<PAGE> 1
As filed with the Securities and Exchange Commission on May 5, 2000
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------
CISCO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0059951
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
300 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Address of principal executive offices) (Zip Code)
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ALTIGA NETWORKS, INC.
1998 OMNIBUS STOCK PLAN
-------------------------
(Full title of the Plans)
-------------
JOHN T. CHAMBERS
PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
CISCO SYSTEMS, INC.
170 WEST TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706
(Name and address of agent for service)
(408) 526-4000
(Telephone number, including area code, of agent for service)
-------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share Price Fee
---------- ------------- --------- --------- ------------
<S> <C> <C> <C> <C>
Altiga Networks, Inc. 1998
Omnibus Stock Plan 176,070 shares $2.92 (2) $514,124.40 (2) $135.73
Common Stock, par value $0.01
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the Altiga Networks,
Inc. 1998 Omnibus Stock Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
Registrant's receipt of consideration which results in an increase in the
number of the Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the weighted average
exercise price of the outstanding options.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Cisco Systems, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 1999, filed with the Commission on September 28,
1999, as amended on Form 10-K405/A filed with the Commission on
February 3, 2000, pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "1934 Act");
(b) The Registrant's Current Reports on Form 8-K filed with the
Commission on March 16, 2000, March 27, 2000, March 28, 2000, and
April 3, 2000 and May 3, 2000;
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 30, 1999, filed with the Commission on
December 14, 1999, as amended on Form 10-Q/A filed with the
Commission on February 3, 2000 and the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended January 29,
2000, filed with the Commission on March 14, 2000;
(d) The Registrant's Registration Statement No. 000-18225 on Form 8-A
filed with the Commission on January 11, 1990, together with
Amendment No. 1 on Form 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's Common Stock, and;
(e) The Registrant's Registration Statement No. 000-18225 on Form 8-A
filed with the Commission on June 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's Preferred Stock
Purchase Rights.
All reports and definitive proxy or information statements filed
pursuant to Section 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.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
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Item 6. Indemnification of Directors and Officers
Section 317 of the California Corporations Code authorizes a
court to award, or a corporation'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 "1933
Act"). The Registrant'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.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statements No. 000-18225 on
Form 8-A, together with the amendments and exhibits thereto,
which are incorporated herein by reference pursuant to Items
3(d) and 3(e).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Altiga Networks, Inc. 1998 Omnibus Stock Plan.
99.2 Form of Stock Option Agreement.
99.3 Form of Restricted Stock Agreement.
99.4 Form of Option Assumption Agreement.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement: (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) 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) 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 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) 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) 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 Altiga Networks,
Inc. Stock Option Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 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.
II-2
<PAGE> 4
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 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.
II-3
<PAGE> 5
SIGNATURES
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 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
5th day of May, 2000.
CISCO SYSTEMS, INC.
By: /s/John T. Chambers
---------------------------------
John T. Chambers
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John T. Chambers and Larry R.
Carter, and each of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for such person and
in such person's name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue thereof.
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:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/John T. Chambers President, Chief Executive May 5, 2000
- --------------------------------- Officer and Director
John T. Chambers (Principal Executive Officer)
/s/Larry R. Carter Senior Vice President, Finance May 5, 2000
- --------------------------------- and Administration, Chief Financial
Larry R. Carter Officer and Secretary
(Principal Financial and Accounting
Officer)
/s/John P. Morgridge Chairman of the Board and May 5, 2000
- --------------------------------- Director
John P. Morgridge
/s/Donald T. Valentine Vice Chairman of the Board and May 5, 2000
- --------------------------------- Director
Donald T. Valentine
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C>
/s/James F. Gibbons Director May 5, 2000
- ---------------------------------
James F. Gibbons
/s/ Steven M. West Director May 5, 2000
- ---------------------------------
Steven M. West
/s/Edward R. Kozel Director May 5, 2000
- ---------------------------------
Edward R. Kozel
Director May _____, 2000
- ---------------------------------
Carol A. Bartz
/s/James C. Morgan Director May 5, 2000
- ---------------------------------
James C. Morgan
/s/Mary Cirillo Director May 5, 2000
- ---------------------------------
Mary Cirillo
Director May _____, 2000
- ---------------------------------
Arun Sarin
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statements No. 000-18225 on
Form 8-A, together with the amendments and exhibits thereto,
which are incorporated herein by reference pursuant to Items
3(d) and 3(e).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Altiga Networks, Inc. 1998 Omnibus Stock Plan.
99.2 Form of Stock Option Agreement.
99.3 Form of Restricted Stock Agreement.
99.4 Form of Option Assumption Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
May 5, 2000
Cisco Systems, Inc.
300 West Tasman Drive
San Jose, California 95134-1706
Re: Cisco Systems, Inc. - Registration Statement for Offering of
176,070 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
an aggregate of 176,070 shares of common stock (the "Shares") and related
stock options under the Altiga Networks, Inc. 1998 Omnibus Stock Plan (the
"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 in connection with the assumption of the Plan.
Based on such review, we are of the opinion that if, as and when the Shares are
issued and sold (and the consideration therefor received) pursuant to the
provisions of option agreements duly authorized under the 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
Plan, or the Shares.
Very truly yours,
/s/ Brobeck Phleger & Harrison LLC
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Cisco Systems, Inc. of our report dated
August 10, 1999, except as to the pooling of interest transactions as described
in Note 3b which is as of November 24, 1999, relating to the consolidated
financial statements of Cisco Systems, Inc. which appears in the Current
Report on Form 8-K/A dated February 3, 2000.
PricewaterhouseCoopers LLP
San Jose, California
April 28, 2000
<PAGE> 1
EXHIBIT 99.1
ALTIGA NETWORKS, INC.
1998 OMNIBUS STOCK PLAN
______________
1. Purpose. This Altiga Networks, Inc. 1998 Omnibus Stock Plan (the
"Plan") is intended to provide incentives (a) to the officers and other
employees of Altiga Networks, Inc. (the "Company"), its parent (if any) and any
present or future subsidiaries of the Company (collectively, "Related
Corporations") by providing them with opportunities to purchase stock in the
Company pursuant to options which qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
granted hereunder ("ISO" or "ISOs"); (b) to directors, officers, employees and
consultants of the Company and Related Corporations by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs ("Non-Qualified Option" or "Non-Qualified
Options"); and (c) to directors, officers, employees and consultants of the
Company and Related Corporations by providing them with opportunities to make
direct purchases of restricted stock in the Company ("Restricted Stock"). Both
ISOs and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code.
2. Administration of the Plan. (a) The Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board may appoint a
Compensation Committee (the "Committee") of two or more of its members to
administer the Plan. In the event the Company registers any class of any equity
security pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), each member of the Committee shall be a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act. Subject
to ratification of the grant of each Option or Restricted Stock by the Board (if
so required by applicable state law), and subject to the terms of the Plan, the
Committee, if so appointed, shall have the authority to (i) determine the
employees of the Company and Related Corporations (from among the class of
employees eligible under paragraph 3 to receive ISOs) to whom ISOs may be
granted, and to determine (from among the class of individuals and entities
eligible under paragraph 3 to receive Non-Qualified Options and Restricted
Stock) to whom Non-Qualified Options or Restricted Stock may be granted; (ii)
determine the time or times at which Options or Restricted Stock may be granted;
(iii) determine the option price of shares subject to each Option, which price
with respect to ISOs shall not be less than the minimum specified in paragraph
6, and the purchase price of Restricted Stock; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine (subject
to paragraph 7) the time or times when each Option shall become exercisable and
the duration of the exercise period; (vi) determine whether restrictions such as
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repurchase options or vesting are to be imposed on shares subject to Options and
to Restricted Stock, and the nature of such restrictions, if any; and (vii)
interpret the Plan and prescribe and rescind rules and regulations relating to
it. If the Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated as
an ISO. The interpretation and construction by the Committee of any provisions
of the Plan or of any Option or authorization or agreement for Restricted Stock
granted under it shall be final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and regulations for carrying
out the Plan as it may deem best. No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Option or Restricted Stock granted under it.
(b) The Committee may select one of its members as its chairman, and
shall hold meetings at such time and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. All references in the Plan to the Committee shall mean the Board if
there is no Committee so appointed. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members of the Committee and thereafter
directly administer the Plan.
3. Eligible Employees and Others. ISOs may be granted to any officer or
other employee of the Company or any Related Corporation. Those directors of the
Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options and Restricted Stock may be granted to any director
(whether or not an employee), officer, employee or consultant of the Company or
any Related Corporation. The Committee may take into consideration an optionee's
individual circumstances in determining whether to grant an ISO or a
Non-Qualified Option or Restricted Stock. Granting of any Option or Restricted
Stock to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Options
or Restricted Stock.
4. Stock. The stock subject to Options and Restricted Stock shall be
authorized but unissued shares of Common Stock of the Company, $.0001 par value
per share (the "Common Stock"), or shares of Common Stock re-acquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 1,000,271, subject to adjustment as provided in
paragraph 13. Any such shares may be issued as ISOs, Non-Qualified Options or
Restricted Stock so long as the aggregate number of shares so issued does not
exceed such number, as adjusted. If any Option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, or if any
Restricted Stock shall be reacquired by the Company by exercise of its
repurchase option, the shares subject to such expired or terminated Option and
reacquired shares of Restricted Stock shall again be available for grants of
Options or Restricted Stock under the Plan.
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5. Grants Under the Plan. Options or Restricted Stock may be granted
under the Plan at any time and prior to April 23, 2008. The date of grant of an
Option under the Plan will be the date specified by the Committee at the time it
awards the Option; provided, however, that such date shall not be prior to the
date of award. Any such grants of ISOs shall be subject to the receipt, within
12 months of April 23, 1998, of the approval of the Company's Stockholders as
provided in paragraph 17. The Committee shall have the right, with the consent
of the optionee, to convert an ISO granted under the Plan to a Non-Qualified
Option pursuant to paragraph 15.
6. Minimum Option Price. (a) The price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than 110 percent of the fair
market value of Common Stock on the date of grant.
(b) In no event shall the aggregate fair market value (determined at the
time the option is granted) of Common Stock for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all stock option plans of the Company and any Related Corporation)
exceed $100,000.
(c) The price per share specified in the agreement related to each
Non-Qualified Option granted under the Plan shall not be less than fifty percent
(50%) of the fair market value of a share of Common Stock on the date of such
grant.
(d) If, at the time an Option is granted under the Plan, the Company's
Common Stock is publicly traded, "fair market value" shall be determined as of
the last business day for which the prices or quotes discussed in this sentence
are available prior to the date such Option is granted and shall mean (i) the
average (on that date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded, if
such stock is then traded on a national securities exchange; or (ii) the last
reported sale price (on that date) of the Common Stock on the Nasdaq National
Market System, if the Common Stock is not then traded on a national securities
exchange; or (iii) the closing bid price (or average of bid prices) last quoted
(on that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the Nasdaq National Market
System or on a national securities exchange. However, if the Common Stock is not
publicly traded at the time an Option is granted under the Plan, "fair market
value" shall be deemed to be the fair value of the Common Stock as determined by
the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
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<PAGE> 4
7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than ten years from the date of grant or, in the case of
ISOs granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation, not more than five years from date of grant. Subject to
earlier termination as provided in paragraphs 9 and 10, the term of each ISO
shall be the term set forth in the original instrument granting such ISO, except
with respect to any part of such ISO that is converted into a Non-Qualified
Option pursuant to paragraph 15.
8. Exercise of Option. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
(a) The Option shall either be fully exercisable on the date of grant or
shall become exercisable thereafter in such installments as the Committee may
specify.
(b) Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option, unless otherwise specified by the
Committee.
(c) Each Option or installment may be exercised at any time or from time
to time, in whole or in part, for up to the total number of shares with respect
to which it is then exercisable.
(d) The Committee shall have the right to accelerate the date of
exercise of any installment and the vesting schedule imposed either on any
shares subject to any Option or on Restricted Stock; provided that the Committee
shall not accelerate the exercise date or vesting schedule of any installment of
any Option granted to any employee as an ISO (and not previously converted into
a Non-Qualified Option pursuant to paragraph 15) if such acceleration would
violate the annual vesting limitation contained in Section 422(d) of the Code
which provides generally that the aggregate fair market value (determined at the
time the option is granted) of the stock with respect to which ISOs granted to
any employee are exercisable for the first time by such employee during any
calendar year (under all plans of the Company and any Related Corporation) shall
not exceed $100,000.
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9. Termination of Employment. If an ISO optionee ceases to be employed
by the Company or any Related Corporation other than by reason of death or
disability as provided in paragraph 10, no further installments of his ISOs
shall become exercisable, and his ISOs shall terminate after the passage of 60
days from the date of termination of his employment, but in no event later than
on their specified expiration dates except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 15. Leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the employee after the
approved period of absence. Employment shall also be considered as continuing
uninterrupted during any other bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute.
Nothing in the Plan shall be deemed to give any grantee of any Option or
Restricted Stock the right to be retained in employment or other service by the
Company or any Related Corporation for any period of time. ISOs granted under
the Plan shall not be affected by any change of employment within or among the
Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. In granting any
Non-Qualified Option, the Committee may specify that such Non-Qualified Option
shall be subject to the restrictions set forth herein with respect to ISOs, or
to such other termination or cancellation provisions as the Committee may
determine.
10. Death; Disability; Dissolution. If an optionee ceases to be employed
by the Company and all Related Corporations by reason of his death, any Option
of his may be exercised, to the extent of the number of shares with respect to
which he could have exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the Option by will or by
the laws of descent and distribution, at any time prior to the earlier of the
Option's specified expiration date or 180 days from the date of the optionee's
death.
If an optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any Option held by him on the date of termination of employment, to the extent
of the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the Option's specified expiration date
or 180 days from the date of the termination of the optionee's employment. For
the purposes of the Plan, the term "disability" shall have the meaning assigned
to it in Section 22(e)(3) of the Code or any successor statute.
In the case of a partnership, corporation or other entity holding a
Non-Qualified Option, if such entity is dissolved, liquidated, becomes insolvent
or enters into a merger or acquisition with respect to which such optionee is
not the surviving entity, such Option shall terminate immediately.
11. Assignability. Subject to the provisions of this Section 11, (a) no
Option shall be transferable otherwise than by will, by the laws of descent and
distribution, or by operation of a
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"qualified domestic relations order," as that term is defined in the Code, and
(b) during the lifetime of the Optionee, rights under the Option may be
exercised only by the Optionee, the Optionee's guardian or legal representative,
or by the assignee of the Option under such a "qualified domestic relations
order." Notwithstanding the foregoing the Committee may provide for greater
transferability in the case of any Option including, without limitation,
transfer to one or more members of the Optionee's family. Unless otherwise
provided by the Committee, the conditions and criteria governing the exercise or
payment of such an Option (by way of example accelerated vesting upon death or
disability or the attainment of performance goals applicable to the Optionee)
shall following any permitted transfer continue to be determined by reference to
the Optionee and not the transferee. In no event shall ISOs awarded under the
Plan be transferable other than as permitted under the rules prescribed in or
under the Code for incentive stock options. An award that is intended to be
exempt under Rule 16b-3 under the Exchange Act or any successor rule, or that is
intended to qualify for the performance-based exception under Section 162(m) of
the Code, shall be transferable only to the extent consistent with such
exemption or qualification.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including transfer and repurchase restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The Committee may from
time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
13. Adjustments. Upon the happening of any of the following described
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided:
(a) In the event shares of Common Stock shall be sub-divided or combined
into a greater or smaller number of shares or if, upon a merger, consolidation,
reorganization, split-up, liquidation, combination, recapitalization or the like
of the Company, the shares of Common Stock shall be exchanged for other
securities of the Company or of another corporation, each optionee shall be
entitled, subject to the conditions herein stated, to purchase such number of
shares of common stock or amount of other securities of the Company or such
other corporation as were exchangeable for the number of shares of Common Stock
which such optionee would have been entitled to purchase except for such action,
and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination, or exchange.
(b) In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall at
the time be subject to option hereunder, each optionee upon exercising an Option
shall be entitled to receive (for the purchase price paid upon
6
<PAGE> 7
such exercise) the shares as to which he is exercising his Option and, in
addition thereto (at no additional cost), such number of shares of the class or
classes in which such stock dividend or dividends were declared or paid, and
such amount of cash in lieu of fractional shares, as he would have received if
he had been the holder of the shares as to which he is exercising his Option at
all times between the date of grant of such Option and the date of its exercise.
(c) Notwithstanding the foregoing, any adjustments made pursuant to
subparagraph (a) or (b) shall be made only after the Committee, after consulting
with counsel for the Company, determines whether such adjustments with respect
to ISOs will constitute a "modification" of such ISOs as that term is defined in
Section 424 of the Code, or cause any adverse tax consequences for the holders
of such ISOs. No adjustments shall be made for dividends paid in cash or in
property other than securities of the Company.
(d) No fractional shares shall actually be issued under the Plan. Any
fractional shares which, but for this subparagraph (d), would have been issued
to an optionee pursuant to an Option, shall be deemed to have been issued and
immediately sold to the Company for their fair market value, and the optionee
shall receive from the Company cash in lieu of such fractional shares.
(e) Upon the happening of any of the foregoing events described in
subparagraphs (a) or (b) above, the class and aggregate number of shares set
forth in paragraph 4 hereof which are subject to Options which previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events specified in such subparagraphs. The Committee
shall determine the specific adjustments to be made under this paragraph 13, and
subject to paragraph 2, its determination shall be conclusive.
14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either (i) in United
States dollars in cash or by check, or (ii) at the discretion of the Committee,
through delivery of shares of Common Stock having fair market value equal as of
the date of the exercise to the cash exercise price of the Option, or (iii) at
the discretion of the Committee, by delivery of the optionee's personal recourse
note bearing interest payable not less than annually at no less than 100% of the
lowest applicable Federal rate, as defined in Section 1274(d) of the Code, or
(iv) at the discretion of the Committee, by any combination of (i), (ii) and
(iii) above. If the Committee exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in clauses (ii) or
(iii) of the preceding sentence, such discretion shall be exercised in writing
at the time of the grant of the ISO in question. The holder of an Option shall
not have the rights of a shareholder with respect to the shares covered by his
Option until the date of issuance of a stock certificate to him for such shares.
Except as expressly provided above in paragraph 13 with respect to change in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificates is issued.
7
<PAGE> 8
15. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with the Plan. Nothing in the Plan shall be
deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
16. Restricted Stock. Each grant of Restricted Stock under the Plan
shall be evidenced by an instrument (a "Restricted Stock Agreement") in such
form as the Committee shall prescribe from time to time in accordance with the
Plan and shall comply with the following terms and conditions, and with such
other terms and conditions as the Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of shares of Common Stock
to be issued to an eligible person pursuant to the grant of Restricted Stock,
and the extent, if any, to which they shall be issued in exchange for cash,
other consideration, or both.
(b) Shares issued pursuant to a grant of Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise disposed of, except by will or
the laws of descent and distribution, or as otherwise determined by the
Committee in the Restricted Stock Agreement, for such period as the Committee
shall determine, from the date on which the Restricted Stock is granted (the
"Restricted Period"). The Company will have the option to repurchase the Common
Stock at such price as the Committee shall have fixed in the Restricted Stock
Agreement which option will be exercisable (i) if the participant's continuous
employment or performance of services for the Company and the Related
Corporations shall terminate prior to the expiration of the Restricted Period,
(ii) if, on or prior to the expiration of the Restricted Period or the earlier
lapse of such repurchase option, the participant has not paid to the Company an
amount equal to any federal, state, local or foreign income or other taxes which
the Company determines is required to be withheld in respect of such Restricted
Stock, or (iii) under such other circumstances as determined by the Committee in
its discretion. Such repurchase option shall be exercisable on such terms, in
such manner and during such period as shall be determined by the Committee in
the Restricted Stock Agreement. Each certificate for shares issued as Restricted
Stock shall bear an appropriate legend referring to the foregoing repurchase
option and other restrictions; shall be deposited by the stockholder with the
Company, together with a stock power endorsed in blank; or shall be evidenced in
such other manner permitted by applicable law as determined by the Committee in
its discretion. Any attempt to dispose of any such shares in contravention of
the foregoing repurchase option and
8
<PAGE> 9
other restrictions shall be null and void and without effect. If shares issued
as Restricted Stock shall be repurchased pursuant to the repurchase option
described above, the stockholder, or in the event of his death, his estate,
personal representative, or beneficiary who has acquired the Option by will or
by the laws of descent and distribution, shall forthwith deliver to the
Secretary of the Company the certificates for the shares, accompanied by such
instrument of transfer, if any, as may reasonably be required by the Secretary
of the Company. If the repurchase option described above is not exercised by the
Company, such repurchase option and the restrictions imposed pursuant to the
first sentence of this subparagraph (b) shall terminate and be of no further
force and effect.
(c) If a person who has been in continuous employment or performance of
services for the Company or a Related Corporation since the date on which
Restricted Stock was granted to him shall, while in such employment or
performance of services, die, or terminate such employment or performance of
services by reason of disability or by reason of early, normal or deferred
retirement under an approved retirement program of the Company or a Related
Corporation (or such other plan or arrangement as may be approved by the
Committee in its discretion, for this purpose) and any of such events shall
occur after the date on which the Restricted Stock was granted to him and prior
to the end of the Restricted Period, the Committee may determine to cancel the
repurchase option (and any and all other restrictions) on any or all of the
shares of Restricted Stock; and the repurchase option shall become exercisable
at such time as to the remaining shares, if any.
17. Term and Amendment of Plan. This Plan shall expire on April 23, 2008
(except as to Options and Restricted Stock outstanding on that date). The Board
may terminate or amend the Plan in any respect at any time. No amendment of the
Plan shall adversely affect in a material manner any right of any Optionee or
purchaser of Restricted Stock without his written consent, under any Option or
Restricted Stock previously granted to him. Subject to the provisions of
paragraph 5 above, Options and Restricted Stock may be granted under the Plan by
the Committee, prior to the date of stockholder approval of the Plan.
18. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options and Restricted Stock authorized under the
Plan shall be used for general corporate purposes.
19. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
20. Withholding of Additional Income Taxes. The Company, in accordance
with the Code, may, upon exercise of a Non-Qualified Option or the purchase of
Common Stock for less than its fair market value or the lapse of restrictions on
Restricted Stock or the making of a Disqualifying Disposition (as defined in
paragraph 21) require the employee to pay additional withholding taxes in
respect of the amount that is considered compensation includible in such
person's gross income.
9
<PAGE> 10
21. Notice to Company of Disqualifying Disposition. Each employee who
receives ISOs shall agree to notify the Company in writing immediately after the
employee makes a disqualifying disposition of any Common Stock received pursuant
to the exercise of an ISO (a "Disqualifying Disposition"). Disqualifying
Disposition means any disposition (including any sale) of such stock before the
later of (a) two years after the employee was granted the ISO under which he
acquired such stock, or (b) one year after the employee acquired such stock by
exercising such ISO. If the employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition will
thereafter occur.
22. Governing Laws; Construction. The validity and construction of the
Plan and the instruments evidencing Options and Restricted Stock shall be
governed by the laws of The Commonwealth of Massachusetts. In construing this
Plan, the singular shall include the plural and the masculine gender shall
include the feminine and neuter, unless the context otherwise requires.
10
<PAGE> 1
EXHIBIT 99.2
STOCK OPTION AGREEMENT
BETWEEN
ALTIGA NETWORKS, INC.
(THE "COMPANY")
AND
_________________
(THE "OPTIONEE")
______________, 199_
1. The Company hereby grants to the Optionee, pursuant to the Company's
1998 Omnibus Stock Plan (the "Plan"), and the Optionee hereby accepts, the right
and option (the "Option") to purchase all and any part of an aggregate of _____
shares of the Company's Common Stock, $.0001 par value, at a price of $_____ per
share (the "Option Price") on the terms and conditions herein set forth and of
the Plan, a copy of which is attached to this Agreement and which is
incorporated herein by reference. The Option is intended to be an incentive
stock option within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended.
2. Subject to the provisions of Sections 3, 4, 6, 7 and 8, the Option
shall be exercisable immediately.
3. (a) Of the shares issuable and/or issued upon the exercise of the
Option, _____ shares, representing 25% of the aggregate number of shares for
which this option is exercisable, shall vest and become "Vested Shares" on the
date one year from ______, 199_ (the "Initial Vesting Date") and the balance
shall vest and become "Vested Shares" in 1,095 daily installments of _____
shares per day, from and including the date immediately following the Initial
Vesting Date to and including the 1,095th day following the Initial Vesting
Date. All shares issued and/or issuable upon the exercise of the Option other
than Vested Shares shall be "Unvested Shares." In the event the Optionee ceases
to serve as an employee of the Company, whether voluntarily or involuntarily,
for any reason, the Company may within 180 days after the date of such
termination exercise its repurchase option under this Section 3 to purchase all
or any portion of shares previously issued upon the exercise of the Option that
were Unvested Shares on the date of such termination at a per share price equal
to the Option Price.
(b) In the event the Company exercises its repurchase option as
set forth herein, the Company shall give to the Optionee a written notice
specifying the number of Unvested Shares it is electing to repurchase, the price
thereof, and the time for a closing hereunder, which closing shall be held at
the Company's principal office and shall occur no earlier than 10 days and no
later than 20 days after the date such notice is given. Upon the date of any
such notice from the Company, the interest of the Optionee in the Unvested
Shares shall automatically terminate, except for the Optionee's right to receive
payment from the Company for such Unvested Shares.
<PAGE> 2
(c) If the Company exercises its repurchase option hereunder, the
Optionee shall at the closing duly endorse for transfer the certificate(s)
representing the Unvested Shares to be sold to the Company, and the Company
shall deliver to the Optionee the purchase price for such Unvested Shares.
(d) The Optionee agrees to deliver and deposit with the Secretary
of the Company, or such other person as designated by the Company, as escrow
agent, a stock assignment duly endorsed (with date and number of shares blank)
with the certificate or certificates evidencing any shares issued upon the
exercise of the Option until the first to occur of (i) such shares becoming
Vested Shares and (ii) the Company's failure to exercise its repurchase option
within the time period specified in this section 3.
(e) Notwithstanding the foregoing, immediately upon the
occurrence of a Change in Control (as defined below), __% of all Unvested Shares
shall vest and become Vested Shares. For purposes hereof, a "Change of Control"
of the Company shall occur or be deemed to have occurred if (i) any person, as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act"), is or becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing 50% of the combined voting power of the
Company's then outstanding securities, (except that (i) shall not include the
transaction involving the purchase by investors of units of the Company's Series
A Preferred Stock and Common Stock) or (ii) the Directors or Shareholders of the
Company shall approve a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or other
transaction which would result in the voting securities of the Company
immediately prior to such transaction representing less than 50% of the combined
voting power of the securities entitled to vote generally in the election of
directors of the Company or such other entity outstanding immediately after such
transaction.
4. The Option shall, to the extent not theretofore exercised, expire and
become void ten years from the date hereof.
5. Except as provided in sections 6, 7 and 8 and subject to sections 2,
3 and 4, the Option shall expire 60 days following the date on which the
Optionee ceases to be an employee of the Company or one of its subsidiaries.
6. Subject to sections 2, 3, 4, 7 and 8, the Optionee may, at any time
or times during the 60 days following the date on which the Optionee ceases to
be an employee of the Company, exercise the Option in whole or in part with
respect to shares under the Option not theretofore purchased, in the same manner
and to the same extent that the Optionee could have exercised the Option at the
date on which the Optionee ceased to be an employee of the Company.
7. Subject to sections 2, 3 and 4, in case of the Optionee's death, the
Option shall be exercisable, to the extent of the number of shares with respect
to which the Optionee could have
-2-
<PAGE> 3
exercised it on the date of the Optionee's death, by the Optionee's estate,
personal representative or beneficiary who has acquired the Option by will or by
the laws of descent and distribution, until the earlier of the scheduled
expiration date of the Option and 180 days from the Optionee's death.
8. Subject to sections 2, 3 and 4, if the Optionee ceases to be employed
by the Company by reason of disability, the Optionee shall have the right to
exercise the Option held by the Optionee on the date of termination of
employment, to the extent of the number of shares with respect to which he could
have exercised it on that date, at any time prior to the earlier of the
scheduled expiration date of the Option and 180 days from the date of the
termination of the Optionee's employment.
9. The Option is exercisable, in whole or in part, by delivering to the
office of the Company written notice of the number of shares with respect to
which the Option is being exercised accompanied by full payment of the Option
Price for such shares.
10. The Option is not transferable by the Optionee, except by will, by
the laws of descent and distribution or by operation of a "qualified domestic
relations order," as that term is defined in the Plan and is exercisable during
the lifetime of the Optionee only by the Optionee, the Optionee's guardian or
legal representative, or by the assignee under such a "qualified domestic
relations order."
11. The Optionee shall have no rights as a stockholder with respect to
any shares covered by the Option until the Optionee becomes the holder of record
of such shares, and no adjustment shall be made, except for adjustments made
pursuant to section 12, for dividends (ordinary or extraordinary, whether in
cash or other property) or distributions or other rights in respect of such
shares for which the record date is prior to the date on which he becomes the
holder of record thereof.
12. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the Common Stock, the Optionee upon exercising
the Option shall be entitled to receive (for the purchase price paid upon such
exercise) the shares as to which he is exercising the Option and, in addition
thereto (at no additional cost), such number of shares of Common Stock, and such
amount of cash in lieu of fractional shares, as he would receive if he had been
the holder of the shares as to which he is exercising the Option at all times
between the date of grant of the Option and the date of its exercise.
13. No fractional shares shall be issued under the Plan. Any fractional
shares that, but for this paragraph, would have been issued pursuant to the
Option shall be deemed to have been issued and immediately sold to the Company
for their fair market value, and the Optionee shall receive from the Company
cash in lieu of such fractional shares.
14. In the event shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if, upon a merger, consolidation,
reorganization, split-up, liquidation, combination, recapitalization or the like
of the Company, the shares of Common Stock shall be
-3-
<PAGE> 4
exchanged for other securities of the Company or of another corporation, each
optionee shall be entitled, subject to conditions stated in the Plan, to
purchase such number of shares of common stock or amount of other securities of
the Company or such other corporation as were exchangeable for the number of
shares of Common Stock that such Optionee would have been entitled to purchase
except for such action, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or exchange.
15. The Optionee agrees to notify the Company in writing immediately
after the Optionee makes any disqualifying disposition of any Common Stock
received pursuant to the exercise of the Option (a "Disqualifying Disposition").
Disqualifying Dispositions means any disposition (including any sale) of such
stock before the later of (a) two years after the Optionee was granted the
Option under which the Optionee acquired such stock or (b) one year after the
employee acquired such stock by exercising such Option.
16. By the Optionee's acceptance of this Option, the Optionee agrees
that such Optionee is subject in all respects to the foregoing terms and
conditions and to the Plan. This Agreement shall be binding on and inure to the
benefit of the executor, administrator, legatees, heirs, legal representatives
and assigns of the Optionee and the successors and permitted assigns of the
Company.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed as of the date first above written.
ALTIGA NETWORKS, INC.
By:
---------------------------------
OPTIONHOLDER:
- ----------------------------------
Print Name:
-----------------------
-4-
<PAGE> 1
EXHIBIT 99.3
RESTRICTED STOCK AGREEMENT
BETWEEN
ALTIGA NETWORKS, INC.
(THE "COMPANY")
AND
___________________
(THE "HOLDER")
___________ __, 199__
1. The Company hereby sells to the Holder, pursuant to the Company's
1998 Omnibus Stock Plan (the "Plan"), and the Holder hereby purchases, an
aggregate of _________ shares (the "Shares") of the Company's Common Stock,
$.0001 par value, at a purchase price of $______ per share (the "Per Share
Purchase Price") (for aggregate consideration of $_________) on the terms and
conditions herein set forth and of the Plan, a copy of which is attached to this
Agreement and which is incorporated herein by reference.
2. (a) Of the Shares, ________ Shares, representing 25% of the
aggregate number of Shares purchased hereunder, shall vest and become "Vested
Shares" on the date one year from _________, 199__ (the "Initial Vesting Date")
and the balance shall vest and become "Vested Shares" in 1,095 daily
installments of _____ shares per day, from and including the date immediately
following the Initial Vesting Date to and including the 1,095th day following
the Initial Vesting Date. All Shares other than Vested Shares shall be "Unvested
Shares." In the event the Holder ceases to serve as an employee of the Company,
whether voluntarily or involuntarily, for any reason (including disability or
death), the Company may within 180 days after the date of such termination
exercise its repurchase option under this Section 2 to purchase all or any
portion of shares that were Unvested Shares on the date of such termination at a
per share price equal to the Per Share Purchase Price.
(b) In the event the Company exercises its repurchase option as
set forth herein, the Company shall give to the Holder a written notice
specifying the number of Unvested Shares it is electing to repurchase, the price
thereof, and the time for a closing hereunder, which closing shall be held at
the Company's principal office and shall occur no earlier than 10 days and no
later than 20 days after the date such notice is given. Upon the date of any
such notice from the Company, the interest of the Holder in the Unvested Shares
shall automatically terminate, except for the Holder's right to receive payment
from the Company for such Unvested Shares.
(c) If the Company exercises its repurchase option hereunder, the
Holder shall at the closing duly endorse for transfer the certificate(s)
representing the Unvested Shares to be sold to the Company, and the Company
shall deliver to the Holder the purchase price for such Unvested Shares.
(d) The Holder agrees to deliver and deposit with the Secretary
of the Company, or such other person as designated by the Company, as escrow
agent, a stock assignment duly endorsed (with date and number of shares blank)
with the certificate or certificates evidencing the
<PAGE> 2
Shares until the first to occur of (i) such shares becoming Vested Shares and
(ii) the Company's failure to exercise its repurchase option within the period
specified in this section 2.
(e) Notwithstanding the foregoing, immediately upon the
occurrence of a Change in Control (as defined below), 50% of all Unvested Shares
shall vest and become Vested Shares. For purposes hereof, a "Change of Control"
of the Company shall occur or be deemed to have occurred if (i) any person, as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act"), is or becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing 50% of the combined voting power of the
Company's then outstanding securities, (except that (i) shall not include the
transaction involving the purchase by investors of units of the Company's Series
A Preferred Stock and Common Stock) or (ii) the Directors or Shareholders of the
Company shall approve a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or other
transaction which would result in the voting securities of the Company
immediately prior to such transaction representing less than 50% of the combined
voting power of the securities entitled to vote generally in the election of
directors of the Company or such other entity outstanding immediately after such
transaction.
3. The Shares have not been registered under the Securities Act of 1933,
as amended (the "Act") on the securities laws of any state. The Shares may not
be offered for sale, sold, transferred, pledged or hypothecated in the absence
of an effective registration statement covering such Shares under the Act and
any applicable state securities laws, or an opinion of counsel satisfactory to
the Company that such registration is not required.
4. By his purchase of the Shares, the Holder agrees that such Holder is
subject in all respects to the foregoing terms and conditions and to the Plan.
This Agreement shall be binding on and inure to the benefit of the executor,
administrator, legatees, heirs, legal representatives and assigns of the Holder
and the successors and permitted assigns of the Company.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed as of the date first above written.
ALTIGA NETWORKS, INC.
By:
---------------------------------
HOLDER:
- --------------------------------------
Print Name:
---------------------------
<PAGE> 1
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
<PAGE> 2
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.
<TABLE>
<CAPTION>
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ALTIGA STOCK OPTIONS CISCO ASSUMED OPTIONS
---------------------------------------------------------- ----------------------------------------------------
----------------------------- ---------------------------- --------------------------- ------------------------
# of Shares of Altiga Exercise Price # of Shares of Cisco Adjusted Exercise
Common Stock per Share Common Stock Price per Share
----------------------------- ---------------------------- --------------------------- ------------------------
<S> <C> <C> <C>
(B) (C) (D) $(E)
----------------------------- ---------------------------- --------------------------- ------------------------
</TABLE>
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.
2
<PAGE> 3
(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.
170 West Tasman Drive
MS11-3
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> 4
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/ LARRY R. CARTER
--------------------------
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 Altiga 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: , 2000
-----------
4
