Exhibit 10.5
INCENTIVE STOCK OPTION AGREEMENT
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THIS AGREEMENT made and entered into as of the ______ day of
____________, ____ (the "Grant Date"), by and between Inforte Corp., a Delaware
corporation (the "Company"), and __________, an employee of the Company
("Participant").
R E C I T A L S
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WHEREAS, the Company has in effect the Amended and Restated Inforte
Corp. 1997 Incentive Compensation Plan (the "Plan"), which permits options to
purchase shares of the Company's common stock, $0.001 par value ("Stock"), to be
granted to certain employees of the Company.
WHEREAS, the Company believes it to be in the best interests of the
Company and its shareholders for employees to obtain or increase their stock
ownership interest in the Company in order that they will have a greater
incentive to work for and manage the Company's affairs.
WHEREAS, the Participant is an employee of the Company or one of its
Subsidiaries and has been selected by the Compensation Committee of the Board of
Directors of the Company (the "Committee") to receive an option under the Plan.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein set forth, the parties hereby mutually covenant and agree
as follows:
1. Grant. Subject to the terms and conditions of the Plan, a copy of
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which is attached hereto and made a part hereof, and this Agreement, the Company
hereby grants to Participant an option to purchase from the Company all or any
part of an aggregate number of ______ shares of Stock (hereinafter such shares
of Stock are referred to as the "Optioned Shares", and the option to purchase
the Optioned Shares is referred to as the "Option"). The Option is intended to
qualify as an "Incentive Stock Option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Vesting. The Option shall vest and become exercisable by
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Participant during the period of his continuous employment by the Company with
respect to ______ Optioned Shares on ____________, ____ , as to an additional
______ Optioned Shares on ____________, ____ , as to an additional ______
Optioned Shares on ____________, ____, and as to the remaining ______ Optioned
Shares on ___________, ____. If the Participant's employment with the Company
changes from full-time to part-time status or is interrupted by a leave of
absence, the Committee, in its discretion, may delay the vesting of the Option
pursuant to this paragraph 2 for such period as it reasonably deems appropriate.
3. Price. The price to be paid for the Optioned Shares shall be
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_______________ ($___) per share, which represents not less than one hundred
percent (100%) of the Fair Market Value of the Optioned Shares on the Grant
Date.
4. Term; Exercise. Subject to the terms and conditions of the Plan
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and this Agreement, the Option may be exercised by the Participant while in the
employ of the Company, in whole or in part, from time to time with respect to
any shares for which the right to exercise shall have accrued pursuant to
paragraph 2 hereof, but only during the period beginning on the date of this
Agreement and ending on ____________, ____.
5. Limit on Incentive Stock Options. To the extent that the
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aggregate fair market value, as determined by the Committee, of the Stock with
respect to which Incentive Stock Options are first exercisable by the
Participant during any calendar year (under the Plan and all other plans of the
Company and its Subsidiaries) exceeds One Hundred Thousand Dollars ($100,000),
such Option as to the excess shall be treated as a Non-Qualified Stock Option.
6. Method of Exercise.
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(a) The Option may be exercised only by written notice, delivered or
mailed by postpaid registered or certified mail, addressed to the treasurer
of the Company at the Company's principal executive offices specifying the
number of Optioned Shares being purchased. Such notice shall be accompanied
by payment of the entire Option price of the Optioned Shares being
purchased: (i) in cash or its equivalent; (ii) with the consent of the
Committee, by tendering previously acquired shares of Stock valued at their
Fair Market Value at the time of exercise; or (iii) by delivery (including
by fax) to the Company or its designated agent of an executed irrevocable
option exercise form together with irrevocable instructions to a broker-
dealer to sell or margin all or a portion of the Stock and deliver the sale
or margin proceeds directly to the Company to pay the Purchase Price; or
(iv) with the consent of the Committee, by any combination of the
foregoing. For purposes of this paragraph, Fair Market Value shall be
determined in the same manner as the Fair Market Value of the Stock on the
Grant Date was determined pursuant to paragraph 3 hereof.
(b) Shares of Stock tendered shall be duly endorsed in blank or
accompanied by stock powers duly endorsed in blank. Upon receipt of the
payment of the entire purchase price of the Optioned Shares so purchased,
certificates for such Optioned Shares shall be issued to the Participant.
The Optioned Shares so purchased shall be fully paid and nonassessable.
(c) The requirements for incentive stock options under Section 422 of
the Code include minimum holding period requirements that require the Stock
acquired upon exercise of the Option to be held for at least two years from
the date of grant and one year from the date of exercise.
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7. Termination of Employment.
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(a) Except as otherwise provided by the Committee, if the Participant
ceases to be an employee of the Company for any reason other than death or
disability (as defined below), then the Participant may exercise the
Option, to the extent vested and exercisable as of the date of the
Participant's termination, for a period of thirty (30) days after such
termination of employment, but in no event beyond the expiration date of
the Option as specified in paragraph 4 hereof (the "Expiration Date").
(b) If the Participant ceases to be an employee of the Company by
reason of death or disability as defined in Section 22(e)(3) of the Code,
then the Participant (or the Participant's beneficiary or estate in the
event of the Participant's death) may exercise the Option, to the extent
vested and exercisable as of the date of the Participant's death or
disability, for a period of six (6) months following the date of death or
disability, but in no event beyond the Expiration Date.
8. No Rights as a Shareholder. The Participant shall not be deemed
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for any purposes to be a shareholder of the Company with respect to any shares
which may be acquired hereunder except to the extent that the Option shall have
been exercised with respect thereto and a stock certificate issued therefor.
9. Nontransferability; Collateral. The Option shall not be
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transferable by the Participant otherwise than by will or the laws of descent
and distribution, and may be exercised during the life of the Participant only
by the Participant. The Option may not be assigned, mortgaged or pledged as any
type of security or collateral.
10. Restrictions on Transfers of Stock. The Participant agrees for
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himself and his heirs, legatees and legal representatives, with respect to all
shares of Stock acquired pursuant to the terms and conditions of this Agreement
(or any shares of Stock issued pursuant to a stock dividend or stock split
thereon or any securities issued in lieu thereof or in substitution or exchange
therefor), that he and his heirs, legatees and legal representatives will not
sell or otherwise dispose of such shares except pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "Act"),
or except in a transaction which, in the opinion of counsel for the Company, is
exempt from registration under the Act.
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11. Adjustments. If the Company shall at any time change the number
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of shares of its Stock without new consideration to the Company (such as by
stock dividend, stock split or similar transaction), the total number of shares
then remaining subject to purchase hereunder shall be changed in proportion to
the change in issued shares, and the Option price per share shall be adjusted so
that the total consideration payable to the Company upon the purchase of all
shares not theretofore purchased shall not be changed. In the event there shall
be any change, other than as specified above, in the number or kind of
outstanding shares of Stock or of any stock or other securities into which such
Stock shall have been changed or for which it shall have been exchanged, then if
the Committee shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to the Option,
such adjustment shall be made by the Committee. The Option price for each share
of Stock or other securities substituted or adjusted as provided in this
paragraph shall be determined by dividing the Option price for each share prior
to such substitution or adjustment by the number of shares or the fraction of a
share substituted for such share or to which such share shall have been
adjusted. No adjustment or substitution provided for in this paragraph shall
require the Company to sell a fractional share.
12. Acquisition. If during the term of this Option the Stock of the
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Company shall be changed into another kind of stock or into securities of
another corporation, cash or other property, or any combination thereof (the
"Acquisition Consideration"), whether as a result of a sale of assets, merger,
consolidation, combination or other corporate reorganization or restructuring of
the Company with or into another corporation, the Company shall cause adequate
provision to be made whereby the Participant shall thereafter be entitled to
receive in lieu of shares of Stock upon the exercise of the Option, the
Acquisition Consideration the Participant would have been entitled to receive
for Stock acquired through the exercise of the Option or portion thereof
immediately prior to the date of such transaction.
13. Powers of Company Not Affected. The existence of the Option
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herein granted shall not affect in any way the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
bonds, debentures, preferred, or prior preference stock ahead of or affecting
the Stock or the rights thereof, or dissolution or liquidation of the Company,
or
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any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
14. Interpretation. As a condition of the granting of the Option, the
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Participant agrees for himself and his legal representatives, that any dispute
or disagreement which may arise under or as a result of or pursuant to this
Agreement shall be determined by the Committee in its sole discretion, and any
interpretation by the Committee of the terms of this Agreement shall be final,
binding and conclusive.
15. Amendment or Modification. No term or provision of this Agreement
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may be amended, modified or supplemented orally, but only by an instrument in
writing signed by the party against whom or which the enforcement of the
amendment, modification or supplement is sought.
16. Governing Law. This Agreement shall be governed by the internal
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laws of the State of Delaware as to all matters, including, but not limited to,
matters of validity, construction, effect, performance and remedies.
17. Terms of Plan Govern. All parties acknowledge that this option is
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granted under and pursuant to the Plan, which shall govern all rights,
interests, obligations and undertakings of both the Company and the Participant.
All capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers and its corporate seal hereunto
affixed, and the Participant has hereunto affixed his hand the day and year
first above written.
INFORTE CORP.
(the "Company")
By: ___________________________________
Its: Chief Financial Officer
PARTICIPANT:
______________________________________
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