EXHIBIT 99.4
Form of Addendum to Stock Option Agreement
(Limited Stock Appreciation Right)
ADDENDUM
TO
STOCK OPTION AGREEMENT
SECTION 16 INSIDERS
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated _______________
(the "Option Agreement") by and between Exogen, Inc. (the "Corporation") and
_________________________________________________ ("Optionee") evidencing the
stock option granted on such date to Optionee under the terms of the
Corporation's 1995 Stock Option/Stock Issuance Plan, and such provisions shall
be effective immediately. 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 in tandem with the option, exercisable upon the terms set forth below:
(i) Optionee shall have the unconditional right,
exercisable at any time during the thirty (30)-day period immediately
following a Hostile TakeOver, 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) days following such delivery date, and
neither the approval of the Plan Administrator nor the consent of the
Board shall be required in connection with such 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 new 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 occur upon
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.
(ii) The Take-Over Price per share shall be deemed to be
equal to the greater of (A) the Fair Market Value per Option Share on
the option surrender 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.
IN WITNESS WHEREOF, Exogen, Inc. has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
EXOGEN, INC.
By: _________________________________
Title: _________________________________
________________________________________
______________________________, OPTIONEE
EFFECTIVE DATE: ______________ , 199_
