Exhibit 10.2

 

CYBERSOURCE CORPORATION

 

1999 STOCK OPTION PLAN

 

(amended and restated April, 2000)

(amended July, 2000)

(amended February, 2001)

(amended and restated February, 2003)

 

1. Purpose. This 1999 Stock Option Plan1 (“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 Delaware
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 (also known as “nonstatutory 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 7,000,000 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. Shares
that actually have been issued under the Plan shall not be returned to the Plan
and shall not become available for future issuance under the Plan, except that
if unvested Shares are forfeited, or repurchased by the Company at their
original purchase price, such Shares shall become available for future grant
under the 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

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1   Approved by the Company's Board of Directors and stockholders in January,
1999.

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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 and Exhibit A-1 (with respect to grants made to Non-Employee
Directors pursuant to Section 6 hereof) 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 Committee 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 Committee). 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. In the case of
Options intended to qualify as Performance-Based Compensation, the exercise
price shall be not less than one hundred percent (100%) of the Fair Market Value
of the Shares on the date of grant.

 

(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, so long as required by Applicable Laws, 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. The Committee may grant an Option whereby the
Optionee may elect to exercise any or all of the Option prior to full vesting.
Any unvested Shares received pursuant to such exercise may be

 

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subject to a repurchase right in favor of the Company or to any other
restriction the Committee determines to be appropriate.

 

(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
there under 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.

 

(f) Individual Option Limit. The maximum number of Shares with respect to which
Options may be granted to any Optionee in any fiscal year of the Company shall
be one million (1,000,000) Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company’s capitalization
pursuant to Section 12, below. To the extent required by Section 162(m) of the
Code or the regulations thereunder, in applying the foregoing limitation with
respect to an Optionee, if any Option is canceled, the canceled Option shall
continue to count against the maximum number of Shares with respect to which
Options may be granted to the Optionee. For this purpose, the repricing of an
Option shall be treated as the cancellation of the existing Option and the grant
of a new Option.

 

(g) Options Non-Transferable. To the extent provided in an individual Grant,
NQSOs shall be transferable by gift to members of the Optionee’s Immediate
Family, by instrument to an inter vivos or testamentary trust under which the
NQSOs are to be passed to beneficiaries upon the death of the Optionee as
settlor of the trust, by will, and by the laws of descent and distribution. ISOs
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.

 

(h) 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.

 

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(i) 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
Company for all purposes under this Section 5(i) 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”).

 

(j) 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.

 

(k) 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. On the date of adoption of this Plan, each Non-Employee
Director shall receive a NQSO for 10,000 shares. Following the date of adoption
of this Plan, upon initial election or appointment to the Company’s Board of
Directors, the elected or appointed Non-Employee Director shall receive a NQSO
for 25,000 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.

 

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(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) Vesting and Repurchase Period. All Options granted pursuant to the terms
of this Section 6 shall be exercisable at anytime on or after the date of grant
pursuant to the terms of the form of Grant set forth as Exhibit A-1 hereto. The
Company shall have the right to repurchase any unvested Shares at the exercise
price paid for such Shares pursuant to the terms of the form of Grant set forth
as Exhibit A-1 hereto. With respect to Shares issued pursuant to Options granted
on the date of adoption of the Plan, the Company’s repurchase rights as to
unvested Shares shall lapse on the earlier of (i) June 30, 1999 or (ii) the
consummation of the Company’s initial public offering of common stock. With
respect to Shares issued pursuant to all other Options granted pursuant to the
terms of this Section 6, the Company’s repurchase rights as to unvested Shares
shall lapse 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 for the entire year or from the date the Non-Employee
Director joined 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, or any
combination thereof, provided that the portion of the consideration equal to the
par value of the

 

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Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law: (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 (but only to the extent that such exercise would
not result in an accounting compensation charge with respect to the Shares used
to pay the exercise price unless otherwise determined by the Committee); (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; 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; and

 

(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,

 

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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) 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 (but not to exceed ninety
(90) days of the later of termination or exercise of the Option, if required by
Applicable Laws), 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. Shares may be repurchased at Optionee’s original purchase
price provided that, so long as required by Applicable Laws, such right to
repurchase as to employees lapses at the rate of at least twenty percent (20%)
of the Shares subject to the Option per year over five (5) years from the date
the Option is granted (without respect to the date the Option was exercised or
became exercisable).

 

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.

 

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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, the maximum number of Shares with respect
to which Options may be granted to any Optionee 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. The Plan became effective when adopted by
the Board of Directors (the “Board”) in January, 1999. The shareholders of the
Company also approved the Plan in January, 1999. In April, 2000, the Board
adopted and approved an amendment and restatement of the Plan (a) to increase
the number of Shares available for issuance under the Plan and (b) to adopt a
limit on the maximum number of Shares with respect to which Options may be
granted to any Optionee in any fiscal year of the Company and certain other
administrative provisions to comply with the performance-based compensation
exception to the deduction limit of Section 162(m) of the Code, which amendments
were approved by the

 

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shareholders of the Company. In February, 2001, the Board adopted and approved
an amendment to the Plan increasing the number of shares granted to a
Non-Employee Director upon initial election or appointment to the Board from
10,000 to 25,000. In February, 2003, the Board adopted and approved an amendment
and restatement of the Plan to revise the definition of Fair Market Value such
that the fair market value of a share of Common Stock of the Company shall be
determined based on the closing price for a share on the date of determination,
which amendment is not subject to approval by the shareholders of the Company.

 

15. Administration.

 

(a) 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, with respect to grants of awards to directors or
employees who are also officers or directors of the Company, the Plan shall be
administered by (A) the Board, or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable
Laws and to permit such grants and related transactions under the Plan to be
exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 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.

 

(b) Notwithstanding the foregoing, grants of an Option to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a
Committee (or subcommittee of a Committee) which is comprised solely of two or
more members of Board of Directors eligible to serve on a committee granting
Options qualifying as Performance-Based Compensation. In the case of such
Options granted to Covered Employees, references to a “Committee” shall be
deemed to be references to such Committee or subcommittee.

 

16. Term of Plan. Options may be granted pursuant to this Plan from time to time
on or prior to December 31, 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. To
the extent necessary to comply with Applicable Laws, the Company shall obtain
approval of the stockholders of the Company of any plan amendment in such a
manner and to such a degree as required. 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.

 

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18. Certain Definitions. As used in this Plan, the following terms shall have
the following meanings:

 

(a) “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.

 

(b) “Applicable Laws” means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable provisions of
federal and state securities laws, the corporate laws of California and, to the
extent other than California, the corporate law of the state of the Company’s
incorporation, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to awards
granted to residents therein.

 

(c) “Covered Employee” means an Optionee who is a “covered employee” under
Section 162(m)(3) of the Code.

 

(d) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:

 

(i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation The Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system on the date of determination
(or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was
reported), as reported in The Wall Street Journal or such other source as the
Committee deems reliable;

 

(ii) If the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, but
selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall
Street Journal or such other source as the Committee deems reliable; or

 

(iii) In the absence of an established market for the Common Stock of the type
described in (i) and (ii), above, the Fair Market Value thereof shall be
determined by the Committee in good faith.

 

(e) “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

 

10

--------------------------------------------------------------------------------

Exchange Act, as such rule is amended from time to time and as interpreted by
the Securities and Exchange Commission.

 

(f) “Immediate Family” means an individual who is a member of the Optionee’s
“immediate family” as that term is defined under Rule 16a-1(e) of the Exchange
Act.

 

(g) “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.

 

(h) “Performance - Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.

 

(i) “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.

 

19. Information to Optionees. The Company shall provide to each Optionee, during
the period for which such Optionee has one or more options outstanding, copies
of financial statements at least annually.

 

20. 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.

 

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 Option:

 

Incentive:       _________

   

Nonqualified: _________

 

1. Grant of Option. CyberSource Corporation, a Delaware 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 1999 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 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                  after                 . Once a portion of this
Option becomes exercisable it

 

1

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

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.

 

(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 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.

 

2

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

(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 (by check), or, where permitted by law, by any of the
following methods approved by the Committee, 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 (but only to the
extent that such exercise would not result in an accounting compensation change
with respect to the Shares used to pay the exercise price unless otherwise
determined by the Committee);

¨

  

(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;

¨

  

(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

 

3

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

¨

  

(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 7(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 as set forth in the Plan. The terms of this Option shall be binding
upon the executors, administrators, successors and assigns of the Optionee.

 

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 90 days of
the later of Optionee’s termination of employment or service with the Company or
its Parent, Subsidiary or

 

4

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

Affiliate of the Company and the exercise of the Option, 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.

 

5

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

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.

 

12. Corporate Transactions.

 

(a) Definitions. For purposes of this Grant, the following terms shall have the
meanings set forth below:

 

(i) “Annual Base Salary” means Optionee’s annual base salary at the rate in
effect during the last regularly scheduled payroll period immediately preceding
(i) the Change in Control or (ii) the Covered Termination, whichever is greater.

 

(ii) “Change in Control” means the occurrence of any of the following events:

 

(A) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) fifty-percent
(50%) or more of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or (ii) the stockholders of the Company approve either a plan
of liquidation or dissolution of the Company or an agreement for the sale,
lease, exchange or other transfer or disposition by the Company of fifty-percent
(50%) or more of the Company’s assets; or

 

(B) any person (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or becomes
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of fifty percent (50%) or more of the Company’s
outstanding common stock.

 

6

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

(iii) “Constructive Termination” means that the Optionee voluntarily terminates
his employment after any of the following are undertaken without Optionee’s
express written consent:

 

(A) the assignment to Optionee of any duties or responsibilities which result in
any material diminution or material adverse change of Optionee’s position,
status or circumstances of employment as in effect immediately prior to a Change
in Control of the Company; a change in Optionee’s titles or offices as in effect
immediately prior to a Change in Control of the Company which results in any
material diminution or material adverse change of Optionee’s position, status or
circumstances of employment; or any removal of Optionee from or any failure to
re-elect Optionee to any of such positions, except in connection with the
termination of his employment for death, disability, retirement, fraud,
misappropriation, embezzlement or any other voluntary termination of employment
by Optionee other than a Constructive Termination; provided, however, that no
Constructive Termination shall be deemed to occur following a Change in Control
of the Company by merely virtue of the Company operating as a subsidiary or
division of the acquiring company if the Optionee continues with no material
adverse change or material diminution in Optionee’s title, duties or
responsibilities following the Change in Control;

 

(B) a reduction by the Company in Optionee’s Annual Base Salary by greater than
ten (10) percent;

 

(C) any failure by the Company to continue in effect any benefit plan or
arrangement, including incentive plans or plans to receive securities of the
Company, in which Optionee is participating at the time of a Change in Control
of the Company (hereinafter referred to as “Benefit Plans”), or the taking of
any action by the Company which would materially adversely affect Optionee’s
participation in or reduce Optionee’s benefits under the Benefit Plans or
deprive Optionee of any fringe benefit enjoyed by Optionee at the time of a
Change in Control of the Company; provided, however, that no Constructive
Termination shall be deemed to occur following a Change in Control of the
Company if the Company offers a range of benefit plans and programs which, taken
as a whole, are comparable to the Benefit Plans as determined in good faith by
the Company;

 

7

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

(D) a relocation of Optionee, or the Company’s principal offices if Optionee’s
principal office is at such offices, to a location more than forty (40) miles
from the location at which Optionee was performing his duties prior to a Change
in Control of the Company, except for required travel by Optionee on the
Company’s business to an extent substantially consistent with Optionee’s
business travel obligations at the time of a Change in control of the Company;

 

(E) any material breach by the Company of any provision of this Grant; or

 

(F) any failure by the Company to obtain the assumption of this Grant by any
successor or assign of the Company.

 

(iv) “Covered Termination” means an Involuntary Termination or a Constructive
Termination occurring in either case within one (1) year following a Change in
Control. No other event shall be a Covered Termination for purposes of this
Grant.

 

(v) “Involuntary Termination” means Optionee’s dismissal or discharge by the
Company (or, if applicable, by the successor entity) for reasons other than
commission of a felony or any other crime involving moral turpitude, repeated
failure to perform services in accordance with the requests of superiors within
the context of Optionee’s duties, or the commission of a material fraud,
misappropriation, embezzlement or other act of gross dishonesty on the part of
Optionee which resulted in material loss, damage or injury to the Company.

 

The termination of an Optionee’s employment would not be deemed to be an
“Involuntary Termination” if such termination occurs as a result of the death or
disability of Optionee.

 

8

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

(b) Stock Option Vesting Acceleration. One-half (1/2) of the Shares covered by
this Option which are then unvested shall become fully vested and exercisable
immediately upon the occurrence of a Covered Termination. By way of example and
solely for illustrative purposes, if at the time of a Covered Termination
Optionee holds stock options covering the purchase of 100,000 shares of Company
stock which are exercisable as to 50,000 shares and not exercisable as to 50,000
shares, the stock options shall be exercisable as to an additional 25,000 shares
due to the Covered Termination. Except as set forth herein, the terms of the
Grant shall remain in full force and effect and subject to the terms of the
Plan. Optionee acknowledges that the acceleration of the vesting of his options
may cause such options to disqualify as incentive stock options (as defined
under Section 422 of the Code) which may create adverse tax consequences to the
Optionee. The Company recommends that Optionee obtain the advice of his tax
advisor prior to entering into this Grant.

 

CYBERSOURCE CORPORATION, a Delaware corporation

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

 

 

 

9

Exhibit A to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

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 1 TO STOCK OPTION GRANT

 

STOCK OPTION EXERCISE AGREEMENT

 

This Agreement is made this              day of                             ,
         between CyberSource Corporation, a Delaware corporation (the
“Company”), and the optionee named below (“Optionee”).

 

Optionee:

   

Address:

   

Total Shares Subject to Option:

   

Exercise Price Per Share:

   

Date of Grant:

   

Expiration Date of Option

   

Type of 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) (but only to the extent that such exercise would not
result in an accounting compensation change with respect to the Shares used to
pay the exercise price unless otherwise determined by the Committee);

 

  ¨   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 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

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

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).

 

(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.

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

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 of 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.

 

(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.

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

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.”

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

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.

 

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 90 days of the later of
the Optionee’s termination of employment or service with the Company or its
Parent, Subsidiary or Affiliate of the Company and the exercise of the Option, 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”

 

“COMPANY”

   

CyberSource Corporation, a Delaware corporation

   

 

--------------------------------------------------------------------------------

 

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

 

Name:

 

--------------------------------------------------------------------------------

Address:

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

--------------------------------------------------------------------------------

   

 

--------------------------------------------------------------------------------

           

 

--------------------------------------------------------------------------------

       

Dated:

 

                               ,             

 

Dated:

 

                               ,             

 

 

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

EXHIBIT A-1

 

IMMEDIATELY EXERCISABLE STOCK OPTION GRANT

 

Optionee:

   

Address:

   

Total Shares Subject to Option:

   

Exercise Price Per Share:

   

Date of Grant:

   

Expiration Date of Option

   

Type of Option:

 

Nonqualified

 

1

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

1. Grant of Option. CyberSource Corporation, a Delaware 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 1999 Stock Option Plan, as amended to
the date hereof (the “Plan”). This Option is not 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 and Vesting. This Option is immediately exercisable
although the Shares issued upon exercise of the Option will be subject to the
restrictions on transfer and a right of repurchase at the Exercise Price, in
favor of the Company, as described herein (the “Repurchase Right”). The Shares
are also subject to a Repurchase Right as to vested Shares pursuant to the terms
of the Company’s Bylaws. For purposes of this Grant, the term “vest” shall mean,
with respect to any Shares, that such Shares (whether subject to the Option or
acquired upon exercise of the Option) are no longer subject to the Repurchase
Right as to unvested Shares, provided, however, that such Shares shall remain
subject to other restrictions on transfer set forth in the Grant or the Plan. If
the Optionee would become vested in a fraction of a Share, such Share shall not
vest until the Optionee becomes vested in the entire Share. This Option shall
remain exercisable until the Expiration Date, or until it terminates pursuant to
the terms of Section 4 hereof, whichever is first to occur. Subject to the
limitations set forth in this Grant and the Plan, the Repurchase Right as to
unvested Shares shall lapse in accordance with the following schedule: The
Optionee has option rights hereunder to purchase a total of                 
Shares subject to NQSOs which vest in full on
                                     after
                                                 .

 

(a) The minimum number of Shares that may be purchased upon any partial exercise
of the Option is one hundred (100) shares.

 

(b) 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 vested and not yet exercised in accordance with the above
schedule as of the applicable dates shall be deemed “Vested Options.”

 

2

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

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.

 

(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

 

3

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

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, 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 (but only to the
extent that such exercise would not result in an accounting compensation charge
with respect to the Shares used to pay the exercise price unless otherwise
determined by the Committee);

¨

  

(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;

¨

  

(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, and the Shares are
vested, 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.

 

4

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

(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 7(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/Escrow. Provided that the 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. For purposes of facilitating the enforcement of
the provisions of the Repurchase Right, the Optionee agrees, immediately upon
receipt of the certificate(s) for the Shares and the request of the Company, to
deliver such certificate(s), together with an Assignment Separate from
Certificate in the form prescribed by the Company, executed in blank by the
Optionee and the Optionee’s spouse (if required for transfer) with respect to
each such stock certificate, to the Secretary or Assistant Secretary of the
Company, or their designee, to hold in escrow for so long as such Shares have
not vested pursuant to the vesting schedule set forth in the Grant and are
subject to Company’s Repurchase Right for unvested Shares, with the authority to
take all such actions and to effectuate all such transfers and/or releases as
may be necessary or appropriate to accomplish the objectives of this Grant in
accordance with the terms hereof. The Optionee hereby acknowledges that the
appointment of the Secretary or Assistant Secretary of the Company (or their
designee) as the escrow holder hereunder with the stated authorities is a
material inducement to the Company to make this Grant and that such appointment
is coupled with an interest and is accordingly irrevocable. The Optionee agrees
that such escrow holder shall not be liable to any party hereto (or to any other
party) for any actions or omissions unless such escrow holder is grossly
negligent relative thereto. The escrow holder may rely upon any letter, notice
or other document executed by any signature purported to be genuine and may
resign at any time. Subject to the provisions of any security agreement relating
to Optionee’s purchase of the Shares, upon the vesting of Shares and termination
of the Company’s Repurchase Right for unvested shares, the escrow holder will,
upon request, transmit to the Optionee the certificate evidencing such Shares.

 

6. Transfer Restrictions for Unvested Shares. The Shares sold to the Optionee
hereunder may not be sold, transferred by gift, pledged, hypothecated, or
otherwise transferred or disposed of by the Optionee prior to the date that the
Shares become vested. Any attempt to transfer Shares in violation of this
Section 6 will be null and void and will be disregarded. After the Shares vest,
the Shares will remain subject to the Company’s Right of First Refusal and the
Company’s Repurchase Right for vested shares as set forth in the Company’s
Bylaws.

 

7. Company’s Repurchase Right.

 

(a) Grant of Repurchase Right. The Company is hereby granted the right (the
“Repurchase Right”), exercisable at any time (i) during the ninety (90) day
period following the Termination Date, or (ii) during the ninety (90) day period
following an exercise of the Option

 

5

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

that occurs after the Termination Date, to repurchase all or any portion of the
unvested Shares purchased upon exercise of the Option (the “Share Repurchase
Period”).

 

(b) Exercise of the Repurchase Right. The Repurchase Right shall be exercisable
by written notice delivered to each holder of the Shares prior to the expiration
of the Share Repurchase Period. The notice shall indicate the number of Shares
to be repurchased and the date on which the repurchase is to be effected, such
date to be not later than the last day of the Share Repurchase Period. On the
date on which the repurchase is to be effected, the Company and/or its assigns
shall pay to the holder in cash or cash equivalents (including the cancellation
of any purchase-money indebtedness) an amount equal to the Exercise Price per
Share for unvested Shares which are to be repurchased from the Holder. Upon such
payment or deposit into escrow for the benefit of the holder, the Company and/or
its assigns shall become the legal and beneficial owner of the Shares being
repurchased and all rights and interest thereon or related thereto, and the
Company shall have the right to transfer to its own name or its assigns the
number of Shares being repurchased, without further action by the holder.

 

(c) Assignment. Whenever the Company shall have the right to purchase Shares
under this Repurchase Right, the Company may designate and assign one or more
employees, officers, directors or shareholders of the Company or other persons
or organizations, to exercise all or a part of the Company’s Repurchase Right.

 

(d) Termination of the Repurchase Right. The Repurchase Right shall terminate
with respect to any Shares for which it is not timely exercised.

 

8. Corporate Transaction. In the event of a corporate transaction described in
Section 13(a)(i) or (ii) of the Plan (I) each Option which is at the time
outstanding under the Plan automatically shall become fully vested (and all
underlying Shares shall not be subject to the Repurchase Right) immediately
prior to the specified effective date of such corporate transaction irrespective
of whether the Option is assumed in such corporate transaction, and (II) each
outstanding unvested Share under the Plan automatically shall become fully
vested and no longer subject to the Repurchase Right immediately prior to the
specified effective date of such corporate transaction irrespective of whether
the Share is assumed in such corporate transaction.

 

9. 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.

 

10. 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 90 days of
the later of Optionee’s termination of employment or service with the Company or
its Parent, Subsidiary or Affiliate of the Company and the exercise of the
Option, a portion of or all vested Shares held by

 

6

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

an Optionee at the higher of (i) the Optionee’s original purchase price or, (ii)
the Fair Market Value of such Shares.

 

11. 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) Section 83 (b) Election For Exercise of Non-Qualified Stock Option Subject
to Vesting. If the Shares are acquired hereunder pursuant to the exercise of a
NQSO that has not vested pursuant to the vesting schedule set forth in the
Grant, then the Optionee understands that under Code Section 83, the excess of
the Fair Market Value of the Shares on the date any forfeiture restrictions
applicable to the Shares lapse over the Exercise Price paid for the Shares will
be reportable as ordinary income on the lapse date. For this purpose, the term
“forfeiture restrictions” includes the right of the Company to repurchase the
Shares pursuant to the Repurchase Right for unvested Shares. The Optionee
understands that he/she may elect under Code Section 83(b) to be taxed at the
time the Shares are acquired hereunder, rather than when and as the Shares cease
to be subject to the forfeiture restrictions. Such election (the “83(b)
Election”) must be filed with the Internal Revenue Service within thirty (30)
days after the date Shares are acquired upon exercise of the Option. Even if the
Fair Market Value of the Shares on the date the Option is exercised equals the
Exercise Price paid (and thus no tax is payable), the 83(b) Election must be
made to avoid adverse tax consequences in the future. THE OPTIONEE UNDERSTANDS
THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD
WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE OPTIONEE AS THE
FORFEITURE RESTRICTIONS LAPSE.

 

(b) Exercise of Vested Non-Qualified Stock Option. If pursuant to the vesting
schedule, the Shares acquired upon exercise of the Option are not subject to any
forfeiture restrictions, 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.

 

7

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

12. 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

 

13. 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 Delaware corporation

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

 

 

 

8

Exhibit A-1 to CyberSource Corporation 1999 Stock Option Agreement

Form of Stock Option Grant

--------------------------------------------------------------------------------

 

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 1 TO STOCK OPTION GRANT

 

IMMEDIATELY EXERCISABLE STOCK OPTION EXERCISE AGREEMENT

 

This Agreement is made this              day of
                                ,          between CyberSource Corporation, a
Delaware corporation (the “Company”), and the optionee named below (“Optionee”).

 

 

 

 

 

 

Optionee:

   

Address:

   

Total Shares Subject to Option:

   

Exercise Price Per Share:

   

Date of Grant:

   

Expiration Date of Option

   

Type of Option:

 

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 and only to the extent that such exercise would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Committee);

 

  ¨   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;

 

  ¨   provided that the Shares are vested, 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

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

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

 

  ¨   provided that the Shares are vested, 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, and such Shares shall
be retained in escrow in the same manner as the Shares with respect to which
they relate. 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 fully aware of the Repurchase Right for unvested Shares in favor
of the Company as set forth in the Grant and that unvested Shares are subject to
restrictions on transfer as set forth in the Grant.

 

(c) 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.

 

(d) 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 Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

(e) 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”).

 

(f) 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.

 

(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

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

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.”

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER, A RIGHT OF FIRST REFUSAL AND A REPURCHASE RIGHT HELD BY THE ISSUER
OR ITS ASSIGNEE(S) AS SET FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST
REFUSAL AND REPURCHASE RIGHT ARE BINDING ON TRANSFEREES OF THESE SHARES.”

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

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.

 

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. The
Optionee shall provide the Company with a copy of any timely filed 83(b)
Election relating to the purchase of the Shares. If the Optionee makes a timely
83(b) Election, the Optionee shall immediately pay the Company (or the entity
that employs the Optionee) the amount necessary to satisfy any applicable
federal, state, and local income and employment tax withholding obligations. If
the Optionee does not make a timely 83(b) Election, the Optionee shall, either
at the time that the restrictions lapse under the Repurchase Right for unvested
Shares and the Plan or at the time withholding is otherwise required by
Applicable Laws, pay the Company (or the entity that employs the Optionee) the
amount necessary to satisfy any applicable federal, state and local income and
employment tax withholding obligations.

 

10. Repurchase Options. In addition to the Repurchase Right for unvested Shares
as set forth in the Grant, 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 90 days of
the later of the Optionee’s termination of employment or service with the
Company or its Parent, Subsidiary or Affiliate of the Company and the exercise
of the Option, 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.

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

 

Submitted by:

 

Accepted By:

“OPTIONEE”

 

“COMPANY”

   

CyberSource Corporation, a Delaware corporation

   

--------------------------------------------------------------------------------

 

By:

 

 

--------------------------------------------------------------------------------

Name

 

 

--------------------------------------------------------------------------------

 

Name:

 

--------------------------------------------------------------------------------

Address:

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

--------------------------------------------------------------------------------

   

 

--------------------------------------------------------------------------------

           

 

--------------------------------------------------------------------------------

       

Dated:

 

                 ,         

 

Dated:

 

                 ,         

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

 

[Please sign this document but do not date it. The date and information of the
transferee will be completed if and when the shares are assigned.]

 

FOR VALUE RECEIVED,                                                   hereby
sells, assigns and transfers unto                                 ,
                                         (            ) shares of the Common
Stock of CyberSource, Corporation, a Delaware corporation (the “Company”),
standing in his name on the books of, represented by Certificate No.     
herewith, and does hereby irrevocably constitute and appoint the Secretary of
the Company attorney to transfer the said stock in the books of the Company with
full power of substitution.

 

 

DATED:

               

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

 

The undersigned spouse of                                          joins in this
assignment.

 

Dated:

 

 

 

--------------------------------------------------------------------------------

     

 

--------------------------------------------------------------------------------

           

(Spouse of                             

 

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement

--------------------------------------------------------------------------------

 

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

 

The undersigned taxpayer hereby elects, pursuant to the Internal Revenue Code,
to include in gross income for                  the amount of any compensation
taxable in connection with the taxpayer’s receipt of the property described
below:

 

1. The name, address, taxpayer identification number and taxable year of the
undersigned are:

 

TAXPAYER’S NAME

 

 

--------------------------------------------------------------------------------

SPOUSE’S NAME

 

 

--------------------------------------------------------------------------------

TAXPAYER’S SOCIAL SECURITY NO.:

 

--------------------------------------------------------------------------------

SPOUSE’S SOCIAL SECURITY NO.:

 

--------------------------------------------------------------------------------

TAXABLE YEAR:

 

Calendar Year                    

ADDRESS:

 

 

--------------------------------------------------------------------------------

   

 

--------------------------------------------------------------------------------

   

 

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2. The property which is the subject of this election is                  shares
of common stock of CyberSource, Corporation, a Delaware corporation.

 

3. The property was transferred to the undersigned on                     ,
        .

 

4. The property is subject to the following restrictions: The right of the
Company to repurchase the shares, or a portion thereof, at the purchase price of
the shares. The rights lapses as to a portion of the shares per month according
to a vesting schedule, based upon continued service to the Company.

 

5. The fair market value of the property at the time of transfer (determined
without regard to any restriction other than a restriction which by its terms
will never lapse) is: $                  per share x                  shares = $
                .

 

6. The undersigned paid $______ per share x _________ shares for the property
transferred or a total of $______________.

 

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned’s receipt of the
above-described property. The undersigned taxpayer is the person performing the
services in connection with the transfer of said property.

 

The undersigned will file this election with the Internal Revenue Service office
to which he or she files his annual income tax return not later than 30 days
after the date of transfer of the property. Additionally, the undersigned will
include a copy of the election with his income tax return for the taxable year
in which the property is transferred.

 

    Dated:

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

       

Taxpayer

 

The undersigned spouse of taxpayer joins in this election.

 

    Dated:

 

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

       

Spouse of Taxpayer

 

Exhibit 1 to Form Stock Option Grant

Form of Stock Option Exercise Agreement