EXHIBIT 99.3
FORM OF OPTION ASSUMPTION AGREEMENT
EFFECTIVE DATE: OCTOBER 10, 2002
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear <>:
As you know, on October 10, 2002 (the "Closing Date") Cisco Systems, Inc.
("Cisco") acquired AYR Networks, Inc. ("AYR") (the "Acquisition"). In the
Acquisition, each share of AYR common stock was exchanged for 0.5766685 (the
"Exchange Ratio") of a share of Cisco common stock ("Cisco Stock"). On the
Closing Date you held one or more outstanding options (the "AYR Options") to
purchase shares of AYR Networks, Inc. common stock granted to you under the AYR
Networks, Inc. 2000 Stock Plan (the "Plan"), each documented with a Stock Option
Agreement -- Early Exercise with Note (the "Option Agreement") issued to you
under the Plan. In accordance with the Acquisition, on the Closing Date Cisco
assumed all obligations of AYR under the AYR Options. This Agreement evidences
the assumption of the AYR Options, including the necessary adjustments to the
AYR Options required by the Acquisition.
Your AYR Options immediately before and after the Acquisition are as follows:
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AYR STOCK OPTIONS CISCO ASSUMED OPTIONS
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# Shares of AYR AYR Exercise Price # of Shares of Cisco Cisco Exercise Price
Common Stock Per Share Common Stock Per Share
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The post-Acquisition adjustments are based on the Exchange Ratio and are
intended to: (i) assure that the total spread of each assumed AYR 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; and (ii) to preserve, on a per share basis, the ratio of
exercise price to fair market value that existed immediately prior to the
Acquisition.
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 AYR 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 AYR 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 AYR
common stock prior to the Acquisition will be taken into account.
The grant date, vesting commencement date, vesting schedule and expiration date
of your assumed AYR 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 AYR 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.
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. Upon your termination of employment with Cisco you will have the
limited time period specified in your Option Agreement to exercise your assumed
AYR Option to the extent vested and outstanding at the time, generally a three
month period, after which time your AYR Options will expire and NOT be
exercisable for Cisco Stock.
To exercise your assumed AYR option, you must utilize one of Cisco's designated
brokers. Please refer to Cisco's option exercise policies and procedures
detailed on Cisco's Stock Administration website
(xxx.xx.xxxxx.xxx/XxxXxx/XxxxxXxxxx) or call the Human Resources Connection at
(000) 000-0000 for further information.
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 AYR
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 AYR Options, please
contact Xxxxxxx Xxxxxxx at (000) 000-0000.
CISCO SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Corporate Secretary
EFFECTIVE DATE OCTOBER 10, 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 AYR Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement.
DATED: __________________, 2002 ----------------------------------------
<>, OPTIONEE
