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EXHIBIT 99.16
EFFECTIVE DATE: SEPTEMBER 25, 2000
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [Komodo Optionee]:
As you know, on September 25, 2000 (the "Closing Date") Cisco Systems, Inc.
("Cisco") acquired Komodo Technology, Inc. ("Komodo") (the "Acquisition"). In
the Acquisition, each share of Komodo common stock was exchanged for 0.10473 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 Komodo common stock
granted to you under the Komodo Technology, Inc. 1999 Stock Plan (the "Plan")
and documented with a Stock Option Agreement(s) and/or Notice(s) of Grant of
Stock Option and any amendment(s) or waiver(s) thereto (collectively, the
"Option Agreement") issued to you under the Plan (the "Komodo Options"). In
accordance with the Acquisition, on the Closing Date Cisco assumed all
obligations of Komodo under the Komodo Options. This Agreement evidences the
assumption of the Komodo Options, including the necessary adjustments to the
Komodo Options required by the Acquisition.
Your Komodo Options immediately before and after the Acquisition are as follows:
<TABLE>
<CAPTION>
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KOMODO STOCK OPTIONS CISCO ASSUMED OPTIONS
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<S> <C> <C> <C>
# Shares of Komodo Komodo Exercise Price # of Shares of Cisco Cisco Exercise Price
Common Stock Per Share Common Stock Per Share
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</TABLE>
The post-Acquisition adjustments are based on the Exchange Ratio and are
intended to: (i) assure that the total spread of each assumed Komodo 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 Komodo 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 Komodo 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
Komodo Stock prior to the Acquisition will be taken into account.
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The grant date, vesting commencement date, vesting schedule and the expiration
date of your assumed Komodo Options remain 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 Komodo 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 Komodo Option
to the extent vested and outstanding at the time, generally a 30 day period,
after which time your Komodo Options will expire and NOT be exercisable for
Cisco Stock.
To exercise your assumed Komodo 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.
170 West Tasman Drive
SJ-11-3
San Jose, CA 95134
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
Komodo 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 Komodo Options, please
contact Kathy Zwern at 408-526-8045.
CISCO SYSTEMS, INC.
By: /s/ Larry R. Carter
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Larry R. Carter
Corporate Secretary
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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 Komodo Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, and such Stock Option Assumption
Agreement.
DATED: __________________, 2000 _____________________________________
<<EMPLOYEE>>, OPTIONEE
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