EXHIBIT 99.3
SPECIAL ADDENDUM
TO
STOCK OPTION AGREEMENT
The provisions of this Special Addendum are hereby incorporated into,
and are hereby made a part of, that certain Stock Option Agreement (the
"Option Agreement") between Cygnus, Inc. (the "Corporation") and
_________________________________ ("Optionee") evidencing the grant on this
date of a stock option (the "Option") to Optionee under the terms of the
Corporation's 1994 Stock Option/Award Plan. The provisions of this Special
Addendum shall be effective immediately for such Option.
All capitalized terms in this Special Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to them in that
certain change in control benefit agreement (the "Change in Control
Agreement") between the Corporation and Optionee dated February 5, 1996 and
as subsequently modified and restated on August 28, 1998 and shall continue
to have those meanings whether or not the Change in Control Agreement remains
in effect throughout the term of each Option subject to this Special Addendum.
CHANGE IN CONTROL
1. The Option, to the extent outstanding at the time of a Change in
Control but not otherwise fully exercisable for all of the Option Shares
pursuant to the Exercise Schedule, shall, immediately prior to the closing
date of such Change in Control, vest in full and become exercisable for all
of the Option Shares and may be exercised for any or all of those shares as
fully-vested shares.
2. Immediately following the consummation of the Change in Control,
the Option shall terminate and cease to be outstanding, except the extent
assumed by the successor entity (or its parent entity) or otherwise continued
in full force and effect pursuant to the express terms of the Change in
Control transaction.
3. To the extent the Option is assumed in the Change in Control or
otherwise continued in full force and effect, the Option shall remain fully
exercisable for the option shares until the EARLIER of (i) the Expiration
Date or (ii) the expiration of the one (1)-year period measured from the Date
of Termination.
4. For purposes of this Addendum, the following definitions shall be
in effect:
CHANGE IN CONTROL shall have the meaning given such term in
Exhibit A to the Change in Control Agreement.
DATE OF TERMINATION refers to cessation of employment and shall
have the meaning given such term in Exhibit A to the Change in Control
Agreement.
EXERCISE SCHEDULE shall mean the schedule set forth in the
Stock Option Agreement for the Option, pursuant to which the Option is
to vest and become exercisable for the Option Shares in a series of
installments over Optionee's period of employment with the
Corporation.
EXPIRATION DATE shall mean the expiration date of the ten
(10)-year term of the Option.
OPTION SHARES shall mean the shares of the Corporation's
Common Stock subject to the Option in question.
5. The provisions of this Special Addendum shall govern the period for
which the Option is to remain exercisable following the termination of the
Optionee's employment after the Change in Control and shall supersede any
provisions to the contrary in the Option Agreement.
2.
6. The provisions of this Special Addendum shall survive the
expiration or termination of the Change in Control Agreement and shall
accordingly remain in full force and effect following any such expiration or
termination.
IN WITNESS WHEREOF, Cygnus, Inc. has caused this Addendum to be executed
by its duly-authorized officer as of the Effective Date specified below.
CYGNUS, INC.
By:_____________________________
Title:__________________________
EFFECTIVE DATE:__________________ , 199__
3.
