Exhibit 10.38
XXXXXX CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into between
XXXXXX CORPORATION, a Washington corporation (the "Corporation"), and Xxxxxxx X.
Xxxxxxxx (the "Employee"), on the date set forth below.
WITNESSETH THAT:
WHEREAS, the Corporation has adopted the Xxxxxx Corporation 1995 Stock
Option Plan (the "Plan"), effective as of February 15, 1995, pursuant to which
the Board of Directors, or a special committee thereof, is authorized to grant,
in its sole discretion, to key employees of the Corporation options to purchase
shares of the Corporation's common stock (the "Common Stock"), and
WHEREAS, the Compensation Committee of the Board of Directors granted
to Employee an option under the Plan to purchase shares of Common Stock under
the terms hereof.
NOW, THEREFORE, in consideration of the foregoing, the Corporation and
the Employee have executed this Agreement evidencing and confirming the issuance
by the Corporation to the Employee of an option for the purchase of 62,000
shares of Common Stock (the "Option") in accordance with the following terms and
conditions:
1. The date of grant of the Option represented hereby is
January 15, 1996.
2. The exercise price for the Option granted pursuant hereto is $1.50
per share.
3. This Option shall be exercisable in accordance with the following
vesting schedule:
Number of Shares of Common
Date Shares Become Stock Which Shall Become
Available for Purchase Available for Purchase
---------------------- --------------------------
July 15, 1996 20,667
July 15, 1997 20,667
July 15, 1998 20,666
4. This Option shall expire, to the extent not previously exercised,
on the earlier of January 14, 2006 or the first to occur of either of the
following events:
(a) The date of the Employee's termination of employment with the
Company for cause as defined in the Plan;
1
(b) The expiration of ninety (90) days from the date of the
Employee's termination of employment with the Company for any reason whatsoever
other than for cause as defined in the Plan; or
(c) The expiration of one (1) year from the date of death of the
Employee, or cessation of the Employee's employment with the Company by reason
of disability as defined in the Plan.
The unvested portion of this Option shall terminate immediately upon
Employee's termination of employment for any reason whatsoever, including death.
5. Each exercise of this Option shall be by means of a written notice
of exercise delivered to the Secretary of the Corporation at its principal
executive office in Lynnwood, Washington, specifying the number of shares of
Common Stock to be purchased and accompanied by: payment in cash, by certified
or cashier's check payable to the order of the Corporation of the full exercise
price for the common Stock to be purchased; delivery of previously acquired
shares of Common Stock with a fair market value equal to or greater than the
full exercise price; or delivery of a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company the
amount of loan or sale proceeds to pay the exercise price.
6. Prior to delivery of any common stock purchased on exercise of
this Option, the Corporation shall determine the amount of any United States
federal and state income tax, if any, which is required to be withheld under
applicable law and shall, as a condition of exercise of this Option and delivery
of certificates representing the common stock purchased upon exercise of the
Option, collect from the employee the amount of any such tax to the extent not
previously withheld.
7. Employee shall not have any rights as a shareholder with respect
to any common stock subject to this Option until the date that a stock
certificate for such common stock as to which the Employee has exercised this
Option has been issued to the Employee. Subject to its obligation to withhold
set forth in Section 6 hereof, and to its obligations under federal and state
securities laws set forth in Section 9 below, the Corporation shall issue such
stock certificate as soon as practicable following the exercise of the Option.
If any law or regulation, whether related to securities or otherwise, requires
the Corporation to take any action with respect to any common stock prior to the
transfer thereof, or prohibits, limits or delays the issuance thereof, then the
date for delivery of such Common Stock shall be extended for the period
reasonable necessary to take and conclude such action, or during the period of
such prohibition, limitation or delay.
8. Neither this Option, the execution of this Agreement nor the
exercise of any portion of this Option shall confer upon the Employee any right
to, or guarantee of, continued employment by the Corporation, or in any way
limit the right of the Corporation to terminate employment of Employee at any
time, subject to the terms of any employment agreements between the Corporation
and Employee.
9. By accepting this Option, Employee represents and agrees for
himself, and all persons who acquire rights in this Option in accordance with
the Plan through Employee, that none of the shares of Common Stock purchased
upon exercise of this Option will be distributed in violation of applicable
federal and state laws and regulations, and Employee
2
shall furnish evidence satisfactory to the Corporation (including a written and
signed representation letter and a consent to be bound by al transfer
restrictions imposed by applicable law, legend condition, or otherwise) to that
effect, prior to delivery of the purchased share of Common Stock.
10. Employee acknowledges that he has read and understands the terms
of this Agreement and the Plan and that:
(a) The issuance of shares of Common Stock pursuant to the exercise
of this Option, and any resale of the shares of common Stock, may only be
effected in compliance with applicable state and federal laws and regulations;
(b) He is not entitled to any rights as a shareholder with respect to
any shares of Common Stock usable thereunder until he becomes a shareholder of
record; and
(c) The share of Common Stock subject hereto may be adjusted in the
event of certain organic changes in the capital structure of the Corporation or
for any other reason permitted by the Plan.
11. This Option may not be transferred, except by will or the laws of
descent and distribution, and during the lifetime of Employee this Option shall
be exercisable only by him.
12. This Option and this Agreement evidencing and confirming the same
are subject to the terms and conditions set forth in the Plan and in any
amendments to the Plan existing now or in the future, which terms and conditions
are incorporated herein by reference. Should any conflict exist between the
provisions of the Plan and those of this Agreement, those of the Plan shall
govern and control. The Employee acknowledges receipt of a copy of the Plan as
presently in effect. This Agreement and the Plan comprise the entire
understanding between the Corporation and Employee with respect to the Option
and shall be construed and enforced under the laws of the State of Washington.
13. The Corporation hereby warrants that a sufficient number of
shares of its common Stock have been reserved and are available to satisfy the
requirements of the Plan.
Dated as of the 15th day of January, 1996.
EMPLOYEE XXXXXX CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx X. World
----------------------------- ----------------------
Xxxxxxx X. Xxxxxxxx Xxxx X. World
General Manager & EVP
3
