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Exhibit 99.3
EFFECTIVE DATE: FEBRUARY 20, 2001
CISCO SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
Dear [Exio Optionee]:
As you know, on February 20, 2001 (the "Closing Date") Cisco Systems, Inc.
("Cisco") acquired Exio Communications, Inc. ("Exio") (the "Acquisition"). In
the Acquisition, each share of Exio common stock was exchanged for 0.6590 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 Exio common stock granted
to you under the Exio 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 "Exio Options"). In accordance with the Acquisition,
on the Closing Date Cisco assumed all obligations of Exio under the Exio
Options. This Agreement evidences the assumption of the Exio Options, including
the necessary adjustments to the Exio Options required by the Acquisition.
Your Exio Options immediately before and after the Acquisition are as follows:
---------------------------------------------------------- ---------------------------------------------------
EXIO STOCK OPTIONS CISCO ASSUMED OPTIONS
---------------------------------------------------------- ---------------------------------------------------
---------------------------- ----------------------------- ------------------------- -------------------------
# Shares of Exio Exio Exercise Price # of Shares of Cisco Cisco Exercise Price
Common Stock Per Share Common Stock Per Share
---------------------------- ----------------------------- ------------------------- -------------------------
The post-Acquisition adjustments are based on the Exchange Ratio and are
intended to: (i) assure that the total spread of each assumed Exio 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 Exio 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 Exio 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 Exio
Stock prior to the Acquisition will be taken into account.
The grant date, vesting commencement date, vesting schedule and the expiration
date of your assumed Exio Options remain the same as set forth in your Option
Agreement, but the
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EFFECTIVE DATE: FEBRUARY 20, 2001
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 Exio 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 Exio Option
to the extent vested and outstanding at the time, generally a three month
period, after which time your Exio Options will expire and NOT be exercisable
for Cisco Stock.
To exercise your assumed Exio 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.
000 Xxxx Xxxxxx Xxxxx
XX-00-0
Xxx Xxxx, XX 00000
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 Exio
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 Exio Options, please
contact Xxxxx Xxxxx at 000-000-0000.
CISCO SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------
Xxxxx X. Xxxxxx
Corporate Secretary
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EFFECTIVE DATE: FEBRUARY 20, 2001
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 Exio Options hereby assumed by Cisco are as set
forth in the Option Agreement, the Plan, and such Stock Option Assumption
Agreement.
DATED: , 2001
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(EMPLOYEE), OPTIONEE
