<PAGE> 1
As filed with the Securities and Exchange Commission on August 14, 1997
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)
--------------------
SKYSTONE SYSTEMS CORPORATION
EMPLOYEE STOCK OPTION PLAN
(Full title of the plan)
--------------------
JOHN T. CHAMBERS
PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
CISCO SYSTEMS, INC.
170 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Name and address of agent for service)
(408) 526-4000
(Telephone number, including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Skystone Systems Corporation
Employee Stock Option Plan
- --------------------------
Common Stock 252,138 $5.3044 $1,337,441 $405
</TABLE>
================================================================================
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Skystone Systems Corporation Employee
Stock Option Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average
exercise price of the outstanding options.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
Cisco Systems, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended July 28, 1996 filed with the Commission on October 25,
1996, pursuant to Section 13 of the Securities Exchange Act of
1934 (the "1934 Act").
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended October 26, 1996, January 25, 1997 and April 26,
1997, filed with the Commission on December 10, 1996, March 10,
1997 and June 10, 1997, respectively, and any amendments
thereto.
(c) The Registrant's reports on Form 8-K filed with the Commission
on October 1, 1996 and January 22, 1997, respectively.
(d) 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-A 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> 3
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
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4.0 Instruments Defining Rights of Shareholders. Reference is made to Registrant's
Registration Statement No. 0-18225 on Form 8-A which is incorporated herein by reference
pursuant to Item 3(c).
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 Skystone Systems Corporation Employee Stock Option Plan.
99.2 Form of Memorandum to Employees re: Stock Options.
99.3 Form of Offer Letter Granting Stock Options.
99.4 Form of Memorandum re: Assumption of Stock Options.
99.5 Form of Stock Option Assumption Agreement.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
into the Registration Statement; (2) that for the purpose of determining any
liability under the 1933 Act each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the Skystone Systems Corporation Employee
Stock Option Plan.
II-2.
<PAGE> 4
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> 5
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 14th day of August, 1997.
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>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John T. Chambers President, Chief Executive August 14, 1997
- ----------------------------- Officer and Director (Principal
John T. Chambers Executive Officer)
/s/ Larry R. Carter Vice President, Finance and August 14, 1997
- ----------------------------- Administration, Chief Financial
Larry R. Carter Officer and Secretary
(Principal Financial and Accounting
Officer)
/s/ John P. Morgridge Chairman of the Board August 14, 1997
- ----------------------------- and Director
John P. Morgridge
</TABLE>
II-4.
<PAGE> 6
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Donald T. Valentine Director August 14, 1997
- -----------------------------
Donald T. Valentine
/s/ James F. Gibbons Director August 14, 1997
- -----------------------------
James F. Gibbons
/s/ Robert L. Puette Director August 14, 1997
- -----------------------------
Robert L. Puette
Director
- -----------------------------
Masayoshi Son
/s/ Steven M. West Director August 14, 1997
- -----------------------------
Steven M. West
/s/ Richard M. Moley Director August 14, 1997
- -----------------------------
Richard M. Moley
/s/ Edward Kozel Director August 14, 1997
- -----------------------------
Edward Kozel
/s/ Carol Bartz Director August 14, 1997
- -----------------------------
Carol Bartz
</TABLE>
II-5.
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
-------------- -------
<S> <C>
4.0 Instruments Defining Rights of Shareholders. Reference is made to Registrant's
Registration Statement No. 0-18225 on Form 8-A which is incorporated herein by reference
pursuant to Item 3(c).
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 Skystone Systems Corporation Employee Stock Option Plan.
99.2 Form of Memorandum to Employees re: Stock Options.
99.3 Form of Offer Letter Granting Stock Options.
99.4 Form of Memorandum re: Assumption of Stock Options.
99.5 Form of Stock Option Assumption Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 5.0
August 14, 1997
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134-1706
Re: Cisco Systems, Inc. Registration Statement for
Offering of 252,138 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 252,138 shares of the common
stock ("Common Stock") of Cisco Systems, Inc. (the "Company") issuable under the
Skystone Systems Corporation Employee Stock Option Plan (the "Plan") as assumed
by the Company. We advise you that, in our opinion, when such shares have been
issued and sold pursuant to the applicable provisions of the Plan and in
accordance with the Registration Statement, such shares will be validly issued,
fully paid and nonassessable shares of Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/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 in the Registration Statement on
Form S-8 of Cisco Systems, Inc. for the registration of 252,138 shares of its
common stock of our reports dated August 13, 1996, except for Note 3 for which
the date is October 14, 1996, on our audits of the consolidated financial
statements and financial statement schedule of Cisco Systems, Inc. as of July
28, 1996 and July 30, 1995, and for the years ended July 28, 1996, July 30,
1995 and July 31, 1994 appearing in Cisco Systems, Inc.'s 1996 Annual Report on
Form 10-K filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1934.
/s/ Coopers & Lybrand L.L.P.
San Jose, California
August 13, 1997
<PAGE> 1
EXHIBIT 99.1
SKYSTONE
EMPLOYEE STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of the Skystone Key Employee
Stock Option Plan is to develop the interest of and provide an incentive to
eligible employees, directors and important advisors of Skystone (the
"Corporation") in the Corporation's growth and development by granting to
eligible employees, directors and important advisors from time to time options
to purchase Common Shares of the Corporation, thereby advancing the interests of
the Corporation and its shareholders.
2. Definitions. In this Plan:
(a) "Board of Directors" means the Board of Directors of the
Corporation;
(b) "Common Shares" means the common shares of the
Corporation;
(c) "Corporations Act" means the Canada Business
Corporations Act, as amended, and the regulations promulgated thereunder;
(d) "Date of Grant" means, for any Option, the date
specified by the Board of Directors at the time it grants the Option, (provided,
however, that such date shall not be prior to the date the Board of Directors
acts to grant the Option) or, if no such date is specified, the date upon which
the Option was granted;
(e) "Disability" means permanent and total disability as
determined under procedures established by the Board of Directors for the
purposes of the Plan;
(f) "Exercise Date" means the date the Corporation receives
from a Participant a completed Notice of Exercise form with payment for the
Option Shares being purchased;
(g) "Exercise Period" means, with respect to any Option
Shares, the period during which a Participant may purchase such Option Shares;
(h) "Option" means a non-assignable and non-transferable
option to purchase Common Shares granted pursuant to the Plan;
(i) "Optionee" means a Participant who has been granted one
or more Options;
(j) "Option Shares" means Common Shares which are subject to
purchase upon the exercise of outstanding Options;
<PAGE> 2
(k) "Participant" means a current or former full-time
permanent employee or director or advisor of the Corporation;
(l) "Plan" means the Skystone Employee Stock Option Plan as
set out herein;
(m) "Plan Shares" means the Common Shares reserved from time
to time by the Board of Directors for issuance pursuant to the exercise of
Options;
(n) "Retirement" means retirement from active employment
with the Corporation, a subsidiary or an other related company at or after age
65, or with the consent for purposes of the Plan of such officer of the
Corporation as may be designated by the Board of Directors, at or after such
earlier age and upon the completion of such years of service as the Board of
Directors may specify.
3. Eligibility. All Participants shall be eligible to participate
in the Plan. Eligibility to participate shall not confer upon any Participant
any right to be granted Options pursuant to the Plan. The extent to which any
Participant shall be entitled to be granted Options pursuant to the Plan shall
be determined in the sole and absolute discretion of the Board of Directors.
4. Number of Option Shares Available for Grants. No Option may be
granted by the Board of Directors which would have the effect of causing the
total number of all Option Shares subject to purchase under outstanding Options
to exceed the number of Plan Shares.
Upon the expiration, surrender, cancellation or termination, in whole or
in part, of an unexercised Option, the Option Shares subject to such Option
shall be available for other Options to be granted from time to time.
5. Granting of Options. The Board of Directors may from time to
time grant Options to Participants to purchase a specified number of Option
Shares at a specified exercise price per share. The number of Option Shares to
be granted, the exercise price, the Date of Grant, and such other terms and
conditions of the Option shall be as determined by the Board of Directors or a
Committee thereof designated from time to time.
6. Exercise Price. The exercise price per Common Share purchasable
under an option shall be determined by the Board of Directors.
7. Exercise Period. Unless otherwise specified by the Board of
Directors at the time of granting an Option, and except as otherwise provided in
the Plan, each Option shall be exercisable in the following installments:
2
<PAGE> 3
Percentage of Total Number
of Option Shares Which
May Be Purchased Exercise Period
25% From the first anniversary of the Date of
Grant to and including the fifth anniversary
of the Date of Grant
1/16th, thereafter for each quarter from the first anniversary of
the Date of Grant to and
including the fifth
anniversary of the Date of
Grant.
See Figure 1 attached for chart explanation of the exercising rights.
Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option, unless otherwise specified by the
Board of Directors. Each Option or installment may be exercised at any time or
from time to time, in whole or in part, for up to the total number of Common
Shares with respect to which it is then exercisable. The Board of Directors
shall have the right in accelerate the date upon which any installment of any
Option is exercisable.
8. Term of Options. Subject to accelerated termination as provided
for in the Plan, each Option shall, unless otherwise specified by the Board of
Directors, expire on the fifth anniversary of the Date of Grant.
9. Exercise of Options. An Optionee may at any time within the
Exercise Period elect to purchase all or a portion of the Option Shares which
such Optionee is then entitled to purchase by delivering to the Corporation a
completed Notice of Exercise, specifying the Date of Grant of the Option being
exercised, the exercise price of the Option and the number of Option Shares the
Optionee desires to purchase. The Notice of Exercise shall be accompanied by
payment in full of the purchase price for such Option Shares. Payment can be
made by cash, certified cheque, bank draft, money order or the equivalent
payable to the order of the Corporation or by such other means as may be
specified by the Board of Directors.
10. Withholding of Tax. If the Corporation determines that under the
requirements of applicable taxation laws it is obliged to withhold for
remittance to a taxing authority any amount upon exercise of an Option, the
Corporation may, prior to and as a condition of issuing the Option Shares,
require the Optionee exercising the Option to pay to the Corporation, in
addition to and in the same manner as the purchase price for the Option Shares,
such amount as the Corporation is obliged to remit to such taxing authority in
respect of the exercise of the Option. Any such additional payment shall, in any
event, be due no later than the date as of which any amount with respect to the
Option exercised first becomes includable in the gross income of the Optionee
for tax purposes.
3
<PAGE> 4
11. Share Certificates. Upon exercise of an Option and payment in
full of the purchase price and any applicable tax withholdings, the Corporation
shall cause to be issued and delivered to the Optionee within a reasonable
period of time a certificate or certificates in the name of or as directed by
the Optionee representing the number of Common Shares the Optionee has
purchased.
12. Termination of Employment. Unless otherwise determined by the
Board of Directors, if an Optionee's employment or services terminate for any
reason other than death, Disability or Retirement, any Option held by such
Optionee shall thereupon terminate, except that each such Option, to the extent
then exercisable, may be exercised for the lesser of 60 days or the balance of
such Option's term.
Options shall not be affected by any change of employment within or
among the Corporation, its subsidiaries or an other related company or, unless
otherwise determined by the Board of Directors, so long as the Participant
continues to be an employee of the Corporation, a subsidiary or an other related
company.
13. Termination by Reason of Death, Disability or Retirement. If an
Optionee's employment or services terminate by reason of death, Disability or
Retirement, any Option held by such Optionee may thereafter be exercised, to the
extent then exercisable or to such other extent as the Board of Directors may
determine, for a period of 180 days (or such other period as the Board of
Directors may specify) from the date of such death, Disability or Retirement or
until the expiration of the stated term of such Option, whichever period is the
shorter.
14. Transfer and Assignment. Options granted under the Plan are not
assignable or transferable by the Optionee or subject to any other alienation,
sale, pledge or encumbrance by such Optionee except by will or by the laws of
descent and distribution. During the Optionee's lifetime Options shall be
exercisable only by the Optionee. The obligations of each Optionee shall be
binding on his heirs, executors and administrators.
15. No Right to Employment. The granting of an Option to a
Participant under the Plan does not confer upon the Participant any right to
expectation of employment by, or to continue in the employment of, the
Corporation, any subsidiary or an other related company, or to be retained as a
consultant by the Corporation, any subsidiary or an other related company.
16. Rights as Shareholders. The Optionee shall not have any rights
as a shareholder with respect to Option Shares until full payment has been made
to the Corporation and a share certificate or share certificates have been duly
issued.
17. Administration of the Plan. The Plan shall be administered by
the Board of Directors which shall have the authority to:
(a) determine the individuals and entities (from among the class
of individuals and entities eligible to receive Options) to whom Options may be
granted;
4
<PAGE> 5
(b) determine the number of Option Shares to be subject to
each Option;
(c) determine the terms and conditions of any grant of
Option,including but not limited to
(i) the time or times at which Options may be
granted;
(ii) the exercise price at which Option Shares
subject to each Option may be purchased;
(iii) the time or times when each Option shall become
exercisable and the duration of the Exercise Period;
(iv) whether or not restrictions or limitations are
to be imposed on Option Shares, and the nature of such restrictions or
limitations, if any; and
(v) any acceleration of exercisability or waiver of
termination regarding any Option, based on such factors as the Board of
Directors may determine;
(d) interpret the Plan and prescribe and rescind rules and
regulations relating to the Plan including the right to rescind and withdraw any
rights to exercise an Option by a person who has or had been dismissed for
cause.
The interpretation and construction by the Board of Directors of any
provisions of the Plan or of any Option granted under it shall be final and
binding on all persons. No member of the Board of Directors shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted under it. The day-to-day administration of the Plan may be
delegated to such officers and employees of the Corporation or any Subsidiary as
the Board as the Board Directors shall determine.
18. Recapitalization and Reorganization. The number of Option Shares
subject to each outstanding Option and the purchase price for such Option Shares
shall be appropriately adjusted for any subdivision, redivision, consolidation
or any similar change affecting the Common Shares.
19. Conditions of Exercise. The Plan and each Option shall be
subject to the requirement that, if at any time the Board of Directors
determines that the listing, registration or qualification of the Common Shares
subject to such Option upon any securities exchange or under any provincial,
state or federal law, or the consent or approval of any governmental body,
securities exchange, or the holders of the Common Shares generally, is necessary
or desirable, as a condition of, or in connection with, the granting of such
Option or the issue or purchase of Common Shares thereunder, no such Option may
be granted or exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been affected or obtained free of
any conditions not acceptable to the Board of Directors.
5
<PAGE> 6
20. Loans. The Board of Directors may, in its discretion, but
subject always to section 44 of the Corporations Act, grant loans, on such terms
as are permitted by law and the Board of Directors may determine, to Optionees
to enable them to purchase Option Shares, provided that all Common Shares
purchased with the proceeds of such loans shall be held by a trustee until the
Corporation has been repaid in full.
21. Notices. All written notices to be given by the Optionee to the
Corporation shall be delivered personally or by registered mail, postage
prepaid, addressed as follows:
Skystone Systems Corporation
146, Colonnade Road, Suite 201
Nepean, Ontario, K2E 7Y1
Attention: Corporate Secretary
Any notice given by the Optionee pursuant to the terms of an Option
shall not be effective until actually received by the Corporation at the above
address.
22. Corporate Action. Nothing contained in the Plan or in an Option
shall be construed so as to prevent the Corporation from taking corporate action
which is deemed by the Corporation to be appropriate or in its best interest,
whether or not such action would have an adverse effect on the Plan or any
Option.
23. Amendments. The Board of Directors shall have the right, in its
sole discretion, to alter, amend, modify or terminate the Plan or any Option
granted under the Plan at any time without notice. The Board of Directors shall
not, however, alter, amend or modify the Plan more often than once every three
months other than to comply with changes to applicable tax and employee benefit
laws and the respective rules and regulations thereunder. No such amendment,
however, may, without the consent of the Optionee, alter or impair any rights or
increase any obligations with respect to an Option previously granted under the
Plan.
24. Change in Control. In the event of a "Change in Control", as
defined below, any Options outstanding as of the date such Change in Control is
determined to have occurred and not then exercisable shall become fully
exercisable unless assumed by an acquiring company as contemplated in (b) below.
For purposes of the Plan, a "Change in Control" means the happening of
any of the following:
(a) When any "person", or any "affiliate" or "associate" of such
person, as such terms are defined by the Corporations Act (other
than the Corporation, a Subsidiary or a Corporation employee
benefit plan, including any trustee of such plan acting as
trustee), hereafter acquires the "beneficial ownership", as
defined in the Corporations Act, directly or indirectly, of
securities of the Corporation
6
<PAGE> 7
representing 50.1 percent or more of the combined voting power
of the Corporation's then outstanding securities; or
(b) The occurrence of a transaction requiring shareholder approval
of the acquisition of the Corporation by an entity other than
the Corporation or a Subsidiary through purchase of assets, by
amalgamation or otherwise.
25. Termination of Plan. Except as otherwise provided herein,
Options may be granted only within the ten year period from the date the Plan
has been adopted by the Board of Directors. The termination of the Plan shall
have no effect on outstanding Options, which shall continue in effect in
accordance with their terms and conditions and the terms and conditions of the
Plan.
26. Further Assurances. Each Participant shall, when requested to do
so by the Corporation, sign and deliver all such documents relating to the
granting or exercise of Options deemed necessary or desirable by the
Corporation.
27. Governing Law. The Plan is established under the laws of the
Province of Ontario, and the rights of all parties and the construction and
effect of each provision of the Plan shall be according to the laws of the
Province of Ontario.
28. Compliance with Applicable Law. If any provision of the Plan or
any Option contravenes any law or any order, policy, bylaw or regulation of any
regulatory body or stock exchange having jurisdiction or authority over the
Corporation or the Plan, then such provision shall be deemed to be amended to
the extent required to bring such provision into compliance therewith.
DATED this ___ day of _________________, 1997.
Antoine Paquin,
President
Secretary
7
<PAGE> 8
SKYSTONE SYSTEMS CORPORATION
Employee Stock Options Plan
The company presently offers its employees a stock option plan: the ESOP
(Employee Stock Option Plan). It is the company's policy that all employees and
directors be allowed to participate in the ESOP.
The Skystone ESOP (Employee Stock Option Plan) allows for shares to vest
as follows:
1/4 of issued options on the first anniversary of issue
1/16 of the issued options per quarter thereafter
This allows for full vesting of issued options over four years,
commencing on the first anniversary of the date of grant in equal annual
installments and executable within 5 years maximum of the date of issue. Figure
1 below outlines the options plan.
[CHART]
8
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June 30, 1997
To the Corporate Secretary of
Skystone Systems Corporation
146, Colonnade Road, Nepean, Ontario
Re: Employee Stock Option Plan
With respect to the acquisition agreement between Skystone and Cisco
dated June 9th, 1997 (the "Agreement"), the undersigned Option holder
acknowledges that the Agreement provides that options held by the undersigned
shall become options to acquire exchangeable shares in Skystone which shares are
exchangeable into common shares in the capital of Cisco. For good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned consents to such substitution as contemplated by the Agreement.
The undersigned has reviewed the attached DRAFT Employee Stock Option
Plan, the form of which substantially on the same terms will be approved by the
Board of Directors of Skystone subsequent to the signing of the above
acquisition agreement. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned hereby agrees to be
bound by the terms of the Employee Stock Option Plan and further agrees that
there are no other terms and/or conditions attaching to the options granted to
the undersigned.
The undersigned understands and agrees that the Agreement shall have no
effect on the exercise period of the option held by the undersigned, and any
provisions in the Employee Stock Option Plan relating to the acceleration of the
exercise period shall not be applicable to or triggered by the acquisition of
Skystone by Cisco as contemplated in the Agreement.
Signed: _____________________________________ Employee and Option Holder
Print name
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<PAGE> 1
EXHIBIT 99.2
MEMORANDUM
TO:
FROM: Antoine Paquin
DATE:
RE: Stock Options
In recognition of your contribution since joining Skystone, and in
expectation of your future performance, we are pleased to advise you that
Skystone is granting you an option to purchase an additional ___________
(______) shares of Common Stock in Skystone Systems Corporation at the price of
__________ ($_______) US per share.
Details of how and when these options may be exercised are outlined in
the Employee Stock Option Program, a copy of which is attached and which can be
further explained if you wish. In this case, one quarter may be exercised one
year from the date of granting with a further one sixteenth each quarter
following. Altogether you have 5 years from the date of granting in which to
exercise part or all of the option. In order to earn the right to exercise an
option you must be employed by Skystone at the time of exercising the portion
which is exercisable.
I would like to thank you for a job well done and trust you are
enjoying the excitement we all feel during this time of growth.
----------------------------------------
Signed
<PAGE> 1
EXHIBIT 99.3
Dear____:
This letter is to extend to you an offer of full-time employment with
Skystone Systems Corporation as _______________. I and the rest of the Skystone
team are looking forward to working with you; we feel that you will be an
important addition to the Skystone team. The employment terms are listed below.
a. Your gross salary, inclusive of any statutory holidays to which
you may be entitled, will be $_______________ per annum payable, subject to
statutory deductions and any group employee deductions, in monthly installments
(not in advance) due on the last business day of each month.
b. In addition, you will be eligible for an annual bonus of up to
$___________ subject to overall company and personal performance.
c. Subject to the Board of Directors approval, you will receive
___________ options to purchase Skystone common stock at $__________ a share
exercisable under the terms of the Skystone Employee Stock Option Plan as may be
modified and amended from time to time by the board.
d. You will earn up to three weeks of ordinary vacation each year.
e. You may enroll in the Employee Benefits Plan that includes
medical, dental, long term disability and other benefits as described in the
Skystone benefits document. The plan's cost is shared between Skystone and
employees via source deductions.
You will be reporting to ________________. The proposed start date is no
later than _____________.
A few additional employment terms that must be specified are listed
below:
a. You agree not to disclose any confidential information learned
in the course of your employment about the business of the firm or its clients
to anybody outside the firm both during and after your term of employment. You
agree to execute and sign such further documents (in particular our NDA and
Employee Covenant) as we may require from time to time.
b. Unless explicitly authorized in advance in writing, Skystone
neither requires nor pays for any overtime.
Please feel free to call me if you want to discuss any matter related
to this offer. If you accept the offer, please confirm your acceptance by
signing this letter below and returning it to Skystone.
We took forward to a positive response.
Yours truly,
-----------------------------------------
I accept ___________________
Dated:______________________
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EXHIBIT 99.4
MEMORANDUM
TO: Holder of Skystone Systems Corporation Nonstatutory Stock Options
FROM: Cisco Systems, Inc.
DATE: July __, 1997
RE: Assumption of Stock Options
As you know, Skystone Systems Corporation ("Skystone") was recently
acquired by Cisco Systems, Inc. ("Cisco") through the merger of Skystone with
two wholly owned Cisco subsidiaries which resulted in the creation of the wholly
owned Cisco subsidiary, Amalco/Unlimco, effected on July __, 1997 (the
"Acquisition").
In connection with this transaction, Cisco and Amalco/Unlimco have
assumed all of your outstanding Skystone stock options so that those options
have been converted into options to acquire Exchangeable Shares of
Amalco/Unlimco Stock. The Exchangeable Shares may then be exchanged by the
holder for shares of Cisco common stock. Several additional changes to your
options were also made as part of the assumption process. These changes are set
forth in the Stock Option Assumption Agreement attached hereto and may be
summarized as follows:
1. The number of shares of Exchangeable Shares subject to
your option reflects the ratio at which shares of Skystone common stock
ultimately were converted into Exchangeable Shares of Amalco/Unlimco in
the Acquisition. That ratio was 0.237109 of an Exchangeable Share for
each share of Skystone common stock (the "Exchange Ratio"). Upon
exercise of your option and your receipt of the Exchangeable Shares,
each Exchangeable Share can then be exchanged by you on a one-for-one
basis into Cisco Stock at any time. As a result, the number of Cisco
shares which you may ultimately receive after exercise of your option
and the one-for-one exchange of Exchangeable Shares, is equal to the
number of shares of Skystone common stock which were subject to your
option immediately before the Acquisition, multiplied by the Exchange
Ratio. No fraction of an Exchangeable Share will be issued, but in lieu
thereof each holder of an assumed Skystone option who would otherwise be
entitled to a fraction of an Exchangeable Share shall receive from
Amalco/Unlimco an amount of cash (rounded to the nearest whole cent)
equal to the product of (i) such fraction,
<PAGE> 2
multiplied by (ii) the average closing price of a share of Cisco Stock
for the ten most recent days that Cisco Stock has traded ending on the
trading day immediately prior to the Effective Time of the Acquisition,
as reported on the Nasdaq National Market (the "Closing Price").
2. The aggregate exercise price payable for the
Exchangeable Shares now subject to your option is the same as the price
that was in effect for the shares of Skystone common stock purchasable
under your option immediately prior to the Acquisition. However, the
exercise price per share has been adjusted to reflect the Exchange
Ratio. Accordingly, the exercise price per share in effect under your
option immediately before the Acquisition has been divided by 0.237109
to establish the price per share payable for the Exchangeable Shares.
3. No change has been made to the vesting schedule in
effect for your option. Your Exchangeable Shares will continue to vest
in accordance with the same installment vesting schedule in effect under
your Skystone option, with the number of Exchangeable Shares subject to
each such installment adjusted to reflect the Exchange Ratio. However,
you will now earn vesting credit not only for the period you continue in
employment with Skystone after the Acquisition but also for any period
of service you may complete as an employee of Cisco, Amalco/Unlimco or
any other Cisco subsidiary should you subsequently transfer within the
Cisco organization.
Attached are two copies of the Stock Option Assumption Agreement
pursuant to which Cisco and Amalco/Unlimco have assumed your Skystone options
with the adjustments discussed above. Please review the agreement carefully so
that you understand your rights to acquire Cisco shares. You should contact
Leslie Chambers at Cisco at (408) 526-8238 if you have any questions. After you
have reviewed the agreement, please sign one copy and return it to Ms. Chambers
in the pre-addressed envelope enclosed.
The other copy of the Stock Option Assumption Agreement should be
attached to your existing option documentation so that you will have a complete
record of all the terms and provisions applicable to your option as now assumed
by Cisco and its wholly owned subsidiary, Amalco/Unlimco.
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EXHIBIT 99.5
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~
NUMBER OF SKYSTONE SHARES: 2~
GRANT DATE: 3~
ORIGINAL EXERCISE PRICE: $4~
OPTION ASSUMPTION AGREEMENT issued as of the __th day of July 1997 by
Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned Optionee is the holder of one or more
outstanding options to purchase shares of the common stock of Skystone Systems
Corporation, a corporation incorporated under the Canada Business Corporations
Act ("CBCA") ("Skystone"), which were granted to Optionee pursuant to the
Skystone Systems Corporation Employee Stock Option Plan (the "Option Plan") and
are evidenced by a Stock Option Grant Document (the "Option Grant Document")
between Skystone and Optionee.
WHEREAS, Skystone has this day been acquired by Cisco through merger of
Skystone with two wholly owned Cisco subsidiaries, Unlimco and 3381111 Canada
Inc., which resulted in the wholly owned Cisco subsidiary, Amalco/Unlimco (the
"Acquisition") pursuant to the Amended and Restated Acquisition Agreement dated
July __, 1997 (the "Acquisition Agreement").
WHEREAS, the provisions of the Acquisition Agreement require Cisco and
Amalco/Unlimco to assume the obligations of Skystone under the options
outstanding under the Option Plan at the time of the Acquisition and to issue an
agreement evidencing the assumption of each such option (the "Assumption
Agreement").
WHEREAS, pursuant to the provisions of the Acquisition Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Acquisition is the
equivalent of 0.237109 Exchangeable Shares of Amalco/Unlimco ("Exchangeable
Shares") for each share of Skystone common stock ("Skystone Stock"). Each
Exchangeable Share received on the exercise of the Assumed Options is
exchangeable by the holder for Cisco Stock on a one-for-one basis at any time.
WHEREAS, this Agreement is to be effective immediately upon the
consummation of the Acquisition (the "Effective Time") and shall reflect certain
adjustments to Optionee's outstanding options under the Option Plan which have
become necessary by reason of the assumption of those options by Cisco and
Amalco/Unlimco in connection with the Acquisition.
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NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Skystone Stock subject to the
stock options held by Optionee under the Option Plan immediately prior to the
Effective Time (the "Skystone Options") and the exercise price payable per share
are set forth below. Cisco and Amalco/Unlimco hereby assume, as of the Effective
Time, all the duties and obligations of Skystone under each of the Skystone
Options and hereby agree to issue up to the number of Exchangeable Shares of
Amalco/Unlimco indicated below for each such assumed option upon (i) exercise of
that option in accordance with the provisions of the Option Grant Document
applicable thereto (as supplemented hereby) and the Option Plan, and (ii)
payment of the adjusted exercise price per share set forth below.
<TABLE>
<CAPTION>
SKYSTONE CISCO - AMALCO/UNLIMCO
STOCK OPTIONS ASSUMED OPTIONS
------------- ---------------
# of Shares # of Shares Adjusted
Common Stock Exercise Common Stock Exercise
Skystone Price/Share Cisco Price/Share
-------- ----------- ----- -----------
<S> <C> <C> <C>
2~ $4~ 6~ $7~
</TABLE>
2. The number of Exchangeable Shares purchasable under each
Skystone Option hereby assumed and the exercise price payable thereunder reflect
the Exchange Ratio at which shares of Skystone Stock were ultimately converted
into Exchangeable Shares of, Amalco/Unlimco, in consummation of the Acquisition.
The intent of such adjustments is to assure that the spread between the
aggregate fair market value of the Exchangeable Shares purchasable under each
assumed Skystone Option and the aggregate exercise price as adjusted hereunder
will, immediately after the consummation of the Acquisition, equal the spread
which existed, immediately prior to the Acquisition, between the then aggregate
fair market value of the Skystone Stock subject to the Skystone Option and the
aggregate exercise price in effect at such time under the Option Grant Document.
Such adjustments are also designed to preserve, on a per-share basis immediately
after the Acquisition, the same ratio of exercise price per option share to fair
market value per share which existed under the Skystone Option immediately prior
to the Acquisition. However, no fraction of an Exchangeable Share will be
issued, but in lieu thereof each holder of an assumed Skystone option who would
otherwise be entitled to a fraction of an Exchangeable Share shall receive from
Amalco/Unlimco an amount of cash (rounded to the nearest whole cent) equal to
the product of (i) such fraction, multiplied by (ii) the average closing price
of a share of Cisco Stock for the ten most recent days that Cisco Stock has
traded ending on the trading day immediately prior to the Effective Time of the
Acquisition, as reported on the Nasdaq National Market (the "Closing Price").
3. The following provisions shall govern each Skystone
Option hereby assumed by Cisco and Amalco/Unlimco:
2.
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- Unless the context otherwise requires, all references to
the "Corporation" in each Option Grant Document and the Option Plan shall mean
Cisco and Amalco/Unlimco, as appropriate, all references to "Common Stock,"
"Common Shares," "Option Shares," "Plan Shares" or "Shares" shall mean
Exchangeable Shares (as convertible into Cisco Stock), and all references to
"Board of Directors" or "Board" shall mean the Compensation Committee of the
Cisco Board of Directors.
- The grant date and the expiration date of each assumed
Skystone Option and all other provisions which govern the termination of each
such assumed Skystone Option shall remain the same as set forth in the Option
Grant Document applicable to such option and shall accordingly govern and
control the Optionee's rights under this Assumption Agreement to purchase
Exchangeable Shares.
- Each assumed Skystone Option shall vest in accordance
with the same installment vesting schedule in effect under the applicable Option
Grant Document immediately prior to the Effective Time, with the number of
Exchangeable Shares subject to each such installment adjusted to reflect the
Exchange Rate. Accordingly, no acceleration of vesting of the Skystone Options
shall be deemed to occur by reason of the Acquisition, and the vesting dates
under each applicable Option Grant Document shall remain the same.
- The adjusted exercise price payable for the Exchangeable
Shares subject to each assumed Skystone Option shall be payable in any of the
forms authorized under the Option Grant Document and/or the provisions of the
Option Plan incorporated by reference into that Option Grant Document.
- In order to exercise each assumed Skystone Option, the
Optionee must deliver to Cisco a written notice of exercise in which the number
of Exchangeable Shares to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted exercise price
payable for the Exchangeable Shares and should be delivered to Cisco at the
following address:
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134
Attention: Option Plan Administrator
- For purposes of applying the termination of employment
provisions of the Option Grant Document, the Optionee shall be deemed to
continue in employment and remain an employee for so long as the Optionee
remains employed by Cisco or any present or future parent or subsidiary of
Cisco, including (without limitation) Skystone or Amalco/Unlimco.
4. Except to the extent specifically modified by this
Assumption Agreement, all of the terms and conditions of each Option Grant
Document and the Option
3.
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Plan as in effect immediately prior to the Acquisition shall continue in full
force and effect and shall not in any way be amended, revised or otherwise
affected by this Assumption Agreement.
4.
<PAGE> 5
IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Assumption
Agreement to be executed on its and Amalco/Unlimco's behalf by its
duly-authorized officer as of the __th day of July, 1997.
CISCO SYSTEMS, INC.
By:______________________________________
Title:___________________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Skystone Options hereby assumed by Cisco Systems,
Inc. and Amalco/Unlimco are as set forth in the Option Grant Document, the
Option Plan and such Stock Option Assumption Agreement.
-----------------------------------------
1~, OPTIONEE
DATED: __________________, 1997
[SIGNATURE PAGE TO STOCK OPTION ASSUMPTION AGREEMENT]
