<SUBMISSION>
<ACCESSION-NUMBER>0000891618-03-000183
<TYPE>S-8
<PUBLIC-DOCUMENT-COUNT>6
<FILING-DATE>20030121
<EFFECTIVENESS-DATE>20030121
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CISCO SYSTEMS INC
<CIK>0000858877
<ASSIGNED-SIC>3576
<IRS-NUMBER>770059951
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>0731
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-8
<ACT>33
<FILE-NUMBER>333-102623
<FILM-NUMBER>03519764
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>170 WEST TASMAN DR
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134-1706
<PHONE>4085264000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>225 WEST TASMAN DR
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134-1706
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>f86992sv8.htm
<DESCRIPTION>FORM S-8
<TEXT>
<HTML>
<HEAD>
<TITLE>Cisco Systems, Inc.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2">As filed with the Securities and
Exchange Commission on January 21, 2003</FONT>

<P align="right"><FONT size="2">Registration No.&nbsp;333-_____</FONT>

<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">




<P align="center"><FONT size="4"><B>SECURITIES AND EXCHANGE COMMISSION</B><BR></FONT>
<FONT size="3">Washington, D.C. 20549</FONT>

<P align="center"><HR align="center" size="1" width="20%" noshade>

<P align="center"><FONT size="5"><B>FORM S-8<BR>
REGISTRATION STATEMENT</B><BR></FONT>
<FONT size="2"><I>Under<BR>
The Securities Act of 1933</I></FONT>

<P align="center"><HR align="center" size="1" width="20%" noshade>

<P align="center"><FONT size="6"><B>CISCO SYSTEMS, INC.</B><BR></FONT>
<FONT size="2">(Exact name of registrant as specified in its charter)</FONT>

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<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2"><B>California</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
<B>77-0059951</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">(State or other jurisdiction</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
(IRS Employer Identification No.)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">of incorporation or organization)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>170 West Tasman Drive,<BR>
San Jose, California 95134-1706</B><BR>
(Address of principal executive offices) (Zip Code)</FONT>

<P align="center"><FONT size="2"><B>PSIONIC SOFTWARE, INC. 2000 STOCK OPTION PLAN (As Assumed by Cisco Systems, Inc.)</B></FONT>

<P align="center"><FONT size="2">(Full title of the Plan(s))</FONT>

<P align="center"><HR align="center" size="1" width="20%" noshade>

<P align="center"><FONT size="2"><B>John T. Chambers<BR>
President, Chief Executive Officer and Director<BR>
Cisco Systems, Inc.<BR>
300 East Tasman Drive<BR>
San Jose, California 95134-1706</B><BR>
(Name and address of agent for service)<BR>
<B>(408)&nbsp;526-4000</B><BR>
(Telephone Number, including area code, of agent for service)</FONT>

<P align="center"><HR align="center" size="1" width="20%" noshade>

<P align="center"><FONT size="2"><B>CALCULATION OF REGISTRATION FEE</B></FONT>

<P align="left"><HR align="center" size="4" width="100%" noshade>

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<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount to be</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Proposed Maximum</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Proposed Maximum</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Title of Securities to be Registered</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registered (1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering Price per Share</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Aggregate Offering Price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Registration Fee</B></FONT></TD>
</TR>
<TR>
    <TD colspan="17" align="left"><DIV style="margin-left:10px; text-indent:-10px"><HR size="1" noshade></DIV></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Psionic Software, Inc. 2000 Stock
Option Plan (as assumed by Registrant)
Cisco Systems, Inc. Common Stock,
$0.001 par value per share</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">167,408 shares</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6.16</FONT></TD>
    <TD nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,031,233.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">94.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="17" align="left"><DIV style="margin-left:10px; text-indent:-10px"><HR size="4" noshade></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">This Registration Statement shall also cover any additional shares of
Cisco Systems, Inc. Common Stock which become issuable under the Psionic
Software, Inc. 2000 Stock Option Plan (as assumed by Registrant) by reason
of any stock dividend, stock split, recapitalization or other similar
transaction effected without the Registrant&#146;s receipt of consideration
which results in an increase in the number of the outstanding shares of
Registrant&#146;s Common Stock.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Calculated solely for purposes of this offering under Rule&nbsp;457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average
exercise price of the outstanding options assumed by the Registrant.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2"></FONT>
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<P><HR noshade><P>




<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
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</TR>
<TR><TD colspan="9"><A HREF="#000"> PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">Item&nbsp;3. Incorporation of Documents by Reference</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">Item&nbsp;4. Description of Securities</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">Item&nbsp;5. Interests of Named Experts and Counsel</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">Item&nbsp;6. Indemnification of Directors and Officers</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Item&nbsp;7. Exemption from Registration Claimed</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item&nbsp;8. Exhibits</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;9. Undertakings</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008"> SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009"> EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="f86992exv5.txt">EXHIBIT 5</A></TD></TR>
<TR><TD colspan="9"><A HREF="f86992exv23w1.txt">EXHIBIT 23.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f86992exv99w1.txt">EXHIBIT 99.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f86992exv99w2.txt">EXHIBIT 99.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="f86992exv99w3.txt">EXHIBIT 99.3</A></TD></TR>
</TABLE>
</CENTER>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>






<!-- link1 " PART II" -->
<DIV align="left"><A NAME="000"></A></DIV>
<P align="center"><FONT size="2"><B>PART II</B></FONT>

<P align="center"><FONT size="2"><B>Information Required in the Registration Statement</B></FONT>

<!-- link2 "Item&nbsp;3. Incorporation of Documents by Reference" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;3. Incorporation of Documents by Reference</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cisco Systems, Inc. (the &#147;Registrant&#148;) hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the &#147;Commission&#148;):
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(a)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Registrant&#146;s Annual Report on Form&nbsp;10-K for the fiscal
year ended July&nbsp;27, 2002 filed with the Commission on September&nbsp;18,
2002 (as amended on Form&nbsp;10-K/A filed with the Commission on
November&nbsp;21, 2002), pursuant to Section&nbsp;13 of the Securities
Exchange Act of 1934, as amended (the &#147;1934 Act&#148;);</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(b)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Registrant&#146;s Quarterly Report on Form&nbsp;10-Q, filed with
the Commission on November&nbsp;21, 2002, for the period ended October
26, 2002;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(c)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Registrant&#146;s Current Reports on Form&nbsp;8-K filed with the
Commission on August&nbsp;5, 2002, August&nbsp;20, 2002, September&nbsp;18, 2002,
October&nbsp;11, 2002, October&nbsp;23, 2002, and December&nbsp;27, 2002;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(d)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Registrant&#146;s Registration Statement No.&nbsp;000-18225 on Form
8-A filed with the Commission on January&nbsp;11, 1990, together with
Amendment No.&nbsp;1 on Form&nbsp;8-A/A filed with the Commission on February
15, 1990, and including any other amendments or reports filed for
the purpose of updating such description, in which there is
described the terms, rights and provisions applicable to the
Registrant&#146;s Common Stock, and;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(e)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Registrant&#146;s Registration Statement No.&nbsp;000-18225 on Form
8-A filed with the Commission on June&nbsp;11, 1998, including any
amendments or reports filed for the purpose of updating such
description, in which there is described the terms, rights and
provisions applicable to the Registrant&#146;s Preferred Stock Purchase
Rights.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All reports and definitive proxy or information statements filed pursuant
to Section&nbsp;13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
de-registers all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
</FONT>

<!-- link2 "Item&nbsp;4. Description of Securities" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;4. Description of Securities</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>

<!-- link2 "Item&nbsp;5. Interests of Named Experts and Counsel" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;5. Interests of Named Experts and Counsel</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this prospectus, attorneys of Brobeck, Phleger &#038;
Harrison LLP and family members thereof beneficially own an aggregate of
approximately 75,854 shares of the Registrant&#146;s Common Stock.
</FONT>

<P align="center"><FONT size="2">II-1</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>



<!-- link2 "Item&nbsp;6. Indemnification of Directors and Officers" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;6. Indemnification of Directors and Officers</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;317 of the California Corporations Code authorizes a court to
award, or a corporation&#146;s board of directors to grant indemnity to directors
and officers in terms sufficiently broad to permit indemnification (including
reimbursement of expenses incurred) under certain circumstances for liabilities
arising under the Securities Act of 1933, as amended (the &#147;1933 Act&#148;). The
Registrant&#146;s Restated Articles of Incorporation, as amended, and Amended and
Restated Bylaws provide for indemnification of its directors, officers,
employees and other agents to the maximum extent permitted by the California
Corporations Code. In addition, the Registrant has entered into
Indemnification Agreements with each of its directors and officers.
</FONT>

<!-- link2 "Item&nbsp;7. Exemption from Registration Claimed" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;7. Exemption from Registration Claimed</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>

<!-- link2 "Item&nbsp;8. Exhibits" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;8. Exhibits
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Instruments Defining the Rights of Stockholders. Reference is made to Registrant&#146;s
Registration Statement No.&nbsp;000-18225 on Form&nbsp;8-A, together with the amendments and
exhibits thereto, which are incorporated herein by reference pursuant to Items 3(d) and
3(e).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion and consent of Brobeck, Phleger &#038; Harrison LLP.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of PricewaterhouseCoopers LLP, Independent Accountants.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Brobeck, Phleger &#038; Harrison LLP is contained in Exhibit&nbsp;5.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney. Reference is made to page II-4 of this Registration Statement.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Psionic Software, Inc. 2000 Stock Option Plan.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Psionic Software, Inc. Notice of Grant of Stock Option and Stock Option Agreement.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Stock Option Assumption Agreement.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<!-- link2 "Item&nbsp;9. Undertakings" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="left"><FONT size="2">Item&nbsp;9. Undertakings</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The undersigned Registrant hereby undertakes: (1)&nbsp;to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i)&nbsp;to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii)&nbsp;to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii)&nbsp;to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii)
shall not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section&nbsp;13 or Section&nbsp;15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2)&nbsp;that for the
purpose of determining any liability under the 1933 Act each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3)&nbsp;to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Psionic Software, Inc. 2000 Stock Option Plan (as assumed by Registrant).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant&#146;s
annual report pursuant to Section&nbsp;13(a) or Section&nbsp;15(d) of the 1934 Act that
is incorporated by reference into this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
</FONT>


<P align="center"><FONT size="2">II-2</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item&nbsp;6 or
otherwise, the Registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933
Act and will be governed by the final adjudication of such issue.
</FONT>



<P align="center"><FONT size="2">II-3</FONT>
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<!-- link1 " SIGNATURES" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="center"><FONT size="2"><B>SIGNATURES</B></FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form&nbsp;S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California on this
20th&nbsp;day
of January, 2003.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2"><B>Cisco Systems, Inc.</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/&nbsp;John T. Chambers</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><HR size="1" noshade>
John T. Chambers<br>
President, Chief Executive Officer and Director</FONT></TD>
</TR>
</TABLE>
</CENTER>



<P align="center"><FONT size="2"><B>POWER OF ATTORNEY</B></FONT>

<P align="left"><FONT size="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL PERSONS BY THESE PRESENTS</B>, that the undersigned officers and directors
of Cisco Systems, Inc., a California corporation, do hereby constitute and
appoint John T. Chambers, President, Chief Executive Officer and Director and
Larry R. Carter, Senior Vice President, Finance and Administration, Chief
Financial Officer, Secretary and Director, and each of them, the lawful
attorneys-in-fact and agents with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys and
agents, and any one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities Act of 1933,
as amended, and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers
granted include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this Registration
Statement, to any and all amendments, both pre-effective and post-effective,
and supplements to this Registration Statement, and to any and all instruments
or documents filed as part of or in conjunction with this Registration
Statement or amendments or supplements thereof, and each of the undersigned
hereby ratifies and confirms that all said attorneys and agents, or any one of
them, shall do or cause to be done by virtue hereof. This Power of Attorney may
be signed in several counterparts.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, each of the undersigned has executed this Power of Attorney
as of the date indicated.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
</FONT>

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    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
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    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ John T. Chambers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">President, Chief Executive Officer and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John T. Chambers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Director (Principal Executive Officer)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Senior Vice President, Finance and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Larry R. Carter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Administration, Chief
Financial</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Officer, Secretary and Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">Larry R. Carter</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
<TD align="left" valign="top"><FONT size="2">(Principal Financial
and Accounting</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Officer)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John P. Morgridge</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of the Board and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">II-4</FONT>
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<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Donald T. Valentine</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Vice Chairman of the Board and Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Carol A. Bartz</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Carol A. Bartz</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Carleton S. Fiorina</FONT><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Carleton S. Fiorina</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Dr. James F.
Gibbons</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Dr. James F. Gibbons</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Dr. John L.
Hennessy</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Dr. John L. Hennessy</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"></FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">James C. Morgan</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

<TD align="left" valign="top"><FONT size="2">January&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Arun Sarin</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Arun Sarin</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Steven M. West</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Steven M. West</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">/s/ Jerry Yang</FONT><BR>
<HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Jerry Yang</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">January&nbsp;20, 2003</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">II-5</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 " EXHIBIT INDEX" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="center"><FONT size="2">EXHIBIT INDEX</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Instruments Defining the Rights of Stockholders. Reference is made to Registrant&#146;s
Registration Statement No.&nbsp;000-18225 on Form&nbsp;8-A, together with the amendments and
exhibits thereto, which are incorporated herein by reference pursuant
to Items 3(d) and 3(e).</FONT></TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion and consent of Brobeck, Phleger &#038; Harrison LLP.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of PricewaterhouseCoopers LLP, Independent Accountants.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Brobeck, Phleger &#038; Harrison LLP is contained in Exhibit&nbsp;5.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney. Reference is made to page II-4 of this Registration Statement.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Psionic Software, Inc. 2000 Stock Option Plan.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Psionic Software, Inc. Notice of Grant of Stock Option and Stock Option Agreement.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">99.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Stock Option Assumption Agreement.</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"></FONT>




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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>3
<FILENAME>f86992exv5.txt
<DESCRIPTION>EXHIBIT 5
<TEXT>
<PAGE>
                                                                       EXHIBIT 5

             OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP

                                January 21, 2003


Cisco Systems, Inc.
170 West Tasman Drive
San Jose, California 95134-1706

      Re:   Cisco Systems, Inc. - Registration Statement for Offering of
            167,408 Shares of Common Stock

Dear Ladies and Gentlemen:

            We have acted as counsel to Cisco Systems, Inc., a California
corporation (the "Company"), in connection with the registration on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended, of
167,408 shares of the Company's common stock reserved for issuance under the
Psionic Software, Inc. 2000 Stock Option Plan as assumed by the Company (the
"Psionic Plan").

            This opinion is being furnished in accordance with the requirements
of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.

            We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company with respect to the assumption of the Psionic
Plan and the options outstanding thereunder in connection with the Company's
acquisition of Psionic Software, Inc. Based on such review, we are of the
opinion that if, as and when the shares of the Company's common stock are issued
and sold (and the consideration therefor received) pursuant to the provisions of
stock option agreements for the outstanding options assumed by the Company under
the Psionic Plan and in accordance with the Registration Statement, such shares
will be duly authorized, legally issued, fully paid and nonassessable.

            We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.

            This opinion letter is rendered as of the date first written above
and we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Psionic Plan or the shares of the Company's common stock issuable under such
plan.

                                            Very truly yours,


                                            /s/ Brobeck, Phleger & Harrison LLP
                                            BROBECK, PHLEGER & HARRISON LLP





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>f86992exv23w1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1

         CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 6, 2002, except for Note 14, as
to which the date is August 19, 2002 relating to the financial statements, which
appears in the 2002 Annual Report to Shareholders of Cisco Systems, Inc., which
is incorporated by reference in Cisco Systems, Inc.'s Annual Report on Form 10-K
for the year ended July 27, 2002. We also consent to the incorporation by
reference of our report dated August 6, 2002, relating to the financial
statement schedule, which appears in such Annual Report on Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

San Jose, California
January 20, 2003



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>f86992exv99w1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>
                                                                    Exhibit 99.1


                             PSIONIC SOFTWARE, INC.
                             2000 STOCK OPTION PLAN

      1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

            1.1   ESTABLISHMENT. The Psionic Software, Inc. 2000 Stock Option
Plan (the "PLAN") is hereby established effective as of May 30, 2000.

            1.2   PURPOSE. The purpose of the Plan is to advance the interests
of the Participating Company Group and its stockholders by providing an
incentive to attract and retain persons performing services for the
Participating Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company Group.

            1.3   TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all Options
shall be granted, if at all, within ten (10) years from the earlier of the date
the Plan is adopted by the Board or the date the Plan is duly approved by the
stockholders of the Company.

      2.    DEFINITIONS AND CONSTRUCTION.

            2.1   DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                  (a)   "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the Plan,
"BOARD" also means such Committee(s).

                  (b)   "CAUSE" shall mean any of the following: (i) the
Optionee's theft of Company property or falsification of any Participating
Company documents or records; (ii) the Optionee's improper use or disclosure of
a Participating Company's confidential or proprietary information; (iii) any
action by the Optionee which has a detrimental effect on a Participating
Company's reputation or business; (iv) the Optionee's failure or inability to
perform any reasonable assigned duties after written notice from the
Participating Company Group of, and a reasonable opportunity to cure, such
failure or inability; (v) any material breach by the Optionee of any employment
agreement between the Optionee and the Participating Company Group, which breach
is not cured pursuant to the terms of such agreement; or (vi) the Optionee's
conviction (including any plea of guilty or nolo contendere) of any criminal act
which impairs the Optionee's ability to perform his or her duties with the
Participating Company Group.

                  (c)   "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.


                                       1
<PAGE>
                  (d)   "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                  (e)   "COMPANY" means Psionic Software, Inc., a Texas
corporation, or any successor corporation thereto.

                  (f)   "CONSULTANT" means a person engaged to provide
consulting or advisory services (other than as an Employee or a Director) to a
Participating Company, provided that the identity of such person, the nature of
such services or the entity to which such services are provided would not
preclude the Company from offering or selling securities to such person pursuant
to the Plan in reliance on either the exemption from registration provided by
Rule 701 under the Securities Act or, if the Company is required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act, registration on a Form S-8
Registration Statement under the Securities Act.

                  (g)   "DIRECTOR" means a member of the Board or of the board
of directors of any other Participating Company.

                  (h)   "DISABILITY" means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                  (i)   "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in the
records of a Participating Company and, with respect to any Incentive Stock
Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a Director nor payment of a
director's fee shall be sufficient to constitute employment for purposes of the
Plan.

                  (j)   "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                  (k)   "FAIR MARKET VALUE" means, as of any date, the value of
a share of Stock or other property as determined by the Board, in its
discretion, or by the Company, in its discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                        (i)   If, on such date, the Stock is listed on a
national or regional securities exchange or market system, the Fair Market Value
of a share of Stock shall be the closing price of a share of Stock (or the mean
of the closing bid and asked prices of a share of Stock if the Stock is so
quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap
Market or such other national or regional securities exchange or market system
constituting the primary market for the Stock, as reported in The Wall Street
Journal or such


                                       2
<PAGE>
other source as the Company deems reliable. If the relevant date does not fall
on a day on which the Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall be
the last day on which the Stock was so traded prior to the relevant date, or
such other appropriate day as shall be determined by the Board, in its
discretion.

                        (ii)  If, on such date, the Stock is not listed on a
national or regional securities exchange or market system, the Fair Market Value
of a share of Stock shall be as determined by the Board in good faith without
regard to any restriction other than a restriction which, by its terms, will
never lapse.

                  (l)   "GOOD REASON" shall mean any one or more of the
following:

                        (i)   without the Optionee's express written consent,
the assignment to the Optionee of any duties, or any limitation of the
Optionee's responsibilities, substantially inconsistent with the Optionee's
positions, duties, responsibilities and status with the Participating Company
Group immediately prior to the date of the Change in Control (as defined in
Section 8 below);

                        (ii)  without the Optionee's express written consent,
the relocation of the principal place of the Optionee's employment to a location
that is more than fifty (50) miles from the Optionee's principal place of
employment immediately prior to the date of the Change in Control, or the
imposition of travel requirements substantially more demanding of the Optionee
than such travel requirements existing immediately prior to the date of the
Change in Control;

                        (iii) any failure by the Participating Company Group to
pay, or any material reduction by the Participating Company Group of the
Optionee's base salary in effect immediately prior to the date of the Change in
Control (unless reductions comparable in amount and duration are concurrently
made for all other employees of the Participating Company Group with
responsibilities, organizational level and title comparable to the Optionee's);
or

                        (iv)  any failure by the Participating Company Group to
(1) continue to provide the Optionee with the opportunity to participate, on
terms no less favorable than those in effect for the benefit of any employee
group which customarily includes a person holding the employment position or a
comparable position with the Participating Company Group then held by the
Optionee, in any benefit or compensation plans and programs, including, but not
limited to, the Participating Company Group's life, disability, health, dental,
medical, savings, profit sharing, stock purchase and retirement plans, if any,
in which the Optionee was participating immediately prior to the date of the
Change in Control, or their equivalent, or (2) provide the Optionee with all
other fringe benefits (or their equivalent) from time to time in effect for the
benefit of any employee group which customarily includes a person holding the
employment position or a comparable position with the Participating Company
Group then held by the Optionee.


                                       3
<PAGE>
                  (m)   "INCENTIVE STOCK OPTION" means an Option intended to be
(as set forth in the Option Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.

                  (n)   "INSIDER" means an officer or a Director of the Company
or any other person whose transactions in Stock are subject to Section 16 of the
Exchange Act.

                  (o)   "NONSTATUTORY STOCK OPTION" means an Option not intended
to be (as set forth in the Option Agreement) or which does not qualify as an
Incentive Stock Option.

                  (p)   "OPTION" means a right to purchase Stock (subject to
adjustment as provided in Section 4.2) pursuant to the terms and conditions of
the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory
Stock Option.

                  (q)   "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee setting forth the terms, conditions and restrictions of
the Option granted to the Optionee and any shares acquired upon the exercise
thereof. An Option Agreement may consist of a form of "Notice of Grant of Stock
Option" and a form of "Stock Option Agreement" incorporated therein by
reference, or such other form or forms as the Board may approve from time to
time.

                  (r)   "OPTIONEE" means a person who has been granted one or
more Options.

                  (s)   "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (t)   "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (u)   "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.

                  (v)   "RULE 16B-3" means Rule 16b-3 under the Exchange Act, as
amended from time to time, or any successor rule or regulation.

                  (w)   "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                  (x)   "SERVICE" means an Optionee's employment or service with
the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. An Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service. Furthermore,
an Optionee's Service with the Participating Company Group shall not be deemed
to have terminated if the Optionee takes any military leave, sick leave, or
other bona fide leave of


                                       4
<PAGE>
absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave the
Optionee's Service shall be deemed to have terminated unless the Optionee's
right to return to Service with the Participating Company Group is guaranteed by
statute or contract. Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under the Optionee's Option
Agreement. The Optionee's Service shall be deemed to have terminated either upon
an actual termination of Service or upon the corporation for which the Optionee
performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its discretion, shall determine whether the
Optionee's Service has terminated and the effective date of such termination.

                  (y)   "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.

                  (z)   "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                  (aa)  "TEN PERCENT OWNER OPTIONEE" means an Optionee who, at
the time an Option is granted to the Optionee, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
a Participating Company within the meaning of Section 422(b)(6) of the Code.

            2.2   CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

      3.    ADMINISTRATION.

            3.1   ADMINISTRATION BY THE BOARD. The Plan shall be administered by
the Board. All questions of interpretation of the Plan or of any Option shall be
determined by the Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Option.

            3.2   AUTHORITY OF OFFICERS. Any officer of a Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, determination or election which is the responsibility
of or which is allocated to the Company herein, provided the officer has
apparent authority with respect to such matter, right, obligation, determination
or election.

            3.3   POWERS OF THE BOARD. In addition to any other powers set forth
in the Plan and subject to the provisions of the Plan, the Board shall have the
full and final power and authority, in its discretion:


                                       5
<PAGE>
                  (a)   to determine the persons to whom, and the time or times
at which, Options shall be granted and the number of shares of Stock to be
subject to each Option;

                  (b)   to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;

                  (c)   to determine the Fair Market Value of shares of Stock or
other property;

                  (d)   to determine the terms, conditions and restrictions
applicable to each Option (which need not be identical) and any shares acquired
upon the exercise thereof, including, without limitation, (i) the exercise price
of the Option, (ii) the method of payment for shares purchased upon the exercise
of the Option, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with the Option or such shares, including by
the withholding or delivery of shares of stock, (iv) the timing, terms and
conditions of the exercisability of the Option or the vesting of any shares
acquired upon the exercise thereof, (v) the time of the expiration of the
Option, (vi) the effect of the Optionee's termination of Service with the
Participating Company Group on any of the foregoing, and (vii) all other terms,
conditions and restrictions applicable to the Option or such shares not
inconsistent with the terms of the Plan;

                  (e)   to approve one or more forms of Option Agreement;

                  (f)   to amend, modify, extend, cancel or renew any Option or
to waive any restrictions or conditions applicable to any Option or any shares
acquired upon the exercise thereof;

                  (g)   to accelerate, continue, extend or defer the
exercisability of any Option or the vesting of any shares acquired upon the
exercise thereof, including with respect to the period following an Optionee's
termination of Service with the Participating Company Group;

                  (h)   to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt supplements to, or alternative
versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the laws of, or to accommodate the tax
policy or custom of, foreign jurisdictions whose citizens may be granted
Options; and

                  (i)   to correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Option Agreement and to make all other
determinations and take such other actions with respect to the Plan or any
Option as the Board may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.

            3.4   ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered


                                       6
<PAGE>
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements, if any, of Rule 16b-3.

            3.5   INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

     4.    SHARES SUBJECT TO PLAN.

            4.1   MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be 1,125,000 shares and shall consist of
authorized but unissued or reacquired shares of Stock or any combination
thereof. If an outstanding Option for any reason expires or is terminated or
canceled or if shares of Stock are acquired upon the exercise of an Option
subject to a Company repurchase option and are repurchased by the Company at the
Optionee's exercise price, the shares of Stock allocable to the unexercised
portion of such Option or such repurchased shares of Stock shall again be
available for issuance under the Plan.

            4.2   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Options and in the exercise price per
share of any outstanding Options. If a majority of the shares which are of the
same class as the shares that are subject to outstanding Options are exchanged
for, converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event, as defined in Section 8.1) shares of another corporation
(the "NEW SHARES"), the Board may unilaterally amend the outstanding Options to
provide that such Options are exercisable for New Shares. In the event of any
such amendment, the number of shares subject to, and the exercise price per
share of, the outstanding Options shall be adjusted in a fair and equitable
manner as determined by the Board, in its discretion. Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to this
Section 4.2 shall be rounded down to the nearest whole number, and in no event
may the exercise price of any Option be decreased to an amount less than the par
value, if any, of the stock subject to the Option. The adjustments determined by
the Board pursuant to this Section 4.2 shall be final, binding and conclusive.


                                       7
<PAGE>
      5.    ELIGIBILITY AND OPTION LIMITATIONS.

            5.1   PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only to
Employees, Consultants, and Directors. For purposes of the foregoing sentence,
"Employees," "Consultants" and "Directors" shall include prospective Employees,
prospective Consultants and prospective Directors to whom Options are granted in
connection with written offers of an employment or other service relationship
with the Participating Company Group. Eligible persons may be granted more than
one (1) Option.

            5.2   OPTION GRANT RESTRICTIONS. Any person who is not an Employee
on the effective date of the grant of an Option to such person may be granted
only a Nonstatutory Stock Option. An Incentive Stock Option granted to a
prospective Employee upon the condition that such person become an Employee
shall be deemed granted effective on the date such person commences Service with
a Participating Company, with an exercise price determined as of such date in
accordance with Section 6.1.

            5.3   FAIR MARKET VALUE LIMITATION. To the extent that options
designated as Incentive Stock Options (granted under all stock option plans of
the Participating Company Group, including the Plan) become exercisable by an
Optionee for the first time during any calendar year for stock having a Fair
Market Value greater than One Hundred Thousand Dollars ($100,000), the portions
of such options which exceed such amount shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5.3, options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of stock shall be determined as of the time the option
with respect to such stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section 5.3, such different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such amendment to the Code.
If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this
Section 5.3, the Optionee may designate which portion of such Option the
Optionee is exercising. In the absence of such designation, the Optionee shall
be deemed to have exercised the Incentive Stock Option portion of the Option
first. Separate certificates representing each such portion shall be issued upon
the exercise of the Option.

      6.    TERMS AND CONDITIONS OF OPTIONS.

            Options shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the Board shall from
time to time establish. No Option or purported Option shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Option
Agreement. Option Agreements may incorporate all or any of the terms of the Plan
by reference and shall comply with and be subject to the following terms and
conditions:

            6.1   EXERCISE PRICE. The exercise price for each Option shall be
established in the discretion of the Board; provided, however, that (a) the
exercise price per share for an


                                       8
<PAGE>
Incentive Stock Option shall be not less than the Fair Market Value of a share
of Stock on the effective date of grant of the Option, and (b) no Incentive
Stock Option granted to a Ten Percent Owner Optionee shall have an exercise
price per share less than one hundred ten percent (110%) of the Fair Market
Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory Stock Option) may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.

            6.2   EXERCISABILITY AND TERM OF OPTIONS. Options shall be
exercisable at such time or times, or upon such event or events, and subject to
such terms, conditions, performance criteria and restrictions as shall be
determined by the Board and set forth in the Option Agreement evidencing such
Option; provided, however, that (a) no Option shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such Option,
(b) no Incentive Stock Option granted to a Ten Percent Owner Optionee shall be
exercisable after the expiration of five (5) years after the effective date of
grant of such Option, and (c) no Option granted to a prospective Employee,
prospective Consultant or prospective Director may become exercisable prior to
the date on which such person commences Service with a Participating Company.
Subject to the foregoing, unless otherwise specified by the Board in the grant
of an Option, any Option granted hereunder shall terminate ten (10) years after
the effective date of grant of the Option, unless earlier terminated in
accordance with its provisions.

            6.3   PAYMENT OF EXERCISE PRICE.

                  (a)   FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Optionee having a Fair Market Value (as
determined by the Company without regard to any restrictions on transferability
applicable to such stock by reason of federal or state securities laws or
agreements with an underwriter for the Company) not less than the exercise
price, (iii) by delivery of a properly executed notice together with irrevocable
instructions to a broker providing for the assignment to the Company of the
proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System) (a
"CASHLESS EXERCISE"), (iv) in the Company's sole discretion at the time the
Option is exercised, by delivery of the Optionee's promissory note in a form
approved by the Company for the aggregate exercise price, provided that, if the
Company is incorporated in the State of Delaware, the Optionee shall pay in cash
that portion of the aggregate exercise price not less than the par value of the
shares being acquired, (v) by such other consideration as may be approved by the
Board from time to time to the extent permitted by applicable law, or (vi) by
any combination thereof. The Board may at any time or from time to time, by
approval of or by amendment to the standard forms of Option Agreement described
in Section 7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.


                                       9
<PAGE>
                  (b)   LIMITATIONS ON FORMS OF CONSIDERATION.

                        (i)   TENDER OF STOCK. Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock. Unless otherwise provided by
the Board, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have
been owned by the Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company.

                        (ii)  CASHLESS EXERCISE. The Company reserves, at any
and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise.

                        (iii) PAYMENT BY PROMISSORY NOTE. No promissory note
shall be permitted if the exercise of an Option using a promissory note would be
a violation of any law, regulation or rule, including, without limitation, any
rule promulgated by the Board of Governors of the Federal Reserve System. Any
permitted promissory note shall be on such terms as the Board shall determine at
the time the Option is granted. The Board shall have the authority to permit or
require the Optionee to secure any promissory note used to exercise an Option
with the shares of Stock acquired upon the exercise of the Option or with other
collateral acceptable to the Company. Unless otherwise provided by the Board, if
the Company at any time is subject to the regulations promulgated by the Board
of Governors of the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the Company's securities,
any promissory note shall comply with such applicable regulations, and the
Optionee shall pay the unpaid principal and accrued interest, if any, to the
extent necessary to comply with such applicable regulations.

            6.4   TAX WITHHOLDING. The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable upon the exercise of an
Option, or to accept from the Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company, equal to all
or any part of the federal, state, local and foreign taxes, if any, required by
law to be withheld by the Participating Company Group with respect to such
Option or the shares acquired upon the exercise thereof. Alternatively or in
addition, in its discretion, the Company shall have the right to require the
Optionee, through payroll withholding, cash payment or otherwise, including by
means of a Cashless Exercise, to make adequate provision for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the shares acquired upon the exercise thereof. The Fair
Market Value of any shares of Stock withheld or tendered to satisfy any such tax
withholding obligations shall not exceed the amount determined by the applicable
minimum statutory withholding rates. The Company shall have no obligation to
deliver shares of Stock or to release shares of Stock from an escrow established
pursuant to the Option Agreement until the Participating Company Group's tax
withholding obligations have been satisfied by the Optionee.


                                       10
<PAGE>
            6.5   REPURCHASE RIGHTS. Shares issued under the Plan may be subject
to a right of first refusal, one or more repurchase options, or other conditions
and restrictions as determined by the Board in its discretion at the time the
Option is granted. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then exercisable, to
one or more persons as may be selected by the Company. Upon request by the
Company, each Optionee shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.

            6.6   EFFECT OF TERMINATION OF SERVICE.

                  (a)   OPTION EXERCISABILITY. Subject to earlier termination of
the Option as otherwise provided herein and unless otherwise provided by the
Board in the grant of an Option and set forth in the Option Agreement, an Option
shall be exercisable after an Optionee's termination of Service only during the
applicable time period determined in accordance with this Section 6.6 and
thereafter shall terminate:

                        (i)   DISABILITY. If the Optionee's Service with the
Participating Company Group terminates because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of twelve (12) months (or such other period of time as determined by
the Board, in its discretion) after the date on which the Optionee's Service
terminated, but in any event no later than the date of expiration of the
Option's term as set forth in the Option Agreement evidencing such Option (the
"OPTION EXPIRATION DATE").

                        (ii)  DEATH. If the Optionee's Service with the
Participating Company Group terminates because of the death of the Optionee, the
Option, to the extent unexercised and exercisable on the date on which the
Optionee's Service terminated, may be exercised by the Optionee's legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee's death at any time prior to the expiration of twelve
(12) months (or such other period of time as determined by the Board, in its
discretion) after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date. The Optionee's Service shall
be deemed to have terminated on account of death if the Optionee dies within
three (3) months (or such other period of time as determined by the Board, in
its discretion) after the Optionee's termination of Service.

                        (iii) OTHER TERMINATION OF SERVICE. If the Optionee's
Service with the Participating Company Group terminates for any reason, except
Disability or death, the Option, to the extent unexercised and exercisable by
the Optionee on the date on which the Optionee's Service terminated, may be
exercised by the Optionee at any time prior to the expiration of three (3)
months (or such other period of time as determined by the Board, in its
discretion) after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date.


                                       11
<PAGE>
                  (b)   EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding
the foregoing, if the exercise of an Option within the applicable time periods
set forth in Section 6.6(a) is prevented by the provisions of Section 10 below,
the Option shall remain exercisable until three (3) months (or such longer
period of time as determined by the Board, in its discretion) after the date the
Optionee is notified by the Company that the Option is exercisable, but in any
event no later than the Option Expiration Date.

                  (c)   EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(B).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 6.6(a) of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.

            6.7   TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, an Option shall be exercisable only by the Optionee or the Optionee's
guardian or legal representative. No Option shall be assignable or transferable
by the Optionee, except by will or by the laws of descent and distribution.
Notwithstanding the foregoing, to the extent permitted by the Board, in its
discretion, and set forth in the Option Agreement evidencing such Option, a
Nonstatutory Stock Option shall be assignable or transferable subject to the
applicable limitations, if any, described in Rule 701 under the Securities Act,
and the General Instructions to Form S-8 Registration Statement under the
Securities Act.

      7.    STANDARD FORMS OF OPTION AGREEMENT.

            7.1   OPTION AGREEMENT. Unless otherwise provided by the Board at
the time the Option is granted, an Option shall comply with and be subject to
the terms and conditions set forth in the form of Option Agreement approved by
the Board concurrently with its adoption of the Plan and as amended from time to
time.

            7.2   AUTHORITY TO VARY TERMS. The Board shall have the authority
from time to time to vary the terms of any standard form of Option Agreement
described in this Section 7 either in connection with the grant or amendment of
an individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement are not
inconsistent with the terms of the Plan.

      8.    CHANGE IN CONTROL.

            8.1   DEFINITIONS.

                  (a)   An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more


                                       12
<PAGE>
than fifty percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.

                  (b)   A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, a
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

            8.2   EFFECT OF CHANGE IN CONTROL ON OPTIONS. In the event of a
Change in Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under
outstanding Options or substitute for outstanding Options substantially
equivalent options for the Acquiring Corporation's stock. For purposes of this
Section 8.2, an Option shall be deemed assumed if, following the Change in
Control, the Option confers the right to purchase in accordance with its terms
and conditions, for each share of Stock subject to the Option immediately prior
to the Change in Control, the consideration (whether stock, cash or other
securities or property) to which a holder of a share of Stock on the effective
date of the Change in Control was entitled. In the event the Acquiring
Corporation elects not to assume or substitute for outstanding Options in
connection with a Change in Control, the exercisability and vesting of each
outstanding Option shall be accelerated in full as of the date ten (10) days
prior to the date of the Change in Control, provided that the Optionee's Service
has not terminated prior to such date. The exercise or vesting of any Option
that was permissible solely by reason of this Section 8.2 shall be conditioned
upon the consummation of the Change in Control. Any Options which are neither
assumed or substituted for by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in Control shall
terminate and cease to be outstanding effective as of the date of the Change in
Control. Notwithstanding the foregoing, shares acquired upon exercise of an
Option prior to the Change in Control and any consideration received pursuant to
the Change in Control with respect to such shares shall continue to be subject
to all applicable provisions of the Option Agreement evidencing such Option
except as otherwise provided in such Option Agreement. Furthermore,
notwithstanding the foregoing, if the Change in Control results from an
Ownership Change Event described in Section 8.1(a)(i) and the Company is the
surviving or continuing corporation and immediately after such Change in Control
less than fifty percent (50%) of the total combined voting power of its voting
stock is held by another corporation or by other corporations that are


                                       13
<PAGE>
members of an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the outstanding
Options shall not terminate unless the Board otherwise provides in its
discretion.

      9.    PROVISION OF INFORMATION.

            Each Optionee shall be given access to information concerning the
Company equivalent to that information generally made available to the Company's
common stockholders in their capacity as stockholders of the Company.

      10.   COMPLIANCE WITH SECURITIES LAW.

            The grant of Options and the issuance of shares of Stock upon
exercise of Options shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities.
Options may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Option may be exercised unless (a) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (b) in the opinion
of legal counsel to the Company, the shares issuable upon exercise of the Option
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

      11.   TERMINATION OR AMENDMENT OF PLAN.

            The Board may terminate or amend the Plan at any time. However,
subject to changes in applicable law, regulations or rules that would permit
otherwise, without the approval of the Company's stockholders, there shall be
(a) no increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.2),
(b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company's stockholders under any applicable law, regulation or rule. No
termination or amendment of the Plan shall affect any then outstanding Option
unless expressly provided by the Board. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Option without
the consent of the Optionee, unless such termination or amendment is required to
enable an Option designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any applicable law,
regulation or rule.


                                       14
<PAGE>
      12.   STOCKHOLDER APPROVAL.

            The Plan or any increase in the maximum aggregate number of shares
of Stock issuable thereunder as provided in Section 4.1 (the "AUTHORIZED
SHARES") shall be approved by the stockholders of the Company within twelve (12)
months of the date of adoption thereof by the Board. Options granted prior to
stockholder approval of the Plan or in excess of the Authorized Shares
previously approved by the stockholders shall become exercisable no earlier than
the date of stockholder approval of the Plan or such increase in the Authorized
Shares, as the case may be.


                                       15

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>f86992exv99w2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.2

                             PSIONIC SOFTWARE, INC.
                         NOTICE OF GRANT OF STOCK OPTION
                                   (STANDARD)

      ________________________ (the "Optionee") has been granted an option (the
"Option") to purchase certain shares of Common Stock of Psionic Software, Inc.
pursuant to Psionic Software, Inc. 2000 Stock Option Plan (the "Plan"), as
follows:

         DATE OF OPTION GRANT:          __________________ , _______

         NUMBER OF OPTION SHARES:       ___________________

         EXERCISE PRICE:                $__________________ per share

         INITIAL VESTING DATE:          __________________ , _______

         OPTION EXPIRATION DATE:        The date ten (10) years after the
                                        Date of Option Grant.

         TAX STATUS OF OPTION:          __________________ Stock Option.
                                        (Enter "Incentive" or "Nonstatutory."
                                        If blank, this Option will be a
                                        Nonstatutory Stock Option.)

         VESTED SHARES: Except as provided in the Stock Option Agreement, the
         number of Vested Shares (disregarding any resulting fractional share)
         as of any date is determined by multiplying the Number of Option Shares
         by the "Vested Ratio" determined as of such date as follows:

<TABLE>
<CAPTION>
                                                                         Vested Ratio
                                                                         ------------
<S>                                                                      <C>
Prior to Initial Vesting Date                                                 0

On Initial Vesting Date, provided the Optionee's Service has
not terminated prior to such date                                             1/4

Plus:

For each full month of the Optionee's continuous Service from
Initial Vesting Date until the Vested Ratio equals 1/1, an
additional                                                                   1/48
</TABLE>

      By their signatures below, the Company and the Optionee agree that the
Option is governed by this Notice and by the provisions of the Plan and the
Stock Option Agreement, both of which are attached to and made a part of this
document. The Optionee acknowledges receipt of a copy of the Plan and the Stock
Option Agreement, represents that the Optionee has read and is familiar with
their provisions, and hereby accepts the Option subject to all of their terms
and conditions.

<TABLE>
<CAPTION>
Psionic Software, Inc.                            Optionee
----------------------                            --------
<S>                                               <C>
By: ________________________________________
                                                  ________________________________________
                                                  Signature
Its:  ______________________________________
                                                  ________________________________________
                                                  Date
Address:  __________________________________
                                                  ________________________________________
                                                  Address
____________________________________________      ________________________________________
</TABLE>

ATTACHMENTS:      2000 Stock Option Plan, as amended through the Date of Option
                  Grant Stock Option Agreement and Exercise Notice


                                       1
<PAGE>
                             PSIONIC SOFTWARE, INC.
                             STOCK OPTION AGREEMENT
                                   (STANDARD)

            Psionic Software, Inc. has granted to the individual (the
"OPTIONEE") named in the Notice of Grant of Stock Option (the "NOTICE") to which
this Stock Option Agreement (the "OPTION AGREEMENT") is attached an option (the
"OPTION") to purchase certain shares of Stock upon the terms and conditions set
forth in the Notice and this Option Agreement. The Option has been granted
pursuant to and shall in all respects be subject to the terms and conditions of
the Psionic Software, Inc. 2000 Stock Option Plan (the "PLAN"), as amended to
the Date of Option Grant, the provisions of which are incorporated herein by
reference. By signing the Notice, the Optionee: (a) represents that the Optionee
has read and is familiar with the terms and conditions of the Notice, the Plan
and this Option Agreement, including the Right of First Refusal set forth in
Section 8, (b) accepts the Option subject to all of the terms and conditions of
the Notice, the Plan and this Option Agreement, (c) agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Notice, the Plan or this Option Agreement, and (d)
acknowledges receipt of a copy of the Notice, the Plan and this Option
Agreement.

      1.    DEFINITIONS AND CONSTRUCTION.

            1.1 DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.

            1.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

      2.    TAX CONSEQUENCES.

            2.1 TAX STATUS OF OPTION. This Option is intended to have the tax
status designated in the Notice.

                  (a) INCENTIVE STOCK OPTION. If the Notice so designates, this
Option is intended to be an Incentive Stock Option within the meaning of Section
422(b) of the Code, but the Company does not represent or warrant that this
Option qualifies as such. The Optionee should consult with the Optionee's own
tax advisor regarding the tax effects of this Option and the requirements
necessary to obtain favorable income tax treatment under Section 422 of the
Code, including, but not limited to, holding period requirements. (NOTE TO
OPTIONEE: If the Option is exercised more than three (3) months after the date
on which you cease to be an Employee (other than by reason of your death or
Disability), the Option will be treated as a Nonstatutory Stock Option and not
as an Incentive Stock Option to the extent required by Section 422 of the Code.)


                                        1
<PAGE>
                  (b) NONSTATUTORY STOCK OPTION. If the Notice so designates,
this Option is intended to be a Nonstatutory Stock Option and shall not be
treated as an Incentive Stock Option within the meaning of Section 422(b) of the
Code.

            2.2 ISO FAIR MARKET VALUE LIMITATION. If the Notice designates this
Option as an Incentive Stock Option, then to the extent that the Option
(together with all Incentive Stock Options granted to the Optionee under all
stock option plans of the Participating Company Group, including the Plan)
becomes exercisable for the first time during any calendar year for shares
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the portion of such options which exceeds such amount will be treated as
Nonstatutory Stock Options. For purposes of this Section 2.2, options designated
as Incentive Stock Options are taken into account in the order in which they
were granted, and the Fair Market Value of stock is determined as of the time
the option with respect to such stock is granted. If the Code is amended to
provide for a different limitation from that set forth in this Section 2.2, such
different limitation shall be deemed incorporated herein effective as of the
date required or permitted by such amendment to the Code. If the Option is
treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option
in part by reason of the limitation set forth in this Section 2.2, the Optionee
may designate which portion of such Option the Optionee is exercising. In the
absence of such designation, the Optionee shall be deemed to have exercised the
Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.
(NOTE TO OPTIONEE: If the aggregate Exercise Price of the Option (that is, the
Exercise Price multiplied by the Number of Option Shares) plus the aggregate
exercise price of any other Incentive Stock Options you hold (whether granted
pursuant to the Plan or any other stock option plan of the Participating Company
Group) is greater than $100,000, you should contact the Treasurer or Chief
Financial Officer of the Company to ascertain whether the entire Option
qualifies as an Incentive Stock Option.)

      3.    ADMINISTRATION.

            All questions of interpretation concerning this Option Agreement
shall be determined by the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

      4.    EXERCISE OF THE OPTION.

            4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Vesting Date and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the number of Vested Shares, as defined herein below, less the number of
shares previously acquired upon exercise of the Option, subject to the Company's
repurchase rights set forth in Section 8. In no event shall the Option be
exercisable for more shares than the Number of Option Shares. "VESTED SHARES"
shall mean the balance of the shares of Stock that have vested in the Optionee.


                                       2
<PAGE>
            4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option, the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by (i) full payment of the
aggregate Exercise Price for the number of shares of Stock being purchased and
(ii) an executed copy, if required herein, of the then current form of escrow
agreement referenced below. The Option shall be deemed to be exercised upon
receipt by the Company of such written notice, the aggregate Exercise Price,
and, if required by the Company, such executed agreement.

            4.3 PAYMENT OF EXERCISE PRICE.

                  (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash, by
check, or cash equivalent, (ii) by tender to the Company, or attestation to the
ownership, of whole shares of Stock owned by the Optionee having a Fair Market
Value (as determined by the Company without regard to any restrictions on
transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the Company) not less than
the aggregate Exercise Price, (iii) by means of a Cashless Exercise, (iv) by
means of a promissory note, if permitted by the Company at the time of exercise,
or (v) by any combination of the foregoing.

                  (b) LIMITATIONS ON FORMS OF CONSIDERATION. The use of the
methods of consideration described in Sections 4.3(a)(ii), (iii) and (iv) shall
be subject to the terms and conditions set forth in Section 6.3(b) of the Plan.

            4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, and otherwise agrees to make adequate provision for (including by
means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Participating Company Group, if any, which arise in
connection with the Option, including, without limitation, obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option, (iii) the
operation of any law or regulation providing for the imputation of interest, or
(iv) the lapsing of any restriction with respect to any shares acquired upon
exercise of the Option. The Company shall have no obligation to deliver shares
of Stock until the tax withholding obligations of the Participating Company
Group have been satisfied by the Optionee.


                                       3
<PAGE>
            4.5 CERTIFICATE REGISTRATION. Except in the event the Exercise Price
is paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, in the names of the heirs of the Optionee.

            4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

            4.7 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

      5.    NONTRANSFERABILITY OF THE OPTION.

            The Option may be exercised during the lifetime of the Optionee only
by the Optionee or the Optionee's guardian or legal representative and may not
be assigned or transferred in any manner except by will or by the laws of
descent and distribution. Following the death of the Optionee, the Option, to
the extent provided in the Plan, may be exercised by the Optionee's legal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

      6.    TERMINATION OF THE OPTION.

            The Option shall terminate and may no longer be exercised on the
first to occur of (a) the Option Expiration Date, (b) the last date for
exercising the Option following termination of the Optionee's Service as
described in the Plan, or (c) a Change in Control to the extent provided in the
Plan.


                                       4
<PAGE>
      7.    RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

            The Optionee shall have no rights as a stockholder with respect to
any shares covered by the Option until the date of the issuance of a certificate
for the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). No adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date such certificate
is issued, except as provided in Section 4.2 of the Plan. If the Optionee is an
Employee, the Optionee understands and acknowledges that, except as otherwise
provided in a separate, written employment agreement between a Participating
Company and the Optionee, the Optionee's employment is "at will" and is for no
specified term. Nothing in this Option Agreement shall confer upon the Optionee
any right to continue in the Service of a Participating Company or interfere in
any way with any right of the Participating Company Group to terminate the
Optionee's Service as an Employee or Consultant, as the case may be, at any
time.

      8.    RIGHT OF FIRST REFUSAL.

            8.1 GRANT OF RIGHT OF FIRST REFUSAL. Except as provided in Section
8.7 below, in the event the Optionee, the Optionee's legal representative, or
other holder of shares acquired upon exercise of the Option proposes to sell,
exchange, transfer, pledge, or otherwise dispose of any shares acquired upon
exercise of the Option (the "TRANSFER SHARES") to any person or entity,
including, without limitation, any stockholder of a Participating Company, the
Company shall have the right to repurchase the Transfer Shares under the terms
and subject to the conditions set forth in this Section 8 (the "RIGHT OF FIRST
REFUSAL").

            8.2 NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
the Transfer Shares, the Optionee shall deliver written notice (the "TRANSFER
NOTICE") to the Company describing fully the proposed transfer, including the
number of Transfer Shares, the name and address of the proposed transferee (the
"PROPOSED TRANSFEREE") and, if the transfer is voluntary, the proposed transfer
price, and containing such information necessary to show the bona fide nature of
the proposed transfer. In the event of a bona fide gift or involuntary transfer,
the proposed transfer price shall be deemed to be the Fair Market Value of the
Transfer Shares, as determined by the Board in good faith. If the Optionee
proposes to transfer any Transfer Shares to more than one Proposed Transferee,
the Optionee shall provide a separate Transfer Notice for the proposed transfer
to each Proposed Transferee. The Transfer Notice shall be signed by both the
Optionee and the Proposed Transferee and must constitute a binding commitment of
the Optionee and the Proposed Transferee for the transfer of the Transfer Shares
to the Proposed Transferee subject only to the Right of First Refusal.

            8.3 BONA FIDE TRANSFER. If the Chief Executive Officer of the
Company determines that the information provided by the Optionee in the Transfer
Notice is insufficient to establish the bona fide nature of a proposed voluntary
transfer, the Company shall give the Optionee written notice of the Optionee's
failure to comply with the procedure described in this Section 8, and the
Optionee shall have no right to transfer the Transfer Shares without first


                                       5
<PAGE>
complying with the procedure described in this Section 8. The Optionee shall not
be permitted to transfer the Transfer Shares if the proposed transfer is not
bona fide.

            8.4 EXERCISE OF RIGHT OF FIRST REFUSAL. If the Chief Executive
Officer of the Company determines the proposed transfer to be bona fide, the
Company shall have the right to purchase all or a portion of the Transfer Shares
at the purchase price and on the terms set forth in the Transfer Notice by
delivery to the Optionee of a notice of exercise of the Right of First Refusal
within thirty (30) days after the date the Transfer Notice is delivered to the
Company. The Company's exercise or failure to exercise the Right of First
Refusal with respect to any proposed transfer described in a Transfer Notice
shall not affect the Company's right to exercise the Right of First Refusal with
respect to any proposed transfer described in any other Transfer Notice, whether
or not such other Transfer Notice is issued by the Optionee or issued by a
person other than the Optionee with respect to a proposed transfer to the same
Proposed Transferee. If the Company exercises the Right of First Refusal, the
Company and the Optionee shall thereupon consummate the sale of the Transfer
Shares to the Company on the terms set forth in the Transfer Notice within sixty
(60) days after the date the Transfer Notice is delivered to the Company (unless
a longer period is offered by the Proposed Transferee); provided, however, that
in the event the Transfer Notice provides for the payment for the Transfer
Shares other than in cash, the Company shall have the option of paying for the
Transfer Shares by the present value cash equivalent of the consideration
described in the Transfer Notice as reasonably determined by the Company. For
purposes of the foregoing, cancellation of any indebtedness of the Optionee to
any Participating Company shall be treated as payment to the Optionee in cash to
the extent of the unpaid principal and any accrued interest canceled.

            8.5 FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL. If the Company fails
to exercise the Right of First Refusal in full (or to such lesser extent as the
Company and the Optionee otherwise agree) within the period specified in Section
8.4 above, the Optionee may conclude a transfer to the Proposed Transferee of
the Transfer Shares on the terms and conditions described in the Transfer
Notice, provided such transfer occurs not later than ninety (90) days following
delivery to the Company of the Transfer Notice. The Company shall have the right
to demand further assurances from the Optionee and the Proposed Transferee (in a
form satisfactory to the Company) that the transfer of the Transfer Shares was
actually carried out on the terms and conditions described in the Transfer
Notice. No Transfer Shares shall be transferred on the books of the Company
until the Company has received such assurances, if so demanded, and has approved
the proposed transfer as bona fide. Any proposed transfer on terms and
conditions different from those described in the Transfer Notice, as well as any
subsequent proposed transfer by the Optionee, shall again be subject to the
Right of First Refusal and shall require compliance by the Optionee with the
procedure described in this Section 8.

            8.6 TRANSFEREES OF TRANSFER SHARES. All transferees of the Transfer
Shares or any interest therein, other than the Company, shall be required as a
condition of such transfer to agree in writing (in a form satisfactory to the
Company) that such transferee shall receive and hold such Transfer Shares or
interest therein subject to all of the terms and conditions of this Option
Agreement, including this Section 8 providing for the Right of First Refusal
with respect to any subsequent transfer. Any sale or transfer of any shares
acquired upon exercise of the Option shall be void unless the provisions of this
Section 8 are met.


                                       6
<PAGE>
            8.7 TRANSFERS NOT SUBJECT TO RIGHT OF FIRST REFUSAL. The Right of
First Refusal shall not apply to any transfer or exchange of the shares acquired
upon exercise of the Option if such transfer or exchange is in connection with
an Ownership Change Event. If the consideration received pursuant to such
transfer or exchange consists of stock of a Participating Company, such
consideration shall remain subject to the Right of First Refusal unless the
provisions of Section 8.9 below result in a termination of the Right of First
Refusal.

            8.8 ASSIGNMENT OF RIGHT OF FIRST REFUSAL. The Company shall have the
right to assign the Right of First Refusal at any time, whether or not there has
been an attempted transfer, to one or more persons as may be selected by the
Company.

            8.9 EARLY TERMINATION OF RIGHT OF FIRST REFUSAL. The other
provisions of this Option Agreement notwithstanding, the Right of First Refusal
shall terminate and be of no further force and effect upon (a) the occurrence of
a Change in Control, unless the Acquiring Corporation assumes the Company's
rights and obligations under the Option or substitutes a substantially
equivalent option for the Acquiring Corporation's stock for the Option, or (b)
the existence of a public market for the class of shares subject to the Right of
First Refusal. A "PUBLIC MARKET" shall be deemed to exist if (i) such stock is
listed on a national securities exchange (as that term is used in the Exchange
Act) or (ii) such stock is traded on the over-the-counter market and prices
therefor are published daily on business days in a recognized financial journal.

      9.    ESCROW.

            9.1 ESTABLISHMENT OF ESCROW. To ensure that shares securing any
promissory note will be available for repurchase, the Company may require the
Optionee to deposit the certificate evidencing the shares which the Optionee
purchases upon exercise of the Option with an agent designated by the Company
under the terms and conditions of an escrow agreement approved by the Company.
If the Company does not require such deposit as a condition of exercise of the
Option, the Company reserves the right at any time to require the Optionee to so
deposit the certificate in escrow. Upon the occurrence of an Ownership Change
Event or a change, as described in Section 4.2 of the Plan, in the character or
amount of any of the outstanding stock of the corporation the stock of which is
subject to the provisions of this Option Agreement, any and all new, substituted
or additional securities or other property to which the Optionee is entitled by
reason of the Optionee's ownership of shares of Stock acquired upon exercise of
the Option that remain, following such Ownership Change Event or change
described in Section 4.2 of the Plan, subject to any security interest held by
the Company shall be immediately subject to the escrow to the same extent as
such shares of Stock immediately before such event. The Company shall bear the
expenses of the escrow.

            9.2 DELIVERY OF SHARES TO OPTIONEE. As soon as practicable after
full repayment of any promissory note secured by the shares or other property
held in escrow, the escrow agent shall deliver to the Optionee the shares and
any other property no longer securing any promissory note.


                                       7
<PAGE>
            9.3 NOTICES AND PAYMENTS. In the event the shares and any other
property held in escrow are subject to the Company's exercise of the Right of
First Refusal, the notices required to be given to the Optionee shall be given
to the escrow agent, and any payment required to be given to the Optionee shall
be given to the escrow agent. Within thirty (30) days after payment by the
Company, the escrow agent shall deliver the shares and any other property which
the Company has purchased to the Company and shall deliver the payment received
from the Company to the Optionee.

      10.   STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT.

            If, from time to time, there is any stock dividend, stock split or
other change, as described in Section 4.2 of the Plan, in the character or
amount of any of the outstanding stock of the corporation the stock of which is
subject to the provisions of this Option Agreement, then in such event any and
all new, substituted or additional securities to which the Optionee is entitled
by reason of the Optionee's ownership of the shares acquired upon exercise of
the Option shall be immediately subject to the Right of First Refusal and any
security interest held by the Company with the same force and effect as the
shares subject to the such restrictions immediately before such event.

      11.   NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

            The Optionee shall dispose of the shares acquired pursuant to the
Option only in accordance with the provisions of this Option Agreement. In
addition, if the Notice designates this Option as an Incentive Stock Option, the
Optionee shall (a) promptly notify the Treasurer or Chief Financial Officer of
the Company if the Optionee disposes of any of the shares acquired pursuant to
the Option within one (1) year after the date the Optionee exercises all or part
of the Option or within two (2) years after the Date of Option Grant and (b)
provide the Company with a description of the circumstances of such disposition.
Until such time as the Optionee disposes of such shares in a manner consistent
with the provisions of this Option Agreement, unless otherwise expressly
authorized by the Company, the Optionee shall hold all shares acquired pursuant
to the Option in the Optionee's name (and not in the name of any nominee) for
the one-year period immediately after the exercise of the Option and the
two-year period immediately after Date of Option Grant. At any time during the
one-year or two-year periods set forth above, the Company may place a legend on
any certificate representing shares acquired pursuant to the Option requesting
the transfer agent for the Company's stock to notify the Company of any such
transfers. The obligation of the Optionee to notify the Company of any such
transfer shall continue notwithstanding that a legend has been placed on the
certificate pursuant to the preceding sentence.

      12.   LEGENDS.

            The Company may at any time place legends referencing the Right of
First Refusal and any applicable federal, state or foreign securities law
restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Optionee shall, at the request of the
Company, promptly present to the Company any and all certificates representing
shares acquired pursuant to the Option in the possession of the Optionee in
order to


                                       8
<PAGE>
carry out the provisions of this Section. Unless otherwise specified by the
Company, legends placed on such certificates may include, but shall not be
limited to, the following:

            12.1 "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."

            12.2 "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET
FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH
HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THIS CORPORATION."

            12.3 If the Notice designates this Option as an Incentive Stock
Option: "THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION
TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED
IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("ISO"). IN
ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES
SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT LATER OF TWO YEARS AFTER THE DATE OF
OPTION GRANT OR ONE YEAR AFTER THE DATE OF EXERCISE HERE]. SHOULD THE REGISTERED
HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX
TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION
IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE
INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF
ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE."

      13.   LOCK-UP AGREEMENT.

            The Optionee hereby agrees that in the event of any underwritten
public offering of stock, including an initial public offering of stock, made by
the Company pursuant to an effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the


                                       9
<PAGE>
registration statement to be filed in connection with such public offering. The
foregoing limitation shall not apply to shares registered in the public offering
under the Securities Act.

      14.   RESTRICTIONS ON TRANSFER OF SHARES.

            No shares acquired upon exercise of the Option may be sold,
exchanged, transferred (including, without limitation, any transfer to a nominee
or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed
of, including by operation of law, in any manner which violates any of the
provisions of this Option Agreement and any such attempted disposition shall be
void. The Company shall not be required (a) to transfer on its books any shares
which will have been transferred in violation of any of the provisions set forth
in this Option Agreement or (b) to treat as owner of such shares or to accord
the right to vote as such owner or to pay dividends to any transferee to whom
such shares will have been so transferred.

      15.   MISCELLANEOUS PROVISIONS.

            15.1 BINDING EFFECT. Subject to the restrictions on transfer set
forth herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

            15.2 TERMINATION OR AMENDMENT. The Board may terminate or amend the
Plan or the Option at any time; provided, however, that except as provided in
the Plan in connection with a Change in Control, no such termination or
amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Optionee unless such termination or amendment is
necessary to comply with any applicable law or government regulation or is
required to enable the Option, if designated an Incentive Stock Option in the
Notice, to qualify as an Incentive Stock Option. No amendment or addition to
this Option Agreement shall be effective unless in writing.

            15.3 NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery or upon deposit in the United States Post
Office, by registered or certified mail, with postage and fees prepaid,
addressed to the other party at the address shown below that party's signature
or at such other address as such party may designate in writing from time to
time to the other party.

            15.4 INTEGRATED AGREEMENT. The Notice, this Option Agreement and the
Plan constitute the entire understanding and agreement of the Optionee and the
Participating Company Group with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or
provided for herein or therein. To the extent contemplated herein or therein,
the provisions of the Notice and the Option Agreement shall survive any exercise
of the Option and shall remain in full force and effect.


                                       10
<PAGE>
            15.5 APPLICABLE LAW. This Option Agreement shall be governed by the
laws of the State of Texas as such laws are applied to agreements between Texas
residents entered into and to be performed entirely within the State of Texas.

            15.6 COUNTERPARTS. The Notice may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


                                       11
<PAGE>
(TM)    Incentive Stock Option           Optionee:
                                                   -----------------------------
(TM)    Nonstatutory Stock Option
                                               Date: ---------------------------

                          STOCK OPTION EXERCISE NOTICE
                                   (STANDARD)

Psionic Software, Inc.
Attention: Treasurer or Chief Financial Officer

--------------------------------
--------------------------------

Ladies and Gentlemen:

      1.    OPTION. I was granted an option (the "OPTION") to purchase shares of
the common stock (the "SHARES") of Psionic Software, Inc. (the "COMPANY")
pursuant to the Company's 2000 Stock Option Plan (the "PLAN"), my Notice of
Grant of Stock Option (the "NOTICE") and my Stock Option Agreement (the "OPTION
AGREEMENT") as follows:

                  Grant Number:
                                                     --------------------------

                  Date of Option Grant:
                                                     --------------------------

                  Number of Option Shares:
                                                     --------------------------

                  Exercise Price per Share:          $
                                                      -------------------------

      2.    EXERCISE OF OPTION. I hereby elect to exercise the Option to
purchase the following number of Shares, all of which are Vested Shares in
accordance with the Notice and the Option Agreement:

                  Total Shares Purchased:
                                                     --------------------------

                  Total Exercise Price
                  (Total Shares  X  Price per Share) $
                                                      -------------------------

      3.    PAYMENTS. I enclose payment in full of the total exercise price for
the Shares in the following form(s), as authorized by my Option Agreement:

                  (TM)    Cash:                      $
                                                       -------------------------

                  (TM)    Check:                     $
                                                      --------------------------

                  (TM)    Tender of Company Stock:   Contact Plan Administrator

                  (TM)    Promissory Note:           Contact Plan Administrator

      4.    TAX WITHHOLDING. I authorize payroll withholding and otherwise will
make adequate provision for the federal, state, local and foreign tax
withholding obligations of the Company, if any, in connection with the Option.


                                        1
<PAGE>
      5.    OPTIONEE INFORMATION.

                  My address is:
                                 -----------------------------------------------

                                 -----------------------------------------------

                  My Social Security Number is:
                                                --------------------------------

      6.    NOTICE OF DISQUALIFYING DISPOSITION. If the Option is an Incentive
Stock Option, I agree that I will promptly notify the Treasurer or Chief
Financial Officer of the Company if I transfer any of the Shares within one (1)
year from the date I exercise all or part of the Option or within two (2) years
of the Date of Option Grant.

      7.    BINDING EFFECT. I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement, including the Right of First Refusal set forth therein, to all
of which I hereby expressly assent. This Agreement shall inure to the benefit of
and be binding upon the my heirs, executors, administrators, successors and
assigns.

      8.    TRANSFER. I understand and acknowledge that the Shares have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 or Rule
701 under the Securities Act. I further understand and acknowledge that the
Company is under no obligation to register the Shares. I understand that the
certificate or certificates evidencing the Shares will be imprinted with legends
which prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to the
Company. I am aware that Rule 144 under the Securities Act, which permits
limited public resale of securities acquired in a nonpublic offering, is not
currently available with respect to the Shares and, in any event, is available
only if certain conditions are satisfied. I understand that any sale of the
Shares that might be made in reliance upon Rule 144 may only be made in limited
amounts in accordance with the terms and conditions of such rule and that a copy
of Rule 144 will be delivered to me upon request.

      I understand that I am purchasing the Shares pursuant to the terms of the
Plan, the Notice and my Option Agreement, copies of which I have received and
carefully read and understand.

                                                    Very truly yours,

                                                    ----------------------------
                                                    (Signature)

Receipt of the above is hereby acknowledged.

Psionic Software, Inc.

By:
     ------------------------------------------------

Title:
        ---------------------------------------------

Dated:
        ---------------------------------------------


                                        2


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>7
<FILENAME>f86992exv99w3.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.3

                               CISCO SYSTEMS, INC.

                        STOCK OPTION ASSUMPTION AGREEMENT
                  PSIONIC SOFTWARE, INC. 2000 STOCK OPTION PLAN

OPTIONEE:((First_Name))((Last_Name)),

            STOCK OPTION ASSUMPTION AGREEMENT effective as of the 20th day of
December, 2002 by Cisco Systems, Inc., a California corporation ("Cisco").

            WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of common stock of Psionic Software,
Inc., a Delaware corporation ("Psionic"), which were granted to Optionee
pursuant to the Psionic Software, Inc. 2000 Stock Option Plan (the "Plan") and
are each evidenced by a Notice of Grant of Stock Option and Stock Option
Agreement (together the "Option Agreement"), with any shares purchased under
such options to be subject to the terms and conditions of the applicable Option
Agreement.

            WHEREAS, Psionic has been acquired by Cisco (the "Merger") pursuant
to an Agreement and Plan of Merger and Reorganization dated October 21, 2002
(the "Merger Agreement") which requires Cisco to assume all obligations of
Psionic under each outstanding option under the Plan upon the consummation of
the Merger and to issue to the holder of each such outstanding option an
agreement evidencing such assumption of the option.

            WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.139780
shares of Cisco common stock, par value $0.001 per share ("Cisco Stock") for
each outstanding share of share of Psionic common stock ("Psionic Stock").

            WHEREAS, the purpose of this Agreement is to evidence the assumption
by Cisco of the outstanding options held by Optionee at the time of the
consummation of the Merger (the "Effective Time") and to reflect certain
adjustments to Optionee's outstanding options which have become necessary in
connection with their assumption by Cisco.

            NOW, THEREFORE, it is hereby agreed as follows:

            1. The number of shares of Psionic Stock subject to the option held
by Optionee immediately prior to the Effective Time (the "Psionic Option") 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 Psionic under each
Psionic Option. In connection with such assumption, the number of shares of
Cisco Stock purchasable under each Psionic 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 Psionic
Option hereby assumed shall be as specified for that option below, and the
adjusted exercise price payable per share of Cisco Stock under the assumed
Psionic Option shall also be as indicated for that option below.
<PAGE>
<TABLE>
<CAPTION>
                PSIONIC STOCK OPTIONS                                       CISCO ASSUMED OPTIONS
----------------------------------------------------          ----------------------------------------------
 Number of Shares of                Exercise Price            Number of Shares of          Adjusted Exercise
Psionic Common Stock                   per Share               Cisco Common Stock           Price per Share
--------------------              ------------------          -------------------          -----------------
<S>                               <C>                         <C>                          <C>
 ((Psionic_Shares))               $((Psionic_Price))            ((Cisco_Shares))            $((Cisco_Price))
</TABLE>

            2. The intent of the foregoing adjustments to each assumed Psionic
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 substantially the same as (and in no event
greater than) the spread which existed, immediately prior to the Merger, between
the then aggregate fair market value of the Psionic Stock subject to the Psionic
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 Psionic Option
immediately prior to the Merger.

            3. The following provisions shall govern each Psionic Option hereby
assumed by Cisco:

                  (a) Unless the context otherwise requires, all references in
      the Option Agreement and the Plan shall be adjusted as follows: (i) all
      references to the "Company" shall mean Cisco, (ii) all references to
      "Plan" shall mean the Psionic, Inc. 2000 Stock Option Plan as assumed
      pursuant to the Merger Agreement, (iii) all references to "Stock" shall
      mean the common stock of Cisco, par value $0.001 per share, (iv) all
      references to "Option Shares" shall mean the shares of Cisco common stock
      subject to the assumed Psionic Option, (v) all references to "Board" or
      "Board of Directors" shall mean the Board of Directors of Cisco and (vi)
      all references 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
      Psionic Option and all other provisions which govern either the exercise
      or the termination of the assumed Psionic Option shall remain the same as
      set forth in the Option Agreement applicable to that option, and the
      provisions of the Plan and the Option Agreement shall accordingly govern
      and control Optionee's rights to purchase Cisco Stock under the assumed
      Psionic Option.

                  (c) Pursuant to the terms of the applicable Option Agreements
      (as may have been modified in connection with the Merger) and the Plan,
      none of the assumed Psionic Options shall vest or become exercisable on an
      accelerated basis upon the consummation of the Merger. Accordingly, each
      Psionic Option assumed by Cisco shall continue to vest and become
      exercisable for any shares of


                                       2
<PAGE>
      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 of Cisco Stock subject to each such installment shall be
      adjusted to reflect the Exchange Ratio.

                  (d) For purposes of applying any and all provisions of the
      Option Agreement and/or the Plan relating to Optionee's period of Service
      with Psionic or its parent and subsidiary corporations, Optionee shall be
      deemed to continue in such Service status for so long as Optionee renders
      services to Cisco or any present or future majority-owned Cisco subsidiary
      in the capacity of an employee, consultant or board member. Accordingly,
      the provisions of the Option Agreement governing the termination of the
      assumed Psionic Options and the limited period during which those options
      may be exercised following Optionee's cessation of Service shall hereafter
      be applied on the basis of Optionee's cessation of Service in such
      capacity with Cisco and its majority-owned subsidiaries. Each assumed
      Psionic Option shall accordingly terminate upon the expiration of the
      designated time period following Optionee's cessation of Service set forth
      in the Option Agreement for that option, as measured from the date of
      Optionee's cessation of Service in such capacity with Cisco and its
      majority-owned subsidiaries.

                  (e) The adjusted exercise price payable for the Cisco Stock
      subject to each assumed Psionic Option shall be payable in any of the
      forms authorized under the Option Agreement applicable to that option.

                  (f) In order to exercise each assumed Psionic 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.
                           170 West Tasman Drive
                           MS 11-3
                           San Jose, CA 95134
                           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.


                                       3
<PAGE>
            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 20th day of December, 2002.

                                     CISCO SYSTEMS, INC.

                                     By:________________________________________
                                              Larry R. Carter
                                              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 Psionic Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, as applicable, and such Stock Option
Assumption Agreement.

                                          ______________________________________
                                          ((FIRST_NAME)) ((LAST_NAME)), OPTIONEE

DATED: ___________________, 2003


                                       4




</TEXT>
</DOCUMENT>
</SUBMISSION>
