Exhibit 99.4
COVISTA COMMUNICATIONS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [Capsule Optionee]:
As you know, on February 8, 2002 (the "Closing Date") Capsule Communications,
Inc. ("Capsule") merged with and into CCI Acquisitions Corp. ("CCI"), a
Delaware corporation and wholly-owned subsidiary of Covista Communications,
Inc. ("Covista") (the "Merger"). In the Merger, each holder of shares of
Capsule common stock, other than Henry G. Luken, III, received 0.0916 of a
share of Covista common stock for each share of Capsule common stock (the
"Conversion Ratio"), and Henry G. Luken, III received 0.0688 of a share of
Covista common stock for each share of Capsule common stock (the "Affiliate
Conversion Ratio"). On the Closing Date you held one or more outstanding
options to purchase shares of Capsule common stock granted to you under either
the Capsule 1999 Stock Option Plan (the "1999 Plan") or the Capsule 2001 Stock
Option Plan (the "2001 Plan") and documented with a Stock Option Agreement(s)
and/or Notice(s) of Grant of Stock Option and any amendment(s) or waiver(s)
thereto (collectively, the "Option Agreement") issued to you under the 1999
Plan or the 2001 Plan, as applicable (the "Capsule Options"). In accordance
with the Merger, on the Closing Date Covista assumed all obligations of
Capsule under the Capsule Options. This Agreement evidences the assumption of
the Capsule Options, including the necessary adjustments to the Capsule
Options required by the Merger.
Your Capsule Options immediately before and after the Merger are as follows:
CAPSULE STOCK OPTIONS COVISTA ASSUMED OPTIONS
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# Shares of Capsule Capsule Exercise Price # of Shares of
Common Stock Per Share Covista Common Stock
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- ------------------------------------------------------------------------------
The post-Merger adjustments are based on the Conversion Ratio or the Affiliate
Conversion Ratio, as applicable, and are intended to: (i) to preserve, on a
per share basis, the ratio of exercise price to fair market value that existed
immediately prior to the Merger; and (ii) 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 1999 Plan or the
2001 Plan and the Option Agreement (i) to the "Company" or the "Corporation"
means Covista, (ii) to "Stock," "Common Stock" or "Shares" means shares of
Covista common stock, (iii) to the "Board of Directors" or the "Board" means
the Board of Directors of Covista and (iv) to the "Committee" means the
Compensation Committee of the Covista Board of Directors. All references in
the Option Agreement and the Plan relating to your status as an employee of
Capsule will now refer to your status as an employee of Covista or any present
or future Covista subsidiary. To the extent the Option Agreement allowed you
to deliver shares of Capsule 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 Capsule
common 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 Capsule 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 Conversion Ratio or Affiliate Conversion
Ratio, as applicable. All other provisions which govern either the exercise
or the termination of the assumed Capsule Option remain the same as set forth
in your Option Agreement, and the provisions of the Option Agreement (except
as expressly modified by this Agreement and the Merger) will govern and
control your rights under this Agreement to purchase shares of Covista common
stock. Upon your termination of employment with Covista you will have the
limited time period specified in your Option Agreement to exercise your
assumed Capsule Option to the extent vested and outstanding at the time,
generally a three (3) month period, after which time your Capsule Options will
expire and NOT be exercisable for Covista Stock.
To exercise your assumed Capsule Option, you must deliver to Covista (i) a
written notice of exercise for the number of shares of Covista common stock
you want to purchase, (ii) the adjusted exercise price, and (iii) all
applicable taxes. The exercise notice and payment should be delivered to
Covista at the following address:
Covista Communications, Inc.
150 Clove Road
Little Falls, NJ 07424
Attention: Stock Administration
Nothing in this Agreement or your Option Agreement interferes in any way with
your rights and Covista'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 Covista will be governed by the terms of the Cisco
stock option plan, and such terms may be different from the terms of your
assumed Capsule 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 Covista's
Stock Administration Department your Covista account will not be activated.
If you have any questions regarding this Agreement or your assumed Capsule
Options, please contact [_________] at (973)___________.
COVISTA COMMUNICATIONS, INC.
By:
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Thomas P. Gunning
Vice President, Treasurer, Secretary,
Chief Financial Officer (Principal
Financial and Accounting Officer)
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 Capsule Options hereby assumed by Covista are as
set forth in the Option Agreement, the 1999 Plan or the 2001 Plan, as
applicable, and such Stock Option Assumption Agreement.
DATED: , 2002
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(EMPLOYEE), OPTIONEE