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+Proc-Type: 2001,MIC-CLEAR
+Originator-Name: webmaster@www.sec.gov
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+<SEC-DOCUMENT>0000891020-01-000114.txt : 20010125
+<SEC-HEADER>0000891020-01-000114.hdr.sgml : 20010125
+ACCESSION NUMBER:		0000891020-01-000114
+CONFORMED SUBMISSION TYPE:	10-K/A
+PUBLIC DOCUMENT COUNT:		1
+CONFORMED PERIOD OF REPORT:	20000930
+FILED AS OF DATE:		20010124
+
+FILER:
+
+	COMPANY DATA:	
+		COMPANY CONFORMED NAME:			F5 NETWORKS INC
+		CENTRAL INDEX KEY:			0001048695
+		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
+		IRS NUMBER:				911714307
+		STATE OF INCORPORATION:			WA
+		FISCAL YEAR END:			0930
+
+	FILING VALUES:
+		FORM TYPE:		10-K/A
+		SEC ACT:		
+		SEC FILE NUMBER:	000-26041
+		FILM NUMBER:		1513806
+
+	BUSINESS ADDRESS:	
+		STREET 1:		200 FIRST AVE WEST
+		STREET 2:		STE 500
+		CITY:			SEATTLE
+		STATE:			WA
+		ZIP:			98119
+		BUSINESS PHONE:		2065050800
+
+	MAIL ADDRESS:	
+		STREET 1:		200 FIRST AVE WEST
+		STREET 2:		STE 500
+		CITY:			SEATTLE
+		STATE:			WA
+		ZIP:			98119
+
+	FORMER COMPANY:	
+		FORMER CONFORMED NAME:	F5 LABS INC
+		DATE OF NAME CHANGE:	19990305
+</SEC-HEADER>
+<DOCUMENT>
+<TYPE>10-K/A
+<SEQUENCE>1
+<FILENAME>v68624e10-ka.txt
+<DESCRIPTION>FORM 10-K/A
+<TEXT>
+
+<PAGE>   1
+================================================================================
+
+                                  UNITED STATES
+                       SECURITIES AND EXCHANGE COMMISSION
+                              WASHINGTON, DC 20549
+
+                                 --------------
+                                   FORM 10-K/A
+                                 --------------
+
+            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
+                        SECURITIES EXCHANGE ACT OF 1934
+
+                  For the fiscal year ended September 30, 2000
+
+                                       OR
+
+            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
+                      THE SECURITIES EXCHANGE ACT OF 1934
+
+                        Commission File Number 000-26041
+
+                                F5 NETWORKS, INC.
+             (Exact name of Registrant as specified in its charter)
+
+          WASHINGTON                                     91-1714307
+(State or other jurisdiction of             (I.R.S. Employer Identification No.)
+incorporation or organization)
+
+                              501 ELLIOTT AVE WEST
+                            SEATTLE, WASHINGTON 98119
+                    (Address of principal executive offices)
+
+                                 (206) 272-5555
+              (Registrant's telephone number, including area code)
+
+           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
+                                      NONE
+
+           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
+                           COMMON STOCK, NO PAR VALUE
+
+Indicate by check mark whether the Registrant (1) has filed all reports required
+to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
+the preceding 12 months (or for such shorter period that the registrant was
+required to file such reports), and (2) has been subject to such filing
+requirements for the past 90 days.  Yes [X]  No [ ]
+
+Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
+of Regulation S-K (229.405 of this chapter) is not contained herein, and will
+not be contained, to the best of registrant's knowledge, in definitive proxy or
+information statements incorporated by reference in Part III of this Form 10-K
+or any amendment to this Form 10-K. [ ]
+
+As of December 1, 2000, the aggregate market value of the Registrant's Common
+Stock held by nonaffiliates of the Registrant was $392,846,884 based on the
+closing sales price of the Registrant's Common Stock on the Nasdaq National
+Market.
+
+As of December 1, 2000, the number of shares of the Registrant's Common Stock
+outstanding was 21,696,714.
+
+                                      NONE
+
+Portions of the Registrant's definitive proxy statement relating to its 2001
+annual meeting of shareholders, to be held on April 20, 2001, are incorporated
+by reference into Part III hereof.
+
+================================================================================
+
+                                Page 1 of 9 Pages
+
+<PAGE>   2
+                                    PART III
+
+ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS.
+
+          The Board of Directors are as follows:
+
+          Jeffrey S. Hussey (39) co-founded F5 in February 1996 and has been our
+Chairman since that time. He has served as our Chief Strategist since July 2000.
+From February 1996 to July 2000, Mr. Hussey served as our Chief Executive
+Officer and President. From February 1996 to March 1999, Mr. Hussey also served
+as our Treasurer. From June 1995 to February 1996, Mr. Hussey served as Vice
+President of Alexander Hutton Capital L.L.C., an investment banking firm. From
+September 1993 to July 1995, Mr. Hussey served as President of Pacific Comlink,
+an inter-exchange carrier providing frame relay and Internet access services to
+the Pacific Rim, which he founded in September 1993. Mr. Hussey holds a B.A. in
+Finance from Seattle Pacific University and an M.B.A. from the University of
+Washington.
+
+          John McAdam (49) has served as our President, Chief Executive Officer
+and a director since July 2000. Prior to joining F5, Mr. McAdam served as
+General Manager of the Web server sales business at IBM. 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 IBM in September 1999. Mr. McAdam holds a B.Sc. in Computer Science
+from the University of Glasgow, Scotland.
+
+          Carlton G. Amdahl (48) has served as our Chief Technical Officer since
+February 2000, and as a Director since May 1998. Mr. Amdahl has operated Amdahl
+Associates, an independent consulting firm specializing in technology
+management, product strategy and system architecture since January 1996. Mr.
+Amdahl has served as a Director of Network Caching Technology LLC since February
+1999. From 1985 to January 1996, Mr. Amdahl served as Chairman of the Board of
+Directors and Chief Technical Officer of NetFRAME Systems, a high performance
+network server company, which he founded in 1985. Mr. Amdahl is a Stanford
+University Sloan Fellow and holds a B.S. degree in Electrical Engineering and
+Computer Science from the University of California, Berkeley, and an M.S. in
+Management from Stanford University.
+
+          Alan J. Higginson (53) has served as one of our directors since May
+1996. From November 1995 to November 1998, Mr. Higginson served as President of
+Atrieva Corporation, a provider of advanced data backup and retrieval
+technology. From May 1990 to November 1995, Mr. Higginson served as Executive
+Vice President of Worldwide Sales and Marketing for Sierra On-line, a developer
+of multimedia software for the home personal computer market. From May 1990 to
+November 1995, Mr. Higginson served as President of Sierra On-line's Bright Star
+division, a developer of educational software. Mr. Higginson holds a B.S. in
+Commerce and an M.B.A. from the University of Santa Clara.
+
+          Karl D. Guelich (58) has served as one of our directors since June
+1999. Mr. Guelich has been in private practice as a certified public accountant
+since his retirement from Ernst & Young in 1993, where he served as the Area
+Managing Partner for the Pacific Northwest offices headquartered in Seattle from
+October 1986 to November 1992. Mr. Guelich holds a B.S. degree in Accounting
+from Arizona State University.
+
+          Keith D. Grinstein (40) has served as one of our directors since
+December 1999. Mr. Grinstein has been the Vice Chairman of Nextel International,
+Inc. since September 1999. From January 1996 to February 1999, Mr. Grinstein
+served as President, Chief Executive Officer and as a director of Nextel
+International, Inc. From January 1991 to December 1995, Mr. Grinstein was
+President and Chief Executive Officer of the aviation communications division of
+AT&T Wireless Services, Inc. Mr. Grinstein had a number of positions at McCaw
+Cellular and its subsidiaries, include Vice President, General Counsel and
+Secretary of LIN Broadcasting Company, a subsidiary of McCaw Cellular, and Vice
+President and Assistant General Counsel of McCaw Cellular. He is currently on
+the board of directors for the Ackerley Group, a media and entertainment
+company. Mr. Grinstein received a BA from Yale University and a JD from
+Georgetown University.
+
+          There are no family relationships among any of the Company's directors
+or executive officers. Information on the executive officers can be found in the
+company's SEC filings under Form 10-K.
+
+
+                                       2
+<PAGE>   3
+SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
+
+          Under SEC rules, the Company's directors, executive officers and
+beneficial owners of more than 10% of any class of equity security are required
+to file periodic reports of their ownership, and changes in that ownership, with
+the SEC. Based solely on its review of copies of these reports and
+representations of such reporting persons, the Company believes during fiscal
+2000, such SEC filing requirements were satisfied with the following exceptions:
+Brett L. Helsel did not file one Form 4 for a single transaction, and filed the
+Form 5 disclosing this transaction late. Jeffrey S. Hussey filed one late Form 4
+disclosing three transactions. Steven Goldman filed one late Form 4 disclosing
+a single transaction, and did not file one Form 4 for a single transaction. The
+Form 5 disclosing this transaction was filed late.
+
+COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
+
+          The members of the Compensation Committee during fiscal 2000 were
+Messrs. Higginson, Grinstein and Guelich. None of the Company's executive
+officers served during fiscal 2000 as a member of the board of directors or
+compensation committee of any entity that has had one or more executive officers
+which served as a member of the Company's Board of Directors or Compensation
+Committee.
+
+ITEM 11. EXECUTIVE COMPENSATION.
+
+          The following tables and descriptive materials set forth information
+concerning compensation earned for services rendered to the Company by (a) the
+Chief Executive Officer of the Company (the "CEO"), and (b) the Company's other
+executive officers whose salary and bonus for fiscal 2000 exceeded $100,000 and
+who were serving as executive officers of the Company at the end of the 2000
+fiscal year (collectively, together with the CEO, the "Named Executive
+Officers").
+
+SUMMARY OF COMPENSATION
+
+          The following table summarizes the compensation earned by the Named
+Executive Officers during fiscal 2000 and 1999.
+
+<TABLE>
+<CAPTION>
+                                                                                           LONG TERM
+                                                            ANNUAL COMPENSATION           COMPENSATION
+                                               -----------------------------------------  ------------
+                                                                            OTHER ANNUAL   SECURITIES
+                                                      SALARY     BONUS(1)   COMPENSATION   UNDERLYING
+NAME AND PRINCIPAL POSITION                    YEAR     ($)        ($)         ($)(2)      OPTIONS(#)
+- ---------------------------                    ----  --------  -----------  ------------  ------------
+<S>                                            <C>   <C>       <C>          <C>           <C>
+John McAdam.................................   2000  $ 75,898  $866,000(3)         --       695,000
+  President and Chief Executive Officer        1999        --        --            --            --
+Jeffrey S. Hussey...........................   2000   260,000   283,900     $   3,000       250,000(4)
+  Chairman of the Board and Chief Strategist   1999   233,730   222,557            --            --
+Steven Goldman..............................   2000   124,833   185,330         3,000        70,000
+  Senior Vice President of Sales, Marketing    1999   120,000   132,550            --       149,998
+  and Services
+Carlton G. Amdahl...........................   2000   180,000    24,300         2,625       150,000
+  Chief Technical Officer                      1999        --        --            --            --
+Brett L. Helsel.............................   2000   168,750    81,388        21,000        50,000
+  Senior Vice President of Product             1999   150,000    72,540         5,250        96,000
+  Development
+Robert J. Chamberlain.......................   2000   172,500    74,307         3,000            --(5)
+  Senior Vice President of Finance and         1999    86,923    65,689            --       150,000(6)
+  Chief Financial Officer
+</TABLE>
+
+(1) Includes bonus amounts earned in the fiscal year but actually paid in the
+    following fiscal year.
+
+(2) Consists of the Company's matching contribution under the 401(k) plan. For
+    Mr. Helsel, the total also includes an auto allowance of $18,000 and $5,250
+    for fiscal years 2000 and 1999, respectively.
+
+(3) Reimbursement for retention bonus that Mr. McAdam was required to pay back
+    to a former employer.
+
+                                       3
+<PAGE>   4
+(4) Options were subsequently cancelled and the underlying shares returned to
+    the plan by request of Mr. Hussey.
+
+(5) No options granted by request of Mr. Chamberlain.
+
+(6) The options to purchase these shares were exercised prior to vesting and the
+    shares issued upon exercise are subject to a right of repurchase by the
+    Company. See "Certain Relationships and Transactions" above.
+
+OPTIONS GRANTS IN LAST FISCAL YEAR
+
+          The following table sets forth information concerning the award of
+stock options to the Named Executive Officers during fiscal 2000.
+
+<TABLE>
+<CAPTION>
+                                          PERCENT OF
+                                            TOTAL                               POTENTIAL REALIZABLE VALUE AT
+                              NUMBER OF    OPTIONS                                ASSUMED ANNUAL RATES OF
+                             SECURITIES  GRANTED TO                             STOCK PRICE APPRECIATION FOR
+                             UNDERLYING   EMPLOYEES   EXERCISE OR                     OPTION TERM(2)
+                              OPTIONS     IN FISCAL   BASE PRICE   EXPIRATION   -----------------------------
+NAME                         GRANTED(#)    YEAR(1)      ($/SH)        DATE          5%($)           10%($)
+- ----                        -----------  ----------   -----------  ----------   ------------    -------------
+<S>                         <C>          <C>          <C>          <C>          <C>             <C>
+John McAdam...............   645,000        15.9        $ 42.56       7/24/10    $17,263,912     $43,750,143
+                              50,000(3)      1.2           1.00       7/24/10      3,416,287       5,469,483
+Carlton G. Amdahl.........    37,500         0.9          68.06       10/1/09      1,605,096       4,067,629
+                             112,500         2.8          89.50       2/10/10      6,332,182      16,046,994
+Steven Goldman............    17,500         0.4         114.00      12/31/09      1,254,644       3,179,516
+                              17,500         0.4          67.75       3/31/10        745,633       1,889,580
+                              17,500         0.4          54.56       6/30/10        600,468       1,521,705
+                              17,500         0.4          34.00       10/1/10        374,451         949,082
+Brett L. Helsel...........    12,500         0.3         114.00      12/31/09        896,174       2,271,083
+                              12,500         0.3          67.75       3/31/10        532,595       1,349,700
+                              12,500         0.3          54.56       6/30/10        428,906       1,086,932
+                              12,500         0.3          34.00       9/29/10        267,280         677,340
+Jeffrey S. Hussey(4)......   110,000         2.7          85.50      10/20/09      5,914,753      14,989,147
+                             140,000         3.5          85.50      10/20/09      7,527,868      19,077,097
+</TABLE>
+- -------
+
+(1) The total number of stock options granted in fiscal 2000 by the Company was
+    4,034,320, including options granted to executive officers, to approximately
+    500 employees.
+
+(2) These assumed rates of appreciation are provided in order to comply with
+    requirements of the SEC, and do not represent the Company's expectation as
+    to the actual rate of appreciation of the Common Stock. The actual value of
+    the options will depend on the performance of the Common Stock, and may be
+    greater or less than the amounts shown.
+
+(3) Options vest in two equal annual increments following the grant date.
+
+(4) Options were subsequently cancelled and the underlying shares returned to
+    the plan by request of Mr. Hussey.
+
+                                       4
+<PAGE>   5
+EXERCISE OF STOCK OPTIONS AND FISCAL YEAR-END OPTION VALUES
+
+          The following table sets forth information concerning the exercise of
+stock options during fiscal 2000 by each of the Named Executive Officers and the
+fiscal year-end value of unexercised options.
+
+<TABLE>
+<CAPTION>
+                                                               NUMBER OF SECURITIES
+                                                              UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
+                                                                    OPTIONS AT              IN-THE-MONEY OPTIONS AT
+                                                              SEPTEMBER 30, 2000 (#)       SEPTEMBER 30, 2000($)(2)
+                             SHARES                        ----------------------------   --------------------------
+                           ACQUIRED ON        VALUE        EXERCISABLE    UNEXERCISABLE   EXERCISABLE  UNEXERCISABLE
+NAME                       EXERCISE(#)    REALIZED($)(1)       (#)             (#)            ($)          ($)
+- ----                       -----------   ---------------   -----------    -------------   -----------  -------------
+<S>                        <C>           <C>               <C>            <C>             <C>          <C>
+Carlton G. Amdahl.......      10,000       $  515,300        55,5000        140,500        $  636,840   $  990,640
+Steven Goldman..........     100,920        5,955,257        103,277        160,551         3,451,895    3,454,464
+Brett L. Helsel.........      46,261        3,324,889         45,740        173,999         1,608,821    4,432,890
+- ----------
+</TABLE>
+
+(1) Based on the market value of the Common Stock at the exercise date, less the
+    exercise price, multiplied by the number of shares acquired upon exercise.
+
+(2) Based on the $34.00 per share market value of the Common Stock at September
+    30, 2000, less the exercise price, multiplied by the number of shares
+    underlying the option.
+
+REPORT OF COMPENSATION COMMITTEE
+
+          The information contained in this report shall not be deemed to be
+"soliciting material" or to be "filed" with the Securities and Exchange
+Commission, nor shall such information be incorporated by reference into any
+future filings under the Securities Act of 1933, as amended, or the 1934
+Securities Exchange Act, as amended, except to the extent that the Company
+specifically incorporates it by reference in such filing.
+
+          The compensation committee is comprised of three members of the board
+of directors who are not employees of the Company. It is responsible for setting
+and monitoring policies governing compensation of executive officers. The
+compensation committee reviews the performance and compensation levels for
+executive officers and sets salary and bonus levels and option grants under the
+Company's stock option plans. The objectives of the committee are to correlate
+executive compensation with our business objectives and performance, and to
+enable the Company to attract, retain and reward executive officers who
+contribute to its long-term success.
+
+    Salary
+
+          The compensation committee annually assesses the performance and sets
+the salary of the President and Chief Executive Officer. This position was held
+by Jeffrey S. Hussey until July 2000, and by John McAdam since that time. In
+turn, the President and Chief Executive Officer annually assesses the
+performance of all other executive officers and recommends salary increases
+which are reviewed and approved by the compensation committee.
+
+          In particular, Mr. McAdam's compensation as President and Chief
+Executive Officer is based on compensation levels of President/Chief Executive
+Officers of comparable size technology companies. A portion of Mr. McAdam's
+compensation consists of incentive compensation that is based on the Company's
+financial performance.
+
+          In determining executive officer salaries, the compensation committee
+reviews recommendations from Mr. McAdam which include information from salary
+surveys covering technology companies in the Seattle and other comparable areas,
+individual performance levels and the Company's financial condition. The
+compensation committee also considers incentive compensation based on the
+Company's financial performance.
+
+          Bonuses for Mr. McAdam and the other executive officers are paid on a
+quarterly basis according to a formula based on actual financial results.
+
+                                       5
+<PAGE>   6
+    Stock Options
+
+          The compensation committee believes that employee equity ownership
+provides significant motivation to executive officers to maximize value for the
+Company's shareholders and, therefore, periodically grants stock options under
+our employee stock option plans. Stock options are typically granted at the
+current market price and will only have value if the Company's stock price
+increases over the exercise price.
+
+          The compensation committee determines the size and frequency of option
+grants for executive officers, based on recommendations from the Chief Executive
+Officer. Recommendations for options are based on the relative position and
+responsibilities of each executive officer, previous and expected contributions
+of each officer to the Company's success, and previous options grants to such
+executive officers. Generally option grants vest over a four-year period.
+Several below-market grants have been given to certain executive officers that
+vest over a two -year period.
+
+          Under the Omnibus Budget Reconciliation Act of 1993, the federal
+income tax deduction for certain types of compensation paid to the chief
+executive officer and four other most highly compensated executive officers of
+publicly held companies 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 had decided that it is not appropriate at this
+time to limit the Company's discretion to design the cash compensation packages
+payable to the Company's executive officers.
+
+                                                      Compensation Committee
+
+                                                      Karl D. Guelich, Chair
+                                                      Alan J. Higginson
+                                                      Keith D. Grinstein
+
+STOCK PRICE PERFORMANCE
+
+          The information regarding stock price performance contained in this
+section shall not be deemed to be "soliciting material" or to be "filed" with
+the Securities and Exchange Commission, nor shall such information be
+incorporated by reference into any future filings under the Securities Act of
+1933, as amended, or the 1934 Securities Exchange Act, as amended, except to the
+extent that the Company specifically incorporates it by reference in such
+filing.
+
+          The graph below compares the annual percentage change in the
+cumulative total return on the Common Stock with the CRSP Total Return Index for
+the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Computer Manufacturer
+Stocks Index for the period commencing June 4, 1999 the date of the Company's
+initial public offering, and ending September 30, 2000.
+
+                      COMPARISON OF CUMULATIVE TOTAL RETURN
+                             AMONG F5 NETWORKS INC.,
+                  NASDAQ STOCK MARKET (US COMPANIES) INDEX AND
+                    NASDAQ COMPUTER MANUFACTURER STOCKS INDEX
+
+<TABLE>
+<CAPTION>
+                                                  6/4/1999       9/30/1999        9/30/2000
+                                                  --------       ---------        ---------
+<S>                                               <C>            <C>              <C>
+F5 Networks                                        100.00          456.99           228.49
+NASDAQ Computer Manufacturer's  Stock Index        100.00          125.61           210.13
+NASDAQ (U.S. Companies)                            100.00          110.71           147.68
+</TABLE>
+
+        Assumes that $100 was invested June 4, 1999 in the Company's Common
+Stock and in each index, and that all dividends were reinvested, Shareholder
+returns over the indicated period should not be considered indicative of future
+shareholder returns.
+
+
+
+                                       6
+<PAGE>   7
+ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
+
+          The following table sets forth information regarding ownership of the
+Common Stock as of December 11, 2000 by (a) each person known to the Company to
+own more than 5% of the outstanding shares of the Common Stock on December 11,
+2000, (b) each director and nominee for director of the Company, (c) the
+Company's Chief Executive Officer and each other executive officer named in the
+compensation tables appearing later in this Proxy Statement and (d) all
+directors and executive officers as a group. The information in this table is
+based solely on statements in filings with the Securities and Exchange
+Commission (the "SEC") or other reliable information.
+
+<TABLE>
+<CAPTION>
+                                                                   NUMBER OF SHARES OF     PERCENT OF
+                                                                      COMMON STOCK        COMMON STOCK
+        NAME AND ADDRESS(1)                                       BENEFICIALLY OWNED(2)  OUTSTANDING(2)
+        -------------------                                       ---------------------  --------------
+<S>                                                               <C>                    <C>
+        Britannia Holdings Limited(3).............................    2,320,000            10.7%
+          P.O. Box 556
+          Main Street
+          Charlestown, Nevis
+        Cypress Partners Limited Partnership(4)...................    1,119,342             5.2%
+          P.O. Box 9006
+          Seattle, WA 98109
+        Jeffrey S. Hussey(5)......................................    2,300,000            10.6%
+        John McAdam...............................................           --              --
+        Steven Goldman(6).........................................      252,942              --
+        Robert J. Chamberlain(7)..................................      145,000              --
+        Brett L. Helsel(8)........................................      130,979              --
+        Carlton G. Amdahl(9)......................................      121,000              --
+        Keith D. Grinstein(10)....................................       11,000              --
+        Karl D. Guelich(11).......................................       10,000              --
+        Alan J. Higginson (12)....................................      116,300              --
+        All directors and executive officers as a group (9            3,087,221            14.2%
+        people)(13)...............................................
+</TABLE>
+- ----------
+
+(1)  Unless otherwise indicated, the address of each of the named individuals is
+     c/o F5 Networks, Inc., 501 Elliott Avenue West, Seattle, Washington 98119.
+
+(2)  Beneficial ownership of shares is determined in accordance with the rules
+     of the SEC and generally includes any shares over which a person exercises
+     sole or shared voting or investment power, or of which a person has the
+     right to acquire ownership within 60 days after December 11, 2000. Except
+     as otherwise noted, each person or entity has sole voting and investment
+     power with respect to the shares shown.
+
+(3)  The number of shares held is based solely on filings made by Britannia
+     Holdings Limited pursuant to Section 16(a) of the Securities Exchange Act
+     of 1934, as amended. The Duvall Trust is the sole shareholder of Britannia
+     Holdings Limited. The Elfin Trust Company Limited, a Guernsey corporation,
+     is the trustee of the Duvall Trust. Mr. Peter Howe is the trustee for the
+     Elfin Trust Company Limited.
+
+(4)  Cypress Partners Limited Partnership ("Cypress LP") holds 500,825 shares;
+     Cypress Nevada LLC, a wholly owned subsidiary of Cypress LP, holds 618,517
+     shares. The number of shares held is based solely on representations made
+     by Cypress LP.
+
+                                       7
+<PAGE>   8
+(5)  Does not include 313,300 shares held by Brian Dixon as trustee of the
+     Hussey Family Trust fbo Mr. Hussey's minor child. Mr. Hussey disclaims any
+     beneficial ownership of the shares held by the trust.
+
+(6)  Includes 146,972 shares issuable upon exercise of options exercisable
+     within 60 days of December 11, 2000.
+
+(7)  Includes 84,375 shares subject to repurchase by Company.
+
+(8)  Includes 73,124 shares issuable upon exercise of options exercisable within
+     60 days of December 11, 2000.
+
+(9)  Includes 93,000 shares issuable upon exercise of options exercisable within
+     60 days of December 11, 2000.
+
+(10) Includes 10,000 shares issuable upon exercise of options exercisable within
+     60 days of December 11, 2000.
+
+(11) Consists of shares issuable upon exercise of options exercisable within 60
+     days of December 11, 2000.
+
+(12) Includes 89,000 shares issuable upon exercise of options exercisable within
+     60 days of December 11, 2000.
+
+(13) Includes 84,375 shares subject to repurchase by the Company and 422,096
+     shares issuable upon exercise of options exercisable within 60 days of
+     December 11, 2000.
+
+ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
+
+          In March 1999, the Company issued 150,000 shares of the Company's
+Common Stock to Robert J. Chamberlain, the Company's Senior Vice President of
+Finance, Chief Financial Officer and Treasurer, in exchange for a $750,000
+promissory note. These shares were acquired by Mr. Chamberlain upon the exercise
+of stock options that vest over a period of four years. The note bears interest
+at a rate of 4.83% which is collateralized by the shares and partially
+guaranteed by Mr. Chamberlain and is due in 2003. Under the related pledge
+agreement, the Company has the obligation to repurchase any remaining unvested
+shares, and the note becomes due upon Mr. Chamberlain's termination. Further,
+the shares may not be transferred until they are vested and paid for except
+under certain circumstances as provided under the pledge agreement. During the
+fiscal year ended, September 30, 2000, Mr. Chamberlain paid $49,520 of interest
+on the note and repaid $281,250 of principal of the note.
+
+          The Company has entered into indemnification agreements with the
+Company's directors and certain 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.
+
+          The Company believes that the foregoing transactions were in the
+Company's best interest and were made on terms no less favorable to the Company
+than could have been obtained from unaffiliated third parties. All future
+transactions between the Company and any of the Company's officers, directors or
+principal shareholders will be approved by a majority of the independent and
+disinterested members of the Board of Directors, will be on terms no less
+favorable to the Company than could be obtained from unaffiliated third parties
+and will be in connection with the Company's bona fide business purposes.
+
+
+                                       8
+<PAGE>   9
+                                   SIGNATURE
+
+          Pursuant to the requirements of Section 13 or 15(d) of the Securities
+Exchange Act of 1934, the Registrant has duly caused this report to be signed on
+its behalf by the undersigned, thereunto duly authorized.
+
+                                    F5 NETWORKS, INC.
+
+Dated: January 24, 2001
+
+                                    By:    /s/ ROBERT J. CHAMBERLAIN
+                                        ----------------------------------------
+                                           Robert J. Chamberlain
+                                           Chief Financial Officer
+
+                                       9
+</TEXT>
+</DOCUMENT>
+</SEC-DOCUMENT>
+-----END PRIVACY-ENHANCED MESSAGE-----