EXECUTIVE EMPLOYMENT AGREEMENT

EXHIBIT 10.15

E XECUTIVE E MPLOYMENT A GREEMENT

This Executive Employment Agreement (the “Agreement”), dated March 31, 2006, is between C YBERSOURCE C ORPORATION (the “Company”) and S COTT C RUICKSHANK (“Executive”).

I. POSITION AND RESPONSIBILITIES

A. Position. Effective April 3, 2006 (the “Effective Date”), Executive will be employed by the Company to serve as its President and Chief Operating Officer, reporting to the Company’s Chief Executive Officer. Executive shall perform such duties and responsibilities as are normally related to such positions in accordance with the standards of the industry, as well as any additional duties now or hereafter assigned to Executive by the Company’s Chief Executive Officer or Board of Directors. Executive shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion.

B. Other Activities. Except upon the prior written consent of the Company, Executive will not, during the term of this Agreement, (i) accept any other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that might interfere with Executive’s duties and responsibilities hereunder or create a conflict of interest with the Company.

C. No Conflict. Executive represents and warrants that Executive’s execution of this Agreement, employment with the Company, and the performance of Executive’s proposed duties under this Agreement shall not violate any obligations Executive may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.

II. COMPENSATION AND BENEFITS

A. Salary. In consideration of the services to be rendered under this Agreement, the Company shall pay Executive a base salary at the rate of Three Hundred Thousand Dollars ($300,000) per year less applicable withholdings and authorized deductions (“Base Salary”). The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice. In addition to the Base Salary, the Company shall pay Executive variable performance based compensation of up to Eighty-five Thousand Dollars ($85,000) per year less applicable withholdings and authorized deductions (“Performance Bonus”). Subject to a quarterly maximum of Twenty-One Thousand Two-Hundred Fifty Dollars ($21,250), the amount of the Performance Bonus payable each calendar quarter shall be based on achievement of certain milestones during such quarter by Executive and the Company, which milestones are mutually agreed to in good faith by Executive and the Company. The Performance Bonus shall be paid at the end of the month immediately following each calendar quarter. Notwithstanding the foregoing, during Executive’s first year of employment with the Company, Executive shall be paid the Performance Bonus at the maximum rate, payable in quarterly installments of Twenty-One Thousand Two-Hundred Fifty Dollars ($21,250), subject to Executive’s continuous

employment with the Company through each such payment period. Executive’s Base Salary and Performance Bonus will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be adjusted in the sole discretion of the Board of Directors of the Company.

B. Retention-Based Stock Options. The Board of Directors has approved an award to Executive, with such approval effective on the Effective Date, of an option to purchase Five-hundred Fifty Thousand (550,000) shares of the Common Stock of the Company (the “Retention-Based Options”). The Retention-Based Options will vest as follows: 275,000 shares of the Retention-Based Options would vest on the fourth anniversary of the Effective Date and the remaining 275,000 shares of the Retention-Based Options would vest on the fifth anniversary of the Effective Date, contingent upon the Executive’s continuous employment with the Company through such dates. The price per share of any approved Retention-Based Options will be determined on the Effective Date. Executive’s entitlement to the Retention-Based Options is conditioned upon Executive’s signing of the Retention-Based Stock Option Agreement attached as Exhibit A to this Agreement and is subject to its terms and the terms of the Stock Option Plan under which the Retention-Based Options are granted, including vesting requirements. In consideration of Executive’s employment by the Company, Executive agrees that the non-employee director options to purchase Common Stock of the Company granted to Executive on March 9, 2006 shall be cancelled effective immediately.

C. Performance-Based Stock Options. The Board of Directors has approved an award to Executive, with such approval effective on the Effective Date, of an option to purchase 300,000 shares of the Common Stock of the Company (the “Performance-Based Options”). The Performance-Based Options will vest in three installments based on increases in the Company’s stock price as measured against the Company’s average stock closing price over the ten trading days between April 24, 2006 and May 5, 2006 (the “Base Price”):

1. 100,000 shares of the Performance-Based Options would vest if, within the first eighteen months following the Effective Date, the Company’s average stock price over a Thirty-Day Trading Period (defined as a consecutive thirty-day period that includes at least twenty trading days) equals or exceeds the greater of (i) thirteen dollars ($13) per share or (ii) a per share price that exceeds the Base Price by at least thirty-seven and one-half percent (37 1/2%) (the “First Installment”);

2. 100,000 shares of the Performance-Based Options would vest if, within the first thirty-six months following the Effective Date, the Company’s average stock price over a Thirty-Day Trading Period equals or exceeds the greater of (i) eighteen dollars ($18) per share or (ii) a per share price that exceeds the triggering price for the First Installment by at least thirty-seven and one-half percent (37 1/2%) (“the Second Installment”); and

3. 100,000 shares of the Performance-Based Options would vest if, within the first fifty-four months following the Effective Date, the Company’s average stock price over a Thirty-Day Trading Period equals or exceeds the greater of (i) twenty-four dollars ($24) per share or (ii) a per share price that exceeds the triggering price for the Second Installment by at least thirty-seven and one-half percent (37 1/2%) (the “Third Installment”).

 

2

Any installment of Performance-Based Options that has not vested by the end of the specified period shall terminate. The price per share of any approved Performance-Based Options will be determined on the Effective Date. Executive’s entitlement to the Performance-Based Options is conditioned upon Executive’s signing of the Performance-Based Stock Option Agreement attached as Exhibit B to this Agreement and is subject to its terms and the terms of the Stock Option Plan under which the Performance-Based Options are granted, including vesting requirements.

D. Restricted Stock. The Board of Directors has approved a grant to Executive, with such approval effective on the Effective Date, of 100,000 shares of restricted stock of the Company (the “Restricted Stock”). The Restricted Shares will vest as follows: 50,000 shares of the Restricted Stock would vest on the fourth anniversary of the Effective Date and the remaining 50,000 shares of the Restricted Stock would vest on the fifth anniversary of the Effective Date, contingent upon the Executive’s continuous employment with the Company through such dates. Executive’s entitlement to the Restricted Stock is conditioned upon Executive’s signing of the Restricted Stock Agreement attached as Exhibit C to this Agreement.

E. Benefits; Indemnification; D&O Insurance.

Benefits. Executive shall be eligible to participate in the benefits made generally available by the Company to similarly-situated officers, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.

Indemnification. Executive shall be entitled, in connection with his employment under this Agreement, to the benefit of the indemnification provisions contained on the date hereof in the Company’s Bylaws and the Company’s standard indemnification agreements entered into with other similarly situated officers of the Company, as the same may hereafter be amended, to the fullest extent permitted by applicable law.

D&O Insurance. The Company shall use best efforts to continue to maintain (with reputable and financially sound insurers) on reasonable business terms one or more directors’ and officers’ liability insurance policies that cover Executive at a level that is commercially reasonable (in light of the Company’s business and the risks of litigation or claims).

F. Reimbursement of Relocation Expenses. Executive agrees to locate from Portland, Oregon to the San Francisco Bay Area by July 1, 2006. The Company agrees to reimburse Executive’s reasonable relocation expenses, subject to a maximum of twenty-five thousand dollars ($25,000) less any reimbursement of relocation expenses Executive receives or is entitled to receive from Qsent, Inc., based on any termination of Executive’s current employment with Qsent, Inc. Executive shall submit receipts and other appropriate documentation of his relocation expenses prior to receiving such reimbursements.

 

3

G. Expenses. The Company shall reimburse Executive for reasonable business expenses incurred in the performance of Executive’s duties hereunder in accordance with the Company’s expense reimbursement guidelines.

III. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

A. At-Will Termination by Company. Executive’s employment with the Company shall be “at-will” at all times. The Company may terminate Executive’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. Upon and after such termination, all obligations of the Company under this Agreement shall cease, except as otherwise provided herein.

B. Severance. Except in situations where the employment of Executive is terminated For Cause, By Death (except as set forth in Section IV.B) or By Disability (as defined in Section IV below), in the event that the Company terminates Executive’s employment without Cause at any time, Executive will be eligible to receive the following severance benefits:

1. severance pay equal to twelve (12) months of Executive’s then-current Base Salary, less applicable withholdings and authorized deductions, payable in the form of salary continuation (“Severance”). Such Severance shall be reduced by any remuneration paid to Executive because of Executive’s employment or self-employment during the severance period, and Executive shall promptly report all such remuneration to the Company in writing.

2. accelerated vesting of Executive’s remaining unvested Restricted Stock, under the following schedule:

a. If Executive’s employment is terminated without Cause after the first anniversary of the Effective Date but prior to the third anniversary of the Effective Date, thirty-three percent (33%) of Executive’s remaining unvested Restricted Stock shall immediately vest;

b. If Executive’s employment is terminated without Cause after the third anniversary of the Effective Date but prior to the fourth anniversary of the Effective Date, seventy-five percent (75%) of Executive’s remaining unvested Restricted Stock shall immediately vest;

c. If Executive’s employment is terminated without Cause after the fourth anniversary of the Effective Date but prior to the fifth anniversary of the Effective Date, one-hundred percent (100%) of Executive’s remaining unvested Restricted Stock shall immediately vest.

Executive’s eligibility for the foregoing severance benefits is conditioned on (a) Executive having first signed a release agreement in the form attached as Exhibit D , and (b) Executive’s compliance with the terms of the Non-competition and Non-solicitation Agreement in the form attached as Exhibit E . If Executive engages in any business activity competitive with the

 

4

Company or its successors or assigns during the severance period, all severance benefits immediately shall cease. Executive shall not be entitled to any severance benefits if Executive’s employment is terminated For Cause or By Disability (as defined in Section IV below) or if Executive’s employment is terminated by Executive without Good Reason (as defined in Section V below).

IV. OTHER TERMINATIONS BY COMPANY

A. Termination for Cause. For purposes of this Agreement, “For Cause” shall mean: (i) Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Executive willfully engages in conduct that is in bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive commits a material breach of this Agreement; (iv) Executive willfully refuses to implement or follow a lawful policy or directive of the Company; or (v) Executive engages in misfeasance or malfeasance demonstrated by a pattern of failure to perform job duties diligently and professionally. The Company may terminate Executive’s employment For Cause at any time, without any advance notice. The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, subject to any other rights or remedies of the Company under law; and thereafter all obligations of the Company under this Agreement shall cease.

B. By Death. Executive’s employment shall terminate automatically upon Executive’s death. The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then due and owing. Additionally, upon termination of Executive’s employment due to Executive’s death, Executive’s beneficiaries or estate, as appropriate, shall be entitled to the applicable severance benefit set forth in Section III.B.2. regarding accelerated vesting of restricted stock, subject to the terms set forth therein. Thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect any entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits.

C. By Disability. If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period, then, to the extent permitted by law, the Company may terminate Executive’s employment. The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect Executive’s rights under any disability plan in which Executive is a participant.

V. AT-WILL EMPLOYMENT; TERMINATION BY EXECUTIVE

A. At-Will Termination by Executive. Executive may terminate employment with the Company at any time for any reason or no reason at all, upon two weeks’ advance written notice. During such notice period Executive shall continue to diligently perform all of

 

5

Executive’s duties hereunder. The Company shall have the option, in its sole discretion, to make Executive’s termination effective at any time prior to the end of such notice period as long as the Company pays Executive all compensation to which Executive is entitled up through the last day of the two week notice period. Thereafter all obligations of the Company shall cease. In the event Executive terminates his employment with Company under this Section V.A. prior to the first anniversary of the Effective Date, Executive shall, within thirty (30) days of the effective date of such termination, return to the Company all relocation expenses received from Company pursuant to Section II.F. above.

B. Termination for Good Reason. Executive’s termination shall be for “Good Reason” if Executive provides written notice to the Company of the Good Reason within three (3) months of the event constituting Good Reason and provides the Company with a period of twenty days to cure the Good Reason and the Company fails to cure the Good Reason within that period. For purposes of this Agreement, “Good Reason” shall mean any of the following events if effected by the Company without the consent of Executive: (A) a change in Executive’s position with Employer which materially reduces Executive’s level of responsibility, excluding changes resulting from a restructuring or reduction in force due to economic forces beyond the Company’s reasonable control; (B) a material reduction in Executive’s Base Salary, except for reductions that are comparable to reductions generally applicable to similarly situated executives of the Company; or (C) a relocation of Executive’s principal place of employment by more than fifty miles. In such event Executive may terminate his employment for Good Reason, in which case Executive will be eligible to receive the severance benefit set forth in Section III.B.1 above, subject to the conditions set forth therein. Thereafter all obligations of the Company or its successor under this Agreement shall cease.

VI. TERMINATION OBLIGATIONS

A. Return of Property. Executive agrees that all property (including without limitation all equipment, tangible proprietary information, documents, records, notes, contracts, customer lists, and computer-generated materials) furnished to or created or prepared by Executive incident to Executive’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment.

B. Resignation and Cooperation. Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all offices and directorships then held with the Company. Following any termination of employment, Executive shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. Executive shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Executive’s employment by the Company.

VII. TAX DETERMINATIONS

Section 280G. In the event that any severance and other benefits provided to or for the benefit of Executive or his legal representatives and dependents pursuant to this Agreement and any other agreement, benefit, plan, or policy of the Company (including, but not

 

6

limited to, the Company’s 1999 Stock Option Plan) (this Agreement and such other agreements, benefits, plans, and policies collectively being referred to herein as the “Change in Control Arrangements”) constitute “parachute payments” within the meaning of Section 280G(b)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) (such severance and other benefits being referred to herein as the “Payments”), the Company will provide Executive with a computation of (i) the maximum amount of “Payments” that could be made, without the imposition of the excise tax imposed by Code Section 4999, under the Change in Control Arrangements (said maximum amount being referred to as the “Capped Amount”); (ii) the value of all Payments that could be made pursuant to the terms of the Change in Control Arrangements (all said payments, distributions and benefits being referred to as the “Uncapped Payments”); (iii) the dollar amount of excise tax (if any) which Executive would become obligated to pay pursuant to Code Section 4999 as a result of receipt of the Uncapped Payments (the “Excise Tax Amount”); and (iv) the net value of the Uncapped Payments after reduction by (A) the Excise Tax Amount, (B) the estimated income taxes payable by Executive on the difference between the Uncapped Payments and the Capped Amount, assuming that Executive is paying the highest marginal tax rate for state, local and federal income taxes, and (C) the estimated hospital insurance taxes payable by Executive on the difference between the Uncapped Payments and the Capped Amount based on the hospital insurance tax rate under Code Section 311 (b) (the “Net Uncapped Amount”).

If the Capped Amount is greater than the Net Uncapped Amount, the Executive shall be entitled to receive or commence to receive Payments equal to the Capped Amount; or if the Net Uncapped Amount is greater than the Capped Amount, the Executive shall be entitled to receive or commence to receive Payments equal to the Uncapped Payments. If Executive receives the Uncapped Payments, then Executive shall be solely responsible for the payment of all income and excise taxes due from Executive and attributable to such Uncapped Payments, with no right of additional payment from the Company as reimbursement for any taxes.

Unless the Company and Executive otherwise agree in writing, any determination required under this Section VII shall be made in writing by independent public accountants agreed to by the Company and Executive (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section VII, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section VII. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section VII.

A. Section 409A. This Agreement is intended to comply with Section 409A of the Code (as amplified by any Internal Revenue Service or U.S. Treasury Department guidance), and shall be construed and interpreted in accordance with such intent. Executive acknowledges that the Company, in the exercise of its sole discretion and without the consent of Executive, (i) may amend or modify this Agreement in any manner in order to meet the requirements of Section

 

7

409A of the Code as amplified by any Internal Revenue Service or U.S. Treasury Department guidance and (ii) shall have the authority to delay the payment of any amounts or the provision of any benefits under this Agreement to the extent it deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “key employees” of certain publicly-traded companies) as amplified by any Internal Revenue Service or U.S. Treasury Department guidance as the Company deems appropriate or advisable. In such event, any amounts or benefits under this Agreement to which Executive would otherwise be entitled during the six (6) month period following Executive’s termination of employment will be paid on the first business day following the expiration of such six (6) month period. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Code or any regulations or rulings thereunder).

VIII. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION

A. Proprietary Information Agreement. Executive agrees to sign and be bound by the terms of the Company’s Agreement Regarding Confidentiality and Inventions, which is attached as Exhibit F (“Proprietary Information Agreement”).

B. Non-Solicitation. Executive acknowledges that because of Executive’s position in the Company, Executive will have access to material intellectual property and confidential information. During the term of Executive’s employment and for one year thereafter, in addition to Executive’s other obligations hereunder or under the Proprietary Information Agreement, Executive shall not, for Executive or any third party, directly or indirectly (a) divert or attempt to divert from the Company any business of any kind, including without limitation the solicitation of or interference with any of its customers, clients, members, business partners or suppliers, or (b) solicit or otherwise induce any person employed by the Company to terminate his employment.

C. Non-Disclosure of Third Party Information. Executive represents and warrants and covenants that Executive shall not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including but not limited to any proprietary information or trade secrets of any former employer, if any; and Executive acknowledges and agrees that any violation of this provision shall be grounds for Executive’s immediate termination and could subject Executive to substantial civil liabilities and criminal penalties. Executive further specifically and expressly acknowledges that no officer or other employee or representative of the Company has requested or instructed Executive to disclose or use any such third party proprietary information or trade secrets.

IX. ARBITRATION

Executive agrees to sign and be bound by the terms of the Company’s Arbitration Agreement, which is attached as Exhibit G.

 

8

X. AMENDMENTS; WAIVERS; REMEDIES

This Agreement may not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the Company other than Executive. Failure to exercise any right under this Agreement shall not constitute a waiver of such right. Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

XI. ASSIGNMENT; BINDING EFFECT

A. Assignment. The performance of Executive is personal hereunder, and Executive agrees that Executive shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.

B. Binding Effect. Subject to the foregoing restriction on assignment by Executive, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Executive.

XII. NOTICES

All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party, as set forth below. The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail. Executive shall be obligated to notify the Company in writing of any change in Executive’s address. Notice of change of address shall be effective only when done in accordance with this paragraph.

Company’s Notice Address:

CyberSource Corporation

1295 Charleston Road

Mountain View, CA 94043

Facsimile: (650) 625-4408

ATTN: General Counsel

Executive’s Notice Address:

 

9

XIII. SEVERABILITY

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

XIV. TAXES

All amounts paid under this Agreement (including without limitation Base Salary or Severance) shall be paid less all applicable state and federal tax withholdings and any other withholdings required by any applicable jurisdiction.

XV. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of California.

XVI. INTERPRETATION

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular.

XVII. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

Each party agrees that its obligations under this agreement, including but not limited to the Exhibits hereto, shall survive the termination of employment of Executive and the termination of this Agreement to the extent necessary for either party to enforce its rights under the Agreement.

XVIII. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.

 

10

XIX. AUTHORITY

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.

XX. ENTIRE AGREEMENT

This Agreement, including any Exhibits attached hereto, is intended to be the final, complete, and exclusive statement of the terms of Executive’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the Exhibits attached hereto). To the extent that the practices, policies or procedures of the Company, now or in the future, apply to Executive and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control. Any subsequent change in Executive’s duties, position, or compensation will not affect the validity or scope of this Agreement.

XXI. EXECUTIVE ACKNOWLEDGEMENT

EXECUTIVE ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

I N W ITNESS W HEREOF , the parties have duly executed this Agreement as of the date first written above.

 

C YBER S OURCE C ORPORATION				S COTT C RUICKSHANK
/s/ William S. McKiernan Signature				/s/ Scott Cruickshank Signature
Chairman and CEO				March 31, 2006
Title				Date
March 31, 2006 Date

 

11

EXHIBIT A

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”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan.

2. Exercise Period of Option .

(a) Vesting Schedule . The Optionee has option rights hereunder to purchase a total of 550,000 Shares which shall become exercisable during the time periods as set forth in this Section 2. This Option may be exercised by the Optionee (i) for the purchase of 275,000 Shares covered by this Option on the fourth anniversary of the Vesting Start Date and (ii) for the purchase of an additional 275,000 Shares covered by this Option on the fifth anniversary of the Vesting Start Date. 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) Minimum Exercise . The minimum number of Shares that may be purchased upon any partial exercise of the Option is one hundred (100) shares.

(c) Expiration of the Option . 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 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. Notwithstanding anything to the contrary in the Plan or this Grant, service as a director shall not be considered employment with or service 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.

2

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:

 

(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. 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.

 

3

6. 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.

7. Federal Tax Consequences . The Optionee may incur tax liability as a result of the Grantee’s purchase or disposition of the Shares. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

8. 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

9. 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.

10. 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

 

4

(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.

(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;

 

5

(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.

(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. The Company recommends that Optionee obtain the advice of his tax advisor prior to entering into this Grant.

 

 

6

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.

 

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 hereby delivers to the Company the Aggregate Purchase Price, to the extent permitted in the Option Grant, as follows [check as applicable and complete] :

 

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).

3. 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.

4. 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 B

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”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan.

2. Exercise Period of Option .

(a) Vesting Schedule . The Optionee has option rights hereunder to purchase a total of 300,000 Shares which shall become exercisable during the time periods as set forth in this Section 2. This Option shall vest and become exercisable by the Optionee upon achievement of the following performance measures:

(i) 100,000 Shares subject to the Option shall vest if, within the first eighteen (18) months following the Date of Grant, the average Fair Market Value of the Company’s Common Stock over a Thirty-Day Trading Period is at least equal to the greater of (a) $13.00 or (b) 137.5% of the Base Price (the “First Installment Goal”). Vesting associated with the achievement of the First Installment Goal shall occur, if at all, on the first trading day following the Thirty-Day Trading Period in which the First Installment Goal is achieved. If the First Installment Goal is not achieved, 100,000 Shares subject to the Option shall be forfeited.

(ii) 100,000 Shares subject to the Option shall vest if, within the first thirty-six (36) months following the Date of Grant, the average Fair Market Value of the Company’s Common Stock over a Thirty-Day Trading Period is at least equal to the greater of (a) $18.00 or (b) 137.5% of the triggering price for the First Installment Goal (the “Second Installment Goal”). Vesting associated with the achievement of the Second Installment Goal shall occur, if at all, on the first trading day following the Thirty-Day Trading Period in which the Second Installment Goal is achieved. If the Second Installment Goal is not achieved, 100,000 Shares subject to the Option shall be forfeited.

(iii) 100,000 Shares subject to the Option shall vest if, within the first fifty-four (54) months following the Date of Grant, the average Fair Market Value of the Company’s Common Stock over a Thirty-Day Trading Period is at least equal to the greater of (a) $24.00 or (b) 137.5% of the triggering price for the Second Installment Goal (the “Third Installment Goal”). Vesting associated with the achievement of the Third Installment Goal shall occur, if at all, on the first trading day following the Thirty-Day Trading Period in which the Third Installment Goal is achieved. If the Third Installment Goal is not achieved, 100,000 Shares subject to the Option shall be forfeited.

“Base Price” is defined as the Fair Market Value of the Company’s Common Stock over the ten trading days between April 24, 2006 and May 5, 2006; provided, however, if the Company’s earnings conference call regarding the results of the first quarter of 2006 (the Q-1 Call”) is not held on April 19, 2006, the Base Price shall be the Fair Market Value of the Company’s Common Stock over the ten trading days commencing with the third trading day after the first to occur of Q-1 Call or the date on which the Company’s results of the first quarter of 2006 are first publicly announced.

“Fair Market Value” is defined, as of any date, the value of Company’s Common Stock determined as follows:

(i) If the Common Stock is listed on one or more established stock exchanges or national market systems, 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 the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination