<PAGE> 1
As filed with the Securities and Exchange Commission on December 1, 1999
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 registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 77-0059951
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
</TABLE>
170 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Address of principal executive offices) (Zip Code)
----------
WEBLINE COMMUNICATIONS CORPORATION 1997 STOCK INCENTIVE 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>
WebLine Communications
Corporation 1997 Stock
Incentive Plan 600,564 Shares $13.65 $8,197,698.60 $2,164.20
Common Stock
===========================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the WebLine
Communications Corporation 1997 Stock Incentive Plan by reason of any
stock dividend, stock split, recapitalization or other similar
transaction effected without the Registrant's receipt of consideration
that 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 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, 1999 filed with the Commission on September 28,
1999, pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the " 1934 Act");
(b) The Registrant's Current Reports on Form 8-K filed with the
Commission on August 13, 1999, as amended on Form 8-K/A filed
with the Commission on August 13, 1999, August 26, 1999,
September 27, 1999, October 20, 1999, November 4, 1999, and
November 17, 1999;
(c) The Registrant's Registration Statement No. 000-18225 on Form 8-A
filed with the Commission on January 11, 1990, together with
Amendment No.1 on Form 8-A/A filed with the Commission on
February 15, 1990, and including any other amendments or reports
filed for the purpose of updating such description, in which
there is described the terms, rights and provisions applicable to
the Registrant's Common Stock, and
(d) The Registrant's Registration Statement No. 000-18225 on Form 8-A
filed with the Commission on June 11, 1998, including any
amendments or reports filed for the purpose of updating such
description, in which there are described the terms, rights and
provisions applicable to the Registrant's Preferred Stock
Purchase Rights.
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 de-registers 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.
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.
II-1
<PAGE> 3
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference
is made to Registrant's Registration Statements No.
000-18225 on Form 8-A, together with the amendments and
exhibits thereto, which are incorporated herein by
reference pursuant to Items 3(c) and 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 WebLine Communications Corporation 1997 Stock Incentive
Plan.
99.2 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Incentive Stock Option Agreement.
99.3 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Incentive Stock Option Agreement - Partial
Acceleration.
99.4 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Nonstatutory Stock Option Agreement.
99.5 Form of Option Assumption Agreement.
99.6 Form of Option Assumption Agreement - Full Acceleration.
99.7 Form of Option Assumption Agreement - Involuntary
Termination.
</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 this 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 this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
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 clauses 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 this 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 WebLine
Communications Corporation 1997 Stock Incentive 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 this 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 indemnification provisions summarized in Item 6 or
otherwise, the Registrant has been advised 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
II-2
<PAGE> 4
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 certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Jose, State of California on this
1st day of December, 1999.
CISCO SYSTEMS, INC.
By: /s/ John T. Chambers
-------------------------------------
John T. Chambers
President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John T. Chambers and Larry R.
Carter, and each of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for such person and
in such person's name, place and stead, 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 lawfully 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 below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John T. Chambers President, Chief Executive December 1, 1999
- --------------------------------- Officer and Director
John T. Chambers (Principal Executive Officer)
/s/ Larry R. Carter Senior Vice President, Finance December 1, 1999
- --------------------------------- and Administration, Chief Financial
Larry R. Carter Officer and Secretary
(Principal Financial and Accounting
Officer)
/s/ John P. Morgridge Chairman of the Board and December 1, 1999
- --------------------------------- Director
John P. Morgridge
/s/ Donald T. Valentine Vice Chairman of the Board and December 1, 1999
- --------------------------------- Director
Donald T. Valentine
</TABLE>
II-4
<PAGE> 6
<TABLE>
<S> <C> <C>
/s/ James F. Gibbons Director December 1, 1999
- ---------------------------------
James F. Gibbons
/s/ Steven M. West Director December 1, 1999
- ---------------------------------
Steven M. West
/s/ Edward R. Kozel Director December 1, 1999
- ---------------------------------
Edward R. Kozel
/s/ Carol A. Bartz Director December 1, 1999
- ---------------------------------
Carol A. Bartz
/s/ James C. Morgan Director December 1, 1999
- ---------------------------------
James C. Morgan
/s/ Mary Cirillo Director December 1, 1999
- ---------------------------------
Mary Cirillo
/s/ Arun Sarin Director December 1, 1999
- ---------------------------------
Arun Sarin
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference
is made to Registrant's Registration Statements No.
000-18225 on Form 8-A, together with the amendments and
exhibits thereto, which are incorporated herein by
reference pursuant to Items 3(c) and 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 WebLine Communications Corporation 1997 Stock Incentive
Plan.
99.2 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Incentive Stock Option Agreement.
99.3 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Incentive Stock Option Agreement - Partial
Acceleration.
99.4 WebLine Communications Corporation 1997 Stock Incentive
Plan-Form of Nonstatutory Stock Option Agreement.
99.5 Form of Option Assumption Agreement.
99.6 Form of Option Assumption Agreement - Full Acceleration.
99.7 Form of Option Assumption Agreement - Involuntary
Termination.
</TABLE>
<PAGE> 1
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
December 1, 1999
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, California 95134-1706
Re: Cisco Systems, Inc. - Registration Statement for Offering
of an Aggregate of 600,564 Shares of Common Stock
Dear Ladies and Gentlemen:
We have acted as counsel to Cisco Systems, Inc., a California
corporation (the "Company"), in connection with the registration on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended, of
an aggregate of 600,564 shares of common stock (the "Shares") and related stock
options under the WebLine Communications Corporation 1997 Stock Incentive Plan
(the "Plan"). This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the assumption of
the Plan and the options outstanding thereunder. Based on such review, we are of
the opinion that if, as and when the Shares are issued and sold (and the
consideration therefor received) pursuant to the provisions of option agreements
duly authorized under the Plan and in accordance with the Registration
Statement, such Shares will be duly authorized, legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement.
This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Plan or the Shares.
Very truly yours,
/S/BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 10, 1999 relating to the
consolidated financial statements, which appears in the 1999 Annual Report to
Shareholders of Cisco Systems, Inc., which is incorporated by reference in Cisco
Systems, Inc.'s Annual Report on Form 10-K for the year ended July 31, 1999. We
also consent to the incorporation by reference of our report dated August 10,
1999 relating to the financial statement schedule, which appears in such Annual
Report on Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
------------------------------
PricewaterhouseCoopers LLP
San Jose, California
November 30, 1999
<PAGE> 1
EXHIBIT 99.1
WEBLINE COMMUNICATIONS CORPORATION
1997 Stock Incentive Plan
Section 1. Purpose
The purpose of this Stock Incentive Plan (the "Plan") is to advance the
interests of the Company by enhancing its ability to attract and retain key
employees, consultants and others who are in a position to contribute to the
Company's future growth and success.
Section 2. Definitions
"Award" means any Option, Restricted Stock or Unrestricted Stock awarded
under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means a committee of not less than two members of the Board
appointed by the Board to administer the Plan, provided that if and when the
Common Stock is registered under Section 12 of the Securities Exchange Act of
1934, each member of the Committee shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 ("Rule 16b-3").
"Common Stock" or "Stock" means the Common Stock, $.001 par value per
share, of the Company.
"Company" means WebLine Communications Corporation, a Delaware
corporation, and, except where the content otherwise requires, all present and
future subsidiaries of the Company as defined in Section 424(f) of the Code.
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Board, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant's estate.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Board in
good faith or in the manner established by the Board from time to time.
1
<PAGE> 2
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 which is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 which is not intended to be an
Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock Option.
"Participant" means a person selected by the Board to receive an Award
under the Plan.
"Performance Shares" mean shares of Common Stock which may be earned by
the achievement of performance goals awarded to a Participant under Section 7.
"Reporting Person" means a person subject to Section 16 of the
Securities Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time selected by the Board
during which shares subject to a Restricted Stock Award may be repurchased by or
forfeited to the Company.
"Restricted Stock" means shares of Common Stock awarded to a Participant
under Section 8.
"Unrestricted Stock" means shares of Common Stock awarded to a
Participant under Section 8(c).
Section 3. Administration
The Plan will be administered by the Board. The Board shall have
authority to make Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable
from time to time, and to interpret the provisions of the Plan. The Board's
decisions shall be final and binding. No member of the Board shall be liable for
any action or determination relating to the Plan made in good faith. To the
extent permitted by applicable law, the Board may delegate to one or more
executive officers of the Company the power to make Awards to Participants who
are not Reporting Persons and all determinations under the Plan with respect
thereto, provided that the Board shall fix the maximum amount of such Awards to
be made by such executive officers and a maximum amount for any one Participant.
To the extent permitted by applicable law, the Board may appoint a Committee to
administer the Plan and, in such event, all references to the Board in the Plan
shall mean such Committee or the Board. All decisions by the Board or the
Committee pursuant to the Plan shall be final and binding on all persons having
or claiming any interest in the Plan or in any Award.
Section 4. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors who are expected to contribute to the Company's future growth and
success, other than persons who have
2
<PAGE> 3
irrevocably elected not to be eligible, are eligible to be Participants in the
Plan. Incentive Stock Options may be awarded only to persons eligible to receive
Incentive Stock Options under the Code.
Section 5. Stock Available for Awards
(1) Subject to adjustment under subsection (b) below, Awards may be made
under the Plan for up to 432,000 shares of Common Stock. If any Award in respect
of shares of Common Stock expires or is terminated unexercised or is forfeited
for any reason or settled in a manner that results in fewer shares outstanding
than were initially awarded, the shares subject to such Award or so surrendered,
as the case may be, to the extent of such expiration, termination, forfeiture or
decrease, shall again in available for award under the Plan. Shares issued under
the Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.
(2) In the event that the Board, in its sole discretion, determines that
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or other
similar transaction affects the Common Stock such that an adjustment is required
in order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Board, subject, in the case of Incentive
Stock Options, to any limitation required under the Code, shall equitably adjust
any or all of (i) the number and kind of shares in respect of which Awards may
be made under the Plan, (ii) the number and kind of shares subject to
outstanding Awards, and (iii) the Award, exercise or conversion price with
respect to any of the foregoing, and if considered appropriate, the Board may
make provision for a cash payment with respect to an outstanding Award, provided
that the number of shares subject to any Award shall always be a whole number.
(3) The Board may grant Awards under the Plan in substitution for stock
and stock based awards held by employees of another corporation who concurrently
become employees of the Company as a result of a merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by the
Company or a subsidiary of property or stock of the employing corporation. The
substitute Awards shall be granted on such terms and conditions as the Board
considers appropriate in the circumstances. The shares which may be delivered
under such substitute Awards shall be in addition to the maximum number of
shares provided for in Section 5(a) only to the extent that the substitute
Awards are both (i) granted to persons whose relationship to the Company does
not make (and is not expected to make) them Reporting Persons; and (ii) granted
in substitution for awards issued under a plan approved, to the extent then
required under Rule 16b-3, by the stockholders of the entity which issued such
predecessor awards.
Section 6. Stock Options
(1) General.
(1) Subject to the provisions of the Plan, the Board may award
Incentive Stock Options and Nonstatutory Stock Options, and determine the number
of shares to be
3
<PAGE> 4
covered by each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the Option. The terms and conditions
of Incentive Stock Options shall be subject to and comply with Section 422 of
the Code, or any successor provision, and any regulations thereunder.
(2) The Board shall establish the exercise price at the time each
Option is awarded. In the case of Incentive Stock Options, such price shall not
be less than 100% of the Fair Market Value of the Common Stock on the date of
award.
(3) Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable Award or
thereafter. The Board may impose such conditions with respect to the exercise of
Options, including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable.
(4) Options granted under the Plan may provide for the payment of
the exercise price by delivery of cash or check in an amount equal to the
exercise price of such Options or, to the extent permitted by the Board at or
after the award of the Option, by (A) delivery of shares of Common Stock owned
by the optionee for at least six months (or such shorter period as is approved
by the Board), valued at their Fair Market Value, (B) delivery of a promissory
note of the optionee to the Company on terms determined by the Board, (C)
delivery of an irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price or delivery of irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price, (D) payment of such other lawful
consideration as the Board may determine, or (E) any combination of the
foregoing.
(5) The Board may provide for the automatic award of an Option upon
the delivery of shares to the Company in payment of the exercise price of an
Option for up to the number of shares so delivered.
(6) The Board may at any time accelerate the time at which all or
any part of an Option may be exercised.
(2) Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive
Stock Options shall be subject to the following additional terms and conditions:
(1) All Incentive Stock Options granted under the Plan shall, at the
time of grant, be specifically designated as such in the option agreement
covering such Incentive Stock Options. The Option exercise period shall not
exceed ten years from the date of grant.
(2) If any employee to whom an Incentive Stock Option is to be
granted under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company (after taking into account the attribution of stock
ownership rule of Section 424(d) and of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
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<PAGE> 5
(x) The purchase price per share of the Common Stock subject to
such Incentive Stock Option shall not be less than 110% of the Fair Market Value
of one share of Common Stock at the time of grant; and
(y) The option exercise period shall not exceed five years from
the date of grant.
(3) For so long as the Code shall so provide, options granted to any
employee under the Plan (and any other incentive stock option plans of the
Company) which are intended to constitute Incentive Stock Options shall not
constitute Incentive Stock Options to the extent that such options, in the
aggregate, become exercisable for the first time in any one calendar year for
shares of Common Stock with an aggregate Fair Market Value (determined as of the
respective date or dates of grant) of more than $100,000.
(4) no Incentive Stock Option may be exercised unless, at the time
of such exercise, the Participant is, and has been continuously since the date
of grant of his or her Option, employed by the Company, except that:
(x) an Incentive Stock Option may be exercised within the period of
three months after the date the Participant ceases to be an employee of
the Company (or within such lesser period as may be specified in the
applicable option agreement), provided, that the agreement with respect
to such Option may designate a longer exercise period and that the
exercise after such three-month period shall be treated as the exercise
of a Nonstatutory Stock Option under the Plan;
(y) if the Participant dies while in the employ of the Company, or
within three months after the Participant ceases to be such an employee,
the Incentive Stock Option may be exercised by the Participant's
Designated Beneficiary within the period of one year after the date of
death (or within such lesser period as may be specified in the
applicable Option agreement); and
(z) if the Participant becomes disabled (within the meaning of
Section 22(e)(3) of the Codes or any successor provision thereto) while
in the employ of the Company, the Incentive Stock Option may be
exercised within the period of one year after the date of disability (or
within such lesser period as may be specified in the Option agreement).
For all purposes of the Plan and any Option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
Section 7. Performance Shares
(1) The Board may make Performance Share Awards entitling recipients to
acquire shares of Stock upon the attainment of specified performance goals. The
Board may make
5
<PAGE> 6
Performance Share Awards independent of or in connection with the granting of
any other Award under the Plan. The Board in its sole discretion shall determine
the performance goals applicable under any such Award, the periods during which
performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance shares; provided, however, that the Board
may rely on the performance goals and other standards applicable to other
performance plans of the Company in setting the standards for Performance share
Awards under the Plan.
(2) Performance Share Awards and all rights with respect to such Awards
may not be sold, assigned, transferred, pledged or otherwise encumbered.
(3) A Participant receiving a Performance Share Award shall have the
rights of a stockholder only as to shares actually received by the Participant
under the Plan and not with respect to shares subject to an Award but not
actually received by the Participant. A Participant shall be entitled to receive
a stock certificate evidencing the acquisition of shares of Stock under a
Performance Share Award only upon satisfaction of all conditions specified in
the agreement evidencing the Performance Share Award.
(4) The Board may at any time accelerate or waive any or all of the
goals, restrictions or conditions imposed under any Performance Share Award.
Section 8. Restricted and Unrestricted Stock
(1) The Board may grant Restricted Stock Awards entitling recipients to
acquire shares of Stock, subject to the right of the Company to repurchase all
or part of such shares at their purchase price (or to require forfeiture of such
shares if purchased at no cost) from the recipient in the event that conditions
specified by the Board in the applicable Award are not satisfied prior to the
end of the applicable Restricted Period or Restricted Periods established by the
Board for such Award. Conditions for repurchase (or forfeiture) may be based on
continuing employment or service or achievement of pre-established performance
or other goals and objectives.
(2) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Board, during the
applicable Restricted Period. Shares of Restricted Stock shall be evidenced in
such manner as the Board may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the Participant
and, unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee). At the expiration of the Restricted Period, the Company (or such
designee) shall deliver such certificates to the Participant or if the
Participant has died, to the Participant's Designated Beneficiary.
(3) The Board may, in its sole discretion, grant (or sell at a purchase
price determined price by the Board, which shall not be lower than 85% of Fair
Market Value on the date of sale) to Participants shares of Stock free of any
restrictions under the Plan ("Unrestricted Stock").
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(4) The purchase price for each share of Restricted Stock and
Unrestricted Stock shall be determined by the Board of Directors and may not be
less than the par value of the Common Stock. Such purchase price may be paid in
the form of past services of such other lawful consideration as is determined by
the Board.
(5) The Board may at any time accelerate the expiration of the
Restricted Period applicable to all, or any particular, outstanding shares of
Restricted Stock.
Section 9. General Provisions Applicable to Awards
(1) Applicability of Rule 16b-3. Those provisions of the Plan which make
an express reference to Rule 16b-3 shall apply to the Company only at such time
as the Company's Common Stock is registered under the Securities Exchange Act of
1934, or any successor provisions, and then only to Reporting Persons.
(2) Reporting Persons Limitations. Notwithstanding any other provisions
of the Plan, to the extent required to qualify for the exemption provided by
Rule 16b-3, (i) any Option, Performance Share Award or other similar rights
related to an equity security issued under the Plan to a Reporting Person shall
not be transferable other than by will of the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code of
Title I or the Employee Retirement Income Security Act, or the rules thereunder,
and shall be exercisable during the participant's lifetime only by the
Participant or the Participant's guardian or legal representative, and (ii) the
selection of a Reporting Person as a Participant and the terms of his or her
Award shall be determined only in accordance with the applicable provisions of
Rule 16b-3.
(3) Documentation. Each Award under the Plan shall be evidenced by an
instrument delivered to the Participant specifying the terms and conditions
thereof and contained such other terms and conditions not inconsistent with the
provisions of the Plan as the Board considers necessary or advisable. Such
instruments may be in the form of agreements to be executed by both the Company
and the Participant, or certificates, letters or similar documents, acceptance
of which will evidence agreement to the terms thereof and of this Plan.
(4) Board of Directors. Each type of Award may be made alone, in
addition to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Board need not treat Participants
uniformly. Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Board at the time of
award or at any time thereafter.
(5) Termination of Status. Subject to the provisions of Section
6(d)(iv), the Committee shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other termination
of employment of other status of a participant and the extent to which and the
period during which, the Participant's legal representative, guardian or
Designated Beneficiary may exercise rights under such Award.
(6) Mergers, Etc. In the event of a consolidation, merger or other
reorganization in which all of the outstanding shares of Common Stock are
exchanged for securities, cash or other
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property of any other corporation or business entity (as "Acquisition") or in
the event of liquidation of the Company, the Board of Directors of the Company,
or the board of directors of any corporation assuming the obligations of the
Company, may, in its discretion, take any one or more of the following actions
as to outstanding Awards: (i) provide that such Awards shall be assumed, or
substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof) on such terms as the Board
determines to be appropriate, (ii) upon written notice to Participants, provide
that all unexercised Option will terminate immediately prior to the consummation
of such transaction unless exercised by the Participant within a specified
period following the date of such notice, (iii) in the event of an Acquisition
under the terms of which holders of the Common Stock of the Company will receive
upon consummation thereof or cash payment for each share surrendered in the
Acquisition (the "Acquisition Price"), make or provide for a cash payment to
Participants equal to the difference between (A) the Acquisition Price times the
number of shares of Common stock subject to outstanding Options (to the extent
then exercisable at prices not in excess of the Acquisition Price) and (B) the
aggregate exercise price of all such outstanding Options in exchange for the
termination of such Options, and (iv) provide that all or any outstanding Awards
shall become exercisable or realizable in full prior to the effective date of
such Acquisition.
(7) Withholding. The Participants shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in respect of Awards under the Plan no later than the date of the
event creating the tax liability. In the Board's discretion, and subject to such
conditions as the Board may establish, such tax obligations may be paid in whole
or in part in shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value. The Company may,
to the extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to the Participant.
(8) Foreign Nationals. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Board considered
necessary or advisable to achieve the purposes of the Plan or comply with
applicable laws.
(9) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including substituting thereof another Award of the same or a
different type, changing the date of exercise or realization and converting an
Incentive Stock Option to Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
(10) Cancellation and New Grant of Options. The Board of Directors shall
have the authority to effect, at any time and from time to time, with the
consent of the affected optionee, (i) the cancellation of any or all outstanding
Options under the Plan and the grant in substitution therefor of new Options
under the Plan covering the same or different numbers of shares of Common Stock
and having an option exercise price per share which may be lower or higher than
the exercise price per share of the cancelled Options or (ii) the amendment of
the terms of any and all outstanding Options under the Plan to provide an option
exercise price per share which is higher or lower than the then current exercise
price per share of such outstanding Options.
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(11) Conditions on Delivery of Stock. The Company shall not be obligated
to deliver any shares of Stock pursuant to the Plan or to remove restrictions
from shares previously delivered under the Plan (i) until all conditions of the
Award have been satisfied or removed, (ii) until, in the opinion of the
Company's counsel, all applicable federal and state laws and regulations have
been complied with, (iii) if the outstanding stock is at the time listed on any
stock exchange, until the shares to be delivered have been listed or authorized
to be listed on such exchange upon official notice of notice of issuance, and
(iv) until all other legal matters in connection with the issuance and delivery
of such shares have been approved by the Company's counsel. If the sale of stock
has not been registered under the Securities Act of 1933, as amended (the
"Act"), the Company may require, as a condition to exercise of the Award, such
representations or agreements as the Company may consider appropriate to avoid
violation of the Act and may require that the certificates evidencing such Stock
bear an appropriate legend restricting transfer.
Section 10. Miscellaneous.
(1) No Right To Employment or other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or service
for the Company. The Company expressly reserves the right at any time to dismiss
a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
(2) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as stockholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the record holder thereof.
(3) Exclusion form Benefit Computations. No amounts payable upon
exercise of Awards granted under the Plan shall be considered salary, wages or
compensation to Participants for purposes of determining the amount or nature of
benefits that Participants are entitled to under issuance, retirement or other
benefits plans or programs of the Company.
(4) Effective Date and Term. Subject to the approval of the stockholders
of the Company, the Plan shall be effective on January 1, 1997. Prior to such
approval, Awards may be made under the Plan expressly subject to such approval.
No Award may be made under the Plan after January 1, 2007, but Awards previously
granted may extend beyond the date.
(5) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that no amendment shall be
made without stockholder approval if such approval is necessary to comply with
any applicable tax or regulatory requirement, including any requirements for
compliance with Rule 16b-3. Prior to any such approval, Awards may be made under
the Plan expressly subject to such approval.
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(6) Governing Law.The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts.
Adopted by the Board of Directors
on __________ __, 1997
Approved by the stockholders
On __________ __, 1997
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EXHIBIT 99.2
WEBLINE COMMUNICATIONS CORPORATION
Incentive Stock Option Agreement
Granted Under 1997 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by WebLine Communications
Corporation, a Delaware corporation (the "Company") on _________ (the "Grant
Date") to____________, an employee of the Company (the "Participant"), of an
option to purchase, in whole or in part, on the terms provided herein and in the
Company's 1997 Stock Incentive Plan (the "Plan"), a total of _______ shares of
common stock, .001 par value per share, of the Company ("Common Stock") (the
"Shares") at $ .__ per Share. Unless earlier terminated, this option shall
expire at 5:00 p.m., Eastern time, on ________ (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code"). Except
as otherwise indicated by the context, the term "Participant", as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on ___________, 1999 (the "First Vesting Date") and as to an
additional 6.25% of the original number of Shares at the end of each successive
full three-month period following the First Vesting Date until the third
anniversary of the First Vesting Date. This option shall expire upon, and will
not be exercisable after, the Final Exercise Date.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in
writing, substantially in the form attached as Exhibit A, signed by the
Participant and received by the Company at its principal office, accompanied by
this agreement, and payment in full in cash or by check, payable to the order of
the Company. The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than ten whole shares.
(b) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
"Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement
WebLine Communications Corp. Confidential 1
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or other agreement between the Participant and the Company, the right to
exercise this option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e)Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of
any employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The Participant shall be
considered to have been discharged for "Cause" if the Company determines, within
30 days after the Participant's resignation, that discharge for cause was
warranted.
4. Right of First Refusal.
(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant proposes
to transfer (the "Offered Shares"), the price per share and all other material
terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer Notice.
In the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within such 30-day
period. Within 10 days after his receipt of such notice, the Participant shall
tender to the Company at its principal offices the certificate or certificates
representing the Offered Shares, duly endorsed in blank by the Participant or
with duly endorsed stock powers attached thereto, all in a form suitable for
transfer of the Offered Shares to the Company. Upon receipt of such certificate
or certificates, the Company shall deliver or mail to the Participant a check in
payment of the purchase price for the Offered Shares; provided that if the terms
of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.
(c) At and after the time at which the Offered Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection (b)
above, the Company shall not pay any dividend to the Participant on account of
such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.
(d) If the Company does not elect to acquire all of the Offered Shares,
the Participant may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the Offered
Shares to the proposed transferee, provided that such transfer shall not be on
terms and conditions more favorable to the transferee than those contained in
the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
WebLine Communications Corp. Confidential 2
<PAGE> 3
(e) The following transactions shall be exempt from the provisions of
this Section 4:
(1) any transfer of Shares to or for the benefit of any spouse,
child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration statement
filed by the Company under the Securities Act of 1933, as amended (the
"Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of all or
substantially all of the business of the Company; provided, however, that in the
case of a transfer pursuant to clause (1) above, such Shares shall remain
subject to the right of first refusal set forth in this Section 4 and such
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument confirming that such transferee shall be bound by all of the
terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or entities.
(g) The provisions of this Section 4 shall terminate upon the earlier of
the following events:
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets or
otherwise.
(h) The Company shall not be required (a) to transfer on its books any
of the Shares which shall have been sold or transferred in violation of any of
the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering)
without the prior written consent of the Company or the underwriters managing
such initial underwritten public offering of the Company's securities for a
period of 180 days from the effective date of such registration statement, and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.
6. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
7. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
8. Disqualifying Disposition.
WebLine Communications Corp. Confidential 3
<PAGE> 4
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.
9. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
WebLine Communications Corporation
Dated: By:
--------------------------------
Name: Daniel A. Keshian
Title: President & CEO
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1997 Stock Incentive Plan.
PARTICIPANT:
-----------------------------------
Address:
---------------------------
---------------------------
WebLine Communications Corp. Confidential 4
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EXHIBIT 99.3
Partial Acceleration
WEBLINE COMMUNICATIONS CORPORATION
Incentive Stock Option Agreement
Granted Under 1997 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by WebLine Communications
Corporation, a Delaware corporation (the "Company") on ___________ (the "Grant
Date") to____________, an employee of the Company (the "Participant"), of an
option to purchase, in whole or in part, on the terms provided herein and in the
Company's 1997 Stock Incentive Plan (the "Plan"), a total of ________shares of
common stock, .001 par value per share, of the Company ("Common Stock") (the
"Shares") at ________per Share. Unless earlier terminated, this option shall
expire at 5:00 p.m., Eastern time, on _________(the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code"). Except
as otherwise indicated by the context, the term "Participant", as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on _______ (the "First Vesting Date") and as to an additional
6.25% of the original number of Shares at the end of each successive full
three-month period following the First Vesting Date until the third anniversary
of the First Vesting Date. This option shall expire upon, and will not be
exercisable after, the Final Exercise Date.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
Fifty percent (50%) of the shares that would become exercisable under
this option on each vesting date will immediately vest should the Company be
acquired or merged with another company (except one in which the holders of
capital stock of the Company immediately prior to consummation of such merger or
acquisition continue to hold at least a majority by voting power of the
surviving entity) (an "Acquisition Event"), provided that the Participant is at
the time of the closing of such Acquisition Event an employee of the Company (or
the Participant's employment by the Company has been terminated by the Company
without Cause, as set forth below). The then remaining unvested fifty percent
(50%) of such shares will continue to vest in accordance with the schedule set
forth in the first paragraph of this Section 2; provided, however, that such
remaining unvested fifty percent (50%) shall immediately vest in the event that,
at any time following the earlier of the signing of a letter of intent for an
Acquisition Event or the signing of a definitive agreement relating to such
Acquisition Event (which such letter of intent (or negotiations relating to the
Acquisition Event) or definitive agreement has not been terminated), the
Participant's employment is terminated by the Company without Cause. For
purposes of this paragraph, the Participant's employment shall be deemed to have
been terminated by the Company without Cause if (i) the Participant is
terminated by the Company without Cause or if, (ii) (A) the Participant is
assigned duties which are materially inconsistent with his former role and
position as a member of the senior management of the Company; (B) the
Participant is asked to relocate beyond a 20-mile radius of the Company's
principal business office on the date hereof; or (C) there is a material
reduction in the Participant's base salary or fringe benefits. "Cause" means a
repeated failure of the Participant to perform his assigned tasks for the
Company notwithstanding a written
WebLine Communications Corp. Confidential 1
<PAGE> 2
notification from the Company setting forth such failure, or the Participant's
conviction of a felony or any crime involving moral turpitude.
The provisions of the preceding paragraph shall not apply to the extent
that the Board of Directors of the Company, based on consultation with the
Company's independent auditors, determines that the acceleration of the vesting
of any options would adversely impact the ability of the Company to account for
an Acquisition Event as a "pooling of interests" for accounting purposes.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be
in writing, substantially in the form attached as Exhibit A, signed by the
Participant and received by the Company at its principal office, accompanied by
this agreement, and payment in full in cash or by check, payable to the order of
the Company. (or by one or more of the following forms: (I) by delivery of
shares of Common Stock owned by the Participant for at least six months; (II) by
delivery of a promissory note of the Participant bearing interest at a fixed
rate equal to the prime rate published in the Wall Street Journal as of the date
of exercise, and payable on demand; or (III) by delivery of an irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price or delivery of irrevocable instructions to a broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price) The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than ten whole shares.
(b) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
"Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Final Exercise Date while he or she is an Eligible Participant and
the Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant by the
Participant, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Company, which determination shall be conclusive.
The Participant shall be considered to have been discharged for "Cause" if the
Company determines, within 30 days after the Participant's resignation, that
discharge for cause was warranted.
WebLine Communications Corp. Confidential 2
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4. Right of First Refusal.
(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant proposes
to transfer (the "Offered Shares"), the price per share and all other material
terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer Notice.
In the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within such 30-day
period. Within 10 days after his receipt of such notice, the Participant shall
tender to the Company at its principal offices the certificate or certificates
representing the Offered Shares, duly endorsed in blank by the Participant or
with duly endorsed stock powers attached thereto, all in a form suitable for
transfer of the Offered Shares to the Company. Upon receipt of such certificate
or certificates, the Company shall deliver or mail to the Participant a check in
payment of the purchase price for the Offered Shares; provided that if the terms
of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.
(c) At and after the time at which the Offered Shares are required
to be delivered to the Company for transfer to the Company pursuant to
subsection (b) above, the Company shall not pay any dividend to the Participant
on account of such Shares or permit the Participant to exercise any of the
privileges or rights of a stockholder with respect to such Offered Shares, but
shall, in so far as permitted by law, treat the Company as the owner of such
Offered Shares.
(d) If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, provided that such transfer shall not
be on terms and conditions more favorable to the transferee than those contained
in the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(e) The following transactions shall be exempt from the provisions
of this Section 4:
(1) any transfer of Shares to or for the benefit of any
spouse, child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended (the
"Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of all
or substantially all of the business of the Company;
(4) provided, however, that in the case of a transfer
pursuant to clause (1) above, such Shares shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.
WebLine Communications Corp. Confidential 3
<PAGE> 4
(g) The provisions of this Section 4 shall terminate upon the
earlier of the following events:
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital
stock, assets or business of the Company, by merger, consolidation, sale of
assets or otherwise.
(h) The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering)
without the prior written consent of the Company or the underwriters managing
such initial underwritten public offering of the Company's securities for a
period of 180 days from the effective date of such registration statement, and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.
6. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
7. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
8. Disqualifying Disposition.
If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.
9. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
WebLine Communications Corp. Confidential 4
<PAGE> 5
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
WebLine Communications Corporation
Dated: By:
------------------ -------------------------------------
Name: Daniel A. Keshian
Title: President & CEO
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1997 Stock Incentive Plan.
PARTICIPANT:
----------------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
WebLine Communications Corp. Confidential 5
<PAGE> 1
EXHIBIT 99.4
WEBLINE COMMUNICATIONS CORPORATION
Nonstatutory Stock Option Agreement
Granted Under 1997 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by WebLine Communications
Corporation, a Delaware corporation (the "Company") on ________, 1998 (the
"Grant Date") to ________, an [employee], [consultant], [director] of the
Company (the "Participant"), of an option to purchase, in whole or in part, on
the terms provided herein and in the Company's 1997 Stock Incentive Plan (the
"Plan"), a total of ________ shares of common stock, .001 par value per share,
of the Company ("Common Stock") (the "Shares") at $________ per Share. Unless
earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on
_______ (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall not be
an incentive stock option as defined in Section 422 of the Internal Revenue Code
of 1986, as amended and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the date of the Grant Date and as
to an additional 6.25% of the original number of Shares at the end of each
successive full three-month period following the first anniversary of the Grant
Date until the fourth anniversary of the Grant Date. This option shall expire
upon, and will not be exercisable after, the Final Exercise Date.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(1) Form of Exercise. Each election to exercise this option shall be
in writing, substantially in the form attached as Exhibit A, signed by the
Participant and received by the Company at its principal office, accompanied by
this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share or for
fewer than ten whole shares.
(2) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee, officer or
director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
"Eligible Participant").
(3) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
90 days after such cessation (but in no event after the Final Exercise Date),
provided that this option shall be exercisable only to the extent that the
Participant was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if the Participant, prior to the Final Exercise
Date, violates the non-
Webline Communications Corp. Confidential 1
<PAGE> 2
competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option shall terminate
immediately upon such violation.
(4) Exercise Period Upon Death or Disability. If the Participant
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Final Exercise Date while he or she is an Eligible Participant and
the Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(5) Discharge for Cause. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Company, which determination shall be conclusive.
The Participant shall be considered to have been discharged for "Cause" if the
Company determines, within 30 days after the Participant's resignation, that
discharge for cause was warranted.
4. Right of First Refusal.
(1) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant proposes
to transfer (the "Offered Shares"), the price per share and all other material
terms and conditions of the transfer.
(2) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer Notice.
In the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within such 30-day
period. Within 10 days after his receipt of such notice, the Participant shall
tender to the Company at its principal offices the certificate or certificates
representing the Offered Shares, duly endorsed in blank by the Participant or
with duly endorsed stock powers attached thereto, all in a form suitable for
transfer of the Offered Shares to the Company. Upon receipt of such certificate
or certificates, the Company shall deliver or mail to the Participant a check in
payment of the purchase price for the Offered Shares; provided that if the terms
of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.
(3) At and after the time at which the Offered Shares are required
to be delivered to the Company for transfer to the Company pursuant to
subsection (b) above, the Company shall not pay any dividend to the Participant
on account of such Shares or permit the Participant to exercise any of the
privileges or rights of a stockholder with respect to such Offered Shares, but
shall, in so far as permitted by law, treat the Company as the owner of such
Offered Shares.
(4) If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, provided that such transfer shall not
be on terms and conditions more favorable to the transferee than those contained
in the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
Webline Communications Corp. Confidential 2
<PAGE> 3
(5) The following transactions shall be exempt from the provisions
of this Section 4:
(1) any transfer of Shares to or for the benefit of any
spouse, child or grandchild of the Participant, or to a trust for their benefit;
(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended (the
"Securities Act"); and
(3) any transfer of the Shares pursuant to the sale of all
or substantially all of the business of the Company; provided, however, that in
the case of a transfer pursuant to clause (1) above, such Shares shall remain
subject to the right of first refusal set forth in this Section 4 and such
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument confirming that such transferee shall be bound by all of the
terms and conditions of this Section 4.
(6) The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.
(7) The provisions of this Section 4 shall terminate upon the
earlier of the following events:
(1) the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or
(2) the sale of all or substantially all of the capital
stock, assets or business of the Company, by merger, consolidation, sale of
assets or otherwise.
(h) The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering)
without the prior written consent of the Company or the underwriters managing
such initial underwritten public offering of the Company's securities for a
period of 180 days from the effective date of such registration statement, and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.
6. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
7. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
8. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this
Webline Communications Corp. Confidential 3
<PAGE> 4
option.
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
WebLine Communications Corporation
Dated: By:
--------------------- -------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1997 Stock Incentive Plan.
PARTICIPANT:
----------------------------------------
Address:
--------------------------------
--------------------------------
Webline Communications Corp. Confidential 4
<PAGE> 1
EXHIBIT 99.5
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
WEBLINE COMMUNICATIONS CORPORATION
1997 STOCK INCENTIVE PLAN
OPTIONEE: [Employee],
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 2nd day of
November, 1999 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 WebLine
Communications Corporation, a Delaware corporation ("WebLine"), which were
granted to Optionee under the WebLine 1997 Stock Incentive Plan (the "Plan") and
are each evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, WebLine has been acquired by Cisco through the merger
of WebLine with and into Cisco (the "Merger") pursuant to the Agreement and Plan
of Reorganization, by and between Cisco and WebLine (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to
assume all obligations of WebLine under all outstanding options 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 (the "Exchange Ratio") in effect for the Merger is 0.15948147 of
a share of Cisco common stock ("Cisco Stock") for each outstanding share of
WebLine common stock ("WebLine Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options that 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 WebLine Stock subject to the
options held by Optionee immediately prior to the Effective Time (the "WebLine
Options") and the exercise price payable per share are set forth below. Cisco
hereby assumes, as of the Effective Time, all the duties and obligations of
WebLine under each of the WebLine Options. In connection with such assumption,
the number of shares of Cisco Stock purchasable under each WebLine Option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio.
<PAGE> 2
Accordingly, the number of shares of Cisco Stock subject to each WebLine Option
hereby assumed shall be as specified for that option below, and the adjusted
exercise price payable per share of Cisco Stock under the assumed WebLine
Option shall also be as indicated for that option below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
WEBLINE STOCK OPTIONS CISCO ASSUMED OPTIONS
- -------------------------------------------------------------------------------------------------
# of Shares of Webline Exercise Price per # of Shares of Adjusted Exercise Price
Common Stock Share Cisco Common Stock per Share
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[WebLine Shares] $[WebLine Price] [Cisco Shares] $[Cisco Price]
- -------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed
WebLine Option is to assure that the spread between the aggregate fair market
value of the shares of Cisco Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
that existed, immediately prior to the Merger, between the then aggregate fair
market value of the WebLine Stock subject to the WebLine Option and the
aggregate exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the WebLine Option immediately prior
to the Merger.
3. Your WebLine Option may have been incorrectly documented
with an expiration date later than ten (10) years from the date of grant, in
violation of the terms of the Plan and the Internal Revenue Code (the "Code").
To comply with the terms of the Plan and the Code, your option is hereby
corrected and will expire on [expiration date].
4. The following provisions shall govern each WebLine
Option hereby assumed by Cisco:
(a) Unless the context otherwise requires, all
references in each Option Agreement and, if applicable, in the
Plan (as incorporated into such Option Agreement) (i) to the
"Company" shall mean Cisco, (ii) to "Common Stock" or "Stock"
shall mean share of Cisco Stock, (iii) to the "Board" shall mean
the Board of Directors of Cisco and (iv) to the "Committee"
shall mean the Compensation Committee of the Cisco Board of
Directors.
(b) Except as modified in paragraph 3, the grant
date and the expiration date of each assumed WebLine Option and
all other provisions which govern either the exercise or the
termination of the assumed WebLine Option shall remain the same
as set forth in the Option Agreement applicable to that option,
and the provisions of the Option Agreement shall accordingly
govern and control Optionee's rights under this Agreement to
purchase Cisco Stock.
2
<PAGE> 3
(c) Pursuant to the Plan, none of your options
assumed by Cisco in connection with the transaction will vest
and become exercisable on an accelerated basis upon the
consummation of the Merger. Each WebLine Option shall be assumed
by Cisco as of the Effective Time. Each such assumed WebLine
Option shall thereafter continue to vest for any remaining
unvested shares of Cisco Stock subject to that option in
accordance with the same installment vesting schedule in effect
under the applicable Option Agreement immediately prior to the
Effective Time; provided, however, that the number of shares
subject to each such installment shall be adjusted to reflect
the Exchange Ratio.
(d) For purposes of applying any and all provisions
of the Option Agreement and/or the Plan relating to Optionee's
status as an employee or a consultant of WebLine, Optionee shall
be deemed to continue in such status as an employee or a
consultant for so long as Optionee renders services as an
employee or a consultant to Cisco or any present or future Cisco
subsidiary. Accordingly, the provisions of the Option Agreement
governing the termination of the assumed WebLine Options upon
Optionee's cessation of service as an employee or a consultant
of WebLine shall hereafter be applied on the basis of Optionee's
cessation of employee or consultant status with Cisco and its
subsidiaries, and each assumed WebLine Option shall accordingly
terminate, within the designated time period in effect under the
Option Agreement for that option, generally a ninety (90)-day
period, following such cessation of service as an employee or a
consultant of Cisco and its subsidiaries.
(e) The adjusted exercise price payable for the
Cisco Stock subject to each assumed WebLine 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 adjusted exercise price, the period for which
such shares were held as WebLine Stock prior to the Merger shall
be taken into account.
(f) In order to exercise each assumed WebLine
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 adjusted exercise price payable
for the purchased shares of Cisco Stock and should be delivered
to Cisco at the following address:
Cisco Systems, Inc.
170 West Tasman Drive
MS 11-3
San Jose, CA 95134
Attention: Stock Administration
3
<PAGE> 4
5. 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.
4
<PAGE> 5
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 2nd day of November, 1999.
CISCO SYSTEMS, INC.
By: /s/ LARRY R. CARTER
-------------------------------------
Larry R. Carter
Corporate Secretary
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 WebLine Communications Corporation Options hereby
assumed by Cisco are as set forth in the Option Agreement, the Plan, as
applicable, and such Stock Option Assumption Agreement.
----------------------------------------
[Employee], OPTIONEE
DATED: __________________, 1999
5
<PAGE> 1
EXHIBIT 99.6
FULL ACCELERATION
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
WEBLINE COMMUNICATIONS CORPORATION
1997 STOCK INCENTIVE PLAN
OPTIONEE: [Employee],
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 2nd day of
November, 1999 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 WebLine
Communications Corporation, a Delaware corporation ("WebLine"), which were
granted to Optionee under the WebLine 1997 Stock Incentive Plan (the "Plan") and
are each evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, WebLine has been acquired by Cisco through the merger
of WebLine with and into Cisco (the "Merger") pursuant to the Agreement and Plan
of Reorganization, by and between Cisco and WebLine (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to
assume all obligations of WebLine under all outstanding options 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 (the "Exchange Ratio") in effect for the Merger is 0.15948147 of
a share of Cisco common stock ("Cisco Stock") for each outstanding share of
WebLine common stock ("WebLine Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options 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 WebLine Stock subject to the
options held by Optionee immediately prior to the Effective Time (the "WebLine
Options") and the exercise price payable per share are set forth below. Cisco
hereby assumes, as of the Effective Time, all the duties and obligations of
WebLine under each of the WebLine Options. In connection with such assumption,
the number of shares of Cisco Stock purchasable under each WebLine Option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio. Accordingly, the number of shares of Cisco Stock subject to
each WebLine Option hereby assumed shall be as specified for that option below,
and the adjusted exercise
<PAGE> 2
price payable per share of Cisco Stock under the assumed WebLine Option shall
also be as indicated for that option below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
WEBLINE STOCK OPTIONS CISCO ASSUMED OPTIONS
- -------------------------------------------------------------------------------------------------
# of Shares of WebLine Exercise Price per # of Shares of Cisco Adjusted Exercise
Common Stock Share Common Stock Price per Share
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[WebLine Shares] $[WebLine Price] [Cisco Shares] $[Cisco Price]
- -------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed
WebLine Option is to assure that the spread between the aggregate fair market
value of the shares of Cisco Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
which existed, immediately prior to the Merger, between the then aggregate fair
market value of the WebLine Stock subject to the WebLine Option and the
aggregate exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the WebLine Option immediately prior
to the Merger.
3. Your WebLine Option may have been incorrectly
documented with an expiration date later than ten (10) years from the date of
grant, in violation of the terms of Plan and the Internal Revenue Code (the
"Code"). To comply with the terms of the Plan and the Code, your option is
hereby corrected and will expire on [expiration date].
4. The following provisions shall govern each WebLine
Option hereby assumed by Cisco:
(a) Unless the context otherwise requires, all
references in each Option Agreement and, if applicable, in the
Plan (as incorporated into such Option Agreement) (i) to the
"Company" shall mean Cisco, (ii) to "Common Stock" or "Stock"
shall mean share of Cisco Stock, (iii) to the "Board" shall mean
the Board of Directors of Cisco and (iv) to the "Committee"
shall mean the Compensation Committee of the Cisco Board of
Directors.
(b) Except as modified in paragraph 3, the grant
date and the expiration date of each assumed WebLine Option and
all other provisions which govern either the exercise or the
termination of the assumed WebLine Option shall remain the same
as set forth in the Option Agreement applicable to that option,
and the provisions of the Option Agreement shall accordingly
govern and control Optionee's rights under this Agreement to
purchase Cisco Stock.
(c) Pursuant to the terms of the Option Agreement,
your option assumed by Cisco in connection with the transaction
will become fully vested and
2
<PAGE> 3
exercisable upon the consummation of the Merger. Your WebLine
Option shall be assumed by Cisco as of the Effective Time.
(d) For purposes of applying any and all provisions
of the Option Agreement and/or the Plan relating to Optionee's
status as an employee or a consultant of WebLine, Optionee shall
be deemed to continue in such status as an employee or a
consultant for so long as Optionee renders services as an
employee or a consultant to Cisco or any present or future Cisco
subsidiary. Accordingly, the provisions of the Option Agreement
governing the termination of the assumed WebLine Options upon
Optionee's cessation of service as an employee or a consultant
of WebLine shall hereafter be applied on the basis of Optionee's
cessation of employee or consultant status with Cisco and its
subsidiaries, and each assumed WebLine Option shall accordingly
terminate, within the designated time period in effect under the
Option Agreement for that option, generally a ninety (90)-day
period, following such cessation of service as an employee or a
consultant of Cisco and its subsidiaries.
(e) The adjusted exercise price payable for the
Cisco Stock subject to each assumed WebLine 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 adjusted exercise price, the period for which
such shares were held as WebLine Stock prior to the Merger shall
be taken into account.
(f) In order to exercise each assumed WebLine
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 adjusted exercise price payable
for the purchased shares of Cisco Stock and should be delivered
to Cisco at the following address:
Cisco Systems, Inc.
170 West Tasman Drive
MS 11-3
San Jose, CA 95134-1706
Attention: Stock Administration
5. 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.
3
<PAGE> 4
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 2nd day of November, 1999.
CISCO SYSTEMS, INC.
By: /s/ LARRY R. CARTER
-------------------------------------
Larry R. Carter
Corporate Secretary
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 WebLine Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, as applicable, and such Stock Option
Assumption Agreement.
----------------------------------------
[Employee], OPTIONEE
DATED: __________________, 1999
4
<PAGE> 1
EXHIBIT 99.7
INVOLUNTARY TERMINATION
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
WEBLINE COMMUNICATIONS CORPORATION
1997 STOCK INCENTIVE PLAN
OPTIONEE: [Employee],
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 2nd day of
November, 1999 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 WebLine
Communications Corporation, a Delaware corporation ("WebLine"), which were
granted to Optionee under the WebLine 1997 Stock Incentive Plan (the "Plan") and
are each evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, WebLine has been acquired by Cisco through the merger
of WebLine with and into Cisco (the "Merger") pursuant to the Agreement and Plan
of Reorganization, by and between Cisco and WebLine (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to
assume all obligations of WebLine under all outstanding options 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 (the "Exchange Ratio") in effect for the Merger is 0.15948147 of
a share of Cisco common stock ("Cisco Stock") for each outstanding share of
WebLine common stock ("WebLine Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options 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 WebLine Stock subject to the
options held by Optionee immediately prior to the Effective Time (the "WebLine
Options") and the exercise price payable per share are set forth below. Cisco
hereby assumes, as of the Effective Time, all the duties and obligations of
WebLine under each of the WebLine Options. In connection with such assumption,
the number of shares of Cisco Stock purchasable under each WebLine Option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio. Accordingly, the number of shares of Cisco Stock subject to
each WebLine Option hereby assumed shall be as specified for that option below,
and the adjusted exercise
<PAGE> 2
price payable per share of Cisco Stock under the assumed WebLine Option shall
also be as indicated for that option below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
WEBLINE STOCK OPTIONS CISCO ASSUMED OPTIONS
- -------------------------------------------------------------------------------------------------
# of Shares of WebLine Exercise Price per # of Shares of Adjusted Exercise Price
Common Stock Share Cisco Common Stock per Share
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[WebLine Shares] $[WebLine Price] [Cisco Shares] $[Cisco Price]
- -------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed
WebLine Option is to assure that the spread between the aggregate fair market
value of the shares of Cisco Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
which existed, immediately prior to the Merger, between the then aggregate fair
market value of the WebLine Stock subject to the WebLine Option and the
aggregate exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the WebLine Option immediately prior
to the Merger.
3. Your WebLine Option may have been incorrectly documented
with an expiration date later than ten (10) years from the date of grant, in
violation of the terms of the Plan and the Internal Revenue Code (the "Code").
To comply with the terms of the Plan and the Code your option is hereby
corrected and will expire on [Expiration Date].
4. The following provisions shall govern each WebLine
Option hereby assumed by Cisco:
(a) Unless the context otherwise requires, all
references in each Option Agreement and, if applicable, in the
Plan (as incorporated into such Option Agreement) (i) to the
"Company" shall mean Cisco, (ii) to "Common Stock" or "Stock"
shall mean share of Cisco Stock, (iii) to the "Board" shall mean
the Board of Directors of Cisco and (iv) to the "Committee"
shall mean the Compensation Committee of the Cisco Board of
Directors.
(b) Except as modified in paragraph 3, the grant
date and the expiration date of each assumed WebLine Option and
all other provisions which govern either the exercise or the
termination of the assumed WebLine Option shall remain the same
as set forth in the Option Agreement applicable to that option,
and the provisions of the Option Agreement shall accordingly
govern and control Optionee's rights under this Agreement to
purchase Cisco Stock.
(c) Each WebLine Option shall be assumed by Cisco as
of the Effective Time. Pursuant to the terms of your Option
Agreement, fifty percent (50%) of the unvested shares subject to
your option assumed by Cisco in connection with the transaction
will vest and become exercisable on an
2
<PAGE> 3
accelerated basis upon the consummation of the Merger. Each such
assumed WebLine Option shall thereafter continue to vest for any
remaining unvested shares of Cisco Stock subject to that option
in accordance with the same installment vesting schedule in
effect under the applicable Option Agreement immediately prior
to the Effective Time; provided, however, that the number of
shares subject to each such installment shall be adjusted to
reflect the Exchange Ratio.
(d) For purposes of applying any and all provisions
of the Option Agreement and/or the Plan relating to Optionee's
status as an employee or a consultant of WebLine, Optionee shall
be deemed to continue in such status as an employee or a
consultant for so long as Optionee renders services as an
employee or a consultant to Cisco or any present or future Cisco
subsidiary. Accordingly, the provisions of the Option Agreement
governing the termination of the assumed WebLine Options upon
Optionee's cessation of service as an employee or a consultant
of WebLine shall hereafter be applied on the basis of Optionee's
cessation of employee or consultant status with Cisco and its
subsidiaries, and each assumed WebLine Option shall accordingly
terminate, within the designated time period in effect under the
Option Agreement for that option, generally a ninety (90)-day
period, following such cessation of service as an employee or a
consultant of Cisco and its subsidiaries.
(e) The adjusted exercise price payable for the
Cisco Stock subject to each assumed WebLine 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 adjusted exercise price, the period for which
such shares were held as WebLine Stock prior to the Merger shall
be taken into account.
(f) In order to exercise each assumed WebLine
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 adjusted exercise price payable
for the purchased shares of Cisco Stock and should be delivered
to Cisco at the following address:
Cisco Systems, Inc.
170 West Tasman Drive
MS 11-3
San Jose, CA 95134
Attention: Stock Administration
5. 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.
3
<PAGE> 4
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 2nd day of November, 1999.
CISCO SYSTEMS, INC.
By: /s/ LARRY R. CARTER
-------------------------------------
Larry R. Carter
Corporate Secretary
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 WebLine Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, as applicable, and such Stock Option
Assumption Agreement.
----------------------------------------
[Employee], OPTIONEE
DATED: __________________, 1999
4
