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EXHIBIT 99.4
EFFECTIVE DATE: [CLOSING DATE]
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [IPCell Optionee]:
As you know, on October 30, 2000 (the "Closing Date") Cisco Systems, Inc.
("Cisco") acquired IPCell Technologies, Inc. ("IPCell") (the "Merger"). In the
Merger, each share of IPCell common stock was exchanged for 0.286237 of a share
of Cisco common stock (the "Exchange Ratio"). On the Closing Date you held one
or more outstanding options to purchase shares of IPCell common stock granted to
you under the 1999 Stock Option Plan (the "Plan") and documented with a Stock
Option Agreement(s) and/or Notice(s) of Grant of Stock Option (collectively, the
"Option Agreement") issued to you under the Plan (the "IPCell Options"). In
accordance with the Merger, on the Closing Date Cisco assumed all obligations of
IPCell under the IPCell Options. This Agreement evidences the assumption of the
IPCell Options, including the necessary adjustments to the IPCell Options
required by the Merger.
Your IPCell Options immediately before and after the Merger are as follows:
<TABLE>
<CAPTION>
IPCELL STOCK OPTIONS CISCO ASSUMED OPTIONS
-------------------------------------------- --------------------------------------
# of Shares of
# Shares of IPCell IPCell Exercise Price Cisco Cisco Exercise Price
Common Stock Per Share Common Stock Per Share
------------------ --------------------- ------------ --------------------
<S> <C> <C> <C>
</TABLE>
The post-Merger adjustments are based on the Exchange Ratio and are intended to:
(i) assure that the total spread of each assumed IPCell Option (i.e., the
difference between the aggregate fair market value and the aggregate exercise
price) does not exceed the total spread that existed immediately prior to the
Merger; (ii) to preserve, on a per share basis, the ratio of exercise price to
fair market value that existed immediately prior to the Merger; and (iii) to the
extent applicable and allowable by law, to retain incentive stock option ("ISO")
status under the Federal tax laws.
Unless the context otherwise requires, any references in the Plan and the Option
Agreement (i) to the "Company" or the "Corporation" means Cisco, (ii) to
"Stock," "Common Stock" or "Shares" means shares of Cisco Stock, (iii) to the
"Board of Directors" or the "Board" means the Board of Directors of Cisco and
(iv) to the "Committee" means the Compensation Committee of the Cisco Board of
Directors. All references in the Option Agreement and the Plan relating to your
status as an employee of IPCell will now refer to your status as an employee of
Cisco or any present or future Cisco subsidiary. To the extent the Option
Agreement allowed you to deliver shares of IPCell common stock as payment for
the exercise price, shares of Cisco common stock may be delivered in payment of
the adjusted exercise price, and the period for which such shares were held as
IPCell Stock prior to the Merger will be taken into account.
The grant date, vesting commencement date, vesting schedule and the expiration
date of your assumed IPCell Options remain the same as set forth in your Option
Agreement, but the number of shares subject to each vesting installment has been
adjusted to reflect the Exchange Ratio. All other provisions which govern either
the exercise or the termination of the assumed IPCell Option remain the same as
explicitly set forth in your Option Agreement, and the provisions of the Option
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EFFECTIVE DATE: [CLOSING DATE]
Agreement (except as expressly modified by this Agreement and the Merger) will
govern and control your rights under this Agreement to purchase shares of Cisco
Stock. However, to the extent an item is not explicitly provided for in you
option documents, Cisco policies will apply. For example, vesting of options
will be suspended during all leaves of absence in accordance with Cisco policy,
unless your option documents explicitly provide otherwise. Upon your termination
of employment with Cisco you will have the limited time period specified in your
Option Agreement to exercise your assumed IPCell Option to the extent vested and
outstanding at the time, generally a 30 day period, after which time your IPCell
Options will expire and NOT be exercisable for Cisco Stock.
To exercise your assumed IPCell Option, you must deliver to Cisco (i) a written
notice of exercise for the number of shares of Cisco Stock you want to purchase,
(ii) the adjusted exercise price, and (iii) all applicable taxes. The exercise
notice and payment should be delivered to Cisco at the following address:
Cisco Systems, Inc.
170 West Tasman Drive
SJ-11-3
San Jose, CA 95134
Attention: Stock Administration
Nothing in this Agreement or your Option Agreement interferes in any way with
your rights and Cisco's rights, which rights are expressly reserved, to
terminate your employment at any time for any reason. Any future options, if
any, you may receive from Cisco will be governed by the terms of the Cisco stock
option plan, and such terms may be different from the terms of your assumed
IPCell Options, including, but not limited to, the time period in which you have
to exercise vested options after your termination of employment.
Please sign and date this Agreement and return it promptly to the address listed
above. Until your fully executed Agreement is received by Cisco's Stock
Administration Department your Cisco account will not be activated. If you have
any questions regarding this Agreement or your assumed IPCell Options, please
contact Kathy Zwern at 408-526-8045.
CISCO SYSTEMS, INC.
By:
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 IPCell Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, and such Stock Option Assumption
Agreement.
DATED: , 2000
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<<EMPLOYEE>>, OPTIONEE
