<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
CYBERCASH, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
[CYBERCASH LOGO]
May 11, 2000
To our Stockholders:
You are cordially invited to attend the annual meeting of stockholders of
CyberCash, Inc. to be held on June 22, 2000, at 10:00 a.m. (EDT), at the
Sheraton Reston Hotel, 11810 Sunrise Valley Drive, Reston, Virginia, 20191.
At this meeting, we are asking you to take the following actions:
- Elect two directors to serve on the Company's Board of Directors until
the annual meeting of stockholders in 2003;
- Approve an amendment to the Company's Amended and Restated Articles of
Incorporation to increase the number of shares of Common Stock that the
Company is authorized to issue from 40 million to 80 million; and
- Ratify the appointment of Ernst & Young LLP as independent auditors of
the Company for the fiscal year ending December 31, 2000.
Please read the enclosed materials carefully and return your proxy card as
soon as possible so that your vote will be counted. Thank you.
Sincerely,
/s/ WILLIAM MELTON
William N. Melton
Chairman of the Board of Directors
<PAGE> 3
CYBERCASH, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 22, 2000
------------------------
Dear CyberCash, Inc. Stockholder:
The annual meeting of stockholders of CyberCash, Inc., a Delaware
corporation, will be held at the Sheraton Reston Hotel, 11810 Sunrise Valley
Drive, Reston, Virginia, 20191, on Thursday, June 22, 2000, at 10:00 a.m. (EDT),
to consider and take action on the following matters:
1. To elect two Class I directors to the Company's Board of Directors;
2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to increase the number of shares of Common Stock
that the Company is authorized to issue from 40 million to 80 million;
3. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending December 31, 2000; and
4. To act on such other matters as may properly come before the
meeting and any adjournment(s) thereof.
The above matters are described in the attached Proxy Statement. Please
read the Proxy Statement. After reading the Proxy Statement, please complete and
return the enclosed proxy card in the postage-prepaid envelope to assure that
your shares are represented at the meeting. Do not forget to sign and date your
proxy card.
The Proxy Statement is being mailed May 11, 2000 to stockholders of record
on April 25, 2000. Only stockholders of record at the close of business on April
25, 2000 are entitled to notice of, and to vote at the meeting.
By order of the Board of Directors,
/s/ JOHN H. KARNES
John H. Karnes
Corporate Secretary
Reston, Virginia
May 11, 2000
<PAGE> 4
May 11, 2000
CYBERCASH, INC.
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 22, 2000
------------------------
GENERAL INFORMATION
The Board of Directors of CyberCash, Inc. is soliciting your proxy for use
at the annual meeting of stockholders to be held Thursday, June 22, 2000, at
10:00 a.m. (Eastern Daylight Savings Time), and at any adjournment(s) or
postponement(s) thereof, for the purposes set forth below. The meeting will be
held at the Sheraton Reston Hotel, 11810 Sunrise Valley Drive, Reston, Virginia
20191. The Company's principal executive offices are located at 2100 Reston
Parkway, Third Floor, Reston, Virginia 20191. The Company's telephone number is
(703) 620-4200. These proxy solicitation materials were mailed on or about May
11, 2000, to all stockholders entitled to vote at the meeting. A copy of the
Company's annual report to stockholders for the fiscal year ended 1999 was
mailed to each stockholder of record together with these materials.
REVOCABILITY OF PROXIES
Stockholders may revoke their proxies at any time before their proxies are
voted by either sending a written revocation to the Secretary of the Company,
submitting another proxy bearing a later date, or by voting in person at the
meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
As of April 25, 2000, the Company had outstanding 24,839,901 shares of
common stock, $0.001 par value per share (the "Common Stock"), entitled to one
vote per share. Only stockholders of record at the close of business on April
25, 2000 (the "Record Date") are entitled to vote at the meeting. A majority of
the shares entitled to vote at the meeting, represented in person or by proxy,
will constitute a quorum for the transaction of business.
REQUIRED VOTES AND VOTING PROCEDURES
Directors will be elected in connection with Proposal 1 by the affirmative
vote of a plurality of all votes cast at the meeting, in person or by proxy. The
affirmative vote of a majority of the Company's outstanding Common Stock, in
person or by proxy, is required for approval of Proposal 2.
If you indicate on your proxy card that you are "withholding" authority for
one or more proposals, your shares will be included for purposes of establishing
a quorum and will be counted as voting at the meeting. All shares represented at
the meeting, in person or by proxy, held by brokers or nominees will be included
for purposes of establishing a quorum but will not be counted as present and
voting as to any proposal with respect to which the broker or nominee lacks the
authority to cast a vote. Inasmuch as Proposal 2 requires an affirmative vote of
all Common Stock outstanding, these "broker non-vote" shares have the same
effect as withholding approval on the proposal. Broker non-vote shares have no
effect on the other proposals to be voted upon at the meeting.
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth certain information known to CyberCash with
respect to the beneficial ownership of its common stock as of April 25, 2000 for
(i) each stockholder who is known by CyberCash
<PAGE> 5
to own beneficially more than 5% of its common stock, (ii) certain executive
officers of CyberCash, (iii) each director of CyberCash and (iv) all directors
and executive officers of CyberCash, as a group. Unless otherwise specified, the
address of all stockholders is the address of CyberCash's principal executive
offices.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) % OF CLASS
------------------- ----------------------- ----------
<S> <C> <C>
William N. Melton(2)........................................ 3,830,498 15.50%
First USA Bank, N.A.(3)..................................... 2,200,000 8.18%
Three Christine Centre
201 North Walnut Street
Wilmington, Delaware 19801
Halifax Fund LP(4).......................................... 1,672,500 6.60%
c/o The Palladin Group, Inc.
40 West 57th Street
New York, New York 10019
RGC International Investors, LDC(5)......................... 2,541,782 9.90%
c/o Rose Glen Capital Management, L.P.
251 St. Asaphs Road, 3 Bala Plaza East
Bala Cynwyd, Pennsylvania 19004
Daniel C. Lynch(6).......................................... 821,576 3.32%
Michael Rothschild(7)....................................... 75,924 *
Charles T. Russell(8)....................................... 30,500 *
Garen K. Staglin(9)......................................... 82,858 *
Parvinder S. Kohli(10)...................................... 25,000 *
James J. Condon(11)......................................... 253,525 *
Russell B. Stevenson, Jr.................................... 1,600 *
Bruce G. Wilson............................................. 107,849 *
Nancy C. Goldberg(12)....................................... 72,675 *
Denis Yaro.................................................. 3,046 *
George C. Pappas(13)........................................ 26,000 *
All directors and executive officers as a group (14
persons)(14).............................................. 5,290,447 20.79%
</TABLE>
- ---------------
* Less than one percent.
(1) The ownership of shares of Common Stock reported herein is based upon
filings with the Securities and Exchange Commission (the "Commission"),
except as noted otherwise. Beneficial ownership is determined in accordance
with the rules of the Commission and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
Securities underlying options and warrants that are exercisable within 60
days of April 25, 2000 are deemed to be outstanding for the purpose of
computing the percentage of outstanding securities owned by the holder of
such options.
(2) Includes 15,000 shares held by members of Mr. Melton's immediate family,
40,000 shares held by The William N. Melton 1994 Charitable Remainder
Annuity Trust, 70,000 shares held by The William N. Melton 1995 Charitable
Remainder Annuity Trust and 110,000 shares held by The Melton Foundation.
(3) Consists of shares subject to warrants exercisable within 60 days of April
25, 2000.
2
<PAGE> 6
(4) Based upon information contained in the most recent Schedule 13G filed by
Halifax Fund LP, Halifax held 1,044,450 shares of Common Stock and warrants
to acquire 388,415 shares of Common Stock at December 31, 1999. The
warrants are exercisable only to the extent that the number of shares of
Common Stock issuable upon the exercise of the warrants, together with any
other shares of Common Stock beneficially owned by the filers, would not
exceed 9.9% of the then outstanding Common Stock of the Company. The
Company issued 239,635 additional warrants to Halifax effective January 6,
2000 pursuant to re-pricing provisions in certain of the warrants. These
additional warrants are also subject to the foregoing 9.9% limitation on
exercisability.
(5) Based upon information contained in the most recent Schedule 13G filed by
RGC International Investors LDC, RGC held 1,510,367 shares of Common Stock
and warrants to acquire 1,093,955 shares of Common Stock at December 31,
1999. The warrants are exercisable only to the extent that the number of
shares of Common Stock issuable upon the exercise of the warrants, together
with any other shares of Common Stock beneficially owned by the filers,
would not exceed 9.9% of the then outstanding Common Stock of the Company.
The Company issued 479,271 additional warrants to RGC effective January 6,
2000 pursuant to re-pricing provisions in certain of the warrants. These
additional warrants are also subject to the foregoing 9.9% limitation on
exercisability. As such, the amount reported above as beneficially owned by
RGC includes only that portion of the warrants as may be exercised by RGC
within 60 days of April 25, 2000 by virtue of the 9.9% limitation on
exercisability contained herein. According to the Schedule 13G filed by
RGC, RGC shares voting and dispositive power over the Common Stock it owns
with Rose Glen Capital Management, L.P., its investment manager, and RGC
General Partner Corp., the general partner of the investment manager.
(6) Consists of 762,576 shares held by The Lynch Living Trust U/T/A dated March
2, 1990 of which Daniel C. Lynch and Karen D. Lynch are co-trustees; 10,000
shares held by The Katherine Danielle Lynch Irrevocable Trust of which
Daniel C. Lynch is trustee; 10,000 shares held by The Michael MacAllen
Lynch Irrevocable Trust of which Daniel C. Lynch is trustee; and 5,000
shares held by The Francis Troy Lynch Irrevocable Trust of which Daniel C.
Lynch is trustee and 34,000 shares subject to stock options exercisable
within 60 days of April 25, 2000.
(7) Consists of 38,924 shares held by The Michael L. Rothschild Trustee
Revocable Trust U/T/A dated August 9, 1993, 10,000 shares held by The MLR
Enterprises, Inc. Master Pension and Profit-Sharing Plan U/T/A dated
January 1, 1991 and 27,000 shares subject to stock options exercisable
within 60 days of April 25, 2000.
(8) Consists of shares subject to stock options exercisable within 60 days of
April 25, 2000.
(9) Includes 16,700 shares held by The Garen K. and Sharalyn King Staglin 1997
Charitable Unit Trust dated July 8, 1997, and 46,158 shares subject to
stock options exercisable within 60 days of April 25, 2000.
(10) Consists of shares subject to stock options exercisable within 60 days of
April 25, 2000.
(11) Includes 249,125 shares subject to stock options exercisable within 60 days
of April 25, 2000.
(12) Includes 71,375 shares subject to stock options exercisable within 60 days
of April 25, 2000.
(13) Consists of shares subject to stock options exercisable within 60 days of
April 25, 2000.
(14) Includes 578,408 shares subject to stock options exercisable within 60 days
of April 25, 2000.
3
<PAGE> 7
PROPOSAL 1
ELECTION OF DIRECTORS
BOARD COMPOSITION
The Company's Board of Directors is comprised of seven directors divided as
evenly as possible into three classes. Members of each class stand for election
on a rotating basis every third year. At the meeting, stockholders will vote to
elect two Class I directors. These two directors will serve on the Board for a
three-year term and until their successors are duly elected and qualified. Class
II and Class III directors will be elected at the annual meeting of stockholders
held in 2001 and 2002, respectively.
NOMINEES FOR ELECTION
The Board of Directors has nominated William N. Melton and Garen K. Staglin
for election to the Board of Directors at the meeting. Both nominees are
currently members of the Board.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RE-ELECTION OF BOTH
MESSRS. MELTON AND STAGLIN. If you sign and return the enclosed proxy card, the
persons named as your proxies on the enclosed proxy card intend to vote "FOR"
the election of the each of the nominees set forth below to the Board of
Directors, unless you indicate that your vote should be withheld with respect to
one or more of the nominees. Each nominee has expressed his intention to serve
the entire three-year term. If any nominee is unable to serve, the proxies
intend to vote for a replacement recommended by the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE BACKGROUND
- ---- --- ----------
<S> <C> <C>
William N. Melton........ 57 Mr. Melton, a founder of CyberCash, has served as a member
of its board since its inception in August 1994 and was
elected chairman of the board in November 1999. He served as
its chief executive officer until November 1999. He also
served as CyberCash's president until January 1999. Mr.
Melton founded VeriFone, Inc., a transaction automation
company, in 1981. He was a director of VeriFone from 1981
until 1996, and served as its Chairman of the Board from
1986 until 1992. Mr. Melton was a founding investor of
Transaction Network Services, Inc., a transaction network
communications company.
Garen K. Staglin......... 55 Mr. Staglin has served as a member of CyberCash's board of
directors since July 1996. Mr. Staglin served as chairman
and chief executive officer from 1991 to 1998 of Safelite
Glass Corporation, a manufacturer and retailer of
replacement autoglass and related services. He continues to
serve as chairman of Safelite's board of directors. Mr.
Staglin is also a director of First Data Corporation, Quick
Response Services, Inc. and Specialized Bicycle Corporation.
He is a member of the Advisory Board of the Stanford
Graduate School of Business.
</TABLE>
4
<PAGE> 8
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING
The following sets forth certain information concerning those members of
the Company's Board of Directors whose terms do not expire at the meeting.
<TABLE>
<CAPTION>
NAME AGE BACKGROUND
- ---- --- ----------
<S> <C> <C>
Daniel C. Lynch.......... 58 Mr. Lynch, a founder of the Company, has served as a member
of CyberCash's board of directors since the Company's
inception in August 1994. He served as CyberCash's chairman
of the board until January 1999. He also served briefly as
vice president during the company's formation in August
1994. Mr. Lynch was the founder of Interop, a conference and
tradeshow company for the computer and communications
industry, now a division of Softbank Expos and formerly
Ziff-Davis Conference and Exhibition Company. From 1980 to
1983, he was director of information processing division for
the Information Sciences Institute. Mr. Lynch is also a
member of the Board of Trustees of the Santa Fe Institute, a
director of Exodus Communications, Inc. and a director of
Covad Communications Group, Inc. Mr. Lynch is a Class II
Director.
Michael Rothschild....... 47 Mr. Rothschild has served as a member of CyberCash's board
of directors since November 1995. He is an author, economic
columnist and president of The Bionomics Institute, a
non-profit educational foundation. Since 1996, Mr.
Rothschild has been president and chief executive officer of
Maxager Technology, Inc., a software maker specializing in
advanced product costing systems for manufacturers. Mr.
Rothschild is a Class III Director.
Charles T. Russell....... 70 Mr. Russell has been a member of CyberCash's board of
directors since August 1997. Mr. Russell was president and
Chief executive officer of Visa International from 1984 to
1994. Mr. Russell is a member of the board of directors of
First Data Corporation. Mr. Russell is a Class II Director.
Parvinder S. Kohli....... 43 Mr. Kohli joined CyberCash's board of directors in February
2000. He has held various management positions in Marketing
and Business Development at Intel for the last 11 years. He
is currently the General Manager of Intel Internet Security
Services, a new start-up operation within Intel that is
delivering content protection solutions to the media
industry. Prior to that he was responsible for leading
Intel's investment strategy in the area of E-Commerce and
Built Intel's investment portfolio of companies in the
E-Commerce/ E-Business sector. Previously Mr. Kohli was
Product Marketing Manager at National Semiconductor from
1984 to 1989. Mr. Kohli is a Class III Director.
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
NAME AGE BACKGROUND
- ---- --- ----------
<S> <C> <C>
James J. Condon.......... 43 Mr. Condon has served as CyberCash's president and its chief
executive officer since January and November of 1999,
respectively. He served as the Company's chief operating
officer from March 1998 until November 1999 and served as
Chief financial officer from February 1997 until July 1999.
Mr. Condon was elected to the board of directors in February
2000. Before joining CyberCash, Mr. Condon was Director of
Performance Improvement for the ICE (Information,
Communications and Entertainment) segment of KPMG. From 1991
to 1995, he was corporate vice president for financial
planning and administration, and before that vice president
of operations, in the customer support and development
divisions of Legent Corporation. Mr. Condon serves as a
director of the following companies: Solutions Consulting, a
privately held company that consults to software companies
about electronic commerce and supply-chain management
issues; Ultraprise Corporation, an online
business-to-business exchange for trading residential whole
loans and other assets between financial services
institutions; PocketPass.Com, Inc., a provider of electronic
pre-paid payment cards for purchases on the Internet; and
Election.com, Inc., a provider of public and private
election services. Mr. Condon is a Class III Director.
</TABLE>
BOARD COMMITTEES AND MEETINGS
During 1999, the Board of Directors held seven meetings. No incumbent Board
member attended fewer than 75 percent the total number of Board and committee
meetings that such director was eligible to attend during the year other than
Charles Russell.
The Board has two standing committees: an Audit Committee and a
Compensation Committee. The Audit Committee reviews the internal accounting
procedures of the Company and consults with and reviews the services provided by
the Company's independent auditors. A copy of the Audit Committee's charter is
included at the end of this Proxy Statement as Exhibit A. Messrs. Lynch,
Rothschild and Staglin comprise the Audit Committee. The Audit Committee met two
times during 1999.
The Compensation Committee of the Board of Directors reviews and recommends
to the Board the compensation and benefits of employees of the Company. The
Compensation Committee also administers the issuance of stock options and other
awards under the Company's stock plans, except for the Company's 1995
Non-Employee Directors' Stock Option Plan, which is administered by the Board of
Directors. Messrs. Kohli, Russell and Staglin comprise the Compensation
Committee. The Compensation Committee met three times during 1999.
DIRECTOR COMPENSATION
Directors currently do not receive any cash compensation from CyberCash for
their service as members of its Board of Directors, although they are reimbursed
for certain expenses in connection with attendance at board and committee
meetings. Under the CyberCash Non-Employee Directors' Option Plan, directors are
awarded options to acquire 5,000 shares of CyberCash Common Stock upon their
election to the Board and are awarded options to acquire 1,500 shares per year
thereafter. Additionally, directors are awarded options to acquire 1,500 shares
of stock annually for each board committee on which they serve and 5,000 shares
for each committee that they chair. All grants are at fair market value and are
fully vested.
6
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of CyberCash served as a director or member of (i) the
compensation committee of another entity which has an executive officer who is a
director of CyberCash or a member of CyberCash's Compensation Committee, (ii)
the board of directors of another entity in which one of the executive officers
of such entity served on CyberCash's compensation committee, or (iii) the
compensation committee of any other entity in which one of the executive
officers of such entity served as a member of CyberCash's board of directors,
during the year ended December 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires
CyberCash's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission, by a specified date, reports regarding their respective ownership of
CyberCash Common Stock. To the Company's knowledge, based solely on its review
of the copies of such reports furnished to it and written representations that
no other reports were required, we believe that all of its officers and
directors and greater than ten percent beneficial owners complied with all
Section 16(a) filing requirements applicable to them with respect to those
transactions during 1999.
EXECUTIVE OFFICERS
The following sets forth certain information concerning CyberCash's
executive officers and key employees as of April 25, 2000.
<TABLE>
<CAPTION>
NAME POSITION BACKGROUND
- ---- -------- ----------
<S> <C> <C>
James J. Condon........... President, Chief Mr. Condon's biographical information is
Executive Officer and set forth above under the heading
Director "Directors Whose Terms of Office Will
Continue After the Meeting".
Charles L. Riegel......... Executive Vice Mr. Riegel, 41, has served as
President, Worldwide CyberCash's President, executive vice
Marketing president responsible for worldwide
marketing since September 1999. Prior to
joining CyberCash, Mr. Riegel served as
executive vice president at Virtus
Corporation, a North Carolina-based
software and technology firm
specializing in 3D imaging from 1996 to
1999 and from 1996 was also a principal
at Software Insights, a high-tech
consulting firm located in Cary, North
Carolina. Previously, from 1994 to 1996
he served as senior vice president of
worldwide marketing at Seer Technologies
Inc., and from 1988 to 1994 as vice
president of marketing and product
management at Legent Corporation. Mr.
Riegel serves as director of Neomar and
WebSurveyor.
</TABLE>
7
<PAGE> 11
<TABLE>
<CAPTION>
NAME POSITION BACKGROUND
- ---- -------- ----------
<S> <C> <C>
Joseph G. Monteil......... Executive Vice Mr. Monteil, 42, joined CyberCash in May
President, Development 1999 as Executive Vice President of
and Operations Development and Operations bringing with
him over 21 years experience in the IT
industry. Prior to joining CyberCash,
Mr. Monteil was the Vice President of
Technical Operations at CareerBuilder
Inc., the fastest growing,
interactive-web-based recruiting company
on the Internet. From 1995 to 1997, Mr.
Monteil was a Senior Manager of
Performance Improvement Services for
KPMG Peat Marwick. He served as the Vice
President, Client Services for Legent
Corporation, from 1986 to 1995, where he
led the Client Services operations
Dennis N. Cavender........ Executive Vice President Mr. Cavender, 49, has served as
and Chief Financial CyberCash's executive vice president and
Officer chief financial officer since July 1999.
Prior to CyberCash, from 1998 to 1999 he
was president, chief operating officer
and chief financial officer of Gooitech,
Inc., a wireless communications company.
Prior to Gooitech, Mr. Cavender was vice
president and chief financial officer
for Broadband Associates from 1997 to
1998, an Internet services company and
vice president and chief financial
officer from 1996 to 1997 for Aksys,
Ltd, a medical device development-stage
company, where he was a member of the
management team at the time of their
initial public offering. Additionally,
Mr. Cavender served as vice president
and chief financial officer for Promega
Corporation 1994 to 1996, a high growth
biotechnology company, held various
senior financial, strategic planning and
operational positions with Amdahl
Corporation from 1981 to 1994, a
manufacturer of mainframe computer
systems, and from 1972 to 1981 held
various financial management positions
with Syntex Corporation, a
pharmaceutical company.
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
NAME POSITION BACKGROUND
- ---- -------- ----------
<S> <C> <C>
Nancy C. Goldberg......... Executive Vice Ms. Goldberg, 41, has served as
President, Sales CyberCash's executive vice president
responsible for Sales since June 1999.
Prior to that she was senior vice
president responsible for the Payments
business. Ms. Goldberg joined CyberCash
in January 1998 as vice president for
Internet Billing and Payment Services.
Before joining CyberCash, Ms. Goldberg
was market director for financial
services at Proxicom, Inc., an Internet
software developer, from October 1997 to
January 1998; chief executive officer
and a co-founder of Verb, Inc., a
developer of internet based recruiting
software, from 1994 to 1997; and a vice
president for Prudential Home Mortgage
from 1991 to 1994, where she was
responsible for all applications
systems. Before 1991, Ms. Goldberg was a
senior manager with the financial
services industry group of Andersen
Consulting
George C. Pappas.......... Executive Vice Mr. Pappas, 40, joined CyberCash as
President, Development executive vice president, development
and Strategic and strategic relationships in March
Relationships 1999. He has served as CyberCash's
executive vice president, technology and
strategic relationships since May 1999.
Mr. Pappas was the president of
Netguard, Inc. an Israeli-based Internet
security and performance vendor from
1997 to 1999. From 1995 to 1997 he also
served as senior vice president, sales
and marketing for Relay Technology, Inc.
In 1994, Mr. Pappas helped start U.S.
Operations for France-based Implicit
Software Inc.; was vice president sales
and marketing for Software Emancipation
Technology, Inc. from 1991 to 1994; and
vice president at Bachman Information
Systems, 1986-1991.
Arthur A. Pumo............ Executive Vice Mr. Pumo, 59, joined CyberCash in March
President, Human 2000 as executive vice president, human
Resources resources. Since 1995 Mr. Pumo served as
vice president, human resources at
Omnipoint Corporation, a leading
provider of wireless personal
communications services and technology.
Mr. Pumo was vice president, human
resources for Legent Corporation from
1993 to 1995, and was with International
Business Machines Corporation from 1963-
1992, serving in numerous human
resources management and executive
positions.
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
NAME POSITION BACKGROUND
- ---- -------- ----------
<S> <C> <C>
John H. Karnes............ Vice President, General Mr. Karnes, 39, joined CyberCash in
Counsel and Corporate February of 2000 as Vice President,
Secretary General Counsel and Corporate Secretary,
positions he has held with a number of
entrepreneurial, public companies
including Snyder Oil Corporation during
1999 (oil and gas exploration);
FIRSTPlus Financial Corporation during
1998 (consumer finance); Pillowtex
Corporation during 1997 (textile
manufacturer); AMRE Incorporated during
1996 (home improvement product
manufacturer and marketer); and Pratt
Hotel Corporation during 1995 (hotel and
casino resort management). Mr. Karnes
previously was in private practice with
the national law firm of Kirkland &
Ellis, where he specialized in corporate
finance acquisitions.
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain compensation awarded or paid by the
Company during the three fiscal years ended December 31, 1999 to its Chief
Executive Officer, the Company's four other most highly compensated officers who
were employed on such date, and one former executive whose 1999 compensation
qualifies him for inclusion notwithstanding his resignation during the year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL -----------------------
COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($) OPTIONS(#) COMPENSATION($)
- --------------------------- ---- --------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William N. Melton............. 1999 -- -- -- -- --
Chairman of the Board(1) 1998 -- -- -- -- --
1997 100,000 -- -- -- --
James J. Condon............... 1999 268,333 100,000 37,500(4) 580,000 11,058(5)
Chief Executive Officer(2) 1998 207,853 -- -- 165,000 --
and President 1997 126,628 -- -- 90,000 --
Russell B. Stevenson,
Jr.(3)...................... 1999 220,000 -- 25,000(4) 35,000 6,346(5)
Senior Vice President,
General 1998 209,160 -- -- 55,000 --
Counsel and Secretary 1997 210,000 20,475 -- 30,000 --
Bruce G. Wilson(3)............ 1999 200,000 -- 11,250(4) 40,000 268,443(6)
Executive Vice President 1998 186,806 -- -- 23,000 --
1997 180,000 9,000 -- 15,000 --
Nancy C. Goldberg............. 1999 194,167 -- 16,250(4) 70,000 --
Executive Vice President 1998 158,718 -- -- 47,500 --
1997 -- -- -- -- --
Denis Yaro(3)................. 1999 184,179 -- 7,500(4) 36,500 26,934(5)
Executive Vice President 1998 220,000 -- -- 10,000 --
1997 220,000 26,000 -- 10,000 --
George C. Pappas.............. 1999 149,583 -- -- 90,000 --
Executive Vice President 1998 -- -- -- -- --
1997 -- -- -- -- --
</TABLE>
- ---------------
(1) Mr. Melton served as chief executive officer of the Company prior to
November 1999.
10
<PAGE> 14
(2) Mr. Condon assumed the role of chief executive officer of the Company
commencing November 1999.
(3) Mr. Stevenson resigned form the Company effective January 31, 2000. Mr.
Wilson resigned from the Company effective December 31, 1999. Mr. Yaro
resigned from the Company effective November 1, 1999.
(4) Awarded February 10, 1999. All stock was 20% vested at issuance and vested
20% every 90 days thereafter. All unvested shares were subject to forfeiture
if the recipient terminated his/her employment prior to February 10, 2000.
Number of shares awarded was as follows: Mr. Condon: 3,000; Mr. Wilson:
1,000; Mr. Stevenson: 2,000; Ms. Goldberg: 1,300; Mr. Yaro: 600. Value of
aggregate restricted stock holdings at December 31, 1999 was as follow: Mr.
Condon: $5,500; Mr. Wilson: $0: Mr. Stevenson: $3,700; Ms. Goldberg: $2,405.
(5) One time settlement of accrued vacation hours resulting from Company-wide
change in vacation policy.
(6) Amount paid in connection with an agreement relating to Mr. Wilson's
resignation.
STOCK OPTION INFORMATION
The following table shows for the fiscal year ended December 31, 1999,
certain information regarding options granted to, exercised by, and held at year
end by the individuals appearing on the preceding Summary Compensation Table:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
NUMBER OF % OF TOTAL OPTION TERM($)(3)(4)
SECURITIES OPTIONS OPTION GRANTS IN LAST
UNDERLYING GRANTED TO EXERCISE OR FISCAL YEAR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
- ---- ------------- ------------ ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
William N. Melton......... -- -- -- -- -- --
James J. Condon........... 580,000 27.2% $9.13-$14.19 8/25/2009 $3,851,260 $9,766,460
Bruce G. Wilson........... 40,000 1.9% $9.13-$14.38 8/25/2009 $ 330,000 $ 832,900
Russell B. Stevenson,
Jr. .................... 35,000 1.6% $9.13-$14.38 8/25/2009 $ 301,275 $ 760,175
Nancy C. Goldberg......... 70,000 3.3% $9.13-$14.38 8/25/2009 $ 592,270 $1,495,370
Denis Yaro................ 36,500 1.7% $9.13-$14.19 8/25/2009 $ 309,892 $ 781,992
George Pappas............. 90,000 4.2% $9.13-$13.03 8/25/2009 $ 669,460 $1,696,410
</TABLE>
- ---------------
(1) The options are generally incentive stock options with vesting occurring
over 40 months, with 7.5% of the shares vesting after three months, and 2.5%
of the shares vesting each month for the next 37 months.
(2) The exercise price is equal to 100% of the fair market value of the Common
Stock on the date of the grant.
(3) The options have a ten-year term, subject to earlier termination upon death,
permanent and total disability or termination of employment.
(4) The potential realizable value is calculated based on the term of the option
at its time of grant (10 years) and is calculated by assuming that the stock
price on the date of grant as determined by the Board of Directors
appreciates at the indicated annual rate compounded annually for the entire
term of the option and that the option is exercised and sold on the last day
of its term for the appreciated price. The 5% and 10% assumed rates of
appreciation are derived from the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of the
future Common Stock price.
The table below sets forth with respect to each individual appearing on the
preceding Summary Compensation Table, the following information with respect to
(i) the exercise of stock options during the fiscal year ended December 31,
1999, (ii) the number of unexercised options held as of December 31, 1999 and
(iii) the value as of December 31, 1999 of unexercised in-the-money options;
calculated as the amount by which the fair market value exceeds the exercise
price of the Common Stock as of December 31, 1999.
11
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL
SHARES OPTIONS AT FISCAL YEAR END(#) YEAR-END($)(1)
ACQUIRED ON ------------------------------ ----------------------------
NAME EXERCISE(#) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
William N. Melton........... -- -- -- -- --
James J. Condon............. -- 176,125 658,875 $ 2,125 $14,125
Bruce G. Wilson............. -- 80,700 -- $89,075 --
Russell B. Stevenson,
Jr. ...................... -- 93,125 61,875 $ 2,313 $ 3,938
Nancy Goldberg.............. -- 54,250 63,250 $ 3,688 $ 6,938
Denis Yaro.................. -- 202,325 14,775 -- --
George Pappas............... -- 13,625 76,375 $ 250 $ 2,250
</TABLE>
- ---------------
(1) Based on the closing price of the Company's Common Stock on December 31,
1999 of $9.25 per share, minus the exercise price, multiplied by the number
of shares underlying the option.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and recommends changes to the Company's
compensation policies and benefits programs. The Committee also administers the
Company's incentive compensation and benefit plans, including approving stock
option grants.
COMPENSATION PHILOSOPHY
The Company's policy on executive compensation attempts to strike a balance
between the need to provide sufficiently attractive compensation packages to
enable the Company to attract and retain executive talent in the highly
competitive technology labor market while, at the same time, correlating
executive compensation to shareholder value and management performance. This
policy involves offering executives a conservative base compensation, a
relatively large long-term incentive opportunity, primarily in the form of stock
options, and periodic incentive bonus opportunities tied to the achievement of
important financial and personal goals. Consistent with practices within the
technology industry, the committee is increasingly shifting the emphasis of the
Company's compensation program toward long-term incentive compensation through
stock options. This is especially true with respect to the position of the
Company's Chief Executive Officer, a large component of whose compensation the
Committee believes should relate directly to increased shareholder value.
BASE SALARY
Although the Company will continue to pay competitive base salaries in
order to retain qualified management, the Company is committed to de-emphasizing
the importance of base salaries in order to more heavily weight management's
total compensation mix toward long-term incentive compensation through options
while maintaining a total level of compensation that is in line the Company's
peers. In order to accomplish this task, the Compensation Committee attempts to
continuously stay abreast of the Company's competitive position in the industry
through informal reference to the compensation packages, including base salary
levels, offered by comparable technology companies. The Committee generally does
not utilize the services of outside compensation consultants in this process.
The Committee subscribes to an independent industry executive compensation
survey which serves as the Committee's principal resource for benchmarking. Due
to the competitive nature of technology labor market, the Committee continually
re-evaluates the appropriateness of each executive's compensation based upon
their responsibilities, experience, service time, and performance level within
the perimeters of the Company's peers. For purposes of comparison, the Committee
considers peer companies to include publicly traded Internet services companies
with substantial operating histories and market capitalizations ranging from
$500 million to $1.5 billion. Technology start-up companies are excluded for
comparative purposes.
12
<PAGE> 16
William N. Melton, who served as Chief Executive Officer of the Company
prior November 1999, waived all base salary in 1998 and 1999. James J. Condon
assumed responsibilities as CEO effective in November. Mr. Condon, who
previously served as President and Chief Operating Officer, was compensated
pursuant to an employment agreement prior to his becoming CEO. At the time Mr.
Condon became CEO, the Committee gave Mr. Condon only a modest salary increase,
reflecting the Committee's policy of incenting the CEO primarily through
long-term incentive compensation.
LONG-TERM INCENTIVE COMPENSATION
The Compensation Committee believes that long-term incentive compensation
through stock ownership is the most effective means available for inducing
exceptional corporate performance, especially at the CEO level. Heavily
weighting management's total compensation toward stock options and equity
ownership closely aligns the interests of management and stockholders by
correlating management's overall compensation with the creation of shareholder
wealth. As a result, beginning in 1999 the Company attempted wherever possible
to structure executive compensation packages including reduced base salary
levels and increased emphasis on long-term incentive compensation. The Company
capitalized on executive attrition during the period replacing all of the
Company's departing executives with new executives who uniformly accepted lower
base salaries and proportionately higher compensation through equity ownership
than the executives who they replaced. In this regard, the additional
compensation package given Jim Condon in connection with his becoming CEO during
1999 consisted primarily of long-term incentive compensation, comprised of
400,000 stock options, and included only a modest increase in base salary. The
Committee does not utilize a formal methodology for allocating stock option
awards, preferring to make periodic grants in light of the facts and
circumstances prevailing at the time of issuance. The number of stock options
granted to Mr. Condon in connection with his becoming CEO was determined by the
Committee based on a number of subjective criteria including Mr. Condon's
demonstrated leadership ability within the Company in a number of key senior
executive capacities, Mr. Condon's stature in the technology community, Mr.
Condon's significant anticipated contribution to the Company's continued
financial improvement in the years ahead, and the significant additional time
commitment associated with Mr. Condon's expanded responsibilities. The Committee
also considered the number of options generally granted to CEOs of comparable
companies.
Mr. Melton declined participation in the Company's long-term incentive
plans while serving as CEO during 1999.
PERFORMANCE INCENTIVE PLAN
The Committee believes that incentive bonus opportunities are an important
supplemental component to a well-rounded executive compensation program. The
Committee administers an incentive compensation plan pursuant to which senior
executives have the opportunity to earn periodic bonuses based on the attainment
of pre-established company-wide financial objectives and individual performance
goals. The Committee promotes aggressive goal setting to ensure that only truly
exceptional performance is rewarded. Inasmuch as the Company failed to achieve
its company-wide financial goals during 1999, no bonuses were paid to senior
executive officers for the year, although Mr. Condon received a bonus under the
terms of his employment agreement. Mr. Melton declined participation in the
Company's bonus program while serving as CEO during 1999.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Present federal income tax law limits to $1 million the Company's deduction
for compensation paid to each of the Chief Executive Officer and the other four
most highly compensated executives. However, compensation which qualifies as
"performance-based" is excluded from the $1 million limit if, among other
requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals under a plan approved by
shareholders.
13
<PAGE> 17
As a policy matter, the Committee intends to structure all senior executive
compensation to qualify for the federal income tax deduction. The Compensation
Committee does not expect total compensation payable in connection with base
salaries, the Company's long-term incentive plans or bonus incentive bonus plans
to exceed the $1 million limit for any individual executive in 2000. The
Committee reserves the right, however, to award compensation to its executives
in the future that may not qualify as deductible compensation in order to
provide cash compensation in line with competitive practice and the Company's
best interests.
The Compensation Committee believes that the foregoing policy has yielded
the Company a highly qualified, motivated and dedicated senior management team
whose compensation correlates closely with the interests of stockholders and the
success of the Company as a whole.
Compensation Committee
Parvinder S. Kohli
Charles T. Russell
Garen K. Staglin
PERFORMANCE GRAPH
Set forth below is a line graph comparing the Company's stock price
performance to the Nasdaq Stock Market (U.S.) Total Return Index and the
Hambrecht & Quist Technology Stock Index for the period commencing on February
15, 1996 (the date on which the Company's Common Stock began trading on the
Nasdaq Stock Market) and ending on December 31, 1999. The stock price
performance on the following graph is not necessarily indicative of future stock
price performance. All stock price performance assumes an initial investment of
$100 at the beginning of the period and assumes the reinvestment of any
dividends.
COMPARISON OF 46 MONTH CUMULATIVE TOTAL RETURN*
AMONG THE CYBERCASH, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NASDAQ STOCK HAMBRECHT & QUIST
CYBERCASH, INC. MARKET (U.S.) TECHNOLOGY
--------------- ------------- -----------------
<S> <C> <C> <C>
100.00 100.00 100.00
12/96 135.00 119.00 117.00
12/97 75.00 146.00 138.00
12/98 88.00 205.00 214.00
12/99 54.00 371.00 478.00
</TABLE>
* $100 INVESTED ON 2/15/96 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
14
<PAGE> 18
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
At the meeting, you will be asked to vote upon a proposal to amend the
Company's Amended and Restated Articles of Incorporation to increase the number
of shares of Common Stock, par value $.001 per share, that the Company is
authorized to issue.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL. If you
sign and return the enclosed proxy card, the persons named as proxies on the
proxy card intend to vote "FOR" approval of this proposal, unless you
affirmatively instruct the persons to vote otherwise by checking one of the
boxes marked abstain or against.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") authorizes 40,000,000 shares of Common Stock and 5,000,000 shares
of Preferred Stock each having a par value of $.001 per share. At April 25,
2000, the Company had outstanding 24,839,901 shares of Common Stock. In
addition, the Company had outstanding institutional warrants and employee stock
options to acquire an aggregate of 9,149,711 shares of Common Stock as of the
record date, leaving the Company with only 6,010,388 shares available for future
issuance.
The Board does not believe this limited number of available shares provides
the Company sufficient flexibility to respond to future opportunities and
corporate needs. Therefore, the Board of Directors unanimously approved in a
meeting on April 13, 2000, an amendment to the Certificate to increase the
authorized number of shares of Common Stock from 40,000,000 shares to 80,000,000
shares. The amendment will replace Article Fourth of the Certificate in its
entirety. As amended, Article Fourth would read as follows:
"FOURTH
The aggregate number of shares of stock which the Company shall
have authority to issue eighty-five million (85,000,000) shares of
stock, consisting of eighty million (80,000,000) shares of Common
Stock with a par value of one-tenth of one cent ($.001) per share
("Common Stock") and five million (5,000,000) shares of Preferred
Stock with a par value of one-tenth of one cent ($.001) per share
("Preferred Stock")."
The Board of Directors would generally have the authority, without further
action of the stockholders, to issue the proposed additional 40,000,000 shares
of Common Stock from time to time as the Board of Directors deems necessary. The
Board of Directors believes it is desirable to have the ability to issue such
additional shares of Common Stock for general corporate purposes. Potential uses
of the additional authorized shares may include acquisition of other businesses,
equity financings, stock dividends or distributions, issuance of options
pursuant to the Company's 1995 Stock Option Plan and the Non-Employee Directors'
Stock Option Plan and issuances of Common Stock pursuant to the Company's
Employee Stock Purchase Plan. Any or all of these could take place without
further action by the stockholders, unless such action were specifically
required by applicable law or rules of any stock exchange on which the Company's
securities may then be listed. The Company's Board of Directors has no current
plans or intentions to issue any of the additional shares of Common Stock.
The proposed increase in the authorized number of shares of Common Stock
could have a number of effects on the Company's stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could deter takeovers, in that additional shares
could be issued (within the limits imposed by applicable law) in one or more
transactions that could make a change in control or takeover of the Company more
difficult. For example, additional shares could be issued by the Company so as
to dilute the stock ownership or voting rights of persons seeking to obtain
control of the Company. Similarly, the issuance of additional shares to certain
persons allied with the Company's management could have the effect of making it
more difficult to remove the Company's
15
<PAGE> 19
current management by diluting the stock ownership or voting rights of persons
seeking to cause such removal. In addition, an issuance of additional shares by
the Company could have an effect on the potential realizable value of a
stockholder's investment. In the absence of a proportionate increase in the
Company's earnings and book value, an increase in the aggregate number of
outstanding shares of the Company caused by the issuance of the additional
shares would dilute the earnings per share and book value per share of all
outstanding shares of the Company's Common Stock. If such factors were reflected
in the price per share of Common Stock, the potential realizable value of a
stockholder's investment could be adversely affected. The Common Stock carries
no preemptive rights to purchase additional shares.
PROPOSAL 3
RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 2000. Ernst & Young LLP
served in this capacity for the previous four fiscal years. A representative of
Ernst & Young LLP will attend the meeting and will be afforded an opportunity to
make a statement if he or she desires to do so. It also is expected the
representative will be available to respond to appropriate questions.
The appointment of auditors is approved annually by the Board and
subsequently submitted to the stockholders for ratification. The decision of the
Board is based on the recommendation of the Audit Committee. Before making its
recommendation to the Board for appointment of Ernst & Young LLP, the Audit
Committee carefully considered that firm's qualifications as auditors for the
Company. This included a review of its performance last year, as well as its
reputation for integrity and competence in the fields of accounting and
auditing. The Audit Committee has expressed its satisfaction with Ernst & Young
LLP in all of these respects.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the meeting. If any other matters should be presented at the
meeting for action, it is the intention of the persons named in the enclosed
Proxy to vote the shares they represent in their own discretion.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholders desiring to submit proposals to be considered for inclusion in
the proxy statement and form of proxy relating to the Company's 2001 annual
meeting of stockholders under Rule 14a-8 promulgated under the Securities and
Exchange Act of 1934 must deliver their proposals to the Company by January 5,
2001 and must otherwise comply with the requirements of Rule 14a-8. Stockholders
desiring to bring any matter before the annual meeting of stockholders to be
held in 2001 must notify the Company in accordance with Section 5 of the
Company's Amended and Restated Bylaws not earlier than March 16, 2001 nor later
than April 23, 2001. All notices and proposals should be addressed to CyberCash,
Inc., 2100 Reston Parkway, Third Floor, Reston, Virginia, 20191, Attention:
Corporate Secretary.
COPIES OF FORM 10-K
The Company will mail without charge, upon written request, a copy of the
Annual Report on Form 10-K, including the financial statements and list of
exhibits. Requests should be sent to CyberCash, Inc., 2100 Reston Parkway, Third
Floor, Reston, Virginia 20191, Attn: Investor Relations. The Annual Report on
Form 10-K is also available on the Company's web site at www.cybercash.com.
16
<PAGE> 20
SOLICITATION OF PROXIES
The cost of soliciting proxies is being borne by the Company. The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone or electronic mail.
By Order of the Board of Directors
/s/ JOHN H. KARNES
John H. Karnes
Corporate Secretary
May 11, 2000
17
<PAGE> 21
EXHIBIT A
CYBERCASH, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE
BOARD OF DIRECTORS
PURPOSE:
The purpose of the Audit Committee (the "Committee") of the Board of
Directors (the "Board") of CyberCash, Inc., a Delaware corporation (the
"Company"), shall be to make such examinations as are necessary to monitor the
corporate financial reporting and the internal and external audits of the
Company, to provide to the Board the results of its examinations and
recommendations derived therefrom, to outline to the Board improvements made, or
to be made, in internal accounting controls, to nominate independent auditors,
and to provide such additional information and materials as it may deem
necessary to make the Board aware of significant financial matters which require
the Board's attention.
COMPOSITION:
The Committee will be comprised of two or more members of the Board. The
members of the Committee and its Chairman will be appointed by and serve at the
discretion of the Board.
FUNCTIONS AND AUTHORITY:
The operation of the Committee shall be subject to the provisions of the
Bylaws of the Company, as in effect from time to time, and to Section 141(c) of
the Delaware General Corporation Law. The Committee shall have the full power
and authority to carry out the following responsibilities:
1. To recommend annually to the full Board the firm of certified
public accountants to be employed by the Company as its independent
auditors for the ensuing year.
2. To review the engagement of the independent auditors, including the
scope, extent and procedures of the audit and the compensation to be paid
therefore, and all other matters the Committee deems appropriate.
3. To have familiarity, through the individual efforts of its members,
with the accounting and reporting principles and practices applied by the
Company in preparing its financial statements, including, without
limitation, the policies for recognition of revenues in financial
statements.
4. To review with management and the independent auditors, upon
completion of their audit, financial results for the year, as reported in
the Company's financial statements, or other disclosures.
5. To assist and interact with the independent auditors in order that
they may carry out their duties in the most efficient and cost effective
manner.
6. To evaluate the cooperation received by the independent auditors
during their audit examination, including their access to all requested
records, data and information, and elicit the comments of management
regarding the responsiveness of the independent auditors to the Company's
needs.
7. To review the Company's balance sheet, profit and loss statement
and statements of cash flows and stockholders' equity for each interim
period, and any changes in accounting policy that have occurred during the
interim period.
8. To review and approve all professional services provided to the
Company by its independent auditors and consider the possible effect of
such services on the independence of such auditors.
9. To consult with the independent auditors and discuss with Company
management the scope and quality of internal accounting and financial
reporting controls in effect.
10. To investigate, review and report to the Board the propriety and
ethical implication of any transactions, as reported or disclosed to the
Committee by the independent auditors, employees, officers, members of the
Board or otherwise, between (a) the Company and (b) any employee, officer
or member of the Board of the Company, or any affiliates of the foregoing.
A-1
<PAGE> 22
11. To perform such other functions and have such power as may be
necessary or convenient in the efficient and lawful discharge of the
foregoing.
MEETINGS:
The Committee will hold at least two regular meetings per year and
additional meetings as the Chairman or Committee deem appropriate. The President
and Chief Executive Officer, Vice President and Chief Financial Officer may
attend any meeting of the Committee, except for portions of the meetings where
his, her or their presence would be inappropriate, as determined by the
Committee Chairman.
MINUTES AND REPORTS:
Minutes of each meeting shall be kept and distributed to each member of the
Committee, members of the Board who are not members of the Committee and the
Secretary of the Company. The Chairman of the Committee shall report to the
Board from time to time, or whenever so requested by the Board.
A-2
<PAGE> 23
1484-PS-2000
<PAGE> 24
CSH19B DETACH HERE
PROXY
CYBERCASH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 22, 2000
The undersigned hereby appoints William N. Melton, James J. Condon, John
H. Karnes, or any of them, the proxies of the undersigned, with full power of
substitution, to vote all shares of Common Stock of CYBERCASH, INC. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held June 22, 2000, or any adjournment thereof, as follows on the
reverse side.
<TABLE>
<S> <C> <C>
- ---------------- ----------------
SEE REVERSE SIDE CONTINUED ANDTO BESIGNED ON REVERSE SIDE SEE REVERSE SIDE
- ---------------- ----------------
</TABLE>
<PAGE> 25
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
FOR AGAINST ABSTAIN
1. Election of William N. Melton and Garen K. Staglin 2. Proposal to amend CyberCash, Inc.'s
the CyberCash, Inc. Board of Directors with terms Amended and Restated Certificate / / / / / /
expiring at the annual meeting of stockholders in of Incorporation to increase the
2003. number of shares of Common Stock
that the company is authorized to
FOR / / WITHHELD / / issue from 40 million shares to
ALL FROM ALL 80 million shares.
NOMINEES NOMINEES
FOR AGAINST ABSTAIN
3. Proposal to ratify the selection
/ / of Ernst & Young LLP as independent / / / / / /
--------------------------------------- auditors for CyberCash, Inc.
INSTRUCTION: To withhold authority to vote for any
nominee, write that nominee's name in the
space above. 4. The proxies are authorized to vote in their discretion on any other
matters which may properly come before the Annual Meeting to
the extent set forth in the proxy statement.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
Execute proxy exactly as your name appears on this form. If stock is
registered in more than one name, each joint holder should sign.
When signing as trustee, executor or other fiduciary, please so
indicate.
Signature: Date: Signature: Date:
-------------------- -------------- --------------------- ------------
</TABLE>
