EXHIBIT 10.31
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
1997 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into as of (the "Date of Grant") between
Expeditors International of Washington, Inc., a Washington corporation (the
"Company"), and (the "Optionee").
WHEREAS, the Company has approved and adopted the 1997 Stock Option Plan
(the "Plan"), pursuant to which the Board of Directors is authorized to grant to
employees of the Company and its subsidiaries and affiliates stock options to
purchase common stock, $.01 par value, of the Company (the "Common Stock");
WHEREAS, the Plan provides for the granting of stock options that either (i)
are intended to qualify as "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) do not qualify under Section 422 of the Code ("Non-Qualified Stock
Options");
WHEREAS, on (the "Date of Grant") the Company authorized the grant to
the Optionee of an Incentive Stock Option to purchase shares of Common
Stock (the "Option");
NOW, THEREFORE, the Company hereby grants to Optionee the option to
purchase, upon the terms and conditions set forth herein and in the Plan
shares of Common Stock.
1. Exercise Price. The exercise price for the Option shall be $ per
share.
2. Limitation on the Number of Shares. The tax treatment set forth in
Section 422 of the Code is subject to certain limitations. These limitations,
which are described in Section 5(a) of the Plan and are based upon the Code,
generally limit the number of shares that will qualify under Section 422 in any
given calendar year. Under Section 5(a) any portion of an Option that exceeds
the annual limit shall be a "Non-Qualified Stock Option." The Company can make
no representation that any of this Option will actually qualify under Section
422 when exercised.
3. Vesting Schedule.
PORTION OF TOTAL OPTION
VESTING DATE WHICH WILL BE EXERCISABLE
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Three years from the Date of Grant.................................. 50%
Four years from the Date of Grant................................... 75%
Five years from the Date of Grant................................... 100%
Upon any Change in Control of the Company, as defined in the Plan, the
Option shall accelerate and become fully vested and exercisable in accordance
with Section 5(n) of the Plan.
4. Option Not Transferable. This Option may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by the laws of descent and distribution, and shall not be
subject to execution, attachment or similar process. Should any of the foregoing
occur, Section 4 of the Plan provides that this Option shall terminate and
become null and void.
5. Investment Intent. By accepting this Option, Optionee represents and
agrees for himself, and all persons who acquire rights in this Option in
accordance with the Plan through Optionee, 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 Optionee shall
furnish evidence satisfactory to the Company (including a written and signed
representation letter and a consent to be bound by all transfer restrictions
imposed by applicable law, legend condition, or otherwise) to that effect,
prior to delivery of the purchased shares of Common Stock.
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6. Termination of Option. A vested Option shall terminate, to the extent not
previously exercised, upon the occurrence of the first of the following events:
(i) ten years from the Date of Grant;
(ii) the termination of Optionee's employment with the Company for any
reason other than death or disability; or
(iii) the expiration of 90 days from the date of death of the Optionee or
the cessation of employment of the Optionee by reason of Disability.
In the event of death of the Optionee, the Option shall be exercisable only
by the person or persons to whom the Optionee's rights under the Option shall
pass by the Optionee's will or by the laws of descent and distribution of the
state or county of the Optionee's domicile at the time of death. Each unvested
Option granted pursuant hereto shall terminate upon the Optionee's termination
of employment for any reason whatsoever, including death or Disability.
7. Stock. In the case of any stock split, stock dividend or like change in
the nature of shares granted by this Agreement, the number of shares and option
price shall be proportionately adjusted as set forth in Section 5(m) of the
Plan.
8. Exercise of Option. Each exercise of this Option shall be by means of
written notice delivered to the Company at its principal executive office in
Seattle, Washington, specifying the number of shares of Common Stock to be
purchased and accompanied by payment in cash, or by certified or cashier's check
payable to the order of the Company, of the full exercise price for the Common
Stock to be purchased. Alternatively, the Optionee may pay for all or any
portion of the exercise price by delivery of previously acquired shares of
Common Stock with a fair market value equal to or greater than the full exercise
price or by complying with any other payment mechanism which the Plan
Administrator may approve at the time of exercise. The Optionee agrees that he
will also pay to the Company the amount necessary for the Company to satisfy its
withholding obligation imposed by the Internal Revenue Code of 1986, if any.
9. Holding Period for Incentive Stock Options. In order to obtain the
favorable tax treatment currently provided by Section 422 of the Code, the
shares of Common Stock must be sold, if at all, after a date which is the later
of two (2) years from the date this agreement is entered into or one (1) year
from the date upon which the Options are exercised. The Optionee agrees to
report sales of such shares prior to the above determined date within one (1)
business day after such sale is concluded. Any tax withholding would be due to
the Company at this time.
10. Optionee Acknowledgments. Optionee acknowledges that he has read and
understands the terms of this Agreement and that:
(a) The issuance of shares of Common Stock pursuant to the exercise of
this Option, the issuance of any securities with respect to such Common
Stock by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
reorganization, and any resale of any such shares of Common Stock, may only
be effected in compliance with applicable state and federal laws and
regulations, including the Securities Act of 1933, as amended (the
"Securities Act");
(b) By acceptance of the Option, he agrees to defend, indemnify and hold
the Company harmless from and against loss or liability arising from the
transfer of the Option or any Common Stock issued pursuant thereto or any
interest therein in violation of the provisions of the Securities Act or of
this Option Agreement;
(c) He agrees that prior to any exercise of the Option, he will seek
access to all information relating to the merits and risks of acquiring
Common Stock necessary to make an informed decision;
(d) He is not entitled to any rights as a shareholder with respect to
any shares of Common Stock issuable hereunder until he becomes a shareholder
of record;
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(e) The shares of Common Stock subject hereto may be adjusted in the
event of certain organic changes in the capital structure of the Company or
for any other reason permitted by the Plan; and
(f) This Agreement does not constitute an employment agreement nor does
it entitle Optionee to any specific employment or to employment for a period
of time, and Optionee's continued employment, if any, with the Company shall
be at will and is subject to termination in accordance with the Company's
prevailing policies and any other agreement between Optionee and the
Company.
11. Professional Advice. The acceptance and exercise of the Option and the
sale of Common Stock issued pursuant to exercise of the Option may have
consequences under federal and state tax and securities laws which may vary
depending on the individual circumstances of the Optionee. Accordingly, the
Optionee acknowledges that he has been advised to consult his personal legal and
tax advisor in connection with this Agreement and his dealings with respect to
the Option or the Common Stock.
12. Notices. Any notice required or permitted to be made or given hereunder
shall be hand delivered or mailed by certified or registered mail to the
addresses set forth below, or as changed from time to time by written notice to
the other.
Notices shall be deemed received and effective upon the earlier of (i) hand
delivery to the recipient, or (ii) five days after the date of postmark by the
United States Postal Service or its successor.
Company: Expeditors International of
Washington, Inc.
Attention: Stock Option Administration
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Optionee:
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(address)
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13. Agreement Subject to Plan. 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. A copy will be made
available upon request. Should any conflict exist between the provisions of the
Plan and those of this Agreement, those of the Plan shall govern and control.
This Agreement and the Plan set forth the entire understanding between the
Company and the Optionee with respect to the Option and shall be construed and
enforced under the laws of the State of Washington.
Dated as of the day of , .
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. OPTIONEE
By ------------------------------------ --------------------------------
Chairman and C.E.O. Optionee's Signature
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