Document:

Separation and General Release Agreement

 Exhibit 10.5 
 SEPARATION AND GENERAL RELEASE AGREEMENT 
 This Separation Agreement (this “Agreement”) is made and
entered into as of July 12, 2006, by and among Michael LaRocco (the “Employee”) and Safeco Corporation, a Washington corporation (together with its successors and assigns, “Safeco”). 
 RECITALS 
 A. Employee serves as the
President and Chief Operating Officer of Safeco’s insurance subsidiaries. Employee has tendered his notice of resignation from employment with Safeco effective as of the date of this Agreement (the “Termination Date”), which
resignation is accepted. 
 B. To resolve any issues among Employee, Safeco and its subsidiaries arising out of Employee’s employment,
Employee and Safeco have voluntarily agreed to enter into this Agreement. This Agreement sets forth the complete understanding among Employee, Safeco and its subsidiaries regarding Employee’s resignation as an officer and employee of Safeco,
and the commitments and obligations arising out of the termination of the employment relationship. 
 AGREEMENT 
 1. Employment Termination. 
 1.1 Resignation.
In consideration of the Severance Payment and other compensation and benefits described in this Agreement, Employee tenders his resignation of employment, including resignation as an officer and director of Safeco’s subsidiaries, effective
as of the Termination Date. 
 1.2 Compensation Through Termination Date. Safeco will pay Employee all base salary through the
Termination Date. 
 1.3 Group Health Benefits Coverage. Safeco shall continue to provide coverage under any group health benefits
plan under which Employee and/or his dependents were covered through and including the Termination Date. Employee shall be responsible to pay any amounts chargeable as “employee premium contribution” amounts with respect to any such
coverage. From and after the Termination Date, Safeco shall provide Employee and/or Employee’s dependents with such benefits continuation or conversion coverage as may be available or required under the terms of Safeco’s benefits plans or
policies (understanding that Safeco retains the right to modify, amend or terminate any of the plans at any time without advance notice). Employee and/or Employee’s covered spouse and dependents may be eligible to elect a temporary extension of
group health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as subsequently amended (“COBRA”). Safeco will pay Employee $15,000 for such coverage. 
  

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 1.4 Payment for Accrued Vacation. Safeco will pay Employee for accrued but unused vacation that
exists as of the Termination Date. 
 1.5 Reimbursement for Expenses Incurred. Safeco will reimburse Employee for reasonable and
necessary business expenses incurred by Employee on or before the Termination Date to the extent such expenses are reimbursable under Safeco’s normal expense reimbursement policies and procedures, and provided that receipts or other acceptable
documentation for such expenses are submitted to Safeco by the Termination Date. 
 1.6 Acknowledgment of Full Compensation to Date.
Employee acknowledges and agrees that, with the payment of his salary through the Termination Date, he will have received all salary due and owing him for services performed through the Termination Date, less all required or agreed upon
withholdings. 
 1.7 No Authority To Act or Represent Safeco. From and after the Termination Date, Employee will have no
further authority to bind Safeco or its subsidiaries to any contract or agreement or to act on behalf of Safeco or to represent Safeco at any industry or business functions. 
 1.8 Return of Materials. On or before the Termination Date, Employee will return to Safeco all Safeco-owned equipment and materials, including,
but not limited to, any computers, wireless communication devices, all documents (whether existing in paper or electronic/digital media), compilations of data, files, manuals, letters, notebooks, reports, diskettes, CDs, flash drives, or similar
devices, and all other materials and records of any kind, and any copies or other reproductions thereof, owned by Safeco or its subsidiaries and used by Employee in the course of Employee’s employment. Notwithstanding the foregoing, Employee
may retain his blackberry for a period of five (5) days following the Termination Date. 
 1.9 Agreement to Cooperate. Employee
agrees for a period of not longer than twelve (12) months from the Termination Date to respond promptly, and to cooperate with, reasonable requests for information that Safeco may make relating to matters on which Employee worked while he was
employed by Safeco. Safeco agrees to directly pay or reimburse the Employee within seven (7) days for the actual expenses incurred by the Employee (including reasonable travel expenses and fees for time worked) as a result of his compliance
with this provision, provided the Employee submits proper documentation of the expenses he incurs as reasonably required by Safeco. 
 1.10
Home Loan. In connection with Employee’s relocation to the Seattle area, Safeco provided Employee with a home purchase loan in the amount of $780,000. The principal amount, together with any accrued interest from the Termination Date,
will be due one (1) year after the Termination Date. This is consistent with the original loan terms as reflected in that certain Promissory Note Secured by a Deed of Trust, dated October 8, 2001, and nothing contained in this Agreement or
otherwise amends Employee’s obligations with respect to this loan in any manner. 
  

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 2. Payments; Contributions. 
 2.1 Severance Payment. In consideration of the termination of Employee’s role as an officer and Employee’s resignation as an officer and director of Safeco’s subsidiaries, Employee’s release
agreement in Section 3 and other agreements made herein, in addition to the benefits provided under Section 1 above and the further consideration provided under Section 2.2 below, Safeco agrees to pay Employee a total sum of Two
Hundred Seventy Five Thousand Dollars ($275,000) in cash as a severance payment (the “Severance Payment”). The Severance Payment will be subject to withholding and deduction for payroll taxes and other deductions as are required by
federal and state law. The Severance Payment will be paid in a lump sum within ten (10) business days of the Effective Date of the Agreement (See Section 10.4). Employee and Safeco agree that the Severance Payment represents sufficient
consideration for the potential claims being released. 
 2.2 Payment in Lieu of Leadership Performance Plan Incentive. Safeco agrees
to pay Employee the sum of Six Hundred Thousand Dollars ($600,000) in cash in lieu of any annual incentive payment Employee might have received in 2007 under the Leadership Performance Plan. Employee will not be entitled to any other bonus,
incentive payment or other variable pay for past services. The sums specified in this Section shall also be subject to withholding and deductions and paid in a lump sum within ten (10) business days of the date of the normal bonus payouts under
Safeco’s existing bonus programs, which payout date will be on or about March 9, 2007. Any such payment under this Section 2.2 is contingent upon Employee’s full and complete compliance with the terms, conditions and restrictions
set forth in this Agreement. 
 2.3 Equity Awards. 
 Safeco shall accelerate and fully vest, on the Termination Date, the following equity awards (the “Awards”): 
  

					
	 Type
	  	No. of Shares	  	Grant Date
	 ISO
	  	1,309	  	05/07/03
	 NQ
	  	10,653	  	05/07/03
	 RSR
	  	951	  	05/07/03
	 RSR
	  	8,039	  	05/05/04
	 RSR
	  	6,116	  	03/11/05
	 RSR
	  	6,181	  	03/10/06

 The terms and conditions of the Safeco Long Term Incentive Plan of 1997, as amended, and
Executive’s award agreements, pursuant to which the Awards were granted, will continue to govern such Awards. Except for the Awards, all equity awards that are granted to Executive that are not fully vested on the Termination Date will be
deemed to have expired without vesting. With respect to the RSRs, the Settlement Date shall be the Termination Date. 
  

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 Executive acknowledges that accelerated stock options may not qualify for preferential income tax
treatment as an incentive stock option under the Internal Revenue Code. 
 3. Release and Settlement. 
 3.1 Release. In consideration of Safeco’s delivery of the Severance Payment and other consideration and benefits provided to Employee under
this Agreement, Employee releases Safeco and its subsidiaries, insurers, employee benefit plans in which Employee participates, and the employees, agents, officers, directors and shareholders or any of them (including their respective spouses and
marital communities), from all claims, demands, actions, causes of action, or damages, of any kind or nature whatsoever that Employee may now have or may ever have had against any of them, whether such claims are known or unknown, and including but
not limited to the Claims as described below. However, nothing in this Agreement will create or imply any waiver by Employee of any claims (a) with respect to Employee’s entitlement to compensation for vested benefits arising under any
Safeco retirement or welfare benefit plan, program or agreement, in accordance with the terms and conditions of such plans, (b) with respect to any breach by Safeco of its obligations under this Agreement, all of which rights will be preserved
and unaffected by this release, or (c) with respect to indemnification by Safeco, to the extent that such indemnification rights may arise or be provided under Safeco’s Articles of Incorporation or Bylaws, in connection with
Employee’s official actions (or omissions) on behalf of Safeco during the period Employee served as an officer of Safeco and director of its subsidiaries. EMPLOYEE ACKNOWLEDGES AND AGREES THAT THROUGH THIS RELEASE EMPLOYEE IS GIVING UP ALL
RIGHTS AND CLAIMS OF EVERY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, CONTINGENT OR LIQUIDATED, THAT EMPLOYEE MAY HAVE AGAINST SAFECO AND ITS SUBSIDIARIES, ENTITIES AND THE OTHER PERSONS REFERENCED ABOVE, EXCEPT FOR THE RIGHTS SPECIFICALLY
EXCLUDED ABOVE. 
 3.2 The Claims. For the purposes of this Agreement, “Claims” mean and include, without limitation,
Claims with respect to any of the following: (i) breach of contract; (ii) discrimination, retaliation, or constructive or wrongful discharge; (iii) lost wages, unpaid compensation under any wage claims statutes, lost employee
benefits, physical and personal injury, defamation, tortuous interference with business expectancy, stress, mental distress, or impaired reputation; (iv) Claims arising under the Age Discrimination in Employment Act (“ADEA”),
the Older Workers Benefit Protection Act, the Washington State Law Against Discrimination, Title VII of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, the Family Medical Leave Act, the Employee Retirement Income
Security Act, or any other federal, state or local laws or regulations prohibiting employment discrimination; (v) attorneys’ fees; and (vi) any other Claim arising from or relating to Employee’s employment with Safeco and/or
Employee’s separation from service. 
  

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 3.3 Consideration for Release. Safeco represents, and Employee acknowledges, that the Severance
Payment and the other consideration and benefits provided hereunder exceed any amount Safeco may arguably be required to pay under any agreement or arrangement to which Employee is a party or under which Employee claims some benefit, or under the
standard policies and procedures of Safeco, and represents valuable consideration to Employee for the release of the Claims described above. 
 4. No
Admission. 
 Employee understands and acknowledges that neither the Severance Payment nor the other benefits provided hereunder, nor the
execution and delivery of this Agreement by Safeco, constitutes an admission by Safeco to (i) any breach of an agreement with Employee, (ii) any violation of a federal, state or local statute, regulation or ordinance, or (iii) any
other wrongdoing. Safeco understands and acknowledges that neither Employee’s acceptance of the Severance Payment and other benefits provided hereunder, nor Employee’s execution and delivery of this Agreement, constitutes an admission by
Employee to (i) any breach of an agreement with Safeco, (ii) any violation of a federal, state or local statute, regulation or ordinance, or (iii) any other wrongdoing. 
 5. Confidential Information. 
 5.1 Possession of Proprietary Information and Trade Secrets.
Employee recognizes that by virtue of Employee’s employment by Safeco, Employee has acquired significant proprietary information and trade secrets relating to Safeco’s strategic planning, customers, agents, distribution, underwriting,
underwriting models and platforms, products, financial projections, capital planning and financing, staffing, operations and accounting information (the “Confidential Information”). Employee recognizes and acknowledges that the
Confidential Information constitutes valuable, special and unique assets of Safeco and its subsidiaries, access to and knowledge of which were essential to the performance of Employee’s duties during Employee’s employment. Employee
specifically reaffirms that he will continue to abide by the provisions of the Product Ownership Agreement and the Intellectual Property Agreement that he entered into with Safeco and its subsidiaries. 
 5.2 Materials. Employee will not remove from Safeco’s premises or possession any documents, marketing materials, compilations of data or
other files or records of any nature, or any copy or reproduction thereof, that were created or developed by Employee while employed by Safeco, contain Confidential Information or that otherwise belong to Safeco and its subsidiaries. 
  

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 6. Non-Disparagement/Conduct Adverse 
 Employee agrees not to make any disparaging or derogatory remarks about Safeco, its subsidiaries or any of their officers, directors, employees or agents at any time. Safeco agrees that it will use its best efforts to
cause its executive officers (those officers who are members of Safeco’s Policy Committee) and directors not to make any public statement that is intended to criticize or disparage the Employee. This Section 6 will not be construed to
prohibit Employee from responding truthfully and publicly to incorrect public statements or from making truthful statements when required by law or order of a court or other person or body having jurisdiction. Employee agrees that without the prior
written consent of Safeco’s chief executive officer, and for a period of not longer than twelve (12) months from the Termination Date, he shall not work for or consult with any person or entity with respect to any claim such person or
entity may have against Safeco or with respect to any offer to acquire, or to merge with, Safeco that such person or entity is considering making, is preparing to make or is making. 
 7. Noncompetition, Nonsolicitation and Intellectual Property 
 7.1 Scope of Competition.
Employee agrees that he will not, directly or indirectly, during his employment and for a three (3) months from the Termination Date, be employed by, consult with or otherwise perform services for, own, manage, operate, join, control or
participate in the ownership, management, operation or control of or be connected with, in any manner, any Competitor. A “Competitor” shall include any entity which, directly or indirectly, competes with Safeco or its subsidiaries
or produces, markets, distributes or otherwise derives benefit from the production, marketing or distribution of products or services that compete with products then produced or services then being provided or marketed, by Safeco or the feasibility
for production of which Safeco is then actually studying, or which is preparing to market or is developing products or services that will be in competition with the products or services then produced or being studied or developed by Safeco, in each
case within the geographical area of the United States, unless released from such obligation in writing by Safeco’s chief executive officer. Employee shall be deemed to be related to or connected with a Competitor if such Competitor is
(a) a partnership in which he is a general or limited partner or employee, (b) a corporation or association of which he is a shareholder, officer, employee, or (c) a partnership, corporation or association of which he is a member,
consultant or agent; provided, however, that nothing herein shall prevent the purchase or ownership by Employee of shares which constitute less than five percent of the outstanding equity securities of a publicly or privately held
corporation, if Employee had no other relationship with such corporation. 
 7.2 Scope of Nonsolicitation and No Hiring Obligation.
For a period of two (2) years following the Termination Date, Employee shall not directly or indirectly solicit, influence or entice, or attempt to solicit, influence or entice, any employee or consultant of Safeco to cease his or her
relationship with Safeco or solicit, influence, entice or in any way divert any customer, distributor, partner, joint venturer or supplier of Safeco to do business or in any way become associated with any competitor of Safeco or 
  

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 its subsidiaries. For a period of two (2) years following the Termination Date, Employee shall not directly or
indirectly hire, on his own behalf or on behalf of any entity with which he may become affiliated any individual or consultant employed by Safeco as of July 1, 2006. 
 7.3 Assignment of Intellectual Property. Employee specifically reaffirms that he will continue to abide by the provisions of the Product Ownership Agreement and the Intellectual Property Agreement that he
entered into with Safeco and its subsidiaries. 
 7.4 Disclosure and Protection of Inventions. Employee hereby represents that he has
previously disclosed or shall disclose in writing before the Termination Date all concepts, designs, processes, technology, plans, embodiments, inventions or improvements constituting intellectual property to Safeco promptly after its or their
development. At Safeco’s request and at Safeco’s expense, Employee will assist Safeco or its designee in efforts to protect all rights relating to such intellectual property. Such assistance may include, without limitation, the following:
(a) making application in the United States and in foreign countries for a patent or copyright on any work products specified by Safeco; (b) executing documents of assignment to Safeco or its designee of all of Employee’s right, title
and interest in and to any work product and related intellectual property rights; and (c) taking such additional action (including, without limitation, the execution and delivery of documents) to perfect, evidence or vest in Safeco or its
designee all right, title and interest in and to any intellectual property and any rights related thereto. 
 7.5 Nondisclosure of
Intellectual Property. Following the Termination Date, Employee will not use nor disclose (except as required by his duties to Safeco) any concept, design, process, technology, trade secret, customer list, plan, embodiment, or invention, any
other intellectual property or any other Confidential Information, whether patentable or not, of Safeco of which Employee became or becomes informed or aware during his employment, whether or not developed by Employee. 
 8. Legal Action. 
 8.1 No Claims. Employee
represents that Employee has not filed a Claim or complaint against Safeco or its subsidiaries, or any of their employees, agents, officers, directors or shareholders with any court or agency. Safeco represents that other than as disclosed to
Employee, it is not aware of any legal action pending or potentially pending against Employee for acts or omissions as a Safeco employee. 
 8.2 Indemnification. The existing rights of the Employee and obligations of Safeco with regard to indemnification of the Employee are not dependent upon Employee’s continued employment or holding an office or directorship with
Safeco or an affiliate. To the extent provided as of the Termination Date in the indemnification provisions of Safeco’s articles of incorporation and bylaws and to the maximum extent permitted under the laws of the state of Washington, Employee
will be entitled to indemnification, and advancement of expenses, in respect of matters that occurred during the time that he was an officer of Safeco. 
  

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 8.3 No Action on Released Claims. Employee agrees not to sue or pursue any court or administrative
action against Safeco or its subsidiaries, or any of their employees, agents, officers, directors or shareholders, to the extent allowed by applicable law, regarding any Claims released herein or otherwise arising from Employee’s employment
with Safeco or Employee’s separation from service, except with respect to any breach by Safeco of its obligations under this Agreement. If any government agency brings any claim or conducts any investigation against Safeco, Employee waives and
agrees to relinquish any damages or other individual relief that may be awarded as a result of any such proceedings to the extent it relates to his employment. 
 8.4 Liability for Defense Costs. If, notwithstanding this Agreement, Employee should file any lawsuit or other proceeding based on legal claims that Employee has released herein, Employee agrees to pay or
reimburse Safeco for all reasonable costs, including attorneys’ fees, which it, or its subsidiaries, or their employees, agents, officers or directors, incur in defending against Employee’s claims. This paragraph will not apply to any
claimed breach by Safeco of any of the terms or conditions of this Agreement. 
 9. Agreement Confidential. 
 9.1 Terms of Agreement. Employee and Safeco agree that neither of them will reveal nor publicize the existence of this Agreement or its terms,
including but not limited to the amount of the Severance Payment, except as required by law, including as required by financial and other corporate reporting requirements (which means that a press release and this Agreement will be filed with the
Securities and Exchange Commission in accordance with its rules and regulations). Other than as just described and unless agreed upon between the parties, the parties agree that they will not discuss with or make an announcement to the public at
large or to any individual person or persons any statements with regard to this Agreement, or matters relating to its terms. Notwithstanding the foregoing, the parties may discuss the existence and terms of this Agreement with their respective
attorneys, accountants, financial advisors to obtain counsel and advice, and, in Employee’s case, with members of Employee’s immediate family, and, in Safeco’s case, with members of Safeco’s Policy Committee. Nothing in this
confidentiality provision prohibits Employee from representing to third parties that Employee “resigned from Safeco on mutually agreeable terms” or that the parties “parted amicably.” 
 9.2 Employment References. If a prospective employer contacts Safeco for an employment reference with respect to Employee, Safeco will provide,
unless required otherwise by law or with specific permission of Employee, only the following information: Employee’s dates of employment, and Employee’s title and salary at the Termination Date. 
  

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 10. Acknowledgment. 
 10.1 Informed Agreement. Employee declares that Employee has read and fully understands the terms of this Agreement and its significance and consequence. Employee further declares that this Agreement is the
product of good faith negotiations between Employee and Safeco, and that Employee voluntarily accepts the same for the purpose of resolving arrangements with respect to Employee’s resignation. 
 10.2 Attorney. Employee acknowledges that Safeco has advised Employee to review the terms of this Agreement with an attorney of Employee’s
own choosing and that Employee has done so or knowingly waived Employee’s right to do so. 
 10.3 Voluntary Act. Employee
acknowledges that this Agreement is voluntary and has not been given as a result or any coercion. 
 10.4 Review and Revocation Periods,
Effective Date. Employee has a period of at least twenty-one (21) days during which to consider this Agreement before signing, but may sign it in less than 21 days at his option. Negotiations about the terms or language of this Agreement
will not re-start the 21-day consideration period. Employee has seven (7) days after signing in which Employee may revoke this Agreement. This Agreement will not become effective or enforceable until such seven-day period has expired (the
“Effective Date of the Agreement”). Employee understands that he may revoke this Agreement by delivering a written notice to the attention of Allie Mysliwy at Safeco Plaza, T-22, Seattle, WA 98185, no later than the close of
business on the seventh day after Employee signs this Agreement. Employee understands and acknowledges that if Employee revokes this Agreement it will not be effective or enforceable and Employee will not receive the payments or other benefits
described herein. 
 11. Entire Agreement. 
 Subject to Sections 5.1 and 7.3, this Agreement constitutes the entire agreement between Employee and Safeco, and it supersedes and replaces all prior written and oral agreements and understandings between the parties with respect to its
subject matter other than any agreement of confidentiality entered into in connection with his employment. Neither Safeco nor any Safeco Subsidiary has made any promises to Employee other than those included within this Agreement. 
 12. Waiver. 
 No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

 13. Costs. 
 Following the Termination
Date, Safeco shall pay Employee a lump sum of Ten Thousand Dollars ($10,000) to defray any attorney and tax advisor fees incurred in 
  

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 connection with Employee’s separation from employment with Safeco. Except for this payment to Employee, each party
shall separately bear their costs and expenses incurred in connection with the negotiation and preparation of this Agreement. 
 14. Injunctive
Relief. 
 Employee recognizes that irreparable and continuing injury for which there is not adequate remedy at law will result to Safeco
and its subsidiaries and their businesses and property if Employee breaches Employee’s obligations under this Agreement. In the event of any such breach or threatened breach, Safeco will be entitled to seek temporary injunctive relief upon a
showing of such breach or threatened breach without proof of actual damage and without posting a bond therefore, and/or an order of temporary and permanent specific performance enforcing this Agreement, and any other remedies provided by applicable
law. Employee agrees that in the event of any such proven breach, Safeco will be entitled to recover its costs associated with enforcing this Agreement, including reasonable attorney’s fees. Employee further understands and agrees that the word
“temporary” as used herein will include both temporary and preliminary relief and/or remedies available. 
 15. Mediation. 
 Any dispute under this Agreement must be submitted in advance of litigation for mediation by a mutually agreed-upon mediator at Judicial Dispute
Resolution, LLC, 1411 Fourth Avenue, Suite 200, Seattle, Washington. 
 16. Amendment. 
 No supplement, modification, or amendment of this Agreement will be valid, unless it is made in writing and signed by both parties hereto. 
 17. Severability. 
 If any provision or portion of
this Agreement is held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Agreement will remain in full force and effect and will in no way be affected or invalidated thereby. 
 18. Governing Law; Jurisdiction and Venue. 
 The
parties acknowledge that this Agreement will be governed, interpreted and enforced in accordance with the laws of the state of Washington, without regard to its conflict of law principles. Any suit or action arising out of or in connection with this
Agreement, or any breach hereof, will be brought and maintained in the federal or state courts located in Seattle, Washington. The parties irrevocably submit to the jurisdiction and venue of such courts for the purpose of such suit or action and
expressly and irrevocably waive, to the fullest extent permitted by law, any objection they may now or hereafter have to the venue of any such suit or action in any such court and any claim that any such suit or action has been brought in an
inconvenient forum. 
  

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 PLEASE READ CAREFULLY. 
 THIS SEPARATION AND GENERAL RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. 
  

			
	EMPLOYEE
	
	 /s/ Michael LaRocco

	Michael LaRocco
	
	Date: July 12, 2006
	
	SAFECO CORPORATION
		
	By	 	 /s/ Paula Rosput Reynolds

		 	Paula Rosput Reynolds
		 	Its President and Chief Executive Officer
	
	Date: July 12, 2006

  

 11Rayonier 1994 Incentive Stock Plan, as amended

 Exhibit 10.1 
 RAYONIER INC. 
 4,500,000 Common Shares 
 RAYONIER 1994 INCENTIVE STOCK PLAN 
 PLAN INFORMATION 
 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES 
 THAT HAVE BEEN REGISTERED UNDER THE 
 SECURITIES ACT OF 1933. 
 The Prospectus covers such additional securities as may be issuable as a result of anti-dilution
provisions 
 contained in the instruments pursuant to which securities covered by the Prospectus are issued. 
 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES 
 AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS 
 THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES 
 COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE 
 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A 
 CRIMINAL OFFENSE. 
 As amended July 21, 2006 

 Additional information about the Plan and its administration may be obtained by writing the Manager of
Stock Option Plan Administration, Rayonier Inc., 50 No. Laura Street, Jacksonville, FL 32202, or telephoning the Manager at (904) 357-9100. 
 Any statement contained in a document incorporated or deemed to be incorporated by reference in the Prospectus shall be deemed to be modified or superseded for purposes of the Prospectus to the extent that a statement contained in the
Prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference in the Prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Prospectus. Any such document, as well as Rayonier’s most recent annual report to shareholders and any other report or communication distributed to Rayonier shareholders generally, may be
obtained without charge by written request to W. Edwin Frazier, III, Corporate Secretary, Rayonier Inc., 50 No. Laura Street, Jacksonville, FL 32202, or by telephoning W. Edwin Frazier, III at (904) 357-9100. 
 TABLE OF CONTENTS 
  

			
	 General Information
	  	3
	 The Plan
	  	3
	 Administration
	  	13
	 Federal Tax Treatment
	  	13

  

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 GENERAL INFORMATION 
 The Rayonier 1994 Incentive Stock Plan (the “Plan”) was adopted by the Board of Directors of Rayonier Inc. and approved by its shareholder to be effective March 1, 1994. 
 The maximum number of common shares of Rayonier Inc. (the “Common Shares”) for which incentive stock options may be issued
under the Plan is one million (1,000,000); the maximum number of shares available for issuance under the Plan generally is determined annually as a function of a percentage of the total number of outstanding Common Shares plus unused carryover from
prior years, pursuant to and subject to additional limitations set forth in, Section 3 of the Plan. The Plan does not contain any limitation on the number of shares for which options may be granted to any one employee, other than due to tax
requirements relating to incentive stock options. The total number of shares available under the Plan registered currently on Form S-8 with the Securities & Exchange Commission is four million five hundred thousand (4,500,000). 

In addition to non-qualified stock options and incentive stock options, the committee administering the Plan (the “Committee”) may grant
stock appreciation rights (“SAR’s”) in connection with options to those employees who are considered directors or executive officers for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended. The Plan
permits the Committee to award performance shares and restricted stock, as well as non-qualified stock options, incentive stock options and SAR’s. Reference is made to the text of the Plan herein for a complete description of awards permitted
under the Plan and the relevant provisions and conditions applicable thereto. 
 The prospectus does not cover resales of Common Shares
acquired pursuant to the provisions of the Plan. Resales may be subject to restrictions or limitations imposed by the Securities Act of 1933 and the Securities Exchange Act of 1934. 
 The Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Furthermore, Section 401 of the Internal
Revenue Code relating to certain qualified pension, profit-sharing and stock bonus plans does not apply to the Plan. 
 Plan participants
receive information with respect to their participation, including the date of grant, the exercise price, the amount exercisable and the expiration date, as well as applicable information concerning whatever performance shares or restricted stock
may be relevant to them. 
 1994 RAYONIER INCENTIVE STOCK PLAN 
 1. Purpose 
 The purpose of the 1994 Rayonier Incentive Stock Plan is to motivate and reward superior
performance on the part of employees of Rayonier and its subsidiaries and to thereby attract and retain employees of superior ability. In addition, the Plan is intended to further opportunities for stock ownership by such employees in order to
increase their proprietary interest in Rayonier and, as a result, their interest in the success of the Company. Awards will be made, in the discretion of the Committee, to Key Employees (including officers and directors who are also employees) whose
responsibilities and decisions directly affect the performance of any Participating Company and its subsidiaries. Such incentive awards may consist of stock options, stock appreciation rights payable in stock or cash, performance shares, restricted
stock or any combination of the foregoing, as the Committee may determine. 
  

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 2. Definitions 
 When used herein, the following terms shall have the following meanings: 
 “Act” means the
Securities Exchange Act of 1934. 
 “Award” means an award granted to any Key Employee in accordance with the provisions of the
Plan in the form of Options, Rights, Performance Shares or Restricted Stock, or any combination of the foregoing. 
 “Award
Agreement” means the written agreement evidencing each Award granted to a Key Employee under the Plan. 
 “Beneficiary” means
the beneficiary or beneficiaries designated pursuant to Section 10 to receive the amount, if any, payable under the Plan upon the death of a Key Employee. 
 “Board” means the Board of Directors of the Company. 
 “Change in Control” has the
meaning specified in the Retirement Plan. 
 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended. (All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered.) 
 “Committee” means the Compensation and Management Development Committee of the Board or such other committee as may be designated by the Board to administer the Plan. 
 “Company” means Rayonier Inc. and its successors and assigns. 
 “Fair Market Value”, unless otherwise indicated in the provisions of this Plan, means, as of any date, the composite closing price for one share of Stock on the New York Stock Exchange or, if no sales of
Stock have taken place on such date, the composite closing price on the most recent date on which selling prices were quoted, the determination to be made in the discretion of the Committee. 
 “Incentive Stock Option” means a stock option qualified under Section 422 of the Code. 
 “Key Employee” means an employee (including any officer or director who is also an employee) of any Participating Company whose
responsibilities and decisions, in the judgment of the Committee, directly affect the performance of the Company and its subsidiaries. 
 “Limited Stock Appreciation Right” means a stock appreciation right which shall become exercisable automatically upon the occurrence of an Acceleration Event as described in Section 9 of the Plan. 
 “Option” means an option awarded under Section 5 of the Plan to purchase Stock of the Company, which option may be an Incentive Stock
Option or a non-qualified stock option. 
 “Participating Company” means the Company or any subsidiary or other affiliate of the
Company; provided, however, for Incentive Stock Options only, “Participating Company” means the Company or any corporation which at the time such Option is granted qualifies as a “subsidiary” of the Company under
Section 425(f) of the Code. 
 “Performance Share” means a performance share awarded under Section 6 of the Plan.

 “Plan” means the 1994 Rayonier Incentive Stock Plan, as the same may be amended, administered or interpreted from time to time.

  

 4 

 “Plan Year” means the calendar year. 
 “Retirement” means eligibility to receive immediate retirement benefits under a Participating Company pension plan. 
 “Restricted Stock” means Stock awarded under Section 7 of the Plan subject to such restrictions as the Committee deems appropriate or
desirable. 
 “Retirement Plan” means the Retirement Plan for Salaried Employees of Rayonier Inc., as amended effective
July 18, 1997, and as the same may be thereafter amended from time to time prior to the occurrence of a Change in Control. 
 “Right” means a stock appreciation right awarded in connection with an option under Section 5 of the Plan. 
 “Stock” means the common shares of the Company. 
 “Total Disability” means the complete and permanent inability
of a Key Employee to perform all of his or her duties under the terms of his or her employment with any Participating Company, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the
Committee deems appropriate or necessary. 
 “Voting Securities” means any securities of the Company that vote generally in the
election of directors. 
 3. Shares Subject to the Plan 
 The aggregate number of shares of Stock which may be awarded under the Plan in any Plan Year shall be subject to an annual limit. The maximum number of shares of Stock for which Awards may be granted under the Plan in
each Plan Year shall be 1.5 percent (l.5%) of the total of the issued and outstanding shares of Stock reported in the Annual Report on Form 10-K of the Company for the fiscal year ending immediately prior to any Plan Year. Any unused portion of the
annual limit for any Plan Year shall be carried forward and be made available for awards in succeeding Plan Years. 
 No more than twenty
percent (20%) of such total number of shares on a cumulative basis shall be available for restricted stock and performance shares Awards. In addition to the foregoing, in no event shall more than one million (1,000,000) shares of Stock be
cumulatively available for Awards of incentive stock options under the Plan. For any Plan Year, no individual employee may receive an Award of stock options for more than ten percent (10%) of the annual limit on available shares applicable to
that Plan Year. 
  

 5 

 Subject to the above limitations, shares of Stock to be issued under the Plan may be made available from the authorized
but unissued shares, or from shares purchased in the open market. For the purpose of computing the total number of shares of Stock available for Awards under the Plan, there shall be counted against the foregoing limitations the number of shares of
Stock which equal the value of performance share Awards, in each case determined as at the dates on which such Awards are granted. If any Awards under the Plan are forfeited, terminated, expire unexercised, are settled in cash in lieu of Stock or
are exchanged for other Awards, the shares of Stock which were theretofore subject to such Awards shall again be available for Awards under the Plan to the extent of such forfeiture or expiration of such Awards. Further, any shares that are
exchanged (either actually or constructively) by optionees as full or partial payment to the Company of the purchase price of shares being acquired through the exercise of a stock option granted under the Plan may be available for subsequent Awards,
provided however, that such shares may be awarded only to those participants who are not directors or executive officers (as that term is defined in the rules and regulations under Section 16 of the Exchange Act). 
 4. Grant of Awards and Award Agreements 
 (a) Subject
to the provisions of the Plan, the Committee shall (i) determine and designate from time to time those Key Employees or groups of Key Employees to whom Awards are to be granted; (ii) determine the form or forms of Award to be granted to
any Key Employee; (iii) determine the amount or number of shares of Stock subject to each Award; and (iv) determine the terms and conditions of each Award. 
 (b) Each Award granted under the Plan shall be evidenced by a written Award Agreement. Such agreement shall be subject to and incorporate the express terms and conditions, if any, required under the Plan or required
by the Committee. 
 5. Stock Options and Rights 
 (a) With respect to Options and Rights, the Committee shall (i) authorize the granting of Incentive Stock Options, non-qualified stock options, or a combination of Incentive Stock Options and non-qualified stock options;
(ii) authorize the granting of Rights which may be granted in connection with all or part of any Option granted under this Plan, either concurrently with the grant of the option or at any time thereafter during the term of the Option;
(iii) determine the number of shares of Stock subject to each Option or the number of shares of Stock that shall be used to determine the value of a Right; and (iv) determine the time or times when and the manner in which each Option or
Right shall be exercisable and the duration of the exercise period. 
 (b) Any option issued hereunder which is intended to qualify as an
Incentive Stock Option shall be subject to such limitations or requirements as may be necessary for the purposes of Section 422 of the Code or any regulations and rulings thereunder to the extent and in such form as determined by the Committee
in its discretion. 
 (c) Rights may be granted only to Key Employees who may be considered directors or officers of the Company for purposes
of Section 16 of the Act. 
 (d) The exercise period for a non-qualified stock option and any related Right shall not exceed ten years
and two days from the date of grant, and the exercise period for an Incentive Stock Option and any related Right shall not exceed ten years from the date of grant. 
 (e) The Option price per share shall be determined by the Committee at the time any Option is granted and shall be not less than the Fair Market Value of one share of Stock on the date the Option is granted.

 (f) No part of any Option or Right may be exercised until the Key Employee who has been granted the Award shall have remained in the
employ of a Participating Company for such period after the date of grant as the Committee may specify, if any, and the Committee may further require exercisability in 

  

 6 

 
installments; provided, however, the period during which a Right is exercisable shall commence no earlier than six months following the date the Option or
Right is granted. 
 (g) The purchase price of the shares as to which an Option shall be exercised shall be paid to the Company at the time
of exercise either in cash or Stock already owned by the optionee having a total Fair Market Value equal to the purchase price, or a combination of cash and Stock having a total fair market value, as so determined, equal to the purchase price. The
Committee shall determine acceptable methods for tendering Stock as payment upon exercise of an Option and may impose such limitations and prohibitions on the use of Stock to exercise an Option as it deems appropriate. 
 (h) Unless Section 9 shall provide otherwise, Rights granted to a director or officer shall terminate when such person ceases to be considered a
director or officer of the Company subject to Section 16 of the Act. 
 (i) In case of termination of employment, the following
provisions shall apply: 
 (A) If a Key Employee who has been granted an Option shall die before such Option has expired, his
or her Option may be exercised in full by the person or persons to whom the Key Employee’s rights under the Option pass by will, or if no such person has such right, by his or her executors or administrators, at any time, or from time to time,
within five years after the date of the Key Employee’s death or within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(d) above.

 (B) If the Key Employee’s employment by any Participating Company terminates because of his or her Retirement or Total
Disability, he or she may exercise his or her Options in full at any time, or from time to time, within five years after the date of the termination of his or her employment or within such other period, and subject to such terms and conditions as
the Committee may specify, but not later than the expiration date specified in Section 5(d) above. Any such Options not fully exercisable immediately prior to such optionee’s retirement shall become fully exercisable upon such retirement
unless the Committee, in its sole discretion, shall otherwise determine. 
 (C) Except as provided in Section 9, if the
Key Employee shall voluntarily resign before eligibility for Retirement or he or she is terminated for cause as determined by the Committee, the Options or Rights shall be cancelled coincident with the effective date of the termination of
employment. 
 (D) If the Key Employee’s employment terminates for any other reason, he or she may exercise his or her
Options, to the extent that he or she shall have been entitled to do so at the date of the termination of his or her employment, at any time, or from time to time, within three months after the date of the termination of his or her employment or
within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(d) above. 
 (j) No Option or Right granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of
the optionee, an Option or Right shall be exercisable only by the Key Employee to whom the Option or Right is granted. 
 (k) With respect to
an Incentive Stock Option, the Committee shall specify such terms and provisions as the Committee may determine to be necessary or desirable in order to qualify such Option as an “incentive stock option” within the meaning of
Section 422 of the Code. 
 (1) With respect to the exercisability and settlement of Rights: 
 (i) Upon exercise of a Right, the Key Employee shall be entitled, subject to such terms and conditions the Committee may specify, to
receive upon exercise thereof all or a 

  

 7 

 
portion of the excess of (A) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as determined by the Committee,
over (B) a specified amount which shall not, subject to Section 5(e), be less than the Fair Market Value of such specified number of shares of Stock at the time the Right is granted. Upon exercise of a Right, payment of such excess shall
be made as the Committee shall specify in cash, the issuance or transfer to the Key Employee of whole shares of Stock with a Fair Market Value at such time equal to any excess, or a combination of cash and shares of Stock with a combined Fair Market
Value at such time equal to any such excess, all as determined by the Committee. The Company will not issue a fractional share of Stock and, if a fractional share would otherwise be issuable, the Company shall pay cash equal to the Fair Market Value
of the fractional share of Stock at such time. 
 (ii) For the purposes of Subsection (i) of this Section 5(l), in
the case of any such Right or portion thereof, other than a Right related to an Incentive Stock Option, exercised for cash during a “window period” specified by Rule 16b-3 under the Act, the Fair Market Value of the Stock at the time of
such exercise shall be the highest composite daily closing price of the Stock during such window period. 
 (iii) In the event
of the exercise of such Right, the Company’s obligation in respect of any related Option or such portion thereof will be discharged by payment of the Right so exercised. 
 6. Performance Shares 
 (a) Subject to the provisions of the Plan, the Committee shall
(i) determine and designate from time to time those Key Employees or groups of Key Employees to whom Awards of Performance Shares are to be made, (ii) determine the Performance Period (the “Performance Period”) and Performance
Objectives (the “Performance Objectives”) applicable to such Awards, (iii) determine the form of settlement of a Performance Share and (iv) generally determine the terms and conditions of each such Award. At any date, each
Performance Share shall have a value equal to the Fair Market Value of a share of Stock at such date; provided that the Committee may limit the aggregate amount payable upon the settlement of any Award. 
 (b) The Committee shall determine a Performance Period of not less than two nor more than five years. Performance Periods may overlap and Key Employees
may participate simultaneously with respect to Performance Shares for which different Performance Periods are prescribed. 
 (c) The
Committee shall determine the Performance Objectives of Awards of Performance Shares. Performance Objectives may vary from Key Employee to Key Employee and between groups of Key Employees and shall be based upon such performance criteria or
combination of factor as the Committee may deem appropriate, including, but not limited to, minimum earnings per share or return on equity. If during the course of a Performance Period there shall occur significant events which the Committee expects
to have a substantial effect on the applicable Performance Objectives during such period, the Committee may revise such Performance Objectives. 
 (d) At the beginning of a Performance Period, the Committee shall determine for each Key Employee or group of Key Employees the number of Performance Shares or the percentage of Performance Shares which shall be paid to the Key Employee or
member of the group of Key Employees if Performance Objectives are met in whole or in part. 
 (e) If a Key Employee terminates service with
all Participating Companies during a Performance Period because of death, Total Disability, Retirement, or under other circumstances where the Committee in its sole discretion finds that a waiver would be in the best interests of the Company, that
Key Employee may, as determined by the Committee, be entitled to an Award of Performance Shares at the end of the Performance Period based upon the extent to which the Performance Objectives were satisfied at the end of 

  

 8 

 
such period, which Award, in the discretion of the Committee, may be maintained without change or reduced and prorated for the portion of the Performance
Period during which the Key Employee was employed by any Participating Company; provided, however, the Committee may provide for an earlier payment in settlement of such Performance Shares in such amount and under such terms and conditions as the
Committee deems appropriate or desirable. If a Key Employee terminates service with all Participating Companies during a Performance Period for any other reason, then such Key Employee shall not be entitled to any Award with respect to that
Performance Period unless the Committee shall otherwise determine. 
 (f) Each Award of a Performance Share shall be paid in whole shares of
Stock, or cash, or a combination of Stock and cash either as a lump sum payment or in annual installments, all as the Committee shall determine, with payment to commence as soon as practicable after the end of the relevant Performance Period.

 7. Restricted Stock 
 (a) Restricted
Stock shall be subject to a restriction period (after which restrictions will lapse) which shall mean a period commencing on the date the Award is granted and ending on such date as the Committee shall determine (the “Restriction Period”).
The Committee may provide for the lapse of restrictions in installments where deemed appropriate. 
 (b) Except when the Committee determines
otherwise pursuant to Section 7(d), if a Key Employee terminates employment with all Participating Companies for any reason before the expiration of the Restriction Period, all shares of Restricted Stock still subject to restriction shall be
forfeited by the Key Employee and shall be reacquired by the Company. 
 (c) Except as otherwise provided in this Section 7, no shares
of Restricted Stock received by a Key Employee shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period. 
 (d) In cases of death, Total Disability or Retirement or in cases of special circumstances, the Committee may, in its sole discretion when it finds that a waiver would be in the best interests of the Company, elect to
waive any or all remaining restrictions with respect to such Key Employee’s Restricted Stock. 
 (e) The Committee may require, under
such terms and conditions as it deems appropriate or desirable, that the certificates for Stock delivered under the Plan may be held in custody by a bank or other institution, or that the Company may itself hold such shares in custody until the
Restriction Period expires or until restrictions thereon otherwise lapse, and may require, as a condition of any Award of Restricted Stock that the Key Employee shall have delivered a stock power endorsed in blank relating to the Restricted Stock.

 (f) Nothing in this Section 7 shall preclude a Key Employee from exchanging any shares of Restricted Stock subject to the
restrictions contained herein for any other shares of Stock that are similarly restricted. 
 (g) Subject to Section 7(e) and
Section 8, each Key Employee entitled to receive Restricted Stock under the Plan shall be issued a certificate for the shares of Stock. Such certificate shall be registered in the name of the Key Employee, and shall bear an appropriate legend
reciting the terms, conditions and restrictions, if any, applicable to such Award and shall be subject to appropriate stop-transfer orders. 
 8.
Certificates for Awards of Stock 
 (a) The Company shall not be required to issue or deliver any certificates for shares of Stock prior
to (i) the listing of such shares on any stock exchange on which the Stock may then be listed and (ii) the completion of any registration or qualification of such shares under any federal or state law, or any ruling or regulation of any
government body which the Company shall, in its sole discretion, determine to be necessary or advisable. 
  

 9 

 (b) All certificates for shares of Stock delivered under the Plan shall also be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed and any applicable
federal or state securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. The foregoing provisions of this Section 8(b) shall not be effective if
and to the extent that the shares of Stock delivered under the Plan are covered by an effective and current registration statement under the Securities Act of 1933, or if and so long as the Committee determines that application of such provisions is
no longer required or desirable. In making such determination, the Committee may rely upon an opinion of counsel for the Company. 
 (c)
Except for the restrictions on Restricted Stock under Section 7, each Key Employee who receives Stock in settlement of an Award of Stock, shall have all of the rights of a shareholder with respect to such shares, including the right to vote the
shares and receive dividends and other distributions. No Key Employee awarded an Option, a Right or Performance Share shall have any right as a shareholder with respect to any shares covered by his or her Option, Right or Performance Share prior to
the date of issuance to him or her of a certificate or certificates for such shares. 
 9. Change in Control 
 Notwithstanding any provisions in this Plan to the contrary: 
 (a) Each outstanding Option granted under the Plan shall become immediately exercisable in full for the aggregate number of shares covered thereby and all related Rights shall also become exercisable upon the
occurrence of a Change in Control and shall continue to be exercisable in full for cash for a period of 60 calendar days beginning on the date that such Change in Control occurs and ending on the 60th calendar day following that date; provided,
however, that (A) no Right shall become exercisable earlier than six months following the date the Right is granted, and (B) no Option or Right shall be exercisable beyond the expiration date of its original term. 
 (b) Options and Rights shall not terminate and shall continue to be fully exercisable for a period of seven months following the
occurrence of a Change in Control in the case of an employee who is terminated other than for just cause or who voluntarily terminates his or her employment because he or she in good faith believes that as a result of such Change in Control he or
she is unable effectively to discharge his or her present duties or the duties of the position he or she occupied just prior to the occurrence of such Change in Control. For purposes of Section 9 only, termination shall be for “just
cause” only if such termination is based on fraud, misappropriation or embezzlement on the part of the employee which results in a final conviction of a felony. Under no circumstances, however, shall any Option or Right be exercised beyond the
expiration date of its original term. 
 (c) Any Right or portion thereof may be exercised for cash within the
60-calendar-day period following the occurrence of a Change in Control with settlement, except in the case of a Right related to an Incentive Stock Option, based on the “Formula Price” which shall be the highest of (A) the highest
composite daily closing price of the Stock during the period beginning on the 60th calendar day prior to the date on which the Right is exercised and ending on the date such Right is exercised, (B) the highest gross price paid for the Stock
during the same period of time, as reported in a report on Schedule 13D filed with the Securities and Exchange Commission or (C) the highest gross price paid or to be paid for a share of Stock (whether by way of exchange, conversion,
distribution upon merger, liquidation or otherwise) in any of the transactions set forth in the definition of “Change in Control” in the Retirement Plan. 
 (d) Upon the occurrence of a Change in Control, Limited Stock Appreciation Rights shall automatically be granted as to any Option
with respect to which Rights are not then outstanding; 

  

 10 

 
provided, however, that Limited Stock Appreciation Rights shall be provided at the time of grant of any Incentive Stock Option subject to exercisability upon
the occurrence of a Change in Control. Limited Stock Appreciation Rights shall entitle the holder thereof, upon exercise of such rights and surrender of the related Option or any portion thereof, to receive, without payment to the Company (except
for applicable withholding taxes), an amount in cash equal to the excess, if any, of the Formula Price as that term is defined in Section 9 over the option price of the Stock as provided in such Option; provided that in the case of the exercise
of any such Limited Stock Appreciation Right or portion thereof related to an Incentive Stock Option, the Fair Market Value of the Stock at the time of such exercise shall be substituted for the Formula Price. Each such Limited Stock Appreciation
Right shall be exercisable only during the period beginning on the first business day following the occurrence of such Change in Control and ending on the 60th calendar day following such date and only to the same extent the related Option is
exercisable. Upon exercise of a Limited Stock Appreciation Right and surrender of the related Option, or portion thereof, such Option, to the extent surrendered, shall not thereafter be exercisable. 
 (e) The restrictions applicable to Awards of Restricted Stock issued pursuant to Section 7 shall lapse upon the occurrence of
a Change in Control and the Company shall issue stock certificates without a restrictive legend. Key Employees holding Restricted Stock on the date of a Change in Control may tender such Restricted Stock to the Company which shall pay the Formula
Price as that term is defined in Section 9; provided, such Restricted Stock must be tendered to the Company within 60 calendar days of the Change in Control. 
 (f) If a Change in Control occurs during the course of a Performance Period applicable to an Award of Performance Shares pursuant
to Section 6, then the Key Employee shall be deemed to have satisfied the Performance Objectives and settlement of such Performance Shares shall be based on the Formula Price, as defined in this Section 9. 
 10. Beneficiary 
 (a) Each Key Employee shall file
with the Company a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. A Key Employee may from time-to-time revoke or change his or her
Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the Company prior to the Key Employee’s death, and in no event shall it be effective as of a date prior to such receipt. 
 (b) If no such Beneficiary designation is in effect at the time of a Key Employee’s death, or if no designated Beneficiary survives the Key Employee
or if such designation conflicts with law, the Key Employee’s estate shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award,
the Company may retain such Award, without liability for any interest thereon, until the Committee determines the rights thereto, or the Company may pay such Award into any court of appropriate jurisdiction and such payment shall be a complete
discharge of the liability of the Company therefor. 
 11. Administration of the Plan 
 (a) Each member of the Committee shall be both a member of the Board and a “non-employee director” within the meaning of Rule 16b-3(b)(3)(i)
under the Act or successor rule or regulation. No member of the Committee shall be, or shall have been, eligible to receive an Award under the Plan or any other plan maintained by any Participating Company to acquire stock, stock options, stock
appreciation rights, performance shares or restricted stock of a Participating Company at any time within the one year immediately preceding the member’s appointment to the Committee. 
  

 11 

 (b) All decisions, determinations or actions of the Committee made or taken pursuant to grants of
authority under the Plan shall be made or taken in the sole discretion of the Committee and shall be final, conclusive and binding on all persons for all purposes. 
 (c) The Committee shall have full power, discretion and authority to interpret, construe and administer the Plan and any part thereof, and its interpretations and constructions thereof and actions taken thereunder
shall be, except as otherwise determined by the Board, final, conclusive and binding on all persons for all purposes. 
 (d) The
Committee’s decisions and determinations under the Plan need not be uniform and may be made selectively among Key Employees, whether or not such Key Employees are similarly situated. 
 (e) The Committee may, in its sole discretion, delegate such of its powers as it deems appropriate. 
 (f) If a Change in Control has not occurred and if the Committee determines that a Key Employee has taken action inimical to the best interests of any
Participating Company, the Committee may, in its sole discretion, terminate in whole or in part such portion of any Option (including any related Right) as has not yet become exercisable at the time of termination, terminate any Performance Share
Award for which the Performance Period has not been completed or terminate any Award of Restricted Stock for which the Restriction Period has not lapsed. 
 12. Amendment, Extension or Termination 
 The Board may, at any time, amend or terminate the Plan and, specifically, may make
such modifications to the Plan as it deems necessary to avoid the application of Section 162(m) of the Code and the Treasury regulations issued thereunder. However, no amendment shall, without approval by a majority of the Company’s
stockholders, (a) alter the group of persons eligible to participate in the Plan, (b) except as provided in Section 13 increase the maximum number of shares of Stock which are available for Awards under the Plan or (c) extend the
period during which awards may be granted beyond December 31, 2003. If a Change in Control has occurred, no amendment or termination shall impair the rights of any person with respect to a prior Award. 
 13. Adjustments in Event of Change in Common Stock 
 I
In the event of any recapitalization, reclassification, split-up or consolidation of shares of Stock or, stock dividend, merger or consolidation of the Company or sale by the Company of all or a portion of its assets, the Committee shall make such
adjustments in the Stock subject to Awards, including Stock subject to purchase by an Option, or the terms, conditions or restrictions on Stock or Awards, including the price payable upon the exercise of such Option, as the Committee deems
equitable; provided however, that in the event of a stock split, stock dividend or consolidation of shares, the number of shares subject to an outstanding Option and the exercise price thereof, and the number of outstanding Performance Shares, shall
be proportionately adjusted to reflect such action. The number of shares available for Awards shall be automatically increased to reflect any additional shares issuable pursuant to the last clause of the preceding sentence. With respect to Awards
intended to qualify as “performance-based compensation” under Section 162(m) of the Code, such adjustments shall be make only to the extent that the Committee determines that such adjustments may be made without a loss of
deductibility of such Awards under Section 162(m) of the Code. 
 14. Miscellaneous 
 (a) Except as provided in Section 9, nothing in this Plan or any Award granted hereunder shall confer upon any employee any right to continue in the
employ of any Participating Company or interfere in any way with the right of any Participating Company to terminate his or her employment at any time. No Award payable under the Plan shall be deemed salary or compensation for the purpose of
computing benefits under any employee benefit plan or other arrangement of any Participating Company for the benefit of its employees 

  

 12 

 
unless the Company shall determine otherwise. No Key Employee shall have any claim to an Award until it is actually granted under the Plan. To the extent
that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as provided in Section 7(e) with respect to Restricted Stock. 
 (b) The Committee may cause to be made, as a condition precedent to the payment of any Award, or otherwise, appropriate arrangements with the Key
Employee or his or her Beneficiary, for the withholding of any federal, state, local or foreign taxes. 
 (c) The Plan and the grant of
Awards shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. 
 (d) The terms of the Plan shall be binding upon the Company and its successors and assigns. 
 (e) Captions
preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof. 
 15. Effective Date, Term of Plan and Shareholder Approval 
 The effective date of the Plan was March 1, 1994 and was
approved by the Company’s shareholders within twelve months before such date. The Plan was amended and restated effective October 16, 1998. No Award shall be granted under this Plan after the Plan’s termination date. The Plan’s
termination date shall be December 31, 2003. The Plan will continue in effect for existing Awards as long as any such Award is outstanding. 
 ADMINISTRATION 
 The Plan is administered by a Committee of the Board of Directors of Rayonier, presently designated as the
Compensation and Management Development Committee, the members of which serve during the pleasure of the Board. The Committee is composed of directors none of whom is an officer or employee of Rayonier and none of whom is eligible to receive any
award under the Plan. 
 FEDERAL INCOME TAX TREATMENT 
 The following is a brief summary of the current Federal income tax rules generally applicable to options, stock appreciation rights, performance shares and restricted stock. Recipients of Awards and Substitute Stock
Options should consult their own tax advisors as to the specific Federal, state and local tax consequences applicable to them. 
 A.
Options and Stock Appreciation Rights 
 Options granted under the Plan may be either non-qualified options or “incentive stock
options” qualifying under Section 422 of the Internal Revenue Code. The Substitute Stock Options are non-qualified options. 
  

 13 

 Non-qualified Options 
 An optionee is not subject to Federal income tax upon grant of a non-qualified option. At the time of exercise, the optionee will realize compensation income (subject to withholding) to the extent that the then fair
market value of the stock exceeds the option price. The amount of such income will constitute an addition to the optionee’s tax basis in the optioned stock. Sale of the shares will result in capital gain or loss (long-term or short-term
depending on the optionee’s holding period). Rayonier is entitled to a Federal tax deduction at the same time and to the same extent that the optionee realizes compensation income. 
 Incentive Stock Options (“ISOs”) 
 Options under the Plan denominated as ISOs are intended
to constitute incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. An optionee is not subject to Federal income tax upon either the grant or exercise of an ISO. If the optionee holds the shares acquired
upon exercise for at least one year after issuance of the optioned shares and until at least two years after grant of the option, then the difference between the amount realized on a subsequent sale or other taxable disposition of the shares and the
option price will constitute long-term capital gain or loss. To obtain favorable tax treatment, an ISO must be exercised within three months after termination of employment (other than by retirement, disability, or death) with Rayonier or
subsidiary. To obtain favorable tax treatment, an ISO must be exercised within three months of retirement or within one year of cessation of employment for disability (with no limitation in the case of death), notwithstanding any longer exercise
period permitted under the terms of the Plan. Rayonier will not be entitled to a Federal tax deduction with respect to the grant or exercise of the ISO. 
 If the optionee disposes of the shares acquired under an ISO before the requisite holding period, he or she will be deemed to have made a “disqualifying disposition” of the shares and will realize
compensation income in the year of disposition equal to the lesser of the fair market value of the shares at exercise or the amount realized on their disposition over the option price of the shares. (However, if the disposition is by gift or by sale
to a related party, the compensation income must be measured by the value of the shares at exercise over the option price.) Any gain recognized upon a disqualifying disposition in excess of the ordinary income portion will constitute either
short-term or long-term capital gain. In the event of a disqualifying disposition, Rayonier will be entitled to a Federal tax deduction in the amount of the compensation income realized by the optionee. 
 The option spread on the exercise of an ISO is an adjustment in computing alternative minimum taxable income. No adjustment is required, however, if the
optionee made a disqualifying disposition of the shares in the same year as he or she is taxed on the exercise. 
 Stock Appreciation Rights
(“SARs”) 
 SARs may be awarded to officers and directors of Rayonier subject to Section 16(b) of the Securities Exchange
Act of 1934 with respect to both incentive stock options and non-qualified options granted under the Plan. An optionee is not taxed upon the grant of SARs. An optionee exercising SARs for cash will realize compensation income (subject to
withholding) in the amount of the cash received. Rayonier is entitled to a tax deduction at the same time and to the same extent that the optionee realizes compensation income. 
 B. Performance Shares 
 A recipient of performance shares generally will realize
compensation income (subject to withholding) when and to the extent that payment is made, whether in the form of cash or shares of Rayonier Common Shares. To the extent that payment is made in the form of stock, income shall be measured by the then
fair market value of the shares, which shall constitute an addition to the recipient’s tax basis in such shares. Rayonier will be entitled to a Federal tax deduction for the value of payment at the time of payment. 
  

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 C. Restricted Stock 
 A recipient of restricted stock generally will realize compensation income (subject to withholding) when and to the extent that the restrictions on the shares lapse, as measured by the value of the shares at the time
of lapse. The recipient’s holding period for the shares will not commence until the date of lapse, and dividends paid during the restriction period will be treated as compensation. The income realized on lapse of the restrictions will
constitute an addition to the recipient’s tax basis in the shares. 
 In lieu of deferred recognition of income, the recipient may file
an election with the Internal Revenue Service, within 30 days of award, to realize compensation income at the time of award, as measured by the fair market value of the stock on the date of award determined without regard to the restrictions. The
income realized will constitute an addition to the tax basis of the shares. In the case of such election, any appreciation (or depreciation) on the shares during the restriction period will give rise to capital gain (or capital loss). In the event
that the recipient terminates employment during the restriction period and forfeits his or her shares, no deduction may be claimed and the taxes paid on award of the shares shall be forfeited. 
 Rayonier will be entitled to a Federal tax deduction at the same time and to the same extent that the recipient realizes compensation income. 

 

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