period . The following provision replaces the second paragraph of Section 3 of the Restricted Stock Unit Terms:

For purposes of the Restricted Stock Units, Participant’s status as a Service Provider will be considered terminated on the last day on which the Participant is actively employed by the Employer, and shall not include or be extended by any period following such day during which Participant is in receipt of or eligible to receive any notice of termination, pay in lieu of notice of termination, severance pay or any other payments or damages, whether arising under statute, contract or at common law.

Notifications

Securities Law Notice . The sale of Shares acquired through the Plan should take place through the Designated Broker outside of Canada through the facilities of a stock exchange on which the Shares are listed ( i.e ., the New York Stock Exchange).

Foreign Assets Reporting . Foreign property must be reported on form T1135 (Foreign Income Verification Statement) if the total fair market value of such foreign property exceeds C$100,000 at any time during the year. Foreign property includes any Shares acquired under the Plan and may also include unvested portions of the Restricted Stock Units. The form T1135 is required for every year during which Participant’s foreign property exceeds C$100,000 and must be filed at the same time Participant files his or her annual tax return. Participant should speak with his or her personal tax advisor to determine the scope of foreign property that must be considered for purposes of this requirement .

-13-

CHILE

Notifications

Securities Law Information . Neither the Company nor the Shares are registered with the Chilean Registry of Securities or under the control of the Chilean Superintendence of Securities.

Exchange Control and Tax Information . Participant is not required to repatriate proceeds obtained from the sale of Shares or from dividends to Chile; however, if Participant decides to repatriate proceeds from the sale of Shares and/or dividends and the amount of the proceeds to be repatriated exceeds US$10,000, such repatriation must be effected through the Formal Exchange Market ( i.e ., a commercial bank or registered foreign exchange office). However, if Participant does not repatriate the funds and uses such funds for the payment of other obligations contemplated under a different Chapter of the Foreign Exchange Regulations, Participant must sign Annex 1 of the Manual of Chapter XII of the Foreign Exchange Regulations and file it directly with the Central Bank of Chile within the first 10 days of the month immediately following the transaction.

Further, if the value of Participant’s aggregate investments held outside of Chile exceeds US$5,000,000 (including the value of Shares acquired under the Plan), Participant must report the status of such investments annually to the Central Bank using Annex 3.1 of Chapter XII of the Foreign Exchange Regulations.

Finally, if Participant holds Shares acquired under the Plan outside of Chile, Participant must inform the Chilean Internal Revenue Service (the “CIRS”) of the details of his or her investment in the Shares by Filing Tax Form 1851 “Annual Sworn Statement Regarding Investments Held Abroad”. Further, if Participant wishes to receive credit against his or her Chilean income taxes for any taxes paid abroad, Participant must report the payment of taxes abroad to the CIRS by filing Tax Form 1853 “Annual Sworn Statement Regarding Credits for Taxes Paid Abroad”. These statements must be submitted electronically through the CIRS website before March 15 of each year: (http://www.sii.cl).

CHINA

Terms and Conditions

Vesting Schedule . The following provision supplements Section 3 of the Restricted Stock Unit Terms ( Vesting Schedule ):

Notwithstanding anything to the contrary in the Award Agreement, the Restricted Stock Units shall not vest and no Shares will be issued to Participant unless and until all necessary exchange control or other approvals with respect to the Restricted Stock Units under the Plan have been obtained from SAFE or its local counterpart (“SAFE Approval”). In the event that SAFE Approval has not been obtained prior to any date(s) on which the Restricted Stock Units are scheduled to vest in accordance with the Vesting Schedule set forth in the Notice of Grant, the vesting date for any such Restricted Stock Units shall instead be the seventh day of the month following the month in which SAFE Approval is obtained (the “Actual Vesting Date”). Notwithstanding the foregoing, if Participant’s status as a Service Provider is terminated prior to the Actual Vesting Date, Participant shall not be entitled to vest in any portion of the Restricted Stock Units and the

-14-

Restricted Stock Units shall be forfeited without any liability to the Company or any Parent or Subsidiary of the Company.

Immediate Sale Restriction . Due to exchange control laws in the PRC, Participant understands and agrees that the Company may require that any Shares acquired upon the vesting of the Restricted Stock Units be immediately sold. If the Company, in its discretion, does not exercise its right to require the automatic sale of Shares issuable upon vesting of the Restricted Stock Units, as described in the preceding sentence, Participant understands and agrees that any Shares acquired by Participant under the Plan must be sold no later than ninety (90) days after termination of Participant’s status as a Service Provider, or within any other such time frame as may be permitted by the Company or required by SAFE. Participant understands that any Shares acquired by Participant under the Plan that have not been sold within ninety (90) day of the termination of Participant’s status as a Service Provider will be automatically sold by the Designated Broker at the Company’s direction pursuant to this authorization by Participant.

Participant agrees that the Company is authorized to instruct the Designated Broker to assist with the mandatory sale of such Shares (on Participant’s behalf pursuant to this authorization), and Participant expressly authorizes the Designated Broker to complete the sale of such Shares. Participant also agrees to sign any agreements, forms and/or consents that may be reasonably requested by the Company (or the Designated Broker) to effectuate the sale of the Shares (including, without limitation, as to the transfers of the proceeds and other exchange control matters noted below) and shall otherwise cooperate with the Company with respect to such matters, provided that Participant shall not be permitted to exercise any influence over how, when or whether the sales occur. Participant acknowledges that the Designated Broker is under no obligation to arrange for the sale of the Shares at any particular price. Due to fluctuations in the Share price and/or applicable exchange rates between the date the Restricted Stock Units vest and (if later) the date on which the Shares are sold, the amount of proceeds ultimately distributed to Participant may be more or less than the market value of the Shares on the vesting date (which is the amount relevant to determining Participant’s Tax-Related Items liability). Participant agrees to bear any currency fluctuation risk between the time the Shares are sold and the time the proceeds are converted into local currency and distributed to Participant.

Upon the sale of the Shares, the Company agrees to pay the cash proceeds from the sale (less any applicable Tax-Related Items, brokerage fees or commissions) to Participant in accordance with applicable exchange control laws and regulations including, but not limited to, the restrictions set forth in this Appendix for China below under “Exchange Control Restrictions.”

Exchange Control Restrictions . By accepting the Restricted Stock Units, Participant understands and agrees that that he or she will be required to immediately repatriate to the PRC all proceeds due to Participant under the Plan, including any Share sale proceeds. Participant understands that such repatriation will need to be effected through a special exchange control account established by the Company or a Subsidiary of the Company in the PRC, and Participant hereby consents and agrees that the proceeds may be transferred to such special account prior to being delivered to Participant.

-15-

currency fluctuation risk between the time the Shares are sold and the time the proceeds are converted into local currency and distributed to Participant. Participant further agrees to comply with any other requirements that may be imposed by the Company in the future to facilitate compliance with PRC exchange control requirements.

FRANCE

Term and Conditions

Language Consent . By accepting the Restricted Stock Units, Participant confirms having read and understood the documents relating to this grant (the Plan, the Award Agreement and the Appendix) which were provided in English language. Participant accepts the terms of these documents accordingly.

Notifications

Exchange Control Information . If Participant maintains a foreign bank account, Participant is required to report such account to the French tax authorities on his or her annual tax return.

GERMANY

Notifications

HONG KONG

Terms and Conditions

Form of Settlement . Notwithstanding any discretion contained in the Plan or anything to the contrary in the Award Agreement, the Restricted Stock Units are payable in Shares only.

Sale of Shares . Participant agrees that, in the event that any Restricted Stock Units vest and Shares are issued prior to the six-month anniversary of the Date of Grant, Participant will not sell any Shares acquired upon such vesting prior to the six-month anniversary of the Date of Grant.

Notifications

Securities Law Notice . WARNING: The Restricted Stock Units and any Shares acquired upon vesting of the Restricted Stock Units do not constitute a public offering of securities under Hong Kong law and are available only to eligible Service Providers of the Company or a Parent or Subsidiary of the Company. The Award Agreement, including the Appendix, the Plan and any other incidental communication materials

-16-

distributed to Participant in connection with the Restricted Stock Units (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong, (ii) have not been reviewed by any regulatory authority in Hong Kong, and (iii) are intended only for the personal use of each eligible Service Provider of the Company or a Parent or Subsidiary of the Company and may not be distributed to any other person. If Participant has any questions regarding the contents of the Award Agreement, including this Appendix, the Plan or any other incidental communication materials distributed to Participant in connection with the Restricted Stock Units, Participant should obtain independent professional advice.

INDIA

Terms and Conditions

Form of Settlement . Notwithstanding any discretion contained in the Plan or anything to the contrary in the Award Agreement, the Restricted Stock Units are payable in Shares only.

Notifications

Exchange Control Information . Proceeds from the sale of Shares must be repatriated to India within ninety (90) days after receipt. Funds from the receipt of any dividends paid in relation to such shares must be repatriated to India within 180 days of receipt. Participant should maintain any foreign inward remittance certificate received from the bank where the foreign currency is deposited in the event that the Reserve Bank of India or the Employer requests proof of repatriation. It is Participant’s responsibility to comply with applicable exchange control laws in India.

Foreign Assets Reporting . Foreign bank accounts and any foreign financial assets (including Shares held outside India) must be declared by Indian taxpayers in their annual tax return. Participant is responsible for complying with this reporting obligation to the extent it applies to Participant and should confer with Participant’s personal legal advisor in this regard.

ISRAEL

Terms and Conditions

Nature of Award . By accepting the Restricted Stock Units, Participant understands and agrees that the Restricted Stock Units are offered subject to and in accordance with the Sub-Plan for Israeli Taxpayers to the Plan (the “Israeli Subplan”) and the Restricted Stock Unit Award is intended to be a 102 Capital Gains Track Grant (as defined in the Israeli Subplan). Notwithstanding the foregoing, the Company does not undertake to maintain the qualified status of the Restricted Stock Units and Participant acknowledges that he or she will not be entitled to damages of any nature whatsoever if the Restricted Stock Unit Award becomes disqualified and no longer qualifies as a 102 Capital Gains Track Grant. In the event of any inconsistencies between the Israeli Subplan, the Award Agreement and/or the Plan, the terms of the Israeli Subplan will govern.

Further, to the extent requested by the Company or the Employer, Participant agrees to execute any letter or other agreement in connection with the grant of the Restricted Stock Units or any future Restricted Stock Units granted under the Israeli Subplan. If Participant fails to comply with such request, the Restricted Stock Unit Award may not qualify as a 102 Capital Gains Track Grant.

-17-

Trust Arrangement . Participant acknowledges and agrees that any Shares issued upon vesting of the Restricted Stock Units will be subject to a supervisory trust arrangement with the Company’s designated trustee in Israel, ESOP Management and Trust Company Ltd. (the “Trustee”) in accordance with the terms of the trust agreement between the Company and the Trustee. Participant further agrees that such Shares will be subject to the Required Holding Period (as defined in the Israeli Subplan), which shall be 24 months from the Date of Grant. The Company may, in its sole discretion, replace the Trustee from time to time and instruct the transfer of all Restricted Stock Units and Shares held and/or administered by such Trustee at such time to its successor and the provisions of this Award Agreement shall apply to the new Trustee mutatis mutandis .

Restriction on Sale . Participant acknowledges that any Shares underlying the Restricted Stock Units may not be sold prior to the expiration of the Required Holding Period in order to qualify for tax treatment under the 102 Capital Gains Track. Accordingly, Participant shall not dispose of (or request the Trustee to dispose of) any such Shares prior to the expiration of the Required Holding Period, other than as permitted by applicable law. For purposes of this Appendix for Israel, “dispose” shall mean any sale, transfer or other disposal of the Shares by Participant (including by means of an instruction by Participant to the Designated Broker) or the Trustee, including a release of such Shares from the Trustee to Participant.

Tax-Related Items . The following provision supplements Section 7 of the Restricted Stock Unit Terms ( Taxes ):

The fair market value of the Restricted Stock Units on the date of grant (as computed in accordance with the provisions relating to the 102 Capital Gains Track) shall be subject to taxation in Israel in accordance with ordinary income tax principles. Moreover, in the event that Participant disposes of any Shares underlying the Restricted Stock Units prior to the expiration of the Required Holding Period, Participant acknowledges and agrees that any additional gains from the sale of such Shares will not qualify for tax treatment under the 102 Capital Gains Track and will be subject to taxation in Israel in accordance with ordinary income tax principles. Further, Participant acknowledges and agrees that he or she will be liable for the Employer’s component of payments to the Israeli National Insurance Institute (to the extent such payments by the Employer are required).

ITALY

Terms and Conditions

Data Privacy . The following provision replaces Section 12 of the Restricted Stock Unit Terms ( Data Privacy ):

Participant understands that the Company and any Parent or Subsidiary of the Company may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any Parent or Subsidiary, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in Participant’s favor (“Data”), and that the Company and the Employer will process said data for the exclusive purpose of managing and administering Participant’s participation the Plan and complying with applicable laws, regulations and EU Community legislation.

-18-

The updated list of Processors and of the subjects to which Data are communicated will remain available upon request from the Employer. Furthermore, Data may be transferred to banks, other financial institutions or brokers involved in the management and administration of the Plan. Participant understands that Data may also be transferred to the independent registered public accounting firm engaged by the Company, and also to the legitimate addressees under applicable laws. Participant further understands that the Company or any Parent or Subsidiary of the Company will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of Participant’s participation in the Plan, and that the Company or any Parent or Subsidiary of the Company may each further transfer Data to third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Data to the Designated Broker or other third party with whom Participant may elect to deposit any Shares acquired under the Plan or any proceeds from the sale of such Shares. Such recipients may receive, possess, use, retain and transfer Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan. Participant understands that these recipients may be acting as Controllers, Processors or persons in charge of processing, as the case may be, according to applicable privacy laws, and that they may be located in or outside the European Economic Area, such as in the U.S. or elsewhere, in countries that do not provide an adequate level of data protection as intended under Italian privacy law.

-19-

1 ( Grant ); Section 2 ( Company Obligation to Pay ); Section 3 ( Vesting Schedule ); Section 5 ( Forfeiture upon Termination of Status as a Service Provider ); Section 7 ( Taxes ); Section 9 ( No Guarantee of Continued Service ); Section 10 ( Nature of Grant ); Section 20 ( Electronic Delivery and Acceptance ); Section 22 ( Modifications to the Award Agreement ); Section 24 ( Governing Law and Venue ); Section 25 ( Language ); Section 27 ( Appendix ); and the Data Privacy provision above in this Appendix for Italy.

Notifications

JAPAN

Notifications

KOREA

Notifications

Exchange Control Information . If Participant realizes US$500,000 or more from the sale of Shares in a single transaction, Korean exchange laws require Participant to repatriate the proceeds to Korea within eighteen (18) months of the sale.

MALAYSIA

Notifications

Director Notification Obligation . If Participant is director of a Subsidiary or affiliate in Malaysia, Participant is subject to certain notification requirements under the Malaysian Companies Act. Among these requirements is an obligation to notify such Malaysian Subsidiary or affiliate in writing when Participant receives or disposes of an interest (e.g., the Restricted Stock Units or Shares) in the Company or any related company. Such notifications must be made within 14 days of receiving or disposing of any interest in the Company or any related company.

-20-

MEXICO

Terms and Conditions

The following provisions supplement the Section 9 ( No Guarantee of Continued Service ) and Section 10 ( Nature of Grant ) of the Restricted Stock Unit Terms:

Modification . By accepting the Restricted Stock Units, Participant understands and agrees that any modification of the Plan or the Award Agreement or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s status as a Service Provider.

Policy Statement . The Restricted Stock Unit Award the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

The Company, with offices at 3 West Plumeria Drive, San Jose, CA 95134, U.S.A., is solely responsible for the administration of the Plan, and participation in the Plan and the grant of the Restricted Stock Units does not, in any way, establish an employment relationship between Participant and the Company since Participant is participating in the Plan on a wholly-commercial basis. Based on the foregoing, Participant expressly acknowledges that the Plan and the benefits that Participant may derive from participation in the Plan do not establish any rights between Participant and the Company and do not form part of any service contract between Participant and the Company or any Parent or Subsidiary of the Company. Further, Participant agrees that any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Participant’s employment or service contract, if applicable.

Plan Document Acknowledgment . By accepting the Restricted Stock Units, Participant acknowledges that the he or she has received copies of the Plan, has reviewed the Plan and the Award Agreement in their entirety, and fully understands and accepts all provisions of the Plan and the Award Agreement.

In addition, Participant further acknowledges that he or she has read and specifically and expressly approves the terms and conditions contained in Section 9 ( No Guarantee of Continued Service ) and Section 10 ( Nature of Grant ) of the Restricted Stock Unit Terms, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly-discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company, the Employer and any Parent or Subsidiary of the Company are not responsible for any decrease in the value of the Shares acquired upon settlement of the Restricted Stock Units.

Spanish Translation

Las siguientes consideraciones complementan la sección 9 (No Garantía de Continuación de Servicios) y la sección 10 (Naturaleza del Otorgamiento) del Acuerdo de Otorgamiento de Acciones Restringidas:

Modificación: Al aceptar la Opción, el Participante está de acuerdo y reconoce que cualquier modificación del Plan o del Acuerdo de Otorgamiento de Acciones o su terminación, no constituirá un cambio o disminución de los términos y condiciones del estatus del Participante como Proveedor o Prestador de Servicios.

-21-

Declaración de Política: El otorgamiento de las Unidades de Acciones Restringidas que la Compañía realiza bajo este Plan es unilateral y discrecional y, por lo tanto, la Compañía se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier momento sin responsabilidad alguna.

La Compañía, con oficinas en 3 West Plumeria Drive, San José, California, 95134, E.E.U.U., es la única responsable de la administración del Plan y de la participación en el mismo, y el otorgamiento de la Opción no establece de forma alguna, una relación de trabajo entre el Participante y la Compañía, toda vez que su participación en el Plan es completamente comercial. De acuerdo a lo anterior, el Participante expresamente reconoce que el Plan y los beneficios derivados de su participación en el mismo no constituyen ni generan derecho alguno entre el Participante y la Compañía, ni tampoco formarán parte de ningún contrato de servicios entre el Participante y la Compañía o cualquier matriz o Subsidiaria. Asimismo, el Participante acuerda que cualquier modificación al Plan o a su terminación no generarán un cambio o impedimento en los términos y condiciones derivados de su contrato de servicios.

Reconocimiento del Documento del Plan. Al aceptar las Unidades de Acciones Restringidas, usted reconoce que ha recibido copias del Plan, que ha revisado las mismas al igual que la totalidad del Acuerdo de Otorgamiento de Acciones y que ha entendido y aceptado completamente todas las disposiciones contenidas en el Plan y en el Acuerdo de Otorgamiento de Acciones.

Adicionalmente, el Participante reconoce que ha leído, y que aprueba específica y expresamente los términos y condiciones contenidos en la sección 9 (No Garantía de Continuación de Servicios) y la sección 10 (Naturaleza del Otorgamiento) del Acuerdo de Otorgamiento de Acciones, en el cual se encuentra claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Compañía de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Compañía, cualquier matriz y/o cualquier Subsidiaria no son responsables por cualquier disminución en el valor de las Acciones adquiridas a través del conferimiento de la Opción.

Finalmente, el Participante declara que no se reserva acción o derecho alguno para interponer una demanda en contra de la Compañía por compensación, daño o perjuicio alguno como resultado de la participación en el Plan y, en consecuencia otorga el más amplio finiquito en favor de la Compañía, cualquier matriz y/o Subsidiaria con respecto a cualquier demanda que pudiera originarse en virtud de los Plan.

NETHERLANDS

Notifications

-22-

SAUDI ARABIA

Notifications

Securities Law Notice . The Company currently does not allow grants to or vestings of Restricted Stock units by Participants who are present in Saudi Arabia. The Company reserves the right to allow grants and vestings in the future should circumstances change.

SINGAPORE

Notifications

Securities Law Notice . The grant of the Restricted Stock Units is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying Shares being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the Restricted Stock Units are subject to section 257 of the SFA and that Participant will not be able to make any subsequent sale of the Shares in Singapore, or any offer or subsequent sale of the Shares in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.

Director Notification Obligation . If Participant is a director, associate director, or shadow director of a Singapore Subsidiary, Participant is subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singaporean Subsidiary in writing when Participant receives an interest ( e.g ., the Restricted Stock Units or Shares) in the Company or any related company. In addition, Participant must notify the Singapore Subsidiary when Participant sells Shares of the Company or any related company (including when Participant sells Shares acquired under the Plan). These notifications must be made within two business days of acquiring or disposing of any interest in the Company or any related company. In addition, a notification must be made of Participant’s interests in the Company or any related company within two business days of becoming a director.

SPAIN

Terms and Conditions

Nature of Grant . This provision supplements Section 10 of the Restricted Stock Unit Terms ( Nature of Grant ):

By accepting the Restricted Stock Units, Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan.

Participant understands that the Company has unilaterally, gratuitously and discretionally decided to grant Restricted Stock Units under the Plan to individuals who may be Service Providers of the Company or its Parent or Subsidiaries throughout the world. This decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or any Parent or Subsidiary of the Company other than as expressly set forth in the Award Agreement. Consequently, Participant understands that the Restricted Stock Units are granted on the assumption and condition that the Restricted Stock Units and any Shares issued upon vesting of the Restricted Stock Units are not a part of any employment or service contract (either with the Company or any Parent or Subsidiary of the Company) and shall not be considered

-23-

a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever.

Further, Participant understands and agrees that, unless otherwise expressly provided for by the Company or set forth in the Plan or the Award Agreement, the Restricted Stock Units will be cancelled without entitlement to any Shares underlying the Restricted Stock Units if Participant’s status as a Service Provider is terminated for any reason, including, but not limited to: resignation, retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, or under Article 10.3 of Royal Decree 1382/1985. The Company, in its sole discretion, shall determine the date when Participant’s status as a Service Provider has terminated for purposes of the Restricted Stock Units.

Notifications

Securities Law Notice . The Restricted Stock Units described in the Award Agreement do not qualify under Spanish regulations as a security. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of the Restricted Stock Units. The Award Agreement has not been, nor will it be, registered with the Comisión Nacional del Mercado de Valores , and does not constitute a public offering prospectus.

Foreign Property Reporting . To the extent that Participant holds rights or assets ( e.g. , Shares, cash, etc.) in a bank or brokerage account outside of Spain with a value in excess of €50,000 per type of right or asset as of December 31 each year, Participant is required to report information on such rights and assets on his or her tax return for such year. Shares acquired under the Plan constitute securities for purposes of this requirement, but the unvested Restricted Stock Units will not be considered an asset or right for purposes of this requirement.

-24-

Shares must also be declared on Form D-6 filed with the DGCI in January, unless the sale proceeds exceed the applicable threshold (currently €1,502,530), in which case, the filing is due within one month after the sale.

SWEDEN

There are no country specific provisions.

TAIWAN

Notifications

Exchange Control Information . Participant may acquire and remit foreign currency (including funds to purchase or proceeds from the sale of Shares) into and out of Taiwan up to US$5 million per year without submission of supporting documentation. If the transaction amount is TWD$500,000 or more in a single transaction, Participant is required to submit a foreign exchange transaction form and if the transaction amount is US$500,000 or more in a single transaction, Participant may be required to provide supporting documentation to the satisfaction of the remitting bank. Participant is personally responsible for complying with exchange control restrictions in Taiwan.

THAILAND

Notifications

Exchange Control Information . If Participant realizes US$50,000 or more in a single transaction from the sale of Shares or the payment of dividends, Participant is required to repatriate the cash proceeds to Thailand immediately following the receipt of such proceeds and to then either convert such repatriated proceeds into Thai Baht or deposit the proceeds into a foreign currency account opened with any commercial bank in Thailand within 360 days of repatriation. Further, for repatriated amounts of US$50,000 or more, Participant must specifically report the inward remittance to the Bank of Thailand on a Foreign Exchange Transaction Form. Participant is personally responsible for complying with exchange control restrictions in Thailand.

TURKEY

Notifications

Securities Law Notice . The sale of Shares acquired through the Plan should take place outside of Turkey through the facilities of a stock exchange on which the Shares are listed ( i.e ., the New York Stock Exchange). Turkish residents are permitted to sell securities traded on exchanges outside of Turkey ( e.g. , the New York Stock Exchange) only through a financial intermediary licensed in Turkey. Therefore, Participant may be required to appoint a Turkish financial intermediary to assist with the sale of Shares.

UNITED ARAB EMIRATES

There are no country-specific provisions.

-25-

UNITED KINGDOM

Terms and Conditions

Form of Settlement . Notwithstanding any discretion contained in the Plan or anything to the contrary in the Award Agreement, the Restricted Stock Units are payable in Shares only.

Joint Election for Transfer of Liability for Employer National Insurance Contributions . The following provision supplements Section 7 of the Restricted Stock Unit Terms ( Taxes ):

As a condition of participation in the Plan and the vesting of the Restricted Stock Units, Participant agrees to accept any liability for secondary Class 1 National Insurance contributions (“NICs”) that may be payable by the Company or the Employer in connection with the Restricted Stock Units and any event giving rise to Tax-Related Items (the “Employer NICs”). The Employer NICs may be collected by the Company or the Employer using any of the methods described in the Plan or the Award Agreement.

Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer (a “Joint Election”), the form of such Joint Election being formally approved by Her Majesty’s Revenue and Customs (“HMRC”), and any other consent or elections required to accomplish the transfer of the Employer NICs liability to Participant. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of Participant’s Joint Election. If Participant does not complete the Joint Election prior to vesting of the Restricted Stock Units, or if approval of the Joint Election is withdrawn by HMRC and a new Joint Election is not entered into, the Restricted Stock Units shall become null and void and will not vest, without any liability to the Company, the Employer or any Parent or Subsidiary of the Company.

Tax Withholding . The following provision supplements Section 7 of the Restricted Stock Unit Terms ( Taxes ):

Unless otherwise determined by the Company in its sole discretion, notwithstanding any discretion contained in the Plan or anything to the contrary in the Award Agreement, Participant’s obligations for Tax-Related Items shall not be satisfied by withholding Shares otherwise issuable upon vesting of the Restricted Stock Units.

Further, Participant agrees that the Company and/or the Employer may calculate the income tax to be withheld and accounted for by reference to the maximum applicable rates, without prejudice to any right that Participant may have to recover any overpayment from HMRC.

-26-

the self-assessment regime and for reimbursing the Company and/or the Employer (as appropriate) for the value of any employee NICs due on this additional benefit, which may be recovered from Participant by the Company or the Employer at any time thereafter by any of the means referred to in the Plan or the Award Agreement.

-27-

Exhibit 31.1

CERTIFICATION

I, Lee Chen, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of A10 Networks, Inc. for the quarter ended June 30, 2014;


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(s) 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)) 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)	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


(c)	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(s) 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 functions):


(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:	August 4, 2014	By: /s/ Lee Chen
		Lee Chen
		President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Greg Straughn, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of A10 Networks, Inc. for the quarter ended June 30, 2014;


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(s) 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)) 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)	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


(c)	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(s) 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 functions):

(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:	August 4, 2014	By: /s/ Greg Straughn
		Greg Straughn
		Chief Financial 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 Quarterly Report on Form 10-Q of A10 Networks, Inc. (the “Company”) for the period ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lee Chen, President and Chief Executive 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, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	August 4, 2014	By: /s/ Lee Chen
		Lee Chen
		President and Chief Executive Officer

Exhibit 32.2

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 Quarterly Report on Form 10-Q of A10 Networks, Inc. (the “Company”) for the period ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg Straughn, Chief 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, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	August 4, 2014	By: /s/ Greg Straughn
		Greg Straughn
		Chief Financial Officer