Exhibit 99.9
EFFECTIVE DATE: MAY , 2002
---
1994 STOCK PLAN
LEGATO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [OTG Optionee]:
As you know, on [_________] (the "Closing Date") Legato Systems, Inc. ("Legato")
acquired OTG Software, Inc. ("OTG") (the "Acquisition"). In the Acquisition,
each share of OTG common stock was exchanged for 0.6876 of a share of Legato
common stock plus a cash payment of $2.50 (the "Exchange Ratio"). On the Closing
Date you held one or more outstanding options to purchase shares of OTG common
stock granted to you under the Smart Storage 1994 Stock Plan (the "Plan") and
documented with a stock option agreement(s) and any amendment(s) thereto
(collectively, the "Option Agreement") issued to you under the Plan (the "OTG
Options"). In accordance with the Acquisition, on the Closing Date Legato
assumed all obligations of OTG under the OTG Options. This Agreement evidences
the assumption of the OTG Options, including the necessary adjustments to the
OTG Options required by the Acquisition.
Your OTG Options immediately before and after the Acquisition are as follows:
--------------------------------------------------------------------------------
OTG STOCK OPTIONS LEGATO ASSUMED OPTIONS
--------------------------------------------------------------------------------
# Shares OTG # of Shares Legato Legato
of OTG Exercise of Legato Exercise Exercise Price
Common Price Common Aggregate Price Per Share Net of
Stock Per Share Stock Cash Payment Per Share Cash Payment
--------------------------------------------------------------------------------
$ $ $ $
--------------------------------------------------------------------------------
The post-Acquisition adjustments are based on the Exchange Ratio and are
intended to: (i) assure that the total spread of each assumed OTG Option (i.e.,
the difference between the aggregate fair market value and the aggregate
exercise price) does not exceed the total spread that existed immediately prior
to the Acquisition and (ii) to preserve, on a per share basis, the ratio of
exercise price to fair market value that existed immediately prior to the
Acquisition.
To the extent your OTG Option was an incentive stock option designed to satisfy
the requirements of Section 422 of the Internal Revenue Code of 1986, as amended
prior to the assumption, your OTG Option will no longer qualify as such and for
tax purposes will be treated as a nonstatutory stock option.
Unless the context otherwise requires, any references in the Plan and the Option
Agreement (i) to the "Company" or the "Corporation" means Legato, (ii) to
"Stock," "Common Stock" or "Shares" means shares of Legato Stock, (iii) to the
"Board of Directors" or the "Board" means the Board of Directors of Legato and
(iv) to the "Committee" means the Compensation Committee of the Legato Board of
Directors. All references in the Option Agreement and the Plan relating to your
status as an employee of OTG will now refer to your status as an employee of
Legato or any present or future Legato subsidiary.
The grant date, vesting commencement date, vesting schedule and the expiration
date of your assumed OTG Options remain the same as set forth in your Option
Agreement, but the number of shares subject to each vesting installment has been
adjusted to reflect the
EFFECTIVE DATE: MAY , 2002
---
1994 STOCK PLAN
Exchange Ratio. All other provisions which govern either the exercise or the
termination of the assumed OTG Option remain the same as set forth in your
Option Agreement, and the provisions of the Option Agreement (except as
expressly modified by this Agreement and the Acquisition) will govern and
control your rights under this Agreement to purchase shares of Legato Stock.
Upon your termination of employment with Legato you will have the limited time
period specified in your Option Agreement to exercise your assumed OTG Option to
the extent vested and outstanding at the time, after which time your OTG Options
will expire and NOT be exercisable for Legato Stock.
To exercise your assumed OTG Option, you must deliver to Legato (i) a written
notice of exercise for the number of shares of Legato Stock you want to
purchase, (ii) the adjusted exercise price for each share of Legato Stock you
wish to exercise, net of the cash payment per share of Legato Stock, and (iii)
all applicable taxes. The exercise notice and payment should be delivered to
Legato at the following address:
Legato Systems, Inc.
0000 Xxxx Xx Xxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Stock Administration
Nothing in this Agreement or your Option Agreement interferes in any way with
your rights and Legato's rights, which rights are expressly reserved, to
terminate your employment at any time for any reason. Any future options, if
any, you may receive from Legato will be governed by the terms of the Legato
stock option Plan, and such terms may be different from the terms of your
assumed OTG Options, including, but not limited to, the time period in which you
have to exercise vested options after your termination of employment.
Please sign and date this Agreement and return it promptly to the address listed
above. If you have any questions regarding this Agreement or your assumed OTG
Options, please contact at .
------------- -------------
LEGATO SYSTEMS, INC.
By:
-----------------------
Title:
EFFECTIVE DATE: MAY , 2002
---
1994 STOCK PLAN
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 OTG Options hereby assumed by Legato are as set
forth in the Option Agreement, the Plan, and such Stock Option Assumption
Agreement.
DATED: , 2002
------------------ -------------------------------------
((Employee)), OPTIONEE
