Document:

EXHIBIT
10.50

 

EXPEDITORS
INTERNATIONAL OF WASHINGTON, INC.

2007 STOCK OPTION
PLAN

 

INCENTIVE STOCK
OPTION AGREEMENT

 

THIS AGREEMENT is
entered into as of May 2, 2007 (the “Date of Grant”) between Expeditors
International of Washington, Inc., a Washington corporation (the “Company”),
and the option grant recipient (the “Optionee”).

 

WHEREAS, the
Company has approved and adopted the 2007 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 May 2,
2007 (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, as
stated in the initial grant notice and/or Optionee’s account at a service
provider’s stock option website. (At the time of this grant, Optionee views and
accepts the Option at the self-service website of Transcentive, a Computershare
company: https://admin01.transcentive.com.)

 

1.                                       Exercise
Price.  The exercise price for the
Option shall be $42.90 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 2, 2010

  	
   

  	
  50

  	
  %

  
	
  May 2, 2011

  	
   

  	
  75

  	
  %

  
	
  May 2, 2012

  	
   

  	
  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.

 

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;

 

(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 Company’s address set forth below, or to the Optionee’s
address on file at the Company’s Stock Administration department 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
  Administration

  
	
   

  	
  1015 Third
  Avenue, 12th Floor

  
	
   

  	
  Seattle,
  Washington 98104EXHIBIT
10.28

 

EXECUTIVE
OFFICER COMPENSATION

 

1) Base Salary

 

The Board of Directors annually reviews each executive
officer’s salary. The Board considers the following with respect to the
determination of an individual executive officer’s base salary:  performance and contribution to the Company,
including length of service in the position, comparative compensation levels of
other companies, including periodic compensation studies performed by
independent compensation and benefit consultants, overall competitive
environment for executives and the level of compensation considered necessary
to attract and retain executive talent, historical compensation and performance
levels for the Company; and a desire to adhere to Internal Revenue Code Section 162(m) regulations
on deductible compensation, thus maximizing the Company’s ability to receive
federal income tax deductions.

 

Companies used in comparative analyses for the purpose
of determining each executive officer’s salary are selected periodically with
the assistance of professional compensation consultants. Selection of such
companies is based on a variety of factors, including market capitalization,
revenue size and industry classification. 
The Board of Directors believes that the Company’s primary competitors
for executive talent are companies with a similar market capitalization and,
accordingly, relies on a broad array of companies in various industries for
comparative analyses. 2008 base salary for the named executive officers is
$999,000, each, for Melvin J. Gordon, Ellen R. Gordon and John W. Newlin,
$990,000  for Thomas E. Corr, and
$751,000 for G. Howard Ember.

 

2) Annual Incentives and Other Awards

 

Effective January 1, 1997, the Compensation
Committee established the Tootsie Roll Industries, Inc. Bonus Incentive
Plan.  In 2006, the shareholders approved
the Management Incentive Plan to replace the previous Bonus Incentive Plan for
2007 and future years.  The Management Incentive
Plan was adopted to ensure the tax deductibility of the annual bonus that may
be earned by executive officers of the Company. 
Under the Plan, certain key employees (including employees who are also
directors) designated by the Compensation Committee may receive annual
incentive compensation determined by pre-established objective performance
goals.  This year, all executive officers
named in the summary compensation table included in the proxy statement were
eligible for the Management Incentive Plan. 
Performance goals were based on the measures, objectives and financial
criteria discussed below.

 

Annual incentive bonuses to executive officers and/or
CAP and split dollar insurance awards for all executive officers are made at
the discretion of the Board of Directors in order to recognize and reward each
executive officer’s contribution to the Company’s overall performance in terms
of both financial results and attainment of individual and Company goals.  The annual cash incentive bonus is designed
to reward executives, as well as other management personnel, for their contributions
to the Company’s financial performance during the recently completed year.

 

 

The annual CAP award and/or split dollar life
insurance program is principally designed to provide an incentive to executive
officers to achieve both short-term and long-term financial and other goals,
including strategic objectives.  These
programs are also designed to provide an incentive for the executive to remain
with the Company on a long-term basis. These awards are determined by the Board
of Directors based on the performance of the Company and the executive’s
contribution to the growth and success of the Company.

 

The Board of Directors considers both achievement of
strategic objectives and financial performance measures in determining
compensation levels. The following measures of Company performance are
considered in the determination of bonuses and awards:  earnings per share, increase in sales of core
brands and total sales, return on assets, return on equity; and net earnings as
a percentage of sales.

 

3) Other

 

Each named executive officer is provided an automobile
except for Mr. and Mrs. Gordon who share an automobile and are
provided with the services of a driver. 
As disclosed in the proxy, Mr. and Mrs. Gordon also share the
use of a corporate apartment in connection with travel to their Chicago offices
and share the use of a corporate aircraft in connection with such travel and
other business and personal purposes.

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