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Exhibit 99.4
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
ALTIGA NETWORKS, INC.
1998 OMNIBUS STOCK PLAN
OPTIONEE: (First Name) (Last Name),
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 29th day of March
2000 by Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Altiga Networks,
Inc., a Commonwealth of Massachusetts corporation ("Altiga"), which were granted
to Optionee under the Altiga 1998 Omnibus Stock Plan (the "Plan").
WHEREAS, each outstanding Altiga option is evidenced by a Stock Option
Agreement the ("Option Agreement"), with any shares purchased under such options
to be subject to the terms and conditions of such agreement.
WHEREAS, Altiga has been acquired by Cisco through the merger of Altiga
with Cisco (the "Merger") pursuant to the Agreement and Plan of Reorganization,
by and between Cisco and Altiga (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require the obligations of
Altiga under each outstanding option under the Plan to be assumed by Cisco at
the consummation of the Merger, and the holder of each such outstanding option
to be issued an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio (the "Exchange Ratio") in effect for the Merger is 0.44355332 of a share
of Cisco Common Stock ("Cisco Stock"), for each outstanding share of Altiga
common stock ("Altiga 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 Altiga Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "Altiga Options") and the
exercise price payable per share are set forth below. Cisco hereby assumes, as
of the Effective Time, all the duties and obligations of Altiga under each of
the Altiga Options. In connection with such assumption, the number of shares of
Cisco Stock purchasable under each Altiga Option hereby
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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 Altiga 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 Altiga Option shall also be as indicated for that option below.
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ALTIGA STOCK OPTIONS CISCO ASSUMED OPTIONS
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----------------------------- ---------------------------- --------------------------- ------------------------
# of Shares of Altiga Exercise Price # of Shares of Cisco Adjusted Exercise
Common Stock per Share Common Stock Price per Share
----------------------------- ---------------------------- --------------------------- ------------------------
(B) (C) (D) $(E)
----------------------------- ---------------------------- --------------------------- ------------------------
2. The intent of the foregoing adjustments to each assumed Altiga 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) than the spread which existed, immediately prior to the Merger,
between the then aggregate fair market value of the Altiga Stock subject to the
Altiga 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 Altiga
Option immediately prior to the Merger.
3. The following provisions shall govern each Altiga Option hereby
assumed by Cisco:
(a) Unless the context otherwise requires, all references in the
Option Agreement and, if applicable, in the Plan (as incorporated into such
Option Agreement) shall be adjusted as follows; (i) all references to the
"Company" shall mean Cisco, (ii) all references to "Share" shall mean shares of
Cisco Stock, (iii) all references to "Stock" or "Common Stock" shall mean Cisco
Stock, (iv) all references to the "Board" shall mean the Board of Directors of
Cisco and (v) 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 Altiga
Option and all other provisions which govern either the exercise or the
termination of the assumed Altiga 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 Altiga Option.
(c) Pursuant to the terms of the Option Agreement, each Altiga Option
assumed by Cisco hereunder immediately vested as to fifty (50%) percent of the
unvested shares as of the date of the merger approval.
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(d) For purposes of applying any and all provisions of the Option
Agreement and/or the Plan relating to Optionee's status as an employee of
Altiga, Optionee shall be deemed to continue in such status as an employee for
so long as Optionee renders services as an employee to Cisco or any present or
future majority-owned Cisco subsidiary. Accordingly, the provisions of the
Option Agreement governing the termination of the assumed Altiga Options shall
hereafter be applied on the basis of Optionee's cessation of employee status
with Cisco and its majority-owned subsidiaries. Each assumed Altiga Option shall
accordingly terminate, within the designated time period in effect under the
Option Agreement for that option, following such cessation of service as an
employee of Cisco and its majority-owned subsidiaries.
(e) The adjusted exercise price payable for the Cisco Stock subject
to each assumed Altiga Option shall be payable in any of the forms authorized
under the Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Cisco Stock delivered in payment
of such adjusted exercise price, the period for which such shares were held as
Altiga Stock prior to the Merger shall be taken into account.
(f) In order to exercise each assumed Altiga Option, Optionee must
deliver to Cisco a written notice of exercise in which the number of shares of
Cisco Stock to be purchased thereunder must be indicated. The exercise notice
must be accompanied by payment of the adjusted exercise price payable for the
purchased shares of Cisco Stock and should be delivered to Cisco at the
following address:
Cisco Systems, Inc.
000 Xxxx Xxxxxx Xxxxx
XX00-0
Xxx Xxxx, XX 00000
Attention: Stock Administration
4. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
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IN WITNESS WHEREOF, Cisco, Inc. has caused this Stock Option Assumption
Agreement to be executed on its behalf by its duly-authorized officer as of the
29th of March 2000.
CISCO SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Corporate Secretary
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Altiga Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, as applicable, and such Stock Option
Assumption Agreement.
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(First Name) (Last Name), OPTIONEE
DATED: , 2000
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