EXHIBIT 99.3
Form of Stock Option Assumption Agreement used in connection
with The OASys Group, Inc. 1996 Stock Option Plan
1996 STOCK OPTION PLAN
CABLETRON SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
---------------------------------
OPTIONEE:
STOCK OPTION ASSUMPTION AGREEMENT issued as of the ____ day of
February, 1997 by Cabletron Systems, Inc., a Delaware corporation ("Cabletron").
WHEREAS, _____________ ("Optionee") holds one or more outstanding
options to purchase shares of the common stock of The OASys Group, Inc., a
California corporation ("OASys"), which were granted to Optionee under The OASys
Group, Inc. 1996 Stock Option Plan (the "Plan"), and are evidenced by a Stock
Option Agreement (the "Option Agreement") between OASys and Optionee.
WHEREAS, OASys has this day been acquired by Cabletron through merger
of a wholly-owned Cabletron subsidiary, Small Cat, Inc. ("Merger Sub"), with and
into OASys (the "Merger") pursuant to the Agreement and Plan of Merger dated as
of November 26, 1996 by and among Cabletron, OASys and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Cabletron to
assume all obligations of OASys under all options outstanding under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option a notice setting forth such holder's rights after consummation of the
Merger.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio in effect for the Merger is .04178 of a share of Cabletron common
stock ("Cabletron Stock") for each outstanding share of OASys common stock (the
"Exchange Ratio").
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by Cabletron in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of OASys common stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "OASys Options") and the exercise price payable per share are set forth in
Exhibit A hereto. Cabletron hereby assumes, as of the Effective Time, all the
duties and obligations of
OASys under each of the OASys Options. In connection with such assumption, the
number of shares of Cabletron Stock purchasable under each OASys Option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the Exchange Ratio at which shares of OASys common stock were converted into
shares of Cabletron Stock in consummation of the Merger. Accordingly, the number
of shares of Cabletron Stock subject to each OASys Option hereby assumed, and
the adjusted exercise price payable per share of Cabletron Stock under the
assumed OASys Option, shall be as indicated for that option in attached
Exhibit B.
2. The intent of the foregoing adjustments to each assumed OASys Option
is to assure that the spread between the aggregate fair market value of the
shares of Cabletron Stock purchasable under that option and the aggregate
exercise price as adjusted hereunder will, immediately after the consummation of
the Merger, equal the spread which existed, immediately prior to the Merger,
between the then aggregate fair market value of the OASys common stock subject
to the OASys Option and the aggregate exercise price in effect at such time
under the Option Agreement. Such adjustments are also designed to preserve, on a
per share basis immediately after the Merger, the same ratio of exercise price
per option share to fair market value per share which existed under the OASys
Option immediately prior to the Merger.
3. The following provisions shall govern each OASys Option hereby
assumed by Cabletron:
- Unless the context otherwise requires, all references to the
"Company" in each Option Agreement and in the Plan (as incorporated into such
Option Agreement) shall mean Cabletron, all references to "Common Stock" shall
mean shares of Cabletron Stock, and all references to the "Committee" shall mean
the Incentive Compensation Committee of the Board of Directors of Cabletron.
- The grant date and the expiration date of each assumed OASys Option
and all other provisions which govern either the exercisability or the
termination of the assumed OASys Option shall remain the same as set forth in
the Option Agreement applicable to that option and shall accordingly govern and
control Optionee's rights under this Agreement to purchase Cabletron Stock.
- Each assumed OASys Option shall remain exercisable in accordance with
the same installment exercise schedule in effect under the applicable Option
Agreement immediately prior to the Effective Time, with the number of shares of
Cabletron Stock subject to each such installment adjusted to reflect the
Exchange Rate. Accordingly, no accelerated vesting of the OASys Options shall be
deemed to occur by reason of the Merger, and the grant date for each assumed
OASys Option shall accordingly remain the same as in effect under the applicable
Option Agreement immediately prior to the Merger.
- For purposes of applying any and all provisions of the Option
Agreement relating to Optionee's status as an employee with the Company,
Optionee shall be deemed to continue in such employee status for so long as
Optionee renders services as an employee to Cabletron or any present or future
Cabletron subsidiary, including (without limitation) OASys. Accordingly, the
provisions of the Option Agreement governing the termination of the assumed
OASys Option upon the Optionee's cessation of employee status with OASys shall
hereafter be applied on the basis of the Optionee's cessation of employee status
with Cabletron and its subsidiaries, and each assumed OASys Option shall
accordingly terminate, within the designated time period in effect under the
Option Agreement for that option, following such cessation of employment with
Cabletron and its subsidiaries.
- The adjusted exercise price payable for the Cabletron Stock subject
to each assumed OASys 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 Cabletron Stock delivered in
payment of such adjusted exercise price, the period for which such shares were
held as OASys common stock prior to the Merger shall be taken into account.
- In order to exercise each assumed OASys Option, Optionee must
deliver to Cabletron a written notice of exercise in which the number of shares
of Cabletron Stock to be purchased thereunder must be indicated. The exercise
notice should be delivered to Cabletron at the following address:
Cabletron Systems, Inc.
00 Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
4. Except to the extent specifically modified by this Stock 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.
IN WITNESS WHEREOF, Cabletron Systems, Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its duly-authorized
officer as of the ____ day of February, 1997.
CABLETRON SYSTEMS, INC.
By:
--------------------------------
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of The OASys Group, Inc.
Common Stock (Pre-Merger)
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of Cabletron Systems, Inc.
Common Stock (Post-Merger)
