EXHIBIT 99.23
STOCK OPTION AGREEMENT
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This STOCK OPTION AGREEMENT (this "Agreement") is made and entered
into as of the _____ day of ________, 199__, by and between GEOCITIES, a
California corporation ("GeoCities"), and _______________, 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 employed by GeoCities as
___________; 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
_______________ shares of Common Stock at a price per share of $________ 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 ____________, this option may be exercised to the
extent of ___________________________ (___________) shares;
(ii) commencing ____________, this option may be exercised to the
extent of an additional ________________________ (____________) shares;
(iii) commencing ____________, this option may be exercised to the
extent of an additional ________________ (____________) shares; and
(iv) commencing ____________, this option may be exercised to the
extent of an additional ______________ (___________).
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 __________________, 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
_________________. 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 __________________. 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. 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
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(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.
8. (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
(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
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pursuant to this Paragraph 8. If any holder of Senior Securities elects (or is
deemed to have elected) not to fully participate in a transaction pursuant to
this Paragraph 8, 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 hold 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. All expenses of such
appraisal shall be paid by the Optionee, unless the Fair Market Value as
determined by such appraisal is at least five percent (5%) greater than the Fair
Market Value initially set by the Board of Directors, in which case GeoCities
and holders of the Senior Securities shall pay for the appraisal in proportion
to each party's purchase of the Optionee's shares.
9. The Optionee may not sell or engage in any transaction which has
resulted in or will result in a change in the beneficial or record ownership of
any shares of Common Stock held by the Optionee, including without limitation a
voluntary or involuntary sale, assignment, transfer, pledge, hypothecation,
encumbrance, disposal, loan, gift, attachment or levy (a "Transfer"), except as
provided in this Agreement, and any such Transfer of shares of Common Stock or
attempted Transfer of shares of Common Stock in contravention of this Agreement
shall be void and ineffective for any purpose or confer on any transferee or
purported transferee any rights whatsoever.
10. (a) Each time the Optionee proposes to Transfer (or is required by
operation of law or other involuntary transfer) any or all of the shares of
Common Stock standing in the Optionee's name or owned by him or her during the
term of this Agreement, the Optionee shall first offer such shares to GeoCities
and the holders of the Senior Securities in accordance with the following
provisions:
(i) The Optionee shall deliver a written notice (a "Notice') to
GeoCities stating (A) the Optionee's bona fide intention to Transfer such
shares, (B) the name and the address of the proposed transferee, (C) the
number of shares to be transferred, and (D)
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the purchase price per share and terms of payment for which the Optionee
proposes to Transfer such shares.
(ii) Within thirty (30) days after receipt of the Notice, GeoCities
shall have the fast right to purchase or obtain such shares, upon the price
and terms of payment designated in the Notice. If the Notice provides for
the payment of non-cash consideration, GeoCities at its option may pay the
consideration in cash equal to GeoCities' good faith estimate of the
present fair market value of the non-cash consideration offered.
(iii) If GeoCities elects not to purchase or obtain all of the shares
designated in the Optionee's Notice, then GeoCities shall promptly provide
written notice of such fact, together with a copy of the Notice, to the
holders of the Senior Securities. The holders of the Senior Securities
shall have an additional thirty (30) days immediately following the receipt
of the Notice from GeoCities in which to purchase the shares not purchased
by GeoCities on a prorata basis upon the terms and conditions specified in
subparagraph (ii) above by giving GeoCities notice of their intent to
exercise such option ("Notice of Purchase") within thirty (30) days after
the receipt of the Termination Notice from GeoCities. For purposes of this
subparagraph (iii), "pro rata" 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).
(iv) Any holder of Senior Securities that fails to provide a timely
Notice of Purchase shall be deemed to have elected to not purchase any
shares in a transaction pursuant to this Paragraph 12. If any holder of
Senior Securities elects (or is deemed to have elected) not to fully
participate in a transaction pursuant to this Paragraph 12, then GeoCities
shall so notify the other holders of Senior Securities who elected to
participate (the "Right of First Refusal Holders"), Such notice may be made
by telephone if confirmed in writing within two (2) days. The Right of
First Refusal 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 Right of First Refusal Holder (on an as-converted basis) and the
denominator of which is the total number of shares of Senior Securities
held by all the Right of First Refusal Holders (on an as converted basis).
(v) If neither (x) GeoCities nor (y) any of the holders of the Senior
Securities elects to purchase or obtain all of the shares designated in the
Optionee's Notice, then the Optionee may Transfer the unsold shares
referred to in the Notice to the proposed referee, providing such Transfer
(A) is completed within 180 days after the expiration of the right of
GeoCities and the holders of the Senior Securities to purchase or obtain
such shares, (B) is made at the same price and terms designated in the
Notice, and (C) the proposed Transferee agrees to be bound by the terms and
provisions of a buy-sell
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agreement substantially similar to the terms of Paragraphs 11 through 16 of
this Agreement and to become a party to such an agreement immediately upon
receipt of such shares. If such shares are not so transferred, the Optionee
must give notice in accordance with this paragraph prior to any other or
subsequent Transfer of such shares.
(b) Notwithstanding Paragraph 12(a), the Optionee may Transfer for no
or nominal consideration shares to (i) the Optionee's spouse, parents,
grandparents, siblings, children or grandchildren or other members of the
Optionee's family (including relatives by marriage), or to a custodian, trustee
or other fiduciary for the account of the Optionee or members of his or her
family, or to any one other person designated by the Optionee, or (ii) by way of
bequest or inheritance upon death; provided that the Optionee or his
representative notifies GeoCities of such Transfer not less than ten (10) nor
more than ninety (90) days prior to the Transfer and that the Proposed
transferee agrees to be bound by the terms and provisions of a buy-sell
agreement substantially similar to the terms of Paragraphs 11 through 16 of this
Agreement and to become a party to such an agreement immediately upon the
receipt of such shares.
11. Notwithstanding any provisions to the contrary contained in this
Agreement, GeoCities' obligations to pay or complete payment for any shares to
be purchased by it under this Agreement are subject to its being legally
permitted to do so under the tests contained in Sections 500 and 501 of the
California General Corporation Law or any successor statute applicable thereto.
The inability of GeoCities to validly purchase any shares hereunder by reason of
its failure to meet the tests contained in Sections 500 and 501 of the
California General Corporation Law shall not be deemed to affect or limit in any
way the ability of the holders of the Senior Securities to purchase the shares.
12. Each certificate representing shares owned of record or
beneficially by a party to this Agreement shall be endorsed with the following
legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCK OPTION AGREEMENT BETWEEN GEOCITIES AND THE HOLDER OF
THE SHARES EVIDENCED BY THIS CERTIFICATE, PROVIDING FOR,
AMONG OTHER MATTERS, THE RIGHT OF GEOCITIES AND CERTAIN
SHAREHOLDERS THEREOF TO REPURCHASE THE SHARES, THE RIGHT OF
FIRST REFUSAL TO PURCHASE THE SHARES REPRESENTED BY TIES
CERTIFICATE, AN AGREEMENT WITH RESPECT TO VOTING AND AN
IRREVOCABLE PROXY. A COPY OF SUCH AGREEMENT IS ON FILE
AT THE PRINCIPAL BUSINESS OFFICE OF GEOCITIES.
Under no circumstances shall any Transfer of any shares subject hereto
be valid until the proposed transferee thereof shall have agreed to be bound by
the terms and provisions of a buy-sell agreement substantially similar to the
terms of Paragraphs 11 through 16 of this Agreement and to become a party to
such an agreement immediately upon receipt of such shares; and notwithstanding
any other provisions of this Agreement, no such Transfer of any kind shall
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in any event result in the non-applicability of the provisions hereof at any
time to any of the shares subject hereto.
13. The restrictions on Transfer of shares set forth in this Agreement
shall terminate upon the consummation of a firm commitment underwritten public
offering from which GeoCities receives gross proceeds of not less dm $20 million
and in which the offering price per share (prior to underwriting commissions and
expenses) equals at least $10 (as adjusted for stock splits, stock dividends,
reorganizations and the like).
14. This Agreement is made solely for the benefits of the parties to this
Agreement and their respective successors and assigns, and, except as provided
in Paragraphs 11 through 16, 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 Paragraphs 11 through 16 of this Agreement.
15. 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.
16. 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.
17. 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 duty given if and when personally
delivered, or if mailed, two (2) business days following its being deposited in
the United States mails in a property scaled envelope, addressed as aforesaid,
registered or certified, postage prepaid.
18. 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.
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19. 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.
20. 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: ___________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED:
_______________________
[Optionee]
_______________________
[Address]
_______________________
_______________________
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