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EXHIBIT 99.5
STRATACOM, INC. 1986 INCENTIVE STOCK OPTION PLAN
STRATACOM, INC. 1994 STOCK OPTION PLAN
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 9th day of July,
1996 by Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Stratacom, Inc., a
Delaware corporation ("Stratacom"), which were granted to Optionee under the
Stratacom, Inc. 1986 Incentive Stock Option Plan and/or the Stratacom, Inc. 1994
Stock Option Plan (the "Plans") and are evidenced by a Stock Option Agreement(s)
(the "Option Agreement(s)") between Stratacom and Optionee.
WHEREAS, Stratacom has this day been acquired by Cisco through merger
of a wholly-owned Cisco subsidiary ("Acquisition Corporation") with and into
Stratacom (the "Merger") pursuant to the Agreement and Plan of Merger dated
April 21, 1996 by and among Cisco, Stratacom and Acquisition Corporation (the
"Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to assume
all obligations of Stratacom under all options outstanding under the Plan at the
consummation of the Merger and to issue to the holder of each outstanding option
an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio in effect for the Merger is one (1) share of Cisco common stock
("Cisco Stock") for each outstanding share of Stratacom common stock (the
"Exchange Rate").
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by Cisco in connection
with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Stratacom common stock subject to the
stock options held by Optionee under the Plan immediately prior to the Effective
Time (the "Stratacom Options") and the exercise price payable per share are set
forth in Exhibit A
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hereto. Cisco hereby assumes, as of the Effective Time, all the duties and
obligations of Stratacom under each of the Stratacom Options. Such assumption is
hereby effected in accordance with the one-for-one Exchange Rate at which shares
of Stratacom common stock were converted into shares of Cisco Stock in
consummation of the Merger. Accordingly, the number of shares of Cisco Stock
purchasable under each Stratacom Option hereby assumed shall be equal to the
same number of shares of Stratacom common stock purchasable under that Stratacom
Option immediately prior to the Merger, and the exercise price per share payable
under each such assumed Stratacom Option shall be equal to the exercise price
per share in effect under that Stratacom Option immediately prior to the Merger.
The specific number of shares of Cisco Stock subject to each Stratacom Option
hereby assumed shall be as set forth for that option in attached Exhibit B, and
the exercise price payable per share of Cisco Stock under the assumed Stratacom
Option shall be as indicated for that option in attached Exhibit B.
2. The following provisions shall govern each Stratacom Option
hereby assumed by Cisco:
- Unless the context otherwise requires, all references
to the "Company" in each Option Agreement(s) and in the Plan (as incorporated
into such Option Agreement(s)) shall mean Cisco, all references to "Shares,"
"Stock" or "Common Stock" shall mean shares of Cisco Stock, and all references
to the "Plan Administrator" shall mean the Compensation Committee of the Cisco
Board of Directors.
- The grant date and the expiration date of each
assumed Stratacom Option and all other provisions which govern either the
exercisability or the termination of the assumed Stratacom Option shall remain
the same as set forth in the Option Agreement(s) applicable to that option and
shall accordingly govern and control Optionee's rights under this Agreement to
purchase Cisco Stock.
- Each assumed Stratacom Option shall remain
exercisable in accordance with the same installment exercise schedule in effect
under the applicable Option Agreement(s) immediately prior to the Effective
Time, with the number of shares of Cisco Stock subject to each such installment
adjusted to reflect the Exchange Rate. Accordingly, no accelerated vesting of
the Stratacom Options shall be deemed to occur by reason of the Merger, and the
grant date for each assumed Stratacom Option shall accordingly remain the same
as in effect under the applicable Option Agreement(s) immediately prior to the
Merger.
- For purposes of applying any and all provisions of
the Option Agreement(s) relating to Optionee's status as an employee with the
Company or his or her consulting or advisory relationship with the Company,
Optionee shall be deemed to continue in such status or relationship for so long
as Optionee renders services as an employee or consultant or advisor,
respectively, to Cisco or any present or future Cisco subsidiary, including
(without limitation) Stratacom. Accordingly, the provisions of the Option
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Agreement(s) governing the termination of the assumed Stratacom Option upon the
Optionee's cessation of employee, consultant or advisor status with Stratacom
shall hereafter be applied on the basis of the Optionee's cessation of employee,
consultant or advisor status, as appropriate, with Cisco and its subsidiaries,
and each assumed Stratacom Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement(s) for that option,
following such cessation of employee, consultant or advisor status with Cisco
and its subsidiaries.
- The exercise price payable for the Cisco Stock
subject to each assumed Stratacom Option shall be payable in any of the forms
authorized under the Option Agreement(s) applicable to that option. For purposes
of determining the holding period of any shares of Cisco Stock delivered in
payment of such exercise price, the period for which such shares were held as
Stratacom common stock prior to the Merger shall be taken into account.
- In order to exercise each assumed Stratacom Option,
Optionee must deliver to Cisco a written notice of exercise in which the number
of shares of Cisco Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the exercise price payable for
the purchased shares of Cisco Stock and should be delivered to Cisco at the
following address:
Cisco Systems, Inc.
170 West Tasman Drive
San Jose, CA 95134
Attention: Christine Calice
3. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option
Agreement(s) as in effect immediately prior to the Merger shall continue in full
force and effect and shall not in any way be amended, revised or otherwise
affected by this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the _____ day of ________, 1996.
CISCO SYSTEMS, INC.
By:
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ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Stratacom Options hereby assumed by Cisco Systems,
Inc. are as set forth in the Option Agreement(s), the Plan and such Stock Option
Assumption Agreement.
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1~, OPTIONEE
DATED: __________________, 1996
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EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of Stratacom, Inc.
Common Stock (Pre-Merger)
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EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of Cisco Systems, Inc.
Common Stock (Post-Merger)