EXHIBIT 99.4
GEOCITIES
STOCK OPTION ASSUMPTION AGREEMENT
UNDER
STARSEED, INC.
1998 STOCK OPTION/STOCK ISSUANCE PLAN
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OPTIONEE:_________________
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 4th day of December
1998 by GeoCities, a Delaware corporation ("GeoCities").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Starseed, Inc., a
Louisiana corporation ("Starseed"), which were granted to Optionee under the
Starseed, Inc. 1998 Stock Option/Stock Issuance Plan (the "Plan") and are
evidenced by a Stock Option Agreement (the "Option Agreement") between Starseed
and Optionee.
WHEREAS, on December 4, 1998, Starseed was acquired by GeoCities
through the merger of Starseed into a wholly-owned subsidiary of GeoCities (the
"Merger") pursuant to the terms of the November 10, 1998 Merger Agreement by and
among GeoCities, GeoCities Acquisition Corporation, Starseed and certain
Starseed affiliates (the "Merger Agreement").
WHEREAS, Optionee has, as a precondition to the assumption by
GeoCities of his or her outstanding options under the Plan, waived any and all
rights Optionee may have had to receive any cash payment upon the subsequent
exercise of those options which would serve to compensate him or her for, or
otherwise provide the economic equivalent of, the cash consideration paid per
share of Starseed common stock to the actual holders of Starseed common stock in
connection with the conversion of their shares of such common stock in the
Merger (the "Waiver").
WHEREAS, the provisions of the Merger Agreement require GeoCities to
assume the obligations of Starseed with respect to all outstanding options held
under the Plan by individuals who have executed the requisite Waiver prior to
consummation of the Merger and to issue to those individuals an agreement
evidencing the assumption of their outstanding options under the Plan.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for conversion of shares in the
Merger is 0.446741 of a share of GeoCities common stock ("GeoCities Stock") for
each outstanding share of Starseed common stock ("Starseed Stock").
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 GeoCities in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Starseed Stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "Starseed Options") and the exercise price payable per share are as set
forth in Exhibit A hereto.
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2. GeoCities hereby assumes, as of the Effective Time, all the
duties and obligations of Starseed under each of the Starseed Options. In
connection with such assumption, the number of shares of GeoCities Stock
purchasable under each Starseed Option hereby assumed and the exercise price
payable thereunder have been adjusted to reflect the Exchange Ratio.
Accordingly, the number of shares of GeoCities Stock subject to each Starseed
Option hereby assumed shall be as specified for that option in attached Exhibit
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A, with any fractional share rounded down to the next whole share, and the
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adjusted exercise price payable per share of GeoCities Stock under the assumed
Starseed Option shall be as indicated for that option in attached Exhibit A,
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with such price rounded up to the next whole cent.
3. The following provisions shall govern each Starseed Option hereby
assumed by GeoCities:
A. Unless the context otherwise requires, all references in
each Option Agreement and in the Plan: (i) to the "Corporation" shall mean
GeoCities, (ii) to "Common Stock" or the "Option Shares" shall mean shares
of GeoCities Stock, (iii) to the "Board" shall mean the Board of Directors
of GeoCities and (iv) to the "Committee" or the "Plan Administrator" shall
mean the Compensation Committee of the GeoCities Board of Directors.
B. The grant date and the expiration date of each assumed
Starseed Option and all other provisions which govern either the vesting or
the termination of the assumed Starseed 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 GeoCities Stock.
C. The shares subject to each assumed Starseed Option held by
Optionee shall continue to vest in accordance with the same installment
vesting schedule in effect under the applicable Option Agreement (and
related Notice of Option Grant) immediately prior to the Effective Time,
with the number of shares of GeoCities Stock subject to each such
installment adjusted to reflect the Exchange Rate. Accordingly, no
accelerated vesting of the shares subject to the Starseed Options held by
Optionee shall be deemed to occur by reason of the Merger, and the vesting
dates for the shares of GeoCities Stock subject to each assumed Option
following the Merger shall remain the same as the vesting schedule in
effect for the shares of Starseed Stock subject to that option immediately
prior to the Merger.
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D. Upon the exercise of the assumed Starseed Option for any
unvested shares of GeoCities Stock, Optionee shall execute a Stock Purchase
Agreement in substantially the form of the Stock Purchase Agreement
currently utilized for the acquisition of unvested Starseed shares under
the Plan. However, the provisions of that form agreement shall be modified
as follows: (i) all references to the "Corporation" shall mean GeoCities
as the successor to the repurchase rights of Starseed in the Merger, (ii)
all references to "Common Stock" or "Purchased Shares" shall mean the
shares of GeoCities Stock purchased under the assumed Starseed Option,
(iii) all references to "Unvested Shares" shall mean the unvested shares of
GeoCities Stock purchased under such Stock Purchase Agreement, (iv) all
references to the "Exercise Price" shall be the adjusted exercise price per
share in effect under the assumed Option, (v) all references to the "Plan
Administrator" shall mean the Compensation Committee of the GeoCities Board
of Directors and (vi) the provisions relating to first refusal rights shall
no longer have any force or effect.
E. For purposes of applying any and all provisions of the
Option Agreement or the Stock Purchase Agreement relating to Optionee's
period of Service, Optionee shall be deemed to continue in Service for so
long as Optionee renders services as an employee or a consultant to
GeoCities or any present or future parent or subsidiary of GeoCities,
including Starseed. Accordingly, the provisions of the Option Agreement
governing the termination of the assumed Starseed Options following
Optionee's cessation of Service and the provisions of the Stock Purchase
Agreement governing the vesting of the shares subject to those Options
during Optionee's period of Service shall hereafter be applied on the basis
of Optionee's continuation in employee or consultant status with GeoCities
or any parent or subsidiary company. Accordingly, all vesting of the shares
subject to the assumed Starseed Options shall cease immediately upon, and
each assumed Starseed Option shall terminate within a designated time
period (as set forth in the Option Agreement for that option) following,
such cessation of service. GeoCities as successor to Starseed in the Merger
shall have the right, exercisable in accordance with the terms and
provisions of the Stock Purchase Agreement, as modified hereby, to
repurchase any unvested shares of GeoCities Stock subject to the Stock
Purchase Agreement at the time of Optionee's cessation of Service.
F. The adjusted exercise price payable for the GeoCities Stock
subject to each assumed Starseed 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 GeoCities Stock
delivered in payment of such adjusted exercise price, the period for which
such shares were held as Starseed Stock prior to the Merger shall be taken
into account.
G. In order to exercise each assumed Starseed Option for vested
shares of GeoCities Stock, Optionee must deliver to GeoCities a written
notice of exercise in which the number of vested shares of GeoCities Stock
to be purchased thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for the
purchased shares of GeoCities Stock and must be delivered to GeoCities at
the following address:
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GeoCities
0000 Xxxxxxx Xxxxxx
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Attention: Stock Option Plan Administrator
H. In order to exercise each assumed Starseed Option for
unvested shares of GeoCities Stock, Optionee must deliver to GeoCities a
properly-executed Stock Purchase Agreement (as modified hereby) in which
the number of unvested shares of GeoCities Stock to be purchased thereunder
must be indicated. The exercise notice must be accompanied by payment of
the adjusted exercise price payable for the purchased shares of GeoCities
Stock and must be delivered to GeoCities at the address indicated above.
I. By reason of the Waiver, Optionee shall have no right to
receive any cash payment in connection with the subsequent exercise of the
assumed Starseed Options, whether for vested or unvested shares.
Accordingly, Optionee shall only be entitled to receive shares of GeoCities
Stock upon exercise of the assumed Starseed Options, and no other payment,
whether in cash or other form, shall be payable by GeoCities, Starseed or
any other entity in connection with such exercise.
4. Except to the extent specifically modified by this Stock Option
Assumption Agreement and the Waiver, 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, GeoCities has caused this Stock Option Assumption
Agreement to be executed on its behalf by its duly authorized officer as of the
__th day of December 1998.
GEOCITIES
By:________________________________
Title:_____________________________
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ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands and acknowledges that all rights and
liabilities with respect to each of his or her Starseed Options hereby assumed
by GeoCities are as set forth only in the Option Agreement, the Plan, such Stock
Option Assumption Agreement and the Waiver, and no other agreements exist with
respect to his or her Starseed Options. The undersigned also acknowledges that
except to the extent specifically modified by this Stock Assumption Agreement
and the Waiver, all of the terms and conditions of the Option Agreement and the
related form Stock Purchase 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.
The undersigned further acknowledges that the Starseed Option or
Options listed in Exhibit A hereto constitute all of the outstanding options or
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other rights to purchase Starseed Stock that he or she owned immediately prior
to the Effective Time.
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OPTIONEE
DATED: DECEMBER 4, 1998
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EXHIBIT A
Optionee's Outstanding Options to Purchase Shares
of Starseed, Inc. Common Stock (Pre-Merger)
and
Optionee's Outstanding Options to Purchase Shares
of GeoCities Common Stock (Post-Merger)
