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Exhibit 99.10
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SENTIENT NETWORKS, INC.
1997 STOCK PLAN
1995 STOCK OPTION PLAN
OPTIONEE: [A]
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 18th day of June,
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 Sentient Networks,
Inc. (formerly Cellstream Networks, Inc.), a Delaware corporation ("Sentient"),
which were granted to Optionee under the Sentient 1997 Stock Plan or 1995 Stock
Option Plan (the "Plans") and are each evidenced by a Stock Option Agreement
(the "Option Agreement").
WHEREAS, Sentient has been acquired by Cisco through the merger of Sentient
with and into Cisco (the "Merger") pursuant to the Agreement and Plan of Merger
and Reorganization, by and between Cisco and Sentient (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to assume all
obligations of Sentient under all outstanding options under the Plans 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 0.06555 shares of Cisco
common stock ("Cisco Stock") for each outstanding share of Sentient common stock
("Sentient 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 Sentient Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "Sentient Options") and
the exercise price payable per share are set forth in Exhibit(s) A hereto. Cisco
hereby assumes, as of the Effective Time, all the duties and obligations of
Sentient under each of the Sentient Options. In connection with such assumption,
the number of shares of Cisco Stock purchasable under each Sentient
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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 Sentient Option hereby assumed shall be as specified
for that option in attached Exhibit(s) A, and the adjusted exercise price
payable per share of Cisco Stock under the assumed Sentient Option shall also be
as indicated for that option in attached Exhibit(s) A.
2. The intent of the foregoing adjustments to each assumed Sentient
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 Sentient Stock subject to the Sentient 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 Sentient Option immediately prior to the Merger.
3. The following provisions shall govern each Sentient Option hereby
assumed by Xxxxx:
(a) Unless the context otherwise requires, all references in each
Option Agreement and in the Plans (i) to the "Company" or the "Corporation"
shall mean Cisco, (ii) to "Shares," "Stock" or "Common Stock" shall mean shares
of Cisco Stock, (iii) to the "Board of Directors" or "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 Sentient
Option and all other provisions which govern either the exercise or the
termination of the assumed Sentient Option shall remain the same as set forth in
the Option Agreement and the Plan, applicable to that option, and the provisions
of the Option Agreement and the Plan 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
Sentient Option shall be assumed by Cisco as of the Effective Time. Each such
assumed Sentient 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 Sentient, 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 Sentient Options upon Optionee's cessation of service as an employee
or a consultant of Sentient shall hereafter be applied on the basis of
Optionee's cessation of employee or consultant status with Cisco and its
subsidiaries, and each assumed Sentient 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 Sentient 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
Sentient Stock prior to the Merger shall be taken into account.
(f) In order to exercise each assumed Sentient 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, Xxxxxxxx X
Xxx Xxxx, XX 00000
Attention: Option Plan Administrator
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
effective as of the 18th day of June, 1999.
CISCO SYSTEMS, INC.
By:
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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 Sentient 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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[A], OPTIONEE
DATED: , 1999
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