<PAGE> 1
As filed with the Securities and Exchange Commission on August 9, 1996
Registration No. 333-________________
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)
STRATACOM, INC.
1994 STOCK OPTION PLAN
1986 INCENTIVE STOCK OPTION PLAN
1992 DIRECTORS' STOCK OPTION PLAN
1992 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
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>
1994 Stock Option Plan
Options to Purchase Common Stock 4,636,356 N/A N/A N/A
Common Stock 4,636,356 $24.6166 $114,131,321.10 $39,355.63
1986 Incentive Stock Option Plan
Options to Purchase Common Stock 4,306,981 N/A N/A N/A
Common Stock 4,306,981 $6.9986 $30,142,837.22 $10,394.08
1992 Directors' Stock Option Plan
Options to Purchase Common Stock 110,000 N/A N/A N/A
Common Stock 110,000 $7.5747 $833,217 $287.32
1992 Employee Stock Purchase Plan
Common Stock 140,000 $30.60 $4,284,000 $1,477.24
Aggregate Filing Fee $51,514.27
</TABLE>
<PAGE> 2
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Stratacom, Inc. 1994 Stock
Option Plan, 1986 Incentive Stock Option Plan, 1992 Directors' Stock
Option Plan and 1992 Employee Stock Purchase 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. The fee for the 1992
Employee Stock Purchase Plan is calculated on the basis of the maximum
purchase price for shares purchased under the plan during the current
offering period, which is equal to 85 per cent of the closing price per
share of Stratacom, Inc. on April 1, 1996.
2
<PAGE> 3
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 31, 1995 filed with the Commission on October
26, 1995 pursuant to Section 13 of the Securities Exchange Act
of 1934 (the "1934 Act").
(b) (1) The Registrant's Quarterly Reports on Form 10-Q for the
fiscal quarters ended October 31, 1995, January 31, 1996 and
April 30, 1996, filed with the Commission on December 12,
1995, March 13, 1996 and June 12, 1996, respectively.
(2) The Registrant's reports on Form 8-K filed with the
Commission on December 6, 1995, April 2, 1996, April 26, 1996
and July 23, 1996.
(3) The Registrant's reports on Form 10-C filed with the
Commission on February 26, 1996 and July 11, 1996.
(c) 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. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
<PAGE> 4
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 and Restated Bylaws 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.
Item 8. Exhibits
Exhibit Number Exhibit
-------------- -------
5.0 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Accountants - Coopers & Lybrand
L.L.P.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Stratacom, Inc. 1994 Stock Option Plan, incorporated by
reference to Exhibit 99.1 of Registrant's Registration
Statement, File Number 333-05447.
99.2 Form of Stock Option Agreement used in connection with the
1994 Stock Option Plan, incorporated by reference to
Exhibit 99.2 of Registrant's Registration Statement, File
Number 333-05447.
99.3 Stratacom, Inc. 1986 Incentive Stock Option Plan,
incorporated by reference to Exhibit 99.3 of Registrant's
Registration Statement, File Number 333-05447.
99.4 Form of Incentive Stock Option Agreement used in
connection with the 1986 Incentive Stock Option Plan,
incorporated by reference to Exhibit 99.4 of Registrant's
Registration Statement, File Number 333-05447.
99.5 Form of Stock Option Assumption Agreement used in
connection with the 1994 Stock Option Plan and the 1986
Incentive Stock Option Plan, incorporated by reference to
Exhibit 99.5 to Registrant's Registration Statement, File
Number 333-05447.
99.6 Stratacom, Inc. 1992 Directors' Stock Option Plan.
99.7 Form of Nonstatutory Stock Option Agreement used in
connection with the 1992 Directors' Stock Option Plan.
99.8 Form of Stock Option Assumption Agreement used in
connection with the 1992 Directors' Stock Option Plan.
99.9 Stratacom, Inc. 1992 Employee Stock Purchase Plan.
99.10 Memorandum re Assumption of 1992 Employee Stock Purchase
Plan.
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
II-2.
<PAGE> 5
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
Stratacom, Inc. 1994 Stock Option Plan, 1986 Incentive Stock Option Plan, 1992
Directors' Stock Option Plan, and/or 1992 Employee Stock Purchase 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.
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> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant 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 5th day of August, 1996.
CISCO SYSTEMS, INC.
By /s/ John T. Chambers
-------------------------------------
John T. Chambers
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints John T. Chambers and Larry R. Carter and each of them
acting individually, as such person's true and lawful attorneys-in-fact and
agents, each with full power of substitution, for such person, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his or her substitutes, may do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
Signatures Title Date
/s/ John T. Chambers President, Chief Executive August 5, 1996
- ---------------------------------- Officer and Director (Principal
John T. Chambers Executive Officer)
/s/ Larry R. Carter Vice President, Finance and August 5, 1996
- ---------------------------------- Administration, Chief Financial
Larry R. Carter Officer and Secretary
(Principal Financial and Accounting Officer)
/s/ John P. Morgridge Chairman of the Board August 5, 1996
- ---------------------------------- and Director
John P. Morgridge
</TABLE>
II-4.
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C> <C>
Signatures Title Date
/s/ Donald T. Valentine Director August 5, 1996
- ----------------------------------
Donald T. Valentine
/s/ Michael S. Frankel Director August 5, 1996
- ----------------------------------
Michael S. Frankel
/s/ James F. Gibbons Director August 5, 1996
- ----------------------------------
James F. Gibbons
/s/ Robert L. Puette Director August 5, 1996
- ----------------------------------
Robert L. Puette
Director
- ----------------------------------
Masayoshi Son
/s/ Steven M. West Director August 5, 1996
- ----------------------------------
Steven M. West
</TABLE>
II-5.
<PAGE> 8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CISCO SYSTEMS, INC.
II-6.
<PAGE> 9
EXHIBIT INDEX
Exhibit Number Exhibit
5.0 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Accountants - Coopers & Lybrand L.L.P.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24.0 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Stratacom, Inc. 1994 Stock Option Plan, incorporated by
reference to Exhibit 99.1 of Registrant's Registration
Statement, File Number 333-05447.
99.2 Form of Stock Option Agreement used in connection with the
1994 Stock Option Plan, incorporated by reference to Exhibit
99.2 of Registrant's Registration Statement, File Number
333-05447.
99.3 Stratacom, Inc. 1986 Incentive Stock Option Plan, incorporated
by reference to Exhibit 99.3 of Registrant's Registration
Statement, File Number 333-05447.
99.4 Form of Incentive Stock Option Agreement used in connection
with the 1986 Incentive Stock Option Plan, incorporated by
reference to Exhibit 99.4 of Registrant's Registration
Statement, File Number 333-05447.
99.5 Form of Stock Option Assumption Agreement used in connection
with the 1994 Stock Option Plan and the 1986 Incentive Stock
Option Plan, incorporated by reference to Exhibit 99.5 to
Registrant's Registration Statement, File Number 333-05447.
99.6 Stratacom, Inc. 1992 Directors' Stock Option Plan.
99.7 Form of Nonstatutory Stock Option Agreement used in connection
with the 1992 Directors' Stock Option Plan.
99.8 Form of Stock Option Assumption Agreement used in connection
with the 1992 Directors' Stock Option Plan.
99.9 Stratacom, Inc. 1992 Employee Stock Purchase Plan.
99.10 Memorandum re Assumption of 1992 Employee Stock Purchase
Plan.
<PAGE> 1
Exhibit 5
August 7, 1996
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134-1706
Re: Cisco Systems, Inc. Registration Statement for
Offering of 9,193,337 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 (i) 4,636,356
shares of the common stock ("Common Stock") of Cisco Systems, Inc. (the
"Company") issuable under the Stratacom, Inc. 1994 Stock Option Plan, (ii)
4,306,981 shares of Common Stock issuable under the Stratacom, Inc. 1986
Incentive Stock Option Plan, (iii) 110,000 shares of Common Stock issuable under
the Stratacom, Inc. 1992 Directors' Stock Option Plan, and (iv) 140,000 shares
of Common Stock issuable under the Stratacom, Inc. 1992 Employee Stock Purchase
Plan (collectively, the "Plans"), as such Plans have been assumed by the Company
on July 9, 1996. We advise you that, in our opinion, when such shares have been
issued and sold pursuant to the applicable provisions of the Plans 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,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<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 schedule 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 9,193,337 shares of its common stock and 9,053,337 options to purchase
shares of its common stock.
/s/ Coopers & Lybrand L.L.P.
San Jose, California
August 6, 1996
<PAGE> 1
EXHIBIT 99.6
STRATACOM, INC.
1992 DIRECTORS' STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Directors' Stock
Option Plan are to attract and retain the best available personnel for service
as Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.
All options granted hereunder shall be "nonstatutory stock
options."
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the
Company.
(d) "Company" shall mean StrataCom, Inc., a Delaware
corporation.
(e) "Continuous Status as a Director" shall mean the
absence of any interruption or termination of service as a Director.
(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean 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
in and of itself to constitute "employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(i) "Option" shall mean a stock option granted pursuant to
the Plan.
(j) "Optioned Stock" shall mean the Common Stock subject to
an Option.
<PAGE> 2
(k) "Optionee" shall mean an Outside Director who receives
an Option.
(l) "Outside Director" shall mean a Director who is not an
Employee.
(m) "Parent" shall mean a "parent corporation," whether now
or hereafter existing, as defined in Section 424(e) of the Code.
(n) "Plan" shall mean this 1992 Directors' Stock Option
Plan.
(o) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 450,000 Shares which may be optioned and
sold under the Plan is 450,000 Shares (the "Pool") of Common Stock. The Shares
may be authorized, but unissued, or reacquired Common Stock.
If an Option 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 the Plan. If Shares which were acquired upon
exercise of an Option are subsequently repurchased by the Company, such Shares
shall not in any event be returned to the Plan and shall not become available
for future grant under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the
Plan shall be administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder
shall be automatic and nondiscretionary and shall be made strictly in accordance
with the following provisions:
(i) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors.
2.
<PAGE> 3
(ii) Each Outside Director shall be automatically
granted an Option to purchase 40,000 Shares (the "First Option") on the date on
which the later of the following events occurs: (A) the effective date of this
Plan, as determined in accordance with Section 6 hereof, or (B) the date on
which such person first becomes an Outside Director, whether through election by
the stockholders of the Company or appointment by the Board of Directors to fill
a vacancy.
(iii) After the First Option has been granted to an
Outside Director, such Outside Director shall thereafter be automatically
granted an Option to purchase 10,000 Shares (a "Subsequent Option") on each
anniversary of the Effective Date, if on such date, he or she shall have served
on the Board for at least six (6) months.
(iv) Notwithstanding the provisions of subsections (ii)
and (iii) hereof, in the event that a grant would cause the number of Shares
subject to outstanding Options plus the number of Shares previously purchased
upon exercise of Options to exceed the Pool, then each such automatic grant
shall be for the number of Shares determined by dividing the total number of
Shares remaining available for grant by the number of Outside Directors on the
automatic grant date. Any further grants shall then be deferred until such time,
if any, as additional Shares become available for grant under the Plan through
action of the stockholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.
(v) Notwithstanding the provisions of subsections (ii)
and (iii) hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 17 hereof.
(vi) The terms of a First Option granted hereunder shall
be as follows:
(A) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option.
(C) the First Option shall become exercisable in
installments cumulatively as to 25% of the Shares subject to the First Option on
each of the first, second, third and fourth anniversaries or the date of grant
of the First Option.
3.
<PAGE> 4
(vii) The terms of a Subsequent Option granted hereunder
shall be as follows:
(A) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(B) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option.
(C) the Subsequent Option shall become exercisable as to
one hundred percent (100%) of the Shares subject to the Subsequent Option on the
fourth anniversary of the date of grant of the Subsequent Option.
(c) Powers of the Board. Subject to the provisions and
restrictions of the Plan, the Board shall have the authority, in its discretion:
(i) to determine, upon review of relevant information and in accordance with
Section 8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which exercise
price shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations
and interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the President or
his or her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Company, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any option whatsoever. In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall
4.
<PAGE> 5
give the Optionee an opportunity to appear and present evidence on Optionee's
behalf at a hearing before the Board or a committee of the Board.
5. Eligibility. Options may be granted only to Outside
Directors. All Options shall be automatically granted in accordance with the
terms set forth in Section 4(b) hereof. An Outside Director who has been granted
an Option may, if he or she is otherwise eligible, be granted an additional
Option or Options in accordance with such provisions.
The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.
6. Term of Plan; Effective Date. The Plan shall become
effective on the thirtieth day following completion of the Company's initial
public offering. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be ten (10)
years from the date of grant thereof.
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be 100% of the fair
market value per Share on the date of grant of the Option.
(b) Fair Market Value. The fair market value shall be
determined by the Board in its discretion; provided, however, that where there
is a public market for the Common Stock, the fair market value per Share shall
be the mean of the bid and asked prices of the Common Stock in the
over-the-counter market on the date of grant, as reported in The Wall Street
Journal (or, if not so reported, as otherwise reported by the National
Association of Securities Dealers Automated Quotation ("NASDAQ") System) or, in
the event the Common Stock is traded on the NASDAQ National Market System or
listed on a stock exchange, the fair market value per Share shall be the closing
price on such system or exchange on the date of grant of the Option, as reported
in The Wall Street Journal.
(c) Form of Consideration. The consideration to be paid for
the Shares to be issued upon exercise of an Option shall consist entirely of
cash, check, other Shares of Common Stock having 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 (which, if acquired from the Company, shall have
been held for at least six months), or
5.
<PAGE> 6
any combination of such methods of payment and/or any other consideration or
method of payment as shall be permitted under applicable corporate law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
until stockholder approval of the Plan in accordance with Section 17 hereof has
been obtained.
An Option may not be exercised for a fraction of a Share.
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 consist of any consideration and method of payment
allowable under Section 8(c) 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. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
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.
(b) Termination of Status as a Director. If an Outside
Director ceases to serve as a Director, he or she may, but only within three (3)
months (or such other period of time not exceeding six (6) months as is
determined by the Board) after the date he or she causes to be a Director of the
Company, exercise his or her Option to the extent that he or she was entitled to
exercise it at the date of such termination. Notwithstanding the foregoing, in
no event may the Option be exercised after its term set forth in Section 7 has
expired. To the extent that such Outside Director was not entitled to exercise
an Option at the date of such termination, or does not exercise such Option
(which he or she was entitled to exercise) within the time specified herein, the
Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions
of Section 9(b) above, in the event a Director is unable to continue his or her
service as a Director with the Company as a result of his or her total and
permanent disability (as
6.
<PAGE> 7
defined in Section 22(e)(3) of the Internal Revenue Code), he or she may, but
only within six (6) months (or such other period of time not exceeding twelve
(12) months as is determined by the Board); from the date of such termination,
exercise his or her Option to the extent he or she was entitled to exercise it
at the date of such termination. Notwithstanding the foregoing, in no event may
the Option be exercised after its term set forth in Section 7 has expired. To
the extent that he or she was not entitled to exercise the Option at the date of
termination, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an
Optionee:
(i) during the term of the Option who is, at the time of
his or her death, a Director of the Company and who shall have been in
Continuous Status as a Director since the date of grant of the Option, the
Option may be exercised, at any time within six (6) months (or such lesser
period of time as is determined by the Board) following the date of death, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and remained
in Continuous Status as Director for six (6) months (or such lesser period of
time as is determined by the Board) after the date of death. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired.
(ii) within three (3) months (or such lesser period of
time as is determined by the Board) after the termination of Continuous Status
as a Director, the Option may be exercised, at any time within six (6) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
term set forth in Section 7 has expired.
10. Nontransferability 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. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised during the lifetime of an Optionee only by the Optionee or a
transferee permitted by this Section.
11. Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the stockholders of the Company, the number of
shares of Common Stock covered by each outstanding Option, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted or which have been returned to
the Plan upon
7.
<PAGE> 8
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, 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.
In the event of the proposed dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable. In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the Optionee shall have the right to
exercise the Option as to some or all of the Optioned Stock, including Shares as
to which the Option would not otherwise be exercisable. If the Board makes an
Option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the Optionee that the Option
shall be exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date determined in accordance with Section 4(b)
hereof. Notice of the determination shall be given to each Outside Director to
whom an Option is so granted within a reasonable time after the date of such
grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided that, to the extent necessary and desirable to comply with
Rule 16b-3 under the Exchange Act (or any other applicable law or regulation),
the Company shall obtain approval of the stockholders of the Company to Plan
amendments to the extent and in
8.
<PAGE> 9
the manner required by such law or regulation. Notwithstanding the foregoing,
the provisions set forth in Section 4 of this Plan (and any other Sections of
this Plan that affect the formula award terms required to be specified in this
Plan by Rule 16b-3) shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1979, as amended, or the rules thereunder.
(b) Effect of Amendment or Termination. Any such amendment
or termination of the Plan that would impair the rights of any Optionee shall
not affect Options already granted to such Optionee and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of such Option
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, state securities laws, 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, the Company may
require the person exercising such Option 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.
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.
15. 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.
16. Option Agreement. Options shall be evidenced by written
option agreements in such form as the Board shall approve.
9.
<PAGE> 10
17. Stockholder Approval.
(a) Continuance of the Plan shall be subject to approval by
the stockholders of the Company at or prior to the first annual meeting of
stockholders held subsequent to the granting of an Option hereunder. If such
stockholder approval is obtained at a duly held stockholders' meeting, it may be
obtained by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present or represented and entitled to vote thereon. If
such stockholder approval is obtained by written consent, it may be obtained by
the written consent of the holders of a majority of the outstanding shares of
the Company.
(b) Any required approval of the stockholders of the
Company shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
18. Information to Optionees. The Company shall provide to
each Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports to stockholders, proxy statements and
other information provided to all stockholders of the Company.
10.
<PAGE> 1
EXHIBIT 99.7
STRATACOM, INC.
1992 DIRECTOR OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
1~
2~
3~
You have been granted an option to purchase Common Stock of
the Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Date of Grant 4~
Vesting Commencement Date 5~
Exercise Price per Share $6~
Total Number of Shares Granted 7~
Total Exercise Price $8~
Term/Expiration Date 9~
Vesting Schedule:
This Option may be exercised, in whole or in part, in
accordance with the following schedule:
10~
Termination Period:
This Option may be exercised for 90 days after termination of
Optionee's Continuous Status as a Director, or such longer period as may be
applicable upon death or Disability of Optionee as provided in the Plan, but in
no event later than the Term/Expiration Date as provided above.
<PAGE> 2
II. AGREEMENT
1. Grant of Option. The Board of Directors of the Company
hereby grants to the Optionee named in the Notice of Grant attached as Part I of
this Agreement (the "Optionee"), 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
and conditions of the Plan, 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.
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 attached as Exhibit A (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 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 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.
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 the requirements of any stock exchange or quotation service 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
2.
<PAGE> 3
(c) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or
(d) surrender of other Shares which (i) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares; or
(e) delivery of Optionee's promissory note (the "Note") in
the form attached hereto as Exhibit C, in the amount of the aggregate Exercise
Price of the Exercised Shares together with the execution and delivery by the
Optionee of the Security Agreement attached hereto as Exhibit B. The Note shall
bear interest at a rate no less than the "applicable federal rate" prescribed
under the Code and its regulations at time of purchase, and shall be secured by
a pledge of the Shares purchased by the Note pursuant to the Security Agreement.
4. 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 the
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.
5. 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 Agreement.
6. Tax Consequences. Some of the federal and [state] 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. Since this Option does not
qualify as an Incentive Stock Option, the Optionee may incur regular federal
income tax and [state] 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.
3.
<PAGE> 4
(b) Disposition of Shares. If the Optionee holds Option
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.
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 Plan and this Option
Agreement. Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option Agreement and fully understands all provisions of the Plan
and Option Agreement. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement.
STRATACOM, INC.
By: _______________________
Title: ____________________
Optionee: 1~
___________________________
4.
<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 Agreement. 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 Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement 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 Agreement.
___________________________
Spouse of Optionee
5.
<PAGE> 6
EXHIBIT A
STRATACOM, INC.
1992 DIRECTOR OPTION PLAN
EXERCISE NOTICE
StrataCom, Inc.
1400 Parkmoor Avenue
San Jose, CA 95126
Attention: Secretary
1. Exercise of Option. Effective as of today, ,
199_, the undersigned ("Purchaser") hereby elects to purchase shares
(the "Shares") of the Common Stock of StrataCom, Inc. (the "Company") under
and pursuant to the Company's 1992 Director Option Plan (the "Plan") and the
Stock Option Agreement dated 4~ (the "Option Agreement"). The purchase price
for the Shares shall be $ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the
Company the full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Subject to the terms and conditions
of this Agreement, Purchaser shall have all of the rights of a stockholder of
the Company with respect to the Shares from and after the date that Purchaser
delivers full payment of the Exercise Price until such time as Purchaser
disposes of the Shares.
5. Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option
Agreement are incorporated herein by reference. This Agreement, the Plan and the
Option Agreement constitute the entire agreement of the parties and supersede in
their entirety all prior undertakings and agreements of the Company and
Purchaser with respect to the subject matter hereof, and such agreement is
governed by [state] law except for that body of law pertaining to conflict of
laws.
A-1
<PAGE> 7
Submitted by:
___________________________
1~
Address: 2~
3~
Accepted by:
STRATACOM, INC.
By: _______________________
Title: ____________________
Address: 1400 Parkmoor Avenue
San Jose, CA 95126
A-2
<PAGE> 8
EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of , 19__ between
StrataCom, Inc., a Delaware corporation ("Pledgee"), and 1~ ("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the
Option Agreement dated 4~ (the "Option"), between Pledgor and Pledgee under
Pledgee's 1992 Director Option Plan, and Pledgor's election under the terms of
the Option to pay for such shares with his promissory note (the "Note"), Pledgor
has purchased shares of Pledgee's Common Stock (the "Shares") at a
price of $ per share, for a total purchase price of $ . The Note and
the obligations thereunder are as set forth in Exhibit C to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In
consideration of the transfer of the Shares to Pledgor under the Option
Agreement, Pledgor, pursuant to the [state] Commercial Code, hereby pledges all
of such Shares (herein sometimes referred to as the "Collateral") represented by
certificate number , duly endorsed in blank or with executed stock
powers, and herewith delivers said certificate to the Secretary of Pledgee
("Pledgeholder"), who shall hold said certificate subject to the terms and
conditions of this Security Agreement.
The pledged stock (together with an executed blank stock
assignment for use in transferring all or a portion of the Shares to Pledgee if,
as and when required pursuant to this Security Agreement) shall be held by the
Pledgeholder as security for the repayment of the Note, and any extensions or
renewals thereof, to be executed by Pledgor pursuant to the terms of the Option,
and the Pledgeholder shall not encumber or dispose of such Shares except in
accordance with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee
to enter into this Security Agreement, Pledgor represents and covenants to
Pledgee, its successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.
B-1
<PAGE> 9
b. Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common
Stock is now or later becomes margin-listed by the Federal Reserve Board and
Pledgee is classified as a "lender" within the meaning of the regulations under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G"),
Pledgor agrees to cooperate with Pledgee in making any amendments to the Note or
providing any additional collateral as may be necessary to comply with such
regulations.
3. Voting Rights. During the term of this pledge and so long
as all payments of principal and interest are made as they become due under the
terms of the Note, Pledgor shall have the right to vote all of the Shares
pledged hereunder.
4. Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of Pledgee, all new, substituted and
additional shares or other securities issued by reason of any such change shall
be delivered to and held by the Pledgee under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In the
event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to "Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of
this pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the
Note and of this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth
in the Option or contained in this Security Agreement for a period of 10 days
after written notice thereof from Pledgee.
B-2
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
"PLEDGOR"
___________________________
1~
Address: 2~
3~
"PLEDGEE"
StrataCom, Inc.,
a Delaware corporation
By: _______________________
Title: ____________________
"PLEDGEHOLDER'
____________________________
Secretary of StrataCom, Inc.
B-3
<PAGE> 11
EXHIBIT C
INSTALLMENT NOTE
$______________ San Jose, California
_____________ , 19__
FOR VALUE RECEIVED, 1~ promises to pay to StrataCom, Inc., a
Delaware corporation (the "Company"), or order, the principal sum of
($ ) , together with interest on the unpaid principal hereof from the date
hereof at the rate of percent (____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on ,
19__. Should the undersigned fail to make full payment of any installment of
principal or interest for a period of 10 days or more after the due date
thereof, the whole unpaid balance on this Note of principal and interest shall
become immediately due at the option of the holder of this Note. Payments of
principal and interest shall be made in lawful money of the United States of
America.
The undersigned may at any time prepay all or any portion of
the principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
4~. This Note is secured by a pledge of the Company's Common Stock under the
terms of a Security Agreement of even date herewith and is subject to all the
provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance of this Note of principal
and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this
Note, the reasonable costs and attorneys' fees therein of the holder shall be
paid by the undersigned.
___________________________
1~
<PAGE> 1
EXHIBIT 99.8
1992 DIRECTORS' STOCK OPTION PLAN
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 9th day of
July, 1996 by Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the common stock of Stratacom,
Inc., a Delaware corporation ("Stratacom"), which were granted to Optionee under
the Stratacom, Inc. 1992 Director Option Plan (the "Plan") and are evidenced by
a Stock Option Agreement (the "Option Agreement") between Stratacom and
Optionee.
WHEREAS, Stratacom has this day been acquired by Cisco through
merger of a wholly-owned Cisco subsidiary ("Acquisition Corporation") with and
into Stratacom (the "Merger") pursuant to the Agreement and Plan of Merger dated
April 21, 1996 by and among Cisco, Stratacom and Acquisition Corporation (the
"Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco
to assume all obligations of Stratacom under all options outstanding under the
Plan at the consummation of the Merger and to issue to the holder of each
outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement,
the exchange ratio in effect for the Merger is one (1) share of Cisco common
stock ("Cisco Stock") for each outstanding share of Stratacom common stock (the
"Exchange Rate").
WHEREAS, this Agreement is to become effective immediately
upon the consummation of the Merger (the "Effective Time") in order to reflect
certain adjustments to Optionee's outstanding options under the Plan which have
become necessary by reason of the assumption of those options by Cisco in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Stratacom common stock subject to
the stock options held by Optionee under the Plan immediately prior to the
Effective Time (the "Stratacom Options") and the exercise price payable per
share are set forth in Exhibit A
<PAGE> 2
hereto. Cisco hereby assumes, as of the Effective Time, all the duties and
obligations of Stratacom under each of the Stratacom Options. Such assumption is
hereby effected in accordance with the one-for-one Exchange Rate at which shares
of Stratacom common stock were converted into shares of Cisco Stock in
consummation of the Merger. Accordingly, the number of shares of Cisco Stock
purchasable under each Stratacom Option hereby assumed shall be equal to the
same number of shares of Stratacom common stock purchasable under that Stratacom
Option immediately prior to the Merger, and the exercise price per share payable
under each such assumed Stratacom Option shall be equal to the exercise price
per share in effect under that Stratacom Option immediately prior to the Merger.
The specific number of shares of Cisco Stock subject to each Stratacom Option
hereby assumed shall be as set forth for that option in attached Exhibit B, and
the exercise price payable per share of Cisco Stock under the assumed Stratacom
Option shall be as indicated for that option in attached Exhibit B.
2. The following provisions shall govern each Stratacom Option
hereby assumed by Cisco:
- Unless the context otherwise requires, all references to
the "Company" in each Option Agreement and in the Plan (as incorporated into
such Option Agreement) shall mean Cisco, all references to "Shares," "Stock" or
"Common Stock" shall mean shares of Cisco Stock, and all references to the "Plan
Administrator" shall mean the Compensation Committee of the Cisco Board of
Directors.
- The grant date and the expiration date of each assumed
Stratacom Option and all other provisions which govern either the exercisability
or the termination of the assumed Stratacom Option shall remain the same as set
forth in the Option Agreement applicable to that option and shall accordingly
govern and control Optionee's rights under this Agreement to purchase Cisco
Stock.
- Each assumed Stratacom Option shall remain exercisable in
accordance with the same installment exercise schedule in effect under the
applicable Option Agreement(s) 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 accelerated vesting of the Stratacom
Options shall be deemed to occur by reason of the Merger, and the grant date for
each assumed Stratacom Option shall accordingly remain the same as in effect
under the applicable Option Agreement(s) immediately prior to the Merger.
- For purposes of applying any and all provisions of the
Option Agreement(s) relating to Optionee's status as a director with the
Company, Optionee shall be deemed to continue in such status for so long as
Optionee renders services as a member of the Board of Directors of Cisco or any
present or future Cisco subsidiary, including (without limitation) Stratacom.
Accordingly, the provisions of the Option Agreement(s) governing the termination
of the assumed Stratacom Option upon the Optionee's cessation
2.
<PAGE> 3
of service as a director with Stratacom shall hereafter be applied on the basis
of the Optionee's cessation of service as a member of the Board of Directors of
Cisco or any of its subsidiaries, and each assumed Stratacom Option shall
accordingly terminate, within the designated time period in effect under the
Option Agreement(s) for that option, following such cessation of Board service.
- The exercise price payable for the Cisco Stock subject to
each assumed Stratacom Option shall be payable in any of the forms authorized
under the Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Cisco Stock delivered in payment
of such exercise price, the period for which such shares were held as Stratacom
common stock prior to the Merger shall be taken into account.
- In order to exercise each assumed Stratacom Option,
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 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: Christine Calice
3. Except to the extent specifically modified by this Option
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 Stock Option Assumption Agreement.
IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its duly-authorized
officer as of the _____ day of ________, 1996.
CISCO SYSTEMS, INC.
___________________________
By:
3.
<PAGE> 4
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 Stratacom Options hereby assumed by Cisco Systems,
Inc. are as set forth in the Option Agreement, the Plan and such Stock Option
Assumption Agreement.
________________________________________
1~, OPTIONEE
DATED: __________________, 1996
4.
<PAGE> 5
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of Stratacom, Inc.
Common Stock (Pre-Merger)
<PAGE> 6
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of Cisco Systems, Inc.
Common Stock (Post-Merger)
<PAGE> 1
EXHIBIT 99.9
STRATACOM, INC.
1992 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1992 Employee
Stock Purchase Plan of StrataCom, Inc.
1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the
Company.
(d) "Company" shall mean StrataCom, Inc., a Delaware
corporation.
(e) "Compensation" shall mean all regular straight time
gross earnings, excluding payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses, commissions and other compensation.
(f) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of service as an Employee. Continuous
Status as an Employee shall not be considered interrupted in the case of a leave
of absence agreed to in writing by the Company, provided that such leave is for
a period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
(g) "Contributions" shall mean all amounts credited to the
account of a participant pursuant to the Plan.
<PAGE> 2
(h) "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.
(i) "Employee" shall mean any person, including an officer,
who is customarily employed for at least twenty (20) hours per week and more
than five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
(j) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(k) "Exercise Date" shall mean the last day of each
Offering Period of the Plan.
(l) "Offering Date" shall mean the first business day of
each Offering Period of the Plan, except that in the case of an individual who
becomes an eligible Employee after the first business day of an Offering Period
but prior to the first business day of the last calendar quarter of such
Offering Period, the term "Offering Date" shall mean the first business day of
the calendar quarter coinciding with or next succeeding the day on which that
individual becomes an eligible Employee.
Options granted after the first business day of an Offering
Period will be subject to the same terms as the options granted on the first
business day of such Offering Period except that they will have a different
grant date (thus, potentially, a different exercise price) and, because they
expire at the same time as the options granted on the first business day of such
Offering Period, a shorter term.
(m) "Offering Period" shall mean a period of six (6)
months.
(n) "Plan" shall mean this Employee Stock Purchase Plan.
(o) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who has been continuously employed as an
Employee for three (3) months as of the Offering Date of a given Offering Period
shall be eligible to participate in such Offering Period under the Plan,
provided that such person was not eligible to participate in such Offering
Period as of any prior Offering Date, and further, subject to the requirements
of Section 5(a) and the limitations imposed by Section 423(b) of the Code.
2.
<PAGE> 3
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any subsidiary of the Company, or (ii) if
such option would permit his or her rights to purchase stock under all employee
stock purchase plans (described in Section 423 of the Code) of the Company and
its Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) of fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. Offering Periods. The Plan shall be implemented by a series
of Offering Periods, with new Offering Periods commencing on or about such times
as may be determined by the Board of Directors. The first Offering Period shall
commence on such date the Board shall determine. The Plan shall continue until
terminated in accordance with Section 19 hereof. The Board of Directors of the
Company shall have the power to change the duration and/or the frequency of
Offering Periods with respect to future offerings without stockholder approval
if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement on the form provided by the Company
and filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given offering. The
subscription agreement shall set forth the percentage of the participant's
Compensation (which shall be not less than 1% and not more than 10%) to be paid
as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll
following the Offering Date and shall end on the last payroll paid on or prior
to the Exercise Date of the offering to which the subscription agreement is
applicable, unless sooner terminated by the participant as provided in Section
10.
6. Method of Payment of Contributions.
(a) The participant shall elect to have payroll deductions
made on each payday during the Offering Period in an amount not less than one
percent (1%) and not more than ten percent (10%) of such participant's
Compensation on each such payday; provided that the aggregate of such payroll
deductions during the Offering
3.
<PAGE> 4
Period shall not exceed ten percent (10%) of the participant's aggregate
Compensation during said Offering Period. All payroll deductions made by a
participant shall be credited to his or her account under the Plan. A
participant may not make any additional payments into such account.
(b) A participant may discontinue his or her participation
in the Plan as provided in Section 10, or, on one occasion only during the
Offering Period, may increase or decrease the rate of his or her Contributions
during the Offering Period by completing and filing with the Company a new
subscription agreement. The change in rate shall be effective as of the
beginning of the calendar quarter following the date of filing of the new
subscription agreement.
(c) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions may be decreased to 0% at such time during any
Offering Period which is scheduled to end during the current calendar year that
the aggregate of all payroll deductions accumulated with respect to such
Offering Period and any other Offering Period ending within the same calendar
year equal $21,250. Payroll deductions shall re-commence at the rate provided in
such participant's Subscription Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date a number of shares of the Company's
Common Stock determined by dividing such Employee's Contributions accumulated
prior to such Exercise Date and retained in the participant's account as of the
Exercise Date by the lower of (i) eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Offering Date, or (ii)
eighty-five percent (85%) of the fair market value of a share of the Company's
Common Stock on the Exercise Date; provided however, that the maximum number of
shares an Employee may purchase during each Offering Period shall be determined
at the Offering Date by dividing $12,500 by the fair market value of a share of
the Company's Common Stock on the Offering Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 12.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).
(b) The option price per share of the shares offered in a
given Offering Period shall be the lower of: (i) 85% of the fair market value of
a share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by
4.
<PAGE> 5
the Board in its discretion based on the closing price of the Common Stock for
such date (or, in the event that the Common Stock is not traded on such date, on
the immediately preceding trading date), as reported by the National Association
of Securities Dealers Automated Quotation (NASDAQ) National Market System or, if
such price is not reported, the mean of the bid and asked prices per share of
the Common Stock as reported by NASDAQ or, in the event the Common Stock is
listed on a stock exchange, the fair market value per share shall be the closing
price on such exchange on such date (or, in the event that the Common Stock is
not traded on such date, on the immediately preceding trading date), as reported
in The Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the
Plan as provided in paragraph 10, his or her option for the purchase of shares
will be exercised automatically on the Exercise Date of the Offering Period, and
the maximum number of full shares subject to option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Exercise Date. During his or
her lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.
9. Delivery. As promptly as practicable after the Exercise
Date of each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option. Any cash remaining to the credit of a
participant's account under the Plan after a purchase by him or her of shares at
the termination of each Offering Period, or which is insufficient to purchase a
full share of Common Stock of the Company, shall be returned to said
participant.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all
the Contributions credited to his or her account under the Plan at any time
prior to the Exercise Date of the Offering Period by giving written notice to
the Company. All of the participant's Contributions credited to his or her
account will be paid to him or her promptly after receipt of his or her notice
of withdrawal and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.
(b) Upon termination of the participant's Continuous Status
as an Employee prior to the Exercise Date of the Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
be automatically terminated.
5.
<PAGE> 6
(c) In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per week
during the Offering Period in which the employee is a participant, he or she
will be deemed to have elected to withdraw from the Plan and the Contributions
credited to his or her account will be returned to him or her and his or her
option terminated.
(d) A participant's withdrawal from an offering will not
have any effect upon his or her eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the Company.
11. Interest. No interest shall accrue on the Contributions of
a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall be 750,000
shares, subject to adjustment upon changes in capitalization of the Company as
provided in Section 18. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) on the Offering Date of an
Offering Period exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.
(b) The participant will have no interest or voting right
in shares covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan
will be registered in the name of the participant or in the name of the
participant and his or her spouse.
13. Administration. The Board, or a committee named by the
Board, shall supervise and administer the Plan and shall have full power to
adopt, amend and rescind any rules deemed desirable and appropriate for the
administration of the Plan and not inconsistent with the Plan, to construe and
interpret the Plan, and to make all other determinations necessary or advisable
for the administration of the Plan. The composition of the committee shall be in
accordance with the requirements to obtain or retain any available exemption
from the operation of Section 16(b) of the Exchange Act pursuant to Rule 16b-3
promulgated thereunder.
6.
<PAGE> 7
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of the Offering Period but prior to delivery to him or her
of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's
account under the Plan in the event of such participant's death prior to the
Exercise Date of the Offering Period. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor of administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
15. Transferability. Neither contributions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.
16. Use of Funds. All Contributions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such Contributions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees promptly following the Exercise Date, which statements will set forth
the amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been
exercised and the
7.
<PAGE> 8
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, 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 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 issue 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.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board. In
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, to shorten the
Offering Period then in progress by setting a new Exercise Date (the "New
Exercise Date"). If the Board shortens the Offering Period then in progress in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify each participant in writing, at least ten (10) days prior
to the New Exercise Date, that the Exercise Date for his or her option has been
changed to the New Exercise Date and that his or her option will be exercised
automatically on the New Exercise Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10. For purposes of
this paragraph, an option granted under the Plan shall be deemed to be assumed
if, following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders of
Common Stock for each share or Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon exercise of the option to be solely
common stock of
8.
<PAGE> 9
the successor corporation or its parent equal in fair market value to the per
share consideration received by holders of Common Stock and the sale of assets
or merger.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time
erminate or amend the Plan. Except as provided in Section 18, no such
termination may affect options previously granted, nor may an amendment make any
change in any option theretofore granted which adversely affects the rights of
any participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor rule
or provision or any applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as so required.
(b) Without shareholder consent and without regard to
whether any participant rights may be considered to have been adversely
affected, the Board (or its committee) shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.
20. Notices. All notices or other communications by a
participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the receipt
thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933 as amended,
9.
<PAGE> 10
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, the Company may
require the person exercising such option 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 applicable provisions of law.
22. Term of Plan; Effective Date. The Plan shall become
effective upon the earlier to occur of its adoption by the Board of Directors or
its approval by the shareholders of the Company. It shall continue in effect for
a term of twenty (20) years unless sooner terminated under Section 19.
23. Additional Restrictions of Rule 16b-3. The terms and
conditions of options granted hereunder to, and the purchase of shares by,
persons subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and
such options shall contain, and the shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by
Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
10.
<PAGE> 1
Exhibit 99.10
MEMORANDUM
TO: Participants in the Stratacom, Inc. 1992 Employee Stock Purchase Plan
FROM: Cisco Systems, Inc.
DATE:
RE: Assumption of Options Under the 1992 Employee Stock Purchase Plan
- --------------------------------------------------------------------------------
As you know, Stratacom, Inc. ("Stratacom") was recently acquired by
Cisco Systems, Inc. ("Cisco") through a merger effected on July 9, 1996. As a
result, Stratacom has become a wholly-owned Cisco subsidiary.
In connection with this transaction, Cisco has assumed the outstanding
options under the Stratacom 1992 Employee Stock Purchase Plan (the "Stratacom
ESPP") such that those options now cover shares of Cisco common stock. Several
additional changes to the options were also made as part of the assumption
process. These changes are summarized as follows:
1. The number of shares of Cisco common stock subject to each assumed
Stratacom ESPP option reflects the ratio at which shares of Stratacom common
stock were exchanged for shares of Cisco common stock in the merger. That
ratio was one (1) share of Cisco common stock for each share of Stratacom
common stock. As a result, the number of Cisco shares now subject to each
option is equal to the number of shares of Stratacom common stock subject to
that option immediately before the merger.
2. The purchase price per share in effect under each assumed Stratacom
ESPP option will be lesser of (a) eighty-five percent (85%) of the fair
market value per share of Stratacom common stock at the start of the current
offering period under the Stratacom ESPP (April 1, 1996) or (b) eighty-five
(85%) of the fair market value per share of Cisco common stock on the
Exercise Date.
3. All outstanding options assumed by Cisco under the Stratacom ESPP
will be exercised on September 30, 1996 (the "Exercise Date").
<PAGE> 2
4. The grant date of each assumed Stratacom ESPP option and all
other provisions which govern the termination or exercise of that
option will remain the same as set forth in the Stratacom ESPP, and
your subscription agreement will accordingly govern and control your
rights to acquire shares of Cisco common stock under your assumed
option.
5. For purposes of applying the termination of employment
provisions of the Stratacom ESPP, you will be deemed to continue in
employment for so long as you remain employed by Cisco or any present
or future Cisco subsidiary.
6. The Stratacom ESPP will terminate immediately following the
exercise of all outstanding Stratacom ESPP options on the Exercise
Date, and no further options will be granted under the Stratacom ESPP
after that date.
You should contact Christine Calice at Cisco at (408) 526-7144 if
you have any questions.
2
