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EXHIBIT 99.4
MEMORANDUM
TO: Holders of Telesend, Inc. Stock Options
FROM: Cisco Systems, Inc.
DATE: March 3, 1997
RE: Assumption of Stock Options
_________________________________________________________________
As you know, Telesend, Inc. ("Telesend") was recently acquired
by Cisco Systems, Inc. ("Cisco") through a merger effected on March 3, 1997
(the "Merger").
In connection with this transaction, Cisco has assumed all of
your outstanding Telesend stock options so that those options now cover shares
of Cisco common stock. Several additional changes to your options were also
made as part of the assumption process. These changes are set forth in the
Stock Option Assumption Agreement attached hereto and may be summarized as
follows:
1. The number of shares of Cisco common stock subject to
your option has been adjusted to reflect the ratio at which your
shares of Telesend common stock were exchanged for shares of Cisco
common stock in the merger. The ratio was 0.066894 of a share of
Cisco common stock for each Telesend share (the "Exchange Ratio"). As
a result, the number of Cisco shares now subject to your option is
equal to the number of Telesend shares that were subject to your
option immediately before the Merger, multiplied by the Exchange Ratio
and rounded down to the next whole share.
2. The aggregate exercise price payable for the shares
of Cisco common stock now subject to your option is the same as the
price that was in effect for the shares of Telesend common stock
purchasable under your option immediately prior to the Merger.
However, the exercise price per share has been adjusted to reflect the
Exchange Ratio. Accordingly, the exercise price per share in effect
under your option immediately before the Merger has been divided by
0.066894 to establish the price per share payable for the Cisco common
stock.
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3. No change has been made to the vesting schedule in
effect for your option. Your Cisco option will continue to vest in
accordance with the same installment vesting schedule in effect under
your Telesend option, with the number of Cisco shares subject to each
such installment adjusted to reflect the Exchange Ratio. However, you
will now earn vesting credit not only for the period you continue in
employment or service with Telesend after the Merger but also for any
period of service you may complete with Cisco or any other Cisco
subsidiary should you subsequently transfer within the Cisco
organization.
Attached are two (2) copies of the Stock Option Assumption
Agreement pursuant to which Cisco has assumed your Telesend options with the
adjustments discussed above. Please review the agreement carefully so that you
understand your rights to acquire Cisco shares. You should contact Xxxxx
Xxxxxx of Cisco at (000) 000-0000 if you have any questions. After you have
reviewed the agreement, please sign one copy and return it to Xx. Xxxxxx in the
pre-addressed envelope enclosed.
The other copy of the Stock Option Assumption Agreement should
be attached to your existing option documentation so that you will have a
complete record of all the terms and provisions applicable to your option as
now assumed by Cisco.
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STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1~
NUMBER OF TELESEND SHARES: 2~
GRANT DATE: 4~
ORIGINAL EXERCISE PRICE PER SHARE: $ 0.40
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 3rd day of
March 1997 by Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned Optionee was previously granted the
stock option described above (the "Option") to purchase shares of the common
stock of Telesend, Inc., a California corporation ("Telesend"), pursuant to the
Telesend 1995 Stock Option Plan (the "Plan"), and such option is evidenced by a
Stock Option Agreement (the "Option Agreement") between Telesend and Optionee.
WHEREAS, Telesend has been acquired by Cisco (the "Merger"),
pursuant to (i) the Agreement and Plan of Reorganization dated as of February
18, 1997, by and among Cisco and Telesend and (ii) the Agreement of Merger
between Cisco and Telesend dated as of March 3, 1997 (collectively the "Merger
Agreements").
WHEREAS, the provisions of the Merger Agreements require Cisco
to assume all obligations of Telesend under all options outstanding under the
Plan at the consummation of the Merger and to issue the holder of each
outstanding option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreements,
the exchange ratio in effect for the Merger is 0.066894 of a share of Cisco
common stock ("Cisco Stock") for each outstanding share of Telesend common
stock (the "Exchange Ratio").
WHEREAS, this Agreement is to become effective immediately
upon the consummation of the Merger (the "Effective Time") in order to reflect
certain adjustments to the Optionee's outstanding options under the Plan which
have become necessary by reason of the assumption of those options by Cisco in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. Cisco hereby assumes, as of the Effective Time, all
the duties and obligations of Telesend under the Option and hereby agrees to
issue up to the number of shares of Cisco common stock indicated below upon (i)
the exercise of that Option in accordance with the provisions of the Option
Agreement (as supplemented hereby) and (ii) the payment of the adjusted
exercise price per share set forth below.
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TELESEND CISCO
STOCK OPTION ASSUMED OPTION
# OF SHARES # SHARES
TELESEND EXERCISE CISCO ADJUSTED EXERCISE
COMMON STOCK PRICE/SHARE COMMON STOCK PRICE/SHARE
------------ ----------- ------------ -----------
2~ $ 0.40 3~ $
2. The number of shares of Cisco Stock purchasable under
the Option hereby assumed (the "Assumed Option") and the exercise price per
share payable thereunder have been adjusted to reflect the Exchange Ratio at
which the outstanding shares of Telesend common stock have been converted into
shares of Cisco Stock on the consummation of the Merger. The intent of such
adjustments is to assure that spread between the aggregate fair market value of
the shares of Cisco Stock purchasable under the Assumed Option and the
aggregate exercise price as adjusted hereunder payable for such shares will,
immediately after the Merger, substantially equal the spread which existed
immediately prior to the Merger between the then aggregate fair market value of
the Telesend common stock subject to the Option as hereby assumed and the
aggregate exercise price in effect at such time under the Option. Such
adjustments are also designed to preserve, on a per share basis immediately
after the Merger, the same ratio of fair market value per option share to
exercise price per share which existed under the Option immediately prior to
the Merger.
3. All references to the "Company" in the Option
Agreement and in the Plan (as incorporated into such Option Agreement) shall be
deemed to refer to Cisco, all references to "Stock" shall be deemed to refer to
the shares of Cisco Stock, and all references to the "Committee" and "Board"
shall mean the Compensation Committee of the Cisco Board of Directors, and the
Cisco Board of Directors, respectively. For purposes of determining the
holding period of any shares of Cisco common stock delivered in payment of the
exercise price of the Assumed Option, the period for which such shares were
held as Telesend common stock prior to the Merger shall be taken into account.
4. The Assumed Option shall continue to have a maximum
ten (10)-year term measured from the original grant date of the Option, and all
references to the "Date of Option Grant" in the Option Agreement shall continue
to relate to that original grant date. The Assumed Option, however, shall be
subject to earlier termination in accordance with Paragraph 7 of the Option
Agreement should the Optionee's Service with Cisco terminate. However, for all
purposes of the Option Agreement, the Optionee shall be deemed to continue in
"Service" status for so long as such individual continues in the service
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of Cisco or any Cisco parent or subsidiary corporation now or hereafter
existing, including (without limitation) Telesend, as an employee, non-
employee member of the board of directors or independent consultant or advisor.
5. All notices to the Company required or permitted to
be given to the Company pursuant to the provisions of the Option Agreement
shall be given to Cisco at the following address:
Cisco Systems, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxx
6. Except to the extent specifically modified by this
Stock Option Assumption Agreement, all of the terms and conditions of the
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.
IN WITNESS WHEREOF, Cisco has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly- authorized
officer as of the 3rd day of March 1997.
CISCO SYSTEMS, INC.
By: ________________________________
Title: _____________________________
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ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities
with respect to the Option as assumed by Cisco Systems, Inc. are as set forth
in the Option Agreement, the Plan and such Stock Option Assumption Agreement.
______________________________
OPTIONEE
Dated: __________________
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