Exhibit 10.23
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made as of
December 31, 2008 by and between Peter J. Rose
(“Rose”) and Expeditors International of Washington,
Inc., a Washington Corporation (“Expeditors”) and
amends and restates the original agreement dated November 2,
1994. In consideration of the mutual covenants and conditions set
forth herein, the parties hereby agree as follows:
1. Employment .
(a) In connection with the election
of Rose to the office of Chairman and Chief Executive Officer,
revocation of the prior employment agreement dated May 19,
1993 and for other good and lawful consideration, Rose’s
compensation and term of service was set forth in the agreement
dated November 2, 1994, which is amended and restated hereby
in order to conform certain provisions to Section 409A of the
Internal Revenue Code of 1986, as amended.
(b) Rose agrees to render services
to the best of his ability on a full-time basis so long as he shall
hold the office of Chairman and Chief Executive Officer and agrees
to perform such duties as the Board of Directors of Expeditors
shall from time to time direct.
2. Term . Subject to
Expeditors’ right to terminate Rose’s employment at the
pleasure of its Board of Directors as set forth in Paragraph 6
below, this Agreement shall be for a period (the “Initial
Term”) commencing on the date first set forth above and
ending with the date of the next annual meeting of the Board of
Directors. Rose’s employment and all the terms of this
Agreement shall be automatically extended for additional one year
terms so long as Rose shall be re-elected as Chairman and Chief
Executive Officer at subsequent annual meetings of the Board of
Directors. This employment relationship shall not be automatically
extended and shall expire in the event that either party hereto
shall have given written notice to the other at least thirty
(30) days prior to the expiration of the Initial Term, or any
subsequent term, of intent to terminate Rose’s services as
Chairman and Chief Executive Officer.
3. Compensation . For all
services rendered by Rose as Chairman and Chief Executive Officer
under this Agreement, Rose shall receive Base Salary and incentive
compensation, as established from time to time by the Compensation
Committee of the Board of Directors. Rose’s other benefits
will be subject to reasonable adjustment by action of
Expeditors’ Board of Directors.
4. Benefits . During the term
of service as Chairman and Chief Executive Officer, Rose shall be
entitled to participate fully in any policies 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.
5. Warranties . Rose
represents to Expeditors that he is free to enter into this
Agreement and that he has no commitment, arrangement or
understanding to or with any third party which restrains or is in
conflict with this Agreement which would operate to prevent him
from performing the services which he has agreed to
provide.
6. Termination . For purposes
of this Paragraph 6, Rose shall be considered to have had a
termination of employment or to have resigned as of the date that
the facts and circumstances indicate that it is reasonably
anticipated that Rose will perform no further services for
Expeditors and its affiliates after such date or that the level of
bona fide services that Rose is expected to perform is expected to
decrease permanently to no more than 45% of the average level of
bona fide services that Rose performed over the immediately
preceding 36-month period. Whether Rose has had a termination of
employment or has resigned will be determined in a manner
consistent with the definition of “separation from
service” under Code section 409A.
(a) For Cause . Expeditors
may terminate Rose’s employment hereunder upon two
(2) days’ prior written notice to Rose for cause, and
the salary and all other compensation referred to above shall cease
upon the effective date of any such termination for cause. In the
event of termination for cause, the terms of Paragraph 7 shall not
apply. However, Rose shall receive a lump sum payment which shall
be calculated as six (6) times Rose’s latest monthly
Base Salary and paid on the first day after the sixth month
anniversary of the termination of employment. “Base
Salary” as used herein shall exclude any incentive or bonus
compensation, any monthly automobile allowance, and any other
benefit or reimbursement. As used herein, the term
“cause” shall mean any act of Rose, which in the
reasonable judgment of Expeditors’ Board of Directors,
constitutes dishonesty, larceny, fraud, deceit, gross negligence, a
crime involving moral turpitude, willful misrepresentation to
shareholders, directors or officers, or a material breach of this
Agreement.
(b) Without
Cause . Expeditors may terminate Rose’s employment at any
time upon fifteen (15) days’ prior written notice and without
cause and the provisions of Paragraph 7 shall become applicable. In
addition to payments under Paragraph 7, Rose shall receive a lump
sum payment equal to one half ( 1 / 2 ) of the Total Cash Compensation
paid to Rose in the preceding twelve (12) month period which
shall be paid on the first day after the sixth month anniversary of
the termination of employment. “Total Cash
Compensation” as used herein includes Base Salary, any
incentive or bonus compensation, and any monthly automobile
allowance, but shall exclude any other benefit or expense
reimbursement.
(c) Resignation . In the
event that Rose shall resign as Chairman and Chief Executive
Officer, the salary and all other compensation referred to above
for services as an employee shall cease and the provisions of
Paragraph 7 shall become applicable. In addition, Rose shall
receive a lump sum payment which shall be calculated as six
(6) times Rose’s latest monthly Base Salary (as defined
in Paragraph 6(a)) and paid on the first day after the sixth month
anniversary of the resignation.
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(d) Death or Disability .
This Agreement and Rose’s employment and compensation shall
in any event terminate upon the death of Rose or the inability of
Rose to perform the duties and functions of his position for a
period of ninety (90) consecutive days due to sickness,
disability or any other cause beyond his control, unless Expeditors
grants Rose a leave of absence with or without all or a portion of
his salary or other benefits, as may be specified.
7. Post Employment Personal
Services . In the event that Rose’s employment
obligations hereunder shall terminate as provided in Paragraph 2,
Paragraph 6(b) or Paragraph 6(c), Rose agrees to render Post
Employment Personal Services to Expeditors for a period of ten
(10) years or until such time as Rose shall reach age seventy
(70) whichever shall come first according to the terms set
forth below.
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(a)
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Rose agrees to
perform services for a minimum of sixty (60) days per year
(but will in no event perform services in excess of 45% of the
average level of bona fide services that Rose performed over the
36-month period immediately preceding termination of employment or
resignation) to provide consulting and other personal appearances
in furtherance of Expeditors’ corporate policies as directed
by the designated representative of the Board of Directors (the
“Post Employment Personal Services”). Such service
shall include up to twenty (20) days of business travel to
mutually agreed locations.
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(b)
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As compensation
for such services, Rose shall receive an “Initial Annual
Payment” equal to the Base Salary received by Rose during his
final twelve (12) months of employment hereunder subject to
adjustment as follows:
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(1)
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In the event
that the Rose shall begin to provide Post Employment Personal
Services prior to reaching age sixty (60), the Initial Annual
Payment required hereunder shall be reduced by four percent
(4%) for each year, or fraction thereof, that Rose shall be
under such age.
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(2)
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The payment
required hereunder shall be adjusted annually for each year after
the payment of the Initial Annual Payment in an amount equal to the
change in the CPI as published by the Department of Labor, or
similar index generally regarded as a measure of the change in the
cost of living, for the Seattle metropolitan area.
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(3)
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The Initial
Annual Payment shall be paid on the first day after the sixth month
anniversary of the termination of employment or resignation, and
subsequent Annual Payments shall be paid on each anniversary of the
termination of employment or resignation.
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(c)
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The obligation
of Expeditors under this Paragraph shall terminate in the event of
death or disability as provided in Paragraph 6(d) or in the event
of Rose’s willful failure to perform Post Employment Personal
Services as required hereunder.
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(d)
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During the
period Post Employment Personal Services are being provided
hereunder, Rose shall be entitled to participate fully in any
policies which Expeditors may adopt generally for full time
employees including group medical, life insurance and other
employee benefits, provided that Rose shall not be entitled to
additional compensation for vacation, holid
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