Exhibit 10.4

                         ALADDIN SYSTEMS HOLDINGS, INC.
                             1999 STOCK OPTION PLAN

SECTION 1. PURPOSE

      The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
Aladdin Systems Holdings, Inc.(the "Company"), or to increase such interest, to
encourage such selected persons to remain in the employ of the Company and to
attract new employees with outstanding qualifications by purchasing Shares of
the Company's Common Stock. The Plan provides for the grant of Options to
purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as Incentive Stock Options intended to qualify under section 422 of the
Internal Revenue Code.

SECTION 2. DEFINITIONS

      (a) "Board of Directors" shall mean the Board of Directors of the Company,
as constituted from time to time.

      (b) "Change of Control" shall mean the occurrence of any of the following
events:

            (i) the consummation of the acquisition of fifty-one percent (51%)
      or more of the outstanding stock of the Company by one person or by two or
      more persons acting as a partnership, limited partnership, syndicate or
      other group pursuant to a tender offer validly made under any federal or
      state law (other than a tender offer by the Company);


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            (ii) the consummation of a merger, consolidation or other
      reorganization of the Company (other than a reincorporation of the
      Company), if after giving effect to such merger, consolidation or other
      reorganization of the Company, the stockholders of the Company immediately
      prior to such merger, consolidation or other reorganization do not
      represent a majority in interest of the holders of voting securities (on a
      fully diluted basis) with the ordinary voting power to elect directors of
      the surviving or resulting entity after such merger, consolidation or
      other reorganization:

            (iii) the sale of all or substantially all of the assets of the
      Company to a third party who is not an affiliate (including a Parent or
      Subsidiary) of the Company; or

            (iv) the dissolution of the Company pursuant to action validly taken
      by the stockholders of the company in accordance with applicable state
      law.

      (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (d) "Committee" shall mean a committee of the Board of Directors which is
authorized to administer the Plan under Section 3. After the initial public
offering of the Company's common stock, the Committee shall have membership
composition which enables the Plan to qualify under Rule 16b-3 with regard to
the grant of options to persons who are subject to Section 16 of the Securities
Exchange Act of 1934.

      (e) "Company" shall mean Aladdin Systems Holdings, Inc., a Delaware
corporation.

      (f) "Disability" shall mean that an Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment.

      (g) "Employee shall mean (i) any individual who is a common-law employee
of the Company or of a Subsidiary, (ii) a member of the Board of Directors, or
(iii) a consultant who performs services for the Company or a Subsidiary.
Service as a member of the Board of Directors or as a consultant shall be
considered employment for all purposes of the Plan except the second sentence of
Section 4(a).

      (h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an option, as specified by the Committee in the
applicable Stock option Agreement.

      (i) "Fair Market Value" shall mean the fair market value of a Share, as
determined by the Committee in good faith. Such determination shall be
conclusive and binding on all persons.

      (j) "ISO" shall mean an employee incentive stock option described in Code
section 411(b).

      (k) "Nonstatutory Option" shall mean an employee stock option that is not
an ISO.

      (l) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.

      (m) "Optionee" shall mean an individual who holds an Option.


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      (n) "Plan" shall mean this Aladdin Systems Holdings 1999 Stock Option
Plan.

      (o) "Service" shall mean service as an Employee.

      (p) "Share" shall mean one share of Stock, as adjusted in accordance with
Section 8 (if applicable).

      (q) "Stock" shall mean the common stock of the Company.

      (r) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

      (s) "Subsidiary" shall mean any corporation, of which the Company and/or
one or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

SECTION 3. ADMINISTRATION.

      (a) Committee Membership. The Plan shall be administered by the Committee,
which shall consist of members of the Board of Directors. The members of the
Committee shall be appointed by the Board of Directors. If no Committee has been
appointed, the entire Board of Directors shall constitute the Committee.

      (b) Committee Procedures. The Board of Directors shall designate one of
the members of the Committee as chairperson. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by all Committee members, shall be valid acts of the
Committee.

      (c) Committee Responsibilities. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:

            (i) To interpret the Plan and to apply its provisions;

            (ii) To adopt, amend or rescind rules, procedures and forms relating
      to the Plan;

            (iii) To authorize any person to execute, on behalf of the Company,
      any instrument required to carry out the purposes of the Plan;

            (iv) To determine when Options are to be granted under the Plan;

            (v) To select the Optionees;

            (vi) To determine the number of Shares to be made subject to each
      Option;

            (vii) To prescribe the terms and conditions of each option,
      including (without limitation) the Exercise Price, the vesting schedule,
      to determine whether such Option is to be classified as


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      an ISO or as a Nonstatutory Option, and to specify the provisions of the
      Stock Option Agreement relating to such Option;

            (viii) To amend or terminate any outstanding Stock Option Agreement;

            (ix) To determine the disposition of an Option in the event of an
      Optionee's divorce or dissolution of marriage;

            (x) To correct any defect, supply any omission, or reconcile any
      inconsistency in the Plan and any Option;

            (xi) To prescribe the consideration for the grant of each Option
      under the Plan and to determine the sufficiency of such consideration; and

            (xii) To take any other actions deemed necessary or advisable for
      the administration of the Plan.

      All decisions, interpretations and other actions of the Committee shall be
final and binding on all Optionees, and all persons deriving their rights from
an Optionee. No member of the Committee shall be liable for any action that he
or she has taken or has failed to take in good faith with respect to the Plan or
any Option.

      (d) Financial Reports. To the extent required by applicable law, and not
less often than annually, the Company shall furnish to Optionees, Company
financial statements including a balance sheet regarding the Company's financial
condition and results of operations, unless such Optionees have duties with the
Company that assure them access to equivalent information. Such financial
statements need not be audited.

SECTION 4. ELIGIBILITY.

      (a) General Rule. Only Employees, as defined in Section 2(g), shall be
eligible for designation as Optionees by the Committee. In addition, only
individuals who are employed as common-law employees by the Company or a
subsidiary shall be eligible for the grant of ISOs.

      (b) Ten-Percent Shareholders. An Employee who owns more than 10 percent of
the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for designation as an
Optionee unless (i) the Exercise Price for an ISO (and an NSO to the extent
required by applicable law) is at least 110 percent of the Fair Market Value of
a Share on the date of grant, and (ii) in the case of an ISO, such ISO by its
terms is not exercisable after the expiration of five years from the date of
grant.

      (c) Attribution Rules. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for his brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or


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for a corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.

      (d) Outstanding Stock. For purposes of Subsection (b) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.

SECTION 5. STOCK SUBJECT TO PLAN.

      (a) Basic Limitation. Shares offered under the Plan shall be authorized
but unissued Shares. The aggregate number of Shares which may be issued under
the Plan (upon exercise of Options) shall not exceed two million (2,000,000)
Shares, subject to adjustment pursuant to Section 8. The number of Shares which
are subject to Options outstanding at any time under the Plan shall not exceed
the number of Shares which then remain available for issuance under the Plan.
The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.

      (b) Additional Shares. In the event that any outstanding Option for any
reason expires or is canceled or otherwise terminated, the Shares allocable to
the unexercised portion of such Option shall again be available for the purposes
of the Plan.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

      (a) Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

      (b) Number of Shares. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with section 8. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.

      (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant. To the extent
required by applicable law, the Exercise Price of a


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Nonstatutory Option shall not be less than eighty-five percent (85%) of the Fair
Market Value of a Share on the date of grant. Subject to the preceding two
sentences, the Exercise Price under any Option shall be determined by the
Committee in its sole discretion. The Exercise Price shall be payable in a form
described in Section 7.

      (d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.

      (e) Exercisability. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. To the
extent required by applicable law, an Option shall become exercisable no less
rapidly than the rate of 20% per year for each of the first five years from the
date of grant. Subject to the preceding sentence, the exercisability of any
Option shall be determined by the Committee in its sole discretion.

      (f) Term. The Stock Option Agreement shall specify the term of the Option.
The term shall not exceed ten (10) years from the date of grant and may be
required to be shorter as provided in Section 4(b). Subject to the preceding
sentence, the Committee at its sole discretion shall determine when an Option is
to expire.

      (g) Nontransferability. No Option shall be transferable by the Optionee
other than by will or by the laws of descent and distribution. An Option may be
exercised during the lifetime of the optionee only by him or by his guardian or
legal representative. No Option or interest therein may be transferred,
assigned, pledged or hypothecated by the Optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.

      (h) Exercise of Options on Termination of Service. Each Option shall set
forth the extent to which the Optionee shall have the right to exercise the
Option following termination of the Optionee's service with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment.
Notwithstanding the foregoing, and to the extent required by applicable law,
each Option shall provide that the Optionee shall have the right to exercise the
vested portion of any Option held at termination for at least 30 days following
termination of service with the Company for any reason, and that the Optionee
shall have the right to exercise the Option for at least six months if the
Optionee's service terminates due to death or Disability.


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      (i) No Rights as a Shareholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Shares
covered by an option until the date of the issuance of a stock certificate for
such Shares.

      (j) Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of Shares and at the same or a different Exercise
Price or for other consideration.

      (k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
an Option shall be subject to such rights of repurchase, rights of first refusal
and other transfer restrictions as the Committee may determine. Such
restrictions shall be set forth in the applicable Stock Option Agreement and
shall apply in addition to any restrictions that may apply to holders of Shares
generally.

SECTION 7. PAYMENT FOR SHARES

      (a) General Rule. The entire Exercise Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided in Subsections (b), (c)
and (d) below.

      (b) Surrender of Stock. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or the Optionee's representative for any time period
specified by the Committee and which are surrendered to the Company in good form
for transfer. Such Shares shall be valued at their Fair Market Value on the date
when the new Shares are purchased under the Plan.

      (c) Promissory Notes. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with a full recourse promissory
note executed by the Optionee. The interest rate and other terms and conditions
of such note shall be determined by the Committee. The Committee may require
that the Optionee pledge his or her Shares to the Company for the purpose of
securing the payment of such note. In no event shall the stock certificate(s)
representing such Shares be released to the optionee until such note is paid in
full.

      (d) Cashless Exercise. To the extent that a Stock Option Agreement so
provides and a public market for the Shares exists, payment may be made all or
in part 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.


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SECTION 8. ADJUSTMENT OF SHARES.

      (a) General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a reclassification or a similar
occurrence, the Committee shall make appropriate adjustments in one or more of
(i) the number of Shares available for future grants under Section 5, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price
under each outstanding Option.

      (b) Reorganizations In the event of: (1) a dissolution or liquidation of
the Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, or (4) any
other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, then at the sole
discretion of the Board and to the extent permitted by applicable law: (i) any
surviving corporation shall assume any options outstanding under the Plan or
shall substitute similar options for those outstanding under the Plan, or (ii)
such options shall continue in full force and effect. In the event any surviving
corporation refuses to assume or continue such options, or to substitute similar
options for those outstanding under the Plan, then, with respect to options held
by persons then performing services as employees, consultants or directors for
the Company, the time during which such options may be exercised shall be
accelerated and the options terminated if not exercised within three (3) months
of such event. Notwithstanding the foregoing, at the discretion of the
Committee, individual Stock Option Agreements may permit acceleration of vesting
under specified circumstances.

      (c) Reservation of Rights. Except as provided in this Section 8, an
Optionee shall have no rights by reason of (i) any subdivision or consolidation
of shares of stock of any class, (ii) the payment of any dividend or (iii) any
other increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Shares
subject to an Option. The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.


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SECTION 9. LEGAL REQUIREMENTS.

      Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.

SECTION 10. NO EMPLOYMENT RIGHTS.

      No provision of the Plan, nor any Option granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to remain
an Employee. The Company and its Subsidiaries reserve the right to terminate any
person's Service at any time and for any reason.

SECTION 11. DURATION AND AMENDMENTS.

      (a) Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's shareholders. In the event that the shareholders fail
to approve the Plan within twelve (12) months after its adoption by the Board of
Directors, any Option grants already made shall be null and void, and no
additional Option grants shall be made after such date. The Plan shall terminate
automatically October 24, 2009, and may be terminated on any earlier date
pursuant to Subsection (b) below.

      (b) Right to Amend or Terminate the Plan. The Board of Directors may amend
the Plan at any time and from time to time. Rights and obligations under any
Option granted before amendment of the Plan shall not be materially altered, or
impaired adversely, by such amendment, except with consent of the person to whom
the Option was granted. An amendment of the Plan shall be subject to the
approval of the Company's stockholders only to the extent required by applicable
laws, regulations or rules.

      (c) Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Option previously granted under the Plan.

SECTION 12. EXECUTION.

      To record the adoption of the Plan by the Board of Directors, the Company
has caused its authorized officer to execute the same as of October 25, 1999.


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                              ALADDIN SYSTEMS HOLDINGS, INC.


                              By /s/ Jonathan Kahn
                              ---------------------------------------------
                                 Jonathan Kahn
                                 Chief Executive Officer


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