EXHIBIT 10.18
STOCK OPTION AGREEMENT
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This STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of January 13, 1997, by and between GeoCities, a California corporation, and
XXXXX X. XXXXXXX, an employee of GeoCities (the "Optionee").
W I T N E S S E T H:
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WHEREAS, the Optionee is currently serving as the president and chief
executive officer, and is a director, of GeoCities; and
WHEREAS, GeoCities desires to grant to the Optionee an option which does
not meet the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended, to purchase shares of the common stock of GeoCities ("Common
Stock");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions hereinafter set forth and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. GeoCities hereby grants to the Optionee the option to purchase 150,000
shares of Common Stock at a price per share of $3.54 upon the terms and subject
to the conditions set forth herein.
2. Subject to the conditions set forth herein, the right to exercise this
option shall accrue in periodic installments as follows:
(i) commencing January 13, 1998, this option may be exercised to the
extent of 37,500 shares;
(ii) commencing January 13, 1999, this option may be exercised to the
extent of an additional 37,500 shares;
(iii) commencing January 13, 2000, this option may be exercised to the
extent of an additional 37,500 shares; and
(iv) commencing January 13, 2001, this option may be exercised to the
extent of an additional 37,500 shares.
This option may be exercised, in whole or in part, subject to the limitations
imposed by the exercise schedule set forth above, at any time and from time to
time commencing with the respective dates on which each portion becomes
exercisable and continuing until January 13, 2004, at which time the entire
unexercised portion of this option shall expire.
3. For purposes of this Agreement, the Optionee's service as an officer
and director of GeoCities shall be deemed to be the equivalent of the Optionee's
employment with GeoCities,
and all references to the Optionee's employment and cessation of employment
shall be deemed to refer to the Optionee's service as an officer and director of
GeoCities and his ceasing to be an officer and director of GeoCities,
respectively. In the event of the termination of the Optionee's employment for
any reason, including for cause or without cause, resignation, death or
disability, then (i) the exercise schedule to which this option is subject
pursuant to Paragraph 2 hereof shall be accelerated and such option shall be
immediately exercisable, and (ii) the Optionee must then exercise his option
within thirty (30) days thereafter. The Optionee shall be deemed to have waived
the right to exercise his option as to any shares which the Optionee fails to
purchase within such thirty (30) day period.
4. This option shall be nontransferable by the Optionee, other than by
will or the laws of descent and distribution.
5. Subject to any required action of GeoCities' stockholders, the
existence of outstanding options hereunder shall not affect GeoCities' right or
power to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in its capital structure or business; to
approve any merger or consolidation, issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock; to elect its
dissolution or liquidation or that of any of its subsidiaries; to sell or
transfer any of its business; or to do any other corporate act whether similar
to the events described above or otherwise. If the number of outstanding shares
of Common Stock is increased or decreased or changed into or exchanged for a
different number or kind of securities, whether of GeoCities or any other
corporation, by reason of recapitalization, reclassification, stock split,
combination of shares, stock dividends or other similar event, the number and
kind of securities as to which outstanding options may be exercised, and the
option price at which outstanding options may be exercised may be adjusted by
the Board of Directors, whose determination shall be binding and final.
6. In the event of (i) a liquidation, dissolution or winding up of
GeoCities, (ii) a consolidation or merger of GeoCities with or into any other
corporation or corporations (other than a wholly-owned subsidiary), (iii) the
sale, transfer or other disposition of all or substantially all of the assets of
GeoCities or (iv) the consummation of any transaction or series of related
transactions which results in GeoCities' shareholders immediately prior to such
transaction not holding at least 50% of the voting power of the surviving or
continuing entity (collectively, a "Liquidation"), then in the event of any such
Liquidation, the exercise schedule to which this option is subject pursuant to
Paragraph 2 hereof shall be accelerated, and the option shall be immediately
exercisable upon the consummation of any such Liquidation. Any actions taken
hereunder by the Board of Directors may be done without consideration of any
resulting income tax consequences to GeoCities or the Optionee.
7. This option may be exercised in accordance with the terms hereof by:
(a) giving written notice of such exercise to GeoCities, specifying the number
of whole shares to be purchased and accompanied by full payment of the purchase
price thereof, either in cash, by check, or by delivery to GeoCities of shares
of Common Stock already owned by the Optionee (duly endorsed in favor of
GeoCities or accompanied by a duly endorsed stock power) together with the
amount of any income tax GeoCities is required by law to withhold by reason of
such exercise, and (b) giving satisfactory assurances in writing, if requested
by GeoCities, signed by
the person exercising this option, that the shares to be purchased upon such
exercise are being purchased for investment and not with the view to
distribution thereof. Any Common Stock which the Optionee acquires by his
exercise of this option shall be subject to the rights and restrictions set
forth in the Optionee's employment agreement dated as of December 28, 1995, as
amended, and that certain Amended and Restated Rights Agreement, dated as of the
date hereof, among the Optionee, GeoCities and certain other shareholders named
therein.
8. Unless the shares to be issued are at the time of issuance registered
under the Securities Act of 1933, as amended, this option is granted on the
condition that the purchase of stock hereunder shall be for investment purposes
and not with the view to resale or distribution.
9. Neither the Optionee nor any person claiming under or through him shall
be, or have any of the rights or privileges of' a stockholder of GeoCities with
respect to any of the shares issuable upon the exercise of this option, unless
and until certificates representing such shares shall have been issued and
delivered to him.
10. Any notice to be given to GeoCities under the terms of this Agreement
shall be addressed to GeoCities, in care of its President, at 0000 Xxxx Xxxxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000, or to such other address as GeoCities may
hereafter designate in writing. Any notice to be given to the Optionee shall be
addressed to the Optionee at the address set forth beneath his signature hereto,
or at any other address as the Optionee may hereafter designate in writing. Any
such notice shall be deemed to have been duly given if and when personally
delivered, or if mailed, two (2) business days following its being deposited in
the United States mails in a properly sealed envelope, addressed as aforesaid,
registered or certified, postage prepaid.
11. Except as otherwise provided herein, this option and the rights and
privileges conferred by this Agreement may not be transferred, assigned, pledged
or hypothecated by the Optionee in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this option, or of any right or privilege conferred hereby,
contrary to the provisions hereof or upon any attempted sale under any
execution, attachment or similar process upon the rights and privileges
conferred hereby, this option and the rights and privileges conferred upon the
Optionee in this Agreement shall immediately become null and void.
12. Subject to the limitations on transferability contained herein, this
Agreement shall be binding upon and inure to the benefit of the heirs, legal
representatives, successors and assigns of the parties hereto.
13. Nothing in this Agreement is intended, nor shall it be deemed, to
create any employment agreement between the Optionee and GeoCities or to impose
any obligation on the part of GeoCities to maintain Optionee's employment with
GeoCities, and any rights that the Optionee may have GeoCities with respect to
the Optionee's employment, other than as an at-will employee, shall be as set
forth in a written employment agreement between the Optionee and GeoCities, if
any.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, as of the day and year first above written.
GEOCITIES
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
ACCEPTED
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
0000 Xxxxxxx Xxx
Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
