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EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between Collateral Therapeutics, Inc. (the "Corporation") and ___________
("Optionee") evidencing the stock option (the "Option") granted this date to
Optionee under the terms of the Corporation's 1998 Stock Incentive Plan, and
such provisions shall be effective immediately with such grant date. 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
exercisable upon the following terms and conditions:
(i) Optionee shall have the unconditional right, exercisable
at any time during the thirty (30)-day period immediately following a
Hostile Take-Over, 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) business days following such delivery
date. The exercise of the limited stock appreciation right in
accordance with the terms of this Addendum is hereby approved by the
Plan Administrator, in advance of such exercise, and no further
approval of the Plan Administrator or the Board shall be required at
the time of the actual 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 replacement 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
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ownership (within the meaning of Rule 13d-3 of the 1934 Act) 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, Collateral Therapeutics, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective Date
specified below.
COLLATERAL THERAPEUTICS, INC.
By:_______________________________
Title:____________________________
EFFECTIVE DATE: __________________, _____
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