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EXHIBIT 99.1
PRECEPT SOFTWARE, INC. 1995 STOCK OPTION PLAN
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CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
PRECEPT SOFTWARE, INC.
1995 STOCK OPTION PLAN
OPTIONEE:
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 6th day of
April, 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 Precept
Software, Inc., a California corporation ("Precept"), which were granted to
Optionee under the Precept 1996 Stock Option Plan (the "Plan") and are evidenced
by a Stock Option Agreement (the "Option Agreement") between Precept and
Optionee.
WHEREAS, Precept has this day been acquired by Cisco through the
merger of Precept with and into Cisco (the "Merger") pursuant to the Agreement
of Merger dated March 11, 1998, by and between Cisco and Precept (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Cisco to
assume all obligations of Precept under all outstanding options under the Plan
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 0.0916154 of a
share of Cisco common stock ("Cisco Stock") for each outstanding share of
Precept common stock ("Precept Stock").
WHEREAS, this Agreement is to become effective immediately upon
the consummation of the Merger (the "Effective Time") in order to reflect
certain adjustments to 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.
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NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Precept Stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "Precept Options") and the exercise price payable per share are set forth
in Exhibit A hereto. Cisco hereby assumes, as of the Effective Time, all the
duties and obligations of Precept under each of the Precept Options. In
connection with such assumption, the number of shares of Cisco Stock purchasable
under each Precept 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 Precept 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 Precept Option
shall be as indicated for that option in attached Exhibit A.
2. The intent of the foregoing adjustments to each assumed
Precept 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, equal the spread which
existed, immediately prior to the Merger, between the then aggregate fair market
value of the Precept Stock subject to the Precept 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 Precept Option immediately prior
to the Merger.
3. The following provisions shall govern each Precept Option
hereby assumed by Xxxxx:
(a) Unless the context otherwise requires, all
references in each Option Agreement and in the Plan (as
incorporated into such Option Agreement) (i) to the "Company"
shall mean Cisco, (ii) to "Stock" shall mean shares of Cisco
Stock, (iii) to 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 Precept Option and all other provisions which govern
either the exercisability or the termination of the assumed
Precept Option shall remain the same as set forth in the Option
Agreement applicable to that option and shall accordingly govern
and control Optionee's rights under this Agreement to purchase
Cisco Stock.
(c) The shares subject to each assumed Precept
Option shall continue to vest in accordance with the same
installment vesting schedule in effect under the applicable
Option Agreement immediately prior to the Effective Time, with
the number of shares of Cisco Stock subject to each such
installment adjusted
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to reflect the Exchange Rate. Accordingly, no acceleration of
vesting under the Precept Options shall be deemed to occur by
reason of the Merger, and the vesting dates under each applicable
Option Agreement shall remain the same following the Merger.
(d) For purposes of applying any and all provisions
of the Option Agreement relating to Optionee's status as an
employee or a consultant of Precept, Optionee shall be deemed to
continue in such status as an employee or a consultant for so
long as Optionee renders services as an employee or a consultant
to Cisco or any present or future Cisco subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination
of the assumed Precept Options upon Optionee's cessation of
service as an employee or a consultant of Precept shall hereafter
be applied on the basis of Optionee's cessation of employee or
consultant status with Cisco and its subsidiaries, and each
assumed Precept 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
or a consultant of Cisco and its subsidiaries. A change in status
from an employee to a consultant or from a consultant to an
employee will not constitute an interruption of continuous status
as an employee or a consultant.
(e) The adjusted exercise price payable for the
Cisco Stock subject to each assumed Precept 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 Precept Stock prior to the Merger shall be taken
into account.
(f) In order to exercise each assumed Precept
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.
000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx X
Xxx Xxxx, XX 00000
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Stock
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 ____ day of ____________________, 1998.
CISCO SYSTEMS, INC.
By: ________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Precept Options hereby assumed by Cisco are as set
forth in the Option Agreement, the 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 Precept Software, Inc.
Common Stock (Pre-Merger)
and
Optionee's Outstanding Options to Purchase Shares
of Cisco Systems, Inc.
Common Stock (Post-Merger)
