OFFICIAL PAYMENTS CORPORATION
1999 STOCK INCENTIVE PLAN
(AS AMENDED EFFECTIVE AS OF APRIL 25, 2000)
SECTION 1. PURPOSE.
The purpose of the Official Payments Corporation 1999 Stock
Incentive Plan (the "Plan") is to enable Official Payments Corporation (the
"Company") to attract, retain and reward certain persons providing valuable
service to the Company to strengthen the existing mutuality of interests
between such individuals and the Company's stockholders by offering to such
eligible persons an equity interest in the Company through the grant of
options ("Options" or "Stock Options") to purchase shares of the Company's
common stock, par value $.01 per share ("Common Stock") at a specified
price per share ("Exercise Price").
SECTION 2. TYPES OF OPTIONS.
2.1 The Plan provides for the grant of Incentive Stock Options and
Non-Qualified Stock Options. An "Incentive Stock Option" is a Stock Option
that is intended to qualify as an "incentive stock option" under Section
422 of the Internal Revenue Code of 1986 (the "Code"). A "Non-Qualified
Stock Option" is a Stock Option that that does not qualify as an "incentive
stock option" under Section 422 of the Code.
2.2 Incentive Stock Options and Non-Qualified Stock Options may be
granted to key employees of the Company. Outside Directors (as defined
below) and Consultants (as defined below) may only be granted Non-Qualified
Stock Options under this Plan. For purposes of this Plan, the term
"Outside Director" shall mean a director of the Company who is not an
officer or employee of the Company, Imperial Bank or U.S. Audiotex, Inc.,
or any affiliated companies thereof; provided, however, that George L.
Graziadio, Jr. shall be deemed to be an Outside Director. For purposes of
this Plan, the term "Consultant" shall mean a consultant or other
independent advisor to the Company.
SECTION 3. ADMINISTRATION.
3.1 The Plan shall be administered by the Company's Board of
Directors ("Board" or the "Board of Directors") and a committee composed of
two or more Outside Directors of the Board as the Board shall designate
(the "Committee"); provided, however, the Plan shall be administered by the
Board of Directors with respect to all Stock Options granted to Outside
Directors. The members of the Committee shall serve at the pleasure of the
Board.
3.2 For purposes of this Plan, the term "Granting Authority" shall
mean: (i) the Board of Directors, with respect to Stock Options granted to
Outside Directors and (ii) the Committee, with respect to Stock Options
granted to key employees and Consultants. The Granting Authority shall
have the following authority with respect to Options granted under this
Plan: to grant Stock Options to persons eligible to receive them under the
Plan; to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall deem advisable; to interpret the
terms and provisions of the Plan and any Options granted by it under the
Plan; and to otherwise supervise the administration of the Plan. In
particular, and without limiting its authority and powers, the Granting
Authority shall have full authority and discretion to make the following
determinations with respect to the Options granted under this Plan:
(a) to determine whether and to what extent Incentive Stock
Options and/or Non-Qualified Stock Options will be granted to an
eligible key employee hereunder;
(b) to select the key employees, Consultants and Outside
Directors to whom Options will be granted;
(c) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder (subject to the limitations
contained in the Plan);
(d) to determine the Exercise Price, vesting schedule and all
other terms and conditions of any Stock Option granted hereunder;
(e) to determine the "Fair Market Value" of a share of Common
Stock on a given date. For purposes of this Plan and all Options
granted hereunder, the term "Fair Market Value" shall mean: (i) the
average of the highest and lowest reported sales prices on the date in
question (or if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) as reported in the
principal consolidated reporting system with respect to securities
listed or admitted to trading on the principal United States securities
exchange on which the shares of Common Stock are listed or admitted to
trading; or (ii) if the Common Stock is not listed or admitted to
trading on any such exchange, the average of the bid and offered prices
quoted with respect to a share of Common Stock on such date on the
National Association of Securities Dealers Automated Quotations System,
or, if no such quotation is provided, on another similar system,
selected by the Granting Authority, then in use; or (iii) if neither
Section 3.2(e)(i) or (ii) is applicable, the Fair Market Value of a
share of Common Stock shall be determined by the Granting Authority in
such manner as it shall deem appropriate;
(f) to provide that the shares of Common Stock received upon
the exercise of a Stock Option shall be subject to a Right of First
Refusal (described in Section 8 hereof) pursuant to which the option
holder shall be required to offer to the Company any shares that the
option holder wishes to sell, subject to such terms and conditions as
the Granting Authority may specify; and
(g) to amend the terms of any Option, prospectively or
retroactively; provided, however, that no amendment shall impair the
rights of the option holder without his or her written consent.
3.3 The Committee shall grant and administer all Options under the
Plan in a manner designed to preserve the deductibility of the compensation
resulting from such Options in accordance with Section 162(m) of the Code.
The Committee shall have discretion to modify the terms of an Option
granted hereunder only to the extent that the exercise of such discretion
would not cause the Option to fail to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code.
3.4 All determinations made by the Granting Authority pursuant to
the provisions of the Plan shall be final and binding on all persons,
including the Company and all participants in the Plan.
SECTION 4. STOCK SUBJECT TO PLAN.
4.1 The total number of shares of Common Stock which may be issued
under the Plan shall be 6,900,000, of which 6,000,000 shall be available
for the grant of Stock Options to key employees and Consultants and 900,000
shall be available for the grant of Stock Options to Outside Directors (all
subject to adjustment as provided below). Such shares may consist of
authorized but unissued shares or treasury shares.
4.2 To the extent an Option granted under this Plan terminates
without the issuance of shares, the shares subject to such Option shall
again be available for grant pursuant to an Option under the Plan. Shares
of Common Stock equal in number to the shares withheld in payment of the
Exercise Price, and shares of Common Stock which are withheld in order to
satisfy federal, state or local tax liabilities, shall not count against
the above limit, and shall again be available for grant pursuant to an
Option under this Plan.
4.3 No key employee shall be granted Stock Options with respect to
more than 1,950,000 shares of Common Stock in any calendar year (subject to
adjustment as provided in Section 4.4).
4.4 In the event of any merger, reorganization, consolidation,
sale of substantially all the Company's assets, recapitalization, stock
dividend, stock split, spin-off split-up, split-off distribution of assets
or other change in the Company's corporate structure affecting the shares
of the Company's Common Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole discretion, shall
be made in the aggregate number of shares of Common Stock reserved for
issuance under the Plan, the number of shares as to which Options may be
granted to any individual in any calendar year and the number and type of
shares subject to outstanding Options; provided, however, that no such
adjustment shall increase the aggregate value of any outstanding Option.
SECTION 5. ELIGIBILITY.
5.1 Key employees of the Company, including those key employees
who are officers and/or directors of the Company, are eligible to be
granted Options under the Plan. The Committee, in its sole discretion, may
select the key employees who are granted Options under this Plan.
5.2 Consultants who provide service to the Company are eligible to
be granted Options under the Plan. The Committee, in its sole discretion,
may select the Consultants to be granted Options under the Plan, and the
terms and conditions of the Options to such Consultants.
5.3 All Outside Directors of the Company shall be eligible to be
granted Options under the Plan. The terms and conditions of the Options
granted to Outside Directors shall be determined by the Board of Directors.
SECTION 6. STOCK OPTIONS.
6.1 The Stock Options granted under the Plan may be of two types:
(i) Incentive Stock Options within the meaning of Section 422 of the Code
or any successor provision thereto (which may be granted only to key
employees); and (ii) Non-Qualified Stock Options. To the extent that any
Stock Option does not qualify as an Incentive Stock Option, it shall
constitute a Non-Qualified Stock Option.
6.2 The maximum number of shares of Common Stock that may be
issued under Options intended to be Incentive Stock Options shall be
3,000,000 shares.
6.3 All Stock Options granted under this Plan and the terms and
conditions of such Stock Option Options shall be evidenced by a written
stock option agreement ("Stock Option Agreement") between the option
recipient and the Company.
6.4 Each Stock Option shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and
to such other terms and conditions not inconsistent therewith as the
Granting Authority shall determine.
(a) Exercise Price. The Exercise Price of each Stock Option
granted hereunder will be determined by the Granting Authority at the
time of grant and such Exercise Price will be specified in the Stock
Option Agreement. Except as provided in Section 6.5 or Section 11, the
Exercise Price of a Stock Option may be less than the Fair Market Value
of a share of Common Stock subject to the Stock Option on the date of
grant.
(b) Vesting and Exercisability of Stock Option. Unless
otherwise provided by the Granting Authority in the Stock Option
Agreement, a Stock Option granted to a key employee, Consultant or
Outside Director shall become vested and exercisable over a three-year
period as follows:
(i) effective on the first anniversary of the date of
grant, the Stock Option shall first become vested and exercisable with
respect to a maximum of one-third (1/3) of the total shares of Common
Stock subject to the Stock Option when granted; and
(ii) thereafter, effective commencing on the last day of
the first calendar month immediately succeeding the first anniversary of
the Stock Option's date of grant and continuing on the last day of each
of the next immediately succeeding twenty-three (23) calendar months,
the Stock Option shall become vested and exercisable with respect to
one-twenty-fourth (1/24th) of the total number of shares of Common Stock
subject to the Stock Option which did not become vested and exercisable
on the first anniversary of the date of grant;
provided, however, a Stock Option shall immediately become 100% vested
and exercisable upon the option recipient's death or Disability (as
defined below).
(c) Option Term. Subject to the provisions of Section 6.5
applicable to Options that are intended to be Incentive Stock Options,
the period during which a Stock Option granted hereunder may be
exercised shall commence on the date specified by the Granting Authority
in the Stock Option Agreement and shall expire on the date specified in
the Stock Option Agreement; provided, however, that the term of the
Option shall expire on the earliest to occur of:
(i) the close of business on the last day of the three-
month period commencing on the date of the option holder's termination
of employment or service, other than on account of death, Disability, or
a Termination for Cause (as defined below);
(ii) the close of business on the last day of the one-
year period commencing on the date of the option holder's termination of
employment or service due to death or Disability;
(iii) the date and time when the option holder's
employment or service ceases due to a Termination for Cause; and
(iv) the day immediately preceding the tenth anniversary
of the date the Stock Option was granted.
(d) Defined Terms. Unless otherwise provided by the Granting
Authority in the Stock Option Agreement, the following terms shall have
the following meanings for purposes of the Plan:
(i) "Disability" shall mean a condition of total
incapacity, mental or physical, for further performance of duty with the
Company, which the Committee shall have determined, on the basis of
competent medical evidence, is likely to be permanent.
(ii) "Termination for Cause" shall mean with respect to
an employee or Consultant, as the case may be, that the employee's
employment with, or Consultant's service to, the Company has been
terminated as a result of the determination by the Board of Directors
that such employee or Consultant has committed an act of embezzlement,
fraud, dishonesty, or breach of fiduciary duty to the Company, or has
deliberately disregarded the rules of the Company which resulted in
loss, damage, or injury to the Company, or because the employee or
Consultant has made an unauthorized disclosure of any of the secrets or
confidential information of the Company, has induced any client or
customer of the Company to breach any contract with the Company, has
induced any principal for whom the Company acts as agent to terminate
the agency relationship, or has engaged in any conduct that constitutes
unfair competition with the Company. Notwithstanding the foregoing, if
an employee or Consultant is a party to an employment agreement or a
consulting agreement governing the terms of his employment or
consultancy and such agreement contains a definition of "termination for
cause" or a definition of an equivalent term, then for purposes hereof,
the term "termination for cause" shall have the meaning ascribed to it
in such agreement.
(iii) "Termination for Cause" shall mean with respect
to an Outside Director, that the service of such Director on the
Company's Board of Directors has been terminated due to a "removal for
cause" determined in accordance with the Company's By-Laws.
(e) Effect of Termination for Cause. No Stock Option granted
hereunder, whether or not previously exercisable, shall be exercised
after the date and time on which the option holder's employment or
service with the Company is terminated in a Termination for Cause.
(f) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the Option Term by giving written
notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment of the Exercise Price. Unless
otherwise provided by the Granting Authority in the Stock Option
Agreement, payment of the Exercise Price may be made in the following
manner: (i) in United States dollars by certified check, money order or
bank draft made payable to the order of Official Payments Corporation;
(ii) delivery of shares of Common Stock that have been owned by the
optionee for at least six months; (iii) a cashless exercise (which may
be either (A) a broker-assisted cash exercise effected in accordance
with rules adopted by the Granting Authority or (B) a direction to the
Company to withhold shares of Common Stock, otherwise deliverable to the
option holder with respect to the Option, having a Fair Market Value on
the date of exercise equal to the Option's Exercise Price); or (iv) in
any combination of the foregoing.
(g) No Stockholder Rights. An optionee shall not have rights
to dividends or any of the other rights of a stockholder with respect to
shares subject to a Stock Option until the optionee has given written
notice of exercise and has paid the Exercise Price for such shares.
(h) Non-transferability. Unless otherwise provided by the
Granting Authority in a Stock Option Agreement, (i) Stock Options shall
not be transferable by the optionee other than by will or by the laws of
descent and distribution, and (ii) during the optionee's lifetime, all
Stock Options shall be exercisable only by the optionee or by his or her
guardian or legal representative.
6.5 A Stock Option granted to a key employee hereunder that is
designated by the Granting Authority to be an Incentive Stock Option shall
be subject to the following limitations:
(a) A Stock Option granted to a key employee under this Plan
will not be considered an Incentive Stock Option to the extent that such
Stock Option, together with any earlier Stock Option granted to such
employee under this or any other plan of the Company that is intended to
be Incentive Stock Option, permits the exercise for the first time in
any calendar year of shares of Common Stock having a Fair Market Value
in excess of $100,000 (determined at the time of grant);
(b) The Exercise Price of an Incentive Stock Option granted
to a key employee who, at the time the Stock Option is granted, owns
shares of Common Stock comprising more than 10% of the total combined
voting power of all classes of stock of the Company shall not be less
than 110% of the Fair Market Value of a share, and if a Stock Option
designated as an Incentive Stock Option is granted at an Exercise Price
that does not satisfy this requirement, the designated Exercise Price
shall be observed and the Option shall be treated as a Non-Qualified
Stock Option;
(c) The term of an Incentive Stock Option granted to a key
employee who, at the time the Option is granted, owns shares comprising
more than 10% of the total combined voting power of all classes of
Common Stock of the Company, shall expire no later than the fifth
anniversary of the date on which the Stock Option was granted, and if an
Option designated as an Incentive Stock Option shall be granted for an
option term that does not satisfy this requirement, the term of the
Option shall be observed and the Option shall be treated as a Non-
Qualified Stock Option;
(d) An Incentive Stock Option that is exercised during its
designated term but more than:
(i) three (3) months after the termination of employment
with the Company, a parent or a subsidiary (other than on account of
disability within the meaning of Section 22(e)(3) of the Code) of the
key employee to whom it was granted; and
(ii) one (1) year after such individual's termination of
employment with the Company, a parent or a subsidiary due to disability
(within the meaning of Section 22(e)(3) of the Code);
(iii) may be exercised in accordance with the terms
but shall at the time of exercise be treated as a Non-Qualified Stock
Option; and
(e) Unless prior written notice is given to the Committee, no
individual shall dispose of shares acquired pursuant to the exercise of
an Incentive Stock Option until after the later of (i) the second
anniversary of the date on which the Incentive Stock Option was granted,
or (ii) the first anniversary of the date on which the shares of Common
Stock were acquired.
SECTION 7. TAX WITHHOLDING.
7.1 Each key employee who has been granted a Non-Qualified Stock
Option under this Plan shall be required to make arrangements satisfactory
to the Granting Authority regarding payment of, any federal, state, local
or other taxes of any kind required by law to be withheld upon the exercise
of such Option. The obligations of the Company under the Plan shall be
conditioned on such payment or arrangements, and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the employee.
7.2 To the extent permitted by the Committee, and subject to such
terms and conditions as the Committee may provide, an employee may elect to
have the withholding tax obligation, or any additional tax obligation with
respect to any Options hereunder, satisfied by (i) having the Company
withhold shares of Common Stock otherwise deliverable to such person with
respect to the Option or (ii) delivering to the Company shares of
previously acquired Common Stock that has been owned by the option holder
for at least six months.
7.3 Each Outside Director and Consultant shall be solely
responsible for the payment of all tax obligations resulting from the
exercise of any Non-Qualified Stock Option granted to such Outside Director
or Consultant under this Plan.
SECTION 8. RIGHT OF FIRST REFUSAL.
8.1 In the event that an option recipient who has received shares
of Common Stock through the exercise of a Stock Option granted under this
Plan (hereinafter, a "Selling Stockholder") proposes to sell, pledge or
otherwise transfer to a third party any of such shares, the Company shall
have the Right of First Refusal (as set forth in this Section 8) with
respect to all (and not less than all) of such shares. The Selling
Stockholder shall give a written notice to the Company describing the
proposed transfer which shall include the number of shares proposed to be
transferred, the proposed transfer price, the name and address of the
proposed transferee ("the Transferee") and proof satisfactory to the
Company that the proposed sale or transfer will not violate any applicable
federal or state securities laws (hereinafter such notice shall be referred
to as the "Transfer Notice"). The Transfer Notice shall be signed by both
the Selling Stockholder and the proposed Transferee and must constitute a
binding commitment of both parties to the transfer of the shares. The
Company shall have the right to purchase all, and not less than all, of the
shares of the Company's Common Stock on the terms described in the Transfer
Notice (subject, however, to any change in such terms permitted under
Section 8.2 below) by delivery of a notice of exercise of the Right of
First Refusal within 30 days after the date when the Transfer Notice was
received by the Company. The Company's rights under this Section 8.1 shall
be freely assignable, in whole or in part.
8.2 If the Company fails to exercise its Right of First Refusal
within 30 days after the date when it received the Transfer Notice, the
Selling Stockholder may, not later than 90 days following receipt of the
Transfer Notice by the Company, conclude a transfer of the shares subject
to the Transfer Notice on the terms and conditions described in the
Transfer Notice, provided that any such sale is made in compliance with
applicable federal and state securities laws and not in violation of any
other contractual restrictions to which the Selling Stockholder is bound.
Any proposed transfer on terms and conditions different from those
described in the Transfer Notice, as well as any subsequent proposed
transfer by the Selling Stockholder, shall again be subject to the Right of
First Refusal and shall require compliance with the procedure described in
Section 8.1 above. If the Company exercises its Right of First Refusal,
the parties shall consummate the sale of the shares on the terms set forth
in the Transfer Notice within 60 days after the date when the Company
received the Transfer Notice (or within such longer period as may have been
specified in the Transfer Notice); provided, however, that in the event the
Transfer Notice provided that payment for the shares was to be made in a
form other than cash or cash equivalents paid at the time of transfer, the
Company shall have the option of paying for the shares with cash or cash
equivalents equal to the present value of the consideration described in
the Transfer Notice.
8.3 In the event of the declaration of a stock dividend, the
declaration of an extraordinary dividend payable in a form other than
stock, a spin-off, a stock split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company's
outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property which are by reason
of such transaction distributed with respect to any shares subject to this
Section 8 or into which such shares thereby become convertible shall
immediately be subject to this Section 8. Appropriate adjustments to
reflect the distribution of such securities or property shall be made to
the number and/or class of the shares subject to this Section 8.
8.4 In the event that the Company's Common Stock is readily
tradable on an established securities market when the Selling Stockholder
desires to transfer shares, the Company shall have no Right of First
Refusal, and the Selling Stockholder shall have no obligation to comply
with the procedures prescribed by Sections 8.1 and 8.2 above.
SECTION 9. AMENDMENTS AND TERMINATION.
The Board of Directors may discontinue the Plan at any time and may
amend it from time to time No amendment or discontinuation of the Plan
shall adversely affect any Option previously granted without the option
holder's written consent. Amendments may be made without stockholder
approval except as required to satisfy the requirements of Section 422 of
the Code, with respect to Incentive Stock Options, Section 162(m) of the
Code, with respect to performance-based compensation, or the rules and
regulations of any stock exchange on which the shares of the Company's
Common Stock are then currently traded or listed.
SECTION 10. CHANGE OF CONTROL.
10.1 Unless otherwise specified by the Granting Authority in the
Stock Option Agreement, in the event of a Change of Control (as defined
below) all outstanding Stock Options granted under the Plan shall become
fully exercisable.
10.2 "Change of Control" shall be deemed to occur on:
(a) the date on which any "person" within the meaning of
Section 13(d)(3) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the Rules promulgated thereunder, other
than Imperial Bank, Imperial Bancorp, Inc., any affiliate or subsidiary
thereof, acquires "beneficial ownership" within the meaning of Rule 13d-
3 of the Exchange Act, directly or indirectly, of securities issued by
the Company representing 35% or more of the total combined voting power
of all classes of the Company's then-outstanding securities;
(b) the date of approval by the stockholders of the Company
of an agreement providing for the merger or consolidation of the Company
with another corporation where either: (i) the stockholders of the
Company, immediately prior to the merger or consolidation, would not
"beneficially own" within the meaning of Rule 13d-3 of the Exchange Act,
immediately after the merger or consolidation, 50% or more of the total
combined voting power of all classes of the Company's then-outstanding
securities or (ii) where the members of the Company's Board of
Directors, immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation, constitute a majority of
the Company's Board of Directors; or
(c) the date of approval by the stockholders of the Company
of an agreement providing for the sale or other disposition of 50% of
the assets of the Company;
provided, however, in no event shall an underwritten initial public
offering of the shares of the Company's Common Stock registered under the
Securities Act of 1933, as amended, in which the gross proceeds to the
Company exceed $30,000,000 constitute a "Change of Control."
SECTION 11. SPECIAL RULES APPLICABLE TO CERTAIN STOCK OPTIONS.
Prior to the date that the shares of the Company's Common Stock are
listed or traded on a national securities exchange, any grant of a Stock
Option under this Plan to a California resident shall comply with the
requirements of Section 25110 of the California Corporate Securities Law
Code (the "Code") and the regulations promulgated thereunder (or any
successor statutory or regulatory provisions), unless exempt therefrom
pursuant to Section 25102 (or any successor provision) or any other
exemptions provided in the Code, as amended from time to time.
SECTION 12. GENERAL PROVISIONS.
12.1 Each Option under the Plan shall be subject to the requirement
that, if at any time the Granting Authority shall determine that (i) the
listing, registration or qualification of the Common Stock subject or
related thereto upon any securities exchange or under any state or federal
law, or (ii) the consent or approval of any government regulatory body or
(iii) an agreement by the recipient of an Option with respect to the
disposition of Common Stock is necessary or desirable (in connection with
any requirement or interpretation of any federal or state securities law,
rule or regulation) as a condition of, or in connection with, the granting
of such Option or the issuance, purchase or delivery of Common Stock
thereunder, such Option shall not be granted or exercised, in whole or in
part, unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any conditions
not acceptable to the Granting Authority.
12.2 Nothing set forth in this Plan shall prevent the Board from
adopting other or additional compensation arrangements. Neither the
adoption of the Plan nor any Option hereunder shall confer upon any
employee of the Company any right to continued employment, and no Option
shall confer upon any Outside Director or Consultant any right to continued
service as a director or consultant or other independent advisor to the
Company, as the case may be.
12.3 Determinations by the Granting Authority under the Plan
relating to the form, amount, and terms and conditions of Options need not
be uniform, and may be made selectively among persons who receive or are
eligible to receive Options under the Plan, whether or not such persons are
similarly situated.
12.4 No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee,
shall be personally liable for any action, determination or interpretation
taken or made with respect to the Plan, and all members of the Board or the
Committee and all officers or employees of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.
SECTION 13. EFFECTIVE DATE OF PLAN.
13.1 The provisions of the Plan became effective on August 24,
1999, the date that the Plan was adopted by the Company's Board of
Directors and approved by its shareholders.
13.2 No Stock Option may be granted under this Plan after August
24, 2009.
SECTION 14. GOVERNING LAW.
The Plan shall be construed, administered and enforced according to
the laws of the State of California without giving effect to the conflict
of laws principles thereof, except to the extent that such laws are
preempted by federal law.
SECTION 15. EXECUTION.
Execution to record the amendment of this Plan to incorporate
Amendment No. 2 thereto, the Company has caused its authorized officer to
execute the same.
OFFICIAL PAYMENTS CORPORATION
By /s/ Thomas R. Evans
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Thomas R. Evans
Chairman and Chief Executive Officer