<PAGE> 1
As filed with the Securities and Exchange Commission on November 15, 1995
Registration No. 33-________________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
CISCO SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
CALIFORNIA 77-0059951
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
170 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Address of principal executive offices) (Zip Code)
------------------
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
(Full title of the plan)
------------------
JOHN T. CHAMBERS
PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
CISCO SYSTEMS, INC.
170 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Name and address of agent for service)
(408) 526-4000
(Telephone number, including area code, of agent for service)
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered (1) per Share (2) Price (2) Fee
---------- -------------- ------------- --------- ---
<S> <C> <C> <C> <C>
Grand Junction Networks, Inc.
1992 Stock Plan
Options to Purchase N/A N/A N/A N/A
Common Stock
Common Stock 1,118,047 $11.19 $12,510,946 $4,314.00
================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Cisco's Common Stock which become issuable under the Grand Junction
Networks, Inc. 1992 Stock Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the receipt of consideration which results in an increase in the number
of the Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the weighted
average exercise price of the outstanding options.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
Cisco Systems, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended July 30,1995 filed with the Commission pursuant to
Section 13 of the Securities Exchange Act of 1934 (the "1934
Act").
(b) The Registrant's Registration Statement No. 0-18225 on Form
8-A filed with the Commission on January 11, 1990, together
with Amendment No. 1 on Form 8 filed with the Commission on
February 15, 1990, in which there is described the terms,
rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 317 of the California Corporations Code authorizes a
court to award, or a corporation's Board of Directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit indemnification
(including reimbursement of expenses incurred) under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the "1933
Act"). The Registrant's Restated Articles of Incorporation, as amended, and
Amended By-laws provide for indemnification of its directors, officers,
employees and other agents to the maximum extent permitted by the California
Corporations Code. In addition, the Registrant has entered into Indemnification
Agreements with each of its directors and officers.
Item 7. Exemption from Registration Claimed
Not Applicable.
II-1.
<PAGE> 3
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Exhibit
-------------- -------
<S> <C>
5. Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Accountants - Coopers & Lybrand L.L.P.
23.2 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24. Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 Grand Junction Networks, Inc. 1992 Stock Plan.
99.2 Form of Stock Option Agreement.
99.3 Form of Stock Option Agreement - Officer, No Acceleration.
99.4 Form of Stock Option Agreement - Officer, Acceleration.
99.5 Form of Notice of Stock Option Grant.
99.6 Form of Notice of Stock Option Grant - Transfer of Control.
99.7 Form of Notice of Stock Option Grant - Officer Grant.
99.8 Form of Exercise Notice for Shares and Restricted Stock Agreement.
99.9 Form of Stock Option Assumption Agreement.
99.10 Form of Stock Option Assumption Agreement - Officer.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
into the Registration Statement; (2) that for the purpose of determining any
liability under the 1933 Act each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the Grand Junction Networks, Inc. 1992 Stock
Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2.
<PAGE> 4
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnity provisions summarized in Item 6 or
otherwise, the Registrant has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
II-3.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on this 14th day
of November, 1995.
CISCO SYSTEMS, INC.
By /s/John T. Chambers
---------------------------
John T. Chambers
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of CISCO SYSTEMS,
INC., a California corporation, do hereby constitute and appoint John T.
Chambers and Larry R. Carter, and each of them, the lawful attorneys and agents,
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, and any one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the 1933 Act, as amended, and any rules or regulations or
requirements of the Commission in connection with this Registration Statement.
Without limiting the generality of the foregoing power and authority, the powers
granted include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this Registration
Statement, to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms all that said attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the 1933 Act, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/John T. Chambers President, Chief Executive November 14, 1995
- -----------------------
John T. Chambers Officer and Director (Principal
Executive Officer)
</TABLE>
II-4.
<PAGE> 6
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/Larry R. Carter Vice President, Finance and Administration, November 14, 1995
- ----------------------------------
Larry R. Carter Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
/s/John P. Morgridge Chairman of the Board November 14, 1995
- ----------------------------------
John P. Morgridge
/s/Donald T. Valentine Vice Chairman of the Board November 14, 1995
- ----------------------------------
Donald T. Valentine
/s/Michael S. Frankel Director November 14, 1995
- ----------------------------------
Michael S. Frankel
/s/James F. Gibbons Director November 14, 1995
- ----------------------------------
James F. Gibbons
/s/Robert L. Puette Director November 14, 1995
- ----------------------------------
Robert L. Puette
Director , 1995
- ----------------------------------
Masayoshi Son
</TABLE>
II-5.
<PAGE> 7
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CISCO SYSTEMS, INC.
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
5. Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Accountants - Coopers & Lybrand L.L.P.
23.2 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
24. Power of Attorney. Reference is made to page II-4 of this Registration Statement.
99.1 Grand Junction Networks, Inc. 1992 Stock Plan.
99.2 Form of Stock Option Agreement.
99.3 Form of Stock Option Agreement - Officer, No Acceleration.
99.4 Form of Stock Option Agreement - Officer, Acceleration.
99.5 Form of Notice of Stock Option Grant.
99.6 Form of Notice of Stock Option Grant - Transfer of Control.
99.7 Form of Notice of Stock Option Grant - Officer Grant.
99.8 Form of Exercise Notice for Shares and Restricted Stock Agreement.
99.9 Form of Stock Option Assumption Agreement.
99.10 Form of Stock Option Assumption Agreement - Officer.
</TABLE>
<PAGE> 1
EXHIBIT 5
Opinion of Brobeck, Phleger & Harrison.
<PAGE> 2
November 14, 1995
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134-1706
Re: Cisco Systems, Inc. Registration Statement for
Offering of 1,118,047 Shares of Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 1,118,047 shares of
the common stock ("Common Stock") of Cisco Systems, Inc. (the "Company")
issuable under the Grand Junction Networks, Inc. 1992 Stock Plan (the "Stock
Plan") as assumed by the Company on November 6, 1995. We advise you that, in our
opinion, when such shares have been issued and sold pursuant to the applicable
provisions of the assumed Stock Plan and in accordance with the Registration
Statement, such shares will be validly issued, fully paid and nonassessable
shares of Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference of our reports dated August 15,
1995, with respect to the financial statements and schedules of Cisco Systems,
Inc. for the years ended July 30, 1995, included in the Annual Report (Form
10-k) for 1995, filed with the Securities and Exchange Commission, in the
Registration Statement on Form S-8 of Cisco Systems, Inc. for the registration
of 1,118,047 shares of its common stock and 1,118,047 options to purchase
shares of its common stock.
COOPERS & LYBRAND L.L.P.
San Jose, California
November 14, 1995
<PAGE> 1
EXHIBIT 23.2
Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5.
<PAGE> 1
EXHIBIT 24
Power of Attorney. Reference is made to page II-4
of this Registration Statement.
<PAGE> 1
EXHIBIT 99.1
Grand Junction Networks, Inc. 1992 Stock Plan.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
(AS AMENDED EFFECTIVE_________________ , 1995)
1. Purposes of the Plan. The purposes of this Stock Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonstatutory stock options, as
determined by the Administrator at the time of the grant of an option and
subject to the applicable provisions of Section 422 of the Code, as amended, and
the regulations promulgated thereunder. Stock purchase rights may also be
granted under the Plan.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Administrator" means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.
(d) "Committee" means the Committee appointed by the Board
of Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock, par value
$0.001, of the Company.
(f) "Company" means Grand Junction Networks, Inc., a
Delaware corporation.
(g) "Consultant" means any person, including an advisor,
who is engaged by the Company or any Parent or Subsidiary of the Company to
render services and is compensated for such services, and any director of the
Company whether compensated for such services or not provided that if and in the
event the Company registers any class of any equity security pursuant to the
Exchange Act, the term Consultant shall thereafter not include directors who are
not compensated for their services or are paid only a director's fee by the
Company.
<PAGE> 3
(h) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(j) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system including without limitation the
National Market System of the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system or exchange for the last market trading day
prior to the time of determination) as reported in the Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and low asked prices for the
Common Stock; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.
(k) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(l) "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to the
Plan.
(n) "Option Agreement" means a written agreement between
the Company and an Optionee setting forth the terms, conditions and restrictions
of the Option granted to the Optionee and any shares acquired upon the exercise
thereof.
(o) "Optioned Stock" means the Common Stock subject to an
Option.
2.
<PAGE> 4
(p) "Optionee" means an Employee or Consultant who receives
an Option.
(q) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(r) "Plan" means this 1992 Stock Plan, as amended from time
to time.
(s) "Purchaser" means an Employee or Consultant who
exercises a Stock Purchase Right.
(t) "Restricted Stock Agreement" means a written agreement
between the Company and a Purchaser setting forth the terms, conditions and
restrictions of the Restricted Stock acquired by the Purchaser upon the exercise
of a Stock Purchase Right.
(u) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 13 of the Plan.
(v) "Stock Purchase Right" means the right to purchase
Restricted Stock granted pursuant to Section 11 of the Plan.
(w) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
(x) "Ten Percent Owner Optionee" means an Optionee who, at
the time an Option is granted to the Optionee, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary of the Company within the meaning of
Section 422(b)(6) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is [5,450,000] shares of Common Stock. The
shares may be authorized, but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under plan.
3.
<PAGE> 5
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options or Stock Purchase Rights to
Employees who are also officers or directors of the Company, the Plan shall be
administered by (A) the Board if the Board may administer the Plan in compliance
with Rule 16b-3 promulgated under the Exchange Act or any successor thereto
("Rule 16b-3") with respect to a plan intended to qualify thereunder as a
discretionary plan, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted in such a manner as to permit the
Plan to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by Rule 16b-3 with respect to a plan intended
to qualify thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.
(iii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options or Stock Purchase Rights to
Employees or Consultants who are neither directors nor officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which Committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the administration of incentive stock option
plans, if any, of Delaware corporate and securities laws and of the Code (the
"Applicable Laws"). Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members of
the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions
of the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(j) of the Plan;
4.
<PAGE> 6
(ii) to select the officers, Consultants and Employees
to whom Options and Stock Purchase Rights may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock
to be covered by each such award granted hereunder;
(v) to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;
(vi) to approve forms of Option Agreement and
Restricted Stock Agreement for use under the Plan;
(vii) to determine the terms, conditions and
restrictions applicable to each Option and Stock Purchase Right (which need not
be identical) and any shares acquired upon the exercise thereof, including,
without limitation, (A) the exercise price of the Option or Stock Purchase
Right, (B) the method of payment for shares purchased upon the exercise of the
Option or Stock Purchase Right, (C) the method for satisfaction of any tax
withholding obligation arising in connection with the Option, Stock Purchase
Right or shares acquired upon the exercise thereof, including by the withholding
or delivery of shares of stock, (D) the timing, terms and conditions of the
exercisability of the Option or Stock Purchase Right or the vesting of any
shares acquired upon the exercise thereof, (E) the time of the expiration of the
Option or Stock Purchase Right, (F) the effect of the Optionee's or Purchaser's
termination of employment or service with the Company or a Parent or Subsidiary
of the Company on any of the foregoing, and (G) all other terms, conditions and
restrictions applicable to the Option, Stock Purchase Right or such shares not
inconsistent with the terms of the Plan;
(viii) to amend, modify, extend, or renew, or grant a
new Option or Stock Purchase Right in substitution for, any Option or Stock
Purchase Right, or to waive any restrictions or conditions applicable to any
Option, Stock Purchase Right or any shares acquired upon the exercise thereof;
(ix) to accelerate, continue, extend or defer the
exercisability of any Option or Stock Purchase Right or the vesting of any
shares acquired upon the exercise thereof, including with respect to the period
following an Optionee's or Purchaser's termination of employment or service with
the Company or a Parent or Subsidiary of the Company;
(x) to prescribe, amend or rescind rules, guidelines
and policies relating to the Plan, or to adopt supplements to, or alternative
versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the
5.
<PAGE> 7
laws of, or to accommodate the tax policy or custom of, foreign jurisdictions
whose citizens may be granted Options; and
(xi) to correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Option Agreement or Restricted
Stock Agreement used under the Plan and to make all other determinations and
take such other actions with respect to the Plan or any Option or Stock Purchase
Right as the Board may deem advisable to the extent consistent with the Plan and
applicable law.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and Purchasers and any other holders of any Options,
Stock Purchase Right, or shares acquired upon the exercise thereof.
5. Eligibility for Options.
(a) Nonstatutory Stock Options may be granted to Employees
and Consultants. Incentive Stock Options may be granted only to Employees. For
purposes of this Section 5(a), "Employees" shall include prospective Employees
to whom Options are granted in connection with written offers of employment with
the Company or any Parent or Subsidiary of the Company, and "Consultants" shall
include prospective Consultants to whom Options are granted in connection with
written offers of engagement with the Company or any Parent or Subsidiary of the
Company. An Employee or Consultant who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the Option Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary of the Company)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. If the Code is amended to provide for a different limitation from that
set forth in this Section 5(b), such different limitation shall be deemed
incorporated herein effective as of the date and with respect to such Options as
required or permitted by such amendment to the Code. If an Option is treated as
an Incentive Stock Option in part and as a Nonstatutory stock option in part by
reason of the limitation set forth in this Section 5(b), the Optionee may
designate which portion of such Option the Optionee is exercising and may
request that separate certificates representing each such portion be issued upon
the exercise of the Option. In the absence of such designation, the Optionee
shall be deemed to have exercised the Incentive Stock Option portion of the
Option first.
6.
<PAGE> 8
(c) For purposes of Section 5(b), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right
with respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
6. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the stockholders of the Company as described in Section 19 of the Plan. All
Incentive Stock Options shall be granted, if at all, before April 2, 2002,
unless the Plan is sooner terminated pursuant to Section 15. Notwithstanding the
foregoing, if the maximum number of shares of Common Stock issuable pursuant to
the Plan as provided in Section 3 has been increased at any time, all Incentive
Stock Options shall be granted, if at all, no later than the last day preceding
the tenth (10th) anniversary of the earlier of (a) the date on which the latest
such increase in the maximum number of shares of Common Stock issuable under the
Plan was approved by the stockholders of the Company or (b) the date such
amendment was adopted by the Board.
7. Term of Option. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that in the case of an
Incentive Stock Option, the term shall be no more than ten (10) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary of the Company, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:
(i) The per Share exercise price of an Incentive Stock
Option shall be no less than 100% of the Fair Market Value per Share on the
effective date of grant of the Option; provided, however, that the per Share
exercise price of an Incentive Stock Option granted to a Ten Percent Owner
Optionee shall be no less than 110% of the Fair Market Value per Share on the
effective date of grant of the Option.
7.
<PAGE> 9
(ii) The per Share exercise price of a Nonstatutory Stock
Option shall be no less than 85% of the Fair Market Value per Share on the
effective date of grant of the Option.
(b) The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist entirely of (i) cash,
(ii) check, (iii) other Shares which (x) in the case of Shares acquired upon
exercise of an Option either have been owned by the Optionee for more than six
months on the date of surrender or were not acquired, directly or indirectly,
from the Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, (iv) authorization from the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (v) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (vi) any combination of the foregoing
methods of payment, or (vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws.
9. Exercise of Option. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the Board,
including performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan.
(a) An Option may not be exercised for a fraction of a
Share.
(b) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.
8.
<PAGE> 10
(c) Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
10. Non-Transferability of Options. The Option may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase Restricted Stock. Stock Purchase
Rights may be issued either alone, in addition to, or in tandem with other
awards granted under the Plan and/or cash awards made outside of the Plan. After
the Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid (if any), and the
time within which such person must accept such offer, which shall in no event
exceed one-hundred twenty (120) days from the date of grant of the Stock
Purchase Right. The offer shall be accepted by execution of a Restricted Stock
Agreement in the form determined by the Administrator. Shares purchased pursuant
to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock."
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
Purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Agreement shall be the original price paid by Purchaser and may
be paid by cancellation of any indebtedness of the purchaser of the Company. The
repurchase option with respect to the Restricted Stock shall lapse at such rate
as the Administrator may determine.
(c) Other Provisions. The Restricted Stock Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Agreements need not be the same
with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase Right
is exercised, the Purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
9.
<PAGE> 11
12. Tax Withholding.
(a) The Company, in its sole discretion, shall have the
right to require the Optionee or Purchaser, through payroll withholding, cash
payment or otherwise, to make adequate provision for any such tax withholding
obligations of the Company or any Parent or Subsidiary of the Company arising in
connection with the Option, the Stock Purchase Right or the shares acquired
thereunder. The Company shall have no obligation to deliver Shares or to release
Shares from an escrow established pursuant to the acquisition of such Shares
until such tax withholding obligations have been satisfied by the Optionee or
the Purchaser.
(b) At the discretion of the Administrator, Optionees or
Purchasers may satisfy withholding obligations as provided in this paragraph.
When an Optionee or Purchaser incurs tax liability in connection with an Option
or Stock Purchase Right, which tax liability is subject to tax withholding under
applicable tax laws, and the Optionee or Purchaser is obligated to pay the
Company (or a Parent or Subsidiary of the Company) an amount required to be
withheld under applicable tax laws, the Optionee or Purchaser may satisfy the
withholding tax obligation by electing to have the Company withhold from the
Shares to be issued upon exercise of the Option, or the Shares to be issued in
connection with the Stock Purchase Right, if any, that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined (the "Tax Date"). All elections
by an Optionee or Purchaser to have Shares withheld for this purpose shall be
made in writing in a form acceptable to the Administrator and shall be subject
to the following restrictions:
(i) the election must be made on or prior to the
applicable Tax Date;
(ii) once made, the election shall be irrevocable as to
the particular Shares of the Option or Stock Purchase Right as to which the
election is made;
(iii) all elections shall be subject to the consent or
disapproval of the Administrator;
(iv) if the Optionee or Purchaser is subject to Rule
16b-3, the election must comply with the applicable provisions of Rule 16b-3 and
shall be subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(c) In the event the election to have Shares withheld is
made by an Optionee or Purchaser and the Tax Date is deferred under Section 83
of the Code because no election is filed under Section 83(b) of the Code, the
Optionee or Purchaser shall receive the full number of Shares with respect to
which the Option or Stock Purchase Right is
10.
<PAGE> 12
exercised but such Optionee or Purchaser shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
13. Adjustments Upon Changes in Capitalization or Transfer of
Control.
(a) Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.
(b) Transfer of Control.
(i) Definitions.
(A) An "Ownership Change Event" shall be deemed
to have occurred if any of the following occurs with respect to the Company: (1)
the direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (2) a merger or consolidation in which the
Company is a party; (3) the sale, exchange, or transfer of all or substantially
all of the assets of the Company; or (4) a liquidation or dissolution of the
Company.
(B) A "Transfer of Control" shall mean an
Ownership Change Event or a series of related Ownership Change Events
(collectively, the "Transaction") wherein the Stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company's voting stock immediately before the Transaction direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company, its
successor, or the corporation or corporations to which the assets of the Company
were
11.
<PAGE> 13
transferred (the "Transferee Corporation(s)"), as the case may be. For purposes
of the preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company, its
successor or the Transferee Corporation(s), as the case may be, either directly
or through one or more subsidiary corporations. The Board shall have the right
to determine whether multiple sales or exchanges of the voting stock of the
Company or multiple Ownership Change Events are related, and its determination
shall be final, binding and conclusive.
(ii) Effect of Transfer of Control. In the event of a
Transfer of Control the surviving continuing successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "Acquiring
Corporation"), may either assume the Company's rights and obligations under
outstanding Options and/or Stock Purchase Rights or substitute for outstanding
Options and/or Stock Purchase Rights substantially equivalent options or rights,
as the case may be, for the Acquiring Corporation's stock. In the event the
Acquiring Corporation elects not to assume or substitute for outstanding Options
in connection with a Transfer of Control, any unexercisable or unvested portion
of the outstanding Options shall be immediately exercisable and vested in full
as of the date ten (10) days prior to the date of the Transfer of Control. In
the event the Acquiring Corporation elects not to assume or substitute for
outstanding Stock Purchase Rights in connection with a Transfer of Control, any
unvested Restricted Stock shall be immediately vested in full as of the date ten
(10) days prior to the date of the Transfer of Control. The exercise of any
Option or vesting of any Option or Restricted Stock that was permissible solely
by reason of this Section 13(b)(ii) shall be conditioned upon the consummation
of the Transfer of Control. Any Options or Stock Purchase Rights which are
neither assumed or substituted for by the Acquiring Corporation in connection
with the Transfer of Control nor exercised as of the date of the Transfer of
Control shall terminate and cease to be outstanding effective as of the date of
the Transfer of Control. Notwithstanding the foregoing, shares acquired upon
exercise of an Option or a Stock Purchase Right prior to the Transfer of Control
and any consideration received pursuant to the Transfer of Control with respect
to such shares shall continue to be subject to all applicable provisions of the
agreement evidencing such Option or Stock Purchase Right except as otherwise
provided in such agreement. Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options or Stock
Purchase Rights immediately prior to an Ownership Change Event described in
Section 13(b)(i)(A) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
and Stock Purchase Rights shall not terminate unless the Board otherwise
provides in its sole discretion.
14. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such
12.
<PAGE> 14
Option, or such other date as is determined by the Board; provided, however,
that for an Incentive Stock Option granted to a prospective Employee upon the
condition that such person become an Employee, the date of grant shall be the
date such person becomes an Employee. Notice of the determination shall be given
to each Employee or Consultant to whom an Option is so granted within a
reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee or Purchaser under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with Rule
16b-3 under the Exchange Act or with Section 422 of the Code (or any other
applicable law or regulation, including the requirements of the NASD or an
established stock exchange), the Company shall obtain stockholder approval of
any Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment
or termination of the Plan shall not affect Options and Stock Purchase Rights
already granted and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee or Purchaser and the Board, which
agreement must be in writing and signed by the Optionee or Purchaser and the
Company.
16. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option or Stock Purchase
Right, the Company may require the person exercising such Option or Stock
Purchase Right to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
17. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
13.
<PAGE> 15
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
18. Agreements. Options and Stock Purchase Rights shall be
evidenced by written agreements in such form as the Board shall approve from
time to time.
19. Stockholder Approval. Continuance of the Plan shall be
subject to approval by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted. Such stockholder approval shall be
obtained in the degree and manner required under applicable state and federal
law.
20. Provision of Information. Each Optionee shall be given
access to information concerning the Company equivalent to that information
generally made available to the Company's common stockholders.
IN WITNESS WHEREOF, the undersigned Secretary of the Company
certifies that the foregoing Grand Junction Networks, Inc. 1992 Stock Option
Plan was duly amended by the Board on ____________________, 1995.
------------------------------
14.
<PAGE> 1
EXHIBIT 99.2
Form of Stock Option Agreement.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC
1992 STOCK PLAN
EXHIBIT A TO NOTICE OF GRANT
STOCK OPTION AGREEMENT
1. Grant of Option. GRAND JUNCTION NETWORKS, INC., a
California corporation (the "Company"), hereby grants to the Optionee (the
"Optionee") named in the Notice of Grant, an option (the "Option") to purchase a
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms, conditions and definitions of the 1992 Stock Plan (the "Plan") adopted by
the Company, which is incorporated herein by reference. In the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Option Agreement, the terms and conditions of the Plan shall
prevail unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of Optionee's
employment or consulting relationship, the exercisability of the option is
governed by the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form provided by the Company (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as to the
holder's investment intent with respect to the Exercised Shares as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be signed by the Optionee and, if the Optionee is married, by the
Optionee's spouse, and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
1
<PAGE> 3
No Shares shall be issued pursuant to the exercise of
this Option unless such issuance and exercise complies with all relevant
provisions of law and requirements of any stock exchange upon which the Shares
are then listed. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:
(a) cash; or
(b) check; or
(c) such other consideration as is indicated on the Notice
of Grant.
4. Optionee's Representations. In the event the Shares
purchasable pursuant to the exercise of this Option have not been registered
under the Securities Act of 1933, as amended, at the time this Option is
exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of this Option, deliver to the Company his
Investment Representation Statement in the form attached hereto as Exhibit B and
shall read the applicable rules of the Commissioner of Corporations attached to
such Investment Representation Statement.
5. Restrictions on Exercise. This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any
rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation
G") as promulgated by the Federal Reserve Board. As a condition to the exercise
of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
6. Termination of Relationship. In the event of termination of
Optionee's consulting relationship or Continuous Status as an Employee, Pawnee
may, to the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise this Option during the Termination Period set out
in the Notice of Grant. To the extent that Optionee was not entitled to exercise
this Option at the date of such termination, or if Optionee does not exercise
this Option within the time specified herein, the Option shall terminate.
7. Disability of Optionee. Notwithstanding the provisions of
Section 6 above, in the event of termination of Optionee's Continuous Status as
an Employee as a result of total and permanent disability (as defined in Section
22(e)(3) of the Code),
2
<PAGE> 4
Optionee may, but only within twelve (12) months from the date of termination of
employment (but in no event later than the date of expiration of the term of
this Option as set forth in Section 10 below), exercise the Option to the extent
otherwise so entitled at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.
8. Death of Optionee. In the event of the death of Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the date of expiration of the term of
this Option as set forth in Section 10 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent the Optionee could exercise the Option at the date of
death.
9. Non-Transferability of Option. This Option may not be
Transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by him.
The terms of this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
10. Term of Option. This Option may be exercised only within
the term set out in the Notice of Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Option. The limitations
set out in Section 7 of the Plan regarding Option terms and Options granted to
more than ten percent (10%) shareholders shall apply to this Option.
11. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonqualified Stock Option ("NSO"). If this Option
does not qualify as an ISO, the Optionee may incur regular federal income tax
and California income tax liability upon exercise. The Optionee will be Created
as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the fair market value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price. If the Optionee is an
employee, the Company will be required to withhold from his or her compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.
3
<PAGE> 5
(ii) Incentive Stock Option ("ISO"). If this Option
qualifies as an ISO, the Optionee will have no regular federal income tax or
California income tax liability upon its exercise, although the excess, if any,
of the fair market value of the Exercised Shares on the date of exercise over
their aggregate Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
alternative minimum tax in the year of exercise.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the fair market value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If
the Optionee sells or otherwise disposes of any of the Shares acquired pursuant
to an ISO on or before the later of (i) the date two years after the grant date,
or (ii) the date one year after the exercise date, the Optionee shall
immediately notify the Company in writing of such disposition. The Optionee
agrees that he or she may be subject to income tax withholding by the Company on
the compensation income recognized from such early disposition of ISO Shares by
payment in cash or out of the current earnings paid to the Optionee.
4
<PAGE> 1
EXHIBIT 99.3
Form of Stock Option Agreement - Officer, No Acceleration.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC
1992 STOCK PLAN
EXHIBIT A TO NOTICE OF GRANT
STOCK OPTION AGREEMENT
1. Grant of Option. GRAND JUNCTION NETWORKS, INC., a Delaware
corporation (the "Company"), hereby grants to the Optionee (the "Optionee")
named in the Notice of Grant, an option (the "Option") to purchase a number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms,
conditions and definitions of the 1992 Stock Plan (the "Plan") adopted by the
Company, which is incorporated herein by reference. In the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Option Agreement, the terms and conditions of the Plan shall prevail.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of Optionee's
employment or consulting relationship, the exercisability of the Option is
governed by the applicable provisions of this Option Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form provided by the Company (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as to the
holder's investment intent with respect to the Exercised Shares as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be signed by the Optionee, and shall be delivered in person, by
certified or registered mail, return receipt requested by confirmed facsimile
transmission, or by such other means as the Company may permit, to the Secretary
of the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by such aggregate Exercise Price.
1
<PAGE> 3
No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law and requirements of any stock exchange upon which the Shares are then
listed. Assuming such compliance, for income tax purposes the Exercised Shares
shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.
(c) Tax Withholding. At the time the Option is exercised,
in whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for any
sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or any Parent or Subsidiary of the Company, if any,
which arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the Option,
(ii) the transfer, in whole or in part, of any shares acquired upon exercise of
the Option, (iii) the operation of any law or regulation providing for the
imputation of interest, or (iv) the lapsing of any restriction with respect to
any shares acquired upon exercise of the Option. The Optionee is cautioned that
the Option is not exercisable unless such tax withholding obligations are
satisfied. Accordingly, the Optionee may not be able to exercise the Option when
desired even though the Option is vested, and the Company shall have no
obligation to issue a certificate for such shares or release such shares from
any escrow provided for in connection with the acquisition of the shares.
3. Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:
(a) cash;
(b) check;
(c) irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds required to pay the
exercise price; or
(d) such other consideration as is indicated on the Notice
of Grant.
4. Restrictions on Exercise. This Option may not be exercised
until such time as the Plan has been approved by the stockholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any
rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation
G") as promulgated by the Federal Reserve Board. As a condition to the exercise
of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
2
<PAGE> 4
5. Termination of Relationship.
(a) In the event of termination of Optionee's consulting
relationship or "Continuous Status as an Employee" (as defined below), Optionee
may, to the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise this Option during the Termination Period set out
in the Notice of Grant or such other applicable period as provided below.
(b) Notwithstanding the foregoing, if a sale within the
Termination Period set out in the Notice of Grant of shares acquired upon the
exercise of the Option would subject the Optionee to suit under Section 16(b) of
the Securities Exchange Act of 1934, as amended, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Optionee would no longer be
subject to such suit, (ii) the one hundred and ninetieth (10th) day after the
Termination Date, or (iii) the Expiration Date set out in the Notice of Grant.
If the Option is intended to qualify as an Incentive Stock Option, the Company
makes no representation as to the tax consequences of any such delayed exercise.
The Optionee should consult with the Optionee's own tax advisors as to the tax
consequences to the Optionee of any such delayed exercise.
(c) To the extent that Optionee was not entitled to
exercise this Option on the Termination Date, or if Optionee does not exercise
this Option within the time specified herein, the Option shall terminate.
(d) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the Company or
any Parent or Subsidiary of the Company. Continuous Status as an Employee shall
not be considered interrupted in the case of: (i) sick leave, military leave or
any other leave of absence approved by the Board, provided that such leave is
for a period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (ii)
transfers between locations of the Company or between the Company, its Parent,
its Subsidiaries or its successor. Notwithstanding the foregoing, unless
otherwise designated by the Company (or required by law), no service credit for
vesting purposes will be given during a leave of absence.
6. Disability of Optionee. Notwithstanding the provisions of
Section 5 above, in the event of termination of Optionee's Continuous Status as
an Employee as a result of total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may, but only within twelve (12) months from the
date of termination of employment (but in no event later than the date of
expiration of the term of this Option as set forth in Section 9 below), exercise
the Option to the extent otherwise so entitled at the date of such termination.
To the extent that Optionee was not entitled to exercise the
3
<PAGE> 5
Option at the date of termination, or if Optionee does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the date of expiration of the term of
this Option as set forth in Section 9 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent the Optionee could exercise the Option at the date of
death.
8. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by him.
The terms of this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
9. Term of Option. This Option may be exercised only within
the term set out in the Notice of Grant, and may be exercised during such term
only in accordance with the Plan and the terms of this Option. The limitations
set out in Section 7 of the Plan regarding Option terms and Incentive Stock
Options granted to Ten Percent Owner Optionees shall apply to this Option.
10. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonstatutory Stock Option ("NSO"). If this Option
does not qualify as an ISO, the Optionee may incur regular federal income tax
and California income tax liability upon exercise. The Optionee will be treated
as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the fair market value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price. If the Optionee is an
employee, the Company will be required to withhold from his or her compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.
(ii) Incentive Stock Option ("ISO"). If this Option
qualifies as an ISO, the Optionee will have no regular federal income tax or
California income tax liability upon its exercise, although the excess, if any,
of the fair market value of the Exercised Shares on the date of exercise over
their aggregate Exercise Price will be treated
4
<PAGE> 6
as an adjustment to the alternative minimum tax for federal tax purposes and may
subject the Optionee to alternative minimum tax in the year of exercise.
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the fair market value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If
the Optionee sells or otherwise disposes of any of the Shares acquired pursuant
to an ISO on or before the later of (i) the date two years after the grant date,
or (ii) the date one year after the exercise date, the Optionee shall
immediately notify the Company in writing of such disposition.
5
<PAGE> 1
EXHIBIT 99.4
Form of Stock Option Agreement - Officer, Acceleration.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
EXHIBIT A TO NOTICE OF GRANT
STOCK OPTION AGREEMENT
OFFICER GRANT
1. Grant of Option. GRAND JUNCTION NETWORKS, INC., a Delaware
corporation (the "Company"), hereby grants to the Optionee (the "Optionee")
named in the Notice of Grant, an option (the "Option") to purchase a number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms,
conditions and definitions of the 1992 Stock Plan (the "Plan") adopted by the
Company, which is incorporated herein by reference. In the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Option Agreement, the terms and conditions of the Plan shall prevail.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.
If designated in the Notice of Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option under Section 422 of
the Code.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment, the
exercisability of the Option is governed by the applicable provisions of this
Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice, in the form provided by the Company (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as to the holder's investment intent
with respect to the Exercised Shares as may be required by the Company pursuant
to the provisions of the Plan. The Exercise Notice shall be signed by the
Optionee, and shall be delivered in person, by certified or registered mail,
return receipt requested, by confirmed facsimile transmission, or by such other
means as the Company may permit, to the Secretary of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as
<PAGE> 3
to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and requirements of any stock exchange upon which the Shares are then listed.
Assuming such compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.
(c) Tax Withholding. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, and otherwise agrees to make adequate provision for any sums required
to satisfy the federal, state, local and foreign tax withholding obligations of
the Company or any Parent or Subsidiary of the Company, if any, which arise in
connection with the Option, including, without limitation, obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option, (iii) the
operation of any law or regulation providing for the imputation of interest, or
(iv) the lapsing of any restriction with respect to any shares acquired upon
exercise of the Option. The Optionee is cautioned that the Option is not
exercisable unless such tax withholding obligations are satisfied. Accordingly,
the Optionee may not be able to exercise the Option when desired even though the
Option is vested, and the Company shall have no obligation to issue a
certificate for such shares or release such shares from any escrow provided for
in connection with the acquisition of the shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash;
(b) check;
(c) irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds required to pay the exercise
price; or
(d) such other consideration as is indicated on the Notice of
Grant.
4. Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration
2.
<PAGE> 4
for such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Termination of Relationship.
(a) In the event of termination of Optionee's "Continuous Status
as an Employee" (as defined below), Optionee may, to the extent otherwise so
entitled at the date of such termination (the "Termination Date"), exercise this
Option during the Termination Period set out in the Notice of Grant or such
other applicable period as provided below.
(b) Notwithstanding the foregoing, if a sale within the
Termination Period set out in the Notice of Grant of shares acquired upon the
exercise of the Option would subject the Optionee to suit under Section 16(b) of
the Securities Exchange Act of 1934, as amended, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Optionee would no longer be
subject to such suit, (ii) the one hundred and ninetieth (190th) day after the
Termination Date, or (iii) the Expiration Date set out in the Notice of Grant.
If the Option is intended to qualify as an Incentive Stock Option, the Company
makes no representation as to the tax consequences of any such delayed exercise.
The Optionee should consult with the Optionee's own tax advisors as to the tax
consequences to the Optionee of any such delayed exercise.
(c) To the extent that Optionee was not entitled to exercise this
Option on the Termination Date, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
(d) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or any
Parent or Subsidiary of the Company. Continuous Status as an Employee shall not
be considered interrupted in the case of: (i) sick leave, military leave or any
other leave of absence approved by the Board, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (ii)
transfers between locations of the Company or between the Company, its Parent,
its Subsidiaries or its successor. Notwithstanding the foregoing, unless
otherwise designated by the Company (or required by law), no service credit for
vesting purposes will be given during a leave of absence.
3.
<PAGE> 5
(e) "Termination After Transfer of Control" shall mean either of
the following events occurring within twelve (12) months after a Transfer of
Control (as defined in the Plan): (i) termination of the Optionee's Continuous
Status as an Employee by the Company or any Parent or Subsidiary of the Company
for any reason other than Termination for Cause (as defined below), or (ii) the
Optionee's resignation from employment with the Company or any Parent or
Subsidiary of the Company within a reasonable period of time following any
Constructive Termination (as defined below).
Notwithstanding any provision herein to the contrary, Termination
After Transfer of Control shall not include any termination of the Optionee's
Continuous Status as an Employee which (i) is a Termination for Cause (as
defined below), (ii) is a result of the Optionee's death or disability, (iii) is
a result of the Optionee's voluntary resignation from employment other than upon
Constructive Termination (as defined below) or (iv) occurs prior to the
effectiveness of a Transfer of Control.
(f) "Termination for Cause" shall mean termination of the
Optionee's Continuous Status as an Employee by the Company or any Parent or
Subsidiary of the Company for any of the following reasons: (i) theft,
dishonesty, or falsification of any records of the Company or any Parent or
Subsidiary of the Company; (ii) improper use or disclosure of confidential or
proprietary information regarding the Company or any Parent or Subsidiary of the
Company; (iii) any action by the Optionee which has a detrimental effect on the
reputation or business of the Company or any Parent or Subsidiary of the
Company; (iv) the Optionee's failure or inability to perform any reasonable
assigned duties after written notice from the Company or any Parent or
Subsidiary of the Company, and a reasonable opportunity to cure, such failure or
inability; (v) any material breach by the Optionee of any employment agreement
between the Optionee and the Company or any Parent or Subsidiary of the Company,
which breach is not cured pursuant to the terms of such agreement; or (vi) the
Optionee's conviction of any criminal act which impairs the Optionee's ability
to perform his or her duties with the Company or any Parent or Subsidiary of the
Company.
(g) "Constructive Termination" shall mean any one or more of the
following:
(i) without the Optionee's express written consent, the
assignment to the Optionee of any duties, or any limitation of the Optionee's
responsibilities, substantially inconsistent with the Optionee's positions,
duties, responsibilities and status with the Company or any Parent or Subsidiary
of the Company immediately prior to the date of the Transfer of Control;
(ii) without the Optionee's express written consent, the
relocation of the principal place of the Optionee's employment to a location
that is more than fifty (50) miles from the Optionee's principal place of
employment immediately prior to the date of the Transfer of Control, or the
imposition of travel requirements
4.
<PAGE> 6
substantially more demanding of the Optionee than such travel requirements
existing immediately prior to the date of the Transfer of Control;
(iii) any failure by the Company or any Parent or Subsidiary
of the Company to pay, or any material reduction by the Company or any Parent or
Subsidiary of the Company of, (1) the Optionee's base salary in effect
immediately prior to the date of the Transfer of Control (unless reductions
comparable in amount and duration are concurrently made for all other employees
of the Company or any Parent or Subsidiary of the Company with responsibilities,
organizational level and title comparable to the Optionee's), or (2) the
Optionee's bonus compensation, if any, in effect immediately prior to the date
of the Transfer of Control (subject to applicable performance requirements with
respect to the actual amount of bonus compensation earned by the Optionee); or
(iv) any failure by the Company or any Parent or Subsidiary of
the Company to (1) continue to provide the Optionee with the opportunity to
participate, on terms no less favorable than those in effect for the benefit of
any employee group which customarily includes a person holding the employment
position or a comparable position with the Company or any Parent or Subsidiary
of the Company then held by the Optionee, in any benefit or compensation plans
and programs, including, but not limited to, the life, disability, health,
dental, medical, savings, profit sharing, stock purchase and retirement plans,
if any, in which the Optionee was participating immediately prior to the date of
the Transfer of Control, or their equivalent, or (2) provide the Optionee with
all other fringe benefits (or their equivalent) from time to time in effect for
the benefit of any employee group which customarily includes a person holding
the employment position or a comparable position with the Company or any Parent
or Subsidiary of the Company then held by the Optionee.
6. Disability of Optionee. Notwithstanding the provisions of Section
5 above, in the event of termination of Optionee's Continuous Status as an
Employee as a result of total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may, but only within twelve (12) months from the
date of termination of employment (but in no event later than the date of
expiration of the term of this Option as set forth in Section 9 below), exercise
the Option to the extent otherwise so entitled at the date of such termination.
To the extent that Optionee was not entitled to exercise the Option at the date
of termination, or if Optionee does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.
7. Death of Optionee. In the event of the death of Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the date of expiration of the term of this
Option as set forth in Section 9 below), by Optionee's estate or by a person who
acquired the right to
5.
<PAGE> 7
exercise the Option by bequest or inheritance, but only to the extent the
Optionee could exercise the Option at the date of death.
8. Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by him. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
9. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Option terms and Incentive Stock Options
granted to Ten Percent Owner Optionees shall apply to this Option.
10. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonstatutory Stock Option ("NSO"). If this Option does not
qualify as an ISO, the Optionee may incur regular federal income tax and
Califonia income tax liability upon exercise. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price. If the Optionee is an
employee, the Company will be required to withhold from his or her compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.
(ii) Incentive Stock Option ("ISO"). If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax or California
income tax liability upon its exercise, although the excess, if any, of the fair
market value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price will be treated as an adjustment to the alternative
minimum tax for federal tax purposes and may subject the Optionee to alternative
minimum tax in the year of exercise.
6.
<PAGE> 8
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least one
year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the fair market value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.
(c) Notice of Disqualifving Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) the date two years after the grant date, or
(ii) the date one year after the exercise date, the Optionee shall immediately
notify the Company in writing of such disposition.
7.
<PAGE> 1
EXHIBIT 99.5
Form of Notice of Stock Option Grant.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted an option, consisting of the Stock Option
Agreement attached hereto as Exhibit A and this Notice of Stock Option Grant
(together, the "Option") to purchase Common Stock of GRAND JUNCTION NETWORKS,
INC. (the "Company") as follows:
Grant Number
Date of Grant
Option Price Per Share
Number of Shares Granted
Total Price of Shares Granted
Type of Option ___ Incentive Stock Option
___ Nonqualified Stock Option
Term/Expiration Date
Exercise Schedule:
___ This Option may be exercised, in whole or in part, in accordance
with the Vesting Schedule set out below.
___ This Option is fully exercisable as of the date of grant, subject
to the Vesting Schedule set out below and execution of a Restricted Stock
Agreement.
Vesting Schedule:
<TABLE>
<CAPTION>
Date of Vesting Number of Shares
--------------- ----------------
<S> <C>
First Annual Anniversary
of Date of Grant 25%
</TABLE>
<PAGE> 3
Thereafter, monthly on the ____ day of each month, 1/48 of the
total number of Shares until fully vested. In the event of
fractional Shares, the monthly number of Shares shall be
adjusted accordingly to the nearest whole Share.
Termination Period:
Option may be exercised for 60 days after termination of employment or
consulting relationship except as set out in Sections 7 and 8 of the Stock
Option Agreement (but in no event later than the Expiration Date).
Additional Forms of Consideration:
In addition to the forms of consideration set out in Section 3 of the
Stock Option Agreement, this Option may be exercised using the following forms
of consideration:
___ No Additional Forms
___ Additional Forms as noted:___________________________
_________________________________________________________
_________________________________________________________
Exercise of this Option shall be on a form of Exercise Notice provided by the
Company.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THIS OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S 1992 STOCK PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related to it and represents that he or she is familiar with the
terms and provisions of the Plan and this Option. Optionee accepts this Option
subject to all such terms and provisions. Optionee has reviewed the Plan and
this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option.
2.
<PAGE> 4
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the 1992 Stock Plan and the
[Incentive/Nonstatutory] Stock Option Agreement, all of which are attached and
made a part of this document.
OPTIONEE:
___________________________________
Signature
___________________________________
Print Name
GRAND JUNCTION NETWORKS,
INC., a California company
By_________________________________
Title______________________________
3.
<PAGE> 5
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option, the undersigned hereby agrees to be irrevocably
bound by the terms and conditions of the Plan and this Option and further agrees
that any community property interest shall be similarly bound. The undersigned
hereby appoints the undersigned's spouse as attorney-in-fact for the undersigned
with respect to any amendment or exercise of rights under the Plan or this
Option.
__________________________________
Spouse of Optionee
4.
<PAGE> 1
EXHIBIT 99.6
Form of Notice of Stock Option Grant - Transfer of Control.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted an option, consisting of the Stock Option
Agreement attached hereto as Exhibit A and this Notice of Stock Option Grant
(together, the "Option") to purchase Common Stock of GRAND JUNCTION NETWORKS,
INC. (the "Company") as follows:
Grant Number: _____________________________
Date of Grant: _____________________________
Option Price Per Share: $___________________
Number of Shares Granted: __________________
Total Price of Shares Granted: $____________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: ______________________
Exercise Schedule:
___ This Option may be exercised, in whole or in part, in accordance
with the Vesting Schedule set out below.
___ This Option is fully exercisable as of the date of grant, subject
to the Vesting Schedule set out below and execution of a Restricted Stock
Agreement.
Vesting Schedule:
<TABLE>
<CAPTION>
Date of Vesting Number of Shares
--------------- ----------------
<S> <C>
First Annual Anniversary
of Date of Grant 25%
</TABLE>
Thereafter, monthly on the ___ day of each month, 1/48 of the
total Number of Shares Granted until fully vested. In the event
of fractional
1.
<PAGE> 3
Shares, the monthly number of Shares shall be adjusted
accordingly to the nearest whole Share.
Notwithstanding the foregoing, the Option shall become vested as
to 100% of the Number of Shares Granted in the event of a
Transfer of Control (as defined in the 1992 Stock Plan) in which
the Option is not assumed or substituted for by the Acquiring
Corporation as provided in Section 13(b)(ii) of the 1992 Stock
Plan.
Termination Period:
Option may be exercised for 60 days after termination of employment or
consulting relationship except as set out in the Stock Option Agreement (but in
no event later than the Expiration Date).
Additional Forms of Consideration:
In addition to the forms of consideration set out in Section 3 of the
Stock Option Agreement, this Option may be exercised using the following forms
of consideration:
___ No Additional Forms
___ Additional Forms as noted:_______________
_____________________________________________
_____________________________________________
_____________________________________________
Exercise of this Option shall be on a form of Exercise Notice provided by the
Company.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THIS OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT (EXCLUSIVE OF
THE PERIOD OF ANY LEAVE OF ABSENCE) AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN
THE COMPANY'S 1992 STOCK PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR
CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR
THE COMPANY'S RIGHT TO TERMINATE HIS EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH
OR WITHOUT CAUSE.
2.
<PAGE> 4
Optionee acknowledges receipt of a copy of the Plan and certain
information related to it and represents that he or she is familiar with the
terms and provisions of the Plan and this Option. Optionee accepts this Option
subject to all such terms and provisions. Optionee has reviewed the Plan and
this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the 1992 Stock Plan and the
[Incentive/Nonstatutory] Stock Option Agreement, all of which are attached and
made a part of this document.
OPTIONEE:
______________________________
Signature
______________________________
Print Name
GRAND JUNCTION NETWORKS, INC.,
a Delaware corporation
By:__________________________
Title:_______________________
3.
<PAGE> 1
EXHIBIT 99.7
Form of Notice of Stock Option Grant - Officer Grant.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
OFFICER GRANT
You have been granted an option, consisting of the Stock Option
Agreement attached hereto as Exhibit A and this Notice of Stock Option Grant
(together, the "Option") to purchase Common Stock of GRAND JUNCTION NETWORKS,
INC. (the "Company") as follows:
Grant Number: _____________________________________
Date of Grant: _____________________________________
Option Price Per Share: $___________________________
Number of Shares Granted: __________________________
Total Price of Shares Granted: $____________________
Type of Option ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: ______________________________
Exercise Schedule:
___ This Option may be exercised, in whole or in part, in accordance
with the Vesting Schedule set out below.
___ This Option is fully exercisable as of the date of grant, subject
to the Vesting Schedule set out below and execution of a Restricted Stock
Agreement.
Vesting Schedule:
<TABLE>
<CAPTION>
Date of Vesting Number of Shares
--------------- ----------------
<S> <C>
First Annual Anniversary
of Date of Grant 25%
</TABLE>
<PAGE> 3
Thereafter, monthly on the ___ day of each month, 1/48 of the
total Number of Shares Granted until fully vested. In the event
of fractional Shares, the monthly number of Shares shall be
adjusted accordingly to the nearest whole Share.
Notwithstanding the foregoing, the Option shall become vested as
to 100% of the Number of Shares Granted in the event of (i) a
Transfer of Control (as defined in the 1992 Stock Plan) in which
the Option is not assumed or substituted for by the Acquiring
Corporation as provided in Section 13(b)(ii) of the 1992 Stock;
Plan, or (ii) Termination After Transfer of Control as defined in
Section 5(e) of the Option Agreement.
Termination Period:
Option may be exercised for 60 days after termination of employment
except as set out in the Stock Option Agreement (but in no event later than the
Expiration Date).
Additional Forms of Consideration:
In addition to the forms of consideration set out in Section 3 of the
Stock Option Agreement, this Option may be exercised using the following forms
of consideration:
___ No Additional Forms
___ Additional Forms as noted: ____________________________________
___________________________________________________________________
___________________________________________________________________
Exercise of this Option shall be on a form of Exercise Notice provided by the
Company.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THIS OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT (EXCLUSIVE OF THE PERIOD OF
ANY LEAVE OF ABSENCE) AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S 1992 STOCK PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE
2.
<PAGE> 4
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE HIS EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related to it and represents that he or she is familiar with the
terms and provisions of the Plan and this Option. Optionee accepts this Option
subject to all such terms and provisions. Optionee has reviewed the Plan and
this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the 1992 Stock Plan and the
[Incentive/Nonstatutory] Stock Option Agreement, all of which are attached and
made a part of this document.
OPTIONEE:
__________________________________
Signature
__________________________________
Print Name
GRAND JUNCTION NETWORKS, INC.,
a Delaware corporation
By _______________________________
Title ____________________________
3.
<PAGE> 1
EXHIBIT 99.8
Form of Exercise Notice for Shares and Restricted Stock Agreement.
<PAGE> 2
GRAND JUNCTION NETWORKS, INC.
1992 STOCK PLAN
EXERCISE NOTICE FOR SHARES AND RESTRICTED STOCK
AGREEMENT
Grand Junction Networks, Inc.
47281 Bayside Parkway
Fremont, CA 94538
Attention: Secretary
1. Exercise of Option. Effective as of today, _______________, 19__,
the undersigned ("Optionee") hereby elects to exercise Optionee's option to
purchase ________________ shares of the Common Stock (the "Shares") of GRAND
JUNCTION NETWORKS, INC. (the "Company") under and pursuant to the Company's 1992
Stock Plan, as amended (the "Plan") and the Notice of Grant and [ ] Incentive [
] Nonstatutory Stock Option Agreement dated ______________, 19__ (together, the
"Option"). Of these Shares, Optionee has elected to purchase _________________
of those Shares which have become vested under the Vesting Schedule set out in
the Notice of Grant (the "Vested Shares") and __________________ Shares which
have not yet vested under such schedule (the "Unvested Shares"). The Purchase
Price for the Shares shall be $_______________, as set out in the Notice of
Grant.
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions. Optionee represents that
Optionee is purchasing the Shares for Optionee's own account for investment and
not with a view to, or for sale in connection with, a distribution of any of
such Shares.
3. Company's Repurchase Option. The Company or its assignee(s) shall
have the option to repurchase all, but not less than all, of the Unvested Shares
on the terms and conditions set forth in this section (the "Repurchase Option")
if the Optionee should cease to be employed by the Company for any reason or no
reason, including without limitation death, disability, voluntary resignation or
termination by the Company with or without cause.
(a) Right of Termination Unaffected. Nothing in this Agreement shall
be construed to limit or otherwise affect in any manner whatsoever the right or
power of the Company to terminate Optionee's employment at any time for any
reason or no reason, with or without cause. Optionee shall be considered to be
employed by the Company if Optionee is an officer, director or full-time
employee of the Company or
<PAGE> 3
any Parent or Subsidiary of the Company (as defined in the Plan) or if the Board
of Directors determines that Optionee is rendering substantial services as a
part-time employee, consultant or independent contractor to the Company or any
Parent or Subsidiary of the Company (as defined in the Plan). In case of any
dispute, the Board of Directors of the Company shall have discretion to
determine (i) whether Optionee has ceased to be employed by the Company and (ii)
the date on which the employment relationship ceases (the "Termination Date").
(b) Exercise of Repurchase Option. At any time within sixty (60)
days after Optionee's Termination Date, the Company or its assignee(s) may elect
to repurchase the Unvested Shares purchased pursuant to the Option Agreement by
giving Optionee (or Optionee's personal representative as the case may be)
written notice of exercise of the Repurchase Option.
(i) Repurchase Price. The Company or its assignee(s) shall have
the option to repurchase from Optionee all, but not less than all, of the
Unvested Shares (or from Optionee's personal representative as the case may be)
at the Exercise Price (as defined in the Option Agreement), as such price may be
adjusted from time to time to reflect any subsequent stock dividend, stock
split, reverse stock split or recapitalization of the Company (the "Repurchase
Price").
(ii) Payment of Repurchase Price. The Repurchase Price shall be
payable, at the option of the Company or its assignee(s), by check or by
cancellation of all or a portion of any outstanding indebtedness of Optionee to
the Company (or, in the case of repurchase by an assignee, to the assignee) or
any combination thereof. The Repurchase Price shall be paid without interest
within 60 days after the Termination Date.
(iii) Lapse of Repurchase Price. All Unvested Shares held by the
Optionee shall be released from the Company's Repurchase Option and cease to be
Unvested Shares according to the Vesting Schedule set out in the Notice of
Grant.
4. Escrow. As security for the faithful performance of this Agreement,
Optionee agrees, immediately upon receipt of the certificate(s) evidencing the
Unvested Shares, to deliver such certificate(s), together with a stock power in
the form of Attachment 1 attached hereto, executed by Optionee and by Optionee's
spouse, if any (with the date and number of Shares left blank), to the Secretary
of the Company or its designee ("Escrow Holder") who is hereby appointed to hold
such certificate(s) and stock power in escrow and to take all such actions and
to effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Agreement. Such appointment shall be evidenced
by an executed form of Joint Escrow Instructions, attached hereto as Attachment
2. Optionee and the Company agree that Escrow Holder shall not be liable to any
party to this Agreement (or to any other party) for any actions or omissions
unless Escrow Holder is grossly negligent relative thereto. The Escrow
2.
<PAGE> 4
Holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may rely on advice of counsel and obey any
order of any court with respect to the transactions contemplated herein. The
Shares shall be released from escrow upon termination of the Repurchase Option;
provided, however, that such release shall not affect the rights of the Company
with respect to any pledge of Shares to the Company.
5. Rights as Stockholder. Subject to the terms and conditions of this
Agreement, Optionee shall have all of the rights of a stockholder of the Company
with respect to the Shares from and after the date that Optionee delivers full
payment of the Exercise Price until such time as Optionee disposes of the Shares
or the Company and/or its assignee(s) exercises the Repurchase Option hereunder.
Upon such exercise, Optionee shall have no further rights as a holder of the
Shares so purchased except the right to receive payment for the Shares so
purchased in accordance with the provisions of this Agreement, and Optionee
shall forthwith cause the certificate(s) evidencing the Shares so purchased to
be surrendered to the Company for transfer or cancellation.
6. Tax Consequences.
(a) Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
(b) Section 83(b) Election For Nonstatutory Stock Options. Optionee
hereby acknowledges that Optionee has been informed that, with respect to the
exercise of any nonstatutory stock option, unless an election is filed by the
Optionee with the Internal Revenue Service and, if necessary, the proper state
taxing authorities, within thirty (30) days of the purchase of the Shares,
electing pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended (and similar state tax provisions if applicable) to be taxed currently
on any difference between the purchase price of the Shares and their fair market
value on the date of purchase, there will be a recognition of taxable income to
the Optionee, measured by the excess, if any, of the fair market value of the
Shares, at the time the Company's Repurchase Option lapses over the purchase
price for such Shares. Optionee represents that Optionee has consulted any tax
consultant(s) Optionee deems advisable in connection with the purchase of the
Shares or the filing of the Election under Section 83(b) and similar tax
provisions. A form of Election Under Section 83(b) is attached hereto as
Attachment 3 for reference. OPTIONEE HEREBY ASSUMES ALL RESPONSIBILITY FOR
FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH ELECTION OR THE
LAPSE OF THE REPURCHASE RESTRICTIONS ON THE SHARES.
3.
<PAGE> 5
(c) Section 83(b) Election For Alternative Minimum Tax for Incentive
Stock Options. Optionee hereby acknowledges that Optionee has been informed
that, with respect to the exercise of any incentive stock option, unless an
election is filed by the Optionee with the Internal Revenue Service within
thirty (30) days of the purchase of the Shares, electing pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended (and similar state tax
provisions if applicable) to be taxed currently for alternative minimum tax
purposes on any difference between the purchase price of the Shares and their
fair market value on the date of purchase, the Optionee will be required to
include (for alternative minimum tax purposes only) an amount equal to the
excess, if any, of the fair market value of the Shares, at the time the
Company's Repurchase Option lapses over the purchase price for such Shares.
Optionee represents that Optionee has consulted any tax consultant(s) Optionee
deems advisable in connection with the purchase of the Shares or the filing of
the Election for alternative minimum tax purposes under Section 83(b) and
similar tax provisions. A form of Election Under Section 83(b) is attached
hereto as Attachment 3A for reference. OPTIONEE HEREBY ASSUMES ALL
RESPONSIBILITY FOR FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH
ELECTION OR THE LAPSE OF THE REPURCHASE RESTRICTIONS ON THE SHARES.
7. Restrictive Legend and Stop-Transfer Orders.
(a) Legend. Optionee understands and agrees that the Company may
cause the legend set forth below or legends substantially equivalent thereto, to
be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by state or federal securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF REPURCHASE OPTION HELD BY THE
ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE AND
RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE ISSUER.
(i) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(ii) Refusal to Transfer. The Company shall not be required (A)
to transfer on its books any Unvested Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or (B) to
4.
<PAGE> 6
treat as owner of such Unvested Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Unvested Shares
shall have been so transferred.
8. Market Standoff Agreement. Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
1933 Act, Optionee shall not sell or otherwise transfer any Shares or other
securities of the Company during the one hundred eighty (180) day period
following the effective date of a registration statement of the Company filed
under the 1933 Act; provided, however, that such restriction shall only apply to
the first two registration statements of the Company to become effective under
the 1933 Act which include securities to be sold on behalf of the Company to the
public in an underwritten public offering under the 1933 Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such one hundred eighty (180) day
period.
9. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.
10. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee.
11. Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, excluding
that body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
12. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
13. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
5.
<PAGE> 7
14. Delivery of Payment. Optionee herewith delivers to the Company the
full Exercise Price for the Shares.
15. Entire Agreement. The Plan and Notice of Grant/Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Notice of
Grant/Option Agreement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof, and is governed by
California law except for that body of law pertaining to conflict of laws.
Submitted by:
OPTIONEE:
_____________________________
(Signature)
Address: _____________________________
_____________________________
_____________________________
Accepted by:
GRAND JUNCTION NETWORKS, INC.
By: _________________________
Its: ________________________
Address: 47281 Bayside Parkway
Fremont, CA 94538
6.
<PAGE> 1
EXHIBIT 99.9
Form of Stock Option Assumption Agreement.
<PAGE> 2
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1-
NUMBER OF GRAND JUNCTION SHARES: 2-
GRANT DATE: 3-
ORIGINAL EXERCISE PRICE: $4-
OPTION ASSUMPTION AGREEMENT issued as of the 6th day of November, 1995
by Cisco Systems, Inc., a Delaware corporation ("Cisco").
WHEREAS, the undersigned Optionee is the holder of one or more
outstanding options to purchase shares of the common stock of Grand Junction
Networks, Inc., a Delaware corporation ("Grand Junction"), which were granted to
Optionee pursuant to the Grand Junction 1992 Stock Plan, as amended (the "Stock
Plan"), and Optionee and Grand Junction have, in order to evidence each such
option, entered into a formal Stock Option Agreement (hereinafter, an "Option
Agreement").
WHEREAS, Grand Junction has this day been acquired by Cisco through
merger of Everest Acquisition Corporation, a wholly-owned Cisco subsidiary, with
Grand Junction (the "Merger") pursuant to the Agreement and Plan of
Reorganization dated September 26, 1995 (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to assume
the obligations of Grand Junction under the options outstanding under the Stock
Plan at the time of the Merger and to issue an agreement evidencing the
assumption of each such option (the "Assumption Agreement").
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Rate") in effect for the Merger is 0.3706197 share
of Cisco common stock ("Cisco Stock") for each outstanding share of Grand
Junction common stock ("Grand Junction Stock").
WHEREAS, this Agreement is to be effective immediately upon the
consummation of the Merger (the "Effective Time") and shall reflect certain
adjustments to Optionee's outstanding options under the Stock Plan which have
become necessary by reason of the assumption of those options by Cisco in
connection with the Merger.
<PAGE> 3
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Grand Junction Stock subject to the stock
options held by Optionee under the Stock Plan immediately prior to the Effective
Time (the "Grand Junction Options") and the exercise price payable per share are
set forth below. Cisco hereby assumes, as of the Effective Time, all the duties
and obligations of Grand Junction under each of the Grand Junction Options and
hereby agrees to issue up to the number of shares of Cisco Stock indicated below
for each such assumed option upon (i) exercise of that option in accordance with
the provisions of the Option Agreement applicable thereto (as supplemented
hereby) and (ii) payment of the adjusted exercise price per share set forth
below.
<TABLE>
<CAPTION>
GRAND JUNCTION CISCO
STOCK OPTIONS ASSUMED OPTIONS
-------------- ---------------
# of Shares # of Shares Adjusted
Common Stock Exercise Common Stock Exercise
Grand Junction Price/Share Cisco Price/Share
-------------- ----------- ----- -----------
<S> <C> <C> <C>
2- $4- 6- $7-
</TABLE>
2. The number of shares of Cisco Stock purchasable under each Grand
Junction Option hereby assumed and the exercise price payable thereunder reflect
the Exchange Rate at which shares of Grand Junction Stock were converted into
shares of Cisco Stock in consummation of the Merger. The intent of such
adjustments is to assure that the spread between the aggregate fair market value
of the shares of Cisco Stock purchasable under each assumed Grand Junction
Option and the aggregate exercise price as adjusted hereunder will, immediately
after the consummation of the Merger, equal the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Grand Junction Stock subject to the Grand Junction Option and the aggregate
exercise price in effect at such time under the Option Agreement. Such
adjustments are also designed to preserve, on a per-share basis immediately
after the Merger, the same ratio of exercise price per option share to fair
market value per share which existed under the Grand Junction Option immediately
prior to the Merger.
3. The following provisions shall govern each Grand Junction Option
hereby assumed by Cisco:
- Unless the context otherwise requires, all references to the
"Company" in each Option Agreement shall mean Cisco, all references to "Shares,"
"Exercised Shares" or "Common Stock" shall mean shares of Cisco Stock, all
references to the "Board" shall mean the Cisco Board of Directors, and all
references to "Committee" or "Administrator" shall mean the Compensation
Committee of the Cisco Board of Directors.
2.
<PAGE> 4
- The grant date and the expiration date of each assumed Grand
Junction Option and all other provisions which govern the termination of each
such assumed Grand Junction Option shall remain the same as set forth in the
Option Agreement applicable to such option and shall accordingly govern and
control the Optionee's rights under this Assumption Agreement to purchase Cisco
Stock.
- The shares subject to each assumed Grand Junction Option shall vest
in accordance with the same installment vesting schedule in effect under the
applicable Option Agreement immediately prior to the Effective Time, with the
number of shares of Cisco Stock subject to each such installment adjusted to
reflect the Exchange Rate. Accordingly, no acceleration of exercisability or
vesting of the Grand Junction Options shall be deemed to occur by reason of the
Merger, and the vesting schedule and exercise dates under each applicable Option
Agreement shall remain the same.
- The adjusted exercise price payable for the Cisco Stock subject to
each assumed Grand Junction Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option. For purposes of
determining the applicable holding period for any shares of Cisco Stock which
the Optionee may be authorized to deliver in payment of the exercise price of
each assumed Grand Junction Option, the period for which such shares were held
as Grand Junction Stock prior to the Merger shall be taken into account.
- In order to exercise each assumed Grand Junction Option, the
Optionee must deliver to Cisco a written notice of exercise in which the number
of shares of Cisco Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted exercise price
payable for the purchased shares of Cisco Stock and should be delivered to Cisco
at the following address:
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134
Attention: Stock Plan Administrator
- For purposes of applying the termination of employment or service
provisions of the Option Agreement, the Optionee shall be deemed to continue in
employment or service and to remain an employee or service provider for so long
as the Optionee remains in the employ or service of Cisco or any present or
future parent or subsidiary of Cisco, including (without limitation) Grand
Junction.
4. Except to the extent specifically modified by this Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this
Assumption Agreement.
3.
<PAGE> 5
IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Assumption
Agreement to be executed on its behalf by its duly-authorized officer as of the
6th day of November, 1995.
CISCO SYSTEMS, INC.
By: __________________________
Title: _______________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Grand Junction Options hereby assumed by Cisco
Systems, Inc. are as set forth in the Option Agreement, the Stock Plan and this
Stock Option Assumption Agreement.
______________________________
1-, OPTIONEE
DATED: __________________, 1995
4.
<PAGE> 1
EXHIBIT 99.10
Form of Stock Option Assumption Agreement - Officer.
II-2.
<PAGE> 2
OFFICERS
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1-
NUMBER OF GRAND JUNCTION SHARES: 2-
GRANT DATE: 3-
ORIGINAL EXERCISE PRICE: $4-
OPTION ASSUMPTION AGREEMENT issued as of the 6th day of November, 1995
by Cisco Systems, Inc., a Delaware corporation ("Cisco").
WHEREAS, the undersigned Optionee is the holder of one or more
outstanding options to purchase shares of the common stock of Grand Junction
Networks, Inc., a Delaware corporation ("Grand Junction"), which were granted to
Optionee pursuant to the Grand Junction 1992 Stock Plan, as amended (the "Stock
Plan"), and Optionee and Grand Junction have, in order to evidence each such
option, entered into a formal Stock Option Agreement (hereinafter, an "Option
Agreement").
WHEREAS, Grand Junction has this day been acquired by Cisco through
merger of Everest Acquisition Corporation, a wholly-owned Cisco subsidiary, with
Grand Junction (the "Merger") pursuant to the Agreement and Plan of
Reorganization dated September 26, 1995 (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to assume
the obligations of Grand Junction under the options outstanding under the Stock
Plan at the time of the Merger and to issue an agreement evidencing the
assumption of each such option (the "Assumption Agreement").
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Rate") in effect for the Merger is 0.3706197 share
of Cisco common stock ("Cisco Stock") for each outstanding share of Grand
Junction common stock ("Grand Junction Stock").
WHEREAS, this Agreement is to be effective immediately upon the
consummation of the Merger (the "Effective Time") and shall reflect certain
adjustments to Optionee's outstanding options under the Stock Plan which have
become necessary by reason of the assumption of those options by Cisco in
connection with the Merger.
<PAGE> 3
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Grand Junction Stock subject to the stock
options held by Optionee under the Stock Plan immediately prior to the Effective
Time (the "Grand Junction Options") and the exercise price payable per share are
set forth below. Cisco hereby assumes, as of the Effective Time, all the duties
and obligations of Grand Junction under each of the Grand Junction Options and
hereby agrees to issue up to the number of shares of Cisco Stock indicated below
for each such assumed option upon (i) exercise of that option in accordance with
the provisions of the Option Agreement applicable thereto (as supplemented
hereby) and (ii) payment of the adjusted exercise price per share set forth
below.
<TABLE>
<CAPTION>
GRAND JUNCTION CISCO
STOCK OPTIONS ASSUMED OPTIONS
-------------- ---------------
# of Shares # of Shares Adjusted
Common Stock Exercise Common Stock Exercise
Grand Junction Price/Share Cisco Price/Share
-------------- ----------- ----- -----------
<S> <C> <C> <C>
2- $4- 6~ $7~
</TABLE>
2. The number of shares of Cisco Stock purchasable under each Grand
Junction Option hereby assumed and the exercise price payable thereunder reflect
the Exchange Rate at which shares of Grand Junction Stock were converted into
shares of Cisco Stock in consummation of the Merger. The intent of such
adjustments is to assure that the spread between the aggregate fair market value
of the shares of Cisco Stock purchasable under each assumed Grand Junction
Option and the aggregate exercise price as adjusted hereunder will, immediately
after the consummation of the Merger, equal the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Grand Junction Stock subject to the Grand Junction Option and the aggregate
exercise price in effect at such time under the Option Agreement. Such
adjustments are also designed to preserve, on a per-share basis immediately
after the Merger, the same ratio of exercise price per option share to fair
market value per share which existed under the Grand Junction Option immediately
prior to the Merger.
3. The following provisions shall govern each Grand Junction Option
hereby assumed by Cisco:
- Unless the context otherwise requires, all references to the
"Company" in each Option Agreement shall mean Cisco, all references to "Shares,"
"Exercised Shares" or "Common Stock" shall mean shares of Cisco Stock, all
references to the "Board" shall mean the Cisco Board of Directors, and all
references to "Committee" or "Administrator" shall mean the Compensation
Committee of the Cisco Board of Directors.
2.
<PAGE> 4
- The grant date and the expiration date of each assumed Grand Junction
Option and all other provisions which govern the termination of each such
assumed Grand Junction Option shall remain the same as set forth in the Option
Agreement applicable to such option and shall accordingly govern and control the
Optionee's rights under this Assumption Agreement to purchase Cisco Stock.
- The shares subject to each assumed Grand Junction Option shall vest
in accordance with the same installment vesting schedule in effect under the
applicable Option Agreement immediately prior to the Effective Time, with the
number of shares of Cisco Stock subject to each such installment adjusted to
reflect the Exchange Rate. Accordingly, no acceleration of exercisability or
vesting of the Grand Junction Options shall be deemed to occur by reason of the
Merger, and the vesting schedule and exercise dates under each applicable Option
Agreement shall remain the same. However, should the Optionee's service be
involuntarily terminated (other than for Cause) within twelve (12) months after
the Merger or other Transfer or Control, or should the Optionee otherwise
terminate his or her service in connection with a Constructive Termination
effected within twelve (12) months after the Merger or other Transfer of
Control, then each assumed Option shall accelerate and become immediately
exercisable for all the option shares as fully vested shares. The foregoing
capitalized terms shall have the meanings assigned to them in the applicable
Option Agreement, and the terms and conditions of the Option Agreement
applicable to the acceleration of the assumed Grand Junction Option upon the
termination of Optionee's employment or constructive termination shall remain in
full force and effect.
- The adjusted exercise price payable for the Cisco Stock subject to
each assumed Grand Junction Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option. For purposes of
determining the applicable holding period for any shares of Cisco Stock which
the Optionee may be authorized to deliver in payment of the exercise price of
each assumed Grand Junction Option, the period for which such shares were held
as Grand Junction Stock prior to the Merger shall be taken into account.
- In order to exercise each assumed Grand Junction Option, the Optionee
must deliver to Cisco a written notice of exercise in which the number of shares
of Cisco Stock to be purchased thereunder must be indicated. The exercise notice
must be accompanied by payment of the adjusted exercise price payable for the
purchased shares of Cisco Stock and should be delivered to Cisco at the
following address:
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134
Attention: Stock Plan Administrator
3.
<PAGE> 5
- For purposes of applying the termination of employment or service
provisions of the Option Agreement, the Optionee shall be deemed to continue in
employment or service and to remain an employee or service provider for so long
as the Optionee remains in the employ or service of Cisco or any present or
future parent or subsidiary of Cisco, including (without limitation) Grand
Junction.
4. Except to the extent specifically modified by this Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this
Assumption Agreement.
IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Assumption
Agreement to be executed on its behalf by its duly-authorized officer as of the
6th day of November, 1995.
CISCO SYSTEMS, INC.
By: ______________________________
Title: ___________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Grand Junction Options hereby assumed by Cisco
Systems, Inc. are as set forth in the Option Agreement, the Stock Plan and this
Stock Option Assumption Agreement.
__________________________________
1-, OPTIONEE
DATED: __________________, 1995
4.
