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EXHIBIT 99.14
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
SUMMA FOUR, INC.
1993 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION PLAN OF AUGUST 1, 1992
1993 DIRECTOR STOCK OPTION PLAN, AS AMENDED
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 1993 Stock Incentive Plan ("1993
Plan"), the Incentive Stock Option Plan of August 1, 1992 (the "1992 Plan") and
the 1993 Director Stock Option Plan, As Amended (the "Director Plan") (each
individually the "Plan," and collectively the "Plans") and are each evidenced by
a Stock Option Agreement (the "Option Agreement") between Summa Four and
Optionee.
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.
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
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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 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
Option Agreement and in the relevant Plan (as incorporated into such 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 Option Agreement applicable to that option, and the provisions
of the Option Agreement shall accordingly govern and control Optionee's
rights under this Agreement to purchase Cisco Stock.
(c) Pursuant to the terms of the Option Agreement, the assumed Summa
Four option shall VEST AND BECOME FULLY EXERCISABLE on an accelerated basis
upon the consummation of the Merger. Each Summa Four Option, as so
accelerated, shall be assumed by ▇▇▇▇▇ as of the Effective Time.
(d) As to Options Granted under the 1993 Plan and the Director Plan.
For purposes of applying any and all provisions of the Option Agreement and
the relevant Plan relating to Optionee's status as an employee, officer or
director of, or a consultant or advisor to Summa Four, Optionee shall be
deemed to continue in such status for so long as Optionee renders services
as an employee, officer or director of, or a consultant or advisor to Cisco
or any present or future Cisco subsidiary. Accordingly, the provisions of
the Option Agreement governing the termination of the assumed Summa Four
Options
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upon Optionee's cessation of service as an employee, officer or director
of, or a consultant or advisor to Summa Four shall hereafter be applied on
the basis of Optionee's cessation of service as an employee, officer or
director of, or a consultant or advisor to Cisco and its subsidiaries, and
each assumed Summa Four 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, officer or
director of, or a consultant or advisor to Cisco and its subsidiaries.
As to Options Granted under the 1992 Plan. For purposes of applying
any and all provisions of the Option Agreement and the 1992 Plan relating
to Optionee's status as a director of Summa Four, Optionee shall be deemed
to continue in such status for so long as Optionee renders services as
director of Cisco or any present or future Cisco subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of the
assumed Summa Four Options upon Optionee's cessation of service as a
director of Summa Four shall hereafter be applied on the basis of
Optionee's cessation of service as a director of Cisco and its
subsidiaries, and each assumed Summa Four Option shall accordingly
terminate, within the designated time period in effect under the Option
Agreement for that option, following such cessation of service as a
director of Cisco and its subsidiaries.
(e) 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 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.
(f) 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 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:
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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 each of his or her Summa Four Options hereby assumed by Cisco are as
set forth in the Option Agreement, the relevant Plan and such Stock Option
Assumption Agreement.
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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)