EXHIBIT 99.15
COMPENSATION AGREEMENT
----------------------
This Agreement is made as of the 13th day of January, 1997 by and
between GeoCities, a California corporation (the "Corporation"), and Xxxx X.
Xxxxxx ("Optionee").
W I T N E S S E T H
-------------------
WHEREAS, in consideration for services performed by Optionee, the
Corporation granted Optionee a stock option on January 13, 1997, to purchase
200,000 shares of the Corporation's Common Stock (the "Option") upon the terms
and conditions set forth in the documentation evidencing such Option attached
hereto.
NOW, THEREFORE, in consideration of the above premises, the parties
hereto agree as follows:
1. The Corporation and Optionee acknowledge and agree that the
Option is granted solely as compensation for services rendered the Corporation
by Optionee and not for any capital-raising purposes or in connection with any
capital-raising activities.
2. The Option shall not be transferable or assignable except in
connection with Optionee's death.
3. This Agreement is intended to constitute a written compensation
contract within the meaning of Rule 701 of the Securities Act of 1933, as
amended.
4. This Agreement is intended solely to memorialize the agreement
and understanding which exists between Optionee and the Corporation
concerning the grant of the Option. Nothing herein or in the documentation
evidencing the Option is intended to provide Optionee with the right to
remain in the Corporation's service for any specific period, and Optionee's
services may be terminated at any time by the Corporation, for any reason,
with or without cause.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
OPTIONEE GEOCITIES
By:
------------------------------------- ----------------------------------
Title:
----------------------------------
STOCK OPTION AGREEMENT
----------------------
This STOCK OPTION AGREEMENT (this "Agreement") is made and entered
into as of the 13th day of January, 1997, by and between GEOCITIES, a California
corporation ("GeoCities"), and XXXX XXXXXX, an employee of GeoCities (the
"Optionee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Optionee is currently employed by GeoCities as Vice
President of Technical Operations; and
WHEREAS, GeoCities desires to grant to the Optionee an option which
does not meet the requirements of Section 422A of the Internal Revenue Code of
1996, 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
50,000 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 twelve thousand five hundred (12,500) shares;
(ii) commencing January 13, 1999, this option may be exercised to
the extent of an additional twelve thousand five hundred (12,500) shares;
(iii) commencing January 13, 2000, this option may be exercised to
the extent of an additional twelve thousand five hundred (12,500) shares; and
(iv) commencing January 13, 2001, this option may be exercised to
the extent of an additional twelve thousand five hundred (12,500).
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. In the event of termination of the Optionee's employment for any
reason other than death, this option shall immediately terminate. Irrespective
of the foregoing, if such cessation of employment shall occur on or after the
Optionee's fifty-fifth (55th) birthday or shall be due to the Optionee's
voluntary resignation with the consent of the Board of Directors
of GeoCities, expressed in the form of a resolution, this option may be
exercised to the extent this option was exercisable on the date of such
cessation of employment, within three (3) months after the date he ceases to be
an employee of GeoCities. If such cessation of employment shall be due to the
Optionee's permanent and total disability, this option may be exercised, to the
extent this option was exercisable on the date of such cessation of employment,
within one (1) year after the date he ceases to be an employee of GeoCities.
Irrespective of the foregoing, no option granted hereunder shall be exercisable
after the expiration of seven (7) years from the date of this Agreement. An
approved leave of absence shall not be deemed a termination of employment for
purposes of this Agreement, but no option may be exercised during any such leave
of absence, except during the first three (3) months thereof.
4. This option shall be exercisable by the Optionee only during his
lifetime. This option shall be nontransferable by the Optionee, other than by
will or the laws of descent and distribution.
5. In the event of the Optionee's death while in the employ of
GeoCities, or during the period following termination of employment during which
the Optionee is permitted to exercise an option pursuant to Paragraph 3 hereof,
this option may be exercised to the extent that it was otherwise executable as
of the date of such death or termination of employment by the Optionee's
transferee to the extent not previously exercised; but under no circumstances
shall the right of any such transferee extend beyond a period of seven (7) years
from the date of this Agreement. The Optionee's transferee shall be the person
or persons entitled to exercise the option under the Optionee's will, or, if no
testamentary disposition of the option shall have been made, his legal
representative. Any transferee exercising the option must furnish GeoCities
with: (a) written confirmation of his status as transferee; (b) evidence
satisfactory to GeoCities to establish the validity of the transfer of this
option in compliance with this Agreement and with any laws or regulations
pertaining to said transfer; and (c) written acceptance of the terms and
conditions of this option as prescribed in this Agreement.
6. Subject to any required action of GeoCities's stockholders, the
existence of outstanding options hereunder shall not affect GeoCities's 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.
7. 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
2
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.
8. 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 (the
"Employment Agreement"), and that certain Amended and Restated Rights Agreement,
dated as of the date hereof, among the Optionee, GeoCities and certain other
shareholders named therein.
9. (a) Notwithstanding anything contained herein to the contrary, in
the event that the Optionee ceases to be employed by GeoCities for any reason
(including, without limitation, as a result of resignation, retirement,
dismissal with or without cause, death or disability), GeoCities shall have the
first right and option, and the holders of Senior Securities (as defined below)
shall have the second right and option, to purchase from the Optionee (or, in
the case of death, from the Optionee's legal representative) all shares of
Common Stock held by the Optionee on the date of cessation of employment or
purchased by the Optionee following such date as permitted under Sections 3 and
5 hereof. In the event that GeoCities or any holder of Senior Securities shall
exercise such right and option, then the exercising party shall pay the
Optionee, as the purchase price for such shares of Common Stock, the Fair Market
Value (as defined below) of such shares. GeoCities may exercise its first right
and option by delivering notice to Optionee and to each holder of Senior
Securities within ninety (90) days following the cessation of the Optionee's
employment or the subsequent purchase of shares, as applicable, of its intent to
exercise its repurchase right and the Fair Market Value, and shall have paid for
such shares in cash at the end of such 90th day (unless the Fair Market Value of
the shares has not been conclusively determined as of such date, in which case
GeoCities shall pay the Optionee promptly after the Fair Market Value is
determined in accordance with subparagraph (d) below).
(b) If GeoCities fails to fully exercise its right to repurchase
all of the Optionee's shares of Common Stock after the cessation of the
Optionee's employment or the subsequent purchase of shares, as applicable, then
GeoCities shall give the Optionee and each holder of its Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock (other than those shares of Series D Preferred Stock held by Venture
Lending or its approved transferees), or Common Stock issued upon conversion
thereof
3
(collectively, the "Senior Securities"), notice ("Termination Notice")
of such fact, the number of shares of Common Stock available for purchase by
each such holder and GeoCities' determination of the Fair Market Value of such
shares. The holders of the Senior Securities shall have the right to purchase
the Optionee's Common Stock, on a pro-rata basis, by giving GeoCities notice of
their intent to exercise such option ("Notice of Election") within twenty (20)
days after the receipt of the Termination Notice from GeoCities, together with
cash in the amount of the purchase price (unless the Fair Market Value of the
shares has not been conclusively determined as of such date, in which case each
such holder shall pay the Optionee promptly after the Fair Market Value has been
conclusively determined in accordance with subparagraph (d) below). For purposes
of this subparagraph (b), "pro rata basis" shall be equal to the product
obtained by multiplying (i) the number of the Optionee's shares not purchased by
GeoCities by (ii) a fraction, the numerator of which is the number of shares of
Senior Securities held by such holder (on an as-converted basis) and the
denominator of which is the total number of shares held by all the holders of
Senior Securities (on an as-converted basis).
(c) Any holder of Senior Securities that fails to provide a
timely Notice of Election shall be deemed to have elected to not purchase any
shares in a transaction pursuant to this Paragraph 9. If any holder of Senior
Securities elects (or is deemed to have elected) not to fully participate in a
transaction pursuant to this Paragraph 9, then GeoCities shall so notify the
other holders of Senior Securities who elected to participate (the "Repurchase
Holders"). Such notice may be made by telephone if confirmed in writing within
two (2) days. The Repurchase Holders shall have five (5) days from the date such
notice was given to agree to purchase their pro rata share of the unsold portion
of the Optionee's shares. For purposes of this subparagraph (iv), a "pro rata
share" shall be equal to the product obtained by multiplying (i) the number of
the Optionee's shares in the unsold portion by (ii) a fraction, the numerator of
which is the number of shares of Senior Securities held by such Repurchase
Holder (on an as-converted basis) and the denominator of which is the total
number of shares held by all of the Repurchase Holders (on an as-converted
basis).
(d) If the Optionee objects to the Fair Market Value as so
proposed, then the Optionee may request an appraisal by written notice of
objection delivered not later than ten (10) days after receipt of the Fair
Market Value set by GeoCities' Board of Directors. If an appraisal is requested,
the Optionee and GeoCities shall jointly select an appraiser to determine the
Fair market Value of the Optionee's shares. If the Optionee and GeoCities cannot
agree on an appraiser, each shall select its own appraiser (each, a "Party
Appraiser") and the two Party Appraisers shall jointly select a third appraiser
(the "Arbitrating Appraiser"). Each of the Party Appraisers shall submit its
appraisal to the Arbitrating Appraiser), and the Arbitrating Appraiser shall
select one of such appraisals as the Fair Market Value. If any such appraisal
results in a Fair Market Value more than 5% higher than the Board of Directors'
original valuation, then all expenses of such appraisal shall be paid by
GeoCities; otherwise, the cost of such appraisal shall be shared equally by the
Optionee and GeoCities.
(e) Notwithstanding anything to the contrary set forth in
Subparagraphs 9(a) through 9(d), if (a) the Optionee's employment with GeoCities
is involuntarily terminated (a "Termination") for any reason other than (i) "for
cause" (as defined in Subparagraph 4.1 of the Employment Agreement) or (ii)
because of the Optionee's death, and (b) there is a Liquidation of GeoCities
within one (1) year after such Termination in which the
4
price per share of Common Stock received by the holders of such Common Stock
upon the consummation of the Liquidation (the "Liquidation Price") is greater
than the price per share of Common Stock received by the Optionee following the
Termination (the "Repurchase Price"), then the Optionee shall be entitled to
receive the following amounts from GeoCities concurrently with the consummation
of the Liquidation. If the Liquidation is consummated within six (6) months
after the Termination as provided above, then the Optionee shall be entitled to
receive an amount equal to the Liquidation Price less the Repurchase Price,
multiplied by the number of shares of Common Stock which the Optionee held at
the time of the Termination (the "Differential Amount"). If the Liquidation is
consummated more than six (6) months but within nine (9) months after the
Termination as provided above, then the Optionee shall be entitled to receive an
amount equal to seventy-five percent (75%) of the Differential Amount. If the
Liquidation is consummated more than nine (9) months but within one (1) year
after the Termination as provided above, then the Optionee shall be entitled to
receive an amount equal to fifty percent (50%) of the Differential Amount. If
the Liquidation is consummated more than one (1) year after the Termination as
provided above, then the Optionee shall not be entitled to receive any amounts
under this Subparagraph 9(e). Any such amounts payable by GeoCities under this
Subparagraph 9(e) shall be paid to the Optionee in the same form of
consideration, and in the same proportions and at the same times, as shall have
been applicable to all other holders of Common Stock in such Liquidation.
10. 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.
11. 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.
12. 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.
13. 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
5
option and the rights and privileges conferred upon the Optionee in this
Agreement shall immediately become null and void.
14. This Agreement is made solely for the benefit of the parties
to this Agreement and their respective successors and assigns, and, except as
provided in Paragraph 9, no other person or entity shall have or acquire any
right by virtue of this Agreement. Each holder of the Senior Securities shall be
a third-party beneficiary of Paragraph 9 of this Agreement.
15. 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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, in duplicate, as of the day and year first above written.
GEOCITIES
By:
---------------------------
Xxxxx X. Xxxxxxx, President
ACCEPTED:
_______________________
XXXX XXXXXX
0000 Xxxxx Xxxxxxxxxx
Xxxxx Xxx, Xxxxxxxxxx, 00000
6
