Staircase timer 4 wire and 3 wire

[Aidanktm]

hi everybody i have recently bought a staircase timer, and on the side of it there are 2 different wiring diagrams. one of it says 3 wire and the other says 4 wire. I have always connected them in the 3 wire diagram but i'd like to know what is the other one and for when it is useful. here is a photo of the timer.

Thanks

 

[telectrix]

;
looks to melikethe 4 wire method allows ar a manual switch local to the lights.