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EXHIBIT 99.7
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
FIBEX SYSTEMS 1997 STOCK OPTION PLAN
OPTIONEE: Employee
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 17th day of May, 1999
by Cisco Systems, Inc., a California corporation ("Cisco").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Fibex Systems, a
California corporation ("Fibex"), which were granted to Optionee either directly
by Fibex independent of an option plan, or under the Fibex 1997 Stock Option
Plan ( the "Plan") and are each evidenced by a Stock Option Agreement (the
"Option Agreement").
WHEREAS, Fibex has been acquired by Cisco through the merger of Fibex with
and into Cisco (the "Merger") pursuant to the Agreement and Plan of
Reorganization, by and between Cisco and Fibex (the "Reorganization Agreement").
WHEREAS, the provisions of the Reorganization Agreement require Cisco to
assume all obligations of Fibex under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Reorganization Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.197847369 of
a share of Cisco common stock ("Cisco Stock") for each outstanding share of
Fibex common stock ("Fibex Stock").
WHEREAS, this Agreement became effective immediately upon the consummation
of the Merger (the "Effective Time") in order to reflect certain adjustments to
Optionee's outstanding options which have become necessary by reason of the
assumption of those options by Cisco in connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Fibex Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "Fibex Options") and the
exercise price payable per share are set forth in Exhibit(s) A hereto. Cisco
hereby assumes, as of the Effective Time, all the duties and obligations of
Fibex under each of the Fibex Options. In connection with such assumption, the
number of shares of Cisco Stock purchasable under each Fibex Option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio. Accordingly, the number of shares of Cisco Stock subject to
each Fibex Option hereby assumed shall be as specified for that option in
attached Exhibit(s) A, and the adjusted
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exercise price payable per share of Cisco Stock under the assumed Fibex Option
shall also be as indicated for that option in attached Exhibit(s) A.
2. The intent of the foregoing adjustments to each assumed Fibex Option
is to assure that the spread between the aggregate fair market value of the
shares of Cisco Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Fibex Stock subject to the Fibex Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the Fibex Option immediately prior to the Merger.
3. The following provisions shall govern each Fibex Option hereby assumed
by Cisco:
(a) Unless the context otherwise requires, all references in each
Option Agreement and, if applicable, in the Plan (as incorporated into such
Option Agreement) (i) to the "Company" shall mean Cisco, (ii) to "Shares"
shall mean shares of Cisco Stock, (iii) to the "Board" shall mean the Board
of Directors of Cisco and (iv) to the "Committee" shall mean the
Compensation Committee of the Cisco Board of Directors.
(b) The grant date and the expiration date of each assumed Fibex
Option and all other provisions which govern either the exercise or the
termination of the assumed Fibex Option shall remain the same as set forth
in the Option Agreement applicable to that option, and the provisions of
the Option Agreement shall accordingly govern and control Optionee's rights
under this Agreement to purchase Cisco Stock.
(c) Pursuant to the terms of the Option Agreement, none of your
options assumed by Cisco in connection with the transaction will terminate
and cease to outstanding upon the consummation of the Merger. Each Fibex
Option shall be assumed by Cisco as of the Effective Time. Each such
assumed Fibex Option shall thereafter continue to vest for any remaining
unvested shares of Cisco Stock subject to that option in accordance with
the same installment vesting schedule in effect under the applicable Option
Agreement immediately prior to the Effective Time; provided, however, that
the number of shares subject to each such installment shall be adjusted to
reflect the Exchange Ratio.
(d) For purposes of applying any and all provisions of the Option
Agreement and/or the Plan relating to Optionee's status as an employee or a
consultant of Fibex, Optionee shall be deemed to continue in such status as
an employee or a consultant for so long as Optionee renders services as an
employee or a consultant to Cisco or any present or future Cisco
subsidiary. Accordingly, the provisions of the Option Agreement governing
the termination of the assumed
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Fibex Options upon Optionee's cessation of service as an employee or a
consultant of Fibex shall hereafter be applied on the basis of Optionee's
cessation of employee or consultant status with Cisco and its subsidiaries,
and each assumed Fibex Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for that
option, following such cessation of service as an employee or a consultant
of Cisco and its subsidiaries.
(e) The adjusted exercise price payable for the Cisco Stock subject
to each assumed Fibex Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option. For
purposes of determining the holding period of any shares of Cisco Stock
delivered in payment of such adjusted exercise price, the period for which
such shares were held as Fibex Stock prior to the Merger shall be taken
into account.
(f) In order to exercise each assumed Fibex Option, Optionee must
deliver to Cisco a written notice of exercise in which the number of shares
of Cisco Stock to be purchased thereunder must be indicated. The exercise
notice must be accompanied by payment of the adjusted exercise price
payable for the purchased shares of Cisco Stock and should be delivered to
Cisco at the following address:
Cisco Systems, Inc.
000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx X
Xxx Xxxx, XX 00000
Attention: Option Plan Administrator
4. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
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IN WITNESS WHEREOF, Cisco Systems, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 28th day of May, 1999.
CISCO SYSTEMS, INC.
By:
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Xxxxx X. Xxxxxx
Corporate Secretary
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 Fibex Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, as applicable, and such Stock Option
Assumption Agreement.
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Employee, OPTIONEE
DATED: __________________, 1999
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