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EXHIBIT 99.13
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SUMMA FOUR, INC.
1995 STOCK OPTION PLAN
1993 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION PLAN OF AUGUST 1, 1992
OPTIONEE:
This STOCK OPTION ASSUMPTION AGREEMENT is effective as of the 4th day of
November, 1998 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 Summa Four, Inc.,
a Delaware corporation ("Summa Four"), which were granted to Optionee under one
or more of the following option plans: the 1995 Stock Option Plan, the 1993
Stock Incentive Plan and the Incentive Stock Option Plan of August 1, 1992 (each
individually the "Plan," and collectively the "Plans") and are each evidenced by
the following agreements between Summa Four and Optionee: (i) a Stock Option
Agreement (the "Option Agreement") and (ii) that certain letter agreement dated
August 24, 1998 (the "Letter Agreement") amending the Option Agreement (and the
relevant Plan, as incorporated into the Option Agreement). The Option Agreement,
including the incorporated provisions of the relevant Plan as amended by the
Letter Agreement, shall be referred to in this document as the "Amended Option
Agreement."
WHEREAS, Summa Four has on November 4, 1998 been acquired by Cisco
through the merger of Agemo Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of Cisco, with and into Summa Four (the "Merger")
pursuant to the Agreement and Plan of Reorganization dated July 27, 1998, by and
among Cisco, Agemo Acquisition Corporation and Summa Four (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to assume
all obligations of Summa Four under all outstanding options under the Plans at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.268491 of a
share of Cisco common stock ("Cisco Stock") for each outstanding share of Summa
Four common stock ("Summa Four Stock").
WHEREAS, this Agreement is effective immediately upon the consummation
of the Merger (the "Effective Time") in order to reflect certain adjustments to
Optionee's outstanding options under the Plans which have become necessary by
reason of the assumption of those options by Cisco in connection with the
Merger.
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NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Summa Four Stock subject to the options held
by Optionee immediately prior to the Effective Time (the "Summa Four Options")
and the exercise price payable per share are set forth in Exhibit A hereto.
Cisco hereby assumes, as of the Effective Time, all the duties and obligations
of Summa Four under each of the Summa Four Options. In connection with such
assumption, the number of shares of Cisco Stock purchasable under each Summa
Four 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 Summa Four Option hereby assumed shall be as
specified for that option in attached Exhibit A, and the adjusted exercise price
payable per share of Cisco Stock under the assumed Summa Four Option shall also
be as indicated for that option in attached Exhibit A.
2. The intent of the foregoing adjustments to each assumed Summa Four
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, approximate the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Summa Four Stock subject to the Summa Four Option and the aggregate exercise
price in effect at such time under the Amended Option Agreement. Such
adjustments are also designed 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 Summa Four Option immediately
prior to the Merger.
3. The following provisions shall govern each Summa Four Option hereby
assumed by ▇▇▇▇▇:
(a) Unless the context otherwise requires, all references in
each Amended Option Agreement and in the relevant Plan (as incorporated
into such Amended Option Agreement) (i) to the "Company" or "Summa Four"
shall mean Cisco, (ii) to "Common Stock" or "Common Shares" shall mean
shares of Cisco Stock, (iii) to the "Board of Directors" or the "Board"
shall mean the Board of Directors of Cisco and (iv) to the "Committee"
shall mean the Compensation Committee of the Cisco Board of Directors.
(b) The grant date and the expiration date of each assumed Summa
Four Option and all other provisions which govern either the exercise or
the termination of the assumed Summa Four Option shall remain the same
as set forth in the Amended Option Agreement applicable to that option,
and the provisions of the Amended Option Agreement shall accordingly
govern and control Optionee's rights under this Agreement to purchase
Cisco Stock.
(c) Pursuant to the terms of the Amended Option Agreement,
because each Summa Four Option will be assumed by Cisco in connection
with the Merger, such option will NOT vest and become exercisable on an
accelerated basis because of the Merger. Each assumed Summa Four Option
shall therefore remain exercisable in accordance with the same
installment exercise schedule in effect under the applicable Amended
Option Agreement immediately prior to the Effective Time, with the
number of
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shares of Cisco Stock subject to each such installment adjusted to
reflect the Exchange Ratio. No accelerated vesting of the Summa Four
Options shall be deemed to occur by reason of the Merger.
(d) Pursuant to the terms of the Amended Option Agreement,
following the Merger, each assumed Summa Four Option shall become
immediately exercisable on an accelerated basis for any unvested shares
of Cisco Stock subject to that Option upon the termination of Optionee's
employment with Summa Four (or any successor) without Cause or upon
Optionee resignation from Summa Four (or any successor) for Good Cause
(as the terms "Cause" and "Good Cause" are defined in the Amended Option
Agreement) within one (1) year following the Effective Date.
(e) For purposes of applying any and all provisions of the
Amended Option Agreement and the relevant Plan relating to Optionee's
status as an employee of Summa Four, 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 Cisco
subsidiary. Accordingly, the provisions of the Amended Option Agreement
governing the termination of the assumed Summa Four Options upon
Optionee's cessation of service as an employee of Summa Four shall
hereafter be applied on the basis of Optionee's cessation of service as
an employee of Cisco and its subsidiaries, and each assumed Summa Four
Option shall accordingly terminate, within the designated time period in
effect under the Amended Option Agreement for that option, following
such cessation of service as an employee of Cisco and its subsidiaries.
(f) The adjusted exercise price payable for the Cisco Stock
subject to each assumed Summa Four Option shall be payable in any of the
forms authorized under the Amended 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 Summa Four Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed Summa Four 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.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Amended Option Agreement as
in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
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IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 4th day of November, 1998.
CISCO SYSTEMS, INC.
By: ____________________________________________
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 Summa Four Options hereby assumed by Cisco are as
set forth in the Amended Option Agreement, the relevant Plan and such Stock
Option Assumption Agreement.
____________________________________________
OPTIONEE
DATED: __________________, 1998
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EXHIBIT A
Optionee's Outstanding Options to Purchase Shares
of Summa Four, Inc.
Common Stock (Pre-Merger)
and
Optionee's Outstanding Options to Purchase Shares
of Cisco Systems, Inc.
Common Stock (Post-Merger)
