EXHIBIT 99.6
FORM OF OPTION ASSUMPTION AGREEMENT FOR XXXXXXX NETWORKS, INC.
EFFECTIVE DATE: JUNE 26, 2002
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [Name]:
As you know, on June 26, 2002 (the "Closing Date") Cisco Systems, Inc. ("Cisco")
acquired Xxxxxxx Networks, Inc. ("Xxxxxxx") (the "Acquisition"). In the
Acquisition, each share of Xxxxxxx common stock was exchanged for 0.48689566598
of a share of Cisco common stock (the "Exchange Ratio"). On the Closing Date you
held one or more outstanding options (the "Xxxxxxx Options") to purchase shares
of Xxxxxxx Networks, Inc. common stock granted to you under the Xxxxxxx
Networks, Inc. 2000 Stock Plan (the "Plan"), each documented with an Option
Agreement - Early Exercise (the "Option Agreement") issued to you under the
Plan. In accordance with the Acquisition, on the Closing Date Cisco assumed all
obligations of Xxxxxxx under the Xxxxxxx Options. This Agreement evidences the
assumption of the Xxxxxxx Options, including the necessary adjustments to the
Xxxxxxx Options required by the Acquisition.
Your Xxxxxxx Options immediately before and after the Acquisition are as
follows:
XXXXXXX STOCK OPTIONS CISCO ASSUMED OPTIONS
------------------------------------------------ ----------------------------------------------
Xxxxxxx Exercise
# Shares of Xxxxxxx Price # of Shares of Cisco Cisco Exercise Price
Common Stock Per Share Common Stock Per Share
------------------------- ---------------------- ----------------------- ----------------------
[Xxxxxxx Shares] [Xxxxxxx 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 Xxxxxxx 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 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 of Xxxxxxx 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 Xxxxxxx 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
Xxxxxxx Stock prior to the Acquisition will be taken into account.
The grant date, vesting commencement date and vesting schedule of your assumed
Xxxxxxx Options remain the same as set forth in your Option Agreement or the
Plan, but the number of shares subject to each vesting installment has been
adjusted to reflect the Exchange Ratio. Provided you remain an employee of
Cisco, your assumed Xxxxxxx Options will terminate ten years from the date such
EFFECTIVE DATE: JUNE 26, 2002
options were granted by Xxxxxxx (the "Expiration Date"). In the event of your
termination of employment with Cisco prior to the Expiration Date, you will have
the limited time period specified in your Option Agreement to exercise your
assumed Xxxxxxx Option to the extent vested and outstanding at the time,
generally a three month period, after which time your Xxxxxxx Options will
expire and NOT be exercisable for Cisco Stock. All other provisions which govern
the assumed Xxxxxxx Option remain the same as set forth in your Option Agreement
or the Plan, and the provisions of the Option Agreement and the Plan (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.
To exercise your assumed Xxxxxxx 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
Xxxxxxx 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 Xxxxxxx Options, please
contact Xxxx Xxxx at 000-000-0000.
CISCO SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXX
----------------------------
Xxxxx X. Xxxxxx
Corporate Secretary
EFFECTIVE DATE: JUNE 26, 2002
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 Xxxxxxx Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement.
DATED: __________________, 2002 ------------------------------------------
[NAME], OPTIONEE
