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EFFECTIVE DATE: FEBRUARY 14, 2001
EXHIBIT 99.7
Cisco Systems, Inc. form of Stock Option Assumption Agreement-
Partial Acceleration
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CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [Target Optionee]:
As you know, on February 14, 2001 (the "Closing Date") Cisco Systems, Inc.
("Cisco") acquired Active Voice Corporation ("Active Voice") (the
"Acquisition"). In the Acquisition, each share of Active Voice common stock was
exchanged for 0.57960 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 Active Voice common stock granted to you under the Active Voice Corporation
1988 Non-qualified Stock Option Plan, 1993 Stock Option Plan, 1996 Stock Option
Plan, 1998 Stock Option Plan, or 2000 Stock Option Plan, and any amendments
thereto (the "Plans") and documented with a Stock Option Agreement(s) and any
amendments or waivers thereto (the "Option Agreement") issued to you under the
Plans (the "Active Voice Options"). In accordance with the Acquisition, on the
Closing Date Cisco assumed all obligations of Active Voice under the Active
Voice Options. This Agreement evidences the assumption of the Active Voice
Options required by the Acquisition.
Your Active Voice Option immediately before and after the Acquisition is as
follows:
------------------------------------------------------------ ---------------------------------------------------------
ACTIVE VOICE STOCK OPTION CISCO ASSUMED OPTION
------------------------------------------------------------ ---------------------------------------------------------
# Shares of Active Voice Active Voice Exercise # of Shares of Cisco Cisco Exercise Price Per
Common Stock Price Per Share Common Stock Share
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
The post-Acquisition adjustments are based on the Exchange Ratio and are
intended to: (i) assure that the total spread of each assumed Active Voice
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; (ii) to preserve, on a per share basis,
the ratio of exercise price to fair market value that existed immediately prior
to the Acquisition; 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 Plans 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 Plans relating to your
status as an employee of Active Voice 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 Active Voice 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 Active Voice Stock prior to the Acquisition will be taken into
account.
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EFFECTIVE DATE: FEBRUARY 14, 2001
In accordance with the terms of the Option Agreement, 50% of the unvested shares
subject to your Active Voice Option at the time of the Acquisition became fully
vested and exercisable upon the close of the Acquisition. The grant date,
vesting commencement date, vesting schedule for the remaining unvested shares,
and the expiration date of your assumed Active Voice Option remains 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
Active Voice 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. Upon your termination of employment
with Cisco you will have the limited time period specified in your Option
Agreement to exercise your assumed Active Voice Option to the extent vested and
outstanding at the time, generally a 30 day period, after which time your Active
Voice Option will expire and NOT be exercisable for Cisco Stock.
To exercise your assumed Active Voice 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.
000 Xxxx Xxxxxx Xxxxx
XX-00-0
Xxx Xxxx, XX 00000
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
Active Voice Option, including, but not limited to, the time period in which you
have to exercise vested option shares 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 Xxxxx's Stock
Administration Department your Cisco account will not be activated. If you have
any questions regarding this Agreement or your assumed Active Voice Option,
please contact Xxxxx Xxxxx at 000-000-0000.
CISCO SYSTEMS, INC.
By
--------------------------------------
Xxxxx X. Xxxxxx
Corporate Secretary
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EFFECTIVE DATE: FEBRUARY 14, 2001
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to his or her Active Voice Option hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, and such Stock Option Assumption
Agreement.
DATED: , 2001
-------------------- ----------------------------------------
(EMPLOYEE), OPTIONEE
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