Document:

GWR 06.30.2014 EX 10.9

GENESEE & WYOMING, INC.
SECOND AMENDED AND RESTATED 2004 OMNIBUS INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD NOTICE

	
			
	Grantee:
	 
	XXXXXXXXX     

	 
	 
	 

	Type of Award:
	 
	Performance-Based Restricted Stock Unit Award

	 
	 
	 

	Number of Units:
	 
	__________    

	 
	 
	 

	Date of Grant:
	 
	[MONTH] [DATE], 20XX

	 
	 
	 

	Performance Vesting Period:
	 
	[MONTH] [DATE], 20XX through [MONTH] [DATE], 20XX

1.Grant of Performance-Vesting Restricted Stock Unit.   This Award Notice serves to notify you that the Compensation Committee (the “Committee”) of the Board of Directors of Genesee & Wyoming Inc. (“G&W”) hereby grants to you, under G&W’s Second Amended and Restated 2004 Omnibus Incentive Plan (the “Plan”), a performance-based restricted stock unit award (the “Award”), on the terms and conditions set forth in this Award Notice and the Plan, representing the contingent right to earn up to the number of shares of G&W’s Class A Common Stock, par value $.01 per share (the “Units”), as described in more detail herein.  The Plan is incorporated herein by reference and made part of this Award Notice.  A copy of the Plan is available on G&W’s Intranet under Corporate Policies, then Human Resources, or from G&W’s Human Resources Department upon request.  You should review the terms of this Award Notice and the Plan carefully.  The capitalized terms used in this Award Notice that are not defined herein have the meanings as defined in the Plan.
2.General Award Description.   The Award consists of a grant of restricted stock units subject to both performance, time and other vesting restrictions as described below in Sections 3, 5 and 6 of this Award Notice.  
3.Restrictions and Performance Vesting.   Subject to the terms set forth in this Award Notice and the Plan, provided you are still in the employment or service of G&W or any Subsidiary or remain in the service of G&W by serving on the G&W Board of Directors or in such other mutually agreed service capacity to G&W (“Services”) at such time, the right to vest in the Units described in this Award Notice is based on and subject to the performance of G&W’s Class A Common Stock, par value $.01 per share (“G&W’s Common Stock”), measured based on G&W’s Common Stock Total Shareholder Return (“TSR”) performance over the period beginning [MONTH] [DATE], 20XX and ending [MONTH] [DATE], 20XX (the “Performance Vesting Period”) relative to the TSR of (a) the individual components of the S&P 500, and (b) the Peer Group (as defined below), each weighted equally as a separate component and independently measured.  For purposes of the Award, the Peer Group consists of the following XX companies:
[INSERT PEER GROUP COMPANIES]

For purposes of the Award, TSR over the Performance Vesting Period will be measured by the percentage change in the average daily closing price of G&W’s Common Stock, with an initial measurement price of $XX.XX, which is the average daily closing price of G&W’s Common Stock from [MONTH] [DATE], 20XX to [MONTH] [DATE], 20XX (the first 30 trading days of the Performance Vesting Period) to the average daily closing price of G&W’s Common Stock for the last 30 trading days of the Performance Vesting Period, assuming dividends declared during the Performance Vesting Period are reinvested on the ex-dividend date.  

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The percentage of the Units available for vesting at the end of the Performance Vesting Period will be based 50% on the Peer Group and 50% on the S&P 500, with each discrete half of the Award measured independently, and the percentage of the Units available for vesting will vary from 0% to 100% depending on G&W’s relative TSR performance over the Performance Vesting Period as compared to each of the Peer Group and the S&P 500 as follows:
	
				
	 
	G&W Relative TSR Performance

	 
	Percentile Rank (1)
	 
	% of Award Units Available (2)

	 
	50th or Below
	 
	0%

	 
	55th
	 
	40%

	 
	60th
	 
	40%

	 
	65th
	 
	60%

	 
	70th
	 
	80%

	 
	75th or Above
	 
	100%

		
	(1)
	Percentile Rank represents average of G&W rankings against S&P 500 and Peer Group (to be measured separately for each S&P 500 and Peer Group component).

		
	(2)
	For TSR performance between the discrete percentile ranks in this table, Units will be interpolated. 

4.Changes to S&P 500 and Peer Group Composition.   In the event that a company in the S&P 500 or the Peer Group ceases to be publicly traded for any reason during the Performance Vesting Period, the following process will apply: (i) if such company has been publicly traded for at least half of the Performance Vesting Period, it will continue to be counted as a member of the S&P 500 or the Peer Group in calculating G&W’s Common Stock relative TSR ranking vis-à-vis the S&P 500 and the Peer Group, and TSR performance for such company will be based on the average closing stock price for its final 30 days of trading during the Performance Vesting Period; (ii) conversely, if such company has been publicly traded for less than half of the Performance Vesting Period, it will be excluded from the S&P 500 or Peer Group for relative TSR measurement.
5.Time Vesting Restrictions.   Except as otherwise provided in Section 6 hereof, the Units available due to performance-based vesting based on G&W’s Common Stock relative TSR performance as defined above will vest at the end of the Performance Vesting Period (i.e., [MONTH] [DATE], 20XX) provided you are still in the employment or service of G&W or any Subsidiary at that time. 
6.Special Vesting Provisions. 
(a)    Effect of Death or Disability.  In the event of your death or “Disability” during the Performance Vesting Period, any further time vesting restrictions related to employment or service to G&W or any Subsidiary applicable to the Award will lapse and the Units will vest to the extent earned at the end of the Performance Vesting Period.  The term “Disability” means you are permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.
(b)     Effect of Certain Other Events.
(i) Termination With Cause.  Upon your termination of Services by G&W for Cause prior to the vesting of the Units, the Units shall be forfeited as of the date of such termination.
(ii) Termination Without Cause.  Upon your involuntary termination of Services by G&W (for any reason other than death, Disability or Cause) or your voluntary termination of employment for Good Reason prior to the vesting of the Units, you will continue to be eligible to vest in the Units in accordance with Section 3 hereof, to the extent earned at the end of the Performance Vesting Period. 

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(iii) Qualified Resignation. Notwithstanding anything to the contrary contained in this Award Notice, following your Qualified Resignation prior to the vesting of the Units, you will continue to be eligible to vest in the Units in accordance with Section 3 hereof, to the extent earned at the end of the Performance Vesting Period, with such period following the Qualified Resignation and prior to the end of the Performance Vesting Period deemed the “Permissive Vesting Period.”  During the Permissive Vesting Period, you shall continue to be eligible to Vest in the Units in accordance with Section 3 hereof, to the extent earned at the end of the Performance Vesting Period, provided you remain in the service of G&W by providing Services and remain in compliance with the provisions of Section 9(c).  In the event you have communicated in writing to the G&W Board of Directors a willingness to provide Services, and either before or during the Permissive Vesting Period you are not nominated or elected to the G&W Board of Directors or are not offered the opportunity to act in some other mutually agreed service capacity to G&W following your Qualified Resignation (a “Rejected Qualified Resignation”), you will continue to be eligible to vest in the Units in accordance with Section 3 hereof, to the extent earned at the end of the Performance Vesting Period.
(iv)    Other Resignations.  Upon your voluntary resignation as Chief Executive Officer of G&W or, during the Permissive Vesting Period, as a member of G&W’s Board of Directors or from such other mutually agreed service capacity in which you provided Services, except for a resignation for Good Reason or a Qualified Resignation, prior to the vesting of the Units, the Units shall be forfeited as of the date of such resignation.   
(v)    Certain Definitions.
(1)    The term “Cause” means (i) your willful and continued failure to substantially perform your duties with G&W or a Subsidiary after written warnings identifying the lack of substantial performance are delivered to you to specifically identify the manner in which G&W or a Subsidiary believes that you have not substantially performed your duties, (ii) your willful engaging in illegal conduct which is materially and demonstrably injurious to G&W or any Subsidiary, (iii) your commission of a felony, (iv) your material breach of a fiduciary duty owed by you to G&W or any Subsidiary, (v) your intentional unauthorized disclosure to any person of confidential information or trade secrets of a material nature relating to the business of G&W or any Subsidiary, or (vi) your engaging in any conduct that G&W’s or a Subsidiary’s written rules, regulations or policies specify as constituting grounds for discharge.  
(2)    The term “Qualified Resignation” means your resignation as Chief Executive Officer of G&W if (i) you have provided at least six (6) months’ advance notice to the G&W Board of Directors regarding your intended resignation (“Sufficient Notice”), (ii) on or prior to the date you provide the Board of Directors with such notice of resignation, the Board of Directors has received an actionable succession plan which it deems to be acceptable (which acceptance may not be unreasonably withheld) and (iii) you have communicated in writing to the G&W Board of Directors a willingness to provide Services.  
(3)    The term “Good Reason” means the occurrence during your employment with G&W or its Subsidiaries, prior to the vesting of the Award, of any of the following without your express written consent:
(4) Any material and adverse diminution in your duties, titles or responsibilities with G&W from those in effect immediately prior to the Date of Grant; provided, however, that no such diminution shall be deemed to exist because of changes in your duties, titles or responsibilities as a consequence of G&W ceasing to be subject to the reporting requirements of the Exchange Act;

(5) Any material reduction in your annual target compensation from your annual target compensation for the prior fiscal year (excluding the impact of any one-time, special or discretionary awards or bonuses and any change due to changes in G&W’s peer group composition or compensation study, as reflected by the independent compensation consultants to the Committee); or

(6)  Any requirement that you be based at a location more than thirty-five (35) miles from the location at which you were based on the Date of Grant.
               
Notwithstanding the foregoing, your resignation shall not be deemed to have occurred for “Good Reason” unless you provide G&W with a written notice of Good Reason termination referencing this Section 6(b)(v) within fifteen (15) days after the occurrence of an event giving rise to a claim of Good Reason, and G&W shall have fifteen (15) days thereafter in which to cure or resolve the behavior otherwise constituting Good Reason, or to dispute such resignation for Good Reason.

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7.Cessation of Public Trading of G&W’s Common Stock.   In the event that G&W’s Common Stock ceases to be traded on a United States public securities exchange (either the NYSE or NASDAQ) during the Performance Vesting Period, except as otherwise provided in Section 10 below, TSR for G&W’s Common Stock and the common stock of the members of the S&P 500 and the Peer Group, as applicable, shall be determined by the percentage difference between the average daily closing price of each company’s common stock for the first 30 trading days of the Performance Vesting Period and the average daily closing price of its common stock for the 30 trading days immediately prior to the cessation of the public trading of G&W’s Common Stock, adjusted to reflect the reinvestment of any dividends declared during this period as of the ex-dividend date.  
In such an event, the number of shares made available for time-based vesting resulting from G&W’s Common Stock relative TSR performance shall be prorated based on the number of days G&W’s Common Stock was publicly traded during the Performance Vesting Period divided by the number of days in the original Performance Vesting Period.  
8.    Issuance and Taxation of Shares.   
(a)   Issuance of Shares.   Upon satisfaction of the performance vesting and time vesting restrictions described in Sections 3, 5 and 6 above, and upon further determining that compliance with this Award Notice has occurred, including compliance with such reasonable requirements as G&W may impose pursuant to the Plan or Section 15 of this Award Notice, and payment of any relevant taxes, G&W shall issue to you a certificate for the number of shares of G&W’s Common Stock equal to the number of vested Units to which you are entitled on the earliest practicable date (as determined by G&W) thereafter, or execute an electronic transfer if so requested.  The shares of G&W’s Common Stock may be issued during your lifetime only to you, or after your death to your designated beneficiary, or in absence of such beneficiary, to your duly qualified personal representative.
(b)    Responsibility for Taxes.  Regardless of any action G&W, its designated agent, or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that G&W and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the Units, or issuance of the shares of G&W’s Common Stock equal to the number of vested Units underlying the Award, or the subsequent sale of shares of G&W’s Common Stock acquired pursuant to such issuance and the receipt of any dividends on shares of G&W’s Common Stock acquired pursuant to such issuance; and (ii) do not commit, other than in accordance with the Plan, to structure the terms of the award or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items.
Prior to issuance of shares of G&W’s Common Stock upon the vesting of Units, you shall pay cash or make adequate arrangements satisfactory to G&W and/or the Employer to satisfy all withholding and payment on account of obligations of G&W and/or the Employer.  In this regard, you authorize G&W and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by G&W and/or the Employer.  Alternatively, or in addition, if permissible under local law, G&W, or its designated agent, may withhold in shares of G&W’s Common Stock from the issuance of G&W’s Common Stock upon the vesting of Units, provided that G&W, or its designated agent, only withholds the amount of shares of G&W’s Common Stock necessary to satisfy the minimum withholding amount.  Finally, you shall pay to G&W, its designated agent, or the Employer any amount of Tax-Related Items that G&W or the Employer may be required to withhold as a result of your participation in the Plan or receipt of shares of G&W’s Common Stock that cannot be satisfied by the means previously described.  G&W, or its designated agent, may refuse to honor the issuance and refuse to deliver the shares of G&W’s Common Stock if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
The payment of such withholding taxes to G&W, or its designated agent, may also be made pursuant to any method approved or accepted by the Committee in its sole discretion, subject to any and all limitations imposed by the Committee from time to time (which may not be uniform).
        9.    Effect of Breach of Certain Covenants.
(a)    During your employment by or service to G&W as Chief Executive Officer and any period in which you are providing Services, and following any termination or resignation in accordance with Section 6(b)(i) hereof or Section 6(b)(iv) hereof:
(i)    In General.  If you engage in the conduct described in subsection (iii) of this Section 9(a), then, unless the Committee determines otherwise (x) you immediately forfeit, effective as of the date you engage in such conduct, the unvested Units and (y) you must return to G&W the shares of G&W’s Common Stock underlying the Units that vested within the twelve (12) month period immediately preceding the date you engage in such conduct or, at the option of G&W, pay to G&W the net after tax Fair Market Value, as of the date you engage in such conduct, of the shares of G&W’s Common Stock underlying the Units that vested within such twelve (12) month period.

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(ii)    Set-Off.  By accepting the Award, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (a)(i) of this Section 9.  G&W may elect to make any set-off in whole or in part.  If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.
(iii)    Conduct. You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your employment by or service to G&W or any Subsidiary.  During your employment by or service to G&W or any Subsidiary and for a period of twelve (12) months after the termination of such employment or service as set forth in Section 9(a) above, you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary, which shall without limitation preclude service to a railroad or other entity (or its affiliate) that competes for railroad acquisition or railroad investment opportunities with G&W.  (For purposes of this Section 9(a), you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amounts to not more than five percent of the capital stock of any such company.)  The restrictive covenants contained in this Section 9(a) apply separately in the United States and in other countries.  Your breach of the restrictive covenants contained in this subsection (iii) shall result in the consequences described in this Section 9(a).
 (b) Following any termination or resignation in accordance with Section 6(b)(ii) hereof or any Rejected Qualified Resignation in accordance with Section 6(b)(iii) hereof, including any period when you are performing Services:  
(i)    In General.  If you engage in the conduct described in subsection (iii) of this Section 9(b), then, unless the Committee determines otherwise you must return to G&W the shares of G&W’s Common Stock underlying the Units that vested in accordance with Section 6(b)(ii) hereof or Section 6(b)(iii) hereof within the twenty-four (24) month period immediately preceding the date you engage in such conduct or, at the option of G&W, pay to G&W the net after tax Fair Market Value, as of the date you engage in such conduct, of the shares of G&W’s Common Stock underlying the Units that vested within such twenty-four (24) month period.
(ii)    Set-Off.  By accepting the Award, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (b)(i) of this Section 9.  G&W may elect to make any set-off in whole or in part.  If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.
 (iii)    Conduct.  You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary and during the Permissive Vesting Period or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your employment by or service to G&W or any Subsidiary.  During your employment by or service to G&W or any Subsidiary and for a period of twenty-four (24) months following your termination or resignation as Chief Executive Officer of G&W in accordance with Section 6(b)(ii) hereof or a Rejected Qualified Resignation in accordance with Section 6(b)(iii), you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary, which shall without limitation preclude service to a railroad or other entity (or its affiliate) that competes for railroad acquisition or railroad investment opportunities with G&W.  (For purposes of this Section 9(b), you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amount to not more than five percent of the capital stock of any such company.)  The restrictive covenants contained in this Section 9(b) apply separately in the United States and in other countries.  Your breach of the restrictive covenants contained in this subsection (iii) shall result in the consequences described in this Section 9(b).
(c) Following any Qualified Resignation in accordance with Section 6(b)(iii) hereof, including any period when you are performing Services:  
(i)    In General.  If you engage in the conduct described in subsection (iii) of this Section 9(c), then, unless the Committee determines otherwise you must return to G&W the shares of G&W’s Common Stock underlying the Units that vested in accordance with Section 6(b)(iii) hereof within the thirty-six (36) month period immediately preceding the date you engage in such conduct or, at the option of G&W, pay to G&W the net after tax Fair Market Value, as of the date you engage in such conduct, of the shares of G&W’s Common Stock underlying the Units that vested within such thirty-six (36) month period.

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(ii)    Set-Off.  By accepting the Award, you consent to a deduction from any amounts G&W or any Subsidiary owes you from time to time (including, but not limited to, amounts owed to you as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amount that you owe G&W under subsection (c)(i) of this Section 9.  G&W may elect to make any set-off in whole or in part.  If G&W does not recover by means of a set-off the full amount that you owe G&W, you shall immediately pay the unpaid balance to G&W.
 (iii)    Conduct.  You hereby agree that you will not, without the written consent of G&W, either during your employment by or service to G&W or any Subsidiary and during the Permissive Vesting Period or thereafter, disclose to anyone or make use of any confidential information which you acquired during your employment or service relating to any of the business of G&W or any Subsidiary, except as such disclosure or use may be required in connection with your employment by or service to G&W or any Subsidiary.  During your employment by or service to G&W or any Subsidiary and for a period of thirty-six (36) months following your Qualified Resignation in accordance with Section 6(b)(iii), you will not, either as principal, agent, consultant, employee, stockholder or otherwise, engage in any work or other activity in direct competition with G&W or any Subsidiary, which shall without limitation preclude service to a railroad or other entity (or its affiliate) that competes for railroad acquisition or railroad investment opportunities with G&W.  (For purposes of this Section 9(c), you shall not be deemed a stockholder of any company subject to the periodic and other reporting requirements of the Exchange Act, if your record and beneficial ownership of any such company amount to not more than five percent of the capital stock of any such company.)  The restrictive covenants contained in this Section 9(c) apply separately in the United States and in other countries.  Your breach of the restrictive covenants contained in this subsection (iii) shall result in the consequences described in this Section 9(c).
(d) You expressly acknowledge that any breach or threatened breach of any of the restrictive covenants set forth in Sections 9(a)(iii), 9(b)(iii) or 9(c)(iii), as applicable, may result in substantial, continuing, and irreparable injury to the Company and its affiliates.  Therefore, you hereby agree that, in addition to any other remedy that may be available to the Company and its affiliates, the Company and its affiliates shall be entitled to seek injunctive relief, specific performance, or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of such restrictive covenants without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach.
            10.    Effect of a Change in Control.
(a)     Upon the occurrence of a “Change in Control” of G&W during the Performance Vesting Period, G&W’s relative TSR performance for the Performance Vesting Period will be determined based on the average daily closing price of G&W’s Common Stock for its last thirty (30) days of trading immediately prior to the effective date of the “Change in Control,” and all remaining performance, time and other vesting restrictions will lapse. 
(b)    A “Change in Control” shall be deemed to have occurred when: 
(i)     Any “person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding G&W and any Subsidiary and any employee benefit plan sponsored or maintained by G&W or any Subsidiary, including any trustee of such plan acting as trustee, directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of G&W representing more than 35% or more of the combined voting power of G&W’s then outstanding securities (other than directly as a result of G&W’s redemption of its securities); provided, however, that in no event shall a Change in Control be deemed to have occurred under this Section 10(b)(i) so long as (x) the combined voting power of shares beneficially owned by (A) G&W’s executive officers (as defined in Rule 16a-1(f) under the Exchange Act) then in office (the “Executive Officer Shares”), (B) Mortimer B. Fuller and/or Sue Fuller and their lineal descendants (the “Founder Shares”), and (C) the shares beneficially owned by any other members of a “group” that includes the Founder Shares and/or a majority of the Executive Officer Shares, exceeds 35% of the combined voting power of G&W’s current outstanding securities and remains the person or group with beneficial ownership of the largest percentage of combined voting power of G&W’s outstanding securities and (y) G&W remains subject to the reporting requirements of the Exchange Act; or
(ii)    The consummation of any merger or other business combination of G&W, a sale of 51% or more of G&W’s assets, liquidation or dissolution of G&W or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the shareholders of G&W and any trustee or fiduciary of any G&W employee benefit plan immediately prior to the Transaction own at least 51% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or business combination; (B) the purchaser of or successor to G&W’s assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such 

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surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D)), as applicable, the “Surviving Entity” or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or
(iii)    Within any twelve-month period, the persons who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to G&W, including any Surviving Entity.  For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two-thirds of the directors who then qualified as Independent Directors ((so long as such director was not nominated by a person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control)).
11.    Book Entry Registration.  Any shares of G&W’s Common Stock issued upon settlement of the Award may be evidenced by book registration only, without the issuance of a certificate representing the shares of G&W’s Common Stock that may be issued pursuant to the Award.    
12.    Nonassignability.  The Units underlying the Award and, prior to their issuance, the shares of G&W’s Common Stock that may be issued upon the vesting of Units may not, except as otherwise provided in the Plan, be sold, alienated, assigned, transferred, pledged or encumbered in any way prior to the vesting of the Units, whether by operation of law or otherwise. After vesting of the Units, the sale or other transfer of the issued shares of G&W’s Common Stock shall be subject to applicable laws and regulations under the Exchange Act and the Securities Act of 1933, as amended.
13.    Rights as a Stockholder.  Until the Units have vested and the underlying shares of G&W’s Common Stock have been delivered to you, you will have no rights as a stockholder with respect to the shares of G&W’s Common Stock to be issued upon the vesting of the Units underlying the Award, including, but not limited to, the right to receive such cash dividends, if any, as may be declared on such shares from time to time or the right to vote (in person or by proxy) such shares at any meeting of stockholders of G&W.
14.    Rights of G&W and Subsidiaries.   This Award Notice does not affect the right of G&W or any Subsidiary to take any corporate action whatsoever, including without limitation, its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, issue bonds, notes, shares of G&W’s Common Stock or other securities, including preferred stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or business.
15.    Restrictions on Issuance of Shares.   If at any time G&W determines that the listing, registration or qualification of the shares of G&W’s Common Stock underlying the Award upon any securities exchange or under any federal, state or local law, or the approval of any governmental agency, is necessary or advisable as a condition to the issuance of any shares of G&W’s Common Stock underlying the Award, such issuance may not be made in whole or in part unless such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to G&W.
16.    Plan Controls.   The Award is subject to all of the provisions of the Plan, which is hereby incorporated by reference, and is further subject to all of the interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted by the Committee pursuant to the Plan.  In the event of any conflict among the provisions of the Plan and this Award Notice, the provisions of the Plan will be controlling and determinative.
17.    Amendment.   Except as otherwise provided in the Plan, G&W may only alter, amend or terminate the Award with your consent.
18.    Governing Law.   The Award and this Award Notice shall be governed by and construed in accordance with the laws of the State of New York, except as superseded by applicable federal law.
19.    Language.   If you have received this Award Notice or any other document related to the Plan in a language other than English, and if the translated version bears a meaning that is different from that of the English version, the English version will control, to the extent permitted by law.

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20.    Notices.   All notices and other communications to G&W, or its designated agent, required or permitted under this Award Notice shall be written, and shall either be delivered personally or sent by registered or certified first-call mail, postage prepaid and return receipt requested, by facsimile or electronically.  If such notice or other communication is to G&W, then it should be addressed to G&W’s office at 200 Meridian Centre, Suite 300, Rochester, New York 14618, Attention: Equity Plan Administrator; Telephone: (585) 328-8601; Facsimile: (585) 328-8622; Email: EquityPlanAdmin@gwrr.com.  If such notice or other communication is to G&W’s designated agent, then it should be addressed and sent in accordance with established procedures.  Each such notice and other communication delivered personally shall be deemed to have been given when received.  Each such notice and other communication delivered by United States mail shall be deemed to have been given when received, and each such notice and other communication delivered by facsimile or electronically shall be deemed to have been given when it is so transmitted and the appropriate answerback is received.
21.    Data Privacy.   You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer, and G&W and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing your participation in the plan, to the extent permitted by law.
You understand that G&W and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in G&W, details of all restricted stock or unit awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”).  You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country.  You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative.  You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon issuance of G&W’s Common Stock underlying the Award, to the extent permitted by law.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan.  You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative.  You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan.  For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.
22.    Electronic Delivery.   G&W may, in its sole discretion, decide to deliver any documents related to the Award granted under the Plan (or related to future awards that may be granted under the Plan) by electronic means or to request your consent to participate in the Plan by electronic means.  You hereby consent to receive such documents by electronic delivery and, if requested, hereby agree to participate in the Plan through an on-line or electronic system established and maintained by G&W or another third party designated by G&W.
23.    Severability.   The provisions of this Award Notice are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.       

8

ACKNOWLEDGEMENT
The undersigned acknowledges receipt of, and understands and agrees to be bound by, this Award Notice and the Plan.  The undersigned further acknowledges that this Award Notice and the Plan set forth the entire understanding between him or her and G&W regarding the restricted stock units granted by this Award Notice and that this Award Notice and the Plan supersede all prior oral and written agreements on that subject.
Dated: _________________________

_______________________________
Name:

                        
Genesee & Wyoming Inc.

                        
By:_______________________________
Name:
Its:                               
    

9dxcm06302014ex1031

[*****] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS AND ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED INFORMATION.

EXHIBIT 10.31
SETTLEMENT AND LICENSE AGREEMENT
This Settlement and License Agreement (the “Agreement”) is entered into by and between Abbott Diabetes Care Inc., a Delaware corporation having a principal place of business at 1420 Harbor Bay Parkway, Alameda, CA 94502 (“ADC”), and DexCom, Inc., a Delaware corporation having a principal place of business at 6340 Sequence Drive, San Diego, CA 92121 (“DexCom”), each of which is referred to as a “Party” and which are collectively referred to as the “Parties,” as of the date on which the last of the two Parties signs the Agreement (the “Effective Date”).
RECITALS
WHEREAS, ADC and DexCom wish to settle all disputes between ADC and DexCom regarding the consolidated patent infringement lawsuits which are captioned Abbott Diabetes Care Inc. v. DexCom, Inc., in the United States District Court for the District of Delaware, Case Nos. 05-590 (GMS), 06-514 (GMS), and 13-02105 (GMS) (the “Litigation”), including all claims, defenses, and counterclaims that were asserted, might have been asserted, might now be asserted, or might hereafter have been asserted by either Party;

1

WHEREAS, to resolve their patent disputes and avoid the inconvenience, uncertainty, and expense of litigation, the Parties have agreed upon the settlement set forth in this Agreement; and
WHEREAS, the Parties desire to grant each other the limited rights described in this Agreement, on the terms and conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises of the Parties, constituting good and valuable consideration, the Parties agree as follows:
		
	A.
	Definitions

As used in this Agreement, the following terms have the meanings stated below:
1.“ADC Licensed Patents” means, collectively:
(a)    [*****];
(b)    All worldwide patents that (i) have issued or in the future issue, and (ii) claim priority to, or have common priority with, the [*****], including, without limitation, continuations, continuations-in-part, and divisionals; and
(c)    All reissues, reexamination certificates, inter partes review certificates, results of oppositions, renewals, patent term extensions, patent term adjustments, and corrections of or to the patents described in subsections (a) or (b).
2.    “ADC Patents” means, collectively, U.S. Patent Nos. [*****].
3.    “ADC Products” means (a) [*****]; or (b) [*****].
4.    “ADC Releasees” means ADC, its Affiliates, and employees, officers, directors, agents, insurers, underwriters, and legal representatives of ADC or its Affiliates. 

2

5.    “Affiliate” means any entity that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with the entity specified.
6.    “Ancillary Products” means [*****].
7.    “Challenge” means, with respect to any Party’s patents or patent applications, directly or indirectly, (a) to assert in any court or other competent governmental authority that such patents or patent applications are invalid or unenforceable, (b) to seek in any court or other competent governmental authority to narrow or change the scope of such patents or patent applications, (c) to seek, request, or otherwise take any action that results, or is reasonably expected to result in the declaration, initiation or continuation of a reexamination, interference or derivation proceeding, opposition, post-grant review or inter partes review of such patents, (d) to submit to any court or other competent governmental authority prior art, evidence, or arguments adverse to the patentability or validity of any of the other Party’s patents or patent applications, or (e) to assist or cooperate with any other person or party to do any of the foregoing.
8.    “Change of Control” means, as to a Party or other entity, (a) a transaction or series of related transactions that result in the sale, exchange, transfer or other disposition of all or substantially all of the Party’s or other entity’s assets pertaining to products or components that are subject to this Agreement; (b) a merger or consolidation in which (i) the Party or other entity is not the surviving entity or (ii) the Party or other entity is the surviving entity, where in either case (whether (i) or (ii)) the persons or entities who Controlled such Party or other entity immediately before the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, Control such Party or other entity; or (c) a transaction or series of related transactions (which may include without limitation a tender offer for a Party’s or other entity’s or its Controlling parent’s stock or the issuance, sale, or exchange 

3

of stock of a Party or other entity or its Controlling parent) if the persons or entities who Controlled such Party or other entity immediately before the initial such transaction do not, immediately after consummation of such transaction or any of such related transactions, Control such Party or other entity; provided, however, notwithstanding anything to the contrary in this Agreement, neither (i) the issuance of securities by a Party or other entity through a public offering, nor (ii) the transfer of ownership or Control in a Party or other entity to one or more of its Affiliates shall constitute a Change of Control.  A Change of Control of a Party’s Controlling parent constitutes a “Change of Control” of the Party.  “Change of Control” includes any Change of Control that results from a bankruptcy proceeding involving a Party.  
9.    “Claims” means any and all claims, defenses, demands, causes of action, suits, choses in action, controversies, actions, judgments, liens, indebtednesses, damages, losses, attorney’s fees, expert’s fees, expenses, liabilities, and proceedings of whatever kind and character, whether known or unknown, asserted or unasserted.
10.    “Control” or “Controlled” means having the power, direct or indirect, to direct or cause the direction of the management and policies of the subject entity whether by ownership, contract, or otherwise.  For the avoidance of doubt, ownership of more than fifty percent (50%) of the voting securities of the subject entity shall constitute “Control.”
11.    “Covenant Period” means the period commencing on the Effective Date of this Agreement and terminating on March 31, 2021.  
12.    “DexCom Releasees” means DexCom, its Affiliates, and employees, officers, directors, agents, insurers, underwriters, and legal representatives of DexCom or its Affiliates.
13.    “DexCom Licensed Patents” means, collectively:

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(a)    All worldwide patents and patent applications (including any provisional or abandoned patent applications) that DexCom owns or has the right to enforce or direct enforcement of (either solely or jointly with one or more other persons or entities) as of the Effective Date that have an actual filing date before January 1, 2005, excluding those patents and patent applications identified on Exhibit A;
(b)    All worldwide patents that DexCom owns or has the right to enforce or direct enforcement of (either solely or jointly with one or more other persons or entities) that (i) have issued as of the Effective Date and that, as of May 15, 2014 claimed, or at any time thereafter claim, priority (in whole or in part) to any of the patents or patent applications captured in subsection (a), or (ii) issue in the future from any patent applications currently pending or subsequently filed (including continuations, continuations-in-part, and divisionals) that, as of May 15, 2014 claimed, or at any time thereafter claim, priority (in whole or in part) to any of the patents or patent applications captured in subsection (a);
(c)    A claim in a continuation, continuation-in-part, divisional or any other worldwide patent claiming priority to a patent captured in subsection (b), but not claiming priority to a patent or application captured in subsection (a), if the following is true: [*****]; and
(d)    All reissues, reexamination certificates, inter partes review certificates, results of oppositions, renewals, patent term extensions, patent term adjustments, and corrections of or to the patents and patent applications captured in subsections (a) and (b), and claims satisfying the criteria in either of subsections (c)(i) or (c)(ii) in all reissues, reexamination certificates, inter partes review certificates, results of oppositions, renewals, patent term extensions, patent term adjustments, and corrections of or to the patents captured in subsection (c).

5

Continuations, continuations-in-part, divisionals and other patents claiming priority to the patents captured in subsection (b), but not claiming priority to any of the patents or patent applications captured in subsection (a), are excluded from the definition of DexCom Licensed Patents, except to the extent they have claims that satisfy the requirements of subsection (c).
14.    “DexCom Products” means (a) [*****]; or (b) [*****].  
15.    “Licensed Patents” means any and all of ADC Licensed Patents or DexCom Licensed Patents, as the context may require.
16.    “Products” means any and all of ADC Products or DexCom Products, as the context may require.
17.    “Third Party” means any person or entity that is not a Party or an Affiliate of a Party.
		
	B.
	Mutual Releases

1.    ADC, on behalf of itself and its agents, officers, directors, employees, advisors, representatives, attorneys, successors, and assigns, in consideration of the agreements set forth herein, and intending to be legally bound, irrevocably releases and forever discharges the DexCom Releasees from any and all Claims of ADC existing as of the Effective Date based upon, arising out of, or in any way relating to the ADC Licensed Patents.
2.    ADC, on behalf of itself and its agents, officers, directors, employees, advisors, representatives, attorneys, successors, and assigns, in consideration of the agreements set forth herein, and intending to be legally bound, also irrevocably releases and forever discharges DexCom’s suppliers, distributors, end-users and other customers strictly with respect to the making, selling, supplying, distribution, importing or use of DexCom Products before the 

6

Effective Date or the use, resale, resupply or further distribution after the Effective Date of DexCom Products first sold, supplied or distributed before the Effective Date. 
3.    DexCom, on behalf of itself and its agents, officers, directors, employees, advisors, representatives, attorneys, successors, and assigns, in consideration of the agreements set forth herein, and intending to be legally bound, irrevocably releases and forever discharges the ADC Releasees from any and all Claims of DexCom existing as of the Effective Date based upon, arising out of, or in any way relating to the Dexcom Licensed Patents.  
4.    DexCom, on behalf of itself and its agents, officers, directors, employees, advisors, representatives, attorneys, successors, and assigns, in consideration of the agreements set forth herein, and intending to be legally bound, also irrevocably releases and forever discharges ADC’s suppliers, distributors, end-users and other customers strictly with respect to the making, selling, supplying, distribution, importing or use of ADC Products before the Effective Date or the use, resale, resupply or further distribution after the Effective Date of ADC Products first sold, supplied or distributed before the Effective Date.
5.    Each of the Parties, on behalf of itself and its agents, officers, directors, employees, advisors, representatives, attorneys, successors, and assigns, expressly and irrevocably waives any and all rights under Section 1542 of the Civil Code of California, and under any statute of similar import or purpose of any other jurisdiction with respect to the releases granted hereunder.  Section 1542 provides as follows:

7

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Each Party acknowledges that it has been fully informed by its counsel concerning the effect and import of this Agreement under California Civil Code Section 1542 and all other requirements of law.
6.    The release and discharge provisions of Paragraphs B.1, B.2, B.3, B.4 and B.5 do not excuse or permit any breach of the obligations set forth in Sections C through K or Exhibits A through C, nor should those Paragraphs be construed as a release of any obligations or liabilities incurred under Sections C through K or Exhibits A through C.
7.    Within five business days after the Effective Date, the Parties will file with the United States District Court for the District of Delaware a stipulation for dismissal of Claims relating to U.S. Patent No. 5,899,855 without prejudice and the rest of the Claims in the Litigation with prejudice, in substantially the form of Exhibit B. 
		
	C.
	Licenses

1.    Subject to DexCom’s material compliance with the terms and conditions of this Agreement, ADC hereby grants DexCom a royalty-free, worldwide, non-exclusive, non-sublicensable license under ADC Licensed Patents to make, have made, use, offer for sale, sell, distribute, import, and have imported DexCom Products. 

8

2.    Subject to ADC’s material compliance with the terms and conditions of this Agreement, DexCom hereby grants ADC a royalty-free, worldwide, non-exclusive, non-sublicensable license under DexCom Licensed Patents to make, have made, use, offer for sale, sell, distribute, import, and have imported ADC Products.
		
	D.
	Covenants Not to Sue

1.    Provided that DexCom is in material compliance with the terms and conditions of this Agreement, ADC covenants not to sue (or cooperate with, instruct, or aid any Third Party or Affiliate to sue), directly or indirectly, DexCom or any DexCom Affiliate, for making, having made, using, offering for sale, selling, distributing, importing, or having imported DexCom Products at any time before the expiration of the Covenant Period based on the assertion that such activity infringes, directly or indirectly (including any assertion that such activity contributes to or induces the infringement of), any patent or patent application that ADC currently owns or subsequently acquires, or any patent or patent application that ADC currently has the right to enforce or direct enforcement of (either solely or jointly with one or more other persons or entities) or in the future acquires the right to do so (subject to Paragraph D.5). 
2.    [*****]
3.    Provided that ADC is in material compliance with the terms and conditions of this Agreement, DexCom covenants not to sue (or cooperate with, instruct, or aid any Third Party or Affiliate to sue), directly or indirectly, ADC or any ADC Affiliate, for making, having made, using, offering for sale, selling, distributing, importing, or having imported ADC Products at any time before the expiration of the Covenant Period based on the assertion that such activity infringes, directly or indirectly (including any assertion that such activity contributes to or induces the infringement of), any patent or patent application that DexCom currently owns or 

9

subsequently acquires, or any patent or patent application that Dexcom currently has the right to enforce or direct enforcement of (either solely or jointly with one or more other persons or entities) or in the future acquires the right to do so (subject to Paragraph D.5).
4.    During the Covenant Period, damages shall not accrue concerning any claim of infringement with respect to the subject matter of this Section D.  For clarity, upon the expiration, or in the event of early termination, of the covenants set forth in this Section D, a Party shall not have the right to sue for past damages.
5.    If after the Effective Date a Party (“Enforcing Party”) acquires the right to enforce or direct the enforcement of (either solely or jointly with one or more other persons or entities) a patent or patent application without acquiring title to the patent or patent application (collectively, “Future Controlled Patent”), such Future Controlled Patent shall be subject to the covenant(s) under Paragraph D.1 and D.2 or D.3 only to the extent the Enforcing Party is permitted to grant a covenant to the Future Controlled Patent without incurring or violating any obligation to a Third Party.  To the extent the Enforcing Party is not permitted to grant a covenant to a Future Controlled Patent without incurring or violating any obligation to a Third Party, the Enforcing Party shall not bring any suit or other action against the other Party to enforce a Future Controlled Patent without first affording the other Party thirty (30) days’ advance notice and an opportunity to negotiate a license to the Future Controlled Patent.  In the course of such negotiations or any time thereafter, the Enforcing Party will not withhold its consent to such a license except to the extent necessary to avoid incurring a non-reimbursed monetary or other obligation or violating an obligation to a Third Party.
6.    [*****].

10

		
	E.
	Ownership

1.    DexCom shall not obtain or claim any ownership interest in, or control over, ADC Licensed Patents.  Except as expressly set forth herein, ADC does not grant, and DexCom does not receive, any ownership right, title, or interest, security interest, other interest, license, or covenant with respect to any intellectual property rights of ADC.
2.    ADC shall not obtain or claim any ownership interest in, or control over, DexCom Licensed Patents.  Except as expressly set forth herein, DexCom does not grant, and ADC does not receive, any ownership right, title, or interest, security interest, other interest, license, or covenant with respect to any intellectual property rights of DexCom.
		
	F.
	No Challenge Covenants and Exceptions Thereto

1.    During the Covenant Period, except as otherwise expressly set forth in this Section F, ADC shall not Challenge any patent or patent application that DexCom currently owns or subsequently acquires, provided that DexCom continues to be in material compliance with the terms and conditions of this Agreement.
2.    During the Covenant Period, except as otherwise expressly set forth in this Section F, DexCom shall not Challenge any patent or patent application that ADC currently owns or subsequently acquires, provided that ADC continues to be in material compliance with the terms and conditions of this Agreement.
3.    However, each Party reserves its rights and is permitted to Challenge any patent or patent application that is being asserted (or threatened to be asserted) against it or its products.
4.    Further, each Party reserves its rights and is permitted to Challenge any of the patents of the other Party if there is a statute, regulation, or rule that sets a deadline to make the Challenge.  This includes, without limitation, the following: (a) submitting a request for, or 

11

participating in, an opposition proceeding before any foreign national or regional patent office or agency; (b) submitting a request for, or participation in, a Post Grant Review proceeding before the USPTO; (c) submitting one or more claims that are substantial or identical copies of one or more claims in any of the patents or patent applications of the other Party, the submittal of which may form a basis for an interference in the USPTO; (d) submitting a request for, or participation in, an interference or derivation proceeding in the USPTO; and (e) submitting a request for, or participating in, an appeal or similar judicial review, in any court or other competent governmental authority, of any decision rendered in a proceeding described in the foregoing subsections (a) – (d).  In addition, nothing in this Section F prevents a Party from (and a Party will not be in breach for) responding to and complying with a lawful subpoena, order of any court or other competent governmental authority, or other similar legal requirement.
5.    Notwithstanding the foregoing, the parties shall address Challenges pending as of the Effective Date in the manner set forth in Exhibit C.
		
	G.
	Assignment

1.    Except as otherwise expressly set forth in this Section G, neither Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party (which consent shall be in the other Party’s sole discretion), except that a Party (“Transferring Affiliate”) may assign this Agreement and all and not less than all of its rights and obligations under this Agreement to any Affiliate (“Transferee Affiliate”) without the consent of the other Party, provided the Transferring Affiliate agrees to remain responsible for the Transferee Affiliate’s performance of its obligations under this Agreement.
2.    If:

12

(i)     a Party transfers or otherwise assigns any patent or patent application that is subject to the licenses in Paragraphs C.1, C.2 or H.3 or the covenants in Paragraphs D.1, D.2, or D.3 of this Agreement directly or indirectly to a Third Party or an Affiliate (other than in a transaction or series of transactions constituting a Change of Control of the transferring Party subject to Paragraph G.3), or 
(ii)     in a transaction or series of transactions constituting a Change of Control of the transferring Party subject to Paragraph G.3, the Acquiring Entity (as defined in Paragraph G.3 below) does not acquire one or more patents or patent applications that are subject to the licenses in Paragraphs C.1, C.2 or H.3 or the covenants in Paragraphs D.1, D.2, or D.3 of this Agreement, and those patents or patent applications are instead transferred directly or indirectly to a Third Party or an Affiliate,
the obligations related to such transferred or otherwise assigned patent(s) or patent application(s) (but not the rights) of the transferring or assigning Party shall be assumed (automatically by operation of law or otherwise as required to make the obligations binding under the law of the relevant jurisdiction), without further action (other than as required to make the obligations binding) or consent by either Party or by such Third Party or Affiliate.
3.    Upon a Change of Control of a Party (“Acquired Party”), the entity that acquires or maintains the assets pertaining to the Acquired Party’s Products (i.e., the ADC Products or DexCom Products, as the case may be) (the “Acquiring Entity”) shall assume or remain subject to the rights and obligations of the Acquired Party under this Agreement (subject to Paragraph G.4) without further action or consent by the other Party.

13

4.    Upon an assignment of this Agreement under Paragraph G.1 (“Assignment”) or upon a Change of Control, the license granted by the Transferring Affiliate or Acquired Party (either, “Assignor”) will continue to apply only with regard to the Licensed Patents owned by the Assignor (or otherwise already subject to the licenses granted by the Assignor in this Agreement) immediately prior to the Assignment or Change of Control, and the covenants made by the Assignor under Section D will continue to apply only with regard to the patents or patent applications owned by the Assignor (or otherwise already subject to the covenants made by the Assignor in this Agreement) immediately before the Assignment or Change of Control, and the other Party (i.e., the Party not subject to the Assignment or Change of Control) shall obtain no rights of any kind under this Agreement with regard to any other patents or patent applications of the Acquiring Entity or Transferee Affiliate (collectively, “Assignee”) or the Assignee’s Affiliates.  In addition, following an Assignment or Change of Control, the license granted by the other Party under Section C and the covenants made by the other Party under Section D shall be limited to only (a) the Assignor’s Products that were in production or under development before the Assignment or Change of Control; and (b) improvements, updates, future versions, or successor products (however named) that are based upon the Assignor’s Products that were in production or under development before the Assignment or Change of Control; and (unless included in the foregoing clause (a) or (b)) do not cover any products that are the same as or based upon products that were made or sold by the Assignee before the Assignment or Change of Control.  Following a Change of Control, the covenants made by both parties in Section F shall terminate 60 days after the effective date of the Assignment or Change of Control. 
5.    Within thirty (30) days after the effective date of the Change of Control, the Acquiring Entity shall pay the other Party (“Non-Acquired Party”), or cause the Non-Acquired 

14

Party to be paid, a one-time upfront continuation fee of twenty-five million dollars in United States currency ($25,000,000.00) (“Continuation Payment”).  Notwithstanding anything set forth in Paragraph G.4, if the Acquiring Entity fails to pay or cause to be paid the Continuation Payment to the Non-Acquired Party within thirty (30) days after the effective date of such Change of Control, then the license granted and all covenants made by the Non-Acquired Party shall expire thirty (30) days after the effective date of such Change of Control and will not then be subject to revival.  However, the license granted and the covenants made by the Acquired Party under Sections C and D shall survive such expiration and persist throughout their respective full terms as otherwise provided in this Agreement, on the terms set forth in Paragraph G.4. 
		
	H.
	Representations and Warranties

1.    Each Party represents and warrants that:  (i) as of the Effective Date, it is the owner of the Licensed Patents attributed to it in this Agreement and that it has not assigned to any Third Party or Affiliate any right of action or recovery against the other Party with respect to such patents; (ii) as of the Effective Date, it has not assigned, transferred, encumbered, or subrogated any interest in any of the Claims released by Section B of this Agreement, whether voluntarily, involuntarily, or by operation of law, and that it is fully entitled to give a full and complete release of those Claims; (iii) it has the authority and right to enter into and grant the license, covenants, and releases granted by it in this Agreement; (iv) it has full power to enter into and perform this Agreement; (v) when executed and delivered, this Agreement shall constitute a legal, valid, and binding obligation enforceable against it in accordance with its terms; and (vi) the individual signing this Agreement on its behalf is fully empowered to bind the Party and is duly authorized to enter into this Agreement on its behalf.

15

2.    EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION, (A) EACH PARTY GRANTS THE LICENSES PROVIDED BY IT HEREIN, AND EACH PARTY AGREES TO AND DOES ACCEPT THE LICENSES RECEIVED BY IT HEREIN, ON A STRICTLY “AS IS” BASIS WITHOUT WARRANTY OR CONDITION OF ANY KIND, AND NEITHER PARTY MAKES ANY REPRESENTATION, WARRANTY, OR GUARANTEE OF ANY KIND IN RELATION TO THE LICENSED PATENTS, WHETHER AS TO THE USES, MERCHANTABLE QUALITY OR MERCHANTABILITY, SUITABILITY, PERFORMANCE, FITNESS FOR A PARTICULAR PURPOSE, CAPABILITIES, NON-INFRINGEMENT OF THIRD PARTY OR AFFILIATE INTELLECTUAL PROPERTY RIGHTS, RELIABILITY OR ACCURACY THEREOF, OR CONCERNING ANY DEFECTS OR DEFICIENCIES OR THE LACK THEREOF; AND (B) NEITHER PARTY MAKES ANY OTHER REPRESENTATION, WARRANTY, OR GUARANTEE OF ANY KIND.
3.    Dexcom warrants and represents that it [*****].
		
	I.
	Term

1.    Subject to Paragraph I.2 below, unless previously terminated, the term of this Agreement shall expire on the earlier of (i) [*****] or (ii) [*****].
2.    Notwithstanding Paragraph I.1, to the extent [*****], strictly because of a patent term extension or patent term adjustment, the license granted under Section C of this Agreement (and the term of this Agreement) would continue strictly as to that one or more patents until the expiration of these patents (but the licenses and covenants with respect to all other patents and patent applications will expire on the date set forth in Paragraph H.1 or as otherwise provided in this Agreement).

16

3.    The provisions of Sections A (“Definitions”), B (“Mutual Releases”), E (“Ownership”), H (“Representations and Warranties”), J (“Dispute Resolution”), and K (“Additional Terms and Conditions”) shall survive any expiration or termination of this Agreement, absent express written agreement between the Parties.  The provisions of Paragraph 3 in Exhibit C to this Agreement shall survive any expiration or termination of this Agreement in the manner set forth in Paragraph 3 of Exhibit C.
		
	J.
	Dispute Resolution

1.    Meeting of Parties. In the event any dispute(s) arise(s) from, under or relating to this Agreement, including alleged material or non-material breaches, a Party (the “Noticing Party”) shall give notice of any such dispute(s), and the Parties shall meet in person or by telephone conference within 14 days after such notice and shall discuss and negotiate an expeditious resolution of the dispute in good faith.  If the Parties are unable to resolve their dispute(s) within 30 days after this initial meeting, the Parties shall elevate the dispute(s) to their respective Presidents, and the President of each Party or his/her direct designee shall meet in person within 45 days of the initial meeting.  The in-person meeting shall occur at or near the headquarters of the Party that is not the Noticing Party, unless a different location is agreed upon by the Parties.  At the in-person meeting, the Parties’ Presidents or their designees shall discuss and negotiate in good faith to arrive at a resolution of the dispute(s).  If the Parties do not resolve their dispute(s) within 30 days of the in-person meeting of their respective Presidents or their designees, either Party may then exercise any remedies available under this Agreement or under the law or equitable principles of any applicable jurisdiction, including instituting litigation subject to the forum selection clause provided in Paragraph J.4 of this Agreement.

17

2.    Self-Executing Remedies. The requirements of Paragraph J.1 shall not apply to the exercise of any remedies that are self-executing under this Agreement, including those provided in Paragraphs D.2, G.5, H.3 and I.2 of this Agreement, but shall apply to any dispute relating to such remedies.
3.    Specific Enforcement.  The Parties acknowledge that money damages may not be an adequate remedy at law if either Party fails to perform in any material respect any of its obligations under this Agreement.  Each Party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to seek to compel specific performance of the obligations of the other Party under this Agreement, without the posting of any bond, in accordance with the terms and conditions of this Agreement.  No remedy under this Agreement shall be exclusive of any other remedy and all available remedies shall be cumulative.
4.    Choice of Forum.  The United States Federal District Court for the District of Delaware shall have exclusive jurisdiction over any dispute arising from or under or relating to this Agreement, to the extent permitted by law.  The state courts of Delaware shall have exclusive jurisdiction over any dispute arising from or under or relating to this Agreement, to the extent subject matter jurisdiction is lacking in federal courts.  For any dispute arising from or under or relating to this Agreement, each Party stipulates to personal jurisdiction and venue in the state of Delaware.  For any dispute brought in Delaware that arises from or under or relates to this Agreement, each Party waives any defenses based upon lack of personal jurisdiction, lack of venue, or forum non conveniens, and waives the right to seek transfer out of Delaware.
		
	K.
	Additional Terms and Conditions 

1.    No Admission of Prior Liability.  It is understood and agreed that the mutual releases in Section B are the result of a compromise of disputed Claims; that it is not to be 

18

construed as an acknowledgment or admission of any wrongdoing on the part of any Party; that the Parties specifically deny any liability related to any Claims released in this Agreement; and that the Parties have entered into this Agreement to avoid the cost, expense, and risk of legal proceedings between them.
2.    Confidentiality.  Both Parties, and all those acting in concert or privity therewith, shall retain as confidential all non-public information they learned or acquired in connection with this Agreement.  Such parties shall also retain as confidential and shall not disclose to any Third Party the terms and conditions of this Agreement except: (i) as may be necessary to enforce or implement its terms and conditions; (ii) either Party may make such limited disclosures of the terms and conditions of this Agreement as may be required under a lawful subpoena, order of court or other competent governmental authority, applicable federal or state laws, or regulations or rules of any securities exchange on which a Party’s securities are traded, after giving (to the extent possible consistent with its legal obligations) ten (10) days prior written notice to the other Party of such disclosure; (iii) in connection with due diligence disclosures related to a possible acquisition, divestiture, merger, consolidation, substantial asset transfer, joint venture, or similar transaction, so long as such disclosures are protected by a written non-disclosure agreement with provisions at least as protective as those set forth above; (iv) to accountants, advisors, bankers, lawyers, insurers, prospective insurers, lenders, or investors, who are subject to contractual or professional obligations of confidentiality; or (v) by written agreement of the Parties.  Any press release concerning this Agreement or the subject thereof shall require the advance written consent of the other Party.  This paragraph shall not apply to information that: (a) is known by the receiving Party prior to its receipt of the disclosure from the disclosing Party (as evidenced by the receiving Party’s written records); (b) is or becomes publicly available through no breach 

19

of this Agreement by the receiving Party; or (c) is received by the receiving Party from a Third Party or Affiliate who, to the receiving Party’s knowledge, is not under an obligation of confidentiality to the disclosing Party with respect to such information.
3.    Relationship.  This Agreement is not intended to constitute or create a joint venture, pooling arrangement, partnership, or formal business organization of any kind, and the rights and obligations of the Parties shall be only those expressly set forth in this Agreement.  Neither Party shall (a) owe any fiduciary duty to the other Party under this Agreement, (b) have authority to bind the other Party, or (c) act as an agent for the other Party.
4.    No Third-Party Beneficiaries.  Except as set forth herein, this Agreement is made expressly and solely for the benefit of the Parties.  No other person or entity shall be entitled to any benefits or rights under this Agreement, nor be authorized or entitled to enforce any rights or remedies under this Agreement.
5.    Severability.  If any part, term, condition, or provision of this Agreement is held void, illegal, unenforceable, or to be in conflict with any law or regulation of a federal, state, or local government having jurisdiction over this Agreement, the validity and effectiveness of the remaining portions of this Agreement shall not be affected.
6.    Licensing Patents on a claim by claim Basis.  With respect to subsections (c) and (d) of Paragraph A.13 and Paragraph H.3, it is the intent of the parties (and the parties have specifically bargained) to license on a claim by claim basis and to exclude from the license claims that are not encompassed within the definition, whether or not in the same patent.  Notwithstanding the foregoing, to the extent a court or other competent governmental authority holds that a patent may not be licensed on a claim by claim basis, then any license to a claim 

20

based on subsections (c) or (d) of Paragraph A.13 or Paragraph H.3 should be construed as a license to the entire patent containing the claim.
7.    Governing Law.  This Agreement or the performance, enforcement, breach, or termination hereof shall be construed, governed, and interpreted in accordance with the laws of the State of Delaware and the United States of America without regard to their conflict of laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted.
8.    Notices.  All notices, consents, and other communications required or permitted by this Agreement shall be in writing and shall be:  (a) delivered to the appropriate address by hand, (b) delivered by nationally recognized overnight service; (c) delivered by courier; or (d) sent by registered or certified mail, return receipt requested, in each case to the following addresses, with costs prepaid, and marked to the attention of the department designated below (or to such other address as a Party may designate by notice to the other Party):
If to ADC, to:
Abbott Diabetes Care Inc.
Attention:  ADC Legal Division
1420 Harbor Bay Parkway
Alameda, CA 94502
with a copy (which shall not constitute notice) to:
Abbott Laboratories
Attention:  Legal Division
100 Abbott Park Rd.
Abbott Park, IL 60064

21

and with a copy (which shall not constitute notice) to:
Guy Ruttenberg
Ruttenberg IP Law, a Professional Corporation
1801 Century Park East
Suite 1920
Los Angeles, CA  90067
guy@ruttenbergiplaw.com

If to DexCom, to:
Attention:  DexCom Legal
6340 Sequence Drive
San Diego, CA 92121
with a copy (which shall not constitute notice) to:
Morrison & Foerster, LLP
Attention:  M. Andrew Woodmansee & David Doyle
12531 High Bluff Drive, Suite 100
San Diego, CA 92121
All notices, consents, and other communications shall be deemed to have been duly given (as applicable): if delivered by hand, when delivered by hand; if delivered by nationally recognized overnight service, when delivered by that overnight service; if delivered by courier, when delivered by courier; or if sent by registered or certified mail, five (5) business days after being deposited in the mail, postage prepaid.

22

9.    Entire Agreement.  This Agreement expresses the Parties’ entire understanding regarding its subject matter and supersedes any and all written or oral representations, warranties, agreements, or understandings previously existing between or among the Parties with respect to the subject matter of this Agreement.
10.    Modifications.  This Agreement may not be amended, modified, or changed, and no waiver of any provision of this Agreement shall be effective, except by a written agreement mutually executed by the Parties.
11.    Waiver.  The waiver of any performance or breach of any term, covenant, or condition in this Agreement shall not be a waiver of such term, covenant, or condition in general, nor shall it waive any subsequent performance or breach.  No delay or omission on the part of either Party to exercise or avail itself of any right, power, or privilege that it has or may have hereunder shall operate as a waiver of any right, power, or privilege by such Party.
12.    Consultation with Counsel.  Each Party acknowledges that it knows and understands the contents of this Agreement and has been represented by counsel of its choice in connection with this Agreement, and has entered into this Agreement knowingly and voluntarily.
13.    Attorneys’ Fees.  Each Party shall bear its own costs, attorney’s fees, and expenses associated with the Litigation, this Agreement, and any disputes arising under this Agreement.
14.    Construction.  The provisions of this Agreement are the result of negotiations between the Parties and have been jointly prepared by both Parties.  This Agreement shall not be construed in favor of, or against, any Party by reason of the extent to which a Party or its counsel participated in its drafting.  As used in this Agreement, the word “including” shall be construed to mean “including without limitation”, and the word “or” shall be construed to mean “and/or”.

23

15.    Headings and Captions.  Headings and captions used in this Agreement are for ease of reference only.  They do not constitute part of this Agreement and shall not be used in interpreting or construing it.
16.    Counterparts.  This Agreement may be executed in counterparts (including by facsimile or electronic image), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, each Party has executed this Agreement as of the date set forth below.

	
			
	 
	 
	ABBOTT DIABETES CARE INC.

	By:
	 
	/s/ Robert Ford

	 
	 
	Robert Ford

	 
	 
	[Print or Type Name]

	 
	 
	Its: President

	 
	 
	 

	 
	 
	Date: July 2, 2014

	
			
	 
	 
	DEXCOM, INC.

	By:
	 
	/s/ Kevin Sayer

	 
	 
	Kevin Sayer

	 
	 
	[Print or Type Name] 

	 
	 
	President & COO

	 
	 
	 

	 
	 
	Date: July 2, 2014

24

EXHBIT A
List of Excluded Patents
	
						
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

	[*****]
	[*****]
	[*****]
	[*****]
	[*****]
	[*****]

        25

EXHIBIT B
Form of Stipulated Dismissal

        26

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF DELAWARE
	
			
	ABBOTT DIABETES CARE INC.,

Plaintiff,

v.

DEXCOM, INC.,

Defendant.
	)
)
)
)
)
)
)
)
)
	

C.A. No. 05-590 (GMS)

CONSOLIDATED

JOINT STIPULATION OF DISMISSAL OF 
ABBOTT DIABETES CARE INC. AND DEXCOM, INC.
Pursuant to Federal Rule of Civil Procedure 41, Plaintiff Abbott Diabetes Care Inc. and Defendant DexCom, Inc. hereby stipulate as follows:
1.All claims and counterclaims in the above-captioned consolidated action relating to U.S. Patent No. 5,899,855 are hereby dismissed WITHOUT PREJUDICE. 
2.    All other claims and counterclaims in the above-captioned consolidated action are hereby dismissed WITH PREJUDICE.
3.    Each party shall bear its own costs, expenses and attorneys’ fees.

        27

	
			
	MORRIS, NICHOLS, ARSHT & TUNNELL LLP

	 
	SHAW KELLER LLP

	

Mary B. Graham (#2256)
Jeremy A. Tigan (#5239)
Thomas Curry (#5877)
1201 N. Market Street  
P.O. Box 1347 
Wilmington, DE  19899-1347 
(302) 658-9200
mgraham@mnat.com
jtigan@mnat.com
tcurry@mnat.com
Attorneys for Abbott Diabetes Care Inc.

	 
	

John W. Shaw (#3362)
Karen E. Keller (#4489)
300 Delaware Avenue, Suite 1120
Wilmington, DE 19801
(302) 298-0700
jshaw@shawkeller.com
kkeller@shawkeller.com
Attorneys for DexCom, Inc.

[DATE]

SO ORDERED this                   day of                  , 2014.

    
CHIEF, UNITED STATES DISTRICT JUDGE

        28

EXHIBIT C
Addressing Pending Challenges
The Parties acknowledge that, as of the Effective Date, there are currently: three (3) ex parte reexaminations that were initiated by DexCom with respect to ADC patents and remain pending before the United States Patent & Trademark Office (“USPTO”) as of the Effective Date (“Ex Parte Reexaminations”); four (4) oppositions that were initiated by ADC with respect to DexCom patents and remain pending before the European Patent Office (“EPO”) as of the Effective Date (“Oppositions”); and one (1) inter partes reexamination that was initiated by ADC with respect to DexCom’s [*****] (“[*****]”) and remains pending before the USPTO as of the Effective Date.  The Parties shall address these pending Challenges as follows:
1.     After the Effective Date, DexCom shall not file any further materials with the USPTO in connection with the three (3) pending Ex Parte Reexaminations relating to two (2) patents of ADC ([*****]).
2.     After the Effective Date, ADC may, in its sole discretion, continue to maintain the Oppositions only to the extent ADC would be permitted to bring such an Opposition, if filed after the Effective Date, in accordance with the provisions of Paragraph F.4 of this Agreement.
3.     After the Effective Date, ADC shall terminate any further participation in the inter partes reexamination of the [*****].  Dexcom agrees, on behalf of its Affiliates and successors and assigns, that neither the inter Partes Reexamination nor any certificate of Reexamination arising therefrom shall be used as a basis for estoppel against ADC or its Affiliates, or any of their successors, assigns, agents, or any other entities in privity with ADC (“ADC Entity”).  To the extent any court or other competent governmental authority finds that any ADC Entity is estopped notwithstanding the foregoing language, that ADC Entity shall be deemed irrevocably 

        29

licensed to the [*****] on a royalty-free, non-exclusive and non-sublicensable basis (i.e., consistant with Paragraph C.2 of the Agreement).  This license for the [*****] shall be irrevocable and shall survive any expiration or termination of the Agreement.  This license for the [*****] shall also be binding upon any acquirer of the [*****] or other successor to DexCom’s rights in the [*****].
4.    The Parties warrant and represent that, as of the Effective Date, they are unaware of any other Challenges that would not be permitted under the Agreement if initiated after the Effective Date and, therefore, the Parties shall not maintain after the Effective Date any other Challenges that would not be permitted under the Agreement if initiated after the Effective Date.

        30

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