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EXHIBIT 99.6
LIGHTSPEED INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
INDIVIDUAL STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION
This Agreement is made this 18th day of December, 1997, between
LightSpeed International, Inc. (the "Company"), a Virginia corporation, and
NAME~, an employee of the Company (the
"Optionee").
WHEREAS, the Company has adopted and maintains the LightSpeed
International, Inc. 1996 Stock Option Plan (the "Plan") for the benefit of its
officers, employees, consultants and advisors; and
WHEREAS, the Plan provides that the Company's Board of Directors (the
"Board"), may grant options to purchase shares of the Company's common stock to
its officers, employees, consultants and advisors; and
WHEREAS, the Board has determined that the Optionee should be given the
opportunity to acquire a stock ownership interest in the Company pursuant to the
Plan, in order to provide the Optionee with additional incentive and motivation
to contribute to the Company's future growth and continued success, and to
encourage the Optionee to continue to provide services to the Company.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. Grant of Option.
Pursuant to the provisions of the Plan, the Company
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hereby grants to the Optionee the right and option (the "Option") to purchase
from the Company, on the terms and conditions hereinafter provided, up to a
maximum number of OPTIONS~ shares of the Company's no par value common stock
(the "Option Shares"). This Option shall be an "Incentive Stock Option" as
defined in the Plan and in Section 422 of the Internal Revenue Code of 1986, as
amended. In the event any shares purchased under the Option are held for the
requisite period to qualify a subsequent sale of those shares as a qualifying
disposition under Section 422(a)(1) of the Internal Revenue Code (a sale
effected more than two years after the December 18, 1997 grant date of the
Option and more than one year after the date the Option is exercised for those
shares) and the Internal Revenue Service disallow the status of the Option as an
incentive stock option under Internal Revenue Code Section 422 so that the
excess of the fair market value of those shares on the exercise date over the
exercise price paid for such shares is taxed as ordinary income in the year of
exercise rather than capital gain in the year of sale, then Cisco Systems, Inc.
("Cisco") hereby agrees, effective upon the assumption of the Option in
connection with the merger of the Company with and into Cisco, to indemnify the
Optionee for any of the following expenses incurred by the Optionee as a result
of such disallowance: (i) the incremental tax liability (based on the difference
between the ordinary income tax rate in effect for the Optionee for the year or
years in which the Option is
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exercised for the shares and the capital gain tax rate applicable to the
Optionee's holding period for those shares) incurred by Optionee as a result of
the recognition of such ordinary income, (ii) any additional FICA, FUTA or
Medicare taxes incurred by the Optionee on that ordinary income and (iii) any
interest and penalties imposed by the Internal Revenue Service upon the Optionee
by reason of such additional tax liabilities.
2. Exercise Price.
The exercise or purchase price to be paid by the Optionee for the
Option Shares shall be One dollar ($1.00)per share. The Board has determined
that the fair market value of the Company's common stock on the date of the
grant of this option is One dollar ($1.00)per share.
3. Schedule of Exercise.
(a) Except as provided in Paragraph 3(b) below, the Optionee
shall have the right to exercise the Option granted under this Agreement as
follows: (i) 25% of the Option Shares shall be eligible for exercise after
VESTING_DATE~; and (ii) an additional 2.0833% of the Option Shares shall be
eligible for exercise at the end of each month, for a period of 36 months,
beginning MONTHLY~.
(b) Notwithstanding any provisions to the contrary contained in
this Agreement, the Optionee's right to exercise the Option granted under this
Agreement shall vest immediately upon the occurrence of any of the following
events: (i) a bona fide
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decision by the Company's Board and shareholders to terminate its business,
dissolve and liquidate its assets; or (ii) the termination of the Optionee's
employment with the Company due to the Optionee's death or permanent disability
(physical or mental). Optionee hereby agrees and acknowledges that the merger of
the Company with and into Cisco pursuant to the terms of the December 1997
Merger Agreement between the parties shall not be deemed to constitute such a
termination, dissolution or liquidation of the Company and that this Option
shall not vest or otherwise accelerate by reason of such merger.
4. Method of Exercise.
Subject to the schedule provided in Paragraph (3) of this
Agreement, the Option granted under this Agreement may be exercised by the
Optionee in whole or in part, and from time to time, by written notice signed by
the Optionee (or by such other person as may be entitled to exercise the option)
and delivered to the Company's president or secretary at the Company's principal
executive offices. The written notice shall state the number of shares with
respect to which the Option is being exercised, and shall be accompanied by the
payment of the total exercise or purchase price for that number of shares. The
exercise or purchase price for the Option Shares shall be paid in cash
(including certified check or bank cashier's check). Should the shares of Common
Stock subject to this Option (either the Common Stock of the Company or any
successor corporation) be
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registered under Section 12 of the Securities Exchange Act of 1934, as amended,
at the time the Option is exercised, then the exercise price may also be paid as
follows:
in shares of such Common Stock held by the Optionee (or any other
person or persons exercising the option) for the requisite period necessary to
avoid a charge to the earnings of the Company (or the successor corporation) for
financial reporting purposes and valued at fair market value on the exercise
date; or
through a special sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (a) to a designated brokerage firm
to effect the immediate sale of the purchased shares and remit to the Company
(or any successor corporation), out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company (or the successor
corporation) by reason of such exercise and (b) to the Company (or the successor
corporation) to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale.
Upon payment of the full exercise or purchase price, the Option Shares shall be
fully paid and nonassessable, outstanding shares
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of the Company's common stock. No partial exercise of the option may be made for
less than 1,000 shares, and the Company shall not be required to issue any
fractional shares.
5. Termination of Option.
(a) Subject to the provisions of Subparagraph (5)(b) hereof, the
Option and all rights granted under this Agreement, to the extent that those
rights have not been exercised, shall terminate on the earliest of: (i) the date
the Optionee's employment with the Company is terminated "for cause" as defined
in Paragraph (8)(g) of the Plan; (ii) the date which is 90 days from the date
that the Optionee is discharged or terminates his employment with the Company
for any reason, other than "for cause" as defined above or by reason of the
Optionee's death or permanent disability; or (iii) the date which is 10 years
from the date of the grant of this Option.
(b) If the Optionee dies or becomes permanently disabled while
serving as an employee of the Company, and prior to the 10 year termination date
described above, the Optionee or in the event of the Optionee's death, his
estate, personal representative or heirs, shall have the right to exercise the
Option granted under this Agreement, for a period of 12 months following the
Optionee's date of death or in the event of permanent disability the last date
on which the Optionee provided services to the Company as an employee.
6. Transferability.
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The Option and all rights granted under this Agreement shall not
be transferred, assigned, pledged or otherwise encumbered in any manner (whether
by operation of law or otherwise) except, in the event of the Optionee's death,
by will or by the applicable laws of descent or distribution. Upon any attempt
to transfer, assign, pledge, encumber or otherwise dispose of this Option
contrary to the provisions of this Agreement, or upon the levy of any attachment
or similar process upon this Option, the Option shall immediately become null
and void. The Option and all rights granted under this Agreement shall be
exercisable during the Optionee's lifetime only by the Optionee, or if
permissible under applicable law, by the Optionee's guardian or legal
representative.
7. Adjustment to Option Shares.
(a) In the event that at any time prior to the
termination date of this Option and prior to the exercise thereof, the Company
issues common stock by way of stock dividend or other distribution, or
subdivides or combines its outstanding shares of common stock, the number of
shares subject to this Option and the exercise price shall be adjusted to be
consistent with such change or changes. In the event that at any time prior to
the termination date of this Option and prior to the exercise thereof, there is
any reclassification, capital reorganization or other change of outstanding
shares of the Company's common stock, or in case of any consolidation or merger
of the Company with or
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into another corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company shall cause effective provision to be made so that the
Optionee shall have the right thereafter, by exercising this Option, to purchase
the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. The determination of the Board as to
any adjustments or provisions to be made under this paragraph shall be final,
binding and conclusive.
(b) Except as provided above, the grant of the Option herein
shall not affect in any manner the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or to issue bonds,
debentures, preferred or prior preference stock ahead of or affecting the common
stock of the Company or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of the Company's assets
or business.
8. Effect of Agreement on Status of Optionee.
(a) The fact that the Board has granted an Option to
the Optionee pursuant to the Plan, shall not confer on the
Optionee any right to employment with the Company or to a
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position as an officer or director of the Company, nor shall it limit the right
of the Company to terminate or remove the Optionee from any position held by him
at any time; provided, however, nothing contained in this Paragraph (8)(a) shall
be deemed to affect any rights or obligations of the Company or the Optionee
contained in any separate employment agreement or similar agreement.
(b) The Optionee shall not be or have any of the rights or
privileges of a shareholder of the Company with respect to the Option Shares,
unless and until the Option has been exercised, the exercise or purchase price
fully paid, certificates representing such shares endorsed, transferred and
delivered to the Optionee, and the Optionee's name entered as a shareholder of
record on the books of the Company.
9. Securities Laws.
Notwithstanding anything to the contrary contained in this
Agreement, this Option shall not be exercisable by the Optionee except for
shares of the Company's common stock which at the time of such exercise are
registered, exempt, or the subject matter of an exempt transaction, under both
federal and applicable state securities laws. By accepting and executing this
Option Agreement, the Optionee acknowledges and represents to the Company that
any and all shares of the Company's common stock purchased under this Agreement
will be acquired by the Optionee as an investment, and not with a view towards
subsequent
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distribution.
10. Taxes.
Except as otherwise provided in this Agreement, the Optionee
agrees to pay all federal, state and local taxes, including withholding taxes,
if any, resulting from the exercise of this Option and the subsequent sale of
the Option Shares.
11. Conditions.
This Option is governed by the terms of this Agreement and the
Plan, the provisions of which are incorporated herein and made a part hereof.
12. Restrictions on Transfer.
The Optionee agrees that the Option Shares shall be subject to
the restrictions on transfer, repurchase option and other conditions of
Paragraph (9) of the Plan. In addition, if the restrictions and other conditions
contained in Paragraph (9) of the Plan should terminate as provided therein,
then following exercise of the Option, the Optionee agrees to notify the Company
promptly of any subsequent sale of the Option Shares if the sale occurs within
two years after the date of this Agreement or within one year after exercise.
13. Acknowledgment.
The Optionee's signature on this Agreement also constitutes his
or her acknowledgment that he or she has received a copy of the Plan and the
Company's Summary Plan Description of the Plan.
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14. Binding Effect.
This Agreement shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company, and shall be binding upon
and inure to the benefit of the Optionee's executors, administrators, heirs and
personal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
LIGHTSPEED INTERNATIONAL, INC.
By:_______________________________
Xxx Xxxxxxxx
Its: President & CEO
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Name~(Optionee)
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