Document:

2013 10-K EX 10.28

EXHIBIT 10.28

SUCCESSION AGREEMENT 

This Succession Agreement (“Succession Agreement”) is made and entered into by Expeditors International of Washington, Inc. (“Expeditors” or the “Company”) and Peter Rose, on behalf of himself, his heirs, executors, administrators, successors and assigns (individually or collectively, as context requires, referred to throughout this Succession Agreement as “Rose”, and, together with Expeditors, the “Parties”).

1.Satisfaction of Employment Agreement.  Rose acknowledges and the Parties hereby agree that this Succession Agreement sets forth the full and final terms of Rose’s separation of employment as Chief Executive Officer of Expeditors (“CEO”) and shall be in full satisfaction of any financial or other obligations imposed on any Expeditors entity pursuant to the Amended and Restated Employment Agreement dated December 31, 2008 between Rose and Expeditors (“2008 Employment Agreement”).  All provisions of the 2008 Employment  Agreement that survive the transition from CEO to Chairman are restated in this Succession Agreement.   

2.    Last Day of Employment.  Rose’s last day as CEO will be March 1, 2014. In January, 2014, Rose will announce publicly, on behalf of the Company’s Board of Directors (“Board”), the selection of a new chief executive officer (hereinafter “CEO”) of the Company and, accordingly, his retirement from Expeditors as CEO. The Parties hereby agree that such public announcement will be no later than January 31, 2014.  For greater certainty, the Parties intend that effective at the end of day of March 1, 2014, Rose will experience a “Separation From Service” for purposes of, and as defined under, Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).  For this purpose, “Separation From Service” is determined in accordance Section 6 of the 2008 Employment Agreement.   

3.    Consideration.  In consideration for signing this Succession Agreement, and complying with its terms, Expeditors and Rose mutually agree to the following consideration and terms:

a.Immediate Announcement of Internal Search and Intent to Retire, Follow Up Communications: Following the execution of this Succession Agreement, no later than Wednesday, October 9, 2013, other than during Nasdaq market hours, Rose  will make mutually agreed upon public and internal announcements stating, in substance, the following: (1) his intention to retire from Expeditors; (2) his plan to make his retirement as CEO effective on March 1, 2014 (3) that the Company’s Board and Rose have begun a CEO selection and succession process and the Company plans to name Expeditors’ new CEO at the January, 2014 District Managers meeting.  The form and timing of Rose’s announcements will be mutually agreeable to Rose and the Board.  Rose will cooperate with the Company, as needed, and serve as an integral part of announcements and discussions about his CEO retirement with key investors, regulators, customers and prospects.

b.Chief Executive Officer Selection Process:  Rose will participate fully with the independent directors of the Company’s Board, or a designated committee established by the Board, in the selection of a new CEO.  The Parties agree to work cooperatively and diligently to identify a viable internal candidate with the goal of an announcement at the Company’s District Managers meeting in January, 2014, the 35th anniversary celebration of the Company.  When the new CEO is confirmed by the Board of Directors, Rose will make the announcement in a mutually agreeable form and then retire as CEO effective March 1, 2014. 

c.Service as Non-Executive Chair of the Board of Directors:  Provided Rose remains willing to do so and is elected to the Board of Directors at the annual meeting in 2014, Rose may serve as non-executive Chairman of the Board of Directors for a period beginning immediately upon his retirement as CEO on March 1, 2014, through a date not later than the annual meeting of the Company in 2015.  Rose’s service on the Company’s Board must be in accordance with the Company’s By-Laws and related Company or Board policies.  For his service as Chairman, Rose will not be an employee of the Company, and will be reimbursed for his expenses incurred for his services as a director in accordance with the Company’s policy, but Rose waives any director fees paid to non-employee directors.  Rose will not seek re-election to the Board of Directors after the end of the 2014-2015 term and will retire as Chairman and Director immediately prior to the annual meeting in 2015.

d.Regular Pay through Last Day as CEO:  Expeditors will pay Rose his regular base pay and incentive pay less applicable deductions through March 1, 2014, and all benefits which Expeditors may adopt generally for employees including policies for vacation, holidays, paid sick leave, group medical, life insurance and other employee benefits. Expeditors shall pay or reimburse Rose for all reasonable travel and other expenses incurred or paid by Rose in connection with the performance of services under this Agreement upon presentation of expense vouchers and such other supporting information as Expeditors may from time to time reasonably request pursuant to Company policy, all according to established company practices.

e.Retirement Bonus:  Provided Rose executes a release of all claims in the form attached hereto as Exhibit 1 or such other form of agreement acceptable to the Company, within thirty days after his last day of employment with the Company and does not revoke his acceptance of the release of claims within seven (7) days (or other applicable revocation period required by law) after such release is signed, Expeditors will pay Rose a retirement bonus (“Retirement Bonus”).  The Retirement Bonus will consist of the amounts determined under the formula set forth on Appendix A (less applicable deductions), and payment will occur on the payment dates set forth on Appendix A, provided that the following limitations on the time of payments, as required under Section 409A, will apply.  Any payments that otherwise would be paid on a date that is earlier than the first day following the six-month anniversary of Rose’s Separation From Service (the “Six-Month Anniversary Date”) will accrue, but will not be paid, until the next scheduled payment date set forth on Appendix A that occurs after the Six-Month Anniversary Date.  

f.Health Coverage:  Rose will be offered health continuation coverage under COBRA as required by law.  Provided that Rose executes a release of all claims in the form attached hereto as Exhibit 1 or such other form of agreement acceptable to the Company, within thirty days after his Separation From Service with the Company and does not revoke his acceptance of the release of claims within seven (7) days (or other applicable revocation period required by law) after such release is signed, the Company will pay Rose a one-time lump sum payment in the amount of $150,000 less applicable withholding.  Such payment will be made on the first scheduled payment date set forth on Appendix A.

g.Travel and Other Business Expenses:  From March 2, 2014 to the annual meeting in May, 2015, it is 

anticipated that Expeditors may request Rose’s assistance, including business travel, during his service as Chairman.  For such assistance, Rose, in addition to the other benefits paid during this period, will be entitled to reimbursement of reasonable expenses for travel consistent with the Company’s travel expense policies and practices.   Expenses shall be reimbursed by the Company as soon as administratively feasible, but in all cases no later than the time period required by Section 409A, if applicable. Additionally, for his lifetime, Rose may continue to book personal travel at his own expense through Expeditors’ travel department as has been customary for executives of the Company during their active employment. 

4.    No Consideration Absent Execution of this Succession Agreement.  Rose understands and agrees that Rose would not receive the monies, terms and/or benefits specified in this Agreement above, except for Rose’s execution of this Succession Agreement and the fulfillment of the promises contained herein. Rose understands and agrees that, except as otherwise set forth herein, Rose shall continue to have the specific post-employment obligations under the Employment Agreement all of which are restated in this Succession Agreement.  
 
5.    General Release of All Claims.  Rose knowingly and voluntarily releases and forever discharges Expeditors, its parent corporation and each of their respective affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, both individually and in their business capacities, and any and all Expeditors benefit plans and programs and their administrators and fiduciaries (collectively referred to throughout the remainder of this Succession Agreement as "Releasees"), of and from any and all claims, known and unknown, asserted or unasserted, which Rose has or may have against Releasees as of the date of execution of this Succession Agreement, including, but not limited to, any alleged violation of any law prohibiting discrimination of any kind, including Title VII of the Civil Rights Act of 1964, as amended, the Washington Law Against Discrimination and all provisions of Title 49 of the Revised Code of Washington, any and all claims arising, directly or indirectly, out of or from the Amended and Restated Employment Agreement dated December 31, 2008, any and all claims based on statutory or common law claims, and any claims of any kind arising out of the discussions and negotiation of this Succession Agreement, any claims arising by virtue of the Company Board’s review of internal personnel matters, and any other duty imposed by law or otherwise.

6.    Communications.  The Parties agree that communications regarding this Succession Agreement are critically important and a material term of this Succession Agreement and that such communications will be mutually agreed.  

 Concurrent with the execution and delivery of this Succession Agreement, Rose shall execute and deliver a signed letter or letters for external and internal communications purposes, in a mutually agreed form.  No later than October 9, 2013, other than during Nasdaq market hours, Rose will make internal and external announcements of the succession plan and his intent to retire on March 1, 2014.  Rose will make himself reasonably available for external communications during the transition period.

Rose hereby acknowledges and affirms that he will, upon his retirement from active employment as CEO and his service as Chair of the Board of Directors, cooperate fully with Expeditors in relation to resigning his position with the Board of Directors of any and all Expeditors-affiliated companies, as well as any officer titles.  Rose further agrees to cooperate promptly with any administrative or ministerial requirements to effectuate such board and officer removals.  

7.    Cessation of Compensation and Benefits.  Notwithstanding the terms of this Succession Agreement, Rose acknowledges and agrees that Expeditors retains the sole right to cease any and all remaining payments, including, but not limited to, regular pay, bonus pay, payments under the Succession Agreement and corresponding group medical benefit plan coverage (and seek reimbursement for amounts paid hereunder) in the event  that: (A) Rose is convicted, whether following a trial or by plea of guilty or nolo contendere (or similar plea) in a criminal proceeding on a misdemeanor and/or felony charge involving fraud, false statements or misleading omissions, wrongful taking, embezzlement or bribery, or (B) Expeditors receives notice of a finding by a governmental, regulatory or law enforcement agency that Rose violated securities laws, any rules or regulations issued pursuant to such laws, or the rules and regulations of any securities where the acts taken leading to such conviction or violation were taken by Rose during his employment with Expeditors or prior to the transition period following his retirement.

8.      Acceleration of Payments.  Notwithstanding the terms of this Succession Agreement, Rose acknowledges and agrees that Expeditors retains the sole right and discretion to accelerate any and all payments required by this Succession Agreement, so long as such acceleration is not prohibited by applicable laws, and provided that there shall be no acceleration of payments that are subject to Section 409A unless permitted under Section 409A.

9.    Confidential Information.  Rose recognizes that Expeditors’ business and the business of other affiliates depend upon the use and protection of a large body of confidential and proprietary information now existing or to be developed in the future which will be referred to in this Agreement as “Confidential Trade Information.” Rose intends that the meaning of Confidential Trade Information in this Agreement will be read as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible medium) which is related to Expeditors’ business and the business of corporations affiliated with Expeditors or any of their potential future business and which is not generally and publicly known. Without limiting the foregoing, Rose agrees that the customer lists and lists of contracts and potential customers of Expeditors and its affiliates are and will be a part of the Confidential Trade Information. Rose agrees to protect and preserve as confidential during the term hereof, and at all times after its termination or expiration, all of the Confidential Trade Information at any time known to Rose or at any time in Rose’s possession or control. Rose will neither use nor allow any other person or entity (including entities partially or wholly owned by Rose) to use in any way, except for the benefit of Expeditors and as directed by Expeditors, any of the Confidential Trade Information. Rose will, prior to or upon leaving employment with Expeditors, deliver to Expeditors any and all records, items, and media of any type (including all partial or complete copies or duplicates) containing or otherwise relating to any of the Confidential Trade Information, whether prepared or acquired by or provided to Rose. Rose acknowledges that all such records, items and media are at all times and shall remain the property of Expeditors.

10.    Covenant Not to Compete.  From the date of this Agreement and until six months after Rose’s resignation as Chairman in approximately May, 2015, Rose hereby agrees that he will not directly or indirectly enter into the employment of, render any service or assistance to or acquire any interest whatsoever, whether as an individual proprietor, partner, associate, officer, director, consultant, trustee or otherwise, in any business, trade or occupation in competition with the business of Employer within one hundred fifty (150) miles of any office of Employer or any affiliate of Employer.  Without limiting the foregoing, Employee also agrees that he will not, during said period, cause or attempt to cause or induce any employee of Employer to leave the employment of Employer, or call on or otherwise solicit business from any of the customers of Employer which, at the time of termination of his employment, were listed (or ought to have been listed) in Employer’s records, in respect of any service or product that competes directly or indirectly with any service provided or marketed by or actually under the development or active 

consideration by Employer at the time of Employee’s termination.

11.    Remedies.  Employee agrees that damages for breach of his covenants under Paragraphs 9 and 10 above will be difficult to determine and probably inadequate to remedy the harm caused thereby and therefor consents that these covenants may be enforced by temporary or permanent injunction.  Such injunctive relief shall be in addition and not in place of any other remedies available at law or equity.  Employee further agrees that profits made in violation of these covenants shall be held in constructive trust for Employer.  Employee acknowledges that the provisions of this Paragraph and such covenants are reasonable, that the payments required by this Succession Agreement provide adequate compensation under the circumstances, and that in any event Employee is capable of gainful employment without breaching such covenants.  However, should any court or tribunal ever find that any provision of such covenants are illegal or unenforceable on the grounds of unreasonableness whether in period of time, geographical area or otherwise, then in that event the parties agree that such covenants shall be interpreted and enforced to the maximum extent which the court or tribunal deems reasonable.  For purpose of this Paragraph and Paragraphs 9 and 10 of this Agreement, the term “Employer” shall include any subsidiary, agent or other affiliate of Employer.   

12.    Governing Law and Interpretation.  This Succession Agreement shall be governed and conformed in accordance with the laws of the State of Washington, without regard to its conflict of laws provision.  

Should any provision of this Succession Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision shall immediately become null and void, leaving the remainder of this Succession Agreement in full force and effect.

13.    Dispute Settlement.  Any controversy, dispute or claim arising out of or relating to this Succession Agreement shall be resolved exclusively in arbitration before J.A.M.S. in the Seattle office, in accordance with the dispute procedures described in their employment rules.  However, any claim or request for injunctive relief shall be presented exclusively to the King County Superior Court.  Prior to any arbitration proceeding, there shall be a mandatory settlement conference of the disputing parties, and a mediation.  If J.A.M.S. is unable or unwilling to serve as the ADR provider, the Parties shall select another locally or nationally reputable ADR provider and resolve the dispute according to the selected provider’s rules.  In the event the parties cannot agree upon a provider, one shall be appointed by the King County Superior Court, upon motion of one of the Parties.

14.    Non-admission of Wrongdoing.  The Parties agree that neither this Succession Agreement nor the furnishing of the consideration for this Succession Agreement shall be deemed or construed at any time for any purpose as an admission by either party of wrongdoing or evidence of any liability or unlawful conduct of any kind.
15.    Amendment.  This Succession Agreement may not be modified, altered or changed except in writing and signed by both Parties wherein specific reference is made to this Succession Agreement.

16.    Entire Agreement.  Except as agreed in the Amended and Restated Employment Agreement between the Parties dated December 31, 2008, or as otherwise set forth herein, this Succession Agreement sets forth the entire agreement between the Parties hereto, and fully supersedes any prior agreements or understandings between the Parties in relation to the subject matter hereof.   To the extent there is any conflict between this Succession Agreement and the Employment Agreement dated December 31, 2008, or modification of the Employment Agreement, the terms of this Succession Agreement shall prevail. Rose acknowledges that Rose has not relied on any representations, promises, or agreements of any kind made to Rose in connection with Rose’s decision to accept this Succession Agreement, except for those set forth in this Succession Agreement.  Rose further acknowledges that the obligations under the Employment Agreement shall be replaced with this Succession Agreement.

ROSE AND EXPEDITORS FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER INTO THIS SUCCESSION AGREEMENT.  

ROSE INTENDS TO WAIVE, SETTLE AND RELEASE ALL CLAIMS ROSE HAS OR MIGHT HAVE AGAINST RELEASEES AS OF THE DATE OF EXECUTION OF THIS SUCCESSION AGREEMENT.

The Parties knowingly and voluntarily sign this Succession Agreement as of the date(s) set forth below:

	
			
	 
	 
	Expeditors International of Washington, Inc.

	By: /s/ Peter J. Rose
	 
	By: /s/ Robert R. Wright

	Peter Rose
	 
	Robert R. Wright

	 
	 
	Lead Independent Director

	 
	 
	 

	Date: 10/7/13
	 
	Pursuant to Authorization by the Board at a Meeting on  10/7/13.

	 
	 
	 

	 
	 
	Date: 10/07/13

Appendix A

Peter Rose’s Retirement Bonus will be paid in accordance with the following schedule and the amount will be determined in a manner consistent with the 2008 Executive Incentive Compensation Plan:

On Friday, September 12, 2014 an amount equal to Operating Income as reported in Form 10-Q for the first and second quarter 2014 before accrual of Executive Bonuses multiplied by 10%, then that amount multiplied by the percentage used to calculate Mr. Rose's incentive compensation for the quarter ended June 30, 2013

On the Friday in November 2014 that corresponds to the payment of Incentive Compensation to Executive Officers an amount equal to Operating Income as reported in Form 10-Q for the third quarter 2014 before accrual of Executive Bonuses multiplied by 10%, then that amount multiplied by the percentage used to calculate Mr. Rose's incentive compensation for the quarter ended June 30, 2013

On the Friday in March 2015 that corresponds to the payment of Incentive Compensation to Executive Officers an amount equal to Operating Income as reported in Form 10-Q for the fourth quarter 2014 before accrual of Executive Bonuses multiplied by 10%, then that amount multiplied by the percentage used to calculate Mr. Rose's incentive compensation for the quarter ended June 30, 2013

On the Friday in May 2015 that corresponds to the payment of Incentive Compensation to Executive Officers an amount equal to Operating Income as reported in Form 10-Q for the first quarter 2015 before accrual of Executive Bonuses multiplied by 10%, then that amount multiplied by the percentage used to calculate Mr. Rose's incentive compensation for the quarter ended June 30, 2013

On the Friday in August 2015 that corresponds to the payment of Incentive Compensation to Executive Officers an amount equal to Operating Income as reported in Form 10-Q for the second quarter 2015 before accrual of Executive Bonuses multiplied by 10%, then that amount multiplied by the percentage used to calculate Mr. Rose's incentive compensation for the quarter ended June 30, 2013, then that amount multiplied by 2/3.

POST CEO EMPLOYMENT RELEASE AGREEMENT 
(Exhibit 1 to Succession Agreement)
Expeditors International of Washington, Inc. (“Expeditors”), and Peter J. Rose, his spouse or domestic partner (if any), executors, administrators, successors and assigns (collectively referred to throughout this Post CEO Employment Release Agreement as “Rose”), agree that:
1.    Last Day of Employment.  Rose’s last day of employment with Expeditors as its CEO was March 1, 2014.    
2.    Consideration.  In consideration for signing this Post-Employment Release Agreement (“Agreement”), Expeditors agrees to pay to Rose the sum specified in his Succession Agreement, less lawful deductions.  Expeditors will provide the payments called for in Sections 3e and 3f therein at the times specified in the Succession Agreement, provided that Rose did not revoke his acceptance of this Agreement within seven days after signing it. This Agreement should not be signed by Rose prior to his last official day of employment as CEO.
3.    No Consideration Absent Execution of this Agreement.  Rose understands and agrees that He would not receive the monies and/or benefits specified in Paragraph “2” above, except for his execution of this Agreement and the fulfillment of the promises contained herein and in the Succession Agreement between the Parties.
4.    General Release of All Claims.  Rose knowingly and voluntarily releases and forever discharges, to the full extent permitted by law, Expeditors, its affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, the employee benefit plans for Expeditors, plan fiduciaries and plan administrators (whether internal or external), both individually and in their official capacities (collectively referred to throughout the remainder of this Agreement as “Releasees”) of and from any and all claims, known and unknown, asserted or unasserted, which Rose has or may have against Releasees as of the date of execution of this Agreement and, including, but not limited to, any alleged violation of or liability for any of the following:  Title VII of the Civil Rights Act of 1964, as amended, the Washington Law Against Discrimination and all provisions of Title 49 of the Revised Code of Washington, The Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990, as amended, the Sarbanes-Oxley Act of 2002, as amended,  any and all claims arising, directly or indirectly, out of the alleged breach of any agreement, any and all claims based on statutory or common law claims, and any claim for attorney’s fees or costs arising out of these matters.
Rose agrees that he will not file any civil action or any other charges over the matters herein released.
If any claim is not subject to release, to the extent permitted by law, Rose waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which Expeditors or any other Releasees identified in this Agreement is a party.
Notwithstanding the above release, Rose does not release any claim for indemnification as an officer or director under the bylaws, company policy or applicable law. 
5.    Affirmations.
a.Rose affirms that he [has not][has] applied or otherwise registered for benefits under Medicare.  Rose affirms he has not suffered any physical or mental health injury that he attributes to his work at Expeditors.
b.Rose affirms that he has not filed, caused to be filed and is not presently a party to any claim, complaint or action against Expeditors.
c.Rose further affirms that he has been paid and/or has received all leaves (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits to which He may be entitled and that no other leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due to him, except as provided in this Agreement and General Release.
d.Rose further affirms that he has not been retaliated against for reporting any allegations of wrongdoing by Expeditors or its officers, including any allegations of corporate fraud.  Both parties acknowledge that this Agreement and General Release does not limit either party’s right, where applicable, to file or participate in an investigative proceeding of any federal, state or local governmental agency.  To the extent permitted by law, Rose agrees that if such an administrative claim is made, he shall not be entitled to recover any individual monetary relief or other individual remedies. 
6.    Return of Property.  Rose affirms that he has returned all of Expeditors’ property, documents and/or any confidential information in Rose’s possession or control.  Rose also affirms that he will collect his property from Expeditor’s premises within thirty days after his retirement day as Chairman.
7.    Governing Law and Interpretation.  This Agreement shall be governed and construed in accordance with the laws of the State of Washington without regard to its conflict of laws provision.  In the event of a breach of this Agreement either party may institute an action specifically to enforce any term or terms of this Agreement or seek any damages for breach.  Should any provision of this Agreement Release be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.  
8.    Non-admission of Wrongdoing.  The Parties agree that neither this Agreement nor the furnishing of the consideration for this Agreement shall be deemed or construed at any time for any purpose as an admission by Releasees of any liability or unlawful conduct of any kind.  
9.    Amendment.  This Agreement may not be modified, altered or changed except upon express written consent of all parties in writing and signed by all parties wherein specific reference is made to this Agreement and General Release.

10.    Entire Agreement.  This Agreement sets forth the entire agreement between the parties hereto with respect to Rose’s post-employment release of claims.  Rose acknowledges that he has not relied on any representations, promises or agreements of any kind made to him in connection with his decision to accept this Agreement.
11. Counterparts.  This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.  Copies of such signed counterparts may be used in lieu of the originals for any purpose.
ROSE IS ADVISED THAT HE HAS AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS AGREEMENT AND GENERAL RELEASE.  ROSE ALSO IS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO HIS SIGNING OF THIS AGREEMENT AND GENERAL RELEASE.
ROSE MAY REVOKE THIS AGREEMENT AND GENERAL RELEASE FOR A PERIOD OF SEVEN (7) CALENDAR DAYS FOLLOWING THE DAY HE SIGNS THIS AGREEMENT AND GENERAL RELEASE.  ANY REVOCATION WITHIN THIS PERIOD MUST BE SUBMITTED, IN WRITING, TO EXPEDITORS REPRESENTATIVE AND STATE, “I HEREBY REVOKE MY ACCEPTANCE OF OUR POST EMPLOYMENT RELEase AGREEMENT.”  THE REVOCATION MUST BE PERSONALLY DELIVERED TO ROBERT WRIGHT WITHIN SEVEN (7) CALENDAR DAYS AFTER HE SIGNS THIS AGREEMENT AND GENERAL RELEASE. 
ROSE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE, DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD.
ROSE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST RELEASEES.
The parties knowingly and voluntarily sign this Post CEO Employment Release Agreement as of the date(s) set forth below:
	
			
	 
	 
	EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

	 
	 
	 

	Date: ___________
	 
	By: ___________________________

	 
	 
	Robert R. Wright

	 
	 
	Lead Independent Director

	 
	 
	 

	 
	 
	Pursuant to Authorization by the Board at a Meeting on  October 7, 2013.

	 
	 
	 

	Date: ___________
	 
	By: ___________________________

	 
	 
	Peter J. RoseQ413 Exhibit 10.39

Exhibit 10.39

FREEPORT-McMoRan COPPER & GOLD INC.
AMENDED AND RESTATED
2006 STOCK INCENTIVE PLAN

SECTION 1

Purpose.  The purpose of the Amended and Restated Freeport-McMoRan Copper & Gold Inc. 2006 Stock Incentive Plan (the “Plan”) is to increase stockholder value and advance the interests of the Company and its Subsidiaries by furnishing a variety of equity incentives designed to (i) attract, retain, and motivate key employees, officers, and directors of the Company and consultants and advisers to the Company and (ii) strengthen the mutuality of interests among such persons and the Company’s stockholders.
SECTION 2    
Definitions.  As used in the Plan, the following terms shall have the meanings set forth below:
“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Other Stock-Based Award.
“Award Agreement” shall mean any written or electronic notice of grant, agreement, contract or other instrument or document evidencing any Award, which the Company may, but need not, require a Participant to execute, acknowledge, or accept.
“Board” shall mean the Board of Directors of the Company.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Committee” refers to the Compensation Committee of the Board, the Nominating and Corporate Governance Committee of the Board, or both of these committees, as the context indicates.
“Common Stock” shall mean the Company’s common stock, $.10 par value per share.
“Company” shall mean Freeport-McMoRan Copper & Gold Inc.
“Designated Beneficiary” shall mean the beneficiary designated by the Participant, in a manner determined by the Committee, to receive the benefits due the Participant under the Plan in the event of the Participant’s death.  In the absence of an effective designation by the Participant, Designated Beneficiary shall mean the Participant’s estate.
“Eligible Individual” shall mean (i) any person providing services as an officer of the Company or a Subsidiary, whether or not employed by such entity, including any such person who is also a director of the Company; (ii) any employee of the Company or a Subsidiary, including any director who is also an employee of the Company or a Subsidiary; (iii) Outside Directors; (iv) any officer or employee of an entity with which the Company has contracted to receive executive, management, or legal services who provides services to the Company or a 

{N1464137.6}                                          As approved by stockholders June 9, 2010 (updated to reflect 2011 stock split)

    

Subsidiary through such arrangement; (v) any consultant or adviser to the Company, a Subsidiary, or to an entity described in clause (iv) hereof who provides services to the Company or a Subsidiary through such arrangement; and (vi) any person who has agreed in writing to become a person described in clauses (i), (ii), (iii), (iv) or (v) within not more than 30 days following the date of grant of such person’s first Award under the Plan.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
“Immediate Family Members” shall mean the spouse and natural or adopted children or grandchildren of the Participant and his or her spouse.  
“Incentive Stock Option” shall mean an option granted under Section 6 of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.
“Nonqualified Stock Option” shall mean an option granted under Section 6 of the Plan that is not intended to be an Incentive Stock Option.
“Option” shall mean an Incentive Stock Option or a Nonqualified Stock Option.
“Other Stock-Based Award” shall mean any right or award granted under Section 10 of the Plan.
“Outside Directors” shall mean members of the Board who are not employees of the Company, and shall include non-voting advisory directors to the Board.
“Participant” shall mean any Eligible Individual granted an Award under the Plan.
“Person” shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof, or other entity.
“Restricted Stock” shall mean any restricted stock granted under Section 8 of the Plan.
“Restricted Stock Unit” shall mean any restricted stock unit granted under Section 9 of the Plan.
“Section 162(m)” shall mean Section 162(m) of the Code and all regulations and guidance promulgated thereunder as in effect from time to time.
“Section 409A” shall mean Section 409A of the Code and all regulations and guidance promulgated thereunder as in effect from time to time.
“Shares” shall mean the shares of Common Stock and such other securities of the Company or a Subsidiary as the Committee may from time to time designate.
“Stock Appreciation Right” shall mean any right granted under Section 7 of the Plan.

{N1464137.6}    2    

    

“Subsidiary” shall mean (i) any corporation or other entity in which the Company possesses directly or indirectly equity interests representing at least 50% of the total ordinary voting power or at least 50% of the total value of all classes of equity interests of such corporation or other entity and (ii) any other entity in which the Company has a direct or indirect economic interest that is designated as a Subsidiary by the Committee.
SECTION 3    
(a)    Administration.  The Plan shall generally be administered by the Compensation Committee.  The Nominating and Corporate Governance Committee of the Board shall administer the Plan with respect to grants to Outside Directors.  Members of the Compensation Committee and the Nominating and Corporate Governance Committee shall qualify as “non-employee directors” under Rule 16b-3 under the 1934 Act.  
(b)    Authority.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Nominating and Corporate Governance Committee (with respect to Outside Directors) and the Compensation Committee (with respect to all other Eligible Individuals) shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to an Eligible Individual; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, whole Shares, other whole securities, other Awards, other property, or other cash amounts payable by the Company upon the exercise of that or other Awards, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable by the Company with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.  
(c)    Effect of Committee’s Determinations.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the applicable Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary, any Participant, any holder or beneficiary of any Award, any stockholder of the Company, and any Eligible Individual.
(d)    Delegation.  Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers of the Company the authority, subject to such terms and limitations as the Committee shall determine, to grant and set the terms of, to cancel, modify, or waive rights with respect to, or to alter, discontinue, suspend, or terminate Awards held by Eligible Individuals who are not officers or directors of the Company for purposes of Section 16 

{N1464137.6}    3    

    

of the Exchange Act, or any successor section thereto, or who are otherwise not subject to such Section; provided, however, that the per share exercise price of any Option granted under this Section 3(d) shall be equal to the fair market value of the underlying Shares on the date of grant.
SECTION 4    
Eligibility.  The Committee, in accordance with Section 3(a), may grant an Award under the Plan to any Eligible Individual.
SECTION 5    
(a)    Shares Available for Awards.  Subject to adjustment as provided in Section 5(b):
(i)    Calculation of Number of Shares Available.
(A)    Subject to the other provisions of this Section 5(a), the number of Shares with respect to which Awards payable in Shares may be granted under the Plan shall be 74,000,000.  Awards that by their terms may be settled only in cash shall not be counted against the maximum number of Shares provided herein.
(B)    The number of Shares that may be issued pursuant to Incentive Stock Options may not exceed 74,000,000.
(C)    Subject to the other provisions of this Section 5(a): 
(1)    the maximum number of Shares issuable under the Plan as Restricted Stock, Restricted Stock Units, or Other Stock-Based Awards payable in Shares for which there is a per share purchase price that is less than 100% of the fair market value of the securities to which the Award relates shall be 17,000,000; and
(2)    up to 3,000,000 of the Shares referenced in Section 5(a)(i)(C)(1) may be issued pursuant to Awards to employees, consultants, or advisers in the form of Restricted Stock, Restricted Stock Units, or Other Stock-Based Awards payable in Shares without compliance with the minimum vesting periods set forth in Sections 8(b), 9(b), and 10(b), respectively.  If (x) Restricted Stock, Restricted Stock Units, or an Other Stock-Based Award is granted with a minimum vesting period of at least three years or a minimum vesting period of at least one year, subject to the attainment of specific performance goals, and (y) the vesting of such Award is accelerated in accordance with Section 12(a) hereof as a result of the Participant’s death, retirement, or other termination of employment or cessation of consulting or advisory services to the Company, or a change in control of the Company, such Shares shall not count against the limitation described in this Section 5(a)(i)(C)(2). 
(D)    To the extent any Shares covered by an Award are not issued because the Award is forfeited or canceled or the Award is settled in cash, such Shares shall again be available for grant pursuant to new Awards under the Plan.
(E)    In the event that Shares are issued as Restricted Stock or Other Stock-Based Awards under the Plan and thereafter are forfeited or reacquired by the Company 

{N1464137.6}    4    

    

pursuant to rights reserved upon issuance thereof, such Shares shall again be available for grant pursuant to new Awards under the Plan.  With respect to Stock Appreciation Rights, if the Award is payable in Shares, all Shares to which the Award relates are counted against the Plan limits, rather than the net number of Shares delivered upon exercise of the Award.
(F)    The maximum value of an Other Stock-Based Award that is valued in dollars (whether or not paid in Common Stock) scheduled to be paid out to any one Participant in any calendar year shall be $5 million.
(ii)    Shares Deliverable Under Awards.  Any Shares delivered pursuant to an Award may consist of authorized and unissued Shares or of treasury Shares, including Shares held by the Company or a Subsidiary and Shares acquired in the open market or otherwise obtained by the Company or a Subsidiary.  The issuance of Shares may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.
(iii)    Individual Limits.  The maximum number of Shares that may be covered by Awards granted under the Plan to any Participant during a calendar year shall be 7,500,000 Shares.
(iv)    Use of Shares.  Subject to the terms of the Plan and the overall limitation on the number of Shares that may be delivered under the Plan, the Committee may use available Shares as the form of payment for compensation, grants, or rights earned or due under any other compensation plans or arrangements of the Company or a Subsidiary, including, but not limited to, the Company’s annual incentive plan and the plans or arrangements of the Company or a Subsidiary assumed in business combinations.
(b)    Adjustments.  In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, Subsidiary securities, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award and, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award and, if deemed appropriate, adjust outstanding Awards to provide the rights contemplated by Section 11(b) hereof; provided, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422(b)(1) of the Code or any successor provision thereto and, with respect to all Awards under the Plan, no such adjustment shall be authorized to the extent that such authority would be inconsistent with the requirements for full deductibility under Section 162(m); and 

{N1464137.6}    5    

    

provided further that the number of Shares subject to any Award denominated in Shares shall always be a whole number.
(c)    Performance Goals for Section 162(m) Awards.  The Committee shall determine at the time of grant if the grant of Restricted Stock, Restricted Stock Units, or an Other Stock-Based Award is intended to qualify as “performance-based compensation” as that term is used in Section 162(m).  Any such grant shall be conditioned on the achievement of one or more performance measures.  The performance measures pursuant to which Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards shall vest shall be any or a combination of the following:  earnings per share, return on assets, an economic value added measure, shareholder return, earnings, return on equity, return on investment, cash provided by operating activities, increase in cash flow, return on cash flow, or increase in production of the Company, a division of the Company or a Subsidiary.  For any performance period, such performance objectives may be measured on an absolute basis or relative to a group of peer companies selected by the Committee, relative to internal goals or relative to levels attained in prior years.  For grants of Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards intended to qualify as “performance-based compensation,” the grants and the establishment of performance measures shall be made during the period required by Section 162(m).
SECTION 6    
(a)    Stock Options.  Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Eligible Individuals to whom Options shall be granted, the number of Shares to be covered by each Option, the option price thereof, the conditions and limitations applicable to the exercise of the Option, and the other terms thereof.  The Committee shall have the authority to grant Incentive Stock Options, Nonqualified Stock Options, or both.  In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be required by Section 422 of the Code, as from time to time amended, and any implementing regulations.  Except in the case of an Option granted in assumption of or substitution for an outstanding award of a company acquired by the Company or with which the Company combines, the exercise price of any Option granted under this Plan shall not be less than 100% of the fair market value of the underlying Shares on the date of grant.
(b)    Exercise.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement or thereafter, provided, however, that in no event may any Option granted hereunder be exercisable after the expiration of 10 years after the date of such grant.  The Committee may impose such conditions with respect to the exercise of Options, including without limitation, any condition relating to the application of Federal or state securities laws, as it may deem necessary or advisable.  An Option may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of Shares to be purchased.  The exercise notice shall be accompanied by the full purchase price for the Shares.
(c)    Payment.  The Option price shall be payable in United States dollars and may be paid by (i) cash or cash equivalent; (ii) delivery of shares of Common Stock, which shares shall be valued for this purpose at the fair market value (valued in accordance with procedures

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established by the Committee) as of the effective date of such exercise; (iii) delivery of irrevocable written instructions to a broker approved by the Company (with a copy to the Company) to immediately sell a portion of the shares issuable under the Option and to deliver promptly to the Company the amount of sale proceeds to pay the exercise price; (iv) if approved by the Committee, through a net exercise procedure whereby the Participant surrenders the Option in exchange for that number of shares of Common Stock with an aggregate fair market value equal to the difference between the aggregate exercise price of the Options being surrendered and the aggregate fair market value of the shares of Common Stock subject to the Option; or (v) in such other manner as may be authorized from time to time by the Committee.  Prior to the issuance of Shares upon the exercise of an Option, a Participant shall have no rights as a shareholder.
SECTION 7    
(a)    Stock Appreciation Rights.  A Stock Appreciation Right shall entitle the holder thereof to receive upon exercise, for each Share to which the Stock Appreciation Right relates, an amount equal to the excess, if any, of the fair market value of a Share on the date of exercise of the Stock Appreciation Right over the grant price.  
(b)    Terms and Conditions.  Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Eligible Individuals to whom Stock Appreciation Rights shall be granted, the number of Shares to be covered by each Award of Stock Appreciation Rights, the grant price thereof, the conditions and limitations applicable to the exercise of the Stock Appreciation Right and the other terms thereof.  Stock Appreciation Rights may be granted in tandem with another Award, in addition to another Award, or freestanding and unrelated to any other Award.  Stock Appreciation Rights granted in tandem with or in addition to an Option or other Award may be granted either at the same time as the Option or other Award or at a later time.  Stock Appreciation Rights shall not be exercisable after the expiration of 10 years after the date of grant.  Except in the case of a Stock Appreciation Right granted in assumption of or substitution for an outstanding award of a company acquired by the Company or with which the Company combines, the grant price of any Stock Appreciation Right granted under this Plan shall not be less than 100% of the fair market value of the Shares covered by such Stock Appreciation Right on the date of grant or, in the case of a Stock Appreciation Right granted in tandem with a then outstanding Option or other Award, on the date of grant of such related Option or Award.
(c)    Committee Discretion to Determine Form of Payment.  The Committee shall determine at the time of grant of a Stock Appreciation Right whether it shall be settled in cash, Shares, or a combination of cash and Shares.
SECTION 8    
(a)    Restricted Stock.  Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Eligible Individuals to whom Restricted Stock shall be granted, the number of Shares to be covered by each Award of Restricted Stock and the terms, conditions, and limitations applicable thereto.  An Award of Restricted Stock may be subject to the attainment of specified performance goals or targets, restrictions on transfer, forfeitability 

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provisions and such other terms and conditions as the Committee may determine, subject to the provisions of the Plan.  An award of Restricted Stock may be made in lieu of the payment of cash compensation otherwise due to an Eligible Individual.  To the extent that Restricted Stock is intended to qualify as “performance- based compensation” under Section 162(m), it must be made subject to the attainment of one or more of the performance goals specified in Section 5(c) hereof and meet the additional requirements imposed by Section 162(m).
(b)    The Restricted Period.  At the time that an Award of Restricted Stock is made, the Committee shall establish a period of time during which the transfer of the Shares of Restricted Stock shall be restricted (the “Restricted Period”).  Each Award of Restricted Stock may have a different Restricted Period.  Except (i) for Restricted Stock that vests based on the attainment of performance goals, and (ii) as provided in Section 5(a)(i)(C)(2), a Restricted Period of at least three years is required with incremental vesting of the Award over the three-year period permitted.  If the grant or vesting of the Shares is subject to the attainment of specified performance goals, a Restricted Period of at least one year with incremental vesting is permitted.  The expiration of the Restricted Period shall also occur as provided in the Award Agreement in accordance with Section 12(a) hereof.
(c)    Escrow.  The Participant receiving Restricted Stock shall enter into an Award Agreement with the Company setting forth the conditions of the grant.  Certificates representing Shares of Restricted Stock shall be registered in the name of the Participant and deposited with the Company, together with a stock power endorsed in blank by the Participant.  Each such certificate shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the Freeport-McMoRan Copper & Gold Inc. Amended and Restated 2006 Stock Incentive Plan (the “Plan”) and a notice of grant issued thereunder to the registered owner by Freeport-McMoRan Copper & Gold Inc.  Copies of the Plan and the notice of grant are on file at the principal office of Freeport-McMoRan Copper & Gold Inc.
Alternatively, in the discretion of the Company, ownership of the Shares of Restricted Stock and the appropriate restrictions shall be reflected in the records of the Company’s transfer agent and no physical certificates shall be issued prior to vesting.
(d)    Dividends on Restricted Stock.  Any and all cash and stock dividends paid with respect to the Shares of Restricted Stock shall be subject to any restrictions on transfer, forfeitability provisions or reinvestment requirements as the Committee may, in its discretion, prescribe in the Award Agreement.
(e)    Forfeiture.  In the event of the forfeiture of any Shares of Restricted Stock under the terms provided in the Award Agreement (including any additional Shares of Restricted Stock that may result from the reinvestment of cash and stock dividends, if so provided in the Award Agreement), such forfeited shares shall be surrendered and any certificates canceled.  The Participants shall have the same rights and privileges, and be subject to the same forfeiture 

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provisions, with respect to any additional Shares received pursuant to Section 5(b) or Section 11(b) due to a recapitalization, merger or other change in capitalization.
(f)    Expiration of Restricted Period.  Upon the expiration or termination of the Restricted Period and the satisfaction of any other conditions prescribed by the Committee or at such earlier time as provided in the Award Agreement or an amendment thereto, the restrictions applicable to the Restricted Stock shall lapse and a stock certificate for the number of Shares of Restricted Stock with respect to which the restrictions have lapsed shall be delivered or book or electronic entry evidencing ownership shall be provided, free of all such restrictions and legends, except any that may be imposed by law, to the Participant or the Participant’s estate, as the case may be.
(g)    Rights as a Stockholder.  Subject to the terms and conditions of the Plan and subject to any restrictions on the receipt of dividends that may be imposed in the Award Agreement, each Participant receiving Restricted Stock shall have all the rights of a stockholder with respect to Shares of stock during any period in which such Shares are subject to forfeiture and restrictions on transfer, including without limitation, the right to vote such Shares.
SECTION 9    
(a)    Restricted Stock Units.  Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Eligible Individuals to whom Restricted Stock Units shall be granted, the number of Shares to be covered by each Award of Restricted Stock Units and the terms, conditions, and limitations applicable thereto.  An Award of Restricted Stock Units is a right to receive shares of Common Stock in the future and may be subject to the attainment of specified performance goals or targets, restrictions on transfer, forfeitability provisions and such other terms and conditions as the Committee may determine, subject to the provisions of the Plan.  An award of Restricted Stock Units may be made in lieu of the payment of cash compensation otherwise due to an Eligible Individual.  To the extent that an Award of Restricted Stock Units is intended to qualify as “performance-based compensation” under Section 162(m), it must be made subject to the attainment of one or more of the performance goals specified in Section 5(c) hereof and meet the additional requirements imposed by Section 162(m).
(b)    The Vesting Period.  At the time that an Award of Restricted Stock Units is made, the Committee shall establish a period of time during which the Restricted Stock Units shall vest.  Each Award of Restricted Stock may have a different vesting period.  Except (i) for Restricted Stock Units that vest based on the attainment of performance goals, and (ii) as provided in Section 5(a)(i)(C)(2), a vesting period of at least three years is required with incremental vesting of the Award over the three-year period permitted.  If the grant or vesting is subject to the attainment of specified performance goals, a vesting period of at least one year with incremental vesting is permitted.  The expiration of the vesting period shall also occur as provided in the Award Agreement in accordance with Section 12(a) hereof.  
(c)    Rights as a Stockholder.  Subject to the terms and conditions of the Plan and subject to any restrictions that may be imposed in the Award Agreement, each Participant 

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receiving Restricted Stock Units shall have no rights as a stockholder with respect to such Restricted Stock Units until such time as Shares are issued to the Participant.
SECTION 10    
(a)    Other Stock-Based Awards.  The Committee is hereby authorized to grant to Eligible Individuals an “Other Stock-Based Award,” which shall consist of an Award that is not an instrument or Award specified in Sections 6 through 9 of this Plan, the value of which is based in whole or in part on the value of Shares.  Other Stock-Based Awards may be awards of Shares or may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible or exchangeable into or exercisable for Shares), as deemed by the Committee consistent with the purposes of the Plan.  The Committee shall determine the terms and conditions of any such Other Stock-Based Award and may provide that such awards would be payable in whole or in part in cash.  To the extent that an Other Stock-Based Award is intended to qualify as “performance-based compensation” under Section 162(m), it must be made subject to the attainment of one or more of the performance goals specified in Section 5(c) hereof and meet the additional requirements imposed by Section 162(m).  
(b)    The Vesting Period.  Except (i) for Other Stock-Based Awards that vest based on the attainment of performance goals, and (ii) as provided in Section 5(a)(i)(C)(2), a vesting period of at least three years is required with incremental vesting of the Award over the three-year period permitted.  If the grant or vesting is subject to the attainment of specified performance goals, a vesting period of at least one year with incremental vesting is permitted.  The expiration of the vesting period shall also occur as provided in the Award Agreement in accordance with Section 12(a) hereof.  
(c)    Dividend Equivalents.  In the sole and complete discretion of the Committee, an Award, whether made as an Other Stock-Based Award under this Section 10 or as an Award granted pursuant to Sections 8 and 9 hereof, may provide the holder thereof with dividends or dividend equivalents, payable in cash, Shares, Subsidiary securities, other securities or other property on a current or deferred basis.
SECTION 11    
(a)    Amendment or Discontinuance of the Plan.  The Board may amend or discontinue the Plan at any time; provided, however, that no such amendment may
(i)    without the approval of the stockholders, (A) increase, subject to adjustments permitted herein, the maximum number of shares of  Common Stock that may be issued through the Plan, (B) materially increase the benefits accruing to Participants under the Plan, (C) materially expand the classes of persons eligible to participate in the Plan, (D) expand the types of Awards available for grant under the Plan, (E) materially extend the term of the Plan, (F) materially change the method of determining the exercise price of Options or Stock Appreciation Rights, or (G) amend Section 11(c) to permit a reduction in the exercise price of Options; or

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(ii)    materially impair, without the consent of the recipient, an Award previously granted.
(b)    Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 5(b) hereof) affecting the Company, or the financial statements of the Company or any Subsidiary, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.
(c)    Cancellation.  Any provision of this Plan or any Award Agreement to the contrary notwithstanding, the Committee may cause any Award granted hereunder to be canceled in consideration of a cash payment or alternative Award made to the holder of such canceled Award equal in value to such canceled Award.  Notwithstanding the foregoing, except for adjustments permitted under Sections 5(b) and 11(b), no action by the Committee shall, unless approved by the stockholders of the Company, (i) cause a reduction in the exercise price of Options granted under the Plan or (ii) permit an outstanding Option with an exercise price greater than the current fair market value of a Share to be surrendered as consideration for a new Option with a lower exercise price, shares of Restricted Stock, Restricted Stock Units, and Other Stock-Based Award, a cash payment, or Common Stock.  The determinations of value under this subparagraph shall be made by the Committee in its sole discretion.
SECTION 12    
(a)    Award Agreements.  Each Award hereunder shall be evidenced by an agreement or notice delivered to the Participant (by paper copy or electronically) that shall specify the terms and conditions thereof and any rules applicable thereto, including but not limited to the effect on such Award of the death, retirement or other termination of employment or cessation of consulting or advisory services of the Participant and the effect thereon, if any, of a change in control of the Company.
(b)    Withholding.  
(i)    A Participant shall be required to pay to the Company, and the Company shall have the right to deduct from all amounts paid to a Participant (whether under the Plan or otherwise), any taxes required by law to be paid or withheld in respect of Awards hereunder to such Participant.  The Committee may provide for additional cash payments to holders of Awards to defray or offset any tax arising from the grant, vesting, exercise or payment of any Award.
(ii)    At any time that a Participant is required to pay to the Company an amount required to be withheld under the applicable tax laws in connection with the issuance of Shares under the Plan, the Participant may, if permitted by the Committee, satisfy this obligation in whole or in part by delivering currently owned Shares or by electing (the “Election”) to have the Company withhold from the issuance Shares, which Shares shall have a value equal to the 

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minimum amount required to be withheld.  The value of the Shares delivered or withheld shall be based on the fair market value of the Shares on the date as of which the amount of tax to be withheld shall be determined in accordance with applicable tax laws (the “Tax Date”).
(iii)    Each Election to have Shares withheld must be made prior to the Tax Date.  If a Participant wishes to deliver Shares in payment of taxes, the Participant must so notify the Company prior to the Tax Date.
(c)    Transferability.  
(i)    No Awards granted hereunder may be sold, transferred, pledged, assigned, or otherwise encumbered by a Participant except: 
(A)    by will; 
(B)    by the laws of descent and distribution;
(C)    pursuant to a domestic relations order, as defined in the Code, if permitted by the Committee and so provided in the Award Agreement or an amendment thereto; or 
(D)    if permitted by the Committee and so provided in the Award Agreement or an amendment thereto, Options may be transferred or assigned (1) to Immediate Family Members, (2) to a partnership in which Immediate Family Members, or entities in which Immediate Family Members are the owners, members or beneficiaries, as appropriate, are the partners, (3) to a limited liability company in which Immediate Family Members, or entities in which Immediate Family Members are the owners, members or beneficiaries, as appropriate, are the members, or (4) to a trust for the benefit of Immediate Family Members; provided, however, that no more than a de minimis beneficial interest in a partnership, limited liability company, or trust described in (2), (3) or (4) above may be owned by a person who is not an Immediate Family Member or by an entity that is not beneficially owned solely by Immediate Family Members.  
(ii)    To the extent that an Incentive Stock Option is permitted to be transferred during the lifetime of the Participant, it shall be treated thereafter as a Nonqualified Stock Option.  Any attempted assignment, transfer, pledge, hypothecation, or other disposition of Awards, or levy of attachment or similar process upon Awards not specifically permitted herein, shall be null and void and without effect.  The designation of a Designated Beneficiary shall not be a violation of this Section 12(c).
(d)    Share Certificates.  Any certificates or book or electronic entry ownership evidence for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

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(e)    No Limit on Other Compensation Arrangements.  Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of options, stock appreciation rights, restricted stock, and other types of Awards provided for hereunder (subject to stockholder approval of any such arrangement if approval is required), and such arrangements may be either generally applicable or applicable only in specific cases.
(f)    No Right to Employment.  The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of or as a consultant or adviser to the Company or any Subsidiary or in the employ of or as a consultant or adviser to any other entity providing services to the Company.  The Company or any Subsidiary or any such entity may at any time dismiss a Participant from employment, or terminate any arrangement pursuant to which the Participant provides services to the Company or a Subsidiary, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.  No Eligible Individual or other person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Eligible Individuals, Participants or holders or beneficiaries of Awards.
(g)    Governing Law.  The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware.
(h)    Severability.  If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(i)    No Trust or Fund Created.  Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.
(j)    No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
(k)    Compliance with Law.  The Company intends that Awards granted under the Plan, or any deferrals thereof, will comply with the requirements of Section 409A to the extent applicable.

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(l)    Deferral Permitted.  Payment of cash or distribution of any Shares to which a Participant is entitled under any Award shall be made as provided in the Award Agreement.  Payment may be deferred at the option of the Participant if provided in the Award Agreement.
(m)    Headings.  Headings are given to the subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
SECTION 13    
Term of the Plan.  Subject to Section 11(a), no Awards may be granted under the Plan after June 9, 2020, which is ten years after the date the Plan was last approved by the Company’s stockholders; provided, however, that Awards granted prior to such date shall remain in effect until such Awards have either been satisfied, expired or canceled under the terms of the Plan, and any restrictions imposed on Shares in connection with their issuance under the Plan have lapsed.

{N1464137.6}    14

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