Exhibit 10.5
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
ALADDIN SYSTEMS HOLDINGS, INC.
1999 STOCK OPTION PLAN
(Effective October 25, 1999)
INCENTIVE STOCK OPTION AGREEMENT
Aladdin Systems Holdings, Inc., a Nevada corporation (The "Company"),
hereby grants an option to purchase Shares of its common stock to the optionee
named below. The terms and conditions of the option are set forth in this cover
sheet, in the attachment and in the Company's 1999 Stock Option Plan (the
"Plan").
Date of Option Grant: ____________, 1999
Name of Optionee: _______________________________________________
Optionee's Social Security Number: ____-___-_____
Number of Shares of Common Stock Covered by Option: _____________
Exercise Price per Share:$_______________________________________
Vesting Start Date: _______________, 1999
By signing this cover sheet, you agree to all of the terms and
conditions described in the attached Agreement and in the Plan, a
copy of which is also enclosed.
Optionee: _______________________________________________________
(Signature)
Company: ________________________________________________________
(Signature)
Title: ________________________________________________
Attachment
ALADDIN SYSTEMS HOLDINGS, INC.
1999 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Incentive Stock Option
This option is intended to be an incentive stock option under section 422 of the
Internal Revenue Code and will be interpreted accordingly.
Vesting
Your right to exercise this option vests monthly beginning on the Vesting Start
Date, as shown on the cover sheet; provided, however, no portion of this option
may be exercised prior to the expiration of twelve (12) months from the Date of
Xxxxx, as shown on the cover sheet. The number of Shares which may be purchased
under this option by you at the Purchase Price shall be equal to the difference
between (i) the product (rounded to the nearest integer) of the number of full
months of your continuous employment with the Company (including all days of any
approved leaves of absence) from the Vesting Starting Date times the number of
Shares covered by this option times .02083333, minus (ii) the number of Shares
purchased pursuant to this Option prior to such exercise. The resulting number
of Shares will be rounded to the nearest whole number. No additional Shares will
vest after your Company service has terminated for any reason.
Term
Your option will expire in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of Grant, as
shown on the cover sheet. (It will expire earlier if your Company service
terminates, as described below.)
Regular Termination
If your service as an employee of the Company (or any subsidiary) terminates for
any reason except death or Disability, then your option will expire at the close
of business at Company headquarters on the 30th day after your termination date.
Notwithstanding anything else in this Agreement to the contrary, in the event
that you cease to be employed by the Company within twelve (12) months from the
Date of Grant for any reason all rights to purchase shares under this Option
shall immediately terminate.
Death
If you die as an employee of the Company (or any subsidiary), then your option
will expire at the close of business at Company headquarters on the date six (6)
months after the date of death.
During that 6-month period, your estate or heirs may exercise the vested portion
of your option.
DisabilityIf your service as an employee of the Company (or any subsidiary)
terminates because of your Disability, then your option will expire at the close
of business at Company headquarters on the date six (6) months after your
termination date.
"Disability" means that you are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment.
Leaves of Absence
For purposes of this option, your service does not terminate when you go on a
bona fide leave of absence that was approved by the Company in writing, if the
terms of the leave provide for continued service crediting, or when continued
service crediting is required by applicable law. However, for purposes of
determining whether your option is entitled to ISO status, your service will be
treated as terminating 90 days after you went on leave, unless your right to
return to active work is guaranteed by law or by a contract. Your service
terminates in any event when the approved leave ends unless you immediately
return to active work.
The Company determines which leaves count for this purpose, and when your
service terminates for all purposes under the Plan.
Restrictions on Exercise
The Company will not permit you to exercise this option if the issuance of
Shares at that time would violate any law or regulation.
Notice of Exercise
When you wish to exercise this option, you must notify the Company by filing the
proper "Notice of Exercise" form at the address given on the form. Your notice
must specify how many Shares you wish to purchase. Your notice must also specify
how your Shares should be registered (in your name only or in you and your
spouse's names as community property or as joint tenants with right of
survivorship). The Notice will be effective when it is received by the Company.
If someone else wants to exercise this option after your death, that person must
prove to the Company's satisfaction that he or she is entitled to do so.
Periods of Nonexercisability
Any other provision of this Agreement notwithstanding, the Company shall have
the right to designate one or more periods of time, each of which shall not
exceed 180 days in length, during which this option shall not be exercisable if
the Company determines (in its sole discretion) that such limitation on exercise
could in any way facilitate a lessening of any restriction on transfer pursuant
to the Securities Act or any state securities laws with respect to any issuance
of securities by the Company, facilitate the registration or qualification of
any securities by the Company under the Securities Act or any state securities
laws, or facilitate the perfection of any exemption from the registration or
qualification requirements of the Securities Act or any applicable state
securities laws for the issuance or transfer of any securities. Such limitation
on exercise shall not alter the vesting schedule set forth in this Agreement
other than to limit the periods during which this option shall be exercisable.
Form of Payment
When you submit your notice of exercise, you must include payment of the option
price for the Shares you are purchasing. Payment may be made in one (or a
combination) of the following forms:
o Your personal check, a cashier's check or a money order.
o To the extent that a public market for the Shares exists as determined by the
Company, by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price.
Withholding Taxes
You will not be allowed to exercise this option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the option exercise or the sale of shares acquired upon exercise of this
option and the sale of the shares.
Restrictions on Resale
In connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the 1933
Act, you shall not sell, make any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or agree to engage in any of the foregoing transactions with respect to any
shares without the prior written consent of the Company or its underwriters, for
such period of time after the effective date of such registration statement as
may be requested by the Company or such underwriters (not to exceed one
hundred-eighty (180) days).
In order to enforce the provisions of the foregoing paragraph, the Company may
impose stop-transfer instructions with respect to the shares until the end of
the applicable stand-off period.
You represent and agree that the Shares to be acquired upon exercising this
option will be acquired for investment, and not with a view to the sale or
distribution thereof. In the event that the sale of Shares under the Plan is not
registered under the Securities Act of 1933 but an exemption is available which
requires an investment representation or other representation, you shall
represent and agree at the time of exercise that the Shares being acquired upon
exercising this option are being acquired for investment, and not with a view to
the sale or distribution thereof, and shall make such other representations as
are deemed necessary or appropriate by the Company and its counsel.
Transfer of Option
Prior to your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these tings, this option will
immediately become invalid. You may, however, dispose of this option in your
will.
Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your spouse or former spouse, nor
is the Company obligated to recognize such individual's interest in your option
in any other way.
Retention Rights
Your option or this Agreement do not give you the right to be retained by the
Company (or any subsidiaries) in any capacity. The Company (and any
subsidiaries) reserve the right to terminate your service at any time and for
any reason.
Shareholder Rights
You, or your estate or heirs, have no rights as a shareholder of the Company
until a certificate for your option Shares has been issued. No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued, except as described in the Plan.
Adjustments
In the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Shares covered by this option and the exercise
price per
share may be adjusted pursuant to the Plan. Your option shall be subject to the
terms of the agreement of merger, liquidation or reorganization in the event the
Company is subject to such corporate activity.
Legends
In the event that the Shares under the Plan is not registered under the
Securities Act of 1933 all certificates representing the Shares issued upon
exercise of this option shall, where applicable, have endorsed thereon the
following legends:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."
Applicable Law
This Agreement will be interpreted and enforced under the internal laws of the
State of California
The Plan and Other Agreements
The text of the Plan is incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this option. Any prior agreements, commitments or
negotiations concerning this option are superseded.
By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.
