CISCO SYSTEMS, INC. STOCK OPTION ASSUMPTION AGREEMENT
EXHIBIT 99.4
Form of Option Assumption Agreement
EFFECTIVE DATE: APRIL 9, 2003
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear «Name»:
As you know, on April 9, 2003 (the “Closing Date”) Cisco Systems, Inc. (“Cisco”) acquired Okena, Inc. (“Okena”) (the “Acquisition”). In the Acquisition, each share of Okena common stock was exchanged for 0.891105678 (the “Exchange Ratio”) of a share of Cisco common stock (“Cisco Stock”). On the Closing Date you held one or more outstanding options (the “Okena Options”) to purchase shares of Okena, Inc. common stock granted to you under the Okena, Inc. 1999 Stock Option and Grant Plan (the “Plan”), each documented with either an Incentive Stock Option Agreement or a Non-Qualified Stock Option Agreement and amended by a letter agreement executed by you waiving certain rights to receive accelerated vesting in connection with the Acquisition (such applicable Incentive Stock Option Agreement or Non-Qualified Stock Option Agreement, as amended, the “Option Agreement”) issued to you under the Plan. In accordance with the terms of the Acquisition, on the Closing Date Cisco assumed all obligations of Okena under the Okena Options. This Agreement evidences the assumption of the Okena Options, including the necessary adjustments to the Okena Options required by the Acquisition.
Your Okena Options immediately before and after the Acquisition are as follows:
| OKENA STOCK OPTIONS |
CISCO ASSUMED OPTIONS | |||||
| # Shares of Okena Common Stock |
Okena Exercise Price Per Share |
# of Shares of Cisco Common Stock |
Cisco Exercise Price Per Share | |||
| «Okena_Shares» |
«Okena_Price» |
«Cisco_Shares» |
«Cisco_Price» | |||
The post-Acquisition adjustments are based on the Exchange Ratio and are intended to: (i) assure that the total spread of each assumed Okena 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 Acquisition; and (ii) to preserve, on a per share basis, the ratio of exercise price to fair market value that existed immediately prior to the Acquisition.
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 or consultant of Okena will now refer to your status as an employee or consultant of Cisco or any present or future Cisco subsidiary. To the extent the Option Agreement allowed you to deliver shares of Okena 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 Okena common stock prior to the Acquisition will be taken into account.
The grant date, vesting commencement date, vesting schedule and expiration date of your assumed Okena Options remain the same as set forth in your Option Agreement (as such Option Agreement was amended in connection with your waiver of the accelerated vesting you would otherwise have received in connection with the Acquisition), but the number of shares subject to each vesting
EFFECTIVE DATE: APRIL 9, 2003
installment has been adjusted to reflect the Exchange Ratio. All other provisions which govern either the exercise or the termination of the assumed Okena 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 Acquisition) 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 your 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 Okena Option to the extent vested and outstanding at the time, generally a period anywhere from thirty days to three months, after which time your Okena Options will expire and NOT be exercisable for Cisco Stock.
To exercise your assumed Okena option, you must utilize one of Cisco’s designated brokers. Please refer to Cisco’s option exercise policies and procedures detailed on Cisco’s Stock Administration website (xxx.xx.xxxxx.xxx/XxxXxx/XxxxxXxxxx) or call the Human Resources Connection at (000) 000-0000 for further information.
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 Okena 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 Okena Options, please contact Xxxxxxx Xxxxxxx at (000) 000-0000.
| CISCO SYSTEMS, INC. | ||
| By: |
||
| Xxxx Xxxxxxxx Corporate Secretary | ||
EFFECTIVE DATE: APRIL 9, 2003
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 Okena Options hereby assumed by Cisco are as set forth in the Option Agreement, the Plan and such Stock Option Assumption Agreement.
| DATED: , 2003 |
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| «Name», OPTIONEE | ||||||||
