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EXHIBIT 99.8
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
PENTACOM, LTD.
1999 SHARE OPTION PLAN
OPTIONEE: [[Employee]],
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 15th day of
June, 2000 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 PenataCom,
LTD., an Israeli corporation ("PentaCom"), which were granted to Optionee under
the PentaCom 1999 Share Option Plan (the "Plan") and are each evidenced by a
Stock Option Agreement (the "Option Agreement").
WHEREAS, PentaCom has been acquired by Cisco through the merger
of PentaCom with and into Cisco (the "Merger") pursuant to the Agreement and
Plan of Reorganization, by and between Cisco and PentaCom (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to
assume all obligations of PentaCom 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 0.0190497
shares of Cisco common stock ("Cisco Stock") for each outstanding share of
PentaCom common stock ("PentaCom 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 PentaCom Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "PentaCom
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
PentaCom under each of the PentaCom Options. In connection with such assumption,
the number of shares of Cisco Stock purchasable under each PentaCom 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 PentaCom Option hereby assumed shall be as specified for that
option below, and the adjusted exercise price payable per
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share of Cisco Stock under the assumed PentaCom Option shall also be as
indicated for that option below.
PENTACOM STOCK OPTIONS CISCO ASSUMED OPTIONS
------------------------------------------------- -----------------------------------------------
# of Shares of PentaCom Exercise Price per # of Shares of Adjusted Exercise Price
Common Stock Share Cisco Common Stock per Share
-------------------------- ---------------------- -------------------- --------------------------
$ $
2. The intent of the foregoing adjustments to each assumed
PentaCom 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 PentaCom Stock subject to the PentaCom 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 PentaCom Option immediately prior
to the Merger.
3. The following provisions shall govern each PentaCom 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 "Share" 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) The grant date and the expiration date of each assumed
PentaCom Option and all other provisions which govern either the
exercise or the termination of the assumed PentaCom 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, 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 PentaCom Option shall be
assumed by Cisco as of the Effective Time. Each such assumed
PentaCom 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.
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(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 PentaCom, 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 PentaCom Options upon Optionee's
cessation of service as an employee or a consultant of PentaCom
shall hereafter be applied on the basis of Optionee's cessation
of employee or consultant status with Cisco and its
subsidiaries, and each assumed PentaCom Option shall accordingly
terminate, within the designated time period in effect under the
Option Agreement for that option, 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 PentaCom 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
PentaCom Stock prior to the Merger shall be taken into account.
(f) In order to exercise each assumed PentaCom 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.
000 Xxxx Xxxxxx Xxxxx
XX 00-0
Xxx Xxxx, XX 00000
Attention: Stock Administration
4. 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.
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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 15th day of June, 2000.
CISCO SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
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 PentaCom Options hereby assumed by Cisco are as
set forth in the Option Agreement, the Plan, as applicable, and such Stock
Option Assumption Agreement.
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[[Employee]], OPTIONEE
DATED: __________________, 2000
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