Exhibit 10.5


 


COPART, INC.


 


2007 EQUITY INCENTIVE PLAN


 


STOCK OPTION AWARD AGREEMENT


 


Unless otherwise defined
herein, the terms defined in the Copart, Inc. 2007 Equity Incentive Plan (the
“Plan”) will have the same defined meanings in this Stock Option Award
Agreement (the “Award Agreement”).


 


I.                                         NOTICE OF STOCK OPTION GRANT


 


Participant Name:


 


Address:


 


You have been granted an
Option to purchase Common Stock of Copart, Inc. (the “Company”), subject
to the terms and conditions of the Plan and this Award Agreement, as follows:


 


	
  Grant Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price
  per Share

  	
   

  	
  $                                 

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Shares Granted

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Exercise
  Price

  	
   

  	
  $                                   

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
        Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
        Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Term/Expiration
  Date:

  	
   

  	
   

  



 


Vesting Schedule:


 


Subject to any
acceleration provisions contained in the Plan or set forth below, this Option
may be exercised, in whole or in part, in accordance with the following
schedule:


 


[INSERT
VESTING SCHEDULE]


 


Termination Period:


 


This Option will be
exercisable for three (3) months after Participant ceases to be a Service
Provider, unless such termination is due to Participant’s death or Disability,
in which case this Option will be exercisable for  twelve
(12) months after Participant ceases to be Service Provider.  


 

















 


Notwithstanding the foregoing, in no event may this
Option be exercised after the Term/Expiration Date as provided above and may be
subject to earlier termination as provided in Section 14(c) of the
Plan.


 


By Participant’s signature and the signature of the
Company’s representative below, Participant and the Company agree that this
Option is granted under and governed by the terms and conditions of the Plan
and this Award Agreement, including the Terms and Conditions of Stock Option
Grant, attached hereto as Exhibit A, all of which are made a part
of this document.  Participant has
reviewed the Plan and this Award Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Award
Agreement and fully understands all provisions of the Plan and Award
Agreement.  Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Award Agreement.  Participant further agrees to notify the
Company upon any change in the residence address indicated below.


 


	
  PARTICIPANT:

  	
  COPART, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
  Title

  
	
   

  	
   

  
	
  Residence
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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EXHIBIT A


 


TERMS AND
CONDITIONS OF STOCK OPTION GRANT


 


1.                                       Grant of Option.  The
Company hereby grants to the Participant named in the Notice of Grant attached
as Part I of this Award Agreement (the “Participant”) an option (the “Option”)
to purchase the number of Shares, as set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the “Exercise Price”),
subject to all of the terms and conditions in this Award Agreement and the
Plan, which is incorporated herein by reference.  Subject to Section 19(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and the terms and conditions of this Award Agreement, the terms and conditions
of the Plan will prevail.


 


If designated in the Notice of Grant as an Incentive
Stock Option (“ISO”), this Option is intended to qualify as an ISO under Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”).  However, if this Option is intended to be an
ISO, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it
will be treated as a Nonstatutory Stock Option (“NSO”).


 


2.                                       Vesting Schedule.  Except
as provided in Section 3, the Option awarded by this Award Agreement will
vest in accordance with the vesting provisions set forth in the Notice of
Grant.  Shares scheduled to vest on a
certain date or upon the occurrence of a certain condition will not vest in
Participant in accordance with any of the provisions of this Award Agreement,
unless Participant will have been continuously a Service Provider from the Date
of Grant until the date such vesting occurs.


 


3.                                       Administrator Discretion. 
The Administrator, in its discretion, may accelerate the vesting of the
balance, or some lesser portion of the balance, of the unvested Option at any
time, subject to the terms of the Plan. 
If so accelerated, such Option will be considered as having vested as of
the date specified by the Administrator.


 


4.                                       Exercise of Option.


 


(a)           Right to Exercise.  This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Award Agreement.


 


(b)           Method of Exercise.  This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit B (the “Exercise Notice”)
or in a manner and pursuant to such procedures as the Administrator may
determine, which will state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the “Exercised Shares”),
and such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. 
The Exercise Notice will be completed by Participant and delivered to
the Company.  The Exercise Notice will be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares together with any applicable tax withholding.  This Option will be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.


 


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5.                                       Method of Payment. 
Payment of the aggregate Exercise Price will be by any of the following,
or a combination thereof, at the election of Participant.


 


(a)                                  cash;


 


(b)                                 check;


 


(c)                                  consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or


 


(d)                                 surrender of
other Shares which have a Fair Market Value on the date of surrender equal to
the aggregate Exercise Price of the Exercised Shares, provided that accepting
such Shares, in the sole discretion of the Administrator, will not result in
any adverse accounting consequences to the Company.


 


6.                                       Tax Obligations.


 


(a)                                  Withholding Taxes. 
Notwithstanding any contrary provision of this Award Agreement, no
certificate representing the Shares will be issued to Participant, unless and
until satisfactory arrangements (as determined by the Administrator) will have
been made by Participant with respect to the payment of income, employment and
other taxes which the Company determines must be withheld with respect to such
Shares.  To the extent determined
appropriate by the Company in its discretion, it will have the right (but not
the obligation) to satisfy any tax withholding obligations by reducing the
number of Shares otherwise deliverable to Participant.  If Participant fails to make satisfactory
arrangements for the payment of any required tax withholding obligations
hereunder at the time of the Option exercise, Participant acknowledges and
agrees that the Company may refuse to honor the exercise and refuse to deliver
Shares if such withholding amounts are not delivered at the time of exercise.


 


(b)                                 Notice of Disqualifying Disposition of
ISO Shares.  If the Option granted to Participant herein
is an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two (2) years
after the Grant Date, or (ii) the date one (1) year after the date of
exercise, Participant will immediately notify the Company in writing of such
disposition.  Participant agrees that
Participant may be subject to income tax withholding by the Company on the
compensation income recognized by Participant.


 


(c)                                  Code Section 409A.  Under Code Section 409A, an option that
vests after December 31, 2004 that was granted with a per Share exercise
price that is determined by the Internal Revenue Service (the “IRS”) to be less
than the Fair Market Value of a Share on the date of grant (a “Discount Option”)
may be considered “deferred compensation.” 
A Discount Option may result in (i) income recognition by
Participant prior to the exercise of the option, (ii) an additional twenty
percent (20%) federal income tax, and (iii) potential penalty and interest
charges.  The Discount Option may also
result in additional state income, penalty and interest charges to the
Participant.  Participant acknowledges
that the Company cannot and has not guaranteed that the IRS will agree that the
per Share exercise price of this Option equals or exceeds the Fair Market Value
of a Share on the Date of Grant in a later examination.  Participant agrees that if the IRS determines
that the Option was granted with a per Share exercise price that was less than
the Fair Market Value 


 


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of
a Share on the date of grant, Participant will be solely responsible for
Participant’s costs related to such a determination;


 


7.                                       Rights as Stockholder. 
Neither Participant nor any person claiming under or through Participant
will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates
representing such Shares will have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to Participant.  After such issuance, recordation and
delivery, Participant will have all the rights of a stockholder of the Company
with respect to voting such Shares and receipt of dividends and distributions
on such Shares.


 


8.                                       No Guarantee of Continued Service. 
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR
RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
THE OPTION OR ACQUIRING SHARES HEREUNDER. 
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE
COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO
TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.


 


9.                                       Address for Notices. 
Any notice to be given to the Company under the terms of this Award Agreement
will be addressed to the Company, in care of its General Counsel at Copart, Inc.,
4665 Business Center Drive, Fairfield, California, 94534, or at such other
address as the Company may hereafter designate in writing.


 


10.                                 Non-Transferability of Option.  This
Option may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution and may be exercised during the lifetime of
Participant only by Participant.


 


11.                                 Binding Agreement. 
Subject to the limitation on the transferability of this grant contained
herein, this Award Agreement will be binding upon and inure to the benefit of
the heirs, legatees, legal representatives, successors and assigns of the
parties hereto.


 


12.                                 Additional Conditions to Issuance of
Stock.  If at any time the Company will determine, in
its discretion, that the listing, registration or qualification of the Shares
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory authority is necessary or desirable
as a condition to the issuance of Shares to Participant (or his or her estate),
such issuance will not occur unless and until such listing, registration,
qualification, consent or approval will have been effected or obtained free of
any conditions not acceptable to the Company. 
The Company will make all reasonable efforts to meet the requirements of
any such state or federal law or securities exchange and to obtain any such
consent or approval of any such governmental authority.  Assuming such compliance, for income tax
purposes the 


 


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Exercised Shares will be
considered transferred to Participant on the date the Option is exercised with
respect to such Exercised Shares.


 


13.                                 Plan Governs. 
This Award Agreement is subject to all terms and provisions of the
Plan.  In the event of a conflict between
one or more provisions of this Award Agreement and one or more provisions of
the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in
this Award Agreement will have the meaning set forth in the Plan.


 


14.                                 Administrator Authority. 
The Administrator will have the power to interpret the Plan and this
Award Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules (including, but not limited to, the
determination of whether or not any Shares subject to the Option have
vested).  All actions taken and all
interpretations and determinations made by the Administrator in good faith will
be final and binding upon Participant, the Company and all other interested
persons.  No member of the Administrator
will be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan or this Award Agreement.


 


15.                                 Electronic Delivery. 
The Company may, in its sole discretion, decide to deliver any documents
related to Options awarded under the Plan or future Options that may be awarded
under the Plan by electronic means or request Participant’s consent to
participate in the Plan by electronic means. 
Participant hereby consents to receive such documents by electronic
delivery and agrees to participate in the Plan through any on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.


 


16.                                 Captions.  Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Award Agreement.


 


17.                                 Agreement Severable. 
In the event that any provision in this Award Agreement will be held
invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Award Agreement.


 


18.                                 Modifications to the Agreement. 
This Award Agreement constitutes the entire understanding of the parties
on the subjects covered.  Participant
expressly warrants that he or she is not accepting this Award Agreement in
reliance on any promises, representations, or inducements other than those
contained herein.  Modifications to this
Award Agreement or the Plan can be made only in an express written contract
executed by a duly authorized officer of the Company.  Notwithstanding anything to the contrary in
the Plan or this Award Agreement, the Company reserves the right to revise this
Award Agreement as it deems necessary or advisable, in its sole discretion and
without the consent of Participant, to comply with Code Section 409A or to
otherwise avoid imposition of any additional tax or income recognition under Section 409A
of the Code in connection to this Option.


 


19.                                 Amendment, Suspension or Termination of
the Plan.  By accepting this Award, Participant
expressly warrants that he or she has received an Option under the Plan, and
has received, read and understood a description of the Plan.  Participant understands that the Plan is
discretionary in nature and may be amended, suspended or terminated by the Company
at any time.


 


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20.                                 Governing Law. 
This Award Agreement will be governed by the laws of the State of California, without giving effect to the conflict
of law principles thereof.  For purposes
of litigating any dispute that arises under this Option or this Award
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of California, and
agree that such litigation will be conducted in the courts of Solano County,
California, or the
federal courts for the United States for the Northern District of California, and no other courts, where this Option
is made and/or to be performed.


 


[Remainder of Page Intentionally Left Blank]


 


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EXHIBIT B


 


COPART, INC.


 


2007 EQUITY INCENTIVE PLAN


 


EXERCISE NOTICE


 


Copart, Inc.


 


4665 Business
Center Drive


 


Fairfield, CA
94534


 


Attention:  [              ]


 


1.                                       Exercise of Option. 
Effective as of today,                                 ,
          , the undersigned (“Purchaser”)
hereby elects to purchase                             
shares (the “Shares”) of the Common Stock of Copart, Inc. (the “Company”)
under and pursuant to the 2007 Equity Incentive Plan (the “Plan”) and the Stock
Option Award Agreement dated                 
(the “Award Agreement”).  The purchase
price for the Shares will be $                          ,
as required by the Award Agreement.


 


2.                                       Delivery of Payment. 
Purchaser herewith delivers to the Company the full purchase price of
the Shares and any required tax withholding to be paid in connection with the
exercise of the Option.


 


3.                                       Representations of Purchaser. 
Purchaser acknowledges that Purchaser has received, read and understood
the Plan and the Award Agreement and agrees to abide by and be bound by their
terms and conditions.


 


4.                                       Rights as Stockholder. 
Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
Shares, no right to vote or receive dividends or any other rights as a
stockholder will exist with respect to the Shares subject to the Option,
notwithstanding the exercise of the Option. 
The Shares so acquired will be issued to Participant as soon as
practicable after exercise of the Option. 
No adjustment will be made for a dividend or other right for which the
record date is prior to the date of issuance, except as provided in Section 14
of the Plan.


 


5.                                       Tax Consultation. 
Purchaser understands that Purchaser may suffer adverse tax consequences
as a result of Purchaser’s purchase or disposition of the Shares.  Purchaser represents that Purchaser has
consulted with any tax consultants Purchaser deems advisable in connection with
the purchase or disposition of the Shares and that Purchaser is not relying on
the Company for any tax advice.


 


6.                                       Entire Agreement; Governing Law. 
The Plan and Award Agreement are incorporated herein by reference.  This Exercise Notice, the Plan and the Award Agreement
constitute the entire 


 

















 


agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Purchaser with respect to the subject matter hereof, and may not be
modified adversely to the Purchaser’s interest except by means of a writing
signed by the Company and Purchaser. 
This agreement is governed by the internal substantive laws, but not the
choice of law rules, of the State of California.


 


	
  Submitted by:

  	
  Accepted by:

  
	
   

  	
   

  
	
  PURCHASER

  	
  COPART, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
  Title

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  
						



 


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