IMAGEX, INC.
STOCK VESTING AGREEMENT
This Stock Vesting Agreement is entered into as of December 20, 1996 by
and between ImageX, Inc., a Washington corporation (the "Company"), and F.
Xxxxxx Xxxxxxxxxxx (the "Shareholder").
RECITALS
A. In connection with the execution and delivery of this Agreement, the
Company is issuing to the Shareholder, in exchange for an aggregate of $100 and
services to be rendered to the Company in the future, 800,000 shares of common
stock, $.01 par value per share, of the Company (the "Stock").
B. In order to induce the Company to issue the Stock, the Shareholder has
agreed that the Stock will be subject to a purchase option in favor of the
Company as set forth herein.
AGREEMENTS
In consideration of the foregoing and the other provisions set forth
herein, the parties hereby agree as follows:
1. Purchase Option
The Stock shall be subject to the following option (the "Purchase
Option"):
(a) In the event that, prior to the termination of this Agreement,
the Shareholder ceases to be continuously employed by the Company, or a parent
or subsidiary or successor or affiliate of the Company, due either to his
voluntary resignation (other than due to disability) or to termination by the
Company for Cause (as defined below), the Company may exercise the Purchase
Option. For the purpose of this paragraph 1, the Shareholder's "continuous
employment" shall cease when the Shareholder ceases to be actively employed by
the Company or a parent or subsidiary or successor or affiliate of the Company,
as determined in the reasonable discretion of the Board of Directors of the
Company after at least 30 days' prior written notice is provided to the
Shareholder that such a determination is under consideration. Vacations and
temporary absences due to illness, disability or family crisis shall not be
considered in determining whether a cessation of the Shareholder's active
employment has occurred. The date when continuous employment ceases is
hereinafter referred to as the "Termination Date." The term "Cause" shall mean:
(i) the Shareholder's
conviction of (or plea of guilty or nolo contendere to) a felony which had or
will have a material detrimental effect on the Company's business, (ii) a
grossly negligent or willful act by the Shareholder which constitutes gross
misconduct and is injurious to the Company, and (iii) continued violations by
the Shareholder of his material duties which are demonstrably willful and
deliberate or grossly negligent on the Shareholder's part after there has been
delivered to the Shareholder a written demand for performance from the Company
which describes the basis for the Company's belief that the Shareholder has not
substantially performed his duties.
(b) The Company shall have the right at any time within sixty (60)
days after the Termination Date, provided that such date is prior to the
termination of this Agreement, to purchase from the the Shareholder, at a price
per share of $.01 (appropriately adjusted for any subsequent stock split,
dividend, combination, or other recapitalization) (the "Repurchase Price"), up
to but not exceeding a number of shares of Stock equal to one hundred percent
(100%) of the Stock (800,000 shares) less 22,222 shares (subject to appropriate
adjustment for any subsequent stock split, stock dividend, combination, or other
recapitalization) for each completed month of employment with the Company
between the date of this Agreement (the "Commencement Date") and the Termination
Date.
(c) The Purchase Option, if exercised by the Company, shall be
exercised by written notice signed by an officer or director of the Company
after approval by the Board of Directors and shall be delivered to the
Shareholder on or prior to the expiration of the 60-day period referred to in
paragraph (b) above. The Company may pay for the shares of Stock it has elected
to repurchase (i) by delivery to the Shareholder of a check in the amount of the
aggregate Repurchase Price for the number of shares of Stock being repurchased,
(ii) by cancellation by the Company of an amount of the Shareholder's
indebtedness to the Company equal to the aggregate Repurchase Price for the
number of shares of Stock being repurchased or (iii) by a combination of (i) and
(ii). Payment of the Repurchase Price shall be completed within five business
days after notice of exercise of the Purchase Option is delivered to the
Shareholder.
(d) In the event that, in connection with any exercise of the
Purchase Option under this Agreement, the Company elects to exercise the
Purchase Option as to fewer than all the shares of Stock then subject thereto,
the Purchase Option shall expire as to all the shares of Stock that the Company
has not elected to repurchase.
(e) Upon the closing of any of the following transactions, provided
any such transaction is duly and validly approved by the Company's Board of
-2-
Directors and shareholders in accordance with applicable law, the Purchase
Option shall automatically lapse in its entirety:
(i) the liquidation, dissolution or indefinite
cessation of business operations of the Company;
(ii) the execution by the Company of a general assignment for
the benefit of creditors, the appointment of a receiver or trustee to take
possession of the property and assets of the Company, or the filing of a
petition under applicable bankruptcy laws with respect to the Company;
(iii) the cessation of the Shareholder's employment with the
Company (or a parent or subsidiary or successor or affiliate of the Company) due
to any reason other than voluntary resignation (other than due to disability) or
termination by the Company for Cause.
(f) Notwithstanding subsections (b) and (c) of this Section, the
Company shall be entitled for a period of one year from the Termination Date
(rather than 60 days) to give notice to the Shareholder and to purchase the
shares to the extent that the Company reasonably determines that such an
extension of time is necessary to prevent the repurchase of the Shareholder's
shares from causing other capital stock of the Company to not qualify as "small
business stock" under Section 1202 of the Internal Revenue Code of 1986, as
amended.
2. Legend
All certificates representing any shares of Stock subject to this
Agreement shall have endorsed thereon the following legend, in addition to any
other legend required by the Company respecting the restricted nature of the
Stock:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A CERTAIN STOCK VESTING AGREEMENT
THAT INCLUDES A REPURCHASE RIGHT IN FAVOR OF THE CORPORATION
RELATING TO THESE SECURITIES. COPIES OF THE STOCK VESTING
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE CORPORATION."
3. Rights as Shareholder
Subject to the terms hereof, the Shareholder shall have all the rights of
a shareholder with respect to the Stock during the term of this Agreement,
including
-3-
without limitation the right to vote and receive any dividends or other
distributions declared thereon.
4. Adjustments for Stock Splits, Recapitalizations and Similar
Events
If, at any time or from time to time, there is (i) a dividend of any
security, stock split or other change in the character or amount of any of the
outstanding securities of the Company, or (ii) any consolidation, merger or
similar event in connection with which the Purchase Option does not lapse under
the terms of this Agreement, then, in such event, any and all new, substituted
or additional securities or other property to which the Shareholder is entitled
by reason of his ownership of the shares of Stock then subject to the Purchase
Option shall be immediately included in the definition of "Stock" under this
Agreement and shall be subject to the Purchase Option with the same force and
effect as the Stock currently subject to this Agreement and the Purchase Option.
The Repurchase Price per share upon exercise of the Purchase Option shall be
appropriately adjusted as determined by the Board of Directors of the Company to
reflect any such event referred to in this Section 4.
5. Termination
This Agreement shall terminate in its entirety upon the lapse of the
Purchase Option in its entirety pursuant to Section 1 or otherwise, or upon the
completion of a repurchase transaction pursuant to an exercise of the Purchase
Option, in either case in accordance with the terms of this Agreement.
6. Tax Matters
The Shareholder acknowledges that he has considered and analyzed the
appropriate treatment by him of the transactions contemplated hereby under the
Internal Revenue Code of 1986, as amended (the "Code"), including without
limitation Section 83 thereof. The Shareholder agrees that any decision as to
whether to file an election relating thereto, and the due and proper filing of
any such election, are solely the Shareholder's responsibilities.
7. No Right to Continued Employment
Nothing in this Agreement shall create any right to continued employment
of the Shareholder, or to affect in any manner the right and power of the
Company to terminate the employment of the Shareholder for any reason or for no
reason, with or without Cause.
-4-
8. Cooperation
The parties agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.
9. Specific Enforcement
Each party expressly agrees that the other party would be irreparably
damaged if this Agreement were not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement by
any party, the other party shall, in addition to all other remedies, each be
entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions of this Agreement.
10. Notices
All notices and other communications required or permitted hereunder shall
be in writing and shall be mailed by first class mail, postage prepaid, or
otherwise delivered by hand or by messenger, facsimile or courier, addressed (a)
if to the Shareholder, at the Shareholder's then current address on the
Company's books or at such other address as the Shareholder shall have furnished
to the Company in writing, or (b) if to the Company, at its principal executive
office, attention President, with a copy to Xxxxxxx X. Xxxx, Xx., Xxxxxxx Coie,
0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000. If notice is provided by mail,
it shall be deemed to be given three (3) business days after proper deposit in
the U.S. Mail, and if notice is given by hand or by messenger, facsimile or
courier, it shall be deemed to be given upon receipt.
11. Entire Agreement
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both oral and written, among such parties, or any of them, with
respect to such subject matter. No such prior agreement or undertaking may
contradict, vary or supplement this Agreement.
12. Amendment and Waiver
Neither this Agreement nor any provision hereof may be modified, amended
or terminated except by a written agreement signed by the parties hereto, and no
waiver of any provision of this Agreement shall be effective unless in writing
and signed by or on behalf of the party to be bound by such waiver.
-5-
13. Governing Law
This Agreement shall be governed by and construed under the laws of the
state of Washington as applied to agreements among Washington residents, made
and to be performed entirely within Washington.
14. Successors and Assigns
The provisions hereof shall inure to the benefit of, and be binding upon,
the successors, permitted assigns, heirs, executors, administrators and personal
representatives of the parties hereto. Notwithstanding anything to the contrary
contained in this Agreement, no shares of Stock may be transferred by the
Shareholder under any circumstances, without the prior written consent of the
Company which may be withheld for any reason, so long as such shares are subject
to the Purchase Option contained in this Agreement. Any transfer or purported
transfer in violation of this Section 14 shall be void.
15. Headings
The headings of the sections and paragraphs of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
16. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
17. Agreement to Perform Future Services
As partial consideration for the Stock being issued to the Shareholder,
the Shareholder agrees to serve as an employee and officer of the Company, and
to perform such srvices for the Company as the Company's Board of Directors may
determine, for the period during which the Purchase Option is in effect.
18. Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provisions shall be excluded from this Agreement and
the balance of this Agreement shall be interpreted as if such provisions were so
excluded and shall be enforceable in accordance with its terms.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IMAGEX, INC.
By /s/ XXXX XXXXXX
-----------------------------------
Name: Xxxx Xxxxxx
--------------------------------
Title: CFO
-------------------------------
Address: 0000 - 000xx Xxxxxx X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
SHAREHOLDER
/s/ F. XXX XXXXXXXXXXX
-------------------------------------
F. Xxx Xxxxxxxxxxx
Address: 0000 00XX XXX XX
----------------------------
XXXXXX XXXXXX, XX 00000
----------------------------
----------------------------
