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CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~
NUMBER OF COMBINET SHARES: 2~
GRANT DATE: 3~
ORIGINAL EXERCISE PRICE: $4~
OPTION ASSUMPTION AGREEMENT issued as of the 29th day of
September 1995 by Cisco Systems, Inc., a Delaware corporation ("Cisco").
WHEREAS, the undersigned Optionee is the holder of one or more
outstanding options to purchase shares of the common stock of Combinet, Inc., a
California corporation ("Combinet"), which were granted to Optionee pursuant to
the Combinet Incentive and Nonqualified Stock Option Plan (the "Option Plan"),
and Optionee and Combinet have, in order to evidence each such option, entered
into either a formal Incentive Stock Option Agreement or a Nonqualified Stock
Option Agreement (hereinafter, an "Option Agreement").
WHEREAS, Combinet has this day been acquired by Cisco through
merger of Mathilda Acquisition Corporation, a wholly-owned Cisco subsidiary,
with Combinet (the "Merger") pursuant to the Agreement and Plan of Merger dated
August 9, 1995 (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco
to assume the obligations of Combinet under the options outstanding under the
Option Plan at the time of the Merger and to issue an agreement evidencing the
assumption of each such option (the "Assumption Agreement").
WHEREAS, pursuant to the provisions of the Merger Agreement,
the exchange ratio (the "Exchange Rate") in effect for the Merger is 0.1380976
shares of Cisco common stock ("Cisco Stock") for each outstanding share of
Combinet common stock ("Combinet Stock").
WHEREAS, this Agreement is to be effective immediately upon the
consummation of the Merger (the "Effective Time") and shall reflect certain
adjustments to Optionee's outstanding options under the Option Plan which have
become necessary by reason of the assumption of those options by Cisco in
connection with the Merger.
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NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Combinet Stock subject to the stock
options held by Optionee under the Option Plan immediately prior to the
Effective Time (the "Combinet 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 Combinet under each of the Combinet Options and hereby
agrees to issue up to the number of shares of Cisco Stock indicated below for
each such assumed option upon (i) exercise of that option in accordance with the
provisions of the Option Agreement applicable thereto (as supplemented hereby)
and (ii) payment of the adjusted exercise price per share set forth below.
COMBINET CISCO
STOCK OPTIONS ASSUMED OPTIONS
------------- ---------------
# of Shares # of Shares Adjusted
Common Stock Exercise Common Stock Exercise
Combinet Price/Share Cisco Price/Share
-------- ----------- ----- -----------
2~ $4~ 6~ $7~
2. The number of shares of Cisco Stock purchasable under each
Combinet Option hereby assumed and the exercise price payable thereunder reflect
the Exchange Rate at which shares of Combinet Stock were converted into shares
of Cisco Stock in consummation of the Merger. The intent of such adjustments is
to assure that the spread between the aggregate fair market value of the shares
of Cisco Stock purchasable under each assumed Combinet Option and the aggregate
exercise price as adjusted hereunder will, immediately after the consummation of
the Merger, equal the spread which existed, immediately prior to the Merger,
between the then aggregate fair market value of the Combinet Stock subject to
the Combinet Option and the aggregate exercise price in effect at such time
under the Option Agreement. Such adjustments are also designed to preserve, on a
per-share basis immediately after the Merger, the same ratio of exercise price
per option share to fair market value per share which existed under the Combinet
Option immediately prior to the Merger.
3. The following provisions shall govern each Combinet Option
hereby assumed by Cisco:
- Unless the context otherwise requires, all references to the
"Company" in each Option Agreement shall mean Cisco, all references to "Common
Stock" or "Optioned Shares" shall mean shares of Cisco Stock, all references to
"Board" or "Administrator" shall mean the Compensation Committee of the Cisco
Board of Directors.
2.
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- The grant date and the expiration date of each assumed
Combinet Option and all other provisions which govern the termination of each
such assumed Combinet Option shall remain the same as set forth in the Option
Agreement applicable to such option and shall accordingly govern and control the
Optionee's rights under this Assumption Agreement to purchase Cisco Stock.
- Each assumed Combinet Option shall remain exercisable in
accordance with the same installment vesting schedule in effect under the
applicable Option Agreement 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 acceleration of exercisability or
vesting of the Combinet Options shall be deemed to occur by reason of the
Merger, and the vesting and exercise dates under each applicable Option
Agreement shall remain the same.
- The adjusted exercise price payable for the Cisco Stock
subject to each assumed Combinet Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option and the
provisions of the Option Plan incorporated by reference into that Option
Agreement. For purposes of determining the applicable holding period for any
shares of Cisco Stock delivered in payment of the exercise price of each assumed
Combinet Option, the period for which such shares were held as Combinet Stock
prior to the Merger shall be taken into account.
- In order to exercise each assumed Combinet Option, the
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
Xxx Xxxx, XX 00000
Attention: Option Plan Administrator
- For purposes of applying the termination of employment
provisions of the Option Agreement, the Optionee shall be deemed to continue in
employment and remain an employee for so long as the Optionee remains employed
by Cisco or any present or future parent or subsidiary of Cisco, including
(without limitation) Combinet.
4. Except to the extent specifically modified by this
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 Assumption Agreement.
3.
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IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 29th day of September, 1995.
CISCO SYSTEMS, INC.
By:______________________________
Title:___________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Combinet Options hereby assumed by Cisco Systems,
Inc. are as set forth in the Option Agreement, the Option Plan and such Stock
Option Assumption Agreement.
_________________________________
1~, OPTIONEE
DATED: __________________, 1995
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