<PAGE>
As filed with the Securities and Exchange Commission on December 21, 1998
Registration No. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------
GEOCITIES
(Exact name of registrant as specified in its charter)
DELAWARE 95-4515867
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4499 GLENCOE AVENUE, MARINA DEL REY, CALIFORNIA 90292
(Address of principal executive offices) (Zip Code)
--------
STARSEED, INC. 1998 STOCK OPTION/STOCK ISSUANCE PLAN
(Full title of the Plan)
--------
STEPHEN L. HANSEN
CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER
GEOCITIES
4499 GLENCOE AVENUE, MARINA DEL REY, CALIFORNIA 90292
(Name and address of agent for service)
(310) 827-3700
(Telephone number, including area code, of agent for service)
--------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ---------- --------- ------ ---
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 215,105 $6.41 $1,378,823.05 $383.31
Aggregate Filing Fee: $383.31
</TABLE>
================================================================================
(1) This Registration Statement shall also cover any additional shares of
Registrant's Common Stock which become issuable under the Starseed, Inc. 1998
Stock Option/Stock Issuance Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the Registrant's
receipt of consideration which results in an increase in the number of the
outstanding shares of Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended (the "1933 Act"), on the basis of the
weighted average exercise price of the outstanding options under the Starseed,
Inc. 1998 Stock Option/Stock Issuance Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
GeoCities (the "Registrant") hereby incorporates by reference into this
Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "SEC"):
(a) The Registrant's prospectus filed with the SEC on August 11, 1998
pursuant to Rule 424(b) of the 1933 Act, in connection with the
Registration No. 333-56659 on Form S-1, together with the amendments
thereto, in which there are set forth audited financial statements for
the Registrant's fiscal year ended December 31, 1996 and 1997 and
unaudited financial statements for the six months ended June 30, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1998, filed with the SEC on November 16, 1998;
(c) The Registrant's Current Report on Form 8-K filed with the SEC on
December 18, 1998; and
(d) The Registrant's Registration Statement on Form 8-A, filed with the
SEC on August 4, 1998 pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "1934 Act") in which there is
described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which de-
registers all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except for
liability for (i) any breach of their duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, or (iv) any transaction from which
the director derives an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and may indemnify its officers, employees and other agents to the
fullest extent permitted by law. The Registrant believes that indemnification
under its Bylaws covers at least negligence and gross negligence on the part of
an indemnified party in connection with the defense of any action or proceeding
arising out of such party's status or service as a director, officer, employee
or other agent of the Company upon an undertaking by such party to repay such
advances if it is ultimately determined that such party is not entitled to
indemnification.
The Registrant has entered into separate indemnification agreements with
each of its directors and officers. These agreements require the Registrant,
among other things, to indemnify such director or officer against certain of its
expenses (including attorneys' fees), judgments, fines and settlements
(collectively, "Liabilities") paid by such individual in connection with any
action, suit or proceeding arising out of such individual's status or service as
a director or officer of the Registrant (other than Liabilities arising from
willful misconduct or conduct that is knowingly fraudulent or deliberately
dishonest), to advance expenses incurred by such individual in connection with
any proceeding against such individual with respect to which such individual may
be entitled to indemnification by the Registrant, and to obtain directors' and
officers' liability insurance if maintained for other directors and officers.
II-1
<PAGE>
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining the Rights of Stockholders. Reference
is made to Registrant's Registration Statement on Form 8-A,
and the exhibits thereto, which are incorporated herein by
reference pursuant to Item 3(b).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 Starseed, Inc. 1998 Stock Option/Stock Issuance Plan.
99.2 Form of Stock Option Agreement under the Starseed, Inc. 1998
Stock Option/Stock Issuance Plan.
99.3 Form of Waiver Letter.
99.4 Form of Stock Option Assumption Agreement.
Item 9. Undertakings
------------
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
--------
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the Starseed, Inc.
1998 Stock Option/Stock Issuance Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnification provisions summarized in Item 6 or otherwise,
the Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Santa Monica, State of California, on this
17th day of December, 1998.
GEOCITIES
/s/ Stephen L. Hansen
By: ____________________________________
Stephen L. Hansen
Chief Operating Officer and Chief Financial
Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of GeoCities, a Delaware
corporation, do hereby constitute and appoint William E. Losch and Stephen L.
Hansen, and each of them, the lawful attorneys-in-fact and agents with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both pre-
effective and post-effective, and supplements to this Registration Statement,
and to any and all instruments or documents filed as part of or in conjunction
with this Registration Statement or amendments or supplements thereof, and each
of the undersigned hereby ratifies and confirms that all said attorneys and
agents, or any one of them, shall do or cause to be done by virtue hereof. This
Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Thomas R. Evans
_____________________ Chief Executive Officer December 17, 1998
Thomas R. Evans and Director
(Principal Executive Officer)
/s/ Stephen L. Hansen
_____________________ Chief Operating Officer and December 17, 1998
Stephen L. Hansen Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ David C. Bohnett
_____________________ Chairman of the December 17, 1998
David C. Bohnett Board of Directors and
Secretary
II-3
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Jerry D. Colonna
_____________________ Director December 17, 1998
Jerry D. Colonna
/s/ Eric C. Hippeau
_____________________ Director December 17, 1998
Eric C. Hippeau
/s/ Harry D. Lambert
_____________________ Director December 17, 1998
Harry D. Lambert
/s/ Peter H. Mills
_____________________ Director December 17, 1998
Peter H. Mills
/s/ David S. Wetherell
_____________________ Director December 17, 1998
David S. Wetherell
II-4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statement on Form 8-A and the
exhibits thereto, which are incorporated herein by reference
pursuant to Item 3(b).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 Starseed, Inc. 1998 Stock Option/Stock Issuance Plan.
99.2 Form of Stock Option Agreement used under the Starseed, Inc.
1998 Stock Option/Stock Issuance Plan.
99.3 Form of Waiver Letter.
99.4 Form of Stock Option Assumption Agreement.
<PAGE>
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
December 18, 1998
GeoCities
4499 Glencoe Avenue
Marina Del Rey, CA 90292
Re: GeoCities - Registration Statement for the
Offering of an Aggregate of 215,105 shares of Common Stock
Dear Ladies and Gentlemen:
We have acted as counsel to GeoCities, a Delaware corporation (the
"Company"), in connection with the registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of an aggregate of
215,105 shares of common stock and related stock options (the "Shares") under
(i) the Starseed, Inc. 1998 Stock Option/Stock Issuance Plan (the "Plan") as
assumed by GeoCities on December 4, 1998 in connection with the merger between
Starseed, Inc. and a wholly-owned GeoCities subsidiary.
This opinion is being furnished in accordance with the requirements of Item
8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the assumption of the Plan
and the options outstanding thereunder. Based on such review, we are of the
opinion that if, as and when the Shares are issued and sold (and the
consideration therefor received) pursuant to the provisions of the option
agreements duly authorized under the Plan and the stock option assumption
agreements issued by GeoCities and in accordance with the Registration
Statement, such Shares will be duly authorized, legally issued, fully paid and
non-assessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Plan or the Shares.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
------------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of GeoCities on Form S-8 to be filed on or about December 18, 1998, of our
report dated July 2, 1998, except for Note 2 as to which the date is July 21,
1998, our audit of the financial statements and financial statement schedule of
GeoCities as of December 31, 1996 and 1997, and for each of the three years in
the period ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
- ----------------------------------
PricewaterhouseCoopers LLP
Woodland Hills, California
December 18, 1998
<PAGE>
EXHIBIT 99.1
STARSEED, INC.
1998 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE I
GENERAL PROVISIONS
1. PURPOSE
This Starseed, Inc. 1998 Stock Option/Stock Issuance Plan is
intended to promote the interests of the Corporation by providing eligible
individuals who are responsible for the management, growth and financial success
of the Corporation or who otherwise render valuable services to the Corporation
with the opportunity to acquire a proprietary interest, or increase their
proprietary interest, in the Corporation and thereby encourage them to remain in
the Service of the Corporation. The options granted under this Plan are intended
to be Non-Statutory Options.
Capitalized terms used herein shall have- the meanings ascribed
to such terms in Paragraph 6 of this Article 1.
2. STRUCTURE OF THE PLAN
The Plan shall be divided into two separate components: the
Option Grant Program specified in Article II and the Stock Issuance Program
specified in Article III. The provisions of Articles I and IV of the Plan shall
apply to both the Option Grant Program and the Stock Issuance Program and shall
accordingly govern the interests of all individuals in the Plan.
3. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board. The Board,
however, may at any time appoint a committee ("Committee") of two (2) or more
Board members and delegate to such Committee one or more of the administrative
powers allocated to the Board pursuant to the provisions of the Plan. Members
of the Committee shall serve for such period of time as the Board may determine
and shall be subject to removal by the Board at any time. The Board may also at
any time terminate the functions of the Committee and reassume all powers and
authority previously delegated to the Committee.
(b) The Plan Administrator (either the Board or the Committee,
to the extent the Committee is at the time responsible for the administration of
the Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper plan administration and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option grants or share
issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or share issuance.
4. OPTION GRANTS AND SHARE ISSUANCES
(a) The persons eligible to receive option grants pursuant to
the Option Grant Program (each an "Optionee") and/or share issuances under the
Stock Issuance Program (each a "Participant") are limited to the following:
(1) key employees (including officers and directors)
of the Corporation (or its parent or subsidiary corporations, if any) who
render services which contribute to the success and-"growth of the
Corporation (or any parent or subsidiary corporations) or which may
reasonably be anticipated to contribute to the future success and growth of
the Corporation (or any parent or subsidiary corporations);
1
<PAGE>
(2) the non-employee members of the Board or the non-
employee members of the board of directors of any parent or subsidiary
corporations; and
(3) those consultants or independent contractors who
provide valuable services to the Corporation (or any parent or subsidiary
corporations).
(b) The Plan Administrator shall have full authority to
determine, (i) with respect to the option grants made under the Plan, which
eligible individuals are to receive option grants, the number of shares to be
covered by each such grant, the time or times at which each granted option is to
become exercisable and the maximum term for which the option may remain
outstanding, and (ii) with respect to share issuances under the Stock Issuance
Program, the number of shares to be issued to each Participant, the vesting
schedule (if any) to be applicable to the issued shares, and the consideration
to be paid by the individual for such shares.
(c) The Plan Administrator shall have the absolute discretion
either to grant options in accordance with Article 11 of the Plan or to effect
share issuances in accordance with Article III of the Plan.
5. STOCK SUBJECT TO THE PLAN
(a) The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock (the "Common
Stock"). The maximum number of shares which may be issued over the term of the
Plan shall not exceed Five Hundred Twenty-Five Thousand (525,000) shares of
Common Stock. The total number of shares issuable under the Plan shall be
subject to adjustment from time to time in accordance with the provisions of
Section 5(c).
(b) Shares subject to (i) the portion of one or more outstanding
options which are not exercised or surrendered prior to expiration or
termination and (ii) outstanding options canceled in accordance with the
cancellation-regrant provisions of Section 4 of Article 11 will be available for
subsequent option grants or stock issuances under the Plan. The shares which
shall not be available for subsequent option grants or stock issuances under the
Plan include shares issued under either the Option Grant Program or the Stock
Issuance Program (whether as vested or unvested shares) which are repurchased by
the Corporation.
(c) In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be ma to aggregate number and/or class of shares issuable under the Plan
and (ii) the aggregate number and/or class of shares and the option price per
share in effect under each outstanding option in order to prevent the dilution
or enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.
(d) Common Stock issuable under the Plan, whether under the
Option Grant Program or the Stock Issuance Program, may be subject to such
restrictions on transfer, repurchase rights or other restrictions as may be
determined by the Plan Administrator.
6. DEFINITIONS
The following definitions shall apply to the respective
capitalized terms used herein:
Board means the Board of Directors of Starseed, Inc.
-----
Code means the Internal Revenue Code of 1986, as amended.
----
Corporation means Starseed, Inc., a Louisiana corporation, and
-----------
its successors.
Corporate Transaction means one or more of the following
---------------------
transactions:
<PAGE>
(a) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state of the Corporation's incorporation;
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or
(c) any reverse merger in which the Corporation is the surviving
entity but in which fifty percent (50%) or more of the Corporation's outstanding
voting stock is transferred to holders different from those who held the stock
immediately prior to such merger.
Employee means an individual who is in the employ of the
--------
Corporation or one or more Parent or Subsidiary corporations (if any). An
optionee shall be considered to be an Employee for so long as such individual
remains in the employ of the Corporation or one or more Parent or Subsidiary
corporations, subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of performance.
Exercise Date shall be the date on which written notice of the
-------------
exercise of an outstanding option under the Plan is delivered to the
Corporation. Such notice shall be in the form of a stock purchase agreement
incorporating any repurchase rights or first refusal rights retained by the
Corporation with respect to the Common Stock purchased under the option.
Fair Market Value of a share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(a) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on the stock
exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the Fair Market Value shall be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.
(b) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-counter market, the
Fair Market Value shall be the mean between the highest bid and the lowest asked
prices (or if such information is available the closing selling price) per share
of Common Stock on the date in question in the over-the-counter market, as such
prices are reported by the National Association of Securities Dealers through
its NASDAQ National Market System or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Common Stock on
the date in question, then the mean between the highest bid and lowest asked
prices (or closing selling price) on the last preceding date for which such
quotations exist shall be determinative of Fair Market Value.
(c) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, or if the Plan Administrator determines that the valuation provisions of
subparagraphs (a) and (b) above will not result in a v= and accurate valuation
of the Common Stock, then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan Administrator
shall deem appropriate under the circumstances.
Non-Statutory Option means an option not intended to meet the
--------------------
statutory requirements prescribed under the Code for an incentive option as
defined under Section 422 of the Code.
Parent corporation means any corporation (other than the
------------------
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
<PAGE>
Permanent Disability means the inability of an individual to
--------------------
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.
Plan means this Starseed, Inc. 1998 Stock Option/Stock Issuance
----
Plan.
Plan Administrator means the Board or the Committee, to the
------------------
extent the Committee is responsible for plan administration in accordance with
Article 1, Section 3.
Service means the performance of services for the Corporation or
-------
one or more Parent or Subsidiary corporations by an individual in the capacity
of an Employee, a non-employee member of the board of directors or an
independent consultant or advisor, unless a different meaning is specified in
the option agreement evidencing the option grant, the purchase agreement
evidencing the purchased option shares or the issuance agreement evidencing any
direct stock issuance. An optionee shall be deemed to remain in Service for so
long as such individual renders services to the Corporation or any Parent or
Subsidiary corporation on a periodic basis in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant or
advisor.
Subsidiary corporation means each corporation (other than the
-----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
ARTICLE II
OPTION GRANT PROGRAM
1. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator. Each granted option shall be evidenced by one
or more instruments in the form approved by the Plan Administrator; provided,
--------
however, that each such instrument shall comply with and incorporate the terms
- -------
and conditions specified below.
(a) Option Price
(1) The option price per share shall be fixed by the Plan
Administrator. In the absolute discretion of the Plan Administrator, the
option price per share may be less than one hundred percent (100%) of the
Fair Market Value of a share of the Corporation's Common Stock on the grant
date.
(2) The option price shall become immediately due upon
exercise of the option, and subject to the provisions of Article IV,
Section 1, shall be payable in cash or check drawn to the Corporation's
order. Should the Corporation's outstanding Common Stock be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
`1934 Act') at the time the option is exercised, then the option price may
also be paid as follows:
(A) in shares of Common Stock held by the
optionee for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date; or
(B) through a special sale and remittance
procedure pursuant to which the Optionee (i) is to provide irrevocable
written instructions to a designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation,
out of the sale
<PAGE>
proceeds, an amount sufficient to cover the aggregate option price
payable for the purchased shares plus all applicable Federal and State
income and employment taxes required to be withheld by the Corporation
by reason of such purchase and (ii) concurrently provides written
directives to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to effect
the sale transaction.
(b) Term and Exercise of Options. Each option granted under the Plan
----------------------------
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the stock option agreement evidencing such option. However, no option
granted under the Plan shall have a term in excess of ten (10) years from the
grant date. During the lifetime of the Optionee, the option shall be
exercisable only by the Optionee and shall riot be assignable or transferable by
the Optionee otherwise dm by will or by the laws of descent and distribution
following the Optionee's death.
(c) Termination of Service.
----------------------
(1) The Plan Administrator shall have complete discretion to
limit the period of time that an option granted under the Plan may be exercised
should the Optionee cease to remain in Service for any reason (including death
or Permanent Disability). In no event, however, shall any such option be
exercisable after the specified expiration date of the option term. During such
limited period of exercisability, the option may not be exercised for more than
that number of shares (if any) for which such option is exercisable on the date
of the Optionee's cessation of Service. Upon the expiration of such period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be exercisable.
(2) Any option granted to an Optionee under the Plan and
exercisable in whole or in part on the date of the Optionee's death may be
subsequently exercised by the personal representative of the Optionee's estate
or by the person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution.
(3) Notwithstanding subsections (1) and (2) above, the Plan
Administrator shall have complete discretion, exercisable either at the time the
option is granted or at the time the Optionee ceases Service, to allow one or
more outstanding options held by the Optionee to be exercised, during the period
of exercisability following the Optionee's cessation of Service, not only with
respect to the number of shares for which the option is exercisable at the time
of the Optionee's cessation of Service but also with respect to one or more
subsequent installments of purchasable shares for which the option otherwise
would have become exercisable had such cessation of Service not occurred.
(d) Shareholder Rights. An Optionee shall have none of the rights of
------------------
a shareholder with respect to any shares covered by the option until such
Optionee shall have exercised the option and paid the option price.
(e) Repurchase Rights. The Plan Administrator shall have complete
-----------------
discretion to impose certain repurchase rights on shares of Common Stock issued
under the Plan including the following:
(1) (A) The Plan Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under the Plan.
Should the Optionee cease Service or should the Corporation consummate a
Corporate Transaction while the Optionee is holding such unvested shares,
the Corporation may reserve the right to repurchase, at the option price
paid per share or such other repurchase price specified in the instrument
evidencing such repurchase right, all or (at the discretion of the
Corporation and with the consent of the Optionee) any of those unvested
shares. The terms and conditions upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the instrument evidencing such
right.
(B) The repurchase right may be assignable to any person or
entity selected by the Corporation, including one or more of the
Corporation's shareholders. However, if the
<PAGE>
selected assignee is other than a Parent or Subsidiary corporation, then
the assignee must make a cash payment to the Corporation, upon the
assignment of the repurchase right, in an amount equal to the amount by
which the Fair Market Value of the unvested shares at the time subject to
the assigned right exceeds the aggregate repurchase price payable for such
unvested shares.
(C) Upon the occurrence of a Corporate Transaction, the
Plan Administrator may, at its sole discretion, (i) terminate all or any
outstanding repurchase rights under the Plan and thereby cause the shares
subject to such rights to vest immediately in full, or (ii) arrange for all
or any of the repurchase rights to be assigned to the successor corporation
(or parent thereof) in connection with the Corporate Transaction.
(2) Until such time as the Corporation's outstanding shares of
Common Stock are first registered under Section 12(g) of the 1934 Act, the
Corporation shall have the right of first refusal with respect to any
proposed sale or other disposition by the Optionee (or any successor in
interest by reason of purchase, gift or other mode of transfer) of any
shares of Common Stock issued under the Plan. Such right of first refusal
shall be exercisable by the Corporation (or its assignees) in accordance
with the terms and conditions established by the Plan Administrator and set
forth in the instrument evidencing such right.
2. corporate TRANSACTION
(a) In the event of any Corporate Transaction, each option
outstanding under the Plan shall terminate upon the consummation of such
Corporate Transaction and cease to be exercisable, unless assumed by the
successor corporation or parent thereof.
(b) In connection with any such Corporate Transaction, the Plan
Administrator may, at its sole discretion, (i) accelerate each or any
outstanding option under the Plan so that each or any such option shall,
immediately prior to the specified effective date for such Corporate
Transaction, become fully exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and may be exercised for all
or any portion of such shares, (ii) arrange for each or any outstanding option
either to be assumed by the successor corporation or parent thereof or to be
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation or parent thereof, (iii) arrange for the option to be
replaced by a comparable cash incentive program of the successor corporation
based on the option spread (the amount by which the Fair Market Value of the
shares of Common Stock at the time subject to the option exceeds the option
price payable for such shares) or (iv) take none of the actions described in
clauses (i), (ii) or (iii) above and allow the option to terminate as provided
in Section 3(a) above. The determination of comparability under clauses (ii)
and (iii) above shall be made by the Plan Administrator, and such determination
shall be final and conclusive.
(c) If the outstanding options under the Plan are assumed by the
successor corporation (or parent thereof) in the Corporate Transaction or are
otherwise allowed to continue in effect following such Corporate Transaction,
then each such assumed or continuing option shall, immediately after such
Corporate Transaction, be appropriately adjusted to apply and pertain to the
number and class of securities or other property that would have been issuable
to the option holder, in consummation of the Corporate Transaction had the
option been exercised immediately prior to such Corporate transaction.
Appropriate adjustments shall also be made to the option price per share,
provided the aggregate option price payable for such securities or other
- --------
property shall remain the same. In addition, the number and class of securities
or other property available for issuance under the Plan following the
consummation of such Corporate Transaction shall be appropriately adjusted.
(d) The grant of options under this Plan shall in no way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any pan of its business or assets.
<PAGE>
3. CANCELLATION AND NEW GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock.
4. EXTENSION OF EXERCISE PERIOD
The Plan Administrator shall have full power and authority to
extend (either at the time while the option is granted or at any time while the
option remains outstanding) the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service, from the limited
period set forth in the option agreement, to such greater period of time as the
Plan Administrator may deem appropriate under the circumstances. In no event,
however, shall such option be exercisable after the specified expiration date of
the option term.
ARTICLE III
STOCK ISSUANCE PROGRAM
1. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares of Common Stock shall be issuable under the Stock Issuance
Program through direct and immediate issuances without any intervening stock
option grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement ("Issuance Agreement") which complies with each of the terms and
conditions of this Article 111.
(a) Issue Price.
(1) In the absolute discretion of the Plan
Administrator, shares may be issued for consideration with a value less
than one-hundred percent (100%) of the Fair Market Value of the issued
shares.
(2) Shares shall be issued under the Plan for such
consideration as the Plan Administrator shall from time to time determine,
provided that in no event shall shares be issued for consideration other
than:
(A) cash or check payable to the
Corporation;
(B) promissory note payable to the
Corporation's order, which may be subject to cancellation by the
Corporation in whole or in part upon such terms and conditions as
the Plan Administrator shall specify; or
(C) services rendered, including any
technology or other intellectual property contributed or assigned
by Participant to the Corporation.
(b) Vesting Schedule.
(1) In the absolute discretion of the Plan
Administrator, the interest of a Participant in the shares of Common Stock
issued to such Participant under the Plan may be fully and immediately
vested upon issuance or may vest in one or more installments in accordance
with the vesting provisions of subsection (b)(4). Except as otherwise
provided in subsection (b)(2), the Participant may not transfer any
purchased shares in which he/she does not have a vested interest.
Accordingly, all unvested shares issued under the Plan shall bear the
restrictive legend specified in subsection (c)(1), until such legend is
removed in accordance with subsection (c)(2). The Participant, however,
shall have all the rights of a shareholder with respect to the shares of
Common Stock issued to Participant hereunder, whether or not Participant's
<PAGE>
interest in such shares is vested. Accordingly, the Participant shall have
the right to vote such shares and to receive any cash dividends or other
distributions paid or made with respect to such shares. Any new, additional
or different shares of stock or other property (including money paid other
than as a regular cash dividend) which the holder of unvested Common Stock
may have the right to receive by reason of a stock dividend, stock split,
reclassification or other similar recapitalization event affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration shall be issued subject to (i) the same vesting requirements
under subsection (b)(4) applicable to the unvested Common Stock and (ii)
such escrow arrangements as the Plan Administrator shall deem appropriate.
(2) As used in this Article III, the term "transfer"
shall include (without limitation) any sale, pledge, encumbrance, gift or
other disposition of such shares. However, the Participant shall have the
right to make a gift of unvested shares acquired under the Stock Issuance
Program to Participant's spouse, parents or issue or to a trust established
for such spouse, parents or issue, provided the donee of such shares
delivers to the Corporation at the time of such donna's acquisition of the
gifted shares a written agreement to be bound by all the provisions of the
Plan and the Purchase Agreement executed by the Participant.
(3) Should the Participant cease Service for any
reason while Participant's interest in the Common Stock remains unvested,
then the Corporation shall have the right to repurchase, at the original
purchase price paid by the Participant or at such other repurchase price
specified in the instrument evidencing such repurchase right, a or (at the
discretion of the Corporation and with the consent of the Participant) any
shares in which the Participant is not at the time vested, and the
Participant shall thereafter cease to have any further shareholder rights
with respect to the repurchased shares.
(4) Any shares of Common Stock issued under the Stock
Issuance Program which are not vested at the time of such issuance shall
vest in one or more installments thereafter. The elements of the vesting
schedule, namely the performance or service objectives to be completed or
achieved, the number of installments in which the shares are to vest, the
interval or intervals (if any) which are to lapse between installments and
the effect which death, Permanent Disability or other event designated by
the Plan Administrator is to have upon the vesting schedule, shall be
determined by the Plan Administrator and specified in the Issuance
Agreement.
(5) The Plan Administrator may in its discretion elect
not to exercise, in whole or in part, its repurchase rights with respect to
any unvested Common Stock or other assets which would otherwise at the time
be subject to repurchase pursuant to the provisions of subsection (b)(3).
Such an election shall result in the immediate vesting of the Participant's
interest in the shares of Common Stock as to which the election applies.
(6) No shares of Common Stock or other assets shall be
issued or delivered under this Plan unless and until, in the opinion of
counsel for the Corporation (or its successor in the event of any Corporate
Transaction), there shall have been compliance with all applicable
requirements of the Federal and state securities exchange on which stock of
the same class is then listed, and all other requirements of law or of any
regulatory bodies having jurisdiction over such issuance and delivery.
(c) Stock Legends.
(1) Each certificate representing unvested shares of
Common Stock (or other securities) issued under the Stock Issuance Program
shall bear a restrictive legend substantially as follows:
The securities represented by this certificate are
subject to repurchase by the Corporation pursuant to
the provisions of the Stock Issuance Agreement between
the Corporation and the registered holder of the
securities (or such holder's predecessor in interest),
a copy of which is on file at the principal office of
the Corporation."
<PAGE>
(2) As the interest of the Participant vests with respect
to any stock certificate representing shares acquired under the Stock
Issuance Program, the Corporation, upon the Participant's delivery of such
certificate during the period or periods designated each year by the Plan
Administrator for such certificate reissuance, shall issue a new
certificate for the vested shares without the restrictive legend of
subsection (F)(1) and a second certificate for the balance of the shares
with such legend. If the Corporation repurchases any unvested shares of the
Participant pursuant to the provisions of subsection (b)(3), the
Corporation shall at the time the repurchase is effected deliver a new
certificate, without the restrictive legend of subsection (c)(1),
representing the number of shares (if any) in which the Participant is
vested and which are accordingly no longer subject to repurchase by the
Corporation.
(d) Right of First Refusal The Plan Administrator may in its
discretion establish as a term and condition of the issuance of one or more
shares of Common Stock under the Stock Issuance Program that the Corporation
shall have a right of first refusal with respect to any proposed disposition by
the Participant (or any successor in interest by reason of purchase, gift or
other mode of transfer) of one or more shares of such Common Stock. Such right
of first refusal shall be exercisable by the Corporation (or its assignees) in
accordance with the terms and conditions specified in the instrument evidencing
such right.
2. CORPORATE TRANSACTION
Upon the occurrence of a Corporate Transaction, the Plan
Administrator may, at its sole discretion, terminate 0 or any outstanding
repurchase rights under this Article III of the Plan and thereby cause the
shares subject to such rights to vest immediately in full, or (ii) arrange for
all or any of the repurchase rights to be assigned to the successor corporation
(or parent thereof) in connection with the Corporate Transaction.
ARTICLE IV
MISCELLANEOUS
1. LOANS
(a) The Plan Administrator may assist any Optionee or
Participant (including an Optionee or Participant who is an officer or director
of the Corporation) in the exercise of one or more options granted to such
Optionee under the Article II Option Grant Program or the purchase of one or
more shares issued to such Participant under the Article III Stock Issuance
Program, including the satisfaction of any Federal and State income and
employment tax obligations arising therefrom, by:
(1) authorizing the extension of a loan from the
Corporation to such Optionee or Participant, or
(2) permitting the Optionee or Participant to pay the
option price or purchase price for the purchased Common Stock in
installments over a period of years.
(b) The terms of any loan or installment method of payment
(including the interest rate and terms of repayment) shall be established by the
Plan Administrator in its sole discretion. Loans or installment payments may be
granted with or without security or collateral; however, any loan made to a
consultant or other non-employee advisor must be secured by property other dm
the purchased shares of Common Stock. In all events, the maximum credit
available to each Optionee or Participant may not exceed the sum of (i) the
aggregate option price or purchase price payable for the purchased shares less
the aggregate par value for such shares plus (ii) any Federal and State income
and employment tax liability incurred by the Optionee or Participant in
connection with such exercise or purchase.
(c) The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under the financial assistance program
shall be subject to forgiveness by the Corporation in whole or in part upon such
terms and conditions as the Board in its discretion deems appropriate.
<PAGE>
2. AMENDMENT OF THE PLAN AND AWARDS
The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever. However, no such
amendment or modification shall adversely affect the rights and obligations of
an Optionee with respect to options at the time outstanding under the Plan, nor
adversely affect the rights of any Participant with respect to Common Stock
issued under the Plan prior to such action, unless the Optionee or Participant
consents to such amendment.
3. Effective DATE AND TERM OF PLAN
(a) The Plan shall become effective when adopted by the Board.
(b) The Plan shall terminate upon the earlier of (i) ten years
after the adoption of the Plan or (ii) the date on which all shares available
for issuance under the Plan have been issued or canceled pursuant to the
exercise or surrender of options granted under Article 11 or the issuance of
shares under Article 111. If the date of termination is determined under clause
(i) above, then no options outstanding on such date under Article II and no
shares issued and outstanding on such date under Article III shall be affected
by the termination of the Plan, and such securities shall thereafter continue to
have force and effect in accordance with the provisions of the stock option
agreements evidencing such Article 11 options and the stock purchase agreements
evidencing the issuance of such Article III shares.
4. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the issuance
of shares of Common Stock under the Plan shall be used for general corporate
purposes.
5. WITHHOLDING
The Corporation's obligation to deliver shares upon the exercise
or surrender of any options granted under Article II or upon the purchase of any
shares issued under Article III shall be subject to the satisfaction of all
applicable Federal, State and local income and employment tax withholding
requirements.
6. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under
the Option Grant Program, the issuance of any shares under the Stock Issuance
Program, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.
<PAGE>
EXHIBIT 99.2
STARSEED, INC.
STOCK OPTION AGREEMENT
WITNESSETH:
----------
RECITALS
A. The Board has adopted the Plan for the purpose of attracting and
retaining the services of selected key employees (including officers and
directors), non-employee members of the Board and consultants and other
independent contractors who contribute to the financial success of the
Corporation.
B. Optionee is an individual who is to render valuable services to
the Corporation, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation's grant
of a stock option to Optionee.
C. Capitalized terms used in this Agreement shall, unless the
context clearly indicates otherwise, have the meaning assigned to such terms in
Paragraph 19 of this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
---------------
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the Grant Date, a stock option to purchase up to that number of Option Shares as
is specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the Option term at the Option Price per share specified in
the Grant Notice.
2. OPTION TERM. This Option shall expire at the close of business
-----------
on the Expiration Date specified in the Grant Notice, unless sooner terminated
in accordance with Paragraphs 5 or 6 hereof; Provided, in no event shall this
Option have a maximum term in excess of ten (10) years measured from the Grant
Date,.
3. OPTION NONTRANSFERABLE; EXCEPTION. This Option shall be neither
---------------------------------
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following the Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE. This Option may not be exercised in whole or
-----------------
in part at any time prior to the time the Plan is approved by the Corporation's
shareholders in accordance with Paragraph 18. As the Option becomes exercisable
in one or more installments, the installments shall accumulate and the Option
shall remain exercisable for such installments until the Expiration Date or the
sooner termination of the Option term under Paragraph 5 or Paragraph 6 of this
Agreement.
5. ACCELERATED TERMINATION OF OPTION TERM. Should Optionee cease to
--------------------------------------
remain in Service while this Option is outstanding, then the period for
exercising this Option
<PAGE>
shall be reduced to a thirty-six (36) month period commencing with the date of
such cessation of Service, but in no event shall this Option be exercisable at
any time after the Expiration Date. This Option may be exercised for any or all
of the Option Shares in which the Optionee, at the time of cessation of Service,
is vested in accordance with the exercise/vesting provisions specified in the
Grant Notice. Upon the expiration of such thirty-six (36) month period or (if
earlier) upon the Expiration Date, this Option shall terminate and cease to be
outstanding. This Option shall immediately terminate upon the Optionee's
cessation of Service if the Optionee is not vested in any of the Option Shares
(in accordance with the exercise/vesting in the Grant Notice) at the time of
termination.
6. CORPORATE TRANSACTION.
---------------------
(a) This Option shall terminate upon the consummation of any
Corporate Transaction, unless expressly assumed by the successor corporation or
parent thereof.
(b) In connection with any such Corporate Transaction, the Plan
Administrator may, at its sole discretion, (i) accelerate this Option so that
this Option shall, immediately prior to the specified effective date for such
Corporate Transaction, become fully exercisable with respect to all of the
Option Shares and may be exercised for all or any portion of such shares, (ii)
arrange for this Option either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof, (iii) arrange
for this Option to be replaced by a comparable cash incentive program of the
successor corporation based on the option spread (the amount by which the Fair
Market Value of the shares of Common Stock at the time subject to the Option
exceeds the Option Price payable for such shares) or (iv) take none of the
actions described in clauses (i), (ii) or (iii) above and allow this Option to
terminate as provided in Paragraph 6(a) above. The determination of
comparability under clauses (ii) and (iii) above shall be made by the Plan
Administrator, and its determination shall be final and conclusive.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
---------------------------
(a) In the event any change is made to the Corporation's outstanding
Common Stock by reason of any stock split, stock dividend, combination of
shares, exchange or conversion of shares, or other change affecting the
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the total number of Option Shares
subject to this Option and (ii) the Option Price payable per share in order to
reflect such change and thereby preclude a dilution or enlargement of benefits
hereunder.
(b) If this Option is to be assumed or is otherwise to remain
outstanding after the Corporate Transaction, then this Option shall be
appropriately adjusted to apply and pertain to the number and class of
securities that would have been issuable to the Optionee in the consummation of
such Corporation Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to
the Option
2
<PAGE>
Price payable per share, provided the aggregate Option Price payable hereunder
shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not
----------------------------
have any of the rights of a shareholder with respect to the Option Shares until
such individual shall have exercised the option and paid the Option Price.
9. MANNER OF EXERCISING OPTION.
---------------------------
(a) In order to exercise this Option with respect to all or any part
of the Option Shares for which this Option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, the Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(1) Execute and deliver to the Secretary of the Corporation the
Purchase Agreement;
(2) Pay the aggregate Option Price for the purchased shares either by
full payment in cash or check, or any other form approved by the
Plan Administrator at the time of exercise in accordance with the
provisions of Paragraph 15.1
(3) Furnish to the Corporation appropriate documentation that the
person or persons exercising the Option (if other than Optionee)
have the right to exercise this Option.
(b) Should the Corporation's outstanding Common Stock be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), at the time the Option is exercised, then the Option Price may also
be paid as follows:
(1) in shares of the Common Stock held by the Optionee for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(2) through a special sale and remittance procedure pursuant to which
the Optionee (i) is to provide irrevocable written instructions
to a designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the
sale proceeds, an amount sufficient to cover the aggregate Option
Price payable for the purchased shares plus all applicable
Federal and state income and employment taxes required to be
withheld by the Corporation by reason of such purchase and (ii)
concurrently provides written directives to the Corporation to
deliver the certificates for the purchased shares directly to
such broker-dealer in order to effect the sale transaction.
(c) Except to the extent the special sale and remittance procedure is
utilized to exercise this Option, payment of the Option Price must accompany the
delivery of the Purchase Agreement. As soon after such payment is practical, the
Corporation shall mail or deliver to Optionee (or to the other person or persons
exercising this Option) a certificate or certificates representing the shares so
purchased and paid for, with the appropriate legends affixed thereto.
(d) In no event may this Option be exercised for any fractional
shares.
10. RIGHTS OF FIRST REFUSAL/REPURCHASE RIGHTS. THE OPTIONEE HEREBY
-----------------------------------------
AGREES THAT ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION
SHALL BE SUBJECT TO CERTAIN RIGHTS OF FIRST REFUSAL OF THE CORPORATION AND
ITS ASSIGNS IN CONNECTION WITH ANY PROPOSED TRANSFER OF ANY SUCH SHARES IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE 1998 STOCK
OPTION/STOCK ISSUANCE PLAN. ADDITIONALLY, THE GRANT NOTICE MAY GRANT THE
CORPORATION THE RIGHT TO REPURCHASE ANY SHARES ACQUIRED UNDER THIS
OPTION, WHICH RIGHT SHALL LAPSE OVER TIME BASED UPON THE OPTIONEE'S LENGTH
OF SERVICE TO THE CORPORATION.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
------------------------------------
(a) The exercise of this Option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporation's Common Stock may be listed at the time of such exercise and
issuance.
(b) In connection with the exercise of this Option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and state securities laws.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
----------------------
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation.
13. LIABILITY OF CORPORATION. The inability of the Corporation to
------------------------
obtain approval from any regulatory body having authority the Corporation deems
necessary to the lawful issuance and sale of any Common stock pursuant to this
Option shall relieve the Corporation of any liability with respect to the
nonissuance of sale of the Common stock as to which such approval shall not have
been obtained. The Corporation, however, shall use its best efforts to obtain
all such approvals.
14. NOTICES. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notices required to be given or
3
<PAGE>
delivered to the Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the US Mail, postage prepaid and properly addressed to the
party to be notified.
15. LOANS. The Plan Administrator may, in its absolute discretion
-----
and without any obligation to do so, assist the Optionee in the exercise of this
Option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the option price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirement for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.
16. CONSTRUCTION. This Agreement and the Option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this Option.
17. GOVERNING LAW. The interpretation, performance, and enforcement
-------------
of this Agreement shall be governed by the laws of the State of Oregon.
18. WITHHOLDING OBLIGATIONS AND PAYMENT OF TAXES. Optionee hereby
--------------------------------------------
agrees to make appropriate arrangements with the Corporation for the
satisfaction of all Federal, state or local tax withholding requirements and
Federal Social Security employee tax requirements applicable to the exercise of
this Option.
19. DEFINITIONS. The following definitions shall apply to the
-----------
respective capitalized terms used herein:
(a) Board means the Board of Directors of Starseed, Inc.
(b) Code means the Internal Revenue Code of 1986, as amended.
(c) Common Stock means the Common Stock of Starseed, Inc.
(d) Corporation means Starseed, Inc., a Louisiana corporation, and
any of its successors.
(e) Corporate Transaction means one or more of the following
transactions:
(1) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal
purpose of which is to change the state of the Corporation's
incorporation;
(2) the sale, transfer, or other disposition of all or
substantially all of the assets of the Corporation; or
4
<PAGE>
(3) any reverse merger in which the Corporation is the surviving
entity but in which fifty percent (50%) or more of the
Corporation's outstanding voting stock is transferred to
holders different from those who held stock immediately
prior to such merger.
(f) EXERCISE DATE shall be the date on which the executed Purchase
-------------
Agreement for one or more Option Shares is delivered to the Corporation in
accordance with Paragraph 9 of this Agreement.
(g) FAIR MARKET VALUE of a share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(1) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-
counter market, the Fair Market Value shall be the mean
between the highest bid and the lowest asked prices (or if
such information is available the closing selling price) per
share of Common Stock on the date in question in the over-
the-counter market, as such prices are reported by the
National Association of Securities Dealers through its
NASDAQ National Market System or any successor system. If
there are no reported bid and asking prices (or closing
selling price) for the Common Stock on the date in question,
then the mean between the highest bid and the lowest asked
prices (or closing selling price) on the last preceding date
for which such quotations exist shall be determinative of
Fair Market Value.
(2) If the Common Stock is at the time listed or admitted to
trading on any stock exchange then the Fair Market Value
shall be the closing selling price per share of Common Stock
on the date in question on the stock exchange determined by
the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there
is no reported sale of Common Stock on such exchange on the
date in question, then the Fair Market Value shall be the
closing selling price on the exchange on the last preceding
date for which such quotation exists.
(3) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded in the
over-the-counter market, or if the Plan Administrator
otherwise determines that the valuation provisions of
subparagraphs (a) and (b) above will not result in a true
and accurate valuation of the Common Stock, then the Fair
Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan
Administrator shall deem appropriate under the
circumstances.
5
<PAGE>
(h) GRANT DATE means the date specified in the Grant Notice as the
----------
date on which the Option was granted to the Optionee under the Plan.
(i) NON-STATUTORY STOCK OPTION means an option not intended to meet
--------------------------
the statutory requirements of Section 422 of the Code.
(j) OPTION SHARES means the total number of shares of Common Stock
-------------
indicated in the Grant Notice as purchasable under this Option.
(k) OPTIONEE means the individual identified in the Grant Notice as
--------
the person to whom this Option has been granted under the Plan.
(l) OPTION PRICE means the exercise price per share to be paid by the
------------
Optionee for the exercise of this Option. The Option Price is indicated in the
Grant Notice.
(m) PARENT corporation means any corporation (other than the
------
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each such corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such claim.
(n) PLAN means the 1998 Stock Option/Stock Issuance Plan of the
----
Corporation, in the form of Exhibit C to the Grant Notice.
(o) PLAN ADMINISTRATOR means either the Board or a committee of two
------------------
or more Board members, to the extent such committee may at the time be
responsible for plan administration.
(p) PURCHASE AGREEMENT means the stock purchase agreement, in
------------------
substantially the form of Exhibit B to the Grant Notice, which is to be
executed in connection with the exercise of this Option for one or more Option
Shares.
(q) SERVICE means the performance of services for the Corporation or
-------
any Parent or Subsidiary corporation by an individual in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor. Accordingly, the Optionee shall be deemed to remain in
Service for so long as such individual renders services to the Corporation or
any Parent or Subsidiary corporation on a periodic basis in the capacity of an
Employee, a non-employee of the board of directors or an independent consultant
or advisor.
(r) SUBSIDIARY corporation means each corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each such corporation (other than the last corporation) in
the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
6
<PAGE>
EXHIBIT 99.3
GeoCities
4499 Glencoe Avenue
Marina Del Rey, CA 90292
December ___, 1998
__________________
c/o Starseed, Inc.
645 "A" Street
Ashland, OR 97520
Dear ____________:
You currently hold the following stock option(s) (collectively the
"Options") to acquire shares of the common stock of Starseed, Inc. (the
"Company") under the Company's 1998 Stock Option/Stock Issuance Plan (the
"Plan"):
<TABLE>
<CAPTION>
Number of
Unexercised
Grant Date Exercise Price Shares
---------- -------------- ------
<S> <C> <C>
__________ ______________ ___________
</TABLE>
Pursuant to the terms and conditions in effect for your Options
(Section 6(a) of the stock option agreement and Section II.2(a) of the Plan),
those Options will terminate in the event the Company is acquired pursuant to a
corporate transaction such as the merger which will occur when the Company is
acquired by GeoCities pursuant to the Agreement and Plan of Merger signed by the
Company and GeoCities on November 10, 1998 (the "Merger"). The effective date
for the Merger is expected to occur on or about December __, 1998.
GeoCities is, however, willing to assume your outstanding Options and
convert them into options to purchase shares of GeoCities common stock, as set
forth in the Assumption section below, PROVIDED YOU EXECUTE THE WAIVER SET FORTH
IN THIS LETTER AGREEMENT.
OPTION ASSUMPTION
-----------------
If you execute the Waiver, then at the time the Merger takes place,
each of your outstanding Options will be assumed by GeoCities, whether vested or
unvested, and converted into the right to purchase shares of GeoCities common
stock at an adjusted exercise price per share. The number of shares of GeoCities
common stock purchasable under each of your assumed Options will be equal to the
number of shares of Starseed common stock subject to that Option immediately
prior to the Merger multiplied by the ratio at which shares of Starseed
<PAGE>
common stock are to be exchanged for shares of GeoCities common stock in the
Merger, with any resulting fractional share to be eliminated.
The per share exercise price of the GeoCities common stock subject to
each of your assumed Options will be equal to the dollar amount determined by
dividing the exercise price per share of Starseed common stock in effect under
that Option immediately prior to the Merger by the merger exchange ratio and
rounded up to the nearest whole cent.
Each Option assumed by GeoCities under this Agreement will continue to
remain exercisable upon the same terms and conditions set forth in the agreement
evidencing that Option immediately prior to the Merger, except (i) for the
adjustments specified above and (ii) the modification made pursuant to your
Waiver below. None of your Options will accelerate in connection with the
Merger, and your Options will continue to vest and become exercisable in
accordance with the vesting schedule currently for those Options. By reason of
your Waiver, you will have no right to receive any cash payments or other cash
consideration from GeoCities, Starseed or any other entity upon the exercise of
your assumed Options.
Should you terminate your employment while holding any unvested shares
of GeoCities Common Stock purchased under your assumed Options, then GeoCities
as the successor to Starseed will have to repurchase those shares at the
purchase price you paid for the shares.
If you fail to return your signed Waiver to Ed Pierce, General Counsel
at the GeoCities headquarters at 4499 Glencoe Avenue, Marina Del Rey, CA 90292
by December 4, 1998 then none of your Options will be assumed by GeoCities, and
those Options will terminate at the time of the Merger. Accordingly, you will
cease to have any rights to purchase either Starseed common stock or GeoCities
common stock under your terminated Options.
Very truly yours
William E. Losch
Vice President, Finance
<PAGE>
WAIVER
------
As consideration for the assumption by GeoCities of my outstanding
options to purchase shares of Starseed common stock, as those options are more
particularly identified above (the "Options"), I hereby waive any and all rights
I may have under the Starseed 1998 Stock Option/Stock Issuance Plan or the
agreements evidencing my Options or otherwise, to receive any cash payment upon
the subsequent exercise of the assumed Options which would serve to compensate
me for, or otherwise provide the economic equivalent of, the cash consideration
to be 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. Accordingly, upon the exercise of each of my Options
assumed by GeoCities in the Merger, I shall only be entitled to receive shares
of GeoCities Common Stock, and no other payment, whether in cash or other form,
shall be due me from GeoCities, Starseed or any other entity in connection with
such exercise.
Signature: ______________________________
Dated: _________________________________
<PAGE>
EXHIBIT 99.4
GEOCITIES
STOCK OPTION ASSUMPTION AGREEMENT
UNDER
STARSEED, INC.
1998 STOCK OPTION/STOCK ISSUANCE PLAN
-------------------------------------
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").
<PAGE>
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.
---------
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
-------
A, with any fractional share rounded down to the next whole share, and the
- -
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,
---------
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.
2
<PAGE>
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:
3
<PAGE>
GeoCities
4499 Glencoe Avenue
Marina Del Rey, California 90292
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:_____________________________
4
<PAGE>
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
---------
other rights to purchase Starseed Stock that he or she owned immediately prior
to the Effective Time.
________________________________________
OPTIONEE
DATED: DECEMBER 4, 1998
5
<PAGE>
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)
