UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Securities Exchange Act of 1934

Filed by the Registrant  x                              Filed by a Party other than the Registrant  ¨

Check the appropriate box:

F5 Networks, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on March 15, 201213, 2013

TO SHAREHOLDERS OF F5 NETWORKS, INC.:

The annual meeting of shareholders of F5 Networks, Inc. (the “Company”) for fiscal year 20112012 will be held on March 15, 201213, 2013 at 11:00 a.m. Pacific Time at F5 Networks, Inc., 351 Elliott Avenue West, Seattle, Washington 98119 for the following purposes, as more fully described in the accompanying Proxy Statement:

1. to elect two Class I directors to hold office until the annual meeting of shareholders for fiscal year 2014, three Class II directors to hold office until the annual meeting of shareholders for fiscal year 2015, and one Class IIII director to hold office until the annual meeting of shareholders for fiscal year 20142013 and until his successor istheir successors are elected and qualified;

2. to ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2012;2013;

3. to conduct an advisory vote on compensation of our named executive officers;

4. to conductadopt and approve an advisory vote on one shareholder proposal if properly presented at the meeting;amendment to our Second Amended and Restated Articles of Incorporation to declassify our Board of Directors and provide for an annual election of directors; and

5. to transact such other business as may properly come before the meeting and any adjournments or postponements thereof.

Only shareholders of record at the close of business on January 9, 20127, 2013 are entitled to notice of, and to vote at, the annual meeting.

By Order of the Board of Directors,

JEFFREY A. CHRISTIANSON

Secretary

Seattle, Washington

January     25, 2012, 2013

Important Notice Regarding the Availability of Proxy Materials for

the Company’s Annual Meeting of Shareholders on March 15, 2012.13, 2013.

The F5 Networks, Inc. Proxy Statement and 20112012 Annual Report to Shareholders are available online at

www.proxyvote.com and www.f5.com/about/investor-relations/corporate-governance.

Your cooperation is appreciated since a majority of the shares of Common Stock must be represented, either in person or by proxy, to constitute a quorum for the conduct of business.

Please note that brokers may not vote your shares on the election of directors or on the advisory votesvote on compensation or the shareholder proposal to amend our articles of incorporation in the absence of your specific instructions as to how to vote. Please vote your proxy so your vote can be counted.

TABLE OF CONTENTS

F5 NETWORKS, INC.

401 Elliott Avenue West

Seattle, Washington 98119

PROXY STATEMENT

FISCAL YEAR 20112012 ANNUAL MEETING OF SHAREHOLDERS

F5 Networks, Inc. (the “Company”) is furnishing this Proxy Statement and the enclosed proxy in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the annual meeting of shareholders to be held on March 15, 2012,13, 2013, at 11:00 a.m., Pacific Time, and at any adjournments thereof (the “Annual Meeting”). As used herein, “we,” “us,” “our,” “F5” or the “Company” refers to F5 Networks, Inc., a Washington corporation. These materials are being mailed to shareholders on or about January     25, 2012., 2013. The Company’s principal executive offices are located at 401 Elliott Avenue West, Seattle, Washington 98119. The Company’s telephone number at that location is 206-272-5555.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THESE PROXY MATERIALS

Why am I receiving these materials?

You are receiving these materials because you are a shareholder of the Company as of the close of business on January 9, 20127, 2013 (the “Record Date”) and are entitled to receive notice of the 2011 Annual Meeting and to vote on matters that will be presented at the meeting. This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote, and information about voting procedures.

Where and when is the Annual Meeting being held?

The Annual Meeting is being held on March 15, 2012,13, 2013, at 11:00 a.m., Pacific Time, at the offices of F5 Networks, Inc., 351 Elliott Avenue West, Seattle, Washington 98119.

What matters will be voted on at the Annual Meeting?

The following matters will be voted on at the Annual Meeting:

How does the Board of Directors recommend that I vote?

The Board of Directors recommends that you vote:

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Will there be any other items of business on the agenda?

The Company is not aware, as of the date of this Proxy Statement, of any matters to be voted upon at the Annual Meeting other than those stated in this Proxy Statement and the accompanying Notice of Annual Meeting of Shareholders. If any other items of business or other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named on the proxy card with respect to those items of business or other matters. The persons named on the proxy card intend to vote the proxy in accordance with their best judgment.

Who is entitled to vote at the Annual Meeting?

Only holders of our common stock, no par value (the “Common Stock”) at the close of business on the Record Date may vote at the Annual Meeting. We refer to the holders of Common Stock as “shareholders” throughout this proxy statement. Each shareholder is entitled to one vote for each share of Common Stock held as of the Record Date.

What constitutes a quorum, and why is a quorum required?

We need a quorum of shares of Common Stock eligible to vote to conduct business at our Annual Meeting. A quorum exists when at least a majority of the outstanding shares entitled to vote at the close of business on the Record Date are represented at the Annual Meeting either in person or by proxy. As of the close of business on the Record Date, we had 79,169,452[78,575,755] shares of Common Stock outstanding and entitled to vote at the Annual Meeting, meaning that 39,584,727[39,287,878] shares of Common Stock must be represented in person or by proxy to have a quorum. Abstentions and broker non-votes (as described below) will also count towards the quorum requirement. Your shares will be counted toward the number needed for a quorum if you: (i) submit a valid proxy card or voting instruction form, (ii) give proper instructions over the telephone or on the Internet or, (iii) in the case of a shareholder of record, attend the Annual Meeting in person.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

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How do I vote?

Shareholders of Record. If you are a shareholder of record, there are several ways for you to vote your shares:

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Voting by Telephone. You may vote by telephone by using the toll-free number listed on your proxy card.

Beneficial Owners. You may vote by the method explained on the proxy card or the information you receive from the broker, nominee or other record holder.

Can I revoke or change my vote after I submit my proxy?

Yes. You may revoke or change your vote after submitting your proxy by one of the following procedures:

Please note that attendance alone at the Annual Meeting will not revoke a proxy; you must actually vote in person at the meeting.

What will happen if I do not vote my shares?

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What if I do submit my proxy but do not specify how my shares are to be voted?

If you are a shareholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:

What is the effect of an abstention or a “broker non-vote”?

Brokers or other nominees who hold shares of Common Stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A “broker non-vote” occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. If you abstain from voting on a proposal, or if a broker or nominee indicates it does not have discretionary authority to vote on a proposal, the shares will be counted for the purpose of determining if a quorum is present, but will not be included in the vote totals with respect to the proposal. Furthermore, any abstention or broker non-vote will have no effect on the proposals to be considered at the Annual Meeting since these actions do not represent votes cast by shareholders.

What is the vote required for each proposal?

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With respect to Proposal 1, you may vote FOR the nominee, AGAINST the nominee, or you may vote ABSTAIN as to the nominee. The nominee will be elected if he or she receives more FOR votes than AGAINST votes. Proxies may not be voted for more than threesix directors and shareholders may not cumulate votes in the election of directors.

With respect to Proposals 2, 3 and 4, you may vote FOR, AGAINST or ABSTAIN as to each proposal.

What happens if the Annual Meeting is adjourned or postponed?

Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted.

Who is making this proxy solicitation and paying for the costs of this proxy solicitation?

The Board of Directors of the Company is soliciting the proxies accompanying this Proxy Statement. The Company will pay all of the costs of this proxy solicitation. However, you will need to obtain your own Internet access if you choose to access the proxy materials and/or vote over the Internet. In addition to mail solicitation, officers, directors, and employees of the Company may solicit proxies personally or by telephone, without

receiving additional compensation. The Company has retained Advantage Proxy to assist with the solicitation of proxies in connection with the Annual Meeting. The Company will pay Advantage Proxy customary fees, which are expected to be $5,750 plus expenses. The Company, if requested, will pay brokers, banks, and other fiduciaries that hold shares of Common Stock for beneficial owners for their reasonable out-of-pocket expenses of forwarding these materials to shareholders.

How can I find the results of the Annual Meeting?

We intend to announce preliminary voting results at the Annual Meeting and publish final results on a Form 8-K within four business days of the 2011 Annual Meeting of Shareholders.Meeting. The Form 8-K will be available on our website atwww.f5.com under the “About F5 –— Investor Relations –— Corporate Governance –— Governance Documents –— View All SEC Filings” section.

BOARD OF DIRECTORS

The Board of Directors of the Company currently consists of seveneight directors divided into three classes. Currently, the Class I directors are Jonathan Chadwick, Michael Dreyer (who was appointed to the Board of Directors in August 2011)October 2012) and Karl D. Guelich;Sandra Bergeron (who was appointed to the Board of Directors in January 2013); the Class II directors are Deborah L. Bevier, Alan J. Higginson and John McAdam; and the Class III directors are A. Gary Ames and Scott Thompson. Mr. Guelich will be retiring fromStephen Smith (who was appointed to the Board as of the date of the Annual Meeting.Directors in January 2013). At the Annual Meeting, the shareholders will vote on the election of onetwo Class I directordirectors to serve for a three-year term until the annual meeting of shareholders for fiscal year 2014. The2014, three Class II directors will hold officeto serve until the Company’s annual meeting for fiscal year 20122015, and theone Class III directors will hold officedirector to serve until the Company’s annual meeting for fiscal year 2013. All directors will hold office until the annual meeting of shareholders at which their terms expire and the election and qualification of their successors.

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The Board of Directors has nominated Jonathan ChadwickMichael Dreyer and Sandra Bergeron for election to the Board of Directors as Class I directors, Deborah L. Bevier, Alan J. Higginson and John McAdam for election to the Board of Directors as Class II directors, and Stephen Smith for election to the Board of Directors as a Class IIII director, at the Annual Meeting. The nominee hasnominees have consented to serve as a directordirectors of the Company if elected. If thea nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for a substitute nominee as the Company may designate.

Director Independence

The Nasdaq MarketplaceListing Rules require that a majority of the Company’s directors be “independent,” as defined by Nasdaq MarketplaceListing Rule 5605(a)(2) and determined by the Board of Directors. The Board of Directors consults with the Company’s legal counsel to ensure that the Board of Directors’ determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent.” After a review of any relevant transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent registered public accounting firm, the Board of Directors has determined that the following directors and nominees are independent: A. Gary Ames, Sandra Bergeron, Deborah L. Bevier, Jonathan Chadwick, Karl D. Guelich,Michael Dreyer, Alan J. Higginson and Scott Thompson.Stephen Smith. John McAdam is not considered independent because he is the Company’s President and Chief Executive Officer.

Stock Ownership Guidelines for Directors

In October 2010, the Board of Directors adopted stock ownership guidelines for the Company’s directors and executive officers. Directors are required to own shares of Common Stock equal in value to 5 times the directors’ annual cash retainer. Directors are required to achieve this ownership level within three (3) years of joining the Board or, in the case of directors serving at the time the guidelines were adopted, within three (3) years of the date of adoption of these guidelines. Shares of Common Stock that count toward satisfaction of the guidelines include shares purchased on the open market, shares obtained through stock option exercises, shares obtained through grants of Restricted Stock Units, and shares beneficially owned in a trust, by a spouse and/or minor children. Shares owned by directors shall be valued at the greater of (i) the price at the time of acquisition/purchase or (ii) the current market value.

Nominees and Continuing Directors

The following individuals have been nominated for election to the Board of Directors or will continue to serve on the Board of Directors after the Annual Meeting:

John McAdam, age 60,61, has served as our President, Chief Executive Officer and a director since July 2000. Prior to joining us, Mr. McAdam served as General Manager of the Web server sales business at International Business Machines Corporation from September 1999 to July 2000. From January 1995 until August 1999, Mr. McAdam served as the President and Chief Operating Officer of Sequent Computer Systems, Inc., a manufacturer of high-end open systems, which was sold to International Business Machines Corporation in September 1999. Mr. McAdam serves as a director of Tableau Software, a privately-held company that provides business intelligence software. Mr. McAdam holds a B.S. in Computer Science from the University of Glasgow, Scotland.

Mr. McAdam has led the Company for over tentwelve years. Since his appointment as President and Chief Executive Officer, the Company’s annual revenues have grown from $108.6 million in fiscal year 2000 to $1.15$1.38 billion in fiscal year 2011.2012. He has been the driving force behind the strategies and execution which hashave resulted in the Company’s history of strong operating results and significant growth in shareholder value. Mr. McAdam brings to the Board of Directors a comprehensive knowledge of and valuable insight into the Company’s technology, strategy, competitive opportunities, operations, financial position, and relationships within the

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industry analyst and investment communities. He is the sole member of management on the Board of Directors and serves a critical role in the communication between the Board of Directors and the Company’s senior management team.

Alan J. Higginson, age 64,65, has served as Board of Directors chair since April 2004, and as one of our directors since May 1996. Mr. Higginson has beenserved as Chairman of Hubspan, Inc., an e-business infrastructure provider, since 2007.from September 2009 to March 2012. He served as President and Chief Executive Officer of Hubspan from August 2001 to September 2007. From November 1995 to November 1998, Mr. Higginson served as President of Atrieva Corporation, a provider of advanced data backup and retrieval technology. Mr. Higginson also serves as a director of Pivot3, Inc., a privately-held company that develops and markets shared storage and virtual server appliances, and Clarity Health Services, a privately-held company that provides web-based health care coordination services.services, and adeptCloud Inc., a privately-held company that provides a cloud-based collaboration service. Mr. Higginson holds a B.S. in Commerce and an M.B.A. from Santa Clara University.

Mr. Higginson has over 30 years of experience as a senior executive in a wide range of both public and private software and other technology companies. His experience includes leading worldwide sales organizations and the management of international joint ventures and distribution channels. He has also been active in a number of software and technology industry associations, and as an advisor to early-stage technology companies. Mr. Higginson joined our Board of Directors shortly after the Company was founded. His deep understanding of the Company’s historical and current business strategies, objectives and technologies provides an important and insightful perspective for our Board of Directors.

A. Gary Ames, age 67,68, has served as one of our directors since July 2004. Mr. Ames served as President and Chief Executive Officer of MediaOne International, a provider of broadband and wireless communications from July 1995 until his retirement in June of 2000. From January 1990 to July 1995, he served as President and Chief Executive Officer of US West Communications, a regional provider of residential and business telephone services, and operator and carrier services. Mr. Ames also serves as a director of MMGL Corporation (formally known as Schnitzer Investment Corp.), a privately heldprivately-held investment firm with interests in commercial, industrial and multi-family properties, real estate development projects, ocean shipping, and other industries. Mr. Ames served as a director of Tektronix, Inc., a publicly-traded supplier of test, measurement, and monitoring products, from 1994 to 2007; SuperValu, Inc., a publicly-traded food and drug retailer, from 2006 to 2010 and iPass, Inc., a publicly-traded enterprise mobility company, from 2002 to 2010. Mr. Ames holds a B.A. in Finance from Portland State University.

Mr. Ames has extensive experience as a senior executive and chief executive officer in the telecommunications industry in the United States, South America, Europe and Asia. He provides to the Board of Directors valuable insight into large telecommunications enterprises, which are an important customer base for the Company. For over twenty years, Mr. Ames has served on a number of other boards, as chairman of compensation and governance committees, and as a member of public company audit committees. Mr. Ames brings to the Board of Directors expertise and insight as a former chief executive officer, broad experience as

director at a wide range of companies and international business experience. His experience as a chief executive officer and member of public company audit committees qualifies him as an “audit committee financial expert” as defined in Item 407 of Regulation S-K.

Deborah L. Bevier, age 60,61, has served as one of our directors since July 2006. Ms. Bevier has been the principal of D.L. Bevier Consulting LLC, an organizational and management consulting firm, since 2004. Prior to that time, from 1996 until 2003, Ms. Bevier served as a director, President and Chief Executive Officer of Laird Norton Financial Group and its predecessor companies, an independent financial advisory services firm. From 1973 to 1996, Ms. Bevier held numerous leadership positions with KeyCorp, including chairman and Chief Executive Officer of Key Bank of Washington. Ms. Bevier currently serves on the board of directors of Coinstar, Inc., a publicly-traded multi-national provider of services to retailers. She served on the board of directors of

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Fisher Communications, Inc., a publicly-traded media and communications company, from 2003 to 2010, and Puget Sound Bank, a commercial bank, from 2006 to 2008. Ms. Bevier holds a B.S. in Economics from SUNY New Paltz and a graduate degree from Stonier Graduate School of Banking at Rutgers University.

Ms. Bevier has over 3536 years of experience with both public and private companies in a wide range of areas including finance, banking, management, and organizational operations. Ms. Bevier’s experience as a director of public companies in the consumer services, communications, and media industries enables her to bring a valuable perspective to our Board of Directors. In addition to Ms. Bevier’s broad background, her extensive strategic, corporate governance, and compensation expertise makes her well qualified to serve on our Board of Directors.

Scott Thompson, age 54, has served as one of our directors since January 2008. Mr. Thompson is President, Chief Executive Officer, and a director of Yahoo! Inc. Mr. Thompson was President of PayPal, an eBay Company from January 2008 to January 2012. He joined PayPal in February 2005 as Senior Vice President and Chief Technology Officer. From April 2000 to February 2005, he served as Executive Vice President and Global Chief Information Officer for Inovant/VISA International. From August 1997 to April 2000, he served as Chief Technology Officer and Executive Vice President, Systems Group at VISA USA. Mr. Thompson also serves on the board of directors of Zuora, Inc., a privately held subscription billing and commerce company. Mr. Thompson holds a B.S. in Accounting from Stonehill College.

With his extensive background in accounting and information technology and his experience as a senior executive, Mr. Thompson has a unique combination of business, financial and technology expertise. He brings to our Board of Directors valuable insights regarding electronic commerce, digital media, data center operations, data traffic management technologies and other networking technology trends.

Jonathan Chadwick, age 45,46, has served as one of our directors since August 2011. Mr. Chadwick is currently Chief Financial Officer at Skype, a provider of Internet-based voice communication. Previously, he was the Executive Vice President and Chief Financial Officer at McAfee.VMware. Prior to joining VMware, Mr. Chadwick served as the chief financial officer of Skype and as a corporate vice president of Microsoft Corporation after its acquisition of Skype in October 2011. Mr. Chadwick joined Skype from McAfee where he was executive vice president and chief financial officer from June 2010 until February 2011. From 1997 to 2010, Mr. Chadwickhe held various finance roles at Cisco Systems, including overseeingsenior vice president, CFO — global customer markets, senior vice president, corporate controller and principal accounting officer, and vice president, corporate finance teams& planning. He also worked for Coopers & Lybrand in various roles in the service provider, enterprise, commercial, small business,US and consumer customer segments.UK. Mr. Chadwick is a Chartered Accountant in England and holds an honors degree in electrical and electronic engineering from the University of Bath, UK. He also serves on the board of Rocketship Education, a national, non-profit elementary charter school network.

Mr. Chadwick has extensive experience as a finance executive in the computer networking and security software industries. In addition, his background in high growth enterprises and significant corporate transactions brings an important and valuable perspective to our Board of Directors. As a chief financial officer of a major multi-national enterprise, his expertise in accounting and financial controls qualifies him as an “audit committee financial expert” as defined in Item 407 of Regulation S-K.

Michael Dreyer, age 49, has served as one of our directors since October 2012. Mr. Dreyer is currently the global head of technology at Visa Inc. and is responsible for the company’s systems and technology platforms. Before joining Visa Inc., he was chief information officer of Inovant, where he oversaw the development and management of Visa’s global systems technology. Previously, Mr. Dreyer held executive positions at VISA USA as senior vice president of processing and emerging products, and senior vice president of commercial solutions. He has also held senior positions at American Express, Prime Financial, Inc., Federal Deposit Insurance Corporation, Downey Savings, Bank of America, and the Fairmont Hotel Management Company. Mr. Dreyer received an M.B.A. with an emphasis in marketing and finance and a B.A. in psychology from Washington State University.

Mr. Dreyer has extensive experience as an information technology executive. He brings to our Board of Directors valuable insights regarding data center operations and the role of our technology in the data center, as well as an understanding of data traffic management technologies, data security, and other networking technology trends. Mr. Dreyer’s information technology and data management expertise combined with his background as a senior executive in the financial industry make him well qualified to serve on our Board of Directors.

Stephen Smith, age 56, has served as one of our directors since January 2013. Mr. Smith is currently Chief Executive Officer and President, and a member of the board of directors of Equinix, Inc., a provider of global data center services. Prior to joining Equinix in April 2007, Mr. Smith served as Senior Vice President at HP Services, a business segment of Hewlett-Packard Co., from January 2005 to October 2006. Prior to joining Hewlett-Packard Co., Mr. Smith served as Vice President of Global Professional and Managed Services at Lucent Technologies Inc., a communications solutions provider. Mr. Smith also held various management and sales positions during his 17 years with Electronic Data Systems Corporation (“EDS”), a business and

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technology solutions company, including Chief Sales Officer, President of EDS Asia-Pacific, and President of EDS Western Region. Mr. Smith serves on the board of directors of Volterra Semiconductor Corporation, a publicly-traded company. He previously served as a director of the public company 3PAR Inc. during the past five years. Mr. Smith graduated from the U.S. Military Academy at West Point and holds a B.S. in Engineering.

The combination of Mr. Smith’s experience as chief executive officer and director of a public company, and his executive leadership and management experience at technology services and critical infrastructure companies make him well-qualified to serve on our Board of Directors. He brings to our Board of Directors a deep understanding of competitive technologies and of the role and value of our technology in data centers.

Sandra Bergeron, age 54, has served as one of our directors since January 2013. From 2004 until 2012, Ms. Bergeron was a venture partner at Trident Capital, Inc., a venture capital firm. Ms. Bergeron currently serves on the board of directors of Qualys, Inc., a publicly-traded provider of cloud security and compliance solutions; Sophos, Inc., a privately-held provider of IT security and data protection products; and TraceSecurity, a privately-held provider of cloud-based security solutions and IT governance, risk and compliance management solutions where she also serves as chairman. Ms. Bergeron previously served on the board of directors of TriCipher, a privately-held secure access management company acquired by VMware in August 2010 and ArcSight, Inc., a publicly-traded security and compliance management company acquired by Hewlett-Packard Company in September 2010. Ms. Bergeron holds a B.A. in Business Administration from Georgia State University and a M.B.A. from Xavier University.

Ms. Bergeron has extensive experience in network and data security and related public policy issues. She has a national reputation as an expert on computer security matters. In addition, she has extensive experience as a director of public and private technology companies, and as an executive managing product development and sales teams in the computer and internet security industries.

There are no family relationships among any of the Company’s directors or executive officers. None of the corporations or other organizations referred to in the biographical information set forth above is a parent, subsidiary or other affiliate of the Company.

CORPORATE GOVERNANCE

Committees of the Board of Directors

The Board of Directors has standing Audit, Compensation, and Nominating and Corporate Governance Committees (collectively, the “Standing Committees”). Each of the Standing Committees has a charter, copies of which are available on our website atwww.f5.com under the “About F5 — Investor Relations — Corporate Governance” section.

Audit Committee. As described more fully in the Audit Committee charter, the functions of the Audit Committee are to select, evaluate and, if necessary, replace the Company’s independent registered public accounting firm; review and approve the planned scope, proposed fee arrangements and results of the annual audit; approve any proposed non-audit services to be provided by the independent registered public accounting firm,firm; oversee the adequacy of accounting and financial controls; review the independence of the independent registered public accounting firm; and oversee the Company’s financial reporting process on behalf of the Board of Directors. The Audit Committee members are Messrs. Ames, (chairman), Chadwick (chairman) and Guelich,Dreyer, and Ms. Bevier. The Board of Directors has determined that each of Messrs. Ames and Chadwick is an “audit committee financial expert” as defined in Item 407 of Regulation S-K. Each current member of the Audit Committee is, and each member of the Audit Committee during fiscal 2011year 2012 was, an independent director as defined by the Nasdaq MarketplaceListing Rules (as independence is currently defined in Rule 5605(a)(2)).

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Compensation Committee. The Compensation Committee conducts an annual review to determine whether the Company’s executive compensation program is meeting the goals and objectives set by the Board of Directors. The Compensation Committee recommends for approval by the Board of Directors the compensation for the Chief Executive Officer and directors, including salaries, incentive compensation levels and stock awards, and reviews and approves compensation proposals made by the Chief Executive Officer for the other executive officers. The Compensation Committee may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Compensation Committee or of the Board of Directors or to Company officers to perform certain of its duties on its behalf. The Compensation Committee members are Ms. Bevier (chairman) and Messrs. Ames, Higginson and Thompson.Smith. Each current member of the Compensation Committee is, and each member of the Compensation Committee during fiscal 2011year 2012 was, an independent director as defined by the Nasdaq MarketplaceListing Rules. In fiscal 2011,year 2012, the Compensation Committee retained an outside independent compensation consultant, Towers Watson, to advise the Compensation Committee on executive compensation issues. Towers Watson provides the Compensation Committee peer and survey group cash and equity compensation data, including 50th and 75th percentile base salary, total cash, long-term incentive and total direct compensation data. For additional information about the Compensation Committee and the information provided by Towers Watson to the Compensation Committee, see the description of the Compensation Committee’s activities in the “Executive Compensation — Compensation Discussion and Analysis” section. The Compensation Committee has determined that the work of Tower Watson has not raised any conflict of interest as defined in Item 407 of Regulation S-K.

Nominating and Corporate Governance Committee. FunctionsThe functions of the Nominating and Corporate Governance Committee (the “Nominating Committee”) are to identify new potential boardBoard members, recommend boardBoard nominees, evaluate the board’sBoard’s performance, and provide oversight of corporate governance and ethical conduct. The Nominating Committee members are Messrs. Ames Guelich,(chairman) and Higginson, and Thompson (chairman).Ms. Bergeron. Each current member of the Nominating Committee is, and each member of this committee during fiscal 2011year 2012 was, an independent director as defined by the Nasdaq MarketplaceListing Rules.

Board Leadership

The Company currently separates the roles of Chief Executive Officer and Chairman of the Board. Mr. McAdam, the President and Chief Executive Officer, is responsible for setting the strategic direction of the Company and for the day-to-day leadership and performance of the Company. Mr. Higginson, the Chairman of the Board, sets the agenda for and presides at Board meetings, and coordinates the Board’s communications with Mr. McAdam and the Company’s senior management team. The Board believes this current structure balances the needs for the President and Chief Executive Officer to run the Company on a day-to-day basis with the benefit provided to the Company by Mr. Higginson’s perspective as an independent member of the Board.

Risk Oversight

Assessing and managing risk is the responsibility of the Company’s senior management team. The Board of Directors oversees certain aspects of the Company’s risk management efforts, and reviews and consults with the Company’s senior management team, Corporate Compliance Officer and Director of Compliance on strategic and operational opportunities, challenges and risks faced by the Company at each of the regular quarterly Board meetings. In fiscal year 2010, the Company implemented an enterprise risk management program. The Company retained Ernst & Young to assist the Company in performing an enterprise risk assessment to identify key strategic, operating, legal and compliance, and financial risks, evaluate the significance of those risks, formulate a risk profile which identified relevant risk levels and management control efforts, and develop action plans to address these key risks. Ernst & Young presented two reports to the Board of Directors in fiscal year 2010 regarding the results of its enterprise risk assessment. The Company’s senior management team regularly reviews and evaluates these key risks and the effectiveness of the Company’s risk management programs, and reported back to the Audit Committee and the full Board of Directors on a regular basis during fiscal year 2011.2012. In addition, the Audit Committee oversees the Company’s financial risk exposures, financial reporting, and internal controls. The Compensation Committee oversees the Company’s executive compensation programs, monitors the administration of the Company’s various equity compensation plans, and conducts compensation-related risk assessments. The

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Nominating Committee oversees risk related to the Company’s overall corporate governance profile and ratings; board and committee composition and structure; and director independence. Each Committee presents regular reports to the full Board of Directors. The Board’s role in risk oversight has not had any effect on the Board’s leadership structure.

Compensation Committee Interlocks and Insider Participation

The following directors served as members of the Compensation Committee during some or all of fiscal year 2011:2012: Ms. Bevier (chairman), Mr.Messrs. Ames Mr.and Higginson, Mr. Chapple, and Mr. Thompson.Scott Thompson (who resigned from the Board in May 2012). None of these persons has at any time been an officer or employee of the Company. During fiscal year 2011,2012, none of the Company’s executive officers served as a member of the board of directors or Compensation Committee of any entity that has had one or more executive officers that served as a member of the Company’s Board of Directors or Compensation Committee.

Related Person Transactions Policy and Procedures

As set forth in the written charter of the Audit Committee of the Board of Directors, any related person transaction involving a Company director or executive officer must be reviewed and approved by the Audit Committee. Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote on the approval or ratification of the transaction. Related persons include any director or executive officer, certain shareholders and any of their “immediate family members” (as defined by SEC regulations). To identify any related person transaction, the Company requires each director and executive officer to complete a questionnaire each year requiring disclosure of any prior or proposed transaction with the Company in which the director, executive officer or any immediate family member might have an interest. Each director and executive officer is directed to notify the Company’s SeniorExecutive Vice President and General Counsel of any such transaction that arises during the year, and the Company’s Chief AccountingFinancial Officer reports to the Audit Committee on a quarterly basis regarding any potential related person transaction. In addition, the Board of Directors determines on an annual basis which directors meet the definition of independent director under the Nasdaq MarketplaceListing Rules and reviews any director relationship that would potentially interfere with his or her exercise of independent judgment in carrying out the responsibilities of a director. A copy of the Company’s “Policy and Procedures for Approving Related-Person Transactions” is available on our website atwww.f5.com under the “About F5 — Investor Relations — Corporate Governance” section.

Certain Relationships and Related Person Transactions

The Company’s Articles limit the liability of the Company’s directors for monetary damages arising from their conduct as directors, except to the extent otherwise required by the Articles of Incorporation and the Washington Business Corporation Act. The Articles also provide that the Company may indemnify its directors

and officers to the fullest extent permitted by Washington law, including in circumstances in which indemnification is otherwise discretionary under Washington law. The Company has entered into indemnification agreements with the Company’s directors and executive officers for the indemnification of, and advancement of expenses to, these persons to the fullest extent permitted by law. The Company also intends to enter into these agreements with the Company’s future directors and certain future officers.

Pursuant to these indemnification agreements, the Company has advanced or indemnified certain current and former directors and officers for fees and expenses incurred by them in connection with the Special Committee’s review of the Company’s stock option practices, including a review of our underlying stock option documentation and procedures, and the previously disclosed restatement of the Company’s financial statements, the legal proceedings described below, and other matters related to the Company’s stock option practices.

Meetings of the Board of Directors and Standing Committees; Attendance at Annual Meetings

The Company’s Board of Directors met or acted by unanimous written consent 910 times during fiscal 2011.year 2012. The Audit Committee met 87 times and the Compensation Committee met or acted by unanimous written consent 1311 times. During fiscal 2011,year 2012, the Nominating and Corporate Governance Committee met 54 times. The outside directors met 42 times during fiscal 2011,2012, with no members of management present. Each member of the Board of Directors attended 75% or more of the Board of Directors meetings during fiscal 2011.year 2012. Each member of the Board of Directors who served on one or more of the Standing Committees attended at least 75%

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of the applicable committee meetings during fiscal 2011, except for Scott Thompson who attended 71% of the Compensation Committee meetings during fiscal 2011.year 2012. All directors are also expected to be present at the Company’s annual meetings of shareholders. All directors attended the Company’s annual meeting in 2011.for fiscal year 2011 except Messrs. Chadwick and Thompson.

Director Nomination

Criteria for Nomination to the Board of Directors. The Nominating Committee considers the appropriate balance of experience, skills and characteristics required of the Board of Directors, and seeks to ensure that at least a majority of the directors are independent under the Nasdaq MarketplaceListing Rules, that members of the Company’s Audit Committee meet the financial literacy requirements under the Nasdaq MarketplaceListing Rules and that at least one of them qualifies as an “audit committee financial expert” under the rules of the Securities and Exchange Commission. Nominees for director are selected on the basis of their depth and breadth of experience, integrity, ability to work effectively as part of a team, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties.

In evaluating director candidates, regardless of the source of the nomination, the Nominating Committee will consider, in accordance with its Charter, the composition of the Board as a whole, the requisite characteristics (including independence, diversity, skills and experience) of each candidate, and the performance and continued tenure of incumbent Board members. With respect to diversity, we broadly construe diversity to mean not only diversity of race, gender and ethnicity, but also diversity of opinions, perspectives, and professional and personal experiences. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law. The board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. The Board therefore considers diversity in identifying nominees for director, but does not have a separate policy directed toward diversity.

Shareholder Proposals for Nominees. The Nominating Committee will consider written proposals from shareholders for nominees for director. Any such nominations should be submitted to the Nominating Committee c/o the Corporate Secretary and should include the following information: (a) all information relating to such nominee that is required to be disclosed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) the name(s) and address(es) of the shareholders(s) making the nomination and the number of shares of Common Stock that are owned beneficially

and of record by such shareholders(s); and (c) appropriate biographical information and a statement as to the qualification of the nominee. Such nominations should be submitted in the time frame described in the Bylaws of the Company and under the caption “Shareholder Proposals for the Annual Meeting for Fiscal Year 2012”2013” below.

Process for Identifying and Evaluating Nominees. The process for identifying and evaluating nominees to fill vacancies on the Board of Directors is initiated by conducting an assessment of critical Company and Board needs, based on the present and future strategic objectives of the Company and the specific skills required for the Board as a whole and for each Board Committee. A third-party search firm may be used by the Nominating Committee to identify qualified candidates. These candidates are evaluated by the Nominating Committee by reviewing the candidates’ biographical information and qualifications and checking the candidates’ references. Serious candidates meet with all members of the Board and as many of the Company’s executive officers as practical. Using the input from such interviews and the information obtained by the Nominating Committee, the full Board determines whether to appoint a candidate to the Board.

The Nominating Committee will evaluate the skills and experience of existing Board members against the Company’s critical needs in making recommendations for nomination by the full Board of candidates for election by the shareholders. The nomineenominees to the Board of Directors described in this Proxy Statement waswere approved unanimously by the Company’s directors. Mr. Chadwick,Dreyer, who joined the Board of Directors in August 2011, wasOctober 2012, and Ms. Bergeron and Mr. Smith, who joined the Board in January 2013 were recommended by a third-party search firm

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firms the Nominating Committee retained at the expense of the Company in fiscal year 2011.2012. The third-party search firm wasfirms were provided guidance as to the particular skills, experience and other characteristics the Nominating Committee was seeking in potential candidates. The third-party search firmfirms identified a number of potential candidates, including Mr. Chadwick,Ms. Bergeron and Messrs. Dreyer and Smith, and prepared background materials on these candidates, which were provided to the members of the Nominating Committee for their review. The third-party search firmfirms interviewed those candidates the Nominating Committee determined merited further consideration, and assisted in arranging interviews of selected candidates with members of the Nominating Committee, other members of the Board of Directors, and certain of the Company’s executive officers. The third-party search firmfirms also completed reference checks on the candidates.

The Nominating Committee expects that a similar process will be used to evaluate nominees recommended by shareholders. However, to date, the Company has not received any shareholder’s proposal to nominate a director.

Communications with Directors

Shareholders who wish to communicate with our directors may do so by contacting them c/o Corporate Secretary, F5 Networks, Inc., 401 Elliott Avenue West, Seattle, Washington 98119. As set forth in the Company’s Corporate Governance Guidelines, a copy of which may be found under the “About F5 — Investor Relations — Corporate Governance” section of our website,www.f5.com, these communications will be forwarded by the Corporate Secretary to a Board member, Board committee or the full Board of Directors as appropriate.

Code of Ethics for Senior Financial Officers

We have adopted a Code of Ethics that applies to all of our senior financial officers, including our Chief Executive Officer Chief Finance Officer and Chief AccountingFinancial Officer. The Code of Ethics is posted under the “About F5 — Investor Relations — Corporate Governance” section of the Company’s website,www.f5.com. A copy of the Code of Ethics may be obtained without charge by written request to the Company’s Corporate Secretary. We also have a separate Code of Ethics that applies to all of the Company’s employees, which may also be found under the “About F5 — Investor Relations — Corporate Governance” section of our website.

Legal Proceedings

Beginning on or about May 24, 2006, several derivative actions were filed against certain of our current and former directors and officers. These derivative lawsuits were filed in: (1) the Superior Court of King County, Washington, as In re F5 Networks, Inc. State Court Derivative Litigation (Case No. 06-2-17195-1 SEA), which

consolidates Adams v. Amdahl, et al. (Case No. 06-2-17195-1 SEA), Wright v. Amdahl, et al. (Case No. 06-2-19159-5 SEA), and Sommer v. McAdam, et al. (Case No. 06-2-26248-4 SEA) (the “State Court Derivative Litigation”); and (2) the U.S. District Court for the Western District of Washington, as In re F5 Networks, Inc. Derivative Litigation, Master File No. C06-0794RSL, which consolidates Hutton v. McAdam, et al. (Case No. 06-794RSL), Locals 302 and 612 of the International Union of Operating Engineers-Employers Construction Industry Retirement Trust v. McAdam et al. (Case No. C06-1057RSL), and Easton v. McAdam et al. (Case No. C06-1145RSL) (the “Federal Court Derivative Litigation”). On August 2, 2007, another derivative lawsuit, Barone v. McAdam et al. (Case No. C07-1200P) was filed in the U.S. District Court for the Western District of Washington. The Barone lawsuit was designated a related case and included in the Federal Court Derivative Litigation on September 4, 2007.

On September 24, 2010, the Company entered into a Stipulation of Settlement (the “Stipulation”) in connection with the Federal Court Derivative Litigation. On October 21, 2010, the United States District Court for the Western District of Washington issued an order granting preliminary approval of the settlement resolving the claims asserted by the plaintiffs against the individual defendants. The Stipulation was filed as an exhibit to the Company’s Current Report on Form 8-K filed on November 1, 2010. On January 6, 2011, the Court entered a final order approving the settlement. As a condition to settlement of the Federal Court Derivative Litigation, the plaintiffs have agreed to a voluntary dismissal with prejudice of the State Court Derivative Litigation.

Compensation Risk Assessment

The Compensation Committee and Company management have reviewed the Company’s compensation plans and programs and have concluded that none of these plans or programs is reasonably likely to have a material adverse effect on the Company. In making this evaluation, the Compensation Committee reviewed the key elements of each of the Company’s compensation programs and the means by which any potential risks are mitigated, including through various elements in the Company’s enterprise risk management program. The Company’s compensation programs include a mix of base salary, cash incentive compensation, and long-term equity compensation. The incentive compensation and performance-based annual equity awards programs for the executive officers include both revenue and EBITDA targets intended to ensure that the executive officers appropriately manage operating risks, avoid excessive risk-taking, and maintain the Company’s gross margin and operating margin targets while growing its revenue base.

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Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Company’s “Compensation Discussion and Analysis.” Based on this review and discussions, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement and the Company’s Annual Report to Shareholders on Form 10-K for the fiscal year ended September 30, 2011.2012.

Members of the Compensation Committee:

A. Gary Ames

Deborah L. Bevier, Chair

Alan J. Higginson

Scott ThompsonStephen Smith

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis provides information about the fiscal year 20112012 compensation program for our fiscal year 20112012 named executive officers.officers:

John McAdam, President and Chief Executive Officer (and our principal executive officer)

John Rodriguez, Executive Vice President and Chief Accounting Officer (and our principal financial officer)

Karl Triebes, Executive Vice President of Product Development and Chief Technical Officer

Manuel F. Rivelo, Executive Vice President of Security and Strategic Solutions

David Feringa, Executive Vice President of Worldwide Sales

Mr. Rodriguez served as our Executive Vice President and Chief Accounting Officer (and our principal financial officer) during fiscal year 2012. As of November 5, 2012, he serves as Senior Vice President and Corporate Compliance Officer. Mr. Rivelo joined the Company in October 2011 and Mr. Feringa was appointed to his current position in May 2012.

Updates to our Executive Compensation Program in Fiscal Year 2012

For fiscal year 2012, in light of the Company’s strong revenue growth and new positioning as part of the S&P 500 Index beginning in December 2010, the Compensation Committee directed its outside independent compensation consultant, Towers Watson, to review the peer group of companies used historically by the Compensation Committee for executive compensation benchmarking to identify a peer group which more closely aligned with the Company’s revenues and market capitalization. Towers Watson received input from the Compensation Committee, other members of the Company’s Board of Directors and management and recommended an updated list of Peer Group Companies for fiscal year 2012 (See “Factors Considered — Benchmarking”). The Peer Group Companies for fiscal year 2012, at the 50^th percentile, had annual revenue of approximately $1.4 billion, while the peer group of companies for fiscal year 2011, at the 50^th percentile, had annual revenue of approximately $777 million. Our annual revenue in fiscal year 2012 was $1.38 billion. The term “Peer Group Companies” used in the Compensation Discussion and Analysis shall mean this updated list.

Also, in November 2011, as part of the annual review of executive compensation, the Compensation Committee and the Board of Directors amended the Company’s “Policy Regarding the Granting of Equity-Based Compensation Awards,” a copy of which may be found under the “About F5 — Investor Relations — Corporate Governance” section of the Company’s website, www.f5.com, to provide that annual equity awards to the Company’s executive officers will be issued on November 1 (or, if such day is not a business day, on the following business day). In moving the award date to November 1, the quarterly targets for the performance portion of the annual equity awards issued to the executive officers will coincide with a single fiscal year and will not overlap two fiscal years. This transition resulted in smaller annual equity awards in fiscal year 2012 for the named executive officers who received annual awards, despite the Company’s strong performance (See “Elements of Our Compensation Program — Fiscal Year 2012 Equity Awards”).

Executive Summary and Executive Compensation Program Objectives

Fiscal Year 2011 Corporate Performance

The Company had outstanding operating results in fiscal year 2011. Our total annual revenue of $1.15 billion was the highest ever and an increase of 31% over fiscal year 2010. Product revenue increased 29%, and revenue from our services business increased 34% over fiscal year 2010. Cash flow from operating activities was $417 million, an increase of 33% over fiscal year 2010. Net income was $241.4 million, an increase of 59.7% over fiscal year 2010. Our GAAP gross margins and operating margins improved throughout fiscal year 2011. Quarterly GAAP gross margins exceeded 81%, and GAAP quarterly operating margins grew sequentially to 31.6% in the fourth quarter of fiscal year 2011. The Company continued to maintain a very strong balance sheet, ending the fiscal year with cash and investments totaling over $1 billion.

The Company further strengthened its position as a technology leader. In fiscal year 2011, we launched a wide-range of new products designed to capitalize on key industry trends including data center consolidation, virtualization and cloud computing. We introduced a virtual edition of ARX, our file virtualization product, and ARX Cloud Extender, software that allows ARX customers to use cloud resources as a low-cost storage tier. We also released virtual editions of BIG-IP Access Policy Manager and Enterprise Manager. To assist customers in analyzing data from their F5 ADC products, detect potential configuration problems, and optimize network performance, we launched iHealth, an online diagnostic tool. We expanded our chassis-based Application Delivery Controller (“ADC”) product line with the introduction of VIPRION 2400, which has been very well received by customers due to its competitive price and outstanding performance.

The objectives of our executive compensation program are to correlate executive compensation with the Company’s business objectives, performance and the creation of shareholder value, and to enable the Company to attract, retain and reward key executive officers who contribute to its long-term success. We believe the total direct compensation our named executive officers received in fiscal year 20112012 as set forth in the Summary Compensation Table on page      22 is consistent with and reflects these objectives.

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Fiscal Year 2012 Corporate Performance

The Company had outstanding operating results in fiscal year 2012. Our total annual revenue of $1.38 billion was the highest ever and an increase of 20% over fiscal year 2011. Product revenue increased 13%, and revenue from our services business increased 30% over fiscal year 2011. Cash flow from operating activities was $495 million, an increase of 19% over fiscal year 2011. Net income was $275 million, an increase of 14% over fiscal year 2011. We maintained very strong GAAP gross margins and operating margins throughout fiscal year 2012. Quarterly GAAP gross margins exceeded 82.7%, and GAAP quarterly operating margins exceeded 30.8% during fiscal year 2012. The Company continued to maintain a very strong balance sheet, ending the fiscal year with cash and investments totaling approximately $1.2 billion.

In fiscal year 2011,2012, the Company further strengthened its position as a technology leader:

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In fiscal year 2012, the Company continued to achieve record operating results while continuing to enhanceenhancing its technology and market leadership positions. Despite the Company’s outstanding operating results, market volatility and uncertainty related to the worldwide economic recovery did impact one year total shareholder return. However, theThe Company continued to deliver significant long-term shareholder value. During the Company’s five most recent fiscal years, shareholder value increased at a compounded annual growth rate of 21.5%23%, while comparable rates for the Nasdaq Composite Index, Nasdaq Computer Index and the S&P 500 index were 1.4%3%, 5.3%7% and -3.3% respectively.-1% respectively, and 2.4% for the Peer Group Companies. Our share price growth rates were -32%47%, 204%164% and 165%181% as of September 30 over the past one, three and five year time periods. Comparable growth rates for the Nasdaq Composite Index were 2%29%, 47% and 15% respectively; 31%, 61% and 7% respectively; 7%, 40% and 30%38% respectively for the Nasdaq Computer Index; 27%, 36% and -1%, -3% and -15%-6% respectively for the S&P 500 Index. From September 30, 2011 throughIndex, and 27%, 33%, and 13% respectively for the Record Date, our share price has increasedPeer Group Companies.

Prepared by over 55%.Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2012 Index Data: Copyright Standard and Poor’s, Inc. and Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved.

The

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In fiscal year 20112012, the Company also had strong performance as compared to the Peer Group Companies.

Except for the updated Peer Group Companies and the new annual grant date referenced above, the fiscal year 2012 compensation program for our named executive officers was consistent with the fiscal year 20102011 program. In evaluating the Company’s executive compensation program for fiscal year 2011,2012, the Compensation Committee considered the shareholder advisory vote on executive compensation for fiscal year 20102011 which was approved by nearlyover 98% of the votes cast. Also, in response to the advisory vote at the 2011 annual meeting, the Board decided that future advisory votes on executive compensation would be submitted to shareholders on an annual basis. The Compensation Committee carefully considers feedback from shareholders regarding the Company’s executive compensation, including the results of the shareholders’ annual advisory vote on executive compensation. Shareholders are invited to express their views to the Committee, including as described above under the heading “Communications with Directors.”

Compensation Philosophy

We design the compensation programs for our executive officers to link compensation to improvements in the Company’s financial performance and the creation of shareholder value. We achieve this objective through a compensation program that:

The Compensation Committee believes that the Company’s executive compensation should also reflect each executive officer’s qualifications, experience, role and personal performance, and the Company’s performance achievements.

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Elements of Our Compensation Program

The three primary components of our executive compensation program are: (i) base salary, (ii) incentive compensation in the form of cash bonuses, and (iii) equity compensation.

Base Salary.

Base salary is the guaranteed element of employees’ annual cash compensation. Executive officers’ base salaries are set at levels that reflect their specific job responsibilities, experience, qualifications, job performance and potential contributions; market data from two salary surveys covering technology companies in comparable areas (“Survey Companies”); and compensation paid to comparable executives as set forth in proxy statements for a peer group of 25 companies (“the Peer Group Companies”)Companies developed by an outside independent compensation consultant (See “Factors Considered — Benchmarking”). Base salaries are reviewed and generally adjusted annually and may also be adjusted from time to time in recognition of individual performance, promotions and marketplace competitiveness. The base salaries of the executive officers, including Mr. McAdam, are generally set at or near the 50th percentile range of base compensation for comparable executive officers in the Survey Companies and Peer Group Companies. For fiscal 2011, the base salaries of Messrs. Triebes and Eames were increased by 5.5%. In recognition of their individual performance and in order to bring their base salaries more in line with comparable executive officers in the Peer Group Companies, the Compensation Committee approved for Messrs. McAdam, Anderson and Rodriguez increases of 10% in their base salaries for fiscal 2011.

Incentive Compensation.

The Compensation Committee believes that incentives based on attaining or exceeding established financial targets properly align the interests of the executive officers with the interests of the shareholders. All of our executive officers participate in the Incentive Compensation Plan for Executive Officers (“Incentive Plan”). The Incentive Plan is a cash incentive bonus plan, with each executive officer assigned a target bonus amount expressed as a percentage of such executive officer’s base salary, ranging from 30% to 80%.

The Compensation Committee, in consultation with our President and CEO, determines each of these target bonus percentages based on its assessment of the impact each position had on the Company’s financial performance and compensation data from the Survey Companies and Peer Group Companies provided by the outside consultant. The total direct cash compensation (base salary plus the target bonus) of the executive officers, including Mr. McAdam, is generally set at or near the 50th percentile range of total direct cash compensation for comparable executive officers at the Survey Companies and the Peer Group Companies.

If earned, the cash incentive bonus is paid quarterly. 50% of the cash incentive bonus is based on the Company achieving target revenue for the quarter, and 50% is based on the Company achieving target EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter. Each such target is determined by the Compensation Committee. See footnote (3) of the Grants of Plan-Based Awards Table in Fiscal 20112012 for

information regarding the targets for fiscal 2011.2012. No cash incentive bonus will be paid for results less than 80% of an applicable target. The cash incentive bonus is paid on a linear basis above 80% of the targeted goals. Results for both targets must equal or exceed 100% for the total cash incentive bonus to be paid at 100% or more. For example, if 90% of the revenue goal and 85% of the EBITDA goal are achieved, the quarterly cash incentive bonus is paid out at 87.5%. If 90% of the revenue goal and 105% of the EBITDA are achieved, the EBITDA goal is capped at 100% and the quarterly cash incentive bonus is paid out at 95%. If 100% of the revenue goal and 120% of the EBITDA goal are achieved, the quarterly cash incentive bonus is paid out at 110% since both goals were achieved at 100% or more.

If the Company restates its reported financial results to correct a material accounting error on an interim or annual financial statement included in a report on Form 10-Q or 10-K due to material noncompliance with a financial reporting requirement under the federal securities laws, the Board of Directors shall review any incentive bonuses paid to the President and Chief Executive Officer, SeniorExecutive Vice President and Chief AccountingFinancial Officer, and SeniorExecutive Vice President and General Counsel as a result of the restated results during the 12-month period preceding the filing of the restatement and, to the extent practicable and in the best interests of shareholders, shall seek to recover or cancel the appropriate excess portion, if any, of such awards that were

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based on financial results that were revised in the restatement. Following such review, if the Board of Directors decides not to recover or cancel any portion of the awards at issue, that decision shall be disclosed in the Company’s next annual proxy statement.

Fiscal Year 2012 Base Salaries and Incentive Compensation awards

As compared to the Peer Group Companies in fiscal year 2011, the base salaries for each of Messrs. McAdam, Rodriguez and Triebes were at or below the 50^th percentile and their total direct cash compensation (base salaries plus cash incentive bonus at 100%) was below the 50^th percentile. Their base salaries for fiscal year 2012 were increased by 15%, 6% and 10%, respectively to bring their base salaries more in line with comparable executive officers in the Peer Group Companies. In the case of Mr. McAdam, the Board determined that this increase was also in recognition of his tenure and outstanding performance as the Company’s President and Chief Executive Officer. There was no change to the target bonus percentages although the increases in the base salaries for these named executive officers resulted in an increase in the dollar amount of the target cash incentive bonuses.

In fiscal 2011,year 2012, the Company achieved 107%104% of the annual revenue target and 116%104% of the annual adjusted EBITDA target. As a result, the executive officers earned 111.5%104% of their total target cash incentive bonus in fiscal 2011.year 2012. The Compensation Committee retains some discretion in the administration of the Incentive Plan, although the Committee did not exercise that discretion in administration of the Incentive Plan in fiscal 2011.year 2012. The Compensation Committee believes that the cash incentive bonuses paid to the executive officers for performance in fiscal 2011year 2012 were merited due to the Company’s outstanding operating results summarized above.

Equity Compensation.

The Compensation Committee believes that equity ownership aligns the interests of executive officers with those of the shareholders and provides significant motivation to executive officers to maximize value for the Company’s shareholders. In accordance with this belief, the Compensation Committee periodically approves grants of equity compensation in the form of restricted stock units (“RSUs”) under the Company’s equity incentive plan. The amounts of these grants are based on the relative position and responsibilities of each executive officer, previous and expected contributions of each officer to the Company’s success, equity compensation data from Survey Companies and Peer Group Companies provided by the outside consultant, previous grants to each officer, and recruitment and retention considerations. The types of awards include stock options and restricted stock units (“RSUs”). The value of equity compensation grants to each of the executive officers including Mr. McAdam, is generally set between the 50th and 75th percentile range of the value of the most recent long-term incentive compensation grants to comparable executive officers in the Survey Companies and Peer Group Companies. In considering the value of equity compensation grants to executive officers, the Compensation Committee considers the total value of the shares underlying the RSUs based on the value of the Common Stock on the date the annual awards are issued rather than the aggregate grant date fair value for accounting purposes as described in more detail in footnote (8) of the Grants of Plan-Based Awards in Fiscal 20112012 Table.

For the annual equity awards issued in fiscal years 2010 and 2011, (“2011 Annual Equity Awards”), the Compensation Committee approved awards to the executive officers as set forth below equal inrecommended a target total value to the awards issued as part of theapproximately $5,309,000 for Mr. McAdam’s annual equity awards in fiscal 2010 (“2010 Annual Equity Awards”).award, and approximately $1,517,000 for Messrs. Rodriguez and Triebes.

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As a result of the increase in the value of the Common Stock, the executive officers received approximately 6% fewer shares in the 2011 Annual Equity Awards than were issued in the 2010 Annual Equity Awards.

In January 2007, the Board of Directors approved and adopted a “Policy Regarding the Granting of Equity-Based Compensation Awards,” a copy of which may be found under the “About F5 — Investor Relations — Corporate Governance” section of the Company’s website,www.f5.com. This policy provides that the Compensation Committee or the Board of Directors, as applicable, shall approve equity awards to existing employees and service providers (other than newly-promoted individuals and non-employee directors) on an annual basis on August 1 (or, if such day is not a business day, on the following business day). TheseIn November 2011, as part of the annual review of executive compensation, the Compensation Committee and the Board of Directors amended this policy to provide that annual equity awards vestto the Company’s executive officers will be issued on November 1 (or, if such day is not a business day, on the following business day). In moving the award date to November 1, the quarterly targets for the performance portion of the annual equity awards issued to the executive officers will coincide with a single fiscal year and will not overlap two fiscal years.

Prior to fiscal year 2010, annual equity awards vested in quarterly increments over a two year period. For the annual equity awards to the Company’s executive officers beginning in fiscal 2010, and 2011, the vesting period was extended to the three year period following the awards. Equity awards to newly-hired employees and service providers (other than non-employee directors) and to newly-promoted individuals shall be approved on a quarterly basis on February 1, May 1, August 1 and November 1 (or, if such day is not a business day, on the following business day). These new-hire and promotion grants generally vest over a four year period, with 25% vesting on the first anniversary of the award and the balance vesting in equal quarterly increments over the following three years. The Compensation Committee or the Board of Directors, as applicable, may approve equity awards outside of the new-hire grant date to select individuals in the event of extraordinary circumstances. Prior to each annual meeting of shareholders, the Compensation Committee reviews and recommends to the Board of Directors for approval the amount and terms of any equity awards to be granted to non-employee directors. The Board of Directors approves all equity awards to be granted to non-employee directors on the date of the annual meeting of shareholders.

Since December 2006, the Board of Directors and Compensation Committee have included a performance-based component in the annual equity awards granted to the executive officers. The vesting of 50% of each annual equity award to the executive officers in fiscal 2006, 2007, 2008 and 2009 was subject to the Company achieving specified performance targets over the two year period following the awards (25% in the first four quarters and 25% in the second four quarters following the awards). Beginning with the annual equity award in fiscal 2010, the vesting period for the awards, including the performance-based component of the awards, was extended to the three year period following the award. The Compensation Committee sets these targets on an annual basis. The Compensation Committee reviews and evaluates revenue and expense projections proposed by management and considers industry, competitive and economic trends in setting these targets. Once vested, exceptThese performance-based awards were to adjustment or recovery by the Company as provided by law, these performance-based awards were not subject to adjustment or recovery.law.

For the performance-based equity awards issued to the named executive officers, including the performance-based equity awards approved in fiscal 2011,2012, the Compensation Committee utilized the performance formula, revenue and EBITDA targets established for the Incentive Plan. See footnote (6) of the Grants of Plan-Based Awards Table in Fiscal 20112012 for additional information regarding the performance-based equity compensation program in fiscal 2011.2012.

The Compensation Committee continues to believe that revenue growth is an important measure for the performance-based equity awards as the Company’s ability to consistently grow revenue is an important elementof crucial importance in maintaining and growing shareholder value, and furthers the shared interests of the Company’s executive officers and shareholders. The focus on revenue growth is balanced by the EBITDA targets intended to ensure that the Company appropriately manages operating risks, avoids excessive risk-taking, and maintains its gross margin and operating margin targets while growing its revenue base. As set forth above, total annual revenue of $1.15$1.38 billion in fiscal year 20112012 was the highest ever, and an increase of 31%20% over fiscal year 2010.2011 and 104% of the annual revenue target set by the Compensation Committee. The Company achieved this record revenue while delivering quarterly GAAP gross margins which exceeded 81%82.7%, and GAAP quarterly operating margins which grew sequentially to 31.6% in the fourth quarter of

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exceeded 30.8% during fiscal year 2011.2012, and achieving 104% of the annual EBITDA target. The Compensation Committee believes that using the same performance formula and targets for the Incentive Plan and the performance-based equity awards is an important and fundamental element in the Company’s executive compensation program. In evaluatingprogram, and has contributed to the Company’s executive compensation program for fiscal year 2011, the Compensation Committee considered the shareholder advisory vote on executive compensation for fiscal year 2010 which was approved by nearly 98% of the votes cast. Also, theoperational and financial success. The performance formula and targets represent

key metrics by which the Company is evaluated, and provide an appropriate and effective balance of performance incentives to focus and motivate executive officers andto maximize value for the Company’s shareholders without excessive risk-taking. Use of the same performance formula and aretargets provide the Company’s shareholders a more direct means of evaluating executive compensation and Company performance, promote a balanced focus on both quarterly and annual targets, and is administratively efficient for the Company in that performance-based equity awards, if any, will be calculated and issued on a quarterly basis. Equity awards not earned for any quarter will beare forfeited and, except as provided by law, issued awards will not be subject to future adjustments or recovery. In accordance with the 2005 Equity Incentive Plan (“2005 Plan”), a named executive officer must be employed by the Company or its affiliates on each vesting date in order to receive the shares of Common Stock issuable upon such vesting date.

PursuantFiscal Year 2012 Equity Awards

For the annual equity awards issued in fiscal year 2012 (“2012 Annual Equity Award”), the Compensation Committee approved the following awards to the executive officers as set forth below.

The target values for the 2012 Annual Equity Awards for Messrs. McAdam, Rodriguez and Triebes were $3,000,000, $500,000 and $1,000,000 respectively. The Compensation Committee approved these grants to facilitate the Company’s “Insider Trading Policy,”transition to the November 1 annual grant date, in recognition of the value of equity compensation grants and the target total direct compensation (total value of annual base, bonus and equity compensation grants) for comparable executive officers in Peer Group Companies, and as a copyretention tool in recognition of which may be found under the “About F5 — Investor Relations — Corporate Governance” section of our website,www.f5.com, the Company considers it improper and inappropriate for any employee, officer or directoroutstanding performance of the Company to engage in short-term or speculative transactions in the Company’s securities. The policy specifically prohibits directors, officers and other employees, and their family members, from engaging in short salestenure of the Company’s securities, transactionsexecutive team. In the absence of these grants in puts, calls or other derivative securities onNovember 2011, the executive officers would not have received an exchange orannual equity award in any other organized market, and certain hedging transactions relatedfiscal year 2012 due to the Company’s securities. transition to the November 1 annual grant date.

In addition, directors, officersfiscal year 2012, the Compensation Committee approved a new-hire grant of 40,000 RSUs for Mr. Rivelo and other employees are prohibited, except under certain limited exceptions, from holding Company securities in a margin account or pledging Company securities as collateralpromotion grant of 30,000 RSUs for Mr. Feringa. Messrs. Rivelo and Feringa did not receive a loan.2012 Annual Equity Award.

Stock Ownership Guidelines

In October 2010, the Board of Directors adopted stock ownership guidelines for the Company’s named executive officers and other executive officers. The guidelines were established to promote a long-term perspective in managing the business, further align the interests of the executive officers and the Company’s shareholders, and reduce any incentive for excessive short-term risk taking. The guidelines provide for the following stock ownership:

Executive officers are required to achieve the ownership guidelines within the later of five years after adoption of the guidelines by the Board of Directors or within three years after first being designated as an executive officer. Until the applicable guideline is achieved, the executive officers are required to retain that number of shares equal to not less than 20% of the Net Shares received as the result of the vesting of any RSUs. “Net

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“Net Shares” are those shares that remain after shares are sold to pay withholding taxes. Shares of Common Stock that count towards satisfaction of the guidelines include shares purchased on the open market, shares obtained through stock option exercises or pursuant to the Company’s Employee Stock Purchase Plan, shares obtained through grants of Restricted Stock Units, and shares beneficially owned in a trust by a spouse and/or minor children. Shares owned by executive officers shall be valued at the greater of (i) the price at the time of acquisition/purchase or (ii) the current market value.

Derivatives Trading and Hedging Policy

Pursuant to the Company’s “Insider Trading Policy,” a copy of which may be found under the “About F5 — Investor Relations — Corporate Governance” section of our website,www.f5.com, the Company considers it improper and inappropriate for any employee, officer or director of the Company to engage in short-term or speculative transactions in the Company’s securities. The policy specifically prohibits directors, officers and other employees, and their family members, from engaging in short sales of the Company’s securities, transactions in puts, calls or other derivative securities on an exchange or in any other organized market, and certain hedging transactions related to the Company’s securities. In addition, directors, officers and other employees are prohibited, except under certain limited exceptions, from holding Company securities in a margin account or pledging Company securities as collateral for a loan. Each of the named executive officers complied with this Policy during fiscal year 2012 and has no Company securities pledged or in margin accounts.

Other Benefits and Perquisites.

The Company’s executive officers participate in broad-based benefit plans that are available to other employees. The Company does not currently provide additional material perquisites for its executive officers.

How Each Element Fits Into our Overall Compensation Objectives and Affects Other Elements of Compensation

Consistent with our philosophy that a significant amount of the executive officers’ compensation should be directly linked to the performance of the Company and align the interests of executive officers with the long-term interests of shareholders, a majority of the executives’ compensation is based on the Company achieving certain performance and financial targets. We do not have an exact formula for allocating between cash and equity compensation, but target total direct cash compensation (base salary plus the target bonus) of the executive officers is at or near the 50th percentile range of total cash compensation for comparable executive officers in the Peer Group Companies, and total direct compensation (cash and equity compensation) is between the 50th and 75th percentiles.

Impact of Accounting and Tax Treatments of a Particular Form of Compensation

The accounting and tax treatment of the elements of our compensation program is one factor considered in the design of the compensation program. Under Section 162(m) of the Internal Revenue Code of 1986, as amended, the federal income tax deduction for certain types of compensation paid to the chief executive officer and the three other most highly compensated executive officers of publicly heldpublicly-held companies (other than the chief executive officer and principal financial officer) is limited to $1 million per officer per fiscal year unless such compensation meets certain requirements. The Compensation Committee is aware of this limitation and has decided that it is not appropriate at this time to limit the Company’s discretion to design the compensation packages payable to the Company’s executive officers to comply with these deductibility guidelines.

Factors Considered — Benchmarking

The Compensation Committee conducts an annual review of the executive compensation program and utilizes peer and survey group data to help set proper compensation levels. The Compensation Committee has

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retained an outside independent compensation consultant, Towers Watson, to assist it in this review and to conduct a competitive review of the total direct compensation (cash and equity compensation) for the Company’s executive officers. Towers Watson worked directly with the Compensation Committee (and not on behalf of management) and performs no other consulting or other services for the Company. The Compensation Committee instructed Towers Watson to collect base salary, total cash, long-term incentive, and total direct compensation data and to analyze and compare on a pay rank and position basis our executive officers’ compensation with the compensation paid to comparable executives as set forth in proxy statements for the Peer Group Companiespeer group companies developed by Towers Watson and approved by the Compensation Committee. The following is a list of these Peer Group Companies:the peer group companies utilized by the Compensation Committee in fiscal year 2011:

As noted above, for fiscal year 2012, the Compensation Committee directed Towers Watson to review the peer group of companies used historically by the Compensation Committee. Towers Watson received input from the Compensation Committee, other members of the Company’s Board of Directors and management and recommended the following updated list of Peer Group Companies for fiscal year 2012:

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Towers Watson also analyzed and compared our executive officers’ compensation with the compensation paid to comparable executives based on compensation data published in the Radford Executive Survey for companies in the Software/Network sector with revenues from $500 million$1 billion to $1$5 billion and the IPAS High Technology Survey for companies with revenues from $250$500 million to $1$3 billion. The following companies participated in the Radford Executive Survey:

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The following companies participated in the IPAS High Technology Survey:

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Role of Executive Officers in Determining Executive Compensation

The Compensation Committee annually assesses the performance of, and recommends to the full Board of Directors base salary and incentive compensation for, the Company’s President and Chief Executive Officer. The Company’s President and Chief Executive Officer recommends to the Compensation Committee annual base salary and incentive compensation adjustments for the other executive officers.

Employment Contracts and Change in Control Arrangements

In May 2009, after an extensive review process and in consultation with Towers Watson and outside legal counsel, the Compensation Committee recommended to the Board of Directors and the Board of Directors approved the Company entering into change of control agreements with each of the Named Executive Officersexecutive officers (See “Potential Payments Upon Termination or Change in Control”). The Compensation Committee recognizes the threat or possibility of an acquisition by another company or some other change of control event can be a distraction and believes that it is in the best interests of the Company and its shareholders to ensure that the Company will have the continued full attention and dedication of the Named Executive Officers notwithstanding the possibility, threat or occurrence of such an event. See the “2011“2012 Potential Payments Upon Termination or Change in Control Table” for additional information regarding the potential payments and benefits that each Named Executive Officer could receive pursuant to the change of control agreements.

There are currently no other written employment contracts with any of the Named Executive Officers. Each such officer is an “at-will” employee, and his employment may be terminated anytime with or without cause. The RSU grant agreements issued to our Named Executive Officers provide that upon certain changes in control of the Company the vesting of outstanding and unvested RSUs will accelerate and such RSUs will become fully vested. We believe that such change in control provisions provide an additional tool for attracting and retaining key executive officers.

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Summary Compensation Table

The following table sets forth information concerning compensation for services rendered to us by (a) our Chief Executive Officer (the “CEO”), (b) our Chief Accounting Officer (the “CAO”)for fiscal year 2012 (now our Senior VP and Corporate Compliance Officer) and (c) our three other most highly compensated executive officers who were serving as our executive officers at the end of fiscal 2011.year 2012. These executive officers together with the CEO and CAO, are collectively hereinafter referred to as the “Named Executive Officers.”

Summary Compensation Table for Fiscal 2011Year 2012

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Items in All Other Compensation Column for Fiscal 2011Year 2012

(5)	During fiscal year 2012 Mr. Rodriguez was the Executive Vice President and Chief Accounting Officer and served as the Principal Financial Officer. Mr. Rodriguez has served as Senior Vice President and Corporate Compliance Officer since November 5, 2012.

(6)	Mr. Rivelo joined the Company in October 2011.

(7)	Mr. Feringa was not an executive officer in fiscal years 2011 or 2010.

(8)	Includes $5,827 of commissions earned in fiscal year 2012 based on .1% of certain training, consulting and installation sales. As an executive officer, Mr. Feringa will no longer earn these commissions.

(9)	Includes $230,064 earned in fiscal year 2012 pursuant to a sales incentive compensation program. For additional information, see footnote (11) of the Grants of Plan-Based Awards in Fiscal Year 2012 Table.

Grants of Plan-Based Awards in Fiscal 2011Year 2012

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(6)

The Performance Awards are subject to the same quarterly revenue and EBITDA goals set by the Board of Directors for the applicable periods in fiscal 2011.year 2012. The quarterly revenue targets for the 2009last three quarters of the second year performance portion of the 2010 Performance Award and the lastfirst three quarters of the first year performance portion of the 2010 Annual Equity2011 Performance Award (based on the Company’s performance in the first through the third quarters of fiscal 2011)year 2012) were $260$315 million, $262$319 million and $268$331 million, and the quarterly EBITDA targets were $78.8$102.2 million, $77.6$102.8 million and $79.9$109.2 million. The quarterly revenue target for the first quarter of the secondthird year performance portion of the 2010 Annual EquityPerformance Award and for the first quarter of the second year performance portion of the 2011 Performance Award (based on the Company’s performance in the fourth quarter of fiscal 2011)year 2012) was $284$358 million and the quarterly EBITDA target was $83.7$119.5 million. For the four quarters of fiscal 2011,year 2012, the Company achieved 103.4%102.4%, 105.9%106.5%, 108.5%106.5% and 111.2%100% of the quarterly revenue target and 108%103.4%, 114%107.7%, 116.9%106.9% and 124.9%99.2% of the quarterly EBITDA target. As a result, the named executive officers earned 105.7%102.9%, 110%107.1%, 112.7%106.7% and 118%99.6% of the performance-based equity awards for the four quarters of fiscal 2011,year 2012, respectively.

50% of these Performance Awards are based on achieving at least 80% of the revenue goal and the other 50% is based on achieving at least 80% of the EBITDA goal. The Performance Awards, if any, are paid on a quarterly basis linearly above 80% of the targeted goals. For example, if the Named Executive Officer’s 20092010 Performance Award is 10,000 RSUs and the Performance Award for a quarter is paid out at 100%, the Named Executive Officer would receive 2,500 RSUs.

At least 100% of both goals must be attained in order for the Performance Awards to be awarded over 100%. Each goal is evaluated individually and subject to the 80% achievement threshold and 100% over-achievement threshold. If 90% of the revenue goal and 85% of the EBITDA goal is achieved, the performance award for that quarter is paid out at 87.5%. If 90% of the revenue goal and 105% of the EBITDA is achieved, the EBITDA goal is capped at 100% and the performance award for that quarter is paid out at 95%. If 100% of the revenue goal and 120% of the EBITDA goal is achieved, the performance award for that quarter is paid out at 110% since both goals were achieved at 100% or more. The threshold payout represents 80% of the applicable Performance Awards and the target payout represents 100% of the applicable Performance Awards.

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(9)

25% vests on November 1, 2012 and the remaining 75% vests in twelve equal quarterly increments beginning February 1, 2013. The holder of the RSU award does not have any of the benefits of ownership of the shares of Common Stock subject to the award, such as the right to vote the shares or to receive dividends, unless and until the RSUs vest and the shares are issued.

(10)

25% vests on August 1, 2013 and the remaining 75% vests in twelve equal quarterly increments beginning November 1, 2013. The holder of the RSU award does not have any of the benefits of ownership of the shares of Common Stock subject to the award, such as the right to vote the shares or to receive dividends, unless and until the RSUs vest and the shares are issued.

(11)

Prior to Mr. Feringa’s appointment to his current position in May 2012 he was eligible for a sales incentive compensation program which is different from the program described in footnote (3). Mr. Feringa’s target sales incentive was set at 100% of base salary and the amount of his target bonus above reflects the target for the period prior to Mr. Feringa becoming an executive officer. 90% of the quarterly base sales incentive at target was based on net sales and 10% was based on qualitative performance measures such as forecasting, linearity and hiring. Upon his appointment to his current position, he was no longer eligible for the sales incentive compensation program and became eligible for the Non-equity Incentive Plan Award program as described in footnote (3) above to the Grants of Plan-Based Awards table.

Outstanding Equity Awards at September 30, 20112012

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established as of September 30, 2011 have been treated as outstanding for purposes of this Table but are not yet treated as granted under ASC Topic 718.

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Option Exercises and Stock Vested in Fiscal 2011Year 2012

Potential Payments Upon Termination or Change in Control

Each of our Named Executive Officers is an “at-will” employee, and his employment may be terminated at any time with or without cause. During 2009, theThe Company has entered into change of control agreements with each of our Named Executive Officers.Messrs. McAdam, Rodriguez, Triebes, Rivelo and Feringa. These change of control agreements provide a protection period of two years after a change of control during which the Named Executive Officer’s annual base salary and annual target incentive bonus cannot be reduced. In addition, each change of control agreement entitles the executive officer to severance benefits if his employment with the Company is terminated within two years after a change of control of the Company, unless such termination is (i) due to death or total disability, (ii) by the Company for cause, or (iii) by the executive officer without good reason. The amount of severance payable to Mr. McAdam will be equal to two times, and in the case of the other Named Executive Officers one times, the sum of the executive officer’s (a) annual salary at the highest rate in effect in the 12 months preceding the change of control date and (b) highest annual target incentive bonus in effect in the 12 months preceding the change of control date. In addition, each Named Executive Officer will be entitled to a pro-rata annual bonus for the year in which his termination of employment occurs, and payment by the Company of premiums for health insurance benefit continuation for one year after termination of the Named Executive Officer’s employment, outplacement services for a period of up to 12 months with a cost to the Company of up to $25,000, and vesting of equity awards. The change of control agreements do not include a tax gross up payment provision. If payments under the change of control agreements or otherwise would subject a Named Executive Officer to the IRS parachute excise tax, the Company would then either (i) reduce the payments to the largest portion of the payments that would result in no portion of the payments being subject to the parachute excise tax or (ii) pay the full amount of such payments, whichever is better on an after-tax basis for the Named Executive Officer.

For purposes of the change of control agreements, a “change of control” is generally defined as (i) acquisition of beneficial ownership of at least 30% of our outstanding shares; (ii) the incumbent directors or

those they approve cease to constitute a majority of the Board of Directors; (iii) a consummation of a reorganization, merger or consolidation unless, following such transaction: (A) more than 50% of the shares after the transaction are beneficially owned by persons who owned shares prior to the transaction in substantially the same proportions, (B) the incumbent Board members constitute more than 50% of the members of the Board, and (C) no person newly acquires beneficial ownership of at least 30% of the shares; (iv) the sale or other disposition of all or substantially all of our assets unless the conditions described above in (A), (B) and (C) are satisfied with respect to the entity which acquires such assets; or (v) our liquidation or dissolution. In addition, the RSU grant agreements issued to our Named Executive Officers provide that upon certain changes in control of the Company the vesting of outstanding and unvested RSUs will accelerate and such RSUs will become fully vested. A “change in control” for those agreements issued prior to fiscal year 2009 is generally defined as (i) a sale of substantially all of the assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation, (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (iv) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company. No options held by Named Executive Officers wereheld no outstanding options as of September 30, 2011.2012.

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The following table sets forth an estimate of the payments and benefits that each Named Executive Officer would have received if a change of control and change in control of the Company (“Change in Control”) occurred on September 30, 20112012 and termination of employment occurred immediately thereafter.

20112012 Potential Payments Upon Termination or Change in Control Table (1)