ex10-5.htm


    
      
        

      
Exhibit 10.5

     

    
      EMPLOYEE
STOCK OPTION AGREEMENT

       

      UNDER
THE

       

      APPLIED
DNA SCIENCES, INC.

       

      2005 INCENTIVE STOCK
PLAN

       

      AGREEMENT
made as of the ______
day of June, 2008, by and between APPLIED DNA SCIENCES, INC. (the "Company") and
_________________________________
(the "Optionee").

       

      1.           Award. Pursuant to
the Applied DNA Sciences, Inc. 2005 Incentive Stock Plan (the “Plan”), the
Company hereby grants to the Optionee an option (the “Option”) to purchase up to
__________________
shares of the Company’s common stock (the “Common Stock”) at an exercise price
per share of $_______
upon the terms and conditions set forth in this Agreement and the Plan.
The Optionee acknowledges having received a copy of the Plan. The provisions of
the Plan will govern in the event of any inconsistency with the terms of this
Agreement. Capitalized terms used but not defined in this Agreement will have
the meanings ascribed to them by the Plan.

       

      2.           Option Term. Unless
terminated sooner, the Option shall expire if and to the extent it is not
exercised within five years from the date hereof. Notwithstanding the foregoing,
the Option will terminate on the date of the next meeting of the Company’s
stockholders if, at that meeting, the Company’s stockholders do not approve a
Plan amendment that would increase the number of shares of Common Stock that may
be issued under the Plan to 100,000,000 shares.

       

      3.           Vesting Conditions.
Except as otherwise provided, the Option will become 25% vested on the date
hereof and the balance of the Option will become vested in three equal annual
increments (each for 25% of the shares covered by the Option) beginning on the
first anniversary of the date hereof, subject to the Optionee’s continuous
employment with the Company or any of its subsidiaries (“Applied DNA Sciences”)
through the applicable vesting date. Notwithstanding anything to the contrary
contained herein, the vested portion of the Option will not be
exercisable  if the Plan amendment described in paragraph 2 above is
not approved at the next meeting of the Company’s stockholders.

       

      4.           Termination of
Employment.

       

      (a)           General. If the
Optionee ceases to be employed by Applied DNA Sciences for any reason other than
death or disability, then, unless sooner terminated under the terms hereof, the
vested portion of the Option will terminate if and to the extent it is not
exercised within three months after the date of the Optionee’s termination of
employment, provided, however, that, if the Optionee’s employment is terminated
by the Company for “cause” (as defined below), then the Option (whether or not
vested) will terminate upon the date of such termination of employment. If the
Optionee’s employment is terminated by reason of the Optionee’s death or
disability, then, unless sooner terminated under the terms hereof, the vested
portion of the Option will terminate if and to the extent it is not exercised
within six months after the date of such termination of employment. The Option
will be forfeited by the Optionee and will terminate at the time of the
termination of the Optionee’s employment with Applied DNA Sciences if and to the
extent the Option is not or does not become vested at such time.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)           Definitions of Disability
and Cause. For the purposes hereof: (1) the term “disability” means the
inability of the Optionee to perform the material duties of the Optionee’s
employment by reason of a physical or mental illness or condition that is
expected to last indefinitely or result in death, as determined by a duly
licensed physician selected by the Company; and (2) the term “cause” means (A)
the Optionee’s willful and repeated failure or refusal to perform the duties of
the Optionee’s employment after written notice thereof by the Company, (B) the
Optionee’s conviction of a felony or other crime that has or could reasonably be
expected to have a material adverse effect on the Company or on the ability of
the Optionee to properly perform the duties of the Optionee’s employment, (C)
substance abuse by the Optionee which impedes the ability of the Optionee to
perform the duties and responsibilities of the Optionee’s employment or which
otherwise has or could reasonably be expected to have an adverse effect on the
Company; or (C) the Optionee’s violation of material Company policy, or the
Optionee’s gross negligence or other misconduct that has or could reasonably be
expected to have a material adverse effect on the Company or on the ability of
the Optionee to properly perform the duties of the Optionee’s
employment.

       

      5.           Exercise of Option.
If the Option becomes vested, it may be exercised in whole or in part by
delivering to the Company (a) a written notice specifying the number of whole
shares of Common Stock with respect to which the Option is being exercised, and
(b) payment in full of the exercise price, together with the amount, if any,
deemed necessary by the Company to enable it to satisfy any income tax
withholding obligations attributable to the exercise. The exercise price and
withholding amount shall be payable by bank or certified check or pursuant to
such other methods as may be permitted by the Company in accordance with the
Plan and applicable law, including, without limitation, delivery of
previously-owned shares of Common Stock or “cashless” exercise pursuant to which
the Company will deliver “net shares” to the Optionee in accordance with the
following formula: Y x (A-B)/A, where—

       

      Y = the
number of shares covered by the exercise of the Option;

       

      A = the
fair market value per share on the date of exercise (determined in accordance
with the Plan); and

       

      B = the
Option exercise price.

       

      6.           Compliance with Law;
Transfer Orders; Legends.  The Company will not be obligated to
issue or deliver shares of Common Stock pursuant to this Option unless the
issuance and delivery of such shares complies with applicable law, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the requirements of any stock exchange or
market upon which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.  All certificates for shares of Common Stock delivered
under this Option shall be subject to such stock-transfer orders and other
restrictions as the Company may deem advisable under the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange
or market upon which the Common Stock may then be listed, and any applicable
federal or state securities law.  The Company may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.

       

      
        
           

        

        
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      7.           Rights as a
Stockholder. No shares of Common Stock shall be sold or delivered
hereunder until full payment for such shares has been made (including, for this
purpose, satisfaction of the applicable withholding tax). The Optionee shall
have no rights as a stockholder with respect to any shares covered by this
Option unless and until the Option is exercised and the shares covered by the
exercise of the Option are issued in the name of the Optionee.

       

      8.           Assignment;
Beneficiary. The Option and the Optionee’s rights with respect thereto
may not be assigned, pledged or transferred except to the Optionee’s beneficiary
following the Optionee’s death (subject to the terms of this Agreement and the
Plan), and any attempted assignment, pledge or transfer in violation of this
Agreement or the Plan will be void ab initio and of no force or effect. The
Optionee may designate a beneficiary by filing a written (or electronic)
beneficiary designation form with the Company in a manner prescribed or deemed
acceptable for this purpose by the Company. Each such beneficiary designation
will automatically revoke all prior designations by the Optionee. If the
Optionee does not make a valid beneficiary designation during the Optionee’s
lifetime or if no designated beneficiary survives the Optionee, the Optionee’s
beneficiary will be deemed to be the Optionee’s surviving spouse or, if none,
the Optionee’s estate.

       

      9.           No Other Rights
Conferred. The grant of the Option under this Agreement shall not be
deemed to constitute a contract of employment with the Optionee or affect in any
way the right of the Company or a subsidiary to terminate the Optionee’s
employment at any time for any or no reason. Compensation attributable to the
Option shall not be taken into account as compensation for purposes of
determining the Optionee’s benefits or entitlements under any employee pension,
savings, group insurance, severance or other benefit plan or arrangement, unless
and except to the extent otherwise specifically provided by such plan or
arrangement.

       

      10.         Withholding. The
Company’s obligation to issue shares of Common Stock pursuant to the exercise of
the Option shall be subject to and conditioned upon the satisfaction by the
Optionee of applicable tax withholding obligations. The Company and its
subsidiaries may require the Optionee to remit an amount sufficient to satisfy
applicable withholding taxes or deduct or withhold such amount from any payments
otherwise owed the Optionee (whether or not under this Agreement or the Plan).
The Optionee expressly elects to authorize the Company to deduct from any
compensation or any other payment of any kind due to the Optionee, including
withholding the issuance of shares of Common Stock, the amount of any federal,
state, local or foreign taxes required by law to be withheld as a result of the
exercise of the Option; provided, however, that the value of the shares withheld
may not exceed the statutory minimum withholding amount required by
law.

       

      11.         Committee Authority.
The Board of Directors of the Company (the “Board”) or, if applicable, the
Compensation Committee of the (the “Committee”) shall have complete discretion
in the exercise of its rights, powers, and duties under this Agreement. Any
interpretation or construction of any provision of, and the determination of any
question arising under, this Agreement shall be made by the Board or the
Committee, as the case may be, in its discretion and such exercise shall be
final, conclusive, and binding.

       

      
        
           

        

        
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      12.         Successors. This
Agreement shall be binding upon, and inure to the benefit of, any successor or
successors of the Company and any beneficiary of the Optionee.

       

      13.         Construction. This
Agreement is intended to reflect the grant of the Option upon the terms and
conditions authorized by the Plan. Any provisions of this Agreement that cannot
be so administered, interpreted, or construed shall be disregarded. In the event
that any provision of this Agreement is held invalid or unenforceable, such
provision shall be considered separate and apart from the remainder of this
Agreement, which shall remain in full force and effect. In the event that any
provision, including any restrictive covenant made as a part of this Agreement,
is held to be unenforceable for being unduly broad as written, such provision
shall be deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to applicable law and shall be enforced
as amended.

       

      14.         Applicable Law. The
validity, construction, interpretation and effect of this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the conflicts of laws provisions thereof.

       

      IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

       

      
        
          	 	APPLIED
      DNA SCIENCES, INC.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	 	 
	 	 	 
	 	      
                  Optionee

                	 


        

      

       

      
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