<PAGE>
As filed with the Securities and Exchange Commission on May 25, 2000
Registration No. 333-________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
E*TRADE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2844166
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4500 Bohannon Drive
Menlo Park, California 94025
(Address of principal executive offices) (Zip Code)
CARD CAPTURE SERVICES, INC. 1996 INCENTIVE STOCK OPTION PLAN
CARD CAPTURE SERVICES, INC. 1997 INCENTIVE STOCK OPTION PLAN
CARD CAPTURE SERVICES, INC. 1998 STOCK INCENTIVE COMPENSATION PLAN
(Full title of the Plans)
Christos M. Cotsakos
Chairman of the Board and Chief Executive Officer
E*TRADE GROUP, INC.
4500 Bohannon Drive
Menlo Park, California 94025
(650) 331-6000
(Name, address including zip code, and 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
----------- ------------------ ------------- ------------- ------------
Card Capture Services, Inc. 1996
Incentive Stock Option Plan
---------------------------
<S> <C> <C> <C> <C>
Common Stock $0.01 par value 684,551 shares $ 4.80 $3,285,844.80 $ 867.47
Card Capture Services, Inc. 1997
Incentive Stock Option Plan.
---------------------------
Common Stock $0.01 par value 181,870 shares $ 6.43 $1,169,424.10 $ 308.73
Card Capture Services, Inc.
1998 Stock Incentive Compensation Plan
- -----------------------------------------
Common Stock $0.01 par value 83,968 shares $17.19 $1,443,409.92 $ 381.06
Aggregate Filing Fee $1,557.26
</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Card Capture Services, Inc. 1998 Stock
Incentive Compensation Plan, the Card Capture Services, Inc. 1997 Incentive
Stock Option Plan and/or the Card Capture Services, Inc. 1996 Incentive
Stock Option Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without 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, on the basis of the weighted average
exercise price of the outstanding options.
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
---------------------------------------
E*TRADE Group, Inc. (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 Annual Report on Form 10-K for the fiscal year
ended September 30, 1999, filed with the SEC on October 22, 1999,
as amended on Form 10-K/A, filed with the SEC on April 17, 2000
pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the "1934 Act");
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended December 31, 1999 and March 31, 2000, filed with the
SEC on February 14. 2000, as amended on Form 10-Q/A, filed with the
SEC on April 17, 2000, and on May 15, 2000, respectively;
(c) The Registrant's Current Reports on Form 8-K for period dates
January 12, 2000 and April 12, 2000, filed with the SEC on January
27, 2000 and April 17, 2000 respectively; and
(d) The Registrant's Registration Statement No. 001-11921 on Form 8-
A12B filed with the SEC on July 12, 1996 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 deregisters 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
-----------------------------------------
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit
II-1
<PAGE>
or proceeding, provided that such officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, for criminal proceedings, had no reasonable cause to
believe his conduct was illegal. A Delaware corporation may indemnify officers
and directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation
in the performance of his duty. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
In accordance with the Delaware Law, the Restated Certificate of
Incorporation of the Registrant contains a provision to limit the personal
liability of the directors of the Registrant for violations of their fiduciary
duty. This provision eliminates each director's liability to the Registrant or
its stockholders for monetary damages except (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Law providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which a director
derived an improper personal benefit. The effect of this provision is to
eliminate the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence.
Article 5 of the Restated Bylaws of the Registrant provide for
indemnification of the officers and directors of the Registrant to the fullest
extent permitted by applicable law.
In connection with the incorporation of the Registrant into the State of
Delaware, the Registrant entered into indemnification agreements with each
director and certain officers. The Indemnification Agreements provide
indemnification to such directors and officers under certain circumstances for
acts or omissions which may not be covered by directors' and officers' liability
insurance.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Number Exhibit
------ -------
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 001-11921 on Form 8-
A12B, including the exhibits thereto, which is incorporated
herein by reference pursuant to Item 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Independent Auditors Consent - Deloitte & Touche LLP.
23.2 Consent of Independent Public Accountants - Arthur Andersen LLP.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Card Capture Services, Inc. 1996 Incentive Stock Option Plan.
99.2 Card Capture Services, Inc. 1997 Incentive Stock Option Plan.
99.3 Card Capture Services, Inc. 1998 Stock Incentive Compensation
Plan.
99.4 Form of 1996 Incentive Stock Option Plan Option Assumption
Agreement-Full Acceleration.
99.5 Form of 1997 Incentive Stock Option Plan Option Assumption
Agreement-Full Acceleration.
99.6 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Standard.
99.7 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Involuntary Termination 12 Months.
99.8 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Involuntary Termination 6 Months.
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
II-2
<PAGE>
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 Card Capture Services, Inc. 1996 Incentive Stock
Option Plan, the Card Capture Services, Inc. 1997 Incentive Stock Option Plan
and/or the Card Capture Services, Inc. 1998 Stock Incentive Compensation 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 foregoing 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-3
<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 Menlo Park, State of California on
this 25th day of May 2000.
E*TRADE GROUP, INC.
By: /s/ Christos M. Cotsakos
------------------------------
Christos M. Cotsakos
Chairman of the Board and Chief Executive
Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of E*TRADE Group, Inc., a
Delaware corporation, do hereby constitute and appoint Brigitte Van Baelen,
Theodore J. Theophilos and Leonard C. Purkis, and each one 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 all that 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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Christos M. Cotsakos Chairman of the Board and Chief Executive May 25, 2000
- ----------------------------- Officer (Principal Executive Officer)
Christos M. Cotsakos
/s/ Leonard C. Purkis Chief Financial Officer (Principal May 25, 2000
- ----------------------------- Financial and Accounting Officer)
Leonard C. Purkis
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ William A. Porter Chairman Emeritus May 25, 2000
- -----------------------------
William A. Porter
/s/ Richard S. Braddock Director May 25, 2000
- -----------------------------
Richard S. Braddock
/s/ William E. Ford Director May 25, 2000
- -----------------------------
William E. Ford
/s/ George Hayter Director May 25, 2000
- -----------------------------
George Hayter
/s/ Lewis E. Randall Director May 25, 2000
- -----------------------------
Lewis E. Randall
/s/ Masayoshi Son Director May 25, 2000
- -----------------------------
Masayoshi Son
/s/ Lester C. Thurow Director May 25, 2000
- -----------------------------
Lester C. Thurow
/s/ Peter Chernin Director May 25, 2000
- -----------------------------
Peter Chernin
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
Item 8. Exhibits
--------
Number Exhibit
------ -------
4 Instruments Defining Rights of Stockholders. Reference is made
to Registrant's Registration Statement No. 001-11921 on Form 8-
A12B, including the exhibits thereto, which is incorporated
herein by reference pursuant to Item 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Independent Auditors Consent-Deloitte & Touche LLP.
23.2 Consent of Independent Public Accountants-Arthur Andersen, LLP.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 Card Capture Services, Inc. 1996 Incentive Stock Option Plan.
99.2 Card Capture Services, Inc. 1997 Incentive Stock Option Plan.
99.3 Card Capture Services, Inc. 1998 Stock Incentive Compensation
Plan.
99.4 Form of 1996 Incentive Stock Option Plan Option Assumption
Agreement-Full Acceleration.
99.5 Form of 1997 Incentive Stock Option Plan Option Assumption
Agreement-Full Acceleration.
99.6 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Standard.
99.7 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Involuntary Termination 12 Months.
99.8 Form of 1998 Stock Incentive Compensation Plan Option
Assumption Agreement-Involuntary Termination 6 Months.
<PAGE>
EXHIBIT 5
Opinion and consent of Brobeck, Phleger & Harrison LLP
May 25, 2000
E*TRADE Group, Inc.
4500 Bohannan Drive
Menlo Park, California 94025
Re: E*TRADE Group, Inc. - Registration Statement for Offering of
950,389 Shares of Common Stock
------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel to E*TRADE Group, Inc., 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, an
aggregate of 950,389 shares of common stock (the "Shares") and related stock
options under (i) the Card Capture Services Inc. 1996 Incentive Stock Option
Plan (the "1996 Plan") , (ii) the Card Capture Services 1997 Incentive Stock
Option Plan (the "1997 Plan), and (iii) the Card Capture Services, Inc. 1998
Stock Incentive Compensation Plan (the "1998 Plan") (collectively, the "Plans").
The Plans, together with the outstanding options under the Plans, have been
assumed by the Company in connection with the Company's acquisition of Card
Capture Services, Inc. pursuant to an Agreement and Plan of Reorganization dated
March 9, 2000 (the "Plan of Reorganization").
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 Plans
and the outstanding options 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 option agreements
duly authorized under the Plans, and in accordance with the Registration
Statement, such Shares will be duly authorized, legally issued, fully paid and
nonassessable.
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
Plans, or the Shares.
Very truly yours,
/S/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in this Registration Statement of
E*TRADE Group, Inc. on Form S-8 of our report dated October 13, 1999 (March 15,
2000 as to the second paragraph of note 1), appearing in the Annual Report on
Form 10-K/A of E*TRADE Group, Inc. for the year ended September 30, 1999.
/s/ DELOITTE & TOUCHE LLP
MAY 25, 2000
<PAGE>
EXHIBIT 23.2
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 15, 2000
included in E*TRADE Group, Inc.'s Form 10-K/A for the year ended September 30,
1999 and to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Vienna, Virginia
May 25, 2000
<PAGE>
EXHIBIT 99.1
CARD CAPTURE SERVICES, INC.
1996 INCENTIVE STOCK OPTION PLAN
1. Purpose. The continued growth and success of Card Capture Services,
Inc. (the "Corporation") depend on its ability to obtain and retain the services
of key employees of the highest competence, and to provide incentives for
effective service and high-level performance. The purposes of this Incentive
Stock Option Plan (the "Plan") are to provide a means whereby the Corporation
can continue to attract, motivate and retain key employees who can contribute
materially to the Corporation's growth and success, and to facilitate the
acquisition of shares of the Corporation's Class A or Class B common stock (the
"Stock") by key employees pursuant to options meeting the requirements of
Internal Revenue Code of 1986 (as amended) ("Code") (S)422, so that such key
employees will more closely identify their interests with those of the
Corporation and its shareholders.
2. Stock. The Stock subject to options under the Plan shall be shares of
the Corporation's authorized but unissued or reacquired Stock. Subject to the
adjustments described in Section 6 of the Plan, the aggregate number of shares
that may be issued pursuant to the Plan shall not exceed 1,649,924 shares of
Stock. The shares issued under the Plan may be authorized and unissued shares
or reacquired shares. More than one option may be granted to the same employee.
In the event any outstanding option granted under the Plan for any reason
expires or is terminated, the shares of Stock allocable to the unexercised
portion of such option may again be the subject of options granted under the
Plan.
3. Eligibility. The persons who shall be eligible to receive awards of
options shall be such key employees (including officers, whether or not they are
directors) of the Corporation as may be selected from time to time by the Board
of Directors of the Corporation (the "Board").
4. Administration. The Plan shall be administered by the members of the
Board. The Board shall have full power and authority, subject to the provisions
of the Plan, to:
(a) Designate participants;
(b) Determine the number of options to be granted to each participant;
(c) Determine the terms of option agreements for each option;
(d) Supervise administration of the Plan;
(e) Interpret the provisions of the Plan and option agreements
granted under it; and
(f) Take all action in connection with the Plan as it deems necessary
or advisable.
Subject to the provisions of the Plan, the Board may from time to time
adopt and amend rules and regulations relating to administration of the Plan,
advance the lapse of any waiting period, accelerate any exercise date, waive or
modify any restriction applicable to shares (except those restrictions imposed
by law) and make all other determinations in the judgment of the Board necessary
or desirable for the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related agreements by the Board
shall be final and conclusive. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any related agreement
in the manner and to the extent it shall deem expedient to implement the Plan
and it shall be the sole and final judge of such expediency. No member of the
Board shall be liable for any action or determination made in good faith with
respect to the Plan or any option granted under it.
1--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
5. Terms and Conditions of Options. Options under the Plan granted by
the Board shall be evidenced by stock option agreements in such form as the
Board shall from time to time approve, and shall comply with and be subject to
the following terms and conditions:
5.1 Number of Shares. Each option agreement shall state the number
of shares of Stock subject to the option.
5.2 Option Price. Each option agreement shall state the option
price, which shall be not less than 100% (110% for 10% Shareholders, as defined
below) of the fair market value, on the date the option is granted, of the
shares of Stock subject to the option. A "10% Shareholder" is any person who,
at the time an option is granted, owns stock of the Corporation possessing more
than 10% of the combined voting power of all classes of stock of the Corporation
or any affiliate.
5.3 Determination of Fair Market Value. The fair market value per
share of Stock shall be determined by the Board in good faith at the time the
option is granted. If the Stock is not publicly traded on the date the option
is granted, the Board may consider any valuation methods it deems appropriate
and may, but is not required to, obtain one or more independent appraisals of
the Corporation.
5.4 Option Period and Limitations on Exercise. Each option shall
expire and shall not be exercisable after the expiration of 10 years (5 years
for 10% Shareholders) from the date the option is granted, or such lesser period
as may be established by the Board at the time the option is granted. Each
option shall be exercisable by the optionee either immediately or after such
period, and according to such schedule for exercise, or in such other manner as
the Board shall provide in the option agreement at the time the option is
granted. Notwithstanding any other provision of the Plan, options granted under
the Plan shall be exercisable only while the optionee remains an employee of the
Corporation, except that
(a) in the event of (1) an optionee's termination of employment
with the Corporation by reason of disability (within the meaning of Code
(S)22(e)(3)), or (2) an optionee's death while an employee of the
Corporation, the option agreement may allow the option to remain
exercisable, to the extent it was exercisable on the date of termination or
the date of death, by the optionee or the estate or devisee of the
decedent, until the expiration date of the term of the option or 1 year
after the date of the optionee's termination of employment or death,
whichever date is earlier; and
(b) in the event of an optionee's involuntary termination of
employment with the Corporation without cause, the option agreement may
allow the option to remain exercisable, to the extent it was exercisable on
the date of termination, by the optionee until the expiration date of the
term of the option or 3 months after the date of the optionee's termination
of employment, whichever date is earlier; and
(c) the Board, at the time of grant or at any time thereafter,
may extend the 1 year and 3 month exercise periods any length of time not
longer than the original expiration date of the option, and may increase
the portion of an option that is exercisable, subject to such terms and
conditions as the Board may determine; and
(d) to the extent that the option of any deceased optionee or of
any optionee whose employment or service terminates is not exercised within
the applicable period, all further rights to purchase shares pursuant to
such option shall cease and terminate.
2--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
5.5 Securities Restrictions. All option agreements evidencing
options granted under the Plan shall provide that:
(a) If the Board at any time determines that registration or
qualification of the Stock or any option under state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable, then the option may not be exercised, in whole or in part, until
such registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
(b) Any person exercising an option to purchase shares of Stock
may be required by the Corporation to give a written representation that he
or she is acquiring such shares for his or her own account for investment
and not with a view to the distribution of such shares.
5.6 Payment of Purchase Price. The option price upon exercise of an
option under the Plan shall be payable to the Corporation in cash or, in the
discretion of the Board, in installments on such terms and over such period as
the Board shall determine. With the consent of the Board, in whole or in part,
the option price may also be paid in Stock of the Corporation valued at fair
market value.
5.7 Nontransferability. Options shall not be transferable except by
testamentary will or the laws of descent and distribution, and shall be
exercisable during an optionee's lifetime only by the optionee.
5.8 Shareholders' Agreement. Each option agreement shall provide
that, as a condition of exercising any option granted under the Plan, the
optionee shall agree to enter into and be bound by the agreement in force at the
time of such exercise among the Corporation and its shareholders relating to the
repurchase by the Corporation or continuing shareholders of its outstanding
shares in certain circumstances and prohibiting competition with the
Corporation.
5.9 Multiple Agreements. The terms of each option may differ from
other options granted under the Plan at the same time or at some other time.
The Board may also grant more than one option to a given optionee during the
term of the Plan, either in addition to, or in substitution for, one or more
options previously granted to that optionee.
5.9 Other Provisions. Any option agreement may contain such other or
additional terms and provisions as may be determined by the Board to be
consistent with the Plan, or necessary or desirable to comply with the
provisions of applicable laws, rules or regulations.
6. Adjustments. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
the Stock, the Board may, in order to prevent the dilution or enlargement of
rights under outstanding options, make such adjustments in the number and type
of shares authorized by the Plan, the number and type of shares covered by
outstanding options and the exercise prices specified therein as may be
determined to be appropriate and equitable.
6.1 Conditions and Restrictions. If, by reason of an adjustment, an
optionee shall be entitled to exercise an option with respect to new, additional
or different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions, restrictions and
performance criteria which were applicable to the Stock subject to the option
prior to such adjustment.
3--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
6.2 Fractional Shares. In connection with any adjustment under this
Section 6 resulting in a fractional share interest, such interest may be rounded
down to the nearest whole share if such interest is less than 0.5 share;
otherwise, such fractional share interest may be rounded up to the nearest whole
share.
7. Change in Control.
7.1 Effect. Notwithstanding anything contained in the Plan but
subject to any term in an option agreement to the contrary, in the event of a
Change in Control, (i) all options granted under the Plan and outstanding on the
date of such Change in Control shall become immediately and fully exercisable
and (ii) upon termination of an optionee's employment with the Corporation
following a Change in Control, options held by such optionee shall remain
exercisable until the later of 1 year after termination or 60 days following the
expiration of the Pooling Period (in the event the Change in Control constitutes
a Pooling Transaction), but in no event beyond the stated term of the option.
In addition, as and to the extent set forth in the option agreement evidencing
the grant of an option, an optionee will be permitted to surrender for
cancellation within 60 days after such Change in Control, any option or portion
of an option, to the extent not yet exercised, and the optionee will be entitled
to receive a cash payment in an amount equal to the excess, if any, of the fair
market value on the date preceding the date of surrender of the Stock subject to
the option or portion thereof surrendered over the aggregate purchase price for
such Stock under the option or portion thereof surrendered. Provided, however,
that in the case of an option granted within 6 months prior to the Change in
Control to any optionee who may be subject to liability under Section 16(b) of
the Exchange Act, such optionee shall be entitled to surrender his option for
cancellation during the 60 day period commencing upon the expiration of 6 months
from the date of grant of any such option.
7.2 Change in Control. A "Change in Control" shall have the meaning
as set forth in the Amended and Restated Employment Agreement dated March 6,
1997 between the Corporation and the optionee and shall include a sale of all or
substantially all of the assets of the Corporation.
7.3 Pooling Transactions. Notwithstanding anything contained in the
Plan or any option agreement to the contrary, in the event of a Change in
Control which is also intended to constitute a Pooling Transaction, the Board
shall take such actions, if any, which are specifically recommended by an
independent accounting firm retained by the Corporation to the extent reasonably
necessary in order to assure that the Pooling Transaction will qualify as such,
including but not limited to (I) deferring the vesting, exercise, payment,
settlement or lapsing of restrictions with respect to any option, (ii) providing
that the payment or settlement in respect of any option be made in the form of
cash, Stock or securities of a successor or acquirer of the Corporation, or a
combination of the foregoing, and (iii) providing for the extension of the term
of any option to the extent necessary to accommodate the foregoing, but not
beyond the maximum term permitted for any option.
(a) "Pooling Transaction" means an acquisition of or by the
Corporation in a transaction which is intended to be treated as a "pooling of
interests" under generally accepted accounting principles.
(b) "Pooling Period" means, with respect to a Pooling Transaction, the
date on which the combined entity resulting from such Pooling Transaction
publishes 30 days of combined operating results, or if the Board makes a
determination, such other period following the Pooling Transaction which the
Board reasonably determines is appropriate in connection with the Pooling
Transaction as a means of qualifying for an pursuing "pooling of interests"
accounting treatment.
4--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
8. Proceeds. The proceeds received by the Corporation from the sale of
Stock pursuant to the Plan will be used for general corporate purposes.
9. Tax Withholding.
9.1 Withholding. At such times as an optionee recognizes taxable
income in connection with the receipt of Stock or cash hereunder (a "Taxable
Event"), the optionee shall pay to the Corporation an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Corporation in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance, or release from escrow, of such
Stock or the payment of such cash. The Corporation shall have the right to
deduct from any payment of cash to an optionee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes.
In satisfaction of the obligation to pay Withholding Taxes to the Corporation,
the optionee may make a written election (the "Tax Election"), which may be
accepted or rejected in the discretion of the Board, to have withheld a portion
of the Stock then issuable to the optionee having an aggregate fair market
value, on the date preceding the date of such issuance, equal to the Withholding
Taxes. Notwithstanding the foregoing, the Board may, by the adoption of rules
or otherwise, modify the provisions of this Section 9.1 or impose such other
restrictions on Tax Elections as may be necessary to ensure that the Tax
Elections will be exempt transactions under Section 16(b) of the Exchange Act,
and the Board may also permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will constitute exempt
transactions under Section 16(b) of the Exchange Act.
9.2 Notice. If an optionee makes a disposition, within the meaning
of Code (S)424(c) and regulations promulgated thereunder, of any Stock issued to
such optionee pursuant to the exercise of an incentive stock option within the 2
year period commencing on the day after the date of the grant or within the 1
year period commencing after the date of transfer of such Stock to the optionee
pursuant to such exercise, the optionee shall, within 20 days of such
disposition, notify the Corporation of such disposition by delivery of written
notice to the Corporation at its principal executive office.
10. Obligation to Exercise; Right to Continued Employment. The granting
of an option shall impose no obligation on the optionee to exercise the option.
The granting of an option does not confer any right to be continued in the
employment of the Corporation.
11. Amendment and Discontinuance. The Board may alter, amend, suspend, or
terminate the Plan, provided that the Board may not, without further approval by
the holders of at least two-thirds of the outstanding shares of stock of the
Corporation entitled to vote,
(a) Increase the aggregate number of shares of Stock for which options
may be granted under the Plan (except for adjustments pursuant to Section 6);
(b) Decrease the option price at which Stock may be offered;
(c) Materially modify the requirements as to eligibility for
participation in the Plan; or
(d) Alter or impair, without the optionee's consent, the rights or
obligations under any option previously granted pursuant to the Plan.
12. Term of Plan and Effective Date. The Plan shall become effective on
the date the Plan is approved by (1) the Board and (2) the holders of a majority
of the outstanding shares of stock of the Corporation entitled to vote,
whichever shall last occur. The Plan must be so
5--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
approved by the shareholders of Corporation within 12 months after the Plan is
approved by the Board. Options may be granted pursuant to the Plan from time to
time within 10 years after the Plan becomes effective.
6--1996 INCENTIVE STOCK OPTION PLAN
<PAGE>
EXHIBIT 99.2
CARD CAPTURE SERVICES, INC.
1997 INCENTIVE STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Incentive Stock
--------------------
Option Plan are to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or nonstatutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall
-----------
apply:
2.1 "Administrator" means the Board or any of its Committees
-------------
appointed pursuant to Section 4 of the Plan.
2.2 "Applicable Laws" means the legal requirements relating to the
---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options will be or are being granted under
the Plan.
2.3 "Board" means the Board of Directors of the Company.
-----
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
----
2.5 "Committee" means a Committee appointed by the Board of
---------
Directors in accordance with Section 4 of the Plan.
2.6 "Common Stock" means the Common Stock of the Company.
------------
2.7 "Company" means Card Capture Services, Inc., an Oregon
-------
corporation.
2.8 "Consultant" means any person who is engaged by the Company or
----------
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not. If and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
2.9 "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
90 days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract, including Company policies. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, on the 181st
day of such leave any Incentive Stock Option held by the Optionee shall cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes as
a Nonstatutory Stock Option.
1--1997 STOCK OPTION PLAN
<PAGE>
2.10 "Employee" means any person, including Officers and directors,
--------
employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
2.11 "Exchange Act" means the Securities Exchange Act of 1934,
------------
as amended.
2.12 "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(a) If the Common Stock is listed on any established stock exchange or
a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;
(b) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination; or
(c) In the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the
Administrator. The Administrator may consider any valuation methods it deems
appropriate and may, but is not required to, obtain one or more independent
appraisals.
2.13 "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code.
2.14 "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
2.15 "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
2.16 "Option" means a stock option granted pursuant to the Plan.
------
2.17 "Optioned Stock" means the Common Stock subject to an Option.
--------------
2.18 "Optionee" means an Employee or Consultant who receives an
--------
Option.
2.19 "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
2.20 "Plan" means this 1997 Stock Option Plan.
----
2.21 "Section 16(b)" means Section 16(b) of the Securities Exchange
-------------
Act of 1934, as amended.
2.22 "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 11 below.
2--1997 STOCK OPTION PLAN
<PAGE>
2.23 "Subsidiary" means a "subsidiary corporation", whether
----------
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
-------------------------
Section 11 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 600,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an option exchange program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
--------------------------
4.1 Initial Plan Procedure. Prior to the date, if any, upon which
----------------------
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a committee appointed by the Board.
4.2 Plan Procedure after the Date, if any, upon which the Company
-------------------------------------------------------------
becomes Subject to the Exchange Act.
- -----------------------------------
(a) Administration with respect to Directors and Officers.
-----------------------------------------------------
With respect to grants of Options to Employees who are also Officers or
directors of the Company, the Plan shall be administered by (A) the Board if the
Board may administer the Plan in compliance with the rules under Rule 16b-3
promulgated under the Exchange Act or any successor thereto ("Rule 16b-3")
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. >From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(b) Multiple Administrative Bodies. If permitted by Rule
------------------------------
16b-3, the Plan may be administered by different bodies with respect to
directors, non-director Officers and Employees who are neither directors nor
Officers.
(c) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options to Employees or Consultants who are
- ---------
neither directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a committee designated by the Board, which committee shall
be constituted in such a manner as to satisfy Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused,
3--1997 STOCK OPTION PLAN
<PAGE>
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws.
4.3 Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:
(a) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2.12 of the Plan;
(b) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(c) to determine whether and to what extent Options are granted
hereunder;
(d) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(e) to approve forms of agreement for use under the Plan;
(f) to determine the terms and conditions of any award granted
hereunder;
(g) to determine whether and under what circumstances an Option
may be settled in cash under Section 9.6 instead of Common Stock;
(h) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted; and
(i) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
Subject to the provisions of the Plan, the Board may from time to
time adopt and amend rules and regulations relating to administration of the
Plan, advance the lapse of any waiting period, accelerate any exercise date,
waive or modify any restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the Board
necessary or desirable for the administration of the Plan. The Board may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem expedient
to implement the Plan and it shall be the sole and final judge of such
expediency. No member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
4.4 Effect of Administrator's Decision. All decisions,
----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
4--1997 STOCK OPTION PLAN
<PAGE>
5. Eligibility.
-----------
5.1 Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
5.2 Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5.2, Incentive Stock Options shall be taken into account in the order in
which they were granted. The Fair Market Value of the Shares shall be determined
as of the time the Option with respect to such Shares is granted.
5.3 The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier
------------
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 17 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.
7. Term of Option. The term of each Option shall be the term
--------------
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. However, in the case
of an Incentive Stock Option granted to an Optionee who, at the time the Option
is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
8.1 The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(a) In the case of an Incentive Stock Option
(i) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.
(ii) granted to any Employee other than an Employee described
in the preceding paragraph, the per share exercise price shall be no less than
one hundred percent (100%) of the Fair Market Value per Share on the date of
grant.
5--1997 STOCK OPTION PLAN
<PAGE>
(b) In the case of a Nonstatutory Stock Option
(i) granted to a person who, at the time of the grant of such
Option, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of the grant.
(ii) granted to any other person, the per Share exercise
price shall be no less than eighty-five percent (85%) of the Fair Market Value
per Share on the date of grant.
8.2 The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six (6) months on the date of surrender and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. Exercise of Option.
------------------
9.1 Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan, but in no case at a rate of less than twenty percent (20%) per year
over five (5) years from the date the Option is granted.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8.2 of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
9.2 Termination of Employment or Consulting Relationship. In the
----------------------------------------------------
event of termination of an Optionee's Continuous Status as an Employee or
Consultant with the Company (but not in the event of an Optionee's change of
status from Employee to Consultant, in which case an Employee's Incentive Stock
Option shall automatically convert to a Nonstatutory Stock
6--1997 STOCK OPTION PLAN
<PAGE>
Option on the date three (3) months and one (1) day from the date of such change
of status, or from Consultant to Employee), such Optionee may, but only within
such period of time as is determined by the Administrator, of at least thirty
(30) days, with such determination in the case of an Incentive Stock Option not
exceeding three (3) months after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
9.3 Disability of Optionee. In the event of termination of an
----------------------
Optionee's consulting relationship or Continuous Status as an Employee as a
result of his or her disability, such Optionee may, but only within twelve (12)
months from the date of such termination or such other period of time as
determined by the Administrator and specified in the Notice of Grant (provided,
however, that such period shall not be less than six (6) months and in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination; provided, however, that if such
disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option
shall automatically convert to a Nonstatutory Stock Option on the day three (3)
months and one (1) day following such termination. To the extent that the
Optionee is not entitled to exercise the Option at the date of termination, or
if the Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
9.4 Death of Optionee. In the event of the death of an Optionee at
-----------------
any time within three (3) months of the termination of employment, the Option
may be exercised at any time within eighteen (18) months following the date of
death or such other period of time as determined by the Administrator and
specified in the Notice of Grant (provided, however, that such period shall not
be less than six (6) months but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall immediately revert to
the Plan. If, after death, the Optionee's estate or a person who acquired the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
9.5 Rule 16b-3. Options granted to persons subject to Section 16(b)
----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
9.6 Buyout Provisions. The Administrator may at any time offer to
-----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
9.7 Shareholder Agreement. Each Option shall provide that, as a
---------------------
condition of exercising the Option and so long as the Shares are not publicly
traded, the Optionee shall agree to enter into and be bound by an agreement
relating to the repurchase in certain circumstances by the Company of Shares
issued pursuant to the Option and prohibiting competition with the Company.
7--1997 STOCK OPTION PLAN
<PAGE>
9.8 Multiple Agreements. The terms of each Option may differ from
-------------------
other Options granted under the Plan at the same time or at some other time.
The Administrator may also grant more than one Option to a given Optionee during
the term of the Plan, either in addition to, or in substitution for, one or more
Options previously granted to that Optionee.
10. Non-Transferability of Options. Options may not be sold,
------------------------------
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
----------------------------------------------------
11.1 Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. In connection with any adjustment under this paragraph resulting in
a fractional share interest, such interest may be rounded down to the nearest
whole share if such interest is less than 0.5 share; otherwise, such fractional
share interest may be rounded up to the nearest whole share. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option.
11.2 Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.
11.3 Merger. In the event of a merger of the Company with or into
------
another corporation, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger, the option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger, the consideration (whether stock, cash or other securities
or property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon the
exercise of the Option for each Share of Optioned Stock subject to the Option to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger.
8--1997 STOCK OPTION PLAN
<PAGE>
12. Time of Granting Options. The date of grant of an Option shall,
------------------------
for all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
-------------------------------------
13.1 Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
13.2 Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee
and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this
---------------------
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
9--1997 STOCK OPTION PLAN
<PAGE>
16. Tax Withholding.
---------------
16.1 Withholding. At such times as an Optionee recognizes taxable
-----------
income in connection with the receipt of Shares or cash hereunder (a "Taxable
Event"), the Optionee shall pay to the Company an amount equal to the federal,
state and local income taxes and other amounts as may be required by law to be
withheld by the Company in connection with the Taxable Event (the "Withholding
Taxes") prior to the issuance, or release from escrow, of such Shares or the
payment of such cash. The Company shall have the right to deduct from any
payment of cash to an Optionee an amount equal to the Withholding Taxes in
satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the
obligation to pay Withholding Taxes to the Company, the Optionee may make a
written election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Administrator, to have withheld a portion of the Shares then
issuable to the Optionee having an aggregate fair market value, on the date
preceding the date of such issuance, equal to the Withholding Taxes.
Notwithstanding the foregoing, the Administrator may, by the adoption of rules
or otherwise, modify the provisions of this paragraph or impose such other
restrictions on Tax Elections as may be necessary to ensure that the Tax
Elections will be exempt transactions under Section 16(b) of the Exchange Act,
and the Administrator may also permit Tax Elections to be made at such other
times and subject to such other conditions as the Administrator determines will
constitute exempt transactions under Section 16(b) of the Exchange Act.
16.2 Notice. If an Optionee makes a disposition, within the meaning
------
of Code (S)424(c) and regulations promulgated thereunder, of any Shares issued
to such Optionee pursuant to the exercise of an Incentive Stock Option within
the two (2) year period commencing on the day after the date of the grant or
within the one (1) year period commencing after the date of transfer of such
Shares to the Optionee pursuant to such exercise, the Optionee shall, within
twenty (20) days of such disposition, notify the Company of such disposition by
delivery of written notice to the Company at its principal executive office.
17. Agreements. Options shall be evidenced by written agreements in
----------
such form as the Administrator shall approve from time to time.
18. Shareholder Approval. Continuance of the Plan shall be subject
--------------------
to approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the degree and manner required under Applicable Laws and the rules
of any stock exchange upon which the Common Stock is listed.
19. Information to Optionees and Purchasers. The Company shall
---------------------------------------
provide to each Optionee, not less frequently than annually, copies of annual
financial statements. The Company shall also provide such statements to each
individual who acquires Shares pursuant to the Plan while such individual owns
such Shares. The Company shall not be required to provide such statements to key
employees whose duties in connection with the Company assure their access to
equivalent information.
10--1997 STOCK OPTION PLAN
<PAGE>
EXHIBIT 99.3
CARD CAPTURE SERVICES, INC.
1998 STOCK INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Card Capture Services, Inc. 1998 Stock Incentive
Compensation Plan (the "Plan") is to enhance the long-term shareholder value of
Card Capture Services, Inc., an Oregon corporation (the "Company"), by offering
opportunities to employees, directors, officers, consultants, agents, advisors
and independent contractors of the Company and its Subsidiaries (as defined in
Section 2) to participate in the Company's growth and success, and to encourage
them to remain in the service of the Company and its Subsidiaries and to acquire
and maintain stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below:
2.1 Award
"Award" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.
2.2 Board
"Board" means the Board of Directors of the Company.
2.3 Cause
"Cause" means (a) dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations) or (b) willful
and continuous failure or refusal to comply with any of the lawful and material
policies, standards, rules and regulations of the Company from time to time
established, after having received 30 days' written notice specifying the
conduct or performance at issue and reasonable time to cure any deficiencies.
The existence of "Cause" shall, in each case, be determined by the Plan
Administrator, and its determination shall be conclusive and binding.
2.4 Code
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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<PAGE>
2.5 Common Stock
"Common Stock" means the common stock, no par value per share, of the
Company.
2.6 Corporate Transaction
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property, if following such merger or consolidation the
holders of the Company's outstanding voting securities immediately prior to
such merger or consolidation own less than 51% of the outstanding voting
securities of the surviving corporation;
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all
of the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as the term "subsidiary corporation"
is defined in Section 8.3) of the Company; or
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
(d) Acquisition by a person, within the meaning of Section 3(a)(9) or
of Section 13(d)(3) (as in effect on the ate of adoption of the Plan) of
the Exchange Act of a majority or more of the Company's outstanding voting
securities (whether directly or indirectly, beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.
2.7 Disability
"Disability" means "disability" as that term is defined for purposes of
Section 22(e)(3) of the Code.
2.8 Early Retirement
"Early Retirement" means early retirement as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.9 Exchange Act
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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<PAGE>
2.10 Fair Market Value
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the average of the high and low per share sales prices for the
Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.
2.11 Good Reason
"Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction in the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are materially inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason;
(b) a reduction in the Holder's annual base salary;
(c) the Successor Corporation's requiring the Holder (without the
Holder's consent) to be based at any place outside a 50-mile radius of his or
her place of employment prior to a Corporate Transaction, except for reasonably
required travel on the Successor Corporation's business that is not materially
greater than such travel requirements prior to the Corporate Transaction;
(d) the Successor Corporation's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof) in
which the Holder was participating at the time of a Corporate Transaction,
including, but not limited to, the Plan, or (ii) provide the Holder with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) to those provided for under each material employee
benefit plan, program and practice as in effect immediately prior to the
Corporate Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent plan of
the Successor Corporation or under any employment agreement with Holder; or
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<PAGE>
(f) any purported termination of the Holder's employment or service
for Cause by the Successor Corporation that does not comply with the terms of
the Plan or any substantially equivalent plan of the Successor Corporation.
2.12 Grant Date
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
2.13 Holder
"Holder" means: (i) the person to whom an Award is granted; (ii) for a
Holder who has died, the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Award have passed by will or by
the applicable laws of descent and distribution, or the beneficiary designated
in accordance with Section 10; or (iii) the person(s) to whom an Award has been
transferred in accordance with Section 10.
2.14 Incentive Stock Option
"Incentive Stock Option" means an Option to purchase Common Stock granted
under Section 7 with the intention that it qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.
2.15 Nonqualified Stock Option
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.16 Option
"Option" means the right to purchase Common Stock granted under Section 7.
2.17 Plan Administrator
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.18 Restricted Stock
"Restricted Stock" means shares of Common Stock granted under Section 9,
the rights of ownership of which are subject to restrictions prescribed by the
Plan Administrator.
2.19 Retirement
"Retirement" means retirement as of the individual's normal retirement date
under the Company's 401(k) Plan or other similar successor plan applicable to
salaried employees.
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<PAGE>
2.20 Securities Act
"Securities Act" means the Securities Act of 1933, as amended.
2.21 Stock Award
"Stock Award" means an Award granted under Section 9.
2.22 Subsidiary
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
2.23 Successor Corporation
"Successor Corporation" has the meaning set forth under Section 11.2.
SECTION 3. ADMINISTRATION
3.1 Plan Administrator
The Plan shall be administered by the Board or a committee or committees
(which term includes subcommittees) appointed by, and consisting of two or more
members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee
directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of two
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.
3.2 Administration and Interpretation by the Plan Administrator
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be
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<PAGE>
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 Authorized Number of Shares
Subject to adjustment from time to time as provided in Section 11.1, a
maximum of 1,000,000 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company.
4.2 Reuse of Shares
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.
SECTION 6. AWARDS
6.1 Form and Grant of Awards
The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be made under the Plan. Such Awards
may include, but are not limited to, Incentive Stock Options, Nonqualified Stock
Options and Stock Awards. Awards may be granted singly or in combination.
6.2 Acquired Company Awards
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan
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<PAGE>
Administrator, except as may be required for compliance with Rule 16b-3 under
the Exchange Act, and the persons holding such Awards shall be deemed to be
Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 Grant of Options
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 Option Exercise Price
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 85% of the Fair Market Value of the
Common Stock on the Grant Date with respect to Nonqualified Stock Options.
7.3 Term of Options
The term of each Option shall be as established by the Plan Administrator
or, if not so established, shall be 10 years from the Grant Date.
7.4 Exercise of Options
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option will vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:
<TABLE>
<CAPTION>
Period of Holder's Continuous Employment
or Service With the Company or Its Percent of Total Option
Subsidiaries From the Option Grant Date That Is Vested and Exercisable
--------------------------------------- ------------------------------
<S> <C>
After 1 year 20%
After 2 years 40%
After 3 years 60%
After 4 years 80%
After 5 years 100%
</TABLE>
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the
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<PAGE>
Option is being exercised and accompanied by payment in full as described in
Section 7.5. The Plan Administrator may determine at any time that an Option
may not be exercised as to less than 100 shares at any one time (or the lesser
number of remaining shares covered by the Option).
7.5 Payment of Exercise Price
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, a combination of cash and/or check (if any) and
one or both of the following alternative forms: (a) tendering (either actually
or, if and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, by attestation) Common Stock already owned by the
Holder for at least six months (or any shorter period necessary to avoid a
charge to the Company's earnings for financial reporting purposes) having a Fair
Market Value on the day prior to the exercise date equal to the aggregate Option
exercise price; or (b) if and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, delivery of a properly executed
exercise notice, together with irrevocable instructions, to (i) a brokerage firm
designated by the Company to deliver promptly to the Company the aggregate
amount of sale or loan proceeds to pay the Option exercise price and any
withholding tax obligations that may arise in connection with the exercise and
(ii) the Company to deliver the certificates for such purchased shares directly
to such brokerage firm, all in accordance with the regulations of the Federal
Reserve Board. In addition, to the extent permitted by the Plan Administrator
in its sole discretion, the price for shares purchased under an Option may be
paid, either singly or in combination with one or more of the alternative forms
of payment authorized by this Section 7.5, by (y) a promissory note delivered
pursuant to Section 13; or (z) such other consideration as the Plan
Administrator may permit.
7.6 Post-Termination Exercises
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. [If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other than by
reason of death or Cause, the Option shall be exercisable, to the extent of the
number of shares purchasable by the Holder at the date of such termination, only
(a) within one year if the termination of the Holder's employment or services is
coincident with Retirement, Early Retirement at the Company's request or
Disability or (b) within three months after the date the Holder ceases to be an
employee, director, officer, consultant, agent, advisor or independent
contractor of the Company or a Subsidiary if termination of the Holder's
employment or services is for any reason
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<PAGE>
other than Retirement, Early Retirement at the Company's request or Disability,
but in no event later than the remaining term of the Option. Any Option
exercisable at the time of the Holder's death may be exercised, to the extent of
the number of shares purchasable by the Holder at the date of the Holder's
death, by the personal representative of the Holder's estate, the person(s) to
whom the Holder's rights under the Award have passed by will or the applicable
laws of descent and distribution or the beneficiary designated pursuant to
Section 10, at any time or from time to time within one year after the date of
death, but in no event later than the remaining term of the Option. Any portion
of an Option that is not exercisable on the date of termination of the Holder's
employment or services shall terminate on such date, unless the Plan
Administrator determines otherwise. In case of termination of the Holder's
employment or services for Cause, the Option shall automatically terminate upon
first notification to the Holder of such termination, unless the Plan
Administrator determines otherwise. If a Holder's employment or services with
the Company are suspended pending an investigation of whether the Holder shall
be terminated for Cause, all the Holder's rights under any Option likewise shall
be suspended during the period of investigation.
A transfer of employment or services between or among the Company and its
Subsidiaries shall not be considered a termination of employment or services.
The effect of a Company-approved leave of absence on the terms and conditions of
an Option shall be determined by the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1 Dollar Limitation
To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the
event the Holder holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
8.2 10% Shareholders
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
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<PAGE>
8.3 Eligible Employees
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
8.4 Term
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 Exercisability
To qualify for Incentive Stock Option tax treatment, an Option designated
as an Incentive Stock Option must be exercised within three months after
termination of employment for reasons other than death, except that, in the case
of termination of employment due to total disability, such Option must be
exercised within one year after such termination. Employment shall not be
deemed to continue beyond the first 90 days of a leave of absence unless the
Holder's reemployment rights are guaranteed by statute or contract. For
purposes of this Section 8.5, "total disability" shall mean a mental or physical
impairment of the Holder that is expected to result in death or that has lasted
or is expected to last for a continuous period of 12 months or more and that
causes the Holder to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall be deemed
to have occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.
8.6 Taxation of Incentive Stock Options
In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, the Holder must hold the shares issued upon the
exercise of an Incentive Stock Option for two years after the Grant Date of the
Incentive Stock Option and one year from the date of exercise. A Holder may be
subject to the alternative minimum tax at the time of exercise of an Incentive
Stock Option. The Holder shall give the Company prompt notice of any
disposition of shares acquired by the exercise of an Incentive Stock Option
prior to the expiration of such holding periods.
8.7 Promissory Notes
The amount of any promissory note delivered pursuant to Section 13 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
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SECTION 9. STOCK AWARDS
9.1 Grant of Stock Awards
The Plan Administrator is authorized to make Awards of Common Stock on such
terms and conditions and subject to such restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals) as the Plan Administrator shall determine, in its sole discretion, which
terms, conditions and restrictions shall be set forth in the instrument
evidencing the Award. The terms, conditions and restrictions that the Plan
Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions and the circumstances under which
forfeiture of Restricted Stock shall occur by reason of termination of the
Holder's services.
9.2 Issuance of Shares
Upon the satisfaction of any terms, conditions and restrictions prescribed
in respect to a Stock Award, or upon the Holder's release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall release, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, the appropriate number of
shares of Common Stock.
9.3 Waiver of Restrictions
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 10. ASSIGNABILITY
No Option granted under the Plan may be assigned or transferred by the
Holder other than by will or by the applicable laws of descent and distribution,
and, during the Holder's lifetime, such Awards may be exercised only by the
Holder. Notwithstanding the foregoing, and to the extent permitted by Section
422 of the Code, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Holder of such Awards
to designate a beneficiary who may exercise the Award or receive compensation
under the Award after the Holder's death; provided, however, that any Award so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the Award.
-11-
<PAGE>
SECTION 11. ADJUSTMENTS
11.1 Adjustment of Shares
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan as set forth in Section 4.1 and (ii) the
number and kind of securities that are subject to any outstanding Award and the
per share price of such securities, without any change in the aggregate price to
be paid therefor. The determination by the Plan Administrator as to the terms
of any of the foregoing adjustments shall be conclusive and binding.
11.2 Corporate Transaction
Except as otherwise provided in the instrument that evidences the Award, in
the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested and exercisable. Such Award shall not so accelerate,
however, if and to the extent that such Award is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof (the "Successor Corporation") or to be replaced with a comparable
award for the purchase of shares of the capital stock of the Successor
Corporation. The determination of Award comparability shall be made by the Plan
Administrator, and its determination shall be conclusive and binding. Any such
Awards granted to an "executive officer" (as that term is defined for purposes
of Section 16 of the Exchange Act) of the Company that are assumed or replaced
in the Corporate Transaction and do not otherwise accelerate at that time shall
be accelerated in the event that the Holder's employment or services should
subsequently terminate within two years following such Corporate Transaction,
unless such employment or services are terminated by the Successor Corporation
for Cause or by the Holder voluntarily without Good Reason. The acceleration
will not occur if, in the opinion of the Company's outside accountants, it would
render unavailable "pooling of interest" accounting for a Corporate Transaction
that would otherwise qualify for such accounting treatment.
11.3 Further Adjustment of Awards
Subject to Section 11.2, the Plan Administrator shall have the discretion,
exercisable at any time before a sale, merger, consolidation, reorganization,
liquidation or change in control of the Company, as defined by the Plan
Administrator, to take such further action as it determines to be necessary or
advisable, and fair and equitable to Holders, with respect to Awards. Such
authorized action may include (but shall not be limited to) establishing,
amending or waiving the
-12-
<PAGE>
type, terms, conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for exercise, lifting
restrictions and other modifications, and the Plan Administrator may take such
actions with respect to all Holders, to certain categories of Holders or only to
individual Holders. The Plan Administrator may take such action before or after
granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation or change in control that is the reason for such action.
11.4 Limitations
The grant of Awards will in no way affect the Company's right 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 part
of its business or assets.
SECTION 12. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Award. Subject to the Plan and applicable
law, the Plan Administrator may, in its sole discretion, permit the Holder to
satisfy withholding obligations, in whole or in part, by paying cash, by
electing to have the Company withhold shares of Common Stock or by transferring
shares of Common Stock to the Company, in such amounts as are equivalent to the
Fair Market Value of the withholding obligation. The Company shall have the
right to withhold from any Award or any shares of Common Stock issuable pursuant
to an Award or from any cash amounts otherwise due or to become due from the
Company to the Holder an amount equal to such taxes. The Company may also
deduct from any Award any other amounts due from the Holder to the Company or a
Subsidiary.
SECTION 13. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To assist a Holder (including a Holder who is an officer or a director of
the Company) in acquiring shares of Common Stock pursuant to an Award granted
under the Plan, the Plan Administrator, in its sole discretion, may authorize,
either at the Grant Date or at any time before the acquisition of Common Stock
pursuant to the Award, (a) the extension of a loan to the Holder by the Company,
(b) the payment by the Holder of the purchase price, if any, of the Common Stock
in installments, or (c) the guarantee by the Company of a loan obtained by the
Holder from a third party. The terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of repayment, will be subject
to the Plan Administrator's discretion; provided, however, that repayment of any
Company loan to the Holder shall be secured by delivery of a full-recourse
promissory note for the loan amount executed by the Holder, together with any
other form of security determined by the Plan Administrator. The maximum credit
available is the purchase price, if any, of the Common Stock acquired, plus the
maximum federal and state income and employment tax liability that may be
incurred in connection with the acquisition.
-13-
<PAGE>
SECTION 14. AMENDMENT AND TERMINATION OF PLAN
14.1 Amendment of Plan
The Plan may be amended only by the Board in such respects as it shall deem
advisable; however, to the extent required for compliance with Section 422 of
the Code or any applicable law or regulation, shareholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan or that may be issued as Stock
Awards, (b) modify the class of persons eligible to receive Options, or (c)
otherwise require shareholder approval under any applicable law or regulation.
14.2 Termination of Plan
The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than 10 years after the earlier of the Plan's
adoption by the Board and approval by the shareholders.
14.3 Consent of Holder
The amendment or termination of the Plan shall not, without the consent of
the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan. Any change or
adjustment to an outstanding Incentive Stock Option shall not, without the
consent of the Holder, be made in a manner so as to constitute a "modification"
that would cause such Incentive Stock Option to fail to continue to qualify as
an Incentive Stock Option.
SECTION 15. GENERAL
15.1 Award Agreements
Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
15.2 Continued Employment or Services; Rights in Awards
None of the Plan, participation in the Plan or any action of the Plan
Administrator taken under the Plan shall be construed as giving any person any
right to be retained in the employ of the Company or limit the Company's right
to terminate the employment or services of any person.
15.3 Registration
The Company shall be under no obligation to any Holder to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if
-14-
<PAGE>
made. The Company may restrict the exercise of any Option and may adopt exercise
control restrictions in order to maintain any exemption requirements of federal
or state securities laws. The Company may refuse the exercise of any Option for
which an exemption from registration under federal and state securities laws is
unavailable. The Company may issue certificates for shares with such legends and
subject to such restrictions on transfer and stop-transfer instructions as
counsel for the Company deems necessary or desirable for compliance by the
Company with federal and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
15.4 No Rights as a Shareholder
No Option shall entitle the Holder to any cash dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Option, free of all applicable
restrictions.
15.5 Compliance With Laws and Regulations
Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Holders who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Holders. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of Section
422 of the Code.
15.6 No Trust or Fund
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Holder, and no Holder shall
have any rights that are greater than those of a general unsecured creditor of
the Company.
15.7 Severability
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
-15-
<PAGE>
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 16. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board,
so long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
Adopted by the Board on August 31, 1998 and approved by the Company's
shareholders on September 15, 1998.
-16-
<PAGE>
PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
<TABLE>
<CAPTION>
Date of
Adoption/
Amendment/ Date of Shareholder
Adjustment Section Effect of Amendment Approval
---------- ------- ------------------- --------
<S> <C> <C> <C>
</TABLE>
-1-
<PAGE>
EXHIBIT 99.4
Full Acceleration
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
CARD CAPTURE SERVICES, INC.
1996 INCENTIVE STOCK OPTION PLAN
Optionee: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 5th day of May,
2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Card Capture
Services, Inc., an Oregon corporation ("CCS"), which were granted to Optionee
under the CCS 1996 Incentive Stock Option Plan (the "Plan") and are each
evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, CCS has been acquired by E*TRADE through the merger of Card
Acquisition Inc. ("Merger Sub") with and into CCS, whereby CCS has become a
wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the Agreement and
Plan of Merger by and between E*TRADE, CCS and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of CCS under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.4149 of a
share of E*TRADE common stock, par value $0.01 per share ("E*TRADE Stock"), for
each outstanding share of CCS common stock ("CCS Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of CCS Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "CCS Options") and the
exercise price payable per share are set forth below. E*TRADE hereby assumes, as
of the Effective Time, all
<PAGE>
the duties and obligations of CCS under each of the CCS Options. In connection
with such assumption, the number of shares of E*TRADE Stock purchasable under
each CCS Option hereby assumed and the exercise price payable thereunder have
been adjusted to reflect the Exchange Ratio. Accordingly, the number of shares
of E*TRADE Stock subject to each CCS Option hereby assumed shall be as specified
for that option below, and the adjusted exercise price payable per share of
E*TRADE Stock under the assumed CCS Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CCS STOCK OPTIONS E*TRADE ASSUMED OPTIONS
- ------------------------------------------------------------------------------------------------------
# of Shares of CCS Exercise Price # of Shares of Adjusted Exercise
Common Stock per Share E*TRADE Common Stock Price per Share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CCS Shares $CCS Price E*TRADE Shares $E*TRADE Price
- ------------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed CCS
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the CCS Stock subject to the CCS Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the CCS Option immediately prior to the Merger.
3. The following provisions shall govern each CCS Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated
into such Option Agreement) (i) to "Card Capture Services, Inc., the
"Corporation" or the "Company" shall mean E*TRADE, (ii) to "Share"
shall mean a share of E*TRADE Stock, (iii) to "Stock" or "Common
Stock" shall mean E*TRADE Stock, (iv) to the "Board" shall mean the
Board of Directors of E*TRADE and (v) to the "Committee" shall mean
the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
CCS Option and all other provisions which govern either the exercise
or the termination of the assumed CCS Option shall remain the same as
set forth in the Option Agreements applicable to that option, and the
provisions of the Option Agreements shall accordingly govern and
control Optionee's rights under this Agreement to purchase E*TRADE
Stock.
2
<PAGE>
(c) Pursuant to the terms of the Plan and the Option
Agreement, your option assumed by E*TRADE in connection with the
transaction, to the extent it was unvested prior to the merger, became
fully vested and exercisable upon the consummation of the Merger.
(d) Your option as assumed by E*TRADE which was originally
designated on your Notice of Grant as an Incentive Option shall remain
an Incentive Stock Option to the maximum extent allowed by law.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee of CCS, Optionee shall be deemed to continue in such status
as an employee for so long as Optionee renders services as an employee
to E*TRADE or any present or future E*TRADE subsidiary. Accordingly,
the provisions of the Option Agreement and the Plan governing the
termination of the assumed CCS Options upon Optionee's cessation of
service as an employee of CCS shall hereafter be applied on the basis
of Optionee's cessation of employee status with E*TRADE and its
subsidiaries, and each assumed CCS Option shall accordingly terminate
one (1) year following such cessation of service as an employee of
E*TRADE and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed CCS 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 E*TRADE Stock delivered in payment of such adjusted exercise price,
the period for which such shares were held as CCS Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed CCS Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE 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 E*TRADE
Stock and should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, California 94025
Attention: Stock Administration
4. Except to the extent specifically modified by this Option
Assumption Agreement, 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.
3
<PAGE>
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the ______ day of ___________, 2000.
E*TRADE GROUP, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her CCS Options hereby assumed by E*TRADE are as set
forth in the Option Agreement, the Plans, as applicable, and such Stock Option
Assumption Agreement.
------------------------------
First_Name Last_Name, OPTIONEE
DATED: __________________, 2000
4
<PAGE>
EXHIBIT 99.5
Full Acceleration
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
CARD CAPTURE SERVICES, INC.
1997 INCENTIVE STOCK OPTION PLAN
Optionee: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 5th day of May,
2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Card Capture
Services, Inc., an Oregon corporation ("CCS"), which were granted to Optionee
under the CCS 1997 Incentive Stock Option Plan (the "Plan") and are each
evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, CCS has been acquired by E*TRADE through the merger of Card
Acquisition Inc. ("Merger Sub") with and into CCS, whereby CCS has become a
wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the Agreement and
Plan of Merger by and between E*TRADE, CCS and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of CCS under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.4149 of a
share of E*TRADE common stock, par value $0.01 per share ("E*TRADE Stock"), for
each outstanding share of CCS common stock ("CCS Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of CCS Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "CCS Options") and the
exercise price payable per share are set forth below. E*TRADE hereby assumes, as
of the Effective Time, all
<PAGE>
the duties and obligations of CCS under each of the CCS Options. In connection
with such assumption, the number of shares of E*TRADE Stock purchasable under
each CCS Option hereby assumed and the exercise price payable thereunder have
been adjusted to reflect the Exchange Ratio. Accordingly, the number of shares
of E*TRADE Stock subject to each CCS Option hereby assumed shall be as specified
for that option below, and the adjusted exercise price payable per share of
E*TRADE Stock under the assumed CCS Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CCS STOCK OPTIONS E*TRADE ASSUMED OPTIONS
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
# of Shares of CCS Exercise Price # of Shares of Adjusted Exercise
Common Stock per Share E*TRADE Common Stock Price per Share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CCS Shares $CCS Price E*TRADE Shares $E*TRADE Price
- ------------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed CCS
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the CCS Stock subject to the CCS Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the CCS Option immediately prior to the Merger.
3. The following provisions shall govern each CCS Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated
into such Option Agreement) (i) to "Card Capture Services, Inc., the
"Corporation" or the "Company" shall mean E*TRADE, (ii) to "Share"
shall mean a share of E*TRADE Stock, (iii) to "Stock" or "Common
Stock" shall mean E*TRADE Stock, (iv) to the "Board" shall mean the
Board of Directors of E*TRADE and (v) to the "Committee" shall mean
the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
CCS Option and all other provisions which govern either the exercise
or the termination of the assumed CCS Option shall remain the same as
set forth in the Option Agreements applicable to that option, and the
provisions of the Option Agreements shall accordingly govern and
control Optionee's rights under this Agreement to purchase E*TRADE
Stock.
2
<PAGE>
(c) Pursuant to the terms of the Option Agreement, your
option assumed by E*TRADE in connection with the transaction, to the
extent it was unvested prior to the merger, became fully vested and
exercisable upon the consummation of the Merger.
(d) Your option as assumed by E*TRADE which was originally
designated on your Notice of Grant as an Incentive Option shall remain
an Incentive Stock Option to the maximum extent allowed by law.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee of CCS, Optionee shall be deemed to continue in such status
as an employee for so long as Optionee renders services as an employee
to E*TRADE or any present or future E*TRADE subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of
the assumed CCS Options upon Optionee's cessation of service as an
employee of CCS shall hereafter be applied on the basis of Optionee's
cessation of employee status with E*TRADE and its subsidiaries, and
each assumed CCS Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for that
option, following such cessation of service as an employee of E*TRADE
and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed CCS 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 E*TRADE Stock delivered in payment of such adjusted exercise price,
the period for which such shares were held as CCS Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed CCS Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE 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 E*TRADE
Stock and should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, California 94025
Attention: Stock Administration
4. Except to the extent specifically modified by this Option
Assumption Agreement, 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.
3
<PAGE>
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the ______ day of ___________, 2000.
E*TRADE GROUP, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her CCS Options hereby assumed by E*TRADE are as set
forth in the Option Agreement, the Plans, as applicable, and such Stock Option
Assumption Agreement.
-------------------------------
First_Name Last_Name, OPTIONEE
DATED: __________________, 2000
4
<PAGE>
EXHIBIT 99.6
Standard
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
CARD CAPTURE SERVICES, INC.
1998 STOCK INCENTIVE COMPENSATION PLAN
Optionee: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 5th day of May,
2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Card Capture
Services, Inc., an Oregon corporation ("CCS"), which were granted to Optionee
under the CCS 1998 Stock Incentive Compensation Plan (the "Plan") and are each
evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, CCS has been acquired by E*TRADE through the merger of Card
Acquisition Inc. ("Merger Sub") with and into CCS, whereby CCS has become a
wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the Agreement and
Plan of Merger by and between E*TRADE, CCS and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of CCS under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is 0.4149 of a
share of E*TRADE common stock, par value $0.01 per share ("E*TRADE Stock"), for
each outstanding share of CCS common stock ("CCS Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of CCS Stock subject to the options held by Optionee
immediately prior to the Effective Time (the "CCS Options") and the exercise
price payable per share are set forth below. E*TRADE hereby assumes, as of the
Effective Time, all the duties and obligations of CCS under each of the CCS
Options. In connection with such
<PAGE>
assumption, the number of shares of E*TRADE Stock purchasable under each CCS
Option hereby assumed and the exercise price payable thereunder have been
adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of
E*TRADE Stock subject to each CCS Option hereby assumed shall be as specified
for that option below, and the adjusted exercise price payable per share of
E*TRADE Stock under the assumed CCS Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CCS STOCK OPTIONS E*TRADE ASSUMED OPTIONS
- ------------------------------------------------------------------------------------------------------
# of Shares of CCS Exercise Price # of Shares of Adjusted Exercise
Common Stock per Share E*TRADE Common Stock Price per Share
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CCS Shares $CCS Price E*TRADE Shares $E*TRADE Price
- ------------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed CCS
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the CCS Stock subject to the CCS Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the CCS Option immediately prior to the Merger.
3. The following provisions shall govern each CCS Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated
into such Option Agreement) (i) to "Card Capture Services, Inc., the
"Corporation" or the "Company" shall mean E*TRADE, (ii) to "Share"
shall mean a share of E*TRADE Stock, (iii) to "Stock" or "Common
Stock" shall mean E*TRADE Stock, (iv) to the "Board" shall mean the
Board of Directors of E*TRADE and (v) to the "Committee" shall mean
the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
CCS Option and all other provisions which govern either the exercise
or the termination of the assumed CCS Option shall remain the same as
set forth in the Option Agreements applicable to that option, and the
provisions of the Option Agreements shall accordingly govern and
control Optionee's rights under this Agreement to purchase E*TRADE
Stock.
(c) Pursuant to the terms of the Option Agreement and the
Plan, none of your options assumed by E*TRADE in connection with the
2
<PAGE>
transaction, will become fully vested and exercisable upon the
consummation of the Merger. Accordingly, each assumed CCS Option shall
continue to vest and become exercisable in accordance with the same
installment vesting schedule in effect for that option, pursuant to
the provisions of the applicable Option Agreement, immediately prior
to the Effective Time provided, however, that the number of shares
subject to each such installment shall be adjusted to reflect the
Exchange Ratio.
(d) Your option as assumed by E*TRADE which was originally
designated on your Notice of Grant as an Incentive Option shall remain
an Incentive Stock Option to the maximum extent allowed by law.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee of CCS, Optionee shall be deemed to continue in such status
as an employee for so long as Optionee renders services as an employee
to E*TRADE or any present or future E*TRADE subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of
the assumed CCS Options upon Optionee's cessation of service as an
employee of CCS shall hereafter be applied on the basis of Optionee's
cessation of employee status with E*TRADE and its subsidiaries, and
each assumed CCS Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for that
option, following such cessation of service as an employee of E*TRADE
and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed CCS 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 E*TRADE Stock delivered in payment of such adjusted exercise price,
the period for which such shares were held as CCS Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed CCS Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE 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 E*TRADE
Stock and should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, California 94025
Attention: Stock Administration
3
<PAGE>
4. Except to the extent specifically modified by this Option
Assumption Agreement, 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, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the ______ day of ___________, 2000.
E*TRADE GROUP, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her CCS Options hereby assumed by E*TRADE are as set
forth in the Option Agreement, the Plans, as applicable, and such Stock Option
Assumption Agreement.
------------------------------
First_Name Last_Name, OPTIONEE
DATED: __________________, 2000
4
<PAGE>
EXHIBIT 99.7
Involuntary Termination 12 Mo.
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
CARD CAPTURE SERVICES, INC.
1998 STOCK INCENTIVE COMPENSATION PLAN
Optionee: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 5th day of May,
2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of CCS Financial
Corporation, an Oregon corporation ("CCS"), which were granted to Optionee under
the CCS 1998 Stock Incentive Compensation Plan (the "Plan") and are each
evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, CCS has been acquired by E*TRADE through the merger of Turbo
Acquisition Corp. ("Merger Sub") with and into CCS, whereby CCS has become a
wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the Agreement and
Plan of Merger, by and between E*TRADE, CCS and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of CCS under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is .4149 of a
share of E*TRADE common stock ("E*TRADE Stock") for each outstanding share of
CCS common stock ("CCS Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of CCS Stock subject to the options held by Optionee
immediately prior to the Effective Time (the "CCS Options") and the exercise
price payable per share are set forth below. E*TRADE hereby assumes, as of the
Effective Time, all the duties and obligations of CCS under each of the CCS
Options. In connection with such
<PAGE>
assumption, the number of shares of E*TRADE Stock purchasable under each CCS
Option hereby assumed and the exercise price payable thereunder have been
adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of
E*TRADE Stock subject to each CCS Option hereby assumed shall be as specified
for that option below, and the adjusted exercise price payable per share of
E*TRADE Stock under the assumed CCS Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
CCS STOCK OPTIONS E*TRADE ASSUMED OPTIONS
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
# of Shares of CCS Exercise Price # of Shares of Adjusted Exercise
Common Stock per Share E*TRADE Price per Share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CCS Shares $CCS Price E*TRADE Shares $E*TRADE Price
- ------------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed CCS
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the CCS Stock subject to the CCS Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the CCS Option immediately prior to the Merger.
3. The following provisions shall govern each CCS Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated
into such Option Agreement) (i) to "Card Capture Services, Inc.," the
"Corporation" or the "Company" shall mean E*TRADE, (ii) to "Share"
shall mean a share of E*TRADE Stock, (iii) to "Common Stock" or
"Stock" shall mean E*TRADE Stock, (iv) to the "Board" shall mean the
Board of Directors of E*TRADE and (v) to the "Committee" shall mean
the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
CCS Option and all other provisions which govern either the exercise
or the termination of the assumed CCS Option shall remain the same as
set forth in the Option Agreement applicable to that option, and the
provisions of the Option Agreement shall accordingly govern and
control Optionee's rights under this Agreement to purchase E*TRADE
Stock.
(c) Your options assumed by E*TRADE which were originally
designated in your Option Agreement as incentive stock options shall
remain such to the maximum extent allowed by law.
<PAGE>
(d) Each CCS Option shall be assumed by E*TRADE as of the
Effective Time. Pursuant to the terms of your Option Agreement, none
of your CCS Options will vest or become exercisable on an accelerated
basis because of the transaction. Each such assumed CCS Option shall
thereafter continue to vest for any remaining unvested shares of
E*TRADE Stock subject to that option in accordance with the same
installment vesting schedule in effect under the applicable Option
Agreement immediately prior to the Effective Time; provided, however,
that the number of shares subject to each such installment shall be
adjusted to reflect the Exchange Ratio. As provided in your Option
Agreement, if your employment is terminated under certain
circumstances within twelve months following the Effective Time, the
remaining unvested portion of your CCS Options will immediately vest
and become exercisable.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee of CCS, Optionee shall be deemed to continue in such status
as an employee for so long as Optionee renders services as an employee
to E*TRADE or any present or future E*TRADE subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of
the assumed CCS Options upon Optionee's cessation of service as an
employee of CCS shall hereafter be applied on the basis of Optionee's
cessation of employee status with E*TRADE and its subsidiaries, and
each assumed CCS Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for that
option following such cessation of service as an employee of E*TRADE
and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed CCS 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 E*TRADE Stock delivered in payment of such adjusted exercise price,
the period for which such shares were held as CCS Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed CCS Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE 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 E*TRADE
Stock and should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, CA 94025
Attention: Stock Administration
Except to the extent specifically modified by this Option Assumption
Agreement, 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
<PAGE>
otherwise affected by this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the _______ day of ______________, 2000.
E*TRADE GROUP, INC.
By: _____________________________
Name: __________________________
Title: _________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her CCS Options hereby assumed by E*TRADE are as set
forth in the Option Agreement, the Plans, as applicable, and such Stock Option
Assumption Agreement.
----------------------------------
First_Name Last_Name, OPTIONEE
DATED: ________ ___, 2000
<PAGE>
EXHIBIT 99.8
Involuntary Termination 6 Mo.
E*TRADE GROUP, INC.
STOCK OPTION ASSUMPTION AGREEMENT
CARD CAPTURE SERVICES, INC.
1998 STOCK INCENTIVE COMPENSATION PLAN
Optionee: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 5th day of May,
2000 by E*TRADE Group, Inc., a Delaware corporation ("E*TRADE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of CCS Financial
Corporation, an Oregon corporation ("CCS"), which were granted to Optionee under
the CCS 1998 Stock Incentive Compensation Plan (the "Plan") and are each
evidenced by a Stock Option Agreement (the "Option Agreement").
WHEREAS, CCS has been acquired by E*TRADE through the merger of Turbo
Acquisition Corp. ("Merger Sub") with and into CCS, whereby CCS has become a
wholly-owned subsidiary of E*TRADE (the "Merger") pursuant to the Agreement and
Plan of Merger, by and between E*TRADE, CCS and Merger Sub (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require E*TRADE to
assume all obligations of CCS under all outstanding options under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is .4149 of a
share of E*TRADE common stock ("E*TRADE Stock") for each outstanding share of
CCS common stock ("CCS Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by E*TRADE in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of CCS Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "CCS Options") and the
exercise price payable per share are set forth below. E*TRADE hereby assumes, as
of the Effective Time, all the duties and obligations of CCS under each of the
CCS Options. In connection with such
<PAGE>
assumption, the number of shares of E*TRADE Stock purchasable under each CCS
Option hereby assumed and the exercise price payable thereunder have been
adjusted to reflect the Exchange Ratio. Accordingly, the number of shares of
E*TRADE Stock subject to each CCS Option hereby assumed shall be as specified
for that option below, and the adjusted exercise price payable per share of
E*TRADE Stock under the assumed CCS Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CCS STOCK OPTIONS E*TRADE ASSUMED OPTIONS
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
# of Shares of CCS Exercise Price # of Shares of Adjusted Exercise
Common Stock per Share E*TRADE Price per Share
Common Stock
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CCS Shares $CCS Price E*TRADE Shares $E*TRADE Price
- ------------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed CCS
Option is to assure that the spread between the aggregate fair market value of
the shares of E*TRADE Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be not less than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the CCS Stock subject to the CCS Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the CCS Option immediately prior to the Merger.
3. The following provisions shall govern each CCS Option hereby
assumed by E*TRADE:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated
into such Option Agreement) (i) to "Card Capture Services, Inc.," the
"Corporation" or the "Company" shall mean E*TRADE, (ii) to "Share"
shall mean a share of E*TRADE Stock, (iii) to "Common Stock" or
"Stock" shall mean E*TRADE Stock, (iv) to the "Board" shall mean the
Board of Directors of E*TRADE and (v) to the "Committee" shall mean
the Compensation Committee of the E*TRADE Board of Directors.
(b) The grant date and the expiration date of each assumed
CCS Option and all other provisions which govern either the exercise
or the termination of the assumed CCS Option shall remain the same as
set forth in the Option Agreement applicable to that option, and the
provisions of the Option Agreement shall accordingly govern and
control Optionee's rights under this Agreement to purchase E*TRADE
Stock.
(c) Your options assumed by E*TRADE which were originally
designated in your Option Agreement as incentive stock options shall
remain such to the maximum extent allowed by law.
<PAGE>
(d) Each CCS Option shall be assumed by E*TRADE as of the
Effective Time. Pursuant to the terms of your Option Agreement, none
of your CCS Options will vest or become exercisable on an accelerated
basis because of the transaction. Each such assumed CCS Option shall
thereafter continue to vest for any remaining unvested shares of
E*TRADE Stock subject to that option in accordance with the same
installment vesting schedule in effect under the applicable Option
Agreement immediately prior to the Effective Time; provided, however,
that the number of shares subject to each such installment shall be
adjusted to reflect the Exchange Ratio. As provided in your Option
Agreement, if your employment is terminated under certain
circumstances within six months following the Effective Time, the
remaining unvested portion of your CCS Options will immediately vest
and become exercisable.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee of CCS, Optionee shall be deemed to continue in such status
as an employee for so long as Optionee renders services as an employee
to E*TRADE or any present or future E*TRADE subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of
the assumed CCS Options upon Optionee's cessation of service as an
employee of CCS shall hereafter be applied on the basis of Optionee's
cessation of employee status with E*TRADE and its subsidiaries, and
each assumed CCS Option shall accordingly terminate, within the
designated time period in effect under the Option Agreement for that
option following such cessation of service as an employee of E*TRADE
and its subsidiaries.
(f) The adjusted exercise price payable for the E*TRADE
Stock subject to each assumed CCS 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 E*TRADE Stock delivered in payment of such adjusted exercise price,
the period for which such shares were held as CCS Stock prior to the
Merger shall be taken into account.
(g) In order to exercise each assumed CCS Option, Optionee
must deliver to E*TRADE a written notice of exercise in which the
number of shares of E*TRADE 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 E*TRADE
Stock and should be delivered to E*TRADE at the following address:
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, CA 94025
Attention: Stock Administration
Except to the extent specifically modified by this Option Assumption
Agreement, 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
<PAGE>
otherwise affected by this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, E*TRADE Group, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the _______ day of ______________, 2000.
E*TRADE GROUP, INC.
By: _____________________________
Name: __________________________
Title: __________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her CCS Options hereby assumed by E*TRADE are as set
forth in the Option Agreement, the Plans, as applicable, and such Stock Option
Assumption Agreement.
----------------------------------
First_Name Last_Name, OPTIONEE
DATED: ___________, 2000
