EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between GeoCities (the "Corporation") and ___________________________
("Optionee") evidencing the stock option (the "Option") granted this date to
Optionee under the terms of the Corporation's 1998 Stock Incentive Plan, and
such provisions shall be effective immediately with such grant date. All
capitalized terms in this Addendum, to the extent not otherwise defined herein,
shall have the meanings assigned to them in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
1. Optionee is hereby granted a limited stock appreciation right exercisable
upon the following terms and conditions:
(i) Optionee shall have the unconditional right, exercisable at any
time during the thirty (30)-day period immediately following a Hostile
Take-Over, to surrender the Option to the Corporation, to the extent the
Option is at the time exercisable for one or more shares of Common Stock.
In return for the surrendered Option, Optionee shall receive a cash
distribution from the Corporation in an amount equal to the excess of (A)
the Take-Over Price of the shares of Common Stock for which the surrendered
option (or surrendered portion) is at the time exercisable over (B) the
aggregate Exercise Price payable for such shares.
(ii) To exercise this limited stock appreciation right, Optionee must,
during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's
copy of the Option Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within five (5)
business days following such delivery date. The exercise of the limited
stock appreciation right in accordance with the terms of this Addendum is
hereby approved by the Plan Administrator, in advance of such exercise, and
no further approval of the Plan Administrator or the Board shall be
required at the time of the actual option surrender and cash distribution.
Upon receipt of such cash distribution, the Option shall be cancelled with
respect to the Option Shares for which the Option has been surrendered, and
Optionee shall cease to have any further right to acquire those Option
Shares under the Option Agreement. The Option shall, however, remain
outstanding and exercisable for the balance of the Option Shares (if any)
in accordance with the terms of the Option Agreement, and the Corporation
shall issue a replacement
stock option agreement (substantially in the same form of the surrendered
Option Agreement) for those remaining Option Shares.
(iii) In no event may this limited stock appreciation right be
exercised when there is not a positive spread between the Fair Market Value
of the Option Shares subject to the surrendered option and the aggregate
Exercise Price payable for such shares. This limited stock appreciation
right shall in all events terminate upon the expiration or sooner
termination of the Option term and may not be assigned or transferred by
Optionee, except to the extent the Option is transferable in accordance
with the provisions of the Option Agreement.
2. For purposes of this Addendum, the following definitions shall be in
effect:
(i) A Hostile Take-Over shall be deemed to be
(A) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 0000 Xxx) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(B) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
(ii) The Take-Over Price per share shall be deemed to be equal to the
greater of the Fair Market Value per Option Share on the option surrender
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date or (B) the highest reported price per share of Common Stock paid by
the tender offeror in effecting the Hostile Take-Over. However, if the
surrendered Option is designated as an Incentive Option in the Grant
Notice, then the Take-Over Price shall not exceed the clause (A) price per
share.
2.
IN WITNESS WHEREOF, GeoCities has caused this Addendum to be executed
by its duly-authorized officer as of the Effective Date specified below.
GEOCITIES
By:
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Title:
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EFFECTIVE DATE: ___________________, 199__
3.
