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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 5, 1998
REGISTRATION NO. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SOFTWARE.NET CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-3212136
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
---------------------------
1195 WEST FREMONT AVENUE
SUNNYVALE, CALIFORNIA 94087
(Address of principal executive offices)
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STOCK OPTION AGREEMENT
1995 STOCK OPTION PLAN
1998 STOCK OPTION PLAN
(Full title of the Plans)
---------------------------
WILLIAM S. MCKIERNAN
CHAIRMAN OF THE BOARD OF DIRECTORS
SOFTWARE.NET CORPORATION
1195 WEST FREMONT AVENUE
SUNNYVALE, CALIFORNIA 94087
(408) 616-4200
(Name,address and telephone number, including area code, of agent for service)
COPY TO:
RICHARD SCUDELLARI
JACKSON TUFTS COLE & BLACK, LLP
60 SOUTH MARKET STREET, 10TH FLOOR
SAN JOSE, CALIFORNIA 95113
(408) 998-1952
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF MAXIMUM TO BE PROPOSED MAXIMUM AMOUNT AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(1) OFFERING PRICE FEE
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Stock Option Agreement
Common Stock, par value $0.001
per share................................. 1,000,000 $ 0.005(2) 5,000.00 $ 1.48
1995 STOCK OPTION PLAN
Common Stock, par value $0.001
per share................................. 2,954,784 $ 1.62(2) $ 4,786,750.08 $1,412.09
Common Stock, par value $0.001
per share................................. 45,216 $12.72(3) $ 575,147.52 $ 169.67
1998 STOCK OPTION PLAN
Common Stock, par value $0.001
per share................................. 1,008,500 $ 5.81(2) $ 5,859,385.00 $1,728.52
Common Stock, par value $0.001
per share................................. 991,500 $12.72(3) $12,611,880.00 $3,720.51
TOTAL..................................... 6,000,000 $23,838,162.60 $7,032.27
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</TABLE>
(1) Pursuant to Rule 416, this Registration Statement shall also cover
any additional shares of Common Stock which become issuable under any
of the Plans being registered pursuant to this Registration Statement
by reason of any stock dividend, stock split, recapitalization or any
other similar transaction effected without the receipt of
consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The computation is based on the
weighted average per share exercise price (rounded to the nearest
cent) of outstanding options under the referenced plan, the shares
issuable under which are registered hereby.
(3) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The computation with respect to
unissued options is based on the average high and low sale prices of
the Common Stock as reported on the Nasdaq National Market on August
4, 1998.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
(i) The Registrant's Prospectus filed on June 18, 1998 pursuant to
Rule 424(b) of the Securities Act of 1933, as amended (the "Securities Act")
under Registration Statement No. 333-51121, which contains audited financial
statements for the Registrant's latest fiscal year for which such statements
have been filed.
(ii) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the Commission under
Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act") on June
12, 1998, including any amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, 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 in this Registration Statement and to
be part hereof from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
In December 1997, Richard Scudellari, a director and Secretary of the
Company and a partner of Jackson Tufts Cole & Black, LLP, the Company's counsel,
exercised options granted under the 1995 Stock Option Plan to purchase 70,000
shares of the Company's Common Stock for an aggregate purchase price of $1,950.
In January 1998, Mr. Scudellari was granted an option to purchase 10,000 shares
of the Company's Common Stock at an exercise price of $0.50 per share.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation limits the liability of
directors to the full extent permitted by Delaware law. Delaware law provides
that a corporation's certificate of incorporation may contain a provision
eliminating or limiting the personal liability of directors for monetary damages
for breach of their fiduciary duties as directors, except for liability (i) for
any breach of their duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) for unlawful payments of dividends or
unlawful stock repurchases or redemptions as provided in Section 174 of the
Delaware General Corporation Law (the "DGCL"), or (iv) for any transaction from
which the director derived an improper personal benefit. The Company's Bylaws
provide that the Company may indemnify its directors and officers, employees and
agents to the fullest extent permitted by law. The Company believes that
indemnification under its Bylaws covers at least negligence and gross negligence
on the part of indemnified parties.
The Company has entered into agreements to indemnify its directors and
executive officers. These agreements, among other things, indemnify the
Company's directors and officers for certain expenses (including attorneys'
fees), judgments, fines and settlement amounts incurred by such persons in any
action or proceeding, including any action by or in the right of the Company,
arising out of such person's services as a director or officer of the Company,
any subsidiary of the Company or any other company or enterprise to which the
person provides services at the request of the Company. The Company believes
that these provisions and agreements are necessary to attract and retain
qualified directors and officers.
At present, there is no pending litigation or proceeding involving any
director, officer, employe or agent of the Company where indemnification will be
required or permitted. The Company is not aware of any threatened litigation or
proceeding that might result in a claim for such indemnification.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
<TABLE>
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Exhibit No. Description
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<S> <C>
4.1 Stock Option Agreement dated as of March 31,
1995, by and between the Registrant and John P.
Pettitt
4.2 1995 Stock Option Plan, as amended
4.3 1998 Stock Option Plan
5.1 Opinion of Jackson Tufts Cole & Black, LLP
23.1 Consent of Jackson Tufts Cole Black, LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Powers of Attorney (see p. 4)
</TABLE>
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Item 9. UNDERTAKINGS.
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 to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) that, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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 offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as the indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 a successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the question has already been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, software.net Corporation, a corporation organized and existing under
the laws of the State of Delaware, 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 Sunnyvale, State of
California, on this 5th day of August 1998.
software.net Corporation
By: /s/ WILLIAM S. MCKIERNAN
------------------------------
William S. McKiernan
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
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NAME TITLE DATE
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PRINCIPAL EXECUTIVE OFFICER:
By: /s/ WILLIAM S. MCKIERNAN Chairman of the Board of Directors August 5, 1998
-------------------------------
WILLIAM S. MCKIERNAN
PRINCIPAL FINANCIAL OFFICER
AND PRINCIPAL ACCOUNTING OFFICER:
By: /s/ MICHAEL J. PRAISNER Vice President for Finance & Administration August 5, 1998
------------------------------- and Chief Financial Officer
MICHAEL J. PRAISNER
ADDITIONAL DIRECTORS:
By: /s/ MARK L. BREIER President, Chief Executive Officer and August 5, 1998
------------------------------- Director
MARK L. BREIER
By: /s/ LINDA FAYNE LEVINSON Director August 5, 1998
-------------------------------
LINDA FAYNE LEVINSON
By: /s/ BERT KOLDE Director August 5, 1998
-------------------------------
BERT KOLDE
By: /s/ STEVEN P. NOVAK Director August 5, 1998
-------------------------------
STEVEN P. NOVAK
By: /s/ RICHARD SCUDELLARI Secretary and Director August 5, 1998
-------------------------------
RICHARD SCUDELLARI
</TABLE>
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William S. McKiernan and Michael J.
Praisner, and each one of them, his/her attorneys-in-fact, each with the power
of substitution, for him/her in any and all capacities, to sign any and all
amendments to this Registration Statement (including post-effective amendments),
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his/her substitute or
substitutes, may do or cause to be done by virtue hereof. This Power of Attorney
may be signed in several counterparts.
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SIGNATURE TITLE DATE
<S> <C> <C>
By: /s/ WILLIAM S. MCKIERNAN Chairman of the Board of Directors August 5, 1998
-----------------------------------------
WILLIAM S. MCKIERNAN
By: /s/ MARK L. BREIER President, Chief Executive Officer and August 5, 1998
----------------------------------------- Director
MARK L. BREIER
By: /s/ MICHAEL J. PRAISNER Vice President for Finance & Administration August 5, 1998
----------------------------------------- and Chief Financial Officer
MICHAEL J. PRAISNER
By: /s/ LINDA FAYNE LEVINSON Director August 5, 1998
-----------------------------------------
LINDA FAYNE LEVINSON
By: /s/ BERT KOLDE Director August 5, 1998
-----------------------------------------
BERT KOLDE
By: /s/ STEVEN P. NOVAK Director August 5, 1998
-----------------------------------------
STEVEN P. NOVAK
By: /s/ RICHARD SCUDELLARI Secretary and Director August 5, 1998
-----------------------------------------
RICHARD SCUDELLARI
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
4.1 Stock Option Agreement dated as of March 31,
1995, by and between the Registrant and John P.
Pettitt
4.2 1995 Stock Option Plan, as amended
4.3 1998 Stock Option Plan
5.1 Opinion of Jackson Tufts Cole & Black, LLP
23.1 Consent of Jackson Tufts Cole Black, LLP (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Powers of Attorney (see p. 4)
</TABLE>
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EXHIBIT 4.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into by and between
CYBERSOURCE CORPORATION, a California corporation (the "Company"), and JOHN
PETTITT, a independent contractor of the Company (the "Option Holder").
RECITALS
WHEREAS, the Company has engaged Option Holder's services as an
independent contractor of the Company; and
WHEREAS, the Board of Directors of the Company has determined that it
would be to the advantage and interest of the Company and its shareholders to
grant to the Option Holder the option rights provided for herein as an
inducement to render services to the Company as an independent contractor, has
approved of the granting to the Option Holder of the option rights evidenced by
this Agreement, has advised the Company thereof and instructed the undersigned
officer to issue the option rights as provided for herein:
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Grant of Option Rights. Subject to the terms and conditions
contained herein, the Company hereby grants to the Option Holder the option
rights specified herein:
1.1 The number and class of shares of the Company's currently
authorized but unissued stock subject to the option rights granted hereunder are
an aggregate of 500,000 shares of the Company's common stock.
1.2 The option exercise price is $.01 per share.
1.3 The Option Holder has option rights hereunder to purchase a
total of 500,000 shares of the Company's common stock which shall become
exercisable during the time periods as set forth in this Section 1.3. On and
after February 15, 1995, this option may be exercised by the Optionee for the
purchase of one-quarter of the shares covered by this option (125,000 shares),
or any portion thereof. On or after the last day of each full month following
February 15, 1995, this option may be exercised by the Optionee for the purchase
of an additional one eighteenth (1/18) of the shares covered by this option
(27,778 shares), or any portion thereof. Once a portion of this option becomes
exercisable it shall remain exercisable until the Expiration Date, or until it
terminates pursuant to the terms of Section 4 hereof, whichever is first to
occur.
(d) Notwithstanding the provisions of subparagraph 1(c) above, (i)
the minimum number of shares which may be
<PAGE> 2
purchased upon any partial exercise of the option rights granted hereunder is
100 shares; and (ii) this Option shall expire on the Expiration Date set forth
below, and must be exercised, if at all on or before the Expiration Date.
Notwithstanding the foregoing, the Board of Directors of the Company in
its sole discretion may, upon written notice to the Option Holder, accelerate
the earliest date on which any of the option rights granted hereunder are
exercisable.
The granting of option rights hereunder shall impose no obligation on the
Company to continue to engage the services of the Option Holder, and shall not
lessen or affect the right of the Company to terminate such engagement or to
change the duties, compensation, or other terms thereof. The parties agree that
either of them may terminate the arrangement under which Option Holder is
performing services at any time for any reason or no reason.
2. Fractional Shares; Compliance with Laws. In no event shall the
Company be required to issue fractional shares upon the exercise of any option
rights granted hereunder.
No option rights granted hereunder may be exercised, and the Company shall
not be required to issue or deliver any certificate or certificates for shares
purchased upon the exercise of option rights granted hereunder until there has
been compliance with all then applicable requirements of law, including such
registration or other proceedings under federal and state securities laws as may
in the Company's opinion be necessary or appropriate. The Option Holder
understands that the Company is under no obligation to register, qualify or list
the shares with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance.
3. Date of Grant; Expiration of Option Rights. The option rights
granted hereunder shall be deemed to have been granted on the date set forth
below. The option rights granted hereunder, to the extent such rights have not
then expired or been exercised, shall terminate and become null and void on
December 31, 2000 ("Expiration Date").
4. Termination of Option. Except as provided in this Paragraph 4, this
option shall terminate and may not be exercised if Option Holder ceases to be
engaged as an independent contractor or employed by the Company. Option Holder
shall be considered to be engaged as an independent contractor or employed by
the Company for all purposes under this Paragraph 4 if Option Holder is an
officer, director or full-time employee of the Company or if Option Holder is
rendering substantial services (defined herein to mean more than 35 hours per
week) as a consultant, contractor or advisor to the Company. The date on which
the Option Holder has ceased to be engaged as an
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<PAGE> 3
independent contractor or employed by the Company shall be referred herein as
the "Termination Date".
4.1 Termination Generally. If Option Holder ceases to be engaged
as an independent contractor or employed by the Company for any reason except
death or disability, this option, to the extent (and only to the extent) that it
wold have been exercisable by Option Holder on the Termination Date, may be
exercised by Option Holder, but only within thirty (30) days after the
Termination Date; provided that this option may not be exercised in any event
after the Expiration Date.
4.2 Death or Disability. If Option Holder's engagement as an
independent contractor or employment with the Company is terminated because of
the death of Option Holder or the permanent and total disability of Option
Holder within the meaning of Section 22(e)(3) of the Internal Revenue Code of
1986 (as amended) ("Code"), this option, to the extent (and only to the extent)
that it would have been exercisable by Option Holder on the Termination Date,
may be exercised by Option Holder (or Option Holder's legal representative), but
only within six (6) months after the Termination Date, provided that this option
may not be exercised in any event later than the Expiration Date.
5. Nonassignability of Option Rights. The option rights granted
hereunder (i) shall be exercisable only by the Option Holder, except in the
event of the death of the Option Holder, the Option Holder's personal
representative or any person who acquires such rights by bequest or inheritance
may exercise the rights set forth herein as set forth in Paragraph 4 hereof,
(ii) shall not be transferred, assigned, pledged or hypothecated in any manner
whatsoever, whether voluntarily, involuntarily or by operation of law, and (iii)
shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of the
said option rights contrary to the provisions hereof, the said option rights
shall immediately terminate and become null and void.
6. Adjustments. Appropriate proportionate adjustments shall be made by
the Company in the number and class of shares of stock subject to the option
rights granted hereunder and the exercise price of the option rights granted
hereunder in the event that (i) the common stock of the Company is changed by
reason of any stock split, reverse stock split, recapitalization, or other
similar change in the capital structure of the Company, or (ii) the outstanding
number of shares of common stock of the Company is increased through payment of
a stock dividend; provided, however, that the Company shall not be required to
issue fractional shares as a result of any such adjustment. Any such adjustment
shall be made upon approval by the Board of Directors of the Company, whose
determination shall be conclusive. No adjustments shall be required by reason of
the issuance or sale by the Company for cash or other consideration of
additional
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<PAGE> 4
shares of its capital stock or securities convertible into or exchangeable for
shares of its capital stock.
New option rights may be substituted for the option rights granted
hereunder, or the Company's duties under this Agreement may be assumed by a
successor corporation other than the Company, or by an affiliate of such
successor corporation, in connection with any merger, consolidation,
acquisition, separation, reorganization, liquidation, or like occurrence, in
which the Company is involved, and to the full extent permitted thereby.
Notwithstanding the foregoing provisions of this paragraph 6, in the event such
successor corporation, or affiliate of such successor corporation, refuses to
substitute new option rights for, and substantially equivalent to, the option
rights granted hereunder, or to assume the option rights granted hereunder, or
if the Board of Directors of the Company determines, in its sole discretion,
that option rights outstanding under this Agreement should not then continue to
be outstanding, the option rights granted hereunder shall terminate and
thereupon become null and void (i) upon the dissolution or liquidation of the
Company, or similar occurrence, or (ii) upon any merger, consolidation,
acquisition, or separation, or similar occurrence, provided, however, that the
Option Holder shall be given notice of such dissolution, liquidation, merger,
consolidation, acquisition, separation or similar occurrence and shall have the
right, for a period of thirty (30) days after such notice is sent by the
Company, to exercise any unexpired option rights granted hereunder, to the
extent such option rights are then exercisable.
7. Method of Exercise; Rights of Option Holder in Stock. The option
rights granted hereunder shall be exercisable upon written notice of election to
exercise to the Company specifying the number of shares being purchased,
accompanied by payment to the Company of the option exercise price as to the
shares being purchased. Payment of the option exercise price shall be in cash.
Neither the Option Holder nor his personal representatives, heirs, or legatees
shall have any rights or privileges of a stockholder of the Company in respect
to the shares issuable upon the exercise of the option rights granted hereunder,
unless and until certificates representing such shares shall have been issued
and delivered in accordance with the terms hereof. As a condition to the
exercise of this option, the Option Holder, or his personal representatives,
heirs or legatees, shall make arrangements as the Company may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such exercise.
8. Notices. Any notice to be given under the terms of this Agreement
shall be mailed, telecopied, or delivered to the Company, in care of its
Secretary, at the principal office of the Company, and any notice to be given to
the Option Holder shall be mailed, telecopied, or delivered to him at the
address given beneath his signature hereto, or at such other address as either
party may hereafter designate in writing to the other. Any such
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<PAGE> 5
notice shall be deemed to have been duly given forty-eight (48) hours after the
deposit thereof in the United States mail, addressed as aforesaid, registered or
certified and postage and registry or certification fee prepaid.
9. Securities Law Compliance. The Option Holder represents and agrees
that the option rights hereunder are, and the shares to be acquired upon
exercising the option rights will be, acquired for investment, and not with a
view to the sale or distribution thereof. The Option Holder also represents and
agrees that he (i) has a preexisting personal or business relationship with the
Company or one or more of its officers, directors or controlling persons, which
relationship consists of personal or business contacts of a nature and duration
such that Option Holder is aware of the character, business acumen, and general
business and financial circumstance of the person with whom the relationship
exists, or (ii) by reason of his business or financial experience is capable of
evaluating the risks and merits of an investment in the Company and of
protecting his own interests in connection with an investment in the Company, or
(iii) is an officer, director or controlling person, including a promoter, of
the Company. Option Holder understands and acknowledges that the option rights
hereunder and the underlying shares have not been registered under the
Securities Act of 1933, as amended (the "Act") or qualified under any state
securities laws and that, notwithstanding any other provision in this Agreement
to the contrary, the exercise of any rights to purchase shares hereunder is
expressly conditioned upon compliance with the Act and all applicable state
securities laws. In the event that the sale of shares is not registered under
the Act or is not registered or qualified under applicable state securities
laws, but an exemption is available which requires an investment representation
or other representation, the Option Holder shall represent and agree at the time
of exercise that the shares being acquired upon exercising the option rights are
being acquired for investment, and not with a view to the sale or distribution
thereof, and shall make such other representations as are deemed necessary or
appropriate by the Company and its counsel. Certificates evidencing shares
acquired under this Agreement in an unregistered transaction may (as deemed
necessary by counsel to the Company) bear the following restrictive legend (and
such other restrictive legends as are required or deemed advisable under the
provisions of any applicable law):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO OR IN CONNECTION WITH THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
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<PAGE> 6
10. Persons Bound. Subject to the provisions against assignment set
forth herein, and to the provisions of paragraph 6 hereof, this Agreement shall
be binding upon and inure to the benefit of any successor or successors of the
Company, and the personal representatives, heirs, and legatees of the Option
Holder.
11. Right of First Refusal. All shares acquired upon exercise of this
option shall be subject to certain rights of first refusal as specified in the
Company's Bylaws and certificates representing such shares shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON PUBLIC RESALE AND TRANSFER AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AND MAY NOT BE
TRANSFERRED EXCEPT AS SET FORTH IN THE ISSUER'S BYLAWS, A COPY OF WHICH
MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS AND RIGHTS OF FIRST REFUSAL ARE BINDING ON ANY TRANSFEREE OF
THESE SHARES."
12. Tax Liability. THE OPTION HOLDER UNDERSTANDS THAT THIS IS A
NON-QUALIFIED OPTION UNDER FEDERAL TAX LAWS AND THAT OPTION HOLDER MAY SUFFER
ADVERSE CONSEQUENCES AS A RESULT OF OPTION HOLDER'S PURCHASE OR DISPOSITION OF
THE UNDERLYING SHARES. The Option Holder understands that, under current law,
Option Holder will recognize ordinary income in the year or years that the
option rights hereunder are exercised and is advised to seek the advice of his
tax counsel or other tax advisor with respect to the precise treatment of the
exercise of the rights hereunder and the sale of the underlying shares.
13. Miscellaneous.
13.1 This Agreement constitutes the entire contract between the
parties hereto with regard to the services to be provided by Option Holder and
may be modified or amended only by written agreement of the Option Holder and
the Company.
13.2 This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.
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<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in its behalf by one of its officers as of the date set forth below, and the
Option Holder has hereunto set his hand on or as of said date, which date is the
date such option rights were approved for grant by the Board of Directors of the
Company, and by such execution represents that the address set forth below is
his bona fide place or residence and domicile.
Date: 3/31/95 CYBERSOURCE CORPORATION
By: /s/ WILLIAM S. McKIERNAN
------------------------------------
Name: William S. McKiernan
Title: President & CEO
OPTION HOLDER
/s/ JOHN PETTITT
----------------------------------------
(Signature)
Name: John Pettitt
-----------------------------------
Address:________________________________
________________________________________
________________________________________
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<PAGE> 1
EXHIBIT 4.2
CYBERSOURCE CORPORATION
1995 STOCK OPTION PLAN
1. PURPOSE. This 1995 Stock Option Plan(1)("Plan") is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of CyberSource Corporation, a
California corporation (the "Company"). Capitalized terms not previously defined
herein are defined in Section 18 of this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(b) nonqualified stock options ("NQSOs"), as designated at the time of grant.
The shares of stock that may be purchased upon exercise of Options granted under
this Plan (the "Shares") are shares of Common Stock of the Company ("Common
Stock").
3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is 3,000,000 Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Option shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.
4. ELIGIBILITY.
(a) GENERAL RULES OF ELIGIBILITY. Options may be granted to
employees, officers, directors, consultants, independent contractors and
advisors (provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction) of the Company or any Parent, Subsidiary or
Affiliate of the Company. ISOs may be granted only to employees (including
officers and directors who are also employees) of the Company or a Parent or
Subsidiary of the Company. The Committee (as defined in Section 15) in its sole
discretion shall select the recipients of Options ("Optionees"). An Optionee may
be granted more than one Option under this Plan.
(b) COMPANY ASSUMPTION OF OPTIONS. The Company may also, from
time to time, assume outstanding options granted by another company, whether in
- ----------------
(1) Approved by the Company's Board of Directors and shareholders on
January 5, 1995. Amended and Approved by the Company's Board of Directors
and shareholders on July 3, 1996. Sections 3 and 18(c) Amended and Approved
by the Company's Board of Directors on March 17, 1998.
-1-
<PAGE> 2
connection with an acquisition of such other company or otherwise, by either (i)
granting an Option under this Plan in replacement of the option assumed by the
Company, or (ii) treating the assumed option as if it had been granted under
this Plan if the terms of such assumed option could be applied to an option
granted under this Plan. Such assumption shall be permissible if the holder of
the assumed option would have been eligible to be granted an option hereunder if
the other company had applied the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine
whether each Option is to be an ISO or an NQSO, the number of Shares subject to
the Option, the exercise price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
(a) FORM OF OPTION GRANT. Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant (the "Grant") in
substantially the form attached hereto as Exhibit A or such other form as shall
be approved by the Committee.
(b) DATE OF GRANT. The date of grant of an Option shall be the
date on which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee and subject to applicable provisions of the
Code. The Grant representing the Option will be delivered to the Optionee with a
copy of this Plan within a reasonable time after the date of grant; provided,
however, that if, for any reason, including a unilateral decision by the Company
not to execute an agreement evidencing such option, a written Grant is not
executed within sixty (60) days after the date of grant, such option shall be
deemed null and void. No Option shall be exercisable until such Grant is
executed by the Company and the Optionee.
(c) EXERCISE PRICE. The exercise price of an NQSO shall be not
less than eighty-five percent (85%) of the Fair Market Value of the Shares on
the date the Option is granted. The exercise price of an ISO shall be not less
than one hundred percent (100%) of the Fair Market Value of the Shares on the
date the Option is granted. The exercise price of any Option granted to a person
owning more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary of the Company ("Ten
Percent Shareholders") shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Shares on the date the Option is granted.
(d) EXERCISE PERIOD. Options shall be exercisable within the
times or upon the events determined by the Committee as set forth in the Grant;
provided, however, that each Option must become exercisable at a rate of at
least twenty percent (20%) per year over five (5) years from the date the Option
is granted; provided further, that no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is granted; and provided
further, that no ISO granted to a Ten Percent Shareholder
-2-
<PAGE> 3
shall be exercisable after the expiration of five (5) years from the date the
Option is granted.
(e) LIMITATIONS ON OPTIONS. The aggregate Fair Market Value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an Optionee during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Parent or Subsidiary of the Company) shall not exceed one hundred
thousand dollars ($100,000). To the extent that the Fair Market Value of stock
with respect to which ISOs are exercisable for the first time by an Optionee
during any calendar year exceeds $100,000, such Options shall be treated as
NQSOs. The foregoing shall be applied by taking options into account in the
order in which they were granted. In the event that the Code or the regulations
promulgated thereunder are amended after the effective date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit shall be incorporated herein and shall
apply to any Options granted after the effective date of such amendment. In
addition, the number of Shares (i) subject to Options granted under this Plan,
and (ii) issued upon exercise of an Option granted under this Plan for any
Optionee may not exceed, in the aggregate, 500,000. In the event Section 162(m)
of the Code or any proposed or final regulations promulgated thereunder are
amended after the effective date of this Plan to eliminate the requirement of a
per Optionee limit on the number of Options which may be granted, then the
restriction in the immediately preceding sentence shall not apply to any Options
granted after the effective date of such amendment.
(f) OPTIONS NON-TRANSFERABLE. Options granted under this Plan,
and any interest therein, shall not be transferable or assignable by the
Optionee, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Optionee only by the Optionee or
any permitted transferee.
(g) ASSUMED OPTIONS. In the event the Company assumes an option
granted by another company in accordance with Section 4(b) above, the terms and
conditions of such Option shall remain unchanged (except the exercise price and
the number and nature of shares issuable upon exercise, which will be adjusted
appropriately pursuant to Section 424 of the Code and the Treasury Regulations
applicable thereto). In the event the Company elects to grant a new Option
rather than assuming an existing option (as specified in Section 4), such new
Option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.
6. DIRECTOR FORMULA OPTION GRANTS. Non-Employee Directors of the Company
shall receive Options in accordance with the following terms:
(a) FORMULA GRANT. Upon the adoption of this Plan by the Board of
Directors, each Non-Employee Director shall receive a NQSO for 20,000 shares.
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<PAGE> 4
Following the date of adoption of this Plan, upon initial election or
appointment to the Company's Board of Directors, provided that such election or
appointment is not during the Company's last quarter of a year, the elected or
appointed Non-Employee Director shall receive a NQSO for 10,000 shares on the
first business day following the election or appointment of such Non-Employee
Director. Thereafter, annually on January 1, each Non-Employee Director shall
receive a NQSO for 10,000 shares.
(b) TERMS OF GRANT. Options granted pursuant to this Section 6
shall be subject to the following terms:
(i) Exercise Price and Payment Terms. The exercise price
for the Options granted pursuant to this Section 6 shall be equal to one hundred
per cent (100%) of the Fair Market Value of the Shares on the date of the grant,
(excepting Ten Percent Shareholders in respect of whom the exercise price for
the Options granted pursuant to this Section 6 shall be equal to one hundred ten
percent (110%)) payable in cash or otherwise in accordance with the alternatives
specified in clauses (i), (ii), (iv), (v) and (vi) of Section 7(b) of this Plan.
(ii) Term. The term of the Options shall be ten (10) years
from the date the Option is granted (excepting Ten Percent Shareholders in
respect of whom the term of the Options shall be five (5) years).
(iii) Exercise Period. The Options shall be exercisable at
any time on or after nine (9) months after the date of the grant.
(iv) Other Terms. In order to be eligible for the annual
automatic option grants, the Non-Employee Director shall be on the date of
grant, and shall have maintained for the prior year, continuous status as an
active member of the Board of Directors. If, for any reason, a Non-Employee
Director ceases to be a member of the Board, such director shall be ineligible
for that year's grant.
(c) AMENDMENTS. Notwithstanding Section 17 of this plan, the
provisions of this Section 6 shall not be amended more frequently than permitted
for formula plans meeting the conditions of Rule 16b-3 as promulgated by the
Securities and Exchange Commission ("Rule 16b-3").
7. EXERCISE OF OPTIONS.
(a) NOTICES. Options may be exercised only by delivery to the
Company of a written exercise agreement in a form approved by the Committee
(which need not be the same for each Optionee), stating the number of Shares
being purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding the Optionee's investment intent and
access to information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
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<PAGE> 5
(b) PAYMENT. Payment for the Shares may be made in cash (by
check) or, where permitted by law any of the following methods approved by the
Committee at the date of grant of this option, or any combination thereof: (i)
by cancellation of indebtedness of the Company to the Optionee; (ii) by
surrender of shares of Common Stock of the Company already owned by the
Optionee, having a Fair Market Value equal to the exercise price of the Option;
(iii) by waiver of compensation due or accrued to Optionee for services
rendered; (iv) through delivery of a promissory note for the full exercise price
bearing interest at such rate with the note due at such time, on a secured or
unsecured basis, as determined by the Committee; (v) provided that a public
market for the Company's stock exists, through a "same day sale" commitment from
the Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably
elects to exercise the Option and to sell a portion of the Shares so purchased
to pay for the exercise price and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company; (vi) provided that a public market for the Company's stock exists,
through a "margin" commitment from the Optionee and an NASD Dealer whereby the
Optionee irrevocably elects to exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company.
(c) WITHHOLDING TAXES. Prior to issuance of the Shares upon
exercise of an Option, the Optionee shall pay or make adequate provision for any
federal or state withholding obligations of the Company, if applicable. Where
approved by the Committee in its sole discretion, the Optionee may provide for
payment of withholding taxes upon exercise of the Option by requesting that the
Company retain Shares with a Fair Market Value equal to the minimum amount of
taxes required to be withheld. In such case, the Company shall issue the net
number of Shares to the Optionee by deducting the Shares retained from the
Shares exercised. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
in accordance with Section 83 of the Code (the "Tax Date"). All elections by
Optionees to have Shares withheld for this purpose shall be made in writing in a
form acceptable to the Committee and shall be subject to the following
restrictions:
(i) the election must be made on or prior to the
applicable Tax Date;
(ii) once made, the election shall be irrevocable as to
the particular Shares as to which the election is made;
(iii) all elections shall be subject to the consent or
disapproval of the Committee;
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<PAGE> 6
(iv) if the Optionee is an officer or director of the
Company or other person (in each case, an "Insider") whose transactions in the
Company's Common Stock are subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and if the Company is subject to
Section 16(b) of the Exchange Act, the election must comply with Rule 16b-3 as
promulgated by the Securities and Exchange Commission ("Rule 16b 3").
(d) LIMITATIONS ON EXERCISE. Notwithstanding anything else to the
contrary in the Plan or any Grant, no Option may be exercisable later than the
expiration date of the Option.
8. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Grant (a) a right of
first refusal to purchase all Shares that an Optionee (or a subsequent
transferee) may propose to transfer to a third party and/or (b) for so long as
the Company's stock is not publicly traded, a right to repurchase a portion of
or all Shares held by an Optionee upon the Optionee's termination of employment
or service with the Company or its Parent, Subsidiary or Affiliate of the
Company for any reason within a specified time as determined by the Committee at
the time of grant at the higher of (i) the Optionee's original purchase price
or, (ii) the Fair Market Value of such Shares.
9. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall
have the power to modify, extend or renew outstanding Options and to authorize
the grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of the Optionee, impair any rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee shall have the power to reduce the exercise price of
outstanding options; provided, however, that the exercise price per share may
not be reduced below the minimum exercise price that would be permitted under
Section 5(c) of this Plan for options granted on the date the action is taken to
reduce the exercise price.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a shareholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. The Company shall provide to each Optionee,
regardless of the reports provided to shareholders in general, a copy of the
annual financial statements of the Company within a reasonable time frame
following the end of the fiscal year of the Company.
11. NO OBLIGATION TO EMPLOY; NO RIGHT TO FUTURE GRANTS. Nothing in this
Plan or any Option granted under this Plan shall confer on any Optionee any
right (a) to continue in the employ of, or other relationship with, the Company
or any Parent or Subsidiary of the Company or limit in any way the right of the
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<PAGE> 7
Company or any Parent, Subsidiary or Affiliate of the Company to terminate the
Optionee's employment or other relationship at any time, with or without cause,
or (b) to have any Option(s) granted to such Optionee under this Plan, or any
other plan, or to acquire any other securities of the Company, in the future.
12. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per share of such Options
shall be proportionately adjusted, subject to any required action by the Board
or shareholders of the Company and compliance with applicable securities laws;
provided, however, that a fractional share shall not be issued upon exercise of
any Option and any fractions of a Share that would have resulted shall either be
cashed out at Fair Market Value or the number of Shares issuable under the
Option shall be rounded down to the nearest whole number, as determined by the
Committee; and provided further that the exercise price may not be decreased to
below the par value, if any, for the Shares.
13. ASSUMPTION OF OPTIONS BY SUCCESSORS.
(a) In the event of (i) a merger or consolidation in which the
Company is not the surviving corporation (other than a merger or consolidation
with a wholly-owned subsidiary or where there is no substantial change in the
shareholders of the corporation and the Options granted under this Plan are
assumed by the successor corporation), or (ii) the sale of all or substantially
all of the assets of the Company, any or all outstanding Options shall be
assumed by the successor corporation, which assumption shall be binding on all
Optionees, an equivalent option shall be substituted by such successor
corporation or the successor corporation shall provide substantially similar
consideration to Optionees as was provided to shareholders (after taking into
account the existing provisions of the Optionees' options such as the exercise
price and the vesting schedule), and, in the case of outstanding shares subject
to a repurchase option, issue substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Optionee.
(b) In the event such successor corporation, if any, refuses to
assume or substitute, as provided above, pursuant to an event described in
subsection (a) above, or in the event of a dissolution or liquidation of the
Company, the Options shall, notwithstanding any contrary terms in the Grant,
expire on a date specified in a written notice given by the Committee to the
Optionees specifying the terms and conditions of such termination (which date
shall be at least twenty (20) days after the date the Committee gives the
written notice).
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<PAGE> 8
14. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective
on the date that it is adopted by the Board of Directors of the Company (the
"Board"). This Plan shall be approved by the shareholders of the Company, in any
manner permitted by applicable corporate law, within twelve (12) months before
or after the date this Plan is adopted by the Board. Thereafter, after the
Company becomes subject to Section 16(b) of the Exchange Act, the Company will
comply with the requirements of Rule 16b-3 (or its successor) with respect to
shareholder approval.
15. ADMINISTRATION. This Plan may be administered by the Board or a
Committee appointed by the Board (the "Committee"). At all times during which
the Company is registered under the Exchange Act, the Committee shall be
comprised solely of two or more Non-Employee Directors. As used in this Plan,
references to the "Committee" shall mean either such Committee or the Board if
no committee has been established. The interpretation by the Committee of any of
the provisions of this Plan, any related agreements, or any Option granted under
this Plan shall be final and binding upon the Company and all persons having an
interest in any Option or any Shares purchased pursuant to an Option.
16. TERM OF PLAN. Options may be granted pursuant to this Plan from time
to time on or prior to January 4, 2005, a date which is less than ten years
after the earlier of the date of approval of this Plan by the Board or the
shareholders of the Company pursuant to Section 14 of this Plan.
17. AMENDMENT OR TERMINATION OF PLAN. The Board or Committee 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 Option theretofore granted, without his or her
consent, or which, without the approval of the shareholders of the Company
would:
(a) except as provided in Section 12 of the Plan, increase the
total number of Shares reserved for the purposes of the Plan;
(b) extend the duration of the Plan;
(c) extend the period during and over which Options may be
exercised under the Plan; or
(d) change the class of persons eligible to receive Options
granted hereunder (except as may be required to comport with changes in the
Code, ERISA or regulations promulgated thereunder).
Without limiting the foregoing, the Board or Committee may at any time
or from time to time authorize the Company, with the consent of the respective
Optionees, to issue new Options in exchange for the surrender and cancellation
of any or all outstanding Options.
-8-
<PAGE> 9
18. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
have the following meanings:
(a) "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(b) "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(c) "AFFILIATE" means Internet Commerce Services Corporation, a
Delaware corporation, and any corporation that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
(d) "NONEMPLOYEE DIRECTORS" shall have the meaning set forth in
Rule 16b-3(b)(3) as promulgated by the Securities and Exchange Commission under
Section 16(b) of the Exchange Act, as such rule is amended from time to time and
as interpreted by the Securities and Exchange Commission.
(e) "FAIR MARKET VALUE" shall mean the fair market value of the
Shares as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the average
of the last reported bid and asked prices for Common Stock of the Company on the
last trading day prior to the date of determination or, in the event the Common
Stock of the Company is listed on a stock exchange or is a NASDAQ National
Market security, the Fair Market Value shall be the closing price on such
exchange or quotation system on the last trading day prior to the date of
determination.
19. APPLICABLE LAW AND REGULATIONS. The obligations of the Company under
this Plan are subject to the approval of state and federal authorities or
agencies with jurisdiction over the subject matter hereof. The Company shall not
be obligated to issue or deliver shares under this Plan if such issuance or
delivery would violate applicable state or federal securities laws.
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<PAGE> 10
EXHIBIT A
STOCK OPTION GRANT
Optionee: ___________________________________________________
Address: ____________________________________________________
Total Shares Subject to Option: _____________________________
Exercise Price Per Share: ___________________________________
Date of Grant: ______________________________________________
Expiration Date of Option: __________________________________
Type of Stock Option: Incentive: _____________
Nonqualified: _____________
1. GRANT OF OPTION. CyberSource Corporation, a California corporation
(the "Company"), hereby grants to the optionee named above ("Optionee") an
option (this "Option") to purchase the total number of shares of Common Stock
("Common Stock") of the Company set forth above (the "Shares") at the exercise
price per share set forth above (the "Exercise Price"), subject to all of the
terms and conditions of this Grant and the Company's 1995 Stock Option Plan, as
amended to the date hereof (the "Plan"). If designated as an Incentive Stock
Option above, this Option is intended to qualify as an "incentive stock option"
("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Plan.
2. EXERCISE PERIOD OF OPTION
(a) (ISOs). The Optionee has option rights hereunder to purchase
a total of ___________ Shares which shall become exercisable during the time
periods as set forth in this Section 2. On and after ______________ [one year
from date of grant], this Option may be exercised by the Optionee for the
purchase of ________ [fraction] of the Shares covered by this Option (_______
Shares), or any portion thereof. On or after the last day of each full month
following __________ [one year from the date of grant] this Option may be
exercised by the Optionee for the purchase of an additional ________ [fraction]
of the Shares covered by this Option (_________ Shares), or any portion thereof.
Once a portion of this Option becomes exercisable it shall remain exercisable
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 11
until the Expiration Date, or until it terminates pursuant to the terms of
Section 4 hereof, whichever is first to occur.
(b) (NQSOs). The Optionee has option rights hereunder to purchase
a total of ___________ Shares which shall become exercisable by the Optionee at
any time on or after nine (9) months after _____________ . Once a portion of
this Option becomes exercisable it shall remain exercisable until the Expiration
Date, or until it terminates pursuant to the terms of Section 4 hereof,
whichever is first to occur.
(c) The minimum number of Shares that may be purchased upon any
partial exercise of this Option is one hundred (100) shares; and
(d) In all events, this Option shall expire on the Expiration
Date set forth above and must be exercised, if at all, on or before the
Expiration Date. The portion of Shares as to which an Option is exercisable in
accordance with the above schedule as of the applicable dates shall be deemed
"Vested Options."
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless such
exercise is in compliance with the Securities Act of 1933, as amended, and all
applicable state securities laws, as they are in effect on the date of exercise,
and the requirements of any stock exchange or over-the-counter market on which
the Company's Common Stock may be listed or quoted at the time of exercise.
Optionee understands that the Company is under no obligation to register,
qualify or list the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section 4,
this Option shall terminate and may not be exercised if Optionee ceases to be
employed by, or provide services to, the Company or by any Parent or Subsidiary
of the Company (or, in the case of a nonqualified stock option, by or to any
Affiliate of the Company). Optionee shall be considered to be employed by the
Company for all purposes under this Section 4 if Optionee is an officer,
director or full-time employee of the Company or any Parent, Subsidiary or
Affiliate of the Company or if the Committee determines that Optionee is
rendering substantial services as a part-time employee, consultant, contractor
or advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.
The Committee shall have discretion to determine whether Optionee has ceased to
be employed by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated (the "Termination
Date").
(a) TERMINATION GENERALLY. If Optionee ceases to be employed by
the Company and all Parents, Subsidiaries or Affiliates of the Company for any
reason except death or disability, the Vested Options, to the extent (and only
to the extent) exercisable by Optionee on the Termination Date, may be exercised
by Optionee, but only within thirty (30) days after the Termination Date;
provided that this Option may not be exercised in any event after the Expiration
Date.
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 12
(b) DEATH OR DISABILITY. If Optionee's employment with the
Company and all Parents, Subsidiaries and Affiliates of the Company is
terminated because of the death of Optionee or the disability of Optionee,
including, without limitation, such disability as defined in Section 22(e)(3) of
the Code, the Vested Options, to the extent (and only to the extent) exercisable
by Optionee on the Termination Date, may be exercised by Optionee (or Optionee's
legal representative), but only within twelve (12) months after the Termination
Date; provided that this Option may not be exercised in any event later than the
Expiration Date.
(c) NO RIGHT TO EMPLOYMENT. Nothing in the Plan or this Grant
shall confer on Optionee any right to continue in the employ of, or other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate Optionee's employment or other
relationship at any time, with or without cause.
5. MANNER OF EXERCISE.
(a) EXERCISE AGREEMENT. This Option shall be exercisable by
delivery to the Company of an executed written Stock Option Exercise Agreement
in the form attached hereto as Exhibit 1, or in such other form as may be
approved by the Company, which shall set forth Optionee's election to exercise
some or all of this Option, the number of Shares being purchased, any
restrictions imposed on the Shares and such other representations and agreements
as may be required by the Company to comply with applicable securities laws.
(b) EXERCISE PRICE. The Stock Option Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being
purchased. Payment for the Shares may be made in cash (by check), or, where
permitted by law, by any of the following methods approved by the Committee at
the date of grant of this Option, or any combinations thereof:
[ ] (i) by cancellation of indebtedness of the Company to
the Optionee;
[ ] (ii) by surrender of shares of Common Stock of the
Company already owned by the Optionee, or which were obtained by Optionee in the
open public market, having a Fair Market Value equal to the exercise price of
the Option;
[ ] (iii) by waiver of compensation due or accrued to
Optionee for services rendered;
[ ] (iv) provided that a public market for the Company's
stock exists, through a "same day sale" commitment from the Optionee and a
broker dealer that is a member of the National Association of Securities
Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the exercise price and whereby the NASD Dealer
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 13
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or
[ ] (v) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise this option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company.
(c) Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. The Optionee
may provide for payment of Optionee's minimum statutory withholding taxes upon
exercise of the Option by requesting that the Company retain Shares with a Fair
Market Value equal to the minimum amount of taxes required to be withheld, all
as set forth in Section 6(c) of the Plan. In such case, the Company shall issue
the net number of Shares to the Optionee by deducting the Shares retained from
the Shares exercised.
(d) Issuance of Shares. Provided that such Stock Option Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall cause the Shares to be issued in the name of Optionee
or Optionee's legal representative.
6. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after exercise of the ISO with respect to the Shares to be sold or disposed
of, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
the Optionee from any such early disposition by payment in cash or out of the
current wages or other earnings payable to the Optionee.
7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by Optionee or any permitted
transferee. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of the Optionee.
8. REPURCHASE OF OPTIONS. The Company and the Company's shareholders
have certain rights of first refusal that are set forth in Article X of the
Company's Bylaws. A copy of Article X of the Bylaws is available upon request
from the Secretary of the Company. The Company reserves to itself (a) the right
of first refusal to purchase all Shares that Optionee (or a subsequent
transferee) may propose to transfer to a third party
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 14
and/or (b) for so long as the Company's stock is not publicly traded, the right
to repurchase within one year of the Optionee's termination of employment or
service with the Company or its Parent, Subsidiary or Affiliate of the Company,
a portion of or all Shares held by an Optionee at the higher of (i) the
Optionee's original purchase price or, (ii) the Fair Market Value of such
Shares.
9. FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of
the date this form of Option Grant was adopted of some of the federal tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of this
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment to
alternative minimum taxable income for federal income tax purposes and may
subject the Optionee to an alternative minimum tax liability in the year of
exercise.
(b) Exercise of Nonqualified Stock Option. If this Option does
not qualify as an ISO (a "Nonqualified Stock Option"), there may be a regular
federal income tax liability upon the exercise of the Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. The Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) Disposition of Shares. In the case of a nonqualified stock
option, if Shares are held for at least one year before disposition, any gain on
disposition of the Shares will be treated as long-term capital gain for federal
and California income tax purposes. In the case of an ISO, if Shares are held
for at least one year after the date of exercise and at least two years after
the Date of Grant, any gain on disposition of the Shares will be treated as
long-term capital gain for federal and California income tax purposes. If Shares
acquired pursuant to an ISO are disposed of within such one-year or two-year
periods (a "disqualifying disposition"), gain on such disqualifying disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price (the "Spread"). Any gain in excess of the
Spread shall be treated as capital gain.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Company's Board of
Directors or the Committee, which shall review such dispute at its next regular
meeting. The
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 15
resolution of such a dispute by the Board or Committee shall be final and
binding on the Company and on Optionee
11. ENTIRE AGREEMENT. The Plan and the Stock Option Exercise Agreement
attached hereto as Exhibit 1 are incorporated herein by this reference. This
Grant, the Plan and the Stock Option Exercise Agreement constitute the entire
agreement of the parties hereto and supersede all prior undertakings and
agreements with respect to the subject matter hereof.
BY:______________________________
NAME:___________________________
TITLE:_____________________________
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 16
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan,
represents that Optionee has read and understands the terms and provisions
thereof, and accepts this Option subject to all the terms and conditions of the
Plan and this Stock Option Grant. Optionee acknowledges that there may be
adverse tax consequences upon exercise of this Option or disposition of the
Shares and that Optionee should consult a tax adviser prior to such exercise or
disposition.
OPTIONEE
-----------------------------------
Signature
-----------------------------------
Print Name
Date:_______________________________
Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 17
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
EXHIBIT 1
TO STOCK OPTION GRANT
STOCK OPTION EXERCISE AGREEMENT
This Agreement is made this _____ day of ________________, 19___
between ___________________, a California corporation (the "Company"), and the
optionee named below ("Optionee").
Optionee: _____________________________________________________
Social Security Number: _______________________________________
Address: ______________________________________________________
Number of Shares Purchased: ___________________________________
Price Per Share: ______________________________________________
Aggregate Purchase Price: _____________________________________
Date of Option Grant: _________________________________________
Type of Stock Option: Incentive: _______________
Nonqualified: _______________
Optionee hereby delivers to the Company the Aggregate Purchase
Price, to the extent permitted in the Option Grant, as follows [check as
applicable and complete]:
[ ] cash (check) in the amount of $___________, receipt of which is
acknowledged by the Company;
[ ] by delivery of ____________ fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Optionee and owned free and
clear of all liens, claims, encumbrances or security interests, valued
at the current fair market value of $_________ per share (determined in
accordance with the Plan);
[ ] by the waiver hereby of compensation due or accrued for services
rendered in the amount of $______________;
[ ] by delivery of a "same day sale" commitment from the Optionee and a
broker dealer that is a member of the National Association of Securities
Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects
to exercise the Option and to sell a portion of the Shares so purchased
to pay for the exercise price of $_________ and whereby the NASD Dealer
irrevocably commits upon receipt of
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 18
such Shares to forward the exercise price directly to the Company (this
payment method may be used only if a public market for the Company's
stock exists); or
[ ] by delivery of a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise this option
and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price of $_________
directly to the Company (this payment method may be used only if a
public market for the Company's stock exists).
The Company and Optionee hereby agree as follows:
1. PURCHASE OF SHARES. On this date and subject to the terms and
conditions of this Agreement, Optionee hereby exercises the Stock Option Grant
between the Company and Optionee dated as of the Date of Option Grant set forth
above (the "Grant"), with respect to the Number of Shares Purchased set forth
above of the Company's Common Stock (the "Shares") at an aggregate purchase
price equal to the Aggregate Purchase Price set forth above (the "Purchase
Price") and the Price per Share set forth above (the "Purchase Price Per
Share"). The term "Shares" refers to the Shares purchased under this Agreement
and includes all securities received (a) in replacement of the Shares, and (b)
as a result of stock dividends or stock splits in respect of the Shares.
Capitalized terms used herein that are not defined herein have the definitions
ascribed to them in the Plan or the Grant.
2. REPRESENTATIONS OF PURCHASER. Optionee represents and warrants to the
Company that:
(a) Optionee has received, read and understood the Plan and the
Grant and agrees to abide by and be bound by their terms and conditions.
(b) Optionee is capable of evaluating the merits and risks of
this investment, has the ability to protect Optionee's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.
(c) Optionee is fully aware of (i) the highly speculative nature
of the investment in the Shares; (ii) the financial hazards involved; and (iii)
the lack of liquidity of the Shares and the restrictions on transferability of
the Shares (e.g., that Optionee may not be able to sell or dispose of the Shares
or use them as collateral for loans).
(d) Optionee is purchasing the Shares for Optionee's own account
for investment purposes only and not with a view to, or for sale in connection
with, a
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 19
distribution of the Shares within the meaning of the Securities Act of 1933, as
amended (the "1933 Act").
(e) Optionee has no present intention of selling or otherwise
disposing of all or any portion of the Shares.
3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and
acknowledges that the Shares have not been registered under the 1933 Act and
that, notwithstanding any other provision of the Grant to the contrary, the
exercise of any rights to purchase any Shares is expressly conditioned upon
compliance with the 1933 Act and all applicable state securities laws. Optionee
agrees to cooperate with the Company to ensure compliance with such laws. The
Shares are being issued under the 1933 Act pursuant to [THE COMPANY WILL CHECK
THE APPLICABLE BOX]:
[ ] the exemption provided by Rule 701;
[ ] the exemption provided by Rule 504;
[ ] Section 4(2) of the 1933 Act;
[ ] other:
4. Federal Restrictions on Transfer. Optionee understands that the
Shares must be held indefinitely unless they are registered under the 1933 Act
or unless an exemption from such registration is available and that the
certificate(s) representing the Shares will bear a legend to that effect.
Optionee understands that the Company is under no obligation to register the
Shares, and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.
(a) Rule 144. Optionee has been advised that Rule 144 promulgated
under the 1933 Act, which permits certain resales or unregistered securities, is
not presently available with respect to the Shares and, in any event, requires
that a minimum of one (1) year elapse between the date of acquisition of Shares
from the Company or an affiliate of the Company and any resale under Rule 144.
Prior to an initial public offering of the Company's stock, "nonaffiliates"
(i.e. persons other than officers, directors and major shareholders of the
Company) may resell only under Rule 144(k), which requires that a minimum of two
(2) years elapse between the date of acquisition of Shares from the Company or
an affiliate of the Company and any resale under Rule 144(k). Rule 144(k) is not
available to affiliates.
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 20
(b) Rule 701. If the exemption relied upon for exercise of the
Shares is Rule 701, the Shares will become freely transferable, subject to
limited conditions regarding the method of sale, by nonaffiliates ninety (90)
days after the first sale of common stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission (the "SEC"), subject to any lengthier market
standoff agreement contained in this Agreement or entered into by Optionee.
Affiliates must comply with the provisions (other than the holding period
requirements) of Rule 144.
5. State Law Restrictions on Transfer. Optionee understands that
transfer of the Shares may be restricted by applicable state securities laws,
and that the certificate(s) representing the Shares may bear a legend or legends
to that effect.
6. Market Standoff Agreement. Optionee agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Optionee will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for a
period of time (not to exceed one hundred eighty (180) days) from the effective
date of such registration as the Company or the underwriters may specify for
employee shareholders generally.
7. Legends. Optionee understands and agrees that the certificate(s)
representing the Shares will bear a legend in substantially the following forms,
in addition to any other legends required by applicable law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT'), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE SECURITIES ACT OR, IN THE OPINION OF COUNSEL,
PREPARED AT ISSUER'S REQUEST AND EXPENSE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH."
8. Stop-Transfer Notices. Optionee understands and agrees that, in order
or ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 21
9. Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.
10. Repurchase Options. The Company and the Company's shareholders have
certain rights of first refusal that are set forth in Article X of the Company's
Bylaws. A copy of Article X of the Bylaws is available upon request from the
Secretary of the Company. The Company reserves to itself (a) the right of first
refusal to purchase all Shares that Optionee (or a subsequent transferee) may
propose to transfer to a third party and/or (b) for so long as the Company's
stock is not publicly traded, the right to repurchase within one year of the
Optionee's termination of employment or service with the Company or its Parent,
Subsidiary or Affiliate, a portion of or all Shares held by an Optionee at the
higher of (i) the Optionee's original purchase price or, (ii) the Fair Market
Value of such Shares.
11. Entire Agreement. The Plan and Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and are governed by California law except for that body of law
pertaining to conflict of laws.
Submitted By: Accepted By:
OPTIONEE:____________________________ _______________________________
[print name]
_____________________________________ By: ___________________________
[signature]
Its:___________________________
Dated: ______________________________ Dated: ________________________
Address: ____________________________
____________________________
____________________________
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1995 Stock Option Plan
<PAGE> 1
EXHIBIT 4.3
CYBERSOURCE CORPORATION
1998 STOCK OPTION PLAN
1. PURPOSE. This 1998 Stock Option Plan(1) ("Plan") is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of CyberSource Corporation, a
California corporation (also known as software.net Corporation, the "Company").
Capitalized terms not previously defined herein are defined in Section 18 of
this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(b) nonqualified stock options ("NQSOs"), as designated at the time of grant.
The shares of stock that may be purchased upon exercise of Options granted under
this Plan (the "Shares") are shares of Common Stock of the Company ("Common
Stock").
3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is 2,000,000 Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Option shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.
4. ELIGIBILITY.
(a) GENERAL RULES OF ELIGIBILITY. Options may be granted to
employees, officers, directors, consultants, independent contractors and
advisors (provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction) of the Company or any Parent, Subsidiary or
Affiliate of the Company. ISOs may be granted only to employees (including
officers and directors who are also employees) of the Company or a Parent or
Subsidiary of the Company. The Committee (as defined in Section 15) in its sole
discretion shall select the recipients of Options ("Optionees"). An Optionee may
be granted more than one Option under this Plan.
(b) COMPANY ASSUMPTION OF OPTIONS. The Company may also, from time to
time, assume outstanding options granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (i)
granting an Option under this Plan in replacement of the Option assumed by the
Company, or (ii) treating the assumed option as if it had been granted under
this Plan if the terms of such
- -----------
(1) Approved by the Company's Board of Directors and shareholders on
April 4, 1998.
-1-
<PAGE> 2
assumed option could be applied to an Option granted under this Plan. Such
assumption shall be permissible if the holder of the assumed option would have
been eligible to be granted an Option hereunder if the other company had applied
the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine
whether each Option is to be an ISO or an NQSO, the number of Shares subject to
the Option, the exercise price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
(a) FORM OF OPTION GRANT. Each Option granted under this Plan shall
be evidenced by a written Stock Option Grant (the "Grant") in substantially the
form attached hereto as Exhibit A or such other form as shall be approved by the
Committee.
(b) DATE OF GRANT. The date of grant of an Option shall be the date
on which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee and subject to applicable provisions of the
Code. The Grant representing the Option will be delivered to the Optionee with a
copy of this Plan within a reasonable time after the date of grant; provided,
however, that if, for any reason, including a unilateral decision by the Company
not to execute an agreement evidencing such option, a written Grant is not
executed within sixty (60) days after the date of grant, such option shall be
deemed null and void (at the discretion of the Company). No Option shall be
exercisable until such Grant is executed by the Company and the Optionee.
(c) EXERCISE PRICE. The exercise price of an NQSO shall be not less
than eighty-five percent (85%) of the Fair Market Value of the Shares on the
date the Option is granted. The exercise price of an ISO shall be not less than
one hundred percent (100%) of the Fair Market Value of the Shares on the date
the Option is granted. The exercise price of any Option granted to a person
owning more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary of the Company ("Ten
Percent Shareholders") shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Shares on the date the Option is granted.
(d) EXERCISE PERIOD. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Grant; provided,
however, that each Option must become exercisable at a rate of at least twenty
percent (20%) per year over five (5) years from the date the Option is granted;
provided further, that no Option shall be exercisable after the expiration of
ten (10) years from the date the Option is granted; and provided further, that
no ISO granted to a Ten Percent Shareholder shall be exercisable after the
expiration of five (5) years from the date the Option is granted.
-2-
<PAGE> 3
(e) LIMITATIONS ON OPTIONS. The aggregate Fair Market Value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an Optionee during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Parent or Subsidiary of the Company) shall not exceed one hundred
thousand dollars ($100,000). To the extent that the Fair Market Value of stock
with respect to which ISOs are exercisable for the first time by an Optionee
during any calendar year exceeds $100,000, the Options for the amount in excess
of $100,000 shall be treated as not being ISOs and shall be treated as NQSOs.
The foregoing shall be applied by taking Options into account in the order in
which they were granted. In the event that the Code or the regulations
promulgated thereunder are amended after the effective date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit shall be incorporated herein and shall
apply to any Options granted after the effective date of such amendment. The
foregoing provisions of this Plan notwithstanding, no Optionee shall be granted
Options under this Plan in any one fiscal year which in the aggregate shall
permit the Optionee to purchase more than 1,000,000 shares of Common Stock,
provided that a newly-hired Optionee may in addition receive a one-time Option
grant to purchase up to an additional 500,000 shares of Common Stock. To the
extent the Board of Directors of the Company determines that limitations such as
the provisions of this Section 5(e) are no longer required to preserve the
deductibility for the Company of option-related compensation under Section
162(m) of the Code, the Board of Directors may modify or eliminate the
limitations contained in this Section 5(e).
(f) OPTIONS NON-TRANSFERABLE. Options granted under this Plan, and
any interest therein, shall not be transferable or assignable by the Optionee,
and may not be made subject to execution, attachment or similar process,
otherwise than by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionee only by the Optionee or any
permitted transferee.
(g) ASSUMED OPTIONS. In the event the Company assumes an option
granted by another company in accordance with Section 4(b) above, the terms and
conditions of such option shall remain unchanged (except the exercise price and
the number and nature of shares issuable upon exercise, which will be adjusted
appropriately pursuant to Section 424 of the Code and the Treasury Regulations
applicable thereto). In the event the Company elects to grant a new Option
rather than assuming an existing option (as specified in Section 4), such new
Option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.
(h) TERMINATION OF OPTIONS. Except as otherwise provided in an
Optionee's Grant, Options granted under the Plan shall terminate and may not be
exercised if the Optionee ceases to be employed by, or provide services to, the
Company or any Parent or Subsidiary of the Company (or, in the case of a NQSO,
by or to any Affiliate of the Company). An Optionee shall be considered to be
employed by the
-3-
<PAGE> 4
Company for all purposes under this Section 5(h) if the Optionee is an officer,
director or full-time employee of the Company or any Parent, Subsidiary or
Affiliate of the Company or if the Committee determines that the Optionee is
rendering substantial services as a part-time employee, consultant, contractor
or advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.
The Committee shall have discretion to determine whether an Optionee has ceased
to be employed by the Company or any Parent, Subsidiary or Affiliate of the
Company and the effective date on which such employment terminated (the
"Termination Date").
(i) TERMINATION GENERALLY. If an Optionee ceases to be employed
by the Company and all Parents, Subsidiaries or Affiliates of the
Company for any reason except death or disability, the Options which are
then exercisable (and only to the extent exercisable)(the "Vested
Options") by the Optionee on the Termination Date, may be exercised by
the Optionee, but only within three months after the Termination Date or
such shorter period of time as provided in the Grant, but in no event
less than thirty (30) days; provided that Options may not be exercised
in any event after the Expiration Date.
(ii) DEATH OR DISABILITY. If an Optionee's employment with the
Company and all Parents, Subsidiaries and Affiliates of the Company is
terminated because of the death of the Optionee or the permanent and
total disability of the Optionee within the meaning of Section 22(e)(3)
of the Code, the Vested Options, as determined on the Termination Date,
may be exercised by the Optionee (or the Optionee's legal
representative), but only within twelve (12) months after the
Termination Date; and provided further that Options may not be exercised
in any event later than the Expiration Date. If an Optionee's employment
with the Company and all Parents, Subsidiaries and Affiliates of the
Company is terminated because of a disability of the Optionee which is
not permanent and total within the meaning of Section 22(e)(3) of the
Code, the Vested Options, as determined on the Termination Date, may be
exercised by the Optionee or the Optionee's legal representative, but
only within six (6) months after the Termination Date; and provided
further that Options may not be exercised in any event later than the
Expiration Date.
6. DIRECTOR FORMULA OPTION GRANTS. In addition to discretionary grants
of Options granted pursuant to other terms of this Plan, Non-Employee Directors
of the Company shall receive Options in accordance with the following terms:
(a) FORMULA GRANT. Following the date of adoption of this Plan, upon
initial election or appointment to the Company's Board of Directors, provided
that such election or appointment is not during the Company's last quarter of a
year, the elected or appointed Non-Employee Director shall receive a NQSO for
10,000 shares on the first business day following the election or appointment of
such Non-Employee Director.
-4-
<PAGE> 5
Thereafter, annually on January 1, each Non-Employee Director shall receive a
NQSO for 10,000 shares.
(b) TERMS OF GRANT. Options granted pursuant to this Section 6 shall
be subject to the following terms:
(i) Exercise Price and Payment Terms. The exercise price for the
Options granted pursuant to this Section 6 shall be equal to one hundred per
cent (100%) of the Fair Market Value of the Shares on the date of the grant,
(excepting Ten Percent Shareholders in respect of whom the exercise price for
the Options granted pursuant to this Section 6 shall be equal to one hundred ten
percent (110%)) payable in cash or otherwise in accordance with the alternatives
specified in clauses (i), (ii), (iv), (v) and (vi) of Section 7(b) of this Plan.
(ii) Term. The term of the Options shall be ten (10) years from
the date the Option is granted (excepting Ten Percent Shareholders in respect of
whom the term of the Options shall be five (5) years).
(iii) Exercise Period. The Options shall be exercisable at any
time on or after nine (9) months after the date of the grant.
(iv) Other Terms. In order to be eligible for the annual
automatic option grants, the Non-Employee Director shall be on the date of
grant, and shall have maintained for the prior year, continuous status as an
active member of the Board of Directors. If, for any reason, a Non-Employee
Director ceases to be a member of the Board, such director shall be ineligible
for that year's grant.
7. EXERCISE OF OPTIONS.
(a) NOTICES. Options may be exercised only by delivery to the Company
of a written exercise agreement in a form approved by the Committee (which need
not be the same for each Optionee), stating the number of Shares being
purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding the Optionee's investment intent and
access to information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
(b) PAYMENT. Payment for the Shares may be made in cash (by check)
or, where permitted by law any of the following methods approved by the
Committee at the date of grant of this option, or any combination thereof: (i)
by cancellation of indebtedness of the Company to the Optionee; (ii) by
surrender of shares of Common Stock of the Company already owned by the
Optionee, having a Fair Market Value equal to the exercise price of the Option;
(iii) by waiver of compensation due or accrued to Optionee for services
rendered; (iv) through delivery of a promissory note for the full
-5-
<PAGE> 6
exercise price bearing interest at such rate with the note due at such time, on
a secured or unsecured basis, as determined by the Committee; (v) provided that
a public market for the Company's stock exists, through a "same day sale"
commitment from the Optionee and a broker-dealer that is a member of the
National Association of Securities Dealers, Inc. (an "NASD Dealer") whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; and/or (vi) provided that a public market for the
Company's stock exists, through a "margin" commitment from the Optionee and an
NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and
to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company.
(c) WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise
of an Option, the Optionee shall pay or make adequate provision for any federal
or state withholding obligations of the Company, if applicable. Where approved
by the Committee in its sole discretion, the Optionee may provide for payment of
withholding taxes upon exercise of the Option by requesting that the Company
retain Shares with a Fair Market Value equal to the minimum amount of taxes
required to be withheld. In such case, the Company shall issue the net number of
Shares to the Optionee by deducting the Shares retained from the Shares
exercised. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
in accordance with Section 83 of the Code (the "Tax Date"). All elections by
Optionees to have Shares withheld for this purpose shall be made in writing in a
form acceptable to the Committee and shall be subject to the following
restrictions:
(i) the election must be made on or prior to the applicable Tax
Date;
(ii) once made, the election shall be irrevocable as to the
particular Shares as to which the election is made;
(iii) all elections shall be subject to the consent or
disapproval of the Committee;
(iv) if the Optionee is an officer or director of the Company or
other person (in each case, an "Insider") whose transactions in the Company's
Common Stock are subject to Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and if the Company is subject to
Section 16(b) of the Exchange Act, the election must comply with Rule 16b-3 as
promulgated by the Securities and Exchange Commission ("Rule 16b 3").
-6-
<PAGE> 7
(d) LIMITATIONS ON EXERCISE. Notwithstanding anything else to the
contrary in the Plan or any Grant, no Option may be exercisable later than the
expiration date of the Option.
8. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Grant (a) a right of
first refusal to purchase all Shares that an Optionee (or a subsequent
transferee) may propose to transfer to a third party and/or (b) for so long as
the Company's stock is not publicly traded, a right to repurchase a portion of
or all Shares held by an Optionee upon the Optionee's termination of employment
or service with the Company or its Parent, Subsidiary or Affiliate of the
Company for any reason within a specified time as determined by the Committee at
the time of grant at the higher of (i) the Optionee's original purchase price
or, (ii) the Fair Market Value of such Shares.
9. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall
have the power to modify, extend or renew outstanding Options and to authorize
the grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of the Optionee, impair any rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee shall have the power to reduce the exercise price of
outstanding options; provided, however, that the exercise price per share may
not be reduced below the minimum exercise price that would be permitted under
Section 5(c) of this Plan for options granted on the date the action is taken to
reduce the exercise price.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a shareholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. The Company shall provide to each Optionee,
regardless of the reports provided to shareholders in general, a copy of the
annual financial statements of the Company within a reasonable time frame
following the end of the fiscal year of the Company.
11. NO OBLIGATION TO EMPLOY; NO RIGHT TO FUTURE GRANTS. Nothing in this
Plan or any Option granted under this Plan shall confer on any Optionee any
right (a) to continue in the employ of, or other relationship with, the Company
or any Parent or Subsidiary of the Company or limit in any way the right of the
Company or any Parent, Subsidiary or Affiliate of the Company to terminate the
Optionee's employment or other relationship at any time, with or without cause,
or (b) to have any Option(s) granted to such Optionee under this Plan, or any
other plan, or to acquire any other securities of the Company, in the future.
12. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend,
-7-
<PAGE> 8
stock split, reverse stock split, combination, reclassification or similar
change in the capital structure of the Company without consideration, or if a
substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per share of such Options
shall be proportionately adjusted, subject to any required action by the Board
or shareholders of the Company and compliance with applicable securities laws;
provided, however, that a fractional share shall not be issued upon exercise of
any Option and any fractions of a Share that would have resulted shall either be
cashed out at Fair Market Value or the number of Shares issuable under the
Option shall be rounded down to the nearest whole number, as determined by the
Committee; and provided further that the exercise price may not be decreased to
below the par value, if any, for the Shares.
13. ASSUMPTION OF OPTIONS BY SUCCESSORS.
(a) In the event of (i) a merger or consolidation as a result of
which the holders of voting securities of the Company prior to the transaction
hold shares representing less than 51% of the voting securities of the Company
after giving effect to the transaction (other than a merger or consolidation
with a wholly-owned subsidiary or where there is no substantial change in the
shareholders of the corporation and the Options granted under this Plan are
assumed by the successor corporation), or (ii) the sale of all or substantially
all of the assets of the Company, any or all outstanding Options shall be
assumed by the successor corporation, which assumption shall be binding on all
Optionees, an equivalent option shall be substituted by such successor
corporation or the successor corporation shall provide substantially similar
consideration to Optionees as was provided to shareholders (after taking into
account the existing provisions of the Optionees' options such as the exercise
price and the vesting schedule), and, in the case of outstanding shares subject
to a repurchase option, issue substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Optionee.
(b) In the event such successor corporation, if any, refuses to
assume or substitute, as provided above, pursuant to an event described in
subsection (a) above, or in the event of a dissolution or liquidation of the
Company, the Options shall, notwithstanding any contrary terms in the Grant,
expire on a date specified in a written notice given by the Committee to the
Optionees specifying the terms and conditions of such termination (which date
shall be at least twenty (20) days after the date the Committee gives the
written notice).
14. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective
on the date that it is adopted by the Board of Directors of the Company (the
"Board"). This Plan shall be approved by the shareholders of the Company, in any
manner permitted by applicable corporate law, within twelve (12) months before
or after the date this Plan is adopted by the Board.
-8-
<PAGE> 9
15. ADMINISTRATION. This Plan may be administered by the Board or a
Committee appointed by the Board (the "Committee"). At all times during which
the Company is registered under the Exchange Act, the Committee shall be
comprised solely of two or more Non-Employee Directors. As used in this Plan,
references to the "Committee" shall mean either such Committee or the Board if
no committee has been established. The interpretation by the Committee of any of
the provisions of this Plan, any related agreements, or any Option granted under
this Plan shall be final and binding upon the Company and all persons having an
interest in any Option or any Shares purchased pursuant to an Option.
16. TERM OF PLAN. Options may be granted pursuant to this Plan from time
to time on or prior to April 3, 2008, a date which is less than ten years after
the earlier of the date of approval of this Plan by the Board or the
shareholders of the Company pursuant to Section 14 of this Plan.
17. AMENDMENT OR TERMINATION OF PLAN. The Board or Committee 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 Option theretofore granted, without his or her
consent, or which, without the approval of the shareholders of the Company
would:
(a) except as provided in Section 12 of the Plan, increase the total
number of Shares reserved for the purposes of the Plan;
(b) extend the duration of the Plan;
(c) extend the period during and over which Options may be exercised
under the Plan; or
(d) change the class of persons eligible to receive Options granted
hereunder (except as may be required to comport with changes in the Code, ERISA
or regulations promulgated thereunder).
Without limiting the foregoing, the Board or Committee may at any time
or from time to time authorize the Company, with the consent of the respective
Optionees, to issue new Options in exchange for the surrender and cancellation
of any or all outstanding Options.
18. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
have the following meanings:
(a) "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty
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<PAGE> 10
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
(b) "SUBSIDIARY" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(c) "AFFILIATE" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
(d) "NON-EMPLOYEE DIRECTORS" shall have the meaning set forth in
Rule 16b-3(b)(3) as promulgated by the Securities and Exchange Commission under
Section 16(b) of the Exchange Act, as such rule is amended from time to time and
as interpreted by the Securities and Exchange Commission.
(e) "FAIR MARKET VALUE" shall mean the fair market value of the
Shares as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the average
of the last reported bid and asked prices for Common Stock of the Company on the
last trading day prior to the date of determination or, in the event the Common
Stock of the Company is listed on a stock exchange or is a Nasdaq National
Market security, the Fair Market Value shall be the closing price on such
exchange or quotation system on the last trading day prior to the date of
determination.
19. APPLICABLE LAW AND REGULATIONS. The obligations of the Company under
this Plan are subject to the approval of state and federal authorities or
agencies with jurisdiction over the subject matter hereof. The Company shall not
be obligated to issue or deliver shares under this Plan if such issuance or
delivery would violate applicable state or federal securities laws.
-10-
<PAGE> 11
EXHIBIT A
STOCK OPTION GRANT
Optionee: ______________________________________________________________
Address: _______________________________________________________________
Total Shares Subject to Option: ________________________________________
Exercise Price Per Share: ______________________________________________
Date of Grant: _________________________________________________________
Expiration Date of Option: _____________________________________________
Type of Stock Option: Incentive: ___________________
Nonqualified: ________________
1. GRANT OF OPTION. CyberSource Corporation, a California corporation
(also known as software.net Corporation, the "Company"), hereby grants to the
optionee named above ("Optionee") an option (this "Option") to purchase the
total number of shares of Common Stock ("Common Stock") of the Company set forth
above (the "Shares") at the exercise price per share set forth above (the
"Exercise Price"), subject to all of the terms and conditions of this Grant and
the Company's 1998 Stock Option Plan, as amended to the date hereof (the
"Plan"). If designated as an Incentive Stock Option above, this Option is
intended to qualify as an "incentive stock option" ("ISO") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings ascribed to them in the Plan.
2. EXERCISE PERIOD OF OPTION
(a) (ISOS). The Optionee has option rights hereunder to purchase a
total of ___________ Shares which shall become exercisable during the time
periods as set forth in this Section 2. On and after ______________ [one year
from date of grant], this Option may be exercised by the Optionee for the
purchase of ________ [fraction] of the Shares covered by this Option (_______
Shares), or any portion thereof. On or after the last day of each full month
following __________ [one year from the date of grant] this Option may be
exercised by the Optionee for the purchase of an additional ________ [fraction]
of the Shares covered by this Option (_________ Shares), or any portion
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 12
thereof. Once a portion of this Option becomes exercisable it shall remain
exercisable until the Expiration Date, or until it terminates pursuant to the
terms of Section 4 hereof, whichever is first to occur.
(b) (NQSOS). The Optionee has option rights hereunder to purchase a
total of ___________ Shares which shall become exercisable by the Optionee at
any time on or after nine (9) months after _____________ . Once a portion of
this Option becomes exercisable it shall remain exercisable until the Expiration
Date, or until it terminates pursuant to the terms of Section 4 hereof,
whichever is first to occur.
(c) The minimum number of Shares that may be purchased upon any
partial exercise of the Option is one hundred (100) shares; and
(d) This Option shall expire on the Expiration Date set forth above
and must be exercised, if at all, on or before the Expiration Date. The portion
of Shares as to which an Option is exercisable in accordance with the above
schedule as of the applicable dates shall be deemed "Vested Options."
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless such
exercise is in compliance with the Securities Act of 1933, as amended, and all
applicable state securities laws, as they are in effect on the date of exercise,
and the requirements of any stock exchange or over-the-counter market on which
the Company's Common Stock may be listed or quoted at the time of exercise.
Optionee understands that the Company is under no obligation to register,
qualify or list the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section 4,
this Option shall terminate and may not be exercised if Optionee ceases to be
employed by, or provide services to, the Company or by any Parent or Subsidiary
of the Company (or, in the case of a nonqualified stock option, by or to any
Affiliate of the Company). Optionee shall be considered to be employed by the
Company for all purposes under this Section 4 if Optionee is an officer,
director or full-time employee of the Company or any Parent, Subsidiary or
Affiliate of the Company or if the Committee determines that Optionee is
rendering substantial services as a part-time employee, consultant, contractor
or advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.
The Committee shall have discretion to determine whether Optionee has ceased to
be employed by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated (the "Termination
Date").
(a) TERMINATION GENERALLY. If Optionee ceases to be employed by
the Company and all Parents, Subsidiaries or Affiliates of the Company for any
reason except death or disability, the Vested Options, to the extent (and only
to the extent) exercisable by Optionee on the Termination Date, may be exercised
by Optionee, but
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 13
only within thirty (30) days after the Termination Date; provided that this
Option may not be exercised in any event after the Expiration Date.
(b) DEATH OR DISABILITY. If Optionee's employment with the Company
and all Parents, Subsidiaries and Affiliates of the Company is terminated
because of the death of Optionee or the disability of Optionee, including,
without limitation, such disability as defined in Section 22(e)(3) of the Code,
the Vested Options, to the extent (and only to the extent) exercisable by
Optionee on the Termination Date, may be exercised by Optionee (or Optionee's
legal representative), but only within twelve (12) months after the Termination
Date; provided that this Option may not be exercised in any event later than the
Expiration Date.
(c) NO RIGHT TO EMPLOYMENT. Nothing in the Plan or this Grant shall
confer on Optionee any right to continue in the employ of, or other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Optionee's employment or other relationship at any
time, with or without cause.
5. MANNER OF EXERCISE.
(a) EXERCISE AGREEMENT. This Option shall be exercisable by delivery
to the Company of an executed written Stock Option Exercise Agreement in the
form attached hereto as Exhibit 1, or in such other form as may be approved by
the Company, which shall set forth Optionee's election to exercise some or all
of this Option, the number of Shares being purchased, any restrictions imposed
on the Shares and such other representations and agreements as may be required
by the Company to comply with applicable securities laws.
(b) EXERCISE PRICE. The Stock Option Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being
purchased. Payment for the Shares may be made in cash (by check), or, where
permitted by law, by any of the following methods approved by the Committee at
the date of grant of this Option, or any combinations thereof:
[ ] (i) by cancellation of indebtedness of the Company to the Optionee;
[ ] (ii) by surrender of shares of Common Stock of the Company already owned
by the Optionee, or which were obtained by Optionee in the open
public market, having a Fair Market Value equal to the exercise price
of the Option;
[ ] (iii) by waiver of compensation due or accrued to Optionee for services
rendered;
[ ] (iv) by delivery of a promissory note in the amount of $__________
with such terms as determined by the Committee;
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 14
[ ] (v) provided that a public market for the Company's stock exists, through
a "same day sale" commitment from the Optionee and a broker dealer
that is a member of the National Association of Securities Dealers,
Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased
to pay for the exercise price and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the exercise price
directly to the Company; or
[ ] (vi) provided that a public market for the Company's stock exists, through
a "margin" commitment from the Optionee and an NASD Dealer whereby
the Optionee irrevocably elects to exercise this option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the
Company.
(c) WITHHOLDING TAXES. PRIOR TO THE ISSUANCE OF THE SHARES UPON
EXERCISE OF THIS OPTION, OPTIONEE MUST PAY OR MAKE ADEQUATE PROVISION FOR ANY
APPLICABLE FEDERAL OR STATE WITHHOLDING OBLIGATIONS OF THE COMPANY. THE OPTIONEE
MAY PROVIDE FOR PAYMENT OF OPTIONEE'S MINIMUM STATUTORY WITHHOLDING TAXES UPON
EXERCISE OF THE OPTION BY REQUESTING THAT THE COMPANY RETAIN SHARES WITH A FAIR
MARKET VALUE EQUAL TO THE MINIMUM AMOUNT OF TAXES REQUIRED TO BE WITHHELD, ALL
AS SET FORTH IN SECTION 6(c) OF THE PLAN. IN SUCH CASE, THE COMPANY SHALL ISSUE
THE NET NUMBER OF SHARES TO THE OPTIONEE BY DEDUCTING THE SHARES RETAINED FROM
THE SHARES EXERCISED.
(d) ISSUANCE OF SHARES. Provided that such Stock Option Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall cause the Shares to be issued in the name of Optionee
or Optionee's legal representative.
6. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after exercise of the ISO with respect to the Shares to be sold or disposed
of, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
the Optionee from any such early disposition by payment in cash or out of the
current wages or other earnings payable to the Optionee.
7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by Optionee or any permitted
transferee. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of the Optionee.
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 15
8. RESTRICTIONS ON SHARES. The Company and the Company's shareholder
have certain rights of first refusal that are set forth in Article X of the
Company's Bylaws. A copy of Article X of the Bylaws is available upon request
from the Secretary of the Company. The Company reserves to itself for so long as
the Company's stock is not publicly traded (a) the right of first refusal to
purchase all Shares that Optionee (or a subsequent transferee) may propose to
transfer to a third party and/or (b) the right to repurchase within one year of
the Optionee's termination of employment or service with the Company or its
Parent, Subsidiary or Affiliate of the Company, a portion of or all Shares held
by an Optionee at the higher of (i) the Optionee's original purchase price or,
(ii) the Fair Market Value of such Shares.
9. FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of
the date this form of Option Grant was adopted of some of the federal tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) EXERCISE OF ISO. If this Option qualifies as an ISO, there will
be no regular federal income tax liability upon the exercise of this Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to
alternative minimum taxable income for federal income tax purposes and may
subject the Optionee to an alternative minimum tax liability in the year of
exercise.
(b) EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option does not
qualify as an ISO (a "nonqualified stock option"), there may be a regular
federal income tax liability upon the exercise of the Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. The Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) DISPOSITION OF SHARES. In the case of a nonqualified stock
option, if Shares are held for at least one year before disposition, any gain on
disposition of the Shares will be treated as long-term capital gain for federal
and California income tax purposes. In the case of an ISO, if Shares are held
for at least one year after the date of exercise and at least two years after
the Date of Grant, any gain on disposition of the Shares will be treated as
long-term capital gain for federal and California income tax purposes. If Shares
acquired pursuant to an ISO are disposed of within such one-year or two-year
periods (a "disqualifying disposition"), gain on such disqualifying disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 16
Exercise Price (the "Spread"). Any gain in excess of the Spread shall be treated
as capital gain.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Company's Board of
Directors or the Committee, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Board or Committee shall be
final and binding on the Company and on Optionee
11. ENTIRE AGREEMENT. The Plan and the Stock Option Exercise Agreement
attached hereto as Exhibit 1 are incorporated herein by this reference. This
Grant, the Plan and the Stock Option Exercise Agreement constitute the entire
agreement of the parties hereto and supersede all prior undertakings and
agreements with respect to the subject matter hereof.
CYBERSOURCE
CORPORATION, A CALIFORNIA CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 17
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan,
represents that Optionee has read and understands the terms and provisions
thereof, and accepts this Option subject to all the terms and conditions of the
Plan and this Stock Option Grant. Optionee acknowledges that there may be
adverse tax consequences upon exercise of this Option or disposition of the
Shares and that Optionee should consult a tax adviser prior to such exercise or
disposition.
OPTIONEE
By: ____________________________________
Name: __________________________________
Date: __________________________________
Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 18
EXHIBIT 1
TO STOCK OPTION GRANT
STOCK OPTION EXERCISE AGREEMENT
This Agreement is made this _____ day of ________________, 19___ between
CyberSource Corporation, a California corporation (the "Company"), and the
optionee named below ("Optionee").
Optionee: ______________________________________________________________
Social Security Number: ________________________________________________
Address: _______________________________________________________________
________________________________________________________________________
Number of Shares Purchased: ____________________________________________
Price Per Share: _______________________________________________________
Aggregate Purchase Price: ______________________________________________
Date of Option Grant: __________________________________________________
Type of Stock Option: Incentive: ________________
Nonqualified: _____________
Optionee hereby delivers to the Company the Aggregate Purchase Price, to
the extent permitted in the Option Grant, as follows [CHECK AS APPLICABLE AND
COMPLETE]:
[ ] cash (check) in the amount of $___________, receipt of which is
acknowledged by the Company;
[ ] by delivery of ____________ fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Optionee and owned free and
clear of all liens, claims, encumbrances or security interests, valued
at the current fair market value of $_________ per share (determined in
accordance with the Plan);
[ ] by the waiver hereby of compensation due or accrued for services
rendered in the amount of $______________;
[ ] through delivery of a promissory note in the amount of $_________ with
such terms as determined by the Committee;
[ ] by delivery of a "same day sale" commitment from the Optionee and a
broker dealer that is a member of the National Association of Securities
Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects
to exercise the Option
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 19
and to sell a portion of the Shares so purchased to pay for the exercise
price of $_________ and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the
Company (this payment method may be used only if a public market for the
Company's stock exists); or
[ ] by delivery of a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise this option
and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price of $_________
directly to the Company (this payment method may be used only if a
public market for the Company's stock exists).
The Company and Optionee hereby agree as follows:
1. PURCHASE OF SHARES. On this date and subject to the terms and
conditions of this Agreement, Optionee hereby exercises the Stock Option Grant
between the Company and Optionee dated as of the Date of Option Grant set forth
above (the "Grant"), with respect to the Number of Shares Purchased set forth
above of the Company's Common Stock (the "Shares") at an aggregate purchase
price equal to the Aggregate Purchase Price set forth above (the "Purchase
Price") and the Price per Share set forth above (the "Purchase Price Per
Share"). The term "Shares" refers to the Shares purchased under this Agreement
and includes all securities received (a) in replacement of the Shares, and (b)
as a result of stock dividends or stock splits in respect of the Shares.
Capitalized terms used herein that are not defined herein have the definitions
ascribed to them in the Plan or the Grant.
2. REPRESENTATIONS OF PURCHASER. Optionee represents and warrants to the
Company that:
(a) Optionee has received, read and understood the Plan and the Grant
and agrees to abide by and be bound by their terms and conditions.
(b) Optionee is capable of evaluating the merits and risks of this
investment, has the ability to protect Optionee's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.
(c) Optionee is fully aware of (i) the highly speculative nature of
the investment in the Shares; (ii) the financial hazards involved; and (iii) the
lack of liquidity of the Shares and the restrictions on transferability of the
Shares (e.g., that Optionee may not be able to sell or dispose of the Shares or
use them as collateral for loans).
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 20
(d) Optionee is purchasing the Shares for Optionee's own account for
investment purposes only and not with a view to, or for sale in connection with,
a distribution of the Shares within the meaning of the Securities Act of 1933,
as amended (the "1933 Act").
(e) Optionee has no present intention of selling or otherwise
disposing of all or any portion of the Shares.
3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and
acknowledges that the Shares have not been registered under the 1933 Act and
that, notwithstanding any other provision of the Grant to the contrary, the
exercise of any rights to purchase any Shares is expressly conditioned upon
compliance with the 1933 Act and all applicable state securities laws. Optionee
agrees to cooperate with the Company to ensure compliance with such laws. The
Shares are being issued under the 1933 Act pursuant to [THE COMPANY WILL CHECK
THE APPLICABLE BOX]:
[ ] the exemption provided by Rule 701;
[ ] the exemption provided by Rule 504;
[ ] Section 4(2) of the 1933 Act;
[ ] other: __________________________________________________________
4. FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the
Shares must be held indefinitely unless they are registered under the 1933 Act
or unless an exemption from such registration is available and that the
certificate(s) representing the Shares will bear a legend to that effect.
Optionee understands that the Company is under no obligation to register the
Shares, and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.
(a) Rule 144. Optionee has been advised that Rule 144 promulgated
under the 1933 Act, which permits certain resales or unregistered securities, is
not presently available with respect to the Shares and, in any event, requires
that a minimum of one (1) year elapse between the date of acquisition of Shares
from the Company or an affiliate of the Company and any resale under Rule 144.
Prior to an initial public offering of the Company's stock, "nonaffiliates"
(i.e. persons other than officers, directors and major shareholders of the
Company) may resell only under Rule 144(k), which requires that a minimum of two
(2) years elapse between the date of acquisition of Shares from the Company or
an affiliate of the Company and any resale under Rule 144(k). Rule 144(k) is not
available to affiliates.
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 21
(b) Rule 701. If the exemption relied upon for exercise of the Shares
is Rule 701, the Shares will become freely transferable, subject to limited
conditions regarding the method of sale, by nonaffiliates ninety (90) days after
the first sale of common stock of the Company to the general public pursuant to
a registration statement filed with and declared effective by the Securities and
Exchange Commission (the "SEC"), subject to any lengthier market standoff
agreement contained in this Agreement or entered into by Optionee. Affiliates
must comply with the provisions (other than the holding period requirements) of
Rule 144.
5. STATE LAW RESTRICTIONS ON TRANSFER. Optionee understands that
transfer of the Shares may be restricted by applicable state securities laws,
and that the certificate(s) representing the Shares may bear a legend or legends
to that effect.
6. MARKET STANDOFF AGREEMENT. Optionee agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Optionee will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for a
period of time (not to exceed one hundred eighty (180) days) from the effective
date of such registration as the Company or the underwriters may specify for
employee shareholders generally.
7. LEGENDS. Optionee understands and agrees that the certificate(s)
representing the Shares will bear a legend in substantially the following forms,
in addition to any other legends required by applicable law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT'), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE SECURITIES ACT OR, IN THE OPINION OF COUNSEL,
PREPARED AT ISSUER'S REQUEST AND EXPENSE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH."
8. STOP-TRANSFER NOTICES. Optionee understands and agrees that, in order
or ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
<PAGE> 22
9. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.
10. REPURCHASE OPTIONS. The Company and the Company's shareholders have
certain rights of first refusal that are set forth in Article X of the Company's
Bylaws. A copy of Article X of the Bylaws is available upon request from the
Secretary of the Company. The Company reserves to itself for so long as the
Company's stock is not publicly traded (a) the right of first refusal to
purchase all Shares that Optionee (or a subsequent transferee) may propose to
transfer to a third party and/or (b) the right to repurchase within one year of
the Optionee's termination of employment or service with the Company or its
Parent, Subsidiary or Affiliate of the Company, a portion of or all Shares held
by an Optionee at the higher of (i) the Optionee's original purchase price or,
(ii) the Fair Market Value of such Shares.
11. ENTIRE AGREEMENT. The Plan and Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and are governed by California law except for that body of law
pertaining to conflict of laws.
Submitted By: Accepted By:
OPTIONEE: __________________________ ______________________________
[print name]
____________________________________ By: __________________________
[signature]
Its: _________________________
Dated: _____________________________ Dated: _______________________
Address: ___________________________
___________________________
___________________________
Exhibit 1 to Exhibit A
to
CyberSource Corporation 1998 Stock Option Plan
S
<PAGE> 1
EXHIBIT 5.1
JACKSON TUFTS COLE & BLACK, LLP
60 So. Market Street, 10th Floor
San Jose, CA 95113
(408) 998-1952
August 5, 1998
software.net Corporation
1195 West Fremont Avenue
Sunnyvale, California 94087
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by you with the Securities and Exchange
Commission (the "Commission") on August 5, 1998, in connection with the
registration under the Securities Act of 1933, as amended, of a total of (i)
3,000,000 shares of your Common Stock (as such number may be adjusted as
provided in the 1995 Stock Option Plan) (the "1995 Shares") reserved for
issuance under the 1995 Stock Option Plan, (ii) 2,000,000 shares of your Common
Stock (as such number may be adjusted as provided in the 1998 Stock Option Plan)
(the "1998 Shares", and, collectively, with the 1995 Shares, the "Shares")
reserved for issuance under the 1998 Stock Option Plan, and (iii) 1,000,000
shares of your Common Stock (the "Pettitt Shares") reserved for issuance under
that certain Stock Option Agreement dated as of March 31, 1995, by and between
the Company and John P. Pettitt (the Pettitt Shares, the 1995 Shares and the
1998 shares are collectively referred to herein as the "Shares").
It is our opinion that the Shares, when issued and sold in accordance
with above-referenced stock option plans, will be legally and validly issued,
fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement, including the Prospectus constituting a
part thereof, and in any amendment thereto.
Very truly yours,
/s/JACKSON TUFTS COLE & BLACK, LLP
----------------------------------------
JACKSON TUFTS COLE & BLACK, LLP
-6-
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Stock Option Agreement, the 1995 Stock Option Plan
and the 1998 Stock Option Plan of software.net Corporation of our report dated
March 25, 1998, with respect to the consolidated financial statements of
software.net Corporation included in its Registration Statement (Form S-1 No.
333-51121) filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG, LLP
----------------------------------------
ERNST & YOUNG, LLP
San Jose, California
July 31, 1998
-7-
