~~B-1~~ |WHEREAS, Expeditors International of Washington, Inc. (the “Company”) maintains the 2002 Employee Stock Purchase Plan (the “2002 Plan”); and

WHEREAS, amendment of the 2002 Plan is now considered desirable to increase the number of shares of the Company’s common stock available for purchase under the 2002 Plan and to make certain other changes related to fractional shares and dividend reinvestment elections;

NOW, THEREFORE, IT IS RESOLVED that by virtue and in exercise of the amending power reserved to the Company under Section 19 of the 2002 Plan, effective upon approval by shareholders at the 2019 Annual Meeting, the 2002 Plan is hereby amended and restated as follows:

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

~~2017 OMNIBUS INCENTIVE~~2002 EMPLOYEE STOCK PURCHASE PLAN


~~Section 1.~~	~~Purpose; Effect on Prior Plan~~

~~(a)Purpose~~

1. Purpose.

The purpose of ~~the~~this 2002 Employee Stock Purchase Plan (the "2002 Plan") is to ~~promote the interests~~provide employees of Expeditors International of Washington, Inc. (the "Company"), its Subsidiaries and Consolidated Affiliates with an opportunity to purchase Stock of the Company ~~and its stockholders by aiding~~through accumulated payroll deductions, enabling such persons to acquire or increase a proprietary interest in the Company in ~~attracting~~order to strengthen the mutuality of interests between such persons and ~~retaining~~the Company's shareholders, and to provide a benefit that will assist the employer in competing to attract and retain employees ~~officers, consultants and non-employee Directors capable~~ of ~~assuring~~high quality. This 2002 Plan consists of two separate plans, one plan under which options ("Qualified Options") intended to qualify under Section 423 of the ~~future success~~Internal Revenue Code of 1986 (the "Code") are granted to employees of the Company or its Subsidiaries and another plan under which options ("Nonqualified Options") that do not so qualify are granted to ~~offer such persons incentives~~employees of Consolidated Affiliates. Qualified and Nonqualified Options are referred to ~~put forth maximum efforts for~~in the ~~success~~aggregate as "Options." It is the intention of the ~~Company’s business and to compensate such persons through various~~Company that the 2002 Plan qualify as an "employee stock ~~and cash-based arrangements and provide them with opportunities for stock ownership~~purchase plan" under Section 423 of the Code. Accordingly, the provisions of the 2002 Plan shall be construed in ~~the Company, thereby aligning the interests of such persons~~a manner consistent with the ~~Company’s stockholders.~~requirements of the Code.


~~Section 2.~~	~~Definitions~~

~~As used in~~2. Definitions.

For purposes of the 2002 Plan, the following terms shall ~~have the meanings~~be defined as set forth ~~below:~~below, in addition to such terms as defined in Section 1 hereof:

~~(a)“Affiliate” shall mean any entity that, directly or indirectly through one or more intermediaries, is controlled~~ "Account" means the account maintained on behalf of the participant by the ~~Company, as determined~~Custodian for the purpose of investing in Stock and engaging in other transactions permitted under the 2002 Plan.

"Administrator" means the person or persons designated to administer the 2002 Plan under Section 13(a).

"Base Pay" means regular straight time earnings, plus bonuses and overtime payments, payments for incentive compensation and other special payments except to the extent that any such item is specifically excluded from the definition of Base Pay by the Committee.

~~(b)~~“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award (including Performance-Based Compensation), Dividend Equivalent, Stock Award, Other Stock-Based Award or Cash Award granted under "Board" means the ~~Plan.~~

~~(c)~~“Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the Plan (including a document in an electronic medium) executed in accordance with the requirements of Section 10(b).

~~(d)“Board” shall mean the~~Company's Board of ~~Directors of the Company.~~Directors.

~~(e)“Cash Award” shall mean any right granted under Section 6(h) of the Plan~~

~~(f)“Cause” shall mean:~~

~~(i)~~the continued failure by a Participant to substantially perform Participant’s duties with the Company or any Affiliate (other than any such failure resulting from the Participant’s Disability) after a demand for substantial performance is delivered to the Participant that specifically identifies the manner "Change in which the Company believes that the Participant has not substantially performed the Participant’s duties, and the Participant has failed to resume substantial performance of the Participant’s duties on a continuous basis;

~~(ii)~~gross and willful misconduct during the course of employment (regardless of whether the misconduct occurs on the Company’s premises), including, without limitation, theft, assault, battery, malicious destruction of property, arson, sabotage, embezzlement, harassment, acts or omissions which violate the Company’s rules or policies (such as breaches of confidentiality), or other conduct which demonstrates a willful or reckless disregard of the interests of the Company or its Affiliates; or

~~(iii)Participant’s conviction of a felony.~~

~~(g)“Change in Control” shall mean any~~Control" means either one of the following:

(i)An when any ‘person,‘ as such term is used in Sections 13(d) and 14(d) of the Exchange Act ~~Person~~(other than the Company, a subsidiary thereof or a Company employee benefit plan, including any trustee of such plan acting as trustee) becomes the ~~beneficial owner (within the meaning of~~‘beneficial owner‘ (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more ~~than 50%~~ of the combined voting power of the ~~Company’s~~Company's then outstanding ~~Voting Securities, except that~~securities; or (ii) the following will not constitute a Change in Control: (A) any acquisition of securities of the Company by an Exchange Act Person directly or indirectly from the Company for the purpose of providing financing to the Company; (B) any formationoccurrence of a ~~Group consisting solely of beneficial owners of~~transaction requiring shareholder approval, and involving the Company’s Voting Securities as of the effective date of this Plan; (C) or any repurchase or other acquisition by the Company of its Voting Securities that causes any Exchange Act Person to become the beneficial owner of more than

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-2~~

50% of the Company’s Voting Securities. If, however, an Exchange Act Person or Group referenced in clause (A), (B) or (C) above acquires beneficial ownership of additional Company Voting Securities after initially becoming the beneficial owner of more than 50% of the combined voting power of the Company’s Voting Securities by one of the means described in those clauses, then a Change in Control will be deemed to have occurred.

~~(ii)~~Individuals who are Continuing Directors cease for any reason to constitute a majority of the members of the Board for any reason other than death, retirement or disability of one or more Continuing Directors.

~~(iii)~~The consummation of a Corporate Transaction unless, immediately following such Corporate Transaction, (i) all or substantially all of the Persons who were the beneficial owners of the Company’s Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, at least 60% of the combined voting power of the then outstanding Voting Securities of the surviving or acquiring entity (or its Parent) resulting from such Corporate Transaction in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Company’s Voting Securities, or (ii) at least 60% of the directors of the surviving or acquiring entity (or its Parent) are Continuing Directors.

~~(iv)Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.~~

Notwithstanding the foregoing, to the extent that any Award constitutes a deferral of compensation subject to Section 409A, and if that Award provides for a change in the time or form of payment upon a Change in Control, then no Change in Control shall be deemed to have occurred upon an event described in this Section 2(g) unless the event also constitutes a change in ownership or effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under Section 409A. Further, an Award Agreement may provide that the definition of Change in Control shall be limited to events described in this Section 2(g) that also constitute a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, in each case as defined under Section 409A, or an Award Agreement may explicitly provide a different definition of Change in Control in which case the definition in the Award Agreement will govern.

~~(h)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.~~

~~(i)~~“Committee” shall mean the Compensation Committee of the Board or any such other committee designated by the Board to administer the Plan. The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b‑3 (but never less than two Directors), and each member of the Committee shall be a “Non-Employee Director” within the meaning of Rule 16b‑3, an “outside director” within the meaning of Section 162(m), and an independent director within the meaning of the rules and regulations of the NASDAQ Stock Market, including the requirements under Nasdaq Rule 5605(d) for compensation committee members.

~~(j)“Company” shall mean Expeditors International of Washington, Inc., a Washington corporation, or any successor corporation.~~

~~(k)~~“Continuing Director” means an individual (A) who is, as of the effective date of the Plan, a director of the Company, or (B) who becomes a director of the Company after the effective date hereof and whose initial election, or nomination for election by the Company’s stockholders, was approved by at least a majority of the then Continuing Directors, but excluding for purposes of this clause (B) any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest or actual or threatened solicitation of proxies by or on behalf of a Person other than the Board.

~~B-3~~ | ~~Expeditors International of Washington, Inc.~~

~~(l)“Corporate Transaction” means (i) a~~ sale ~~or other disposition~~ of all or substantially all of the assets of the Company or ~~(ii) a~~the merger ~~consolidation, statutory share exchange or similar transaction involving~~of the Company ~~regardless~~with or into another corporation.

"Committee" means the Compensation Committee of ~~whether~~the Board or such other committee of two or more non-employee directors that may be designated by the Board to administer the 2002 Plan.

45 | Expeditors International of Washington, Inc.

"Consolidated Affiliates" means entities where the Company maintains unilateral control over assets and operations and where the existence of the parent subsidiary relationship is ~~the surviving corporation.~~maintained by means other than record ownership of voting stock.

~~(m)“Covered Employee” shall mean an Eligible Person who is,~~ "Custodian" means a custodian or ~~who the Committee reasonably expects may become, a covered employee within the meaning of Section 162(m).~~

~~(n)“Date of Grant” shall mean the date on which the Committee approves the grant of an award under the Plan, or such later date~~any successor thereto as ~~may be specified~~appointed by the Committee ~~on the date the Committee approves the Award.~~

~~(o)“Director” shall mean a member of the Board.~~

~~(p)“Disability” shall mean (except as otherwise provided in an Award Agreement) qualifying for and receiving disability benefits under the Company’s long-term disability programs as in effect~~ from time to time.

~~(q)“Dividend Equivalent” shall mean~~ "Employee" means any ~~right granted under Section 6(e)~~individual employed continuously for at least sixty (60) days prior to the Enrollment Date by the Company, Subsidiary or a Consolidated Affiliate as a Full Time Employee.

"Enrollment Date" means the first day of the ~~Plan.~~next Offering Period.

~~(r)“Effective Date” shall mean the date on which the stockholders of the Company approve the Plan.~~

~~(s)~~“Eligible Person” shall mean any employee, officer, non-employee Director, consultant or advisor providing services to the Company or any Affiliate who the Committee determines to be an Eligible Person, or any such person to whom an offer of employment or engagement with the Company or any Affiliate is extended. Notwithstanding the foregoing, a consultant or advisor is considered an Eligible Person only if (i) they are natural persons, (ii) they provide bonafide services to the Company and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

~~(t)“Exchange Act” shall mean~~ "Exchange Act" means the Securities Exchange Act of 1934 as amended.

~~(u)“Exchange Act Person”~~ "Exercise Date" means the last day of each Offering Period.

"Fair Market Value" means the last sale price for the Common Stock of the Company as reported on the National Association of Securities Dealers Automated Quotation System, or if the stock is traded on another stock exchange, the closing price for the stock on the principal such exchange or, if that day is not a Trading Day, then on the latest previous Trading Day.

"Full Time Employee" means an employee whose customary employment with the Company, Subsidiary or Consolidated Affiliate is more than 20 hours per week and more than five months per year.

"Offering Period" means the approximately one-year period commencing on the first Trading Day of August and terminating on the last Trading Day of the following July. The beginning and ending dates and duration of Offering Periods may be changed pursuant to Section 4 of the 2002 Plan.

"Purchase Price" means an amount equal to 85 percent of the Fair Market Value of a share of Stock on the Enrollment Date or 85 percent of the Fair Market Value of a share of Stock on the Exercise Date, whichever is lower.

"Reserves" means the number of shares of Stock covered by all options under the 2002 Plan which have not yet been exercised and the number of shares of Stock which have been authorized for issuance under the 2002 Plan, but which have not yet become subject to options.

"Stock" means the Company's Common Stock, and such other securities as may be substituted for Stock pursuant to Section 18 hereof.

"Subsidiary" means any ~~natural~~corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

"Trading Day" means a day on which the New York Stock Exchange is open for trading.

3. Eligibility.

(a) All Employees (as determined in accordance with Section 2 hereof) of the Company, Subsidiary or Consolidated Affiliate on a given Enrollment Date shall be eligible to participate in the 2002 Plan, subject to Section 5(a).

(b) Any provisions of the 2002 Plan to the contrary notwithstanding, no Employee shall be granted an option under the 2002 Plan (i) to the extent that, immediately after the grant, such Employee (or any other person ~~entity~~ whose Stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock and/or ~~Group other than (i)~~hold outstanding options to purchase such stock possessing five percent or more of the total combined voting power or value of all classes of the capital stock of the Company or of any ~~Subsidiary;~~Subsidiary, (ii) ~~any~~to the extent that his or her rights to purchase stock under all employee ~~benefit plan (or related trust) sponsored or maintained by~~stock purchase plans of the Company ~~or any Affiliate; (iii) an underwriter temporarily holding securities in connection with~~and its Subsidiaries accrue at a ~~registered public offering~~rate which exceeds $25,000 worth of such securities; or (iv) an entity whose Voting Securities are beneficially owned by the beneficial owners of the Company’s Voting Securities in substantially the same proportions as their beneficial ownership of the Company’s Voting Securities.

~~(v)“Fair Market Value” shall mean, with respect to any property (including, without limitation, any Shares or other securities),~~stock (determined at the fair market value of the shares at the time such ~~property determined by~~option is granted) for each calendar year in which such ~~methods~~option is outstanding at any time, or ~~procedures as~~(iii) in excess of 3,000 shares of stock for each calendar year in which such option is outstanding at any time.

(c) All participants in the 2002 Plan shall ~~be established from time~~have equal rights and privileges (subject to ~~time by~~ the ~~Committee. Notwithstanding~~terms of the ~~foregoing, the Fair Market Value of one Share as of a~~2002 Plan) with respect to options outstanding during any given ~~date~~Offering Period.

4. Offering Periods.

The 2002 Plan shall ~~mean (a) if the Shares are readily tradable on~~have consecutive Offering Periods with an ~~established securities market (as determined under Section 409A), the price of one Share shall be the closing sales price for a Share~~initial Offering Period commencing on the principal securities market on which it trades on the day immediately preceding the date for which the fair market value is being determined, or if no sale of Shares occurred on that date, on the next preceding date on which a sale of Shares occurred, as reportedfirst Trading Day in August, 2002 and terminating in the Wall Street Journal or comparable reporting service; or (b) if the Shares are not readily tradable on an established securities market (as determined under Section 409A), then Fair Market Value will be determined by the Board, or any duly authorizedlast Trading Day of July, 2003. The Committee ~~of the Board, in its sole discretion, as a result of a reasonable application of a reasonable valuation method that satisfies the requirements of Section 409A.~~

~~(w)“Full Value Award” shall mean an Award other than an Option or Stock Appreciation Right.~~

~~(x)“Good Reason”~~ shall have the ~~meaning ascribed~~power to ~~it in~~change the ~~applicable Award Agreement.~~

~~(y)“Incentive Stock Option” shall mean an option granted under Section 6(a)(v)~~beginning date, ending date and duration of ~~the Plan that is intended~~Offering Periods with respect to ~~meet the requirements of Section 422 of the Code or any successor provision.~~

~~(z)“Nonemployee Director” shall mean a Director who is not an employee of the Company or any Affiliate.~~future offerings

Notice of Annual Meeting & Proxy Statement | ~~B-4~~ 46

~~(aa)“Nonqualified Stock Option” shall mean an option granted~~without shareholder approval if such change is announced at least five days prior to the scheduled beginning of the first Offering Period to be affected thereafter, provided that Offering Periods will in all cases comply with applicable limitations under Section ~~6(a)~~423(b)(7) of the ~~Plan that is not intended to~~Code.

5. Participation.

(a) Any person who will be an ~~Incentive Stock Option.~~eligible Employee on a given Enrollment Date may become a participant in the 2002 Plan by completing a subscription agreement authorizing payroll deductions and filing it with the Administrator before such Enrollment Date.

~~(ab)“Option”~~ (b) Payroll deductions for a participant shall ~~mean an Incentive Stock Option~~commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.

6. Payroll Deductions.

(a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in a ~~Nonqualified Stock Option~~regular amount, expressed as a percentage, not to ~~purchase Shares~~exceed 10% of Base Pay.

(b) All payroll deductions made for a participant shall be credited to his or her Account under the 2002 Plan. A participant may not make any additional payments into such Account.

(c) A participant may discontinue his or her participation in the 2002 Plan as provided in Section 10 hereof. Unless otherwise authorized by the Committee, a participant may not change his or her payroll deduction rate during any Offering Period. Absent Committee authorization, any change in the rate shall be effective as of the ~~Company.~~next Offering Period. A participant's subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

~~(ac)“Other Stock-Based Award” shall mean any right granted under~~ (d) The foregoing notwithstanding, to the extent necessary to comply with Section ~~6(g)~~423(b)(8) of the ~~Plan.~~

~~(ad)“Participant” shall mean an Eligible Person who~~Code and Section 3(b) hereof, a participant's payroll deductions may be terminated at such time during any Offering Period which is ~~granted an Award under~~scheduled to end during the ~~Plan, provided, however,~~current calendar year (the "Current Offering Period") that the aggregate of all payroll deductions accumulated with respect to the Current Offering Period equals $21,250 (or such other limit as may apply under Code Section 423(b)(8)). Payroll deductions shall recommence at the rate provided in such participant's subscription agreement (as previously on file or as changed in accordance with Section 6(c)) at the beginning of the next Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.

(e) The Company, Subsidiary or Consolidated Affiliate is authorized to withhold from any payment to be made to a participant, including any payroll and other payments not related to the 2002 Plan, amounts of withholding and other taxes due in connection with any transaction under the 2002 Plan, including any disposition of shares acquired under the 2002 Plan, and a participant's enrollment in the 2002 Plan will be deemed to constitute his or her consent to such withholding. At the time of a participant's exercise of an ~~Award~~option or disposition of shares acquired under the 2002 Plan, the Company may require the participant to make other arrangements to meet tax withholding obligations as a condition to the exercise of rights or distribution of shares or cash from the participant's Account. In addition, a Participant may be required to advise the Company of sales and other dispositions of Stock acquired under the 2002 Plan in order to permit the Company to comply with tax laws and to claim any tax deductions to which the Company may be entitled with respect to the 2002 Plan.

7. Grant of Option.

On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an ~~Eligible Person~~option to ~~whom an offer~~purchase on the Exercise Date of ~~employment or engagement~~such Offering Period, at the applicable Purchase Price, up to a number of shares of Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's Account as of the Exercise Date by the applicable Purchase Price; provided that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof.

8. Exercise of Option.

Participant's option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of shares subject to option shall be purchased for such participant at the applicable Purchase Price with the ~~Company~~accumulated payroll deductions in his or ~~an Affiliate has been extended,~~her Account. Shares purchased shall include fractional shares calculated to at least three decimal places, unless otherwise determined by the ~~Award will become effective, and the Eligible Person will become a Participant, only upon such Eligible Person’s commencement of employment or service with the Company or an Affiliate.~~Committee. If fractional

~~(ae)“Performance Award” shall mean any right granted under Section 6(d) of the Plan.~~

~~(af)~~“Performance Goals” shall mean, for purposes of Section 6(d)(i) of the Plan, performance goals based on one or more of the following performance criteria, either individually, alternatively or in any combination, applied on a corporate, subsidiary, division, business unit or line of business basis: (a) revenues (net or gross); (b) profit (including net profit, pre-tax profit, gross profit, operating profit, economic profit or other corporate profit measures); (c) earnings (including earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, earnings per share (basic or diluted), book value per share or other corporate earnings measures); (d) income (including net income (before or after taxes), operating income or other corporate income measures); (e) cash (including cash flow, free cash flow or operating cash flow, net cash provided by operations, cash flow in excess of cost of capital or other cash measures); (f) return measures (including return on assets (gross or net), return on equity, return on investment, return on invested capital, return on operating capital, return on capital employed, return on sales, and cash flow return on assets, capital, investments, equity or sales); (g) operating margin or profit margin; (h) contribution margin (gross or by business unit); (i) market capitalization or total enterprise value, alone or as a multiple of revenue or earnings; (j) price/earnings multiple; (k) stock price or performance; (l) total stockholder return; (m) working capital; (n) sales (including adjustments for commissions); (o) accounts receivable or days sales outstanding; (p) volume growth; (q) expenses (including operating or administrative expense in the absolute or as a percent of revenue, expense management, expense ratio, expense efficiency ratios, expense reduction measures or other expense measures); (r) operating efficiency or productivity measures or ratios; (s) safety measures; (t) dividend payout levels; (u) internal rate of return or increase in net present value; and (v) strategic business criteria consisting of one or more goals regarding, among other things, implementation or completion of critical projects or processes, acquisitions and divestitures, customer satisfaction, employee satisfaction, safety standards, strategic plan development and implementation, and agency ratings of financial strength.

~~(ag)“Person” shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.~~

~~(ah)“Plan” shall mean this~~47 | Expeditors International of Washington, Inc. ~~2017 Omnibus Incentive Plan, as amended from time to time.~~

~~(ai)~~“Qualified Performance-Based Compensation” means an Award to a Covered Employee that is intended to constitute “qualified performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code and Treas. Reg. Section 1.162-27(e).

~~(aj)“Qualifying Termination” means an involuntary termination of employment, other than due to death, disability or Cause, or a voluntary termination with Good Reason~~

~~(ak)“Restricted Stock” shall mean any Share granted under Section 6(c) of the Plan.~~

~~(al)~~“Restricted Stock Unit” shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.

~~(am)“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation.~~

~~B-5~~ | ~~Expeditors International of Washington, Inc.~~

~~(an)~~“shares are not to be purchased for a participant's Account, any payroll deductions accumulated in a participant's Account not sufficient to purchase a full share shall be retained in the participant's Account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section ~~162(m)” shall mean Section 162(m)~~10 hereof. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her.

9. Delivery of Shares; Participant Accounts.

(a) At or as promptly as practicable after the Exercise Date for an Offering Period, the Company will deliver the shares of Stock purchased to the Custodian for deposit into the participant's Account.

(b) Cash dividends on any Stock credited to a participant's Account may, upon a participant's election, be reinvested in additional shares of Stock; such amounts will not be available in the form of cash to participants. All cash dividends paid on Stock credited to participants' Accounts will be paid over by the Company to the Custodian at the dividend payment date. The Custodian will aggregate all purchases of Stock in connection with the 2002 Plan for a given dividend payment date. Purchases of Stock for purposes of dividend reinvestment will be made as promptly as practicable (but not more than 30 days) after a dividend payment date. The Custodian will make such purchases, as directed by the Committee, in transactions on any securities exchange upon which Stock is traded, otherwise in the over-the-counter market, or in negotiated transactions. Any shares of Stock distributed as a dividend or distribution in respect of shares of Stock or in connection with a split of the ~~Code,~~Stock credited to a participant's Account will be credited to such Account. In the event of any other non-cash dividend or ~~any successor provision,~~distribution in respect of Stock credited to a participant's Account, the Custodian will, if reasonably practicable and at the ~~applicable Treasury Regulations promulgated thereunder.~~

~~(ao)“Section 409A” shall mean Section 409A~~direction of the ~~Code,~~Committee, sell any property received in such dividend or ~~any successor provision,~~distribution as promptly as practicable and ~~Treasury Regulations and other applicable guidance thereunder.~~

~~(ap)“Share” or “Shares” shall mean a share or~~use the proceeds to purchase additional shares of ~~common stock, $.01 par value per share,~~Common Stock in the same manner as cash paid over to the Custodian for purposes of dividend reinvestment.

(c) Each participant will be entitled to vote the number of shares of Stock credited to his or her Account (including any fractional shares credited to such Account) on any matter as to which the approval of the ~~Company~~Company's shareholders is sought. If a participant does not vote or grant a valid proxy with respect to shares credited to his or her Account, such ~~other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of~~shares will be voted by the ~~Plan.~~

~~(aq)“Specified Employee” shall mean a specified employee as defined in Section 409A(a)(2)(B) of the Code and applicable regulations under Section 409A, determined~~Custodian in accordance with any stock exchange or other rules governing the Custodian in the voting of shares held for customer accounts. Similar procedures ~~established~~will apply in the case of any consent solicitation of Company shareholders.

10. Withdrawal of Payroll Deductions or Shares; Termination of Employment.

(a) If a participant terminates his or her payroll deduction rate during an Offering Period, the cash balance contributed for the year shall be refunded as soon as practicable. Payroll deductions shall not automatically resume at the beginning of the succeeding Offering Period unless such individual delivers to the Administrator a new subscription agreement.

(b) Upon a participant's ceasing to be an Employee for any reason (including upon the participant's death), he or she shall be deemed to have elected to withdraw from the 2002 Plan and the payroll deductions credited to such participant's Account during the Offering Period but not yet used to exercise the option shall be returned to such participant as soon as practicable or, in the case of his or her death, to the person or persons entitled thereto under Section 14 hereof, and such participant's option shall be automatically terminated.

(c) A participant seeking to withdraw or transfer shares of Stock must give instructions to the Custodian in such manner and form as may be prescribed by the Committee and the Custodian, which instructions will be acted upon as promptly as practicable. Withdrawals and transfers will be subject to any fees imposed in accordance with Section 10(e) hereof.

(d) Upon a participant's ceasing to be an Employee for any reason, the Custodian will continue to maintain the participant's Account until the earlier of such time as the participant withdraws or transfers all Stock in the Account or one year after the participant ceases to be employed by the Company, its Subsidiaries or Consolidated Affiliates. At the expiration of such one-year period, the assets in participant's Account shall be withdrawn or transferred as elected by the participant or, in the absence of such election, as determined by the Committee.

(e) Costs and expenses incurred in the administration of the 2002 Plan and maintenance of Accounts will be paid by the Company, including annual fees of the Custodian and any brokerage fees and commissions for the purchase of Stock upon reinvestment of dividends and distributions. The foregoing notwithstanding, the Custodian may impose or pass through a reasonable fee for the withdrawal of Stock in the form of stock certificates (as permitted under Section 10(c)), and reasonable fees for other services unrelated to the purchase of Stock under the 2002 Plan, to the extent approved in writing by the Company and ~~applied uniformly~~communicated to participants. In no

Notice of Annual Meeting & Proxy Statement | 48

circumstance shall the Company pay any brokerage fees and commissions for the sale of Stock acquired under the 2002 Plan by a participant.

11. Interest.

No interest shall accrue on the payroll deductions of a participant in the 2002 Plan.

12. Stock.

(a) The maximum number of shares of Stock which shall be made available for sale under the 2002 Plan shall be fifteen million (15,000,000) shares plus any shares transferred to Reserves from the 1988 Employee Stock Purchase Plan ("1988 Plan") pursuant to Section 24, subject to further adjustment as provided in Section 18 hereof. If, on a given Exercise Date, the number of shares with respect to ~~all plans maintained~~which options are to be exercised exceeds the number of shares then available under the 2002 Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.

(b) The participant shall have no interest or voting right in shares purchasable upon exercise of his or her option until such option has been exercised.

(c) Shares acquired through dividend reinvestment shall be purchased on the open market unless otherwise determined by the ~~Company that are subject to Section 409A.~~Committee.

~~(ar)“Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.~~13. Administration.

~~(as)“Stock Award” shall mean any Share granted under Section 6(f) of the Plan.~~

~~(at)“Subsidiary” shall mean a “subsidiary corporation”, as defined in Code Section 424(f), of the Company.~~

~~Section 3.Administration~~

(a)~~Power and Authority of the Committee~~

The 2002 Plan shall be administered by the Committee. ~~Subject to the express provisions of the Plan and to applicable law, the~~The Committee shall have full ~~power~~ and final authority ~~to: (i) designate Participants; (ii)~~to construe, interpret and apply the terms of the 2002 Plan, to determine ~~the type or types of Awards~~eligibility and to ~~be granted to each Participant~~adjudicate all disputed claims filed under the ~~Plan; (iii) determine the number of Shares to be covered by (or the method by which payments or other rights are to be calculated~~2002 Plan. The Committee may, in connection with) each Award; (iv) determine the terms and conditions of any Award or Award Agreement, including any terms relating to vesting conditions, the forfeiture of any Award, and the forfeiture, recapture or disgorgement of any cash, Shares or other amounts payable with respect to any Award; (v) amend the terms and conditions of any Award or Award Agreement, provided, however, that, except as otherwise permitted in connection with an event as provided under Section 4(c) hereof or in connection with a Change in Control, the Committee shall not, without stockholder approval, (1) reprice, adjust or amend the exercise price of Options or the grant price of Stock Appreciation Rights previously awarded to any Participant, whether through amendment, cancellation and exchange for cash or another Award, a replacement grant, or any other means, (2) authorize the Company to repurchase Options for cash from a Participant if the current Fair Market Value of the Shares underlying the Options is lower than the exercise price per share of the Options, or (3) authorize the Company to repurchase Stock Appreciation Rights for cash from a Participant if the current Fair Market Value of the Shares underlying the Stock Appreciation Rights is lower than the grant date per Share of the Stock Appreciation Rights; (vi) accelerate the exercisability of any Award or waive any restrictions relating to any Award; (vii) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder of the Award or the Committee, subjectits discretion, delegate authority to the ~~requirements of Section 409A; (ix) interpret~~Administrator. Every finding, decision and administer the Plan and any instrument or agreement, including any Award Agreement, relating to the Plan; (x) 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; (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and (xii) adopt such modifications, rules, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of non-U.S. jurisdictions in which the Company or an Affiliate may operate, including, without limitation, establishing any special

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-6~~

rules for Affiliates, Eligible Persons or Participants located in any particular country, in order to meet the objectives of the Plan and to ensure the viability of the intended benefits of Awards granted to Participants located in such non-United States jurisdictions. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made ~~at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award or Award Agreement, and any employee of the Company or any Affiliate.~~

~~(b)Delegation~~

The Board may also delegate the Committee’s powers and duties under the Plan to one or more senior executive officers (including a Director who is also a senior executive officer of the Company) or another committee of Directors, subject to such terms, conditions and limitations as the Board may establish in its sole discretion; provided, however, that the Board shall not delegate the Committee’s powers and duties under the Plan to a senior executive officer (i) with regard to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act, or (ii) in such manner as would cause the Plan not to comply with the requirements of Section 162(m). The Committee shall be permitted to delegate responsibility for performing certain ministerial functions under the Plan to any appropriate officer or employee of the Company. In the event that the Committee’s authority is delegated to officers or employees in accordance with the foregoing, all provisions of the Plan relating to the Committee shall be interpreted in a manner consistent with the foregoing by treating any such reference as a reference to such officer or employee for such purpose. Any action undertaken in accordance with the Board’s or Committee’s delegation of authority hereunder shall have the same force and effect as if such action were undertaken directly by the Committee ~~and~~or Administrator shall, ~~be deemed for all purposes of the Plan~~ to ~~have been taken by the Committee.~~

~~(c)Power and Authority of the Board~~

Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan, unless the exercise of such powers and duties by the Board would cause the Plan not to comply with the requirements of Rule 16b‑3, Section 162(m), applicable corporate law or stock exchange listing rules.

~~(d)Indemnification~~

To the full extent permitted by law, ~~(i) no member~~be final and binding upon all parties (except for any reserved right of the ~~Board,~~Committee to review a finding, decision or determination of the Administrator). The Committee, Administrator, and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any executive officer, other officer or employee of the Company, Subsidiary, Consolidated Affiliate, the Company's independent auditors, consultants or any other agents assisting in the administration of the 2002 Plan. Members of the Committee or Administrator and any ~~person to whom~~officer or employee of the Company, Subsidiary or Consolidated Affiliate acting at the direction or on behalf of the Committee ~~delegates authority under the Plan~~ shall not be personally liable for any action or determination taken or made in good faith with respect to the ~~Plan or any Award made under the~~2002 Plan, and ~~(ii)~~shall, to the ~~members of the Board, the Committee~~extent permitted by law, be fully indemnified and ~~each person to whom the Board or the Committee delegates authority under the Plan shall be entitled to indemnification~~protected by the Company with respect to any such action or determination.

(b) The Custodian will act as custodian under the 2002 Plan, and will perform such duties as are set forth in the 2002 Plan and in any agreement between the Company and the Custodian. The Custodian will establish and maintain, as agent for each participant, an Account and any sub-accounts as may be necessary or desirable for the administration of the 2002 Plan.

14. Designation of Beneficiary.

(a) A participant may file a written designation of a beneficiary who is to receive shares and cash, if any, from the participant's Account under the 2002 Plan in the event of (i) such participant's death subsequent to an Exercise Date on which the option is exercised, but prior to a distribution to such participant of shares or cash then held in the participant's Account or (ii) such participant's death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.

(b) Subject to spousal consent, if applicable, such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the 2002 Plan who is living at the time of such participant's death, any shares or cash otherwise deliverable under Section 14(a) shall be delivered to the participant's estate.

15. Transferability.

Neither payroll deductions credited to a participant's Account nor any rights with regard to ~~such actions~~the exercise of an option or to receive shares under the 2002 Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and ~~determinations. The provisions of this paragraph shall be in addition to such other rights of indemnification as a member of the Board, the Committee~~distribution or ~~any other person may have by virtue of such person’s position with the Company.~~


~~Section 4.~~	~~Shares Available for Awards~~

~~(a)Shares Available~~

~~Subject to adjustment~~ as provided in Section ~~4(c) of~~14 hereof) by the ~~Plan, the aggregate number of Shares that may be issued under all Awards under the Plan shall equal 2,500,000Shares. The aggregate number of Shares that may be issued under all Awards under the Plan~~participant. Any such attempt at assignment, transfer, pledge or other disposition shall be ~~reduced by Shares subject to Awards granted under the Plan in accordance with the Share counting rules described in Section 4(b) below.~~without effect.

~~B-7~~ 49 | Expeditors International of Washington, Inc.

~~Shares to be issued under the Plan will be authorized but unissued Shares~~16. Use of Funds.

All payroll deductions received or ~~Shares that have been reacquired~~held by the Company under the 2002 Plan may be used by the Company for any corporate purpose, and ~~designated as treasury shares.~~the Company shall not be obligated to segregate such payroll deductions.

~~(b)Counting Shares~~17. Reports.

~~For purposes~~ An individual Account shall be maintained by the Custodian for each participant in the 2002 Plan. Statements of ~~this Section 4(b), if an Award entitles~~Account shall be given to each participant at least annually, which statements shall set forth the ~~holder thereof to receive or purchase Shares,~~amounts of payroll deductions, the Purchase Price, the number of ~~Shares covered~~shares purchased, any remaining cash balance, and other information deemed relevant by ~~such Award~~the Committee.

18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, or ~~to which such Award relates~~Change in Control.

(a) Changes in Capitalization. The Committee shall ~~be counted on~~proportionately adjust the ~~Date of Grant of such Award against~~Reserves and the ~~aggregate number of Shares available for granting Awards under the Plan. Where~~price per share and the number of ~~Shares subject to an Award is variable on~~shares of Stock covered by each option under the ~~Date of Grant,~~2002 Plan which has not yet been exercised for any increase or decrease in the number of ~~Shares to be counted against the share reserve prior to the settlement~~issued shares of Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Award shall be the maximum number of Shares that could be received under that particular Award. Where two or more types of Awards are granted to a Participant in tandem with each other, such that the exercise of one type of Award with respect to a number of Shares cancels at least an equal number of Shares of the other, the number of Shares to be counted against the share reserve shall be the largest number of Shares that would be counted against the share reserve under either of the Awards.

~~(i)Shares Added Back to Reserve~~

. Subject to the limitations in (ii) below, if any Shares covered by an Award or to which an Award relates are not purchased or are forfeited or are reacquired by the Company (including Shares covered by an Award that is settled in cash), or if an Award otherwise terminates or is cancelled without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture, reacquisition by the Company, termination or cancellation, shall again be available for granting Awards under the Plan.

~~(ii)Shares Not Added Back to Reserve~~

. Notwithstanding anything to the contrary contained in this Section 4, including Section 4(b)(i) above, the following Shares shall not be added to the Shares authorized for grant under Section 4(a) and will not be available for future grants of Awards under the Plan: (A) Shares tendered by a Participant or withheld by the Company in payment of the exercise price of an Option under the Plan; (B) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award under the Plan; (C) Shares subject to a Stock, Appreciation Right under the Plan that are not issued in connection with the stock settlement on exercise thereof; or (D) Shares purchased on the open market with the cash proceeds from the exercise of Options under the Plan.

~~(iii)Cash-Only Awards~~

~~Awards that do not entitle the holder thereof to receive or purchase Shares shall not be counted against the aggregate number of Shares available for Awards under the Plan.~~

~~(iv)Substitute Awards Relating to Acquired Entities~~

Shares issued under Awards granted in substitution for awards previously granted by an entity that is acquired by or merged with the Company or an Affiliate shall not be counted against the aggregate number of Shares available for Awards under the Plan, nor shall they reduce the Shares authorized for grant to a Participant in any calendar year.

~~(v)Effect of Plans Operated by Acquired Companies~~

If a Company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-8~~

used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan. Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Eligible Persons prior to such acquisition or combination.

~~(c)Adjustments~~

~~. In the~~extraordinary corporate event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, other securities or other property), stock split or a combination or consolidation of the outstanding Shares into a lesser number of shares, is declared with respect to the Shares, the authorization limits under Sections 4(a) and 4(d) shall be increased or decreased proportionately, and the Shares then subject to each Award shall be increased or decreased proportionately without any change in the aggregate purchase price therefor. In the event the Shares shall be changed into or exchanged for a different number or class of shares of stock or securities of the Company or of another corporation, whether through recapitalization, reorganization, reclassification, 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 any other similar corporate transaction or eventwhich affects the ~~Shares such that an equitable adjustment would be required~~Stock in order to prevent dilution or enlargement of the ~~benefits or potential benefits intended~~rights of participants. The determination of the Committee with respect to ~~be made available under the Plan, then the authorization limits under Sections 4(a) and 4(d) shall be adjusted proportionately, and an equitable~~any such adjustment shall be ~~made to each Share subject to an Award such that no dilution~~final, binding and conclusive.

(b) Dissolution or ~~enlargement~~Liquidation. In the event of the ~~benefits~~proposed dissolution or ~~potential benefits occurs. Each~~liquidation of the Company, the Offering Period shall terminate immediately prior to the consummation of such ~~Share~~proposed action, unless otherwise provided by the Committee.

(c) Change in Control. In the event of a Change in Control, the Committee shall shorten the Offering Period then ~~subject to each Award~~in progress by setting a new Exercise Date (the "New Exercise Date"). The New Exercise Date shall be ~~adjusted~~before the date that will constitute the Change in Control. The Committee shall notify each participant in writing, at least ten business days prior to the ~~number~~New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and ~~class of shares into which each outstanding Share~~that the participant's option shall be ~~so exchanged~~exercised automatically on the New Exercise Date, unless prior to such ~~that no dilution or enlargement of~~date the ~~benefits occurs, all without change in~~participant has withdrawn from the aggregate purchase price for the Shares then subject to each Award. Action by the Committee pursuant to this Section 4(c) may include adjustment to any or all of: (i) the number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards or be delivered under the Plan; (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards; (iii) the purchase price or exercise price of a Share under any outstanding Award or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments the Committee determines to be equitable.

~~(d)Award Limitations under the Plan~~

~~(i)Section 162(m) Limitation for Options and Stock Appreciation Rights~~

The maximum aggregate number of Shares that may subject to Options and/or Stock Appreciation Rights that are granted during any calendar year to any Participant shall not exceed 300,000 Shares, subject to adjustmentOffering Period as provided in Section ~~4(c) of~~10 hereof.

19. Amendment or Termination.

(a) The Board may at any time and for any reason terminate or amend the ~~Plan (for avoidance of the doubt, this limit applies, in the aggregate, to all Awards subject to this paragraph (i)).~~

~~(ii)Section 162(m) Limitation for Full Value Awards Denominated in Shares~~

The maximum aggregate number of Shares that may be the subject of Full Value Awards intended to be Qualified Performance-Based Compensation that are denominated in Shares or Share equivalents that may be granted to any Participant during any calendar year shall not exceed 300,000 Shares, subject to adjustment2002 Plan. Except as provided in Section ~~4(c) of the Plan.~~

~~(iii)Section 162(m) Limitation on Cash-Based or Cash-Denominated Awards~~

~~The maximum aggregate amount~~18 hereof, no such termination can affect options previously granted, provided that an Offering Period may be ~~paid~~terminated by the Board of Directors by shortening the Offering Period and accelerating the Exercise Date to any Participant in any calendar year under an Award of Performance Awards, Cash-Based Awards or any other Awards that are payable or denominated in cash, in each case that are Qualified Performance-Based Compensation, shall be $6,000,000 determined as of

~~B-9~~ | ~~Expeditors International of Washington, Inc.~~

a date not prior to the date of ~~payout (for avoidance~~such Board action if the Board determines that termination of ~~doubt, this limit applies~~the 2002 Plan is in the aggregate, to all forms of Awards subject to this paragraph (iii)). To the extent that any form of Award subject to this paragraph (iii) is to be settled in Shares, either pursuant to the discretion of the Committee or an election by the applicable Participant, compliance with the limit established by this paragraph (iii) shall be determined by calculating the dollar value of the Shares to be issued in settlement based on the Fair Market Value of such Shares as of the applicable vesting date.

~~(iv)Awards not Intended to Constitute Qualified Performance-Based Compensation~~

Notwithstanding the Award limitations set forth in this Section 4(d)(ii), (iii) and (iii) or any other provision to the contrary (“Award Limits”), if the Committee determines that it is advisable to grant Awards (other than Options and Stock Appreciation Rights) that are not intended to constitute Qualified Performance-Based Compensation, the Committee may grant such Awards in excess of the Award Limits.

~~(v)Limitation on Awards to Nonemployee Directors~~

~~Equity-based Awards granted to Nonemployee Directors shall be subject to the following limitations:~~

~~(A)~~Subject to paragraphs (B) below, the maximum aggregate grant date “fair value” of equity-based Awards granted to any Nonemployee Director during any calendar year shall not exceed $600,000, with fair value determined under applicable financial accounting standards (“Annual Nonemployee Director Award Limit”).

~~(B)The Annual Nonemployee Director Award Limit shall be increased to $800,000 for any Nonemployee Director who serves as Chairman of the Board.~~

The foregoing limit shall not apply to any Award made pursuant to any election by a Nonemployee Director to receive an Award in lieu of all or a portion of annual and committee retainers and annual meeting fees that otherwise would be paid in cash.


~~Section 5.~~	~~Eligibility~~

Any Eligible Person shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full‑time or part‑time employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a Subsidiary.


~~Section 6.~~	~~Awards~~

~~(a)Options~~

The Committee is hereby authorized to grant Options to Eligible Persons with the following terms and conditions and with such additional terms and conditions (including performance-based vesting conditions) not inconsistent with the provisions of the Plan as the Committee shall determine:

~~(i)Type and Exercise Price~~

The Award Agreement shall specify whether the Option is an Incentive Stock Option or a Nonqualified Stock Option. The purchase price per Share purchasable under an Option shall be determined by the Committee and shall not be less than 100% of the Fair Market Value of a Share on the Date of Grant of such Option, provided, however, the Committee may designate a purchase price below Fair Market Value

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-10~~

~~on the Date of Grant if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.~~

~~(ii)Option Term~~

The term of each Option shall be fixed by the Committee but shall not be longer than 10 years from the Date of Grant. Notwithstanding the foregoing, the Committee may provide in the terms of an Option (either at grant or by subsequent modification) that, to the extent consistent with Section 409A, in the event that on the last business day of the term of an Option (other than an Incentive Stock Option) (i) the exercise of the Option is prohibited by applicable law or (ii) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option shall be extended for a period of not more than thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement.

~~(iii)Time and Method of Exercise~~

The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares (actually or by attestation), other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price) in which payment of the exercise price with respect thereto may be made or deemed to have been made. The Committee may, in its discretion, permit an Option to be exercised by delivering to the Participant a number of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market Value of the Shares underlying the Option being exercised on the date of exercise, over the exercise price of the Option for such Shares.

~~(iv)Incentive Stock Options~~

~~Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of stock options which are intended to qualify as Incentive Stock Options:~~

~~(A)The aggregate number of Shares that may be issued under all Incentive Stock Options under the Plan shall be 2,500,000 Shares.~~

~~(B)~~The Committee will not grant Incentive Stock Options in which the aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under this Plan and all other plansbest interests of the Company and its ~~Affiliates) shall exceed $100,000.~~

~~(C)All Incentive Stock Options must be~~shareholders. Except as provided in Section 18 and this Section 19, no amendment may make any change in any option theretofore granted ~~within ten years from~~which materially adversely affects the ~~earlier~~rights of ~~the date on which this Plan was adopted by the Board or the date this Plan was approved by the stockholders of the Company.~~

~~(D)~~Unless sooner exercised, all Incentive Stock Options shall expire and no longer be exercisable no later than 10 years after the date of grant; provided, however, that in the case of a grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its Affiliates, such Incentive Stock Option shall expire and no longer be exercisable no later than five years from the date of grant.

~~(E)~~The purchase price per Share for an Incentive Stock Option shall be not less than 100% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option; provided, however, that, in the case of the grant of an Incentive Stock Option to a Participant who, at the time such Option is granted, owns (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its Affiliates,

~~B-11~~ | ~~Expeditors International of Washington, Inc.~~

~~the purchase price per Share purchasable under an Incentive Stock Option shall be not less than 110% of the Fair Market Value of a Share on the date of grant of the Incentive Stock Option.~~

~~(F)~~Any Incentive Stock Option authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain all provisions required in order to qualify the Option as an Incentive Stock Option. If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Code Section 422, such Option shall thereafter be treated as a Nonqualified Stock Option.

~~(b)Stock Appreciation Rights~~

~~The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Persons subject to the terms of the Plan~~any participant, and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than 100% of the Fair Market Value of one Share on the Date of Grant of the Stock Appreciation Right; provided, however, the Committee may designate a grant price below Fair Market Value on the Date of Grant if the Stock Appreciation Right is granted in substitution for a stock appreciation right previously granted by an entity that is acquired by or merged with the Company or an Affiliate. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The term of each Stock Appreciation Right shall be fixed by the Committee but shall not be longer than 10 years from the Date of Grant. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right (including performance-based vesting conditions) as it may deem appropriate.

~~(c)Restricted Stock and Restricted Stock Units~~

The Committee is hereby authorized to grant Restricted Stock and Restricted Stock Units to Eligible Persons with the following terms and conditions and with such additional terms and conditions (including performance-based vesting conditions) not inconsistent with the provisions of the Plan as the Committee shall determine:

~~(i)Restrictions~~. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate. Notwithstanding the foregoing, rights to dividend or Dividend Equivalent payments shallamendment will be subject to the ~~limitations described~~approval of the Company's shareholders not later than one year after Board approval of such amendment if such shareholder approval is required by any Federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, or if such shareholder approval is necessary in ~~Section 6(f).~~

~~(ii)Issuance and Delivery of Shares; Settlement of Restricted Stock Units~~. Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company or held in nominee name by the stock transfer agent or brokerage service selected by the Company to provide such servicesorder for the ~~Plan. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring~~2002 Plan to ~~the restrictions applicable~~continue to such Restricted Stock. Shares representing Restricted Stock that is no longer subject to restrictions shall be delivered (including by updating the book-entry registration) to the Participant promptly after the applicable restrictions lapse or are waived. In the case of Restricted Stock Units, except in the case of a Restricted Stock Unit Award that provides for immediate vesting and payment with respect to such Award, no Shares shall be issued at the time such Awards are granted. Following the lapse or waiver of restrictions and the

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-12~~

restricted period relating to Restricted Stock Units, settlement of the Award and payment to the Participant shall be made: (A) in the form of cash, Shares (which may themselves be considered Restricted Stock under the Plan subject to restrictions on transfer and forfeiture conditions) or a combination of cash and Shares, as determined by the Committee or otherwise set forth in the Award Agreement, (B) at such time or times as determined by the Committee or otherwise set forth in the Award Agreement or, if applicable, at the time designated in a Participant’s timely and properly executed deferral election (made in accordance with all requirements of Section 409A), to the extent that the Committee permits such an election with respect to the Restricted Stock Units.. If the Restricted Stock Unit is not by its terms exempt from the requirement of Section 409A, then the Award Agreement shall contain terms and conditions intended to avoid adverse tax consequences specified in Section 409A.

~~(iii)Forfeiture~~

Except as otherwise determined by the Committee or as provided in the Award Agreement, upon a Participant’s termination of employment or resignation or removal as a Director (in either case, as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units held by the Participant at such time shall be forfeited and reacquired by the Company.

~~(d)Performance Awards~~

The Committee is hereby authorized to grant Performance Awards to Eligible Persons if the Committee establishes one or more measures of corporate, business unit or individual performance which must be attained, and the performance period over which the specified performance is to be attained as a condition to the vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award. Performance Awards may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock and Restricted Stock Units), other securities, other Awards or other property. In connection with any such Award, the Committee shall determine the extent to which the performance goals have been attained and other applicable terms and conditions have been satisfied, and the degree to which vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award has been earned. Rights to dividend or Dividend Equivalent payments shall be subject to the limitations described in Section 6(f).

~~(e)Awards of Qualified Performance-Based Compensation~~

If the Committee determines at the time a Full Value Award is granted to a Participant that such Participant is, or may likely be, a Covered Employee as of the end of the tax year in which the Company ordinarily would claim a tax deduction in connection with such Award, then the Committee may provide that this Section 6(d)(i) will be applicable to such Award, and such Award shall be considered Qualified Performance-Based Compensation. With respect to such Performance Awards, rights to dividend or Dividend Equivalent payments shall be subject to the limitations described in Section 6(f). Such Performance Awards shall be conditioned, to the extent required by Section 162(m), solely on the achievement of one or more objective Performance Goals established by the Committee within the time prescribed by Section 162(m), and shall otherwise comply withmeet the requirements of Section ~~162(m), including the following requirements:~~

~~(i)~~Such Performance Awards shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of one or more objective Performance Goals during such performance periods as the Committee shall establish. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level423 of the ~~particular criteria or~~Code, and the ~~attainment~~Board may otherwise, in its discretion, determine to submit any amendment to shareholders for approval. For the avoidance of ~~a percentage increase or decrease in~~doubt, any action to change the ~~particular criteria, and may be applied~~purchase price of shares to ~~one or more of the Company, an Affiliate, a Business Unit, or a division of the Company, an Affiliate, or a Business Unit, or may be applied to the performance of the Company~~

~~B-13~~ | ~~Expeditors International of Washington, Inc.~~

relative to a market index, a group of other companies, some other external measurement index such as gross domestic product, or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment will be made ~~(or no vesting will occur), levels of performance at which specified payments will~~available for sale under the 2002 Plan shall always be ~~made (or specified vesting will occur),~~subject to shareholder approval.

(b) Without shareholder consent and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). To the extent required under Section 162(m), the terms of the objective performance factors must preclude discretionwithout regard to ~~increase an amount paid in connection with an Award, but~~whether any participant rights may ~~permit discretion to reduce such amount if and to the extent such discretion is expressly provided in the applicable Award Agreement.~~

~~(ii)~~For each such Performance Award, the Committee shall, not later than 90 days after the beginning of each performance period, or, if the performance period is less than one year, on or before the date on which 25% of the performance period has elapsed, (i) designate all Participants for such performance period and (ii) establish the objective performance factors for each Participant for that performance period on the basis of one or more of the Performance Goals, the outcome of which is substantially uncertain at the time the Committee actually establishes the performance factors. The Committee shall have sole discretion to determine the applicable performance period, provided that in the case of a performance period less than 12 months, in no event shall a Performance Measure be considered to ~~be pre‑established if it is established after 25% of~~have been "adversely affected," the ~~performance period (as scheduled in good faith at the time the Performance Measure is established) has elapsed.~~

~~(iii)Following the close of each performance period and prior to payment of compensation to a Participant with respect to each such Performance Award, the~~ Committee shall certify in writing that the applicable Performance Goals upon which any payment of compensation to a Participant for that performance period are to be based, were, in fact, achieved or satisfied.

~~(iv)~~Unless otherwise specified in an Award Agreement and where applicable, all Performance Goals referencing accounting terms shall be interpreted, and all accounting determinations shall be made, in accordance with generally accepted accounting principles. Each of the Performance Goals shall be subject to certification by the Committee. The Committee may provide in any Award Agreement evidencing an Award that is intended to constitute Qualified Performance-Based Compensation that any evaluation of performance may include or exclude the effect, if any, on reported financial results of any of the following events that occurs during a performance period: (1) asset write-downs, (2) litigation or claim judgments or settlements, (3) reorganizations, (4) acquisitions, (5) divestitures, (6) restructurings, (7) discontinued operations, (8) early extinguishment of debt, gains and losses that are treated under Accounting Standards Codification Topic 225 as unusual in nature or that occur infrequently, (9) severance payments, contract termination and other costs related to exiting certain business activities; (10) changes in tax law, accounting principles or other such laws, rules or provisions affecting reported financial results; and (11) foreign exchange gains and losses.

Nothing contained herein precludes the Committee from granting to Covered Employees Awards (including Awards with performance conditions) that do not qualify for tax deductibility under Section 162(m.

~~(f)Dividend Equivalents; Dividends~~

~~The Committee is hereby authorized to grant Dividend Equivalents to Eligible Persons under which the Participant~~ shall be entitled to ~~receive payments (in cash, Shares, other securities, other Awards~~ change the Offering Periods, limit the frequency and/or ~~other property as determined~~number of changes in the ~~discretion~~amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. Dollars, permit payroll withholding in excess of the ~~Committee) equivalent~~amount designated by a participant in order to adjust for delays or mistakes in the ~~amount~~Company's processing of ~~cash dividends paid by~~properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the ~~Company to holders~~purchase of ~~Shares~~Stock for each participant properly correspond with ~~respect to a number of Shares determined by~~amounts withheld from the ~~Committee. Subject to the terms of the Plan~~participant's compensation, and any applicable Award Agreement, such Dividend Equivalents may have such terms and conditions as the Committee shall determine. Notwithstanding anything to the contrary herein, (i) the Committee may not grant Dividend Equivalents to Eligible Persons

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-14~~

in connection with grants of Options or Stock Appreciation Rights, and (ii) no dividend or Dividend Equivalent payments shall be made to a Participant with respect to any Restricted Stock, Restricted Stock Unit, Performance Award or other Award unless and until all vesting conditions or restrictions relating to such Award (or portion thereof to which the dividend or Dividend Equivalent relates) have been satisfied. An Award Agreement may provide that Dividend Equivalents will continue to be awarded or credited with respect to outstanding Awards of Participants who have terminated employment or service with the Company and its Affiliates until such time as such Awards are settled or paid out pursuant to the terms of the Award Agreement (and any timely deferral election, to the extent permitted).

~~(g)Stock Awards~~

The Committee is hereby authorized to grant to Eligible Persons Shares without restrictions thereon, as deemed by the Committee to be consistent with the purpose of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, such Stock Awards may have such terms and conditions as the Committee shall determine.

~~(h)Other Stock-Based Awards~~

~~The Committee is hereby authorized to grant to Eligible Persons~~establish such other ~~Awards that are denominated~~limitations 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 into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan. The Committee shall determine the terms and conditions of such Awards, subject to the terms of the Plan and the Award Agreement. No Award issued under this Section 6(g) shall contain a purchase right or an option-like feature.

~~(i)Cash Awards~~

The Committee is hereby authorized to grant to Eligible Persons cash awards that are not denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares.

~~(j)General Provisions Relating to Awards~~

~~(i)Consideration for Awards~~

~~Awards may be granted for no cash consideration or for any cash or other consideration as determined by the Committee or required by applicable law.~~

~~(ii)Awards May Be Granted Separately or Together~~

Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

~~(iii)Forms of Payment under Awards~~

Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments, or on a deferred basis (consistent with the requirements of Section 409A), in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of

~~B-15~~ | ~~Expeditors International of Washington, Inc.~~

~~reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.~~

~~(iv)Limits on Transfer of Awards~~

Except as otherwise provided by the Committee in its discretion and subject to such additional terms and conditions as it determines, no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) and no right under any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution, and no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. The Committee may, however, provide in an Award Agreement or otherwise that an Award (other than an Incentive Stock Option) may be transferred pursuant to a domestic relations order to the extent and in the manner determined by the Committee. If the Committee permits the transfer of an Award (other than fully vested and unrestricted Shares issued pursuant to any Award) other than by the laws of descent and distribution or pursuant to a domestic relations order, such transfer will be for no value and in accordance with the rules of Form S-8. The Committee may also establish procedures as it deems appropriate for a Participant to designate a person or persons, as beneficiary or beneficiaries, to exercise the rights of the Participant and receive any property distributable with respect to any Award in the event of the Participant’s death.

~~(v)Restrictions; Securities Exchange Listing~~

All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Committee may cause appropriate entries to be made with respect to, or legends to be placed on the certificates for, such Shares or other securities to reflect such restrictions. The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until the requirements of any federal or state securities of other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Committee to be applicable are satisfied.

~~(vi)Section 409A Provisions~~

Notwithstanding anything in the Plan or any Award Agreement to the contrary, the following rules will apply. To the extent that any amount or benefit that constitutes “deferred compensation” to a Participant under Section 409A of the Code and applicable guidance thereunder is otherwise payable or distributable to a Participant under the Plan or any Award Agreement solely by reason of the occurrence of a Change in Control or due to the Participant’s disability or separation from service, such amount or benefit will not be payable or distributable to the Participant by reason of such circumstance unless the Committee determines in good faith that (i) the circumstances giving rise to such Change in Control, disability or separation from service meet the definition of a change in ownership or effective control of the Company or in the ownership of a substantial portion of the Company’s assets, disability, or separation from service, as the case may be, under Section 409A(a)(2)(A) of the Code, (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise, or (iii) payment or distribution of such amount or benefit would not violate Section 409A. Any payment or distribution of deferred compensation that is subject to Section 409A that otherwise would be made to a Participant who is a Specified Employee (as determined by the Committee in good faith) on account of separation from service may not be made before the date which is six (6) months after the date of the Specified Employee’s separation from service (or if earlier, upon the Specified Employee’s death) unless the payment or distribution is exempt from the application of Section 409A by reason of the short term deferral exemption or otherwise. It is intended that Awards

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-16~~

~~under the Plan either will be exempt from Section 409A or will comply with Section 409A,~~its sole discretion are advisable and the Plan and Award Agreements will be construed and administered accordingly. Notwithstanding the foregoing, the Company makes no representations as to the specific tax treatment of any Award. Participants are solely responsible for any and all tax consequences resulting from an Award, including taxes due as a result of the grant, vesting or any payment with respect thereto, and the sale or other taxable disposition of the Shares acquired pursuant to the Award. Neither the Company, nor its officers, directors nor employees, shall be responsible for, or have any liability for, any such taxes, penalties and interest.

~~(vii)Deferrals of Full Value Awards~~

The Committee may, in its discretion, permit or require the deferral by a Participant of the issuance of Shares or payment of cash in settlement of any Full Value Award, subject to the terms, conditions, rules and procedures as it may establish or prescribe for such purpose and subject further to complianceconsistent with the applicable requirements of Section 409A. The terms, conditions, rules and procedures for any such deferral shall be set forth in writing in the relevant Agreement or in such other agreement, plan or other document as the Committee may determine, including any nonqualified deferred compensation plan maintained by the Company, or some combination of such documents. The terms, conditions, rules and procedures for any such deferral shall address, to the extent relevant, matters such as: the permissible times(s) and form(s) of payment of deferred amounts; the terms of any deferral elections by a Participant or of any deferral required by the Company; and the crediting of interest or dividend equivalents on deferred amounts. To the extent that any such deferral is effected in accordance with any separate nonqualified deferred compensation plan or other plan and such deferral is settled in Shares not otherwise authorized under such separate plan, such Shares shall be drawn from and charged against the Plan’s share reserve.


~~Section 7.~~	~~Amendment and Termination~~

~~(a)Amendment and Termination of the Plan~~

Subject to Section 7(e), the Board may amend, alter, suspend, discontinue or terminate the Plan at any time. Any amendment to the Plan is subject to compliance with all applicable laws, rules, regulations and policies of any applicable governmental entity or securities exchange, including receipt of any required approval from the governmental entity or stock exchange. Notwithstanding any other provision of the Plan or any Award Agreement, prior approval of the stockholders of the Company shall be required for any amendment to the Plan that would:

~~(i)require stockholder approval under the rules or regulations of the Securities and Exchange Commission, the Nasdaq Stock Market or any other securities exchange that are applicable to the Company;~~

~~(ii)increase the number of Shares authorized under the Plan as specified in Section 4(a) of the Plan;~~

~~(iii)~~increase the number of Shares or value subject to the limitations contained in Section 4(d) of the Plan or otherwise cause the Section 162(m) exemption for qualified performance-based compensation to become unavailable with respect to Awards granted under the Plan;

~~(iv)permit repricing of Options or Stock Appreciation Rights, which is prohibited by Section 3(a)(v) of the Plan;~~

~~(v)~~permit the award of Options or Stock Appreciation Rights at a price less than 100% of the Fair Market Value of a Share on the Date of Grant of such Option or Stock Appreciation Right, contrary to the provisions of Sections 6(a)(i) and 6(b) of the Plan; or

~~(vi)increase the maximum term permitted for Options and Stock Appreciation Rights as specified in Sections 6(a)(ii) and 6(b) of the~~2002 Plan.

~~B-17~~ | ~~Expeditors International of Washington, Inc.~~

~~(b)Amendments to Awards and Award Agreements~~

~~Subject to Section 7(e), the Committee may amend, alter, suspend, discontinue or terminate any outstanding Award or Award Agreement, prospectively or retroactively.~~

~~(c)Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events~~

~~(i)~~Except as may be limited by Section 162(m) of the Code with respect to Awards intended to constitute Qualified Performance-Based Compensation, the Committee may 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 4(c)) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

~~(ii)~~The determination of the Committee (or its authorized delegate, if applicable) as to any adjustments made pursuant to subparagraphs (i) above shall be conclusive and binding on Participants under the Plan. By accepting an Award under the Plan, a Participant agrees to any adjustment to the Award made pursuant to this Section 7(c) without further consideration or action.

~~(d)Amendment to Conform to Law~~

Notwithstanding any other provision of the Plan to the contrary, the Board may amend the Plan and the Board or the Committee may amend an Award or Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan, Award or Award Agreement to (i) any law relating to plans of this or similar nature, and to the administrative regulations and rulings promulgated thereunder, (ii) any applicable exchange requirements and (iii) any compensation recoupment policy adopted by the Company. In addition, if any provision of the Plan or an Award Agreement would result in adverse tax consequences under Section 409A, the Board may amend the Plan and the Committee may amend the applicable Award Agreements (or the Board and/or Committee may take any other action reasonably necessary) to avoid such adverse tax results and no action taken by the Board and/or Committee to comply with Section 409A shall be deemed to impair or otherwise adversely affect the rights of the Participant or any holder of an Award or beneficiary thereof. By accepting an Award under the Plan, a Participant agrees to any amendment made pursuant to this Section7(d) to the Plan, any Award or any Award Agreement without further consideration or action.

~~(e)Awards Previously Granted~~

Notwithstanding any other provision of the Plan to the contrary, no termination or amendment of the Plan, any Award or any Award Agreement shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award, except as otherwise permitted under Sections 4(c), 7(c) and 7(d).

~~(f)Correction of Defects, Omissions and Inconsistencies~~

The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Plan.


~~Section 8.~~	~~Change in Control~~

~~(a)Vesting Upon a Change in Control~~

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-18~~

Subject to Section 4(c), upon a Change in Control all then-outstanding Awards shall immediately vest and be settled in accordance with paragraphs (i) and (ii) and below, unless otherwise provided for in an Award Agreement as determined in the Committee’s discretion. The immediately preceding sentence shall not apply the extent that another award meeting the requirements of Section 8(b) (“Replacement Award”) is provided to the Participant pursuant to Section 4(c) to replace an Award (“Replaced Award”) subject to subparagraphs (i) and (ii) below:

~~(i)Outstanding Awards Subject Solely to a Service Condition~~

~~(A)~~Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options and Stock Appreciation Rights, that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the Participant to the Company or any Affiliate shall become fully vested and shall be settled in cash, Shares or a combination thereof, as determined by the Committee, within thirty (30) days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Code Section 409A).

~~(B)~~Upon a Change in Control, a Participant’s then-outstanding Options and Stock Appreciation Rights that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the Participant to the Company or any Affiliate shall immediately become fully vested and exercisable over the exercise period set forth in the applicable Award Agreement. Notwithstanding the immediately preceding the sentence, the Committee may elect to cancel such outstanding Options or Stock Appreciation Rights and pay the Participant an amount of cash (less normal withholding taxes) equal to the excess of (i) the value, as determined by the Committee, of the consideration (including cash) received by the holder of a Share as a result of the Change in Control (or if the Company shareholders do not receive any consideration as a result of the Change in Control, the Fair Market Value of a Share on the day immediately prior to the Change in Control) over (ii) the exercise price of such Options or the grant price of such Stock Appreciation Rights, multiplied by the number of Shares subject to each such Award in accordance with Code Section 409A to the extent applicable. No payment shall be made to a Participant for any Option or Stock Appreciation Right if the exercise price or grant price for such Option or Stock Appreciation Right, respectively, exceeds the value, as determined by the Committee, of the consideration (including cash) received by the holder of a Share as a result of Change in Control.

~~(ii)Outstanding Awards Subject to a Performance Condition~~

~~(A)~~Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options and Stock Appreciation Rights, that are not vested and as to which vesting depends upon the satisfaction of one or more performance conditions shall immediately vest and all performance conditions shall be deemed satisfied (x) based on actual performance, to the extent determinable, through the date immediately prior to the date of the Change in Control, with performance goals adjusted to reflect the truncated performance period and payable without proration or (y) as if target performance was achieved prorated to reflect the portion of the performance period that has elapsed through the date of the Change in Control, whichever shall result in the largest payout, and shall be settled in cash, Shares or a combination thereof, as determined by the Committee, within thirty (30) days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to

~~B-19~~ | ~~Expeditors International of Washington, Inc.~~

~~comply with Code Section 409A), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied.~~

~~(B)~~Upon a Change in Control, a Participant’s then-outstanding Options and Stock Appreciation Rights that are not vested and as to which vesting depends upon the satisfaction of one or more performance conditions shall immediately vest and all performance conditions shall be deemed satisfied (x) based on actual performance, to the extent determinable, through the date immediately prior to the date of the Change in Control, with performance goals adjusted to reflect the truncated performance period and payable without proration or (y) as if target performance was achieved prorated to reflect the portion of the performance period that has elapsed through the date of the Change in Control, whichever shall result in the greatest number of vested Options and/or Stock Appreciation Rights. Such vested Options and/or Stock Appreciation Rights shall be deemed exercised as of the date of the Change in Control and shall be settled cash within thirty (30) days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Code Section 409A) in an amount equal to the excess of (i) the value, as determined by the Committee, of the consideration (including cash) received by the holder of a Share as a result of the Change in Control (or if the Company shareholders do not receive any consideration as a result of the Change in Control, the Fair Market Value of a Share on the day immediately prior to the Change in Control) over (ii) the exercise price of such Options or the grant price of such Stock Appreciation Rights, multiplied by the number of Shares subject to each such Award in accordance with Code Section 409A to the extent applicable. No payment shall be made to a Participant for any Option or Stock Appreciation Right if the exercise price or grant price for such Option or Stock Appreciation Right, respectively, exceeds the value, as determined by the Committee, of the consideration (including cash) received by the holder of a Share as a result of Change in Control.

~~(b)Replacement Award~~

~~The following provisions will apply to Replacement Awards:~~

~~(i)~~An Award shall meet the conditions of this subparagraph (b)(i) (and hence qualify as a Replacement Award) if: (A) it is of the same type as the Replaced Award (or, it is of a different type as the Replaced Award, provided that the Committee, as constituted immediately prior to the Change in Control, finds such type acceptable); (B) it has an intrinsic value at least equal to the value of the Replaced Award; (C) it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control; (D) its terms and conditions comply with Section subparagraph (b)(ii) below; and (E) its other terms and conditions are not less favorable to the Grantee than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this paragraph (b)(i) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion. Without limiting the generality of the foregoing, the Committee may, ~~determine~~but shall not be required to, modify or eliminate grants to persons who are otherwise eligible to receive options under this 2002 Plan who are foreign nationals or employed outside the ~~value of Awards and Replacement Awards that are stock options~~United States to recognize differences in local law, tax policy or ~~stock appreciation rights by reference to either their intrinsic value or their fair value.~~

~~(ii)Upon a Qualifying Termination that occurs within the two-year period following a Change in Control, to the extent permitted under Code Section 409A and/or Code Section 83 to the extent~~custom.

Notice of Annual Meeting & Proxy Statement | ~~B-20~~ 50

~~applicable, all Replacement Awards held~~20. Notices.

All notices or other communications by a participant to the ~~Participant~~Company under or in connection with the 2002 Plan shall ~~become fully vested and free of restrictions and, in the case of Replacement Awards~~be deemed to have been duly given when received in the form ~~(A) stock options~~specified by the Company at the location, or ~~stock appreciation rights~~by the person, designated by the Company for the receipt thereof.

21. Conditions Upon Issuance of Shares.

The Company shall not be ~~fully exercisable and (B) awards (other than stock options or stock appreciation rights)~~obligated to issue shares with respect to an option unless the ~~vesting of which depends on the satisfaction of a service condition shall be paid upon or within sixty (60) days~~exercise of such ~~Qualifying Termination,~~option and ~~(C) awards (other than stock options or stock appreciation rights) as to which vesting depends upon~~ the satisfaction of one or more performance conditions, shall vest based on (1) actual performance, to the extent determinable, through the date immediately prior to the date of the Qualifying Termination, with performance goals adjusted to reflect the truncated performance period or (2) the assumption target performance is achieved with the numberissuance and delivery of such awards that would otherwise vest due to achievement of target performance prorated to reflect the portion of the performance period that has elapsed through the date of the Qualifying Termination, whichevershares pursuant thereto shall result in the largest payout. Such vested award shall be settled in cash, Shares or a combination thereof, as determined pursuant to the applicable award agreement, within thirty (30) days following such Qualifying Termination (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Code Section 409A), and (D) options and stock appreciation rights as to which vesting depends upon the satisfaction of one or more performance conditions, shall immediately vest based on (1) actual performance, to the extent determinable, through the date immediately prior to the date of the Qualifying Termination, with performance goals adjusted to reflect the truncated performance period or (2) the assumption target performance is achieved with the number of options and stock appreciation rights that would otherwise vest due to achievement of target performance prorated to reflect the portion of the performance period that has elapsed through the date of the Qualifying Termination, whichever shall result in the greatest number of vested options and/or stock appreciation rights and such vested options and/or stock appreciation rights shall be exercisable during the period specified in the applicable award agreement.

~~Section 9.Income Tax Withholding~~

~~In order to~~ comply with all applicable ~~federal, state, local~~provisions of law, domestic or foreign, ~~income tax laws~~including, without limitation, the Exchange Act, the Securities Act of 1933, as amended, all regulations promulgated thereunder, and the requirements of any stock exchange or ~~regulations,~~automated quotation system upon which the ~~Company~~shares may ~~take such action as it deems appropriate to ensure that all applicable federal, state, local~~then be listed or ~~foreign payroll, withholding, income or other taxes, which are the sole~~quoted, and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of the applicable taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (a) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes (but only to the extent necessary to satisfy certain statutory withholding requirements to avoid adverse accounting treatment under ASC 718); (b) delivering to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes; or (c) such other process as may be approved by the Committee from time to time. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.


~~Section 10.~~	~~Clawback or Recoupment~~

~~All Awards under this Plan~~ shall be subject to (a) forfeiture or other penalties under any clawback or recoupment policy of the Company in effect from time to time and (b) such forfeiture or penalty provisions as determined by the Committee and set forth in the applicable Award Agreement or forfeiture or clawback provisions imposed by law or required to be adopted by the Company.

~~B-21~~ | ~~Expeditors International of Washington, Inc.~~


~~Section 11.~~	~~General Provisions~~

~~(a)No Rights to Awards~~

No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.

~~(b)Award Agreements~~

Except for any Award that involves only the immediate issuance of unrestricted Shares, no Participant shall have rights under an Award granted to such Participant unless and until an Award Agreement shall have been signed by the Participant (if requested by the Company), or until such Award Agreement is delivered and accepted through any electronic medium in accordance with procedures established by the Company. An Award agreement need not be signed by a representative of the Company unless required by the Committee. Each Award Agreement shall befurther subject to the ~~applicable terms and conditions~~approval of ~~the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.~~

~~(c)Plan Provisions Control~~

In the event that any provision of an Award Agreement directly conflicts with or is inconsistent with the terms of the Plan as set forth herein or subsequently amended, the terms of the Plan shall control.

~~(d)No Rights of Stockholders~~

Except with respect to Restricted Stock, Stock Awards and certain types of stock-based Performance Awards, neither a Participant nor the Participant’s legal representative shall be, or have any of the rights and privileges of, a stockholder ofcounsel for the Company with respect to ~~any Shares issuable upon the exercise or payment of any Award, in whole or in part, unless and until the Shares have been issued.~~such compliance.

~~(e)No Limit on Other Compensation Plans or Arrangement~~s

Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation plans or arrangements, and such plans or arrangements may be either generally applicable or applicable only in specific cases.

~~(f)~~22. No Right to ~~Employment~~Options or ~~Directorship~~to Employment.

~~The grant of an Award shall not be construed as giving a Participant the right to be retained as an employee of~~ This contract is between the Company ~~or any Affiliate, or a Director to be retained as a Director, nor will it affect~~and the individual participant and does not in any way alter or amend the ~~right~~existing employment relationship with the Company, its Subsidiary or Consolidated Affiliate. Participation in the 2002 Plan shall in no way constitute any form of agreement or understanding binding on the Company, Subsidiary or Consolidated Affiliate, express or implied, of continued employment for any length of time, nor shall participation in the 2002 Plan interfere in any way with the lawful rights of the ~~Company or an Affiliate~~actual employer to terminate ~~a Participant’s~~the employment relationship, which rights are hereby reserved for that particular legal entity.

23. Limitations on Sales of Stock Purchased Under the 2002 Plan.

The 2002 Plan is intended to provide common stock for investment and not for resale. The Company does not, however, intend to restrict or influence any participant in the conduct of his or her own affairs. A participant, therefore, may sell stock purchased under the 2002 Plan at any time, subject to compliance with any applicable Federal or ~~without cause, or remove~~state securities laws; provided, however, that because of certain Federal tax requirements, each participant will agree by entering the 2002 Plan, promptly to give the company notice of any such stock disposed of within two years after the date of the grant of the applicable option, showing the number of such shares disposed of. THE INDIVIDUAL EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

24. 2002 Plan Effective Date and Shareholder Approval.

The 2002 Plan shall become effective upon approval by the Company's shareholders by a ~~Director~~vote sufficient to meet the requirements of Section 423(b)(2) of the Code at the next annual meeting of the shareholders to be held May 8, 2002, which is prior to the first Exercise Date. In the event that the 2002 Plan is approved by the Company's shareholders, the final plan year for the existing 1988 Plan shall close on July 31, 2002 and the 1988 Plan shall be terminated upon distribution of shares purchased in ~~accordance~~such final plan year with ~~applicable law. In addition, the Company or an Affiliate may at~~ any ~~time dismiss a Participant from employment or remove a Director who is a Participant free from any liability or any claim~~remaining shares registered for issuance under the 1988 Plan ~~or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement. Nothing in~~being transferred to Reserves under this Plan shall confer on any person any legal or equitable right against the Company or any Affiliate, directly or indirectly, or give rise to any cause of action at law or in equity against the Company or an Affiliate. Under no circumstances shall any person ceasing to be an employee of the Company or any Affiliate be entitled to any compensation for any loss of any right or benefit under the Plan which such employee might otherwise have enjoyed but for termination of employment, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise. By participating in the Plan, each Participant shall be deemed to have accepted all the conditions of the Plan and the terms and conditions of any rules and regulations adopted by the Committee and shall be fully bound thereby.2002 Plan.

~~Notice of Annual Meeting & Proxy Statement~~ 51 | ~~B-22~~

~~(g)Governing Law~~

The internal law, and not the law of conflicts, of the State of Washington, shall govern all questions concerning the validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award.

~~(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 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 so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or 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 or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

~~(j)Other Benefits~~

No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose of computing such Participant’s compensation or benefits under any pension, retirement, savings, profit sharing, group insurance, disability, severance, termination pay, welfare or other benefit plan of the Company, unless required by law or otherwise provided by such other plan.

~~(k)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 shall be paid in lieu of any fractional Share or whether such fractional Share or any rights thereto shall be canceled, terminated or otherwise eliminated.

~~(l)Headings~~

Headings are given to the sections and 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 12.~~	~~Effective Date of the Plan~~

The Plan shall be subject to approval by the stockholders of the Company at the annual meeting of stockholders of the Company to be held on May 2, 2017, and the Plan shall be effective as of the date of such stockholder approval.

~~B-23~~ | Expeditors International of Washington, Inc.


~~Section 13.~~	~~Term of the Plan~~

Awards shall be granted under the Plan only during a 10-year period beginning on the Effective Date, or if the Plan is terminated earlier pursuant to Section 7(a) of the Plan, during the period beginning on the Effective Date and ending on such date of termination of the Plan. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond the termination of the Plan, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-24~~

~~FORM OF PERFORMANCE SHARE AWARD AGREEMENT~~

~~(Expeditors International of Washington, Inc. 2017 Omnibus Incentive Plan)~~

~~THIS AGREEMENT, dated as of ____________, 20__ (“Agreement”), is entered into between Expeditors International of Washington, Inc., a Washington corporation (the “Company”), and _____________, an employee of the Company or an affiliate of the Company (“Participant”). This Agreement sets forth the terms and conditions of a Performance Share Award representing the right to receive shares of Common Stock (“Common Stock”), par value $.01 per share, of the Company granted by the Company pursuant to its 2017 Omnibus Incentive Plan, which was approved by shareholders on May 2, 2017 (the “Plan”). Capitalized terms that are not defined in this Agreement shall have the meaning ascribed to such terms in the Plan.~~

Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a Performance Share Award entitling Participant to the number of Performance Share Units (sometimes referred to herein as “~~PSUs”) equal to the “Target Award Number”~~ ~~set forth below. The Target Award Number shall be adjusted upward or downward following the end of the Performance Period based on performance, as provided in the~~ ~~Exhibit A~~ to this Agreement, which Exhibit is made a part of this Agreement. The number of PSUs that Participant will receive under the Agreement, after giving effect to such adjustment, is referred to herein as the “~~Final Award Number~~.” Each PSU represents the right to receive one share of Common Stock, subject to the vesting requirements and distribution provisions of the Agreement and the terms of the Plan. The shares of Common Stock distributable to Participant with respect to PSUs granted hereunder are referred to as the “Shares”. The performance periods over which the Final Award Number will be determined (the “~~Performance Period”) are set forth below.~~

~~The Company and the Participant agree as follows:~~


1.	~~Performance Share Award~~. The Company, effective as of the date of this Agreement, hereby grants to Participant Performance Share Units as set forth below and subject to the terms and conditions set forth in this Agreement and the Plan:

~~(a)~~Target Award Number; Final Award Number. The Target Award Number shall consist of two (2) tranches (Tranche A and Tranche B). Seventy-five percent of the total Target Award Number is allocated to Tranche A; and twenty-five percent of the total Target Award Number is allocated to Tranche B, in each case as set forth in 1(b) below. The potential Final Award Number for each tranche ranges from a maximum number equal to 200% of the Tranche Target Award Number to zero in the event the threshold level of performance for that tranche is not achieved (see ~~Exhibit A~~).

~~(b)~~Performance Criteria; Performance Period. Performance criteria for Tranche A are based on Cumulative EPS and performance criteria for Tranche B are based on Net Revenues, in each case as set forth in Exhibit A. The Performance Periods for purposes of determining whether, and the extent to which the PSUs within each tranche will vest and become payable hereunder, and the Target Number of Shares for each Tranche subject to this Award are:

~~Performance PeriodTarget Number in Tranche~~

~~Tranche A: _________, 20__ to __________, 20__[75% of total Target Award Number]~~

~~Tranche B _________, 20__ to__________, 20__[25% of total Target Award Number]~~

~~B-25~~ | ~~Expeditors International of Washington, Inc.~~

~~(c)Vesting Date. Except as otherwise provided herein, the “Vesting Date~~” for Performance Share Units (to the extent they become vested based on satisfaction of performance goals) shall be the last day of the performance period. Provided Participant remains continuously employed by the Company or an Affiliate through the Vesting Date, and subject to earlier settlement/payout with respect to Performance Share Units that become vested under Section 3(b) below in the event of Disability or death, vested Performance Share Units will be settled and Shares delivered as soon as administratively feasible following the Vesting Date, but in no event later than March 15^th ~~of the year following the calendar year in which the Vesting Date occurs.~~


2.	~~Rights of Participant with Respect to the Performance Share Units~~.

~~(a)No Shareholder Rights~~. Performance Share Units granted pursuant to this Agreement do not and shall not entitle Participant to any rights of a shareholder of Common Stock. The rights of Participant with respect to the Performance Share Units shall remain forfeitable at all times prior to the date on which such rights become vested, and the restrictions with respect to Performance Share Units lapse, in accordance with Sections 1 and 3 hereof.

~~(b)Dividend Equivalents~~. As long as Participant holds Performance Share Units granted pursuant to this Agreement, the Company shall credit to Participant, on each date that the Company pays a cash dividend to holders of Common Stock generally, an additional number of Performance Share Units (“~~Additional Performance Share Units~~”) equal to the number of whole Performance Share Units and Additional Performance Share Units previously credited to Participant under this Agreement multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such date, divided by the Fair Market Value of a share of Common Stock on such date. Any fractional Performance Share Unit resulting from such calculation shall be included in the Additional Performance Share Units. A report showing the number of Additional Performance Share Units so credited shall be sent to Participant periodically, as determined by the Company. The Additional Performance Share Units so credited shall be subject to the same terms and conditions as the Performance Share Units with respect to which such Additional Performance Share Units were credited, and the Additional Performance Share Units shall be forfeited in the event that the Performance Share Units with respect to which such additional Performance Share Units were credited are forfeited. Further, for avoidance of doubt, Participant will be eligible to receive Additional Performance Share Units with respect to unvested Performance Share Units only if Participant remains in continuous employment with the Company or an Affiliate through the applicable dividend record date as declared by the Board. Additional Performance Share Units are subject to income and payroll tax withholding by the Company.

~~(c)Issuance of Shares; Conversion of Performance Share Units~~. No Shares of Common Stock shall be issued to Participant prior to the date on which the Performance Share Units vest, and the restrictions with respect to the Performance Share Units lapse, in accordance with Section 1 or Section 3 hereof. Neither this Section 2(c) nor any action taken pursuant to or in accordance with this Section 2(c) or any other provision of the Plan or this Performance Share Award agreement shall be construed to create a trust of any kind. After any Performance Share Units vest pursuant to Section 1 or Section 3 hereof, the Company shall promptly cause to be issued, in either certificated or uncertificated form, Shares of Common Stock registered in Participant’s name or in the name of Participant’s legal representatives, beneficiaries or heirs, as the case may be, in payment of such vested whole Performance Share Units and any Additional Performance Share Units and shall cause such certificated or uncertificated shares to be delivered to Participant or Participant’s legal representatives, beneficiaries or heirs, as the case may be (including for this purpose a delivery of Shares to a deceased Participant’s brokerage account maintained in connection with Awards under the Plan). In no event shall issuance of Shares occur later than March 15^th of the year following the calendar year in which PSUs vest (and the restrictions with respect to such PSUs lapse). The value of any fractional Performance Share Unit shall be cancelled at the time certificated or uncertificated shares are delivered to Participant in payment of Performance Share Units and any Additional Performance Share Units.

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-26~~

3.~~Vesting; Forfeiture~~.

~~(a)Termination of Employment~~. In the event that Participant’s employment with the Company and its Affiliates is terminated prior to a Tranche Vesting Date, the Participant’s right to receive any Shares (including the right to receive any Shares relating to Additional Performance Share Units) corresponding to that Tranche Vesting Date shall be immediately and irrevocably forfeited, unless such termination is by reason of:


~~(1)~~	~~Participant’s permanent disability (within the meaning of Section 409A(a)(2)(C)(i) of the Code (“Disability”);~~


~~(2)~~	~~Participant’s death;~~


~~(3)~~	~~Participant’s Retirement (as defined in Section 3(c) below).~~


~~(4)~~	~~Participant’s Involuntary Termination without Cause (as defined in Section 3(d) below) or~~


~~(5)~~	~~Participant’s Voluntary Termination for Good Reason (as defined in Section 3(d) below.~~

~~(b)Death and Disability~~. In the event of Participant’s death or Disability (as defined in Section 3(a) above) prior to the commencement or completion of a Performance Period, the Participant or Participant’s estate shall be entitled to receive a payment/settlement with respect to a prorated portion of PSUs corresponding to such Performance Period based on, and assuming that, performance would be achieved at the target level, as set forth in ~~Exhibit A~~ to this Agreement. The prorated number of PSUs for the Performance Period shall be determined by dividing the number of days during the performance period prior to Participant’s death or Disability by the total number of days in the Performance Period. Such settlement of PSUs will occur as soon as administratively feasible following death or Disability but in no event more than ninety (90) days following Participant’s death or Disability, as applicable. If a payment/settlement is made pursuant to this Section 3(b), no payment/settlement shall be made pursuant to Section 1 of this Agreement.

~~(c)Retirement~~. In the event Participant terminates employment as a result of Retirement prior to the commencement or completion of a Performance Period, then (i) a prorated portion of PSUs corresponding to such Performance Period shall be eligible to become vested at the end of the Performance Period based on actual achievement of performance goals as specified in ~~Exhibit A~~; and (ii) all other unvested PSUs will be forfeited. The prorated number of PSUs (that otherwise would become vested and payable under Section 1 based on actual performance achieved) shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of Retirement, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period. “Retirement” shall mean the voluntary or involuntary termination of Participant’s employment for any reason other than for Cause, Disability or death (i) at such time or after Participant has attained age 55 and completed at least ten years of service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, or (ii) after having completed at least thirty years of continuous service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, and in either case, so long as Participant has at all times that Performance Share Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. Settlement of such PSUs shall occur as soon as administratively feasible following the end of the Performance Period (but in no event later than March 15^th of the year following the calendar year in which the last day of the Performance Period occurs). If a payment/settlement is made pursuant to this Section 3(c), no payment/settlement shall be made pursuant to Section 1 of this Agreement.

~~B-27~~ | ~~Expeditors International of Washington, Inc.~~

~~(d)Involuntary Termination without Cause or Voluntary Termination for Good Reason (not in connection with a Change in Control)~~. The following provisions apply if Participant terminates employment as a result of an Involuntary Termination (as defined below) without Cause (as defined in the Plan) or a Voluntary Termination for Good Reason (as defined below) and such termination is not a Qualifying Termination as defined in the Plan (in connection with a Change in Control). If Participant’s employment is terminated as a result of an Involuntary Termination without Cause or a Voluntary Termination for Good Reason prior to the commencement or completion of a Performance Period, then (i) unvested PSUs granted during the prior six month period will be forfeited; (ii) provided that Participant timely executes a waiver and release of claims against the Company in a form acceptable to the Company, a prorated portion (based on service completed at the time of termination) of unvested PSUs will be eligible to become vested at the end of the applicable Performance Period, based on actual achievement of performance goals as specified in ~~Exhibit A~~; and (iii) all other unvested PSUs shall be forfeited. The prorated number of PSUs shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of termination, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period. “~~Involuntary Termination without Cause~~” means termination of Participant’s employment by the Company’s exercise of unilateral authority in circumstances where Participant was willing and able to continue employment and such termination was not for Cause (as defined in the Plan). “~~Voluntary Termination for Good Reason~~” means Participant’s voluntary termination of employment as a result of (i) a material diminution of Participant’s annual base compensation, authority, duties or responsibilities; (ii) a material change in Participant’s reporting relationship, including a requirement that Participant report to a corporate officer or employee instead of reporting directly to the Board; (iii) a material change in the geographic location at which Participant must perform the duties of his or her position; or (iv) any other action or inaction that constitutes a material breach by the Company of the agreement under which Participant serves (e.g. an employment agreement), and in each case Participant has advised the Company in writing of the condition set forth above within ninety (90) days of the initial existence of the condition and the Company has not remedied the condition with thirty (30) days of receipt of such notice. Notwithstanding the foregoing, the provisions in the Section 3(d) will apply only if Participant has at all times that Performance Share Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. Settlement of such PSUs shall occur as soon as administratively feasible following the end of the Performance Period (but in no event later than March 15^th of the year following the calendar year in which the last day of the Performance Period occurs). If a payment/settlement is made pursuant to this Section 3(d), no payment/settlement shall be made pursuant to Section 1 of this Agreement.

~~(e)Change in Control - Qualifying Termination~~. Notwithstanding the foregoing provisions, in the event that a Change in Control (as defined in the Plan) occurs, the provisions of the Plan will govern the treatment of Performance Share Units, provided that for purposes of determining any prorated portion of the Award pursuant to Section 8 of the Plan, the prorated number of PSUs shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of the Change in Control, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period.

4.~~Restrictions on Transfer.~~ Performance Share Units shall not be transferable other than by will or by the laws of descent and distribution. Notwithstanding the foregoing, Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant and receive any property distributable with respect to Performance Share Units upon the death of Participant. Each right under this Agreement shall be exercisable during Participant’s lifetime only by Participant or, if permissible under applicable law, by Participant’s legal representative. Performance Share Units and any rights under this Agreement may not be sold, assigned, transferred, pledged, alienated, attached or otherwise encumbered and any purported sale, assignment, transfer, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company or any Affiliate.

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-28~~

5.~~Income Tax Matters~~. In order to comply with all applicable federal, foreign, state or local income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, foreign, state or local payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. Upon vesting of the Performance Share Units and the lapse of the restrictions with respect to the Performance Share Units under the terms of this Award Agreement, Participant shall be obligated to pay any applicable withholding taxes arising from such vesting and lapse of restrictions and payment with respect to Performance Share Units.

6.~~Securities Matters~~. No Shares of Common Stock shall be issued pursuant to this Agreement prior to such time as counsel to the Company shall have determined that the issuance of such shares will not violate any securities or other laws, rules or regulations. The Company shall not be required to deliver any Shares of Common Stock until the requirements of any applicable securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied. In addition, the grant of these Performance Share Units and/or the delivery of any Shares of Common Stock under this Agreement are subject to the Company’s executive compensation clawback policies as they may exist at the time of grant of this Award and as the Company may adopt in the future to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (or any other applicable law) and any applicable rules and regulations of the Securities and Exchange Commission or applicable stock exchange.

7.~~Tax Consequences~~. Participant agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimize the Participant’s tax liabilities. Participant will not make any claim against the Company, or any of its officers, directors, employees or Affiliates related to tax liabilities arising from Performance Share Units or the Participant’s other compensation.

8.~~Adjustments~~. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares, 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 Common Stock such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Committee shall, in such manner as it may deem equitable, in its sole discretion, adjust any or all of the number and type of shares subject to Performance Share Units.

9.~~General Provisions.~~

~~(a)Section 409A~~. This Performance Share Award is intended to be exempt from Section 409A of the Code (“Section 409A”) under Treas. Reg. Section 1.409A-1(b)(4) and this Agreement and the Plan will be construed and administered accordingly. Notwithstanding the foregoing, to the extent it is determined that any payment due hereunder is (i) deferred compensation subject to Section 409A, and (ii) is payable to a specified employee (as that term is defined in Section 409A), and (iii) is payable on account of the specified employee’s separation from service (as that term is defined in Section 409A), payment of any part of such amount that would have been made during the six (6) months following the separation from service shall not then be paid but shall rather be paid on the first day of the seventh (7th) month following the separation from service.

~~(1)For this purpose, specified employees shall be identified by the Company on a basis consistent with regulations issued under Section 409A, and consistently applied to all plans, programs, contracts,~~ ~~etc. maintained by the Company that are subject to Section 409A.~~

~~(2)For this purpose, “termination of employment” shall be defined as “separation from service” as that term is defined under Section 409A.~~

~~B-29~~ | ~~Expeditors International of Washington, Inc.~~

~~(3)~~To the extent that Section 409A is applicable to this Agreement, this Agreement shall be construed and administered to comply with the rules of Section 409A. Neither the Company nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the participant or other person on account of any amounts under this Plan or on account of any failure to comply with any Code section.

~~(b)Interpretations~~. This Agreement is subject in all respects to the terms of the Plan. Terms used herein which are defined in the Plan shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan shall govern. Any question of administration or interpretation arising under this Agreement shall be determined by the Committee, and such determination shall be final and conclusive upon all parties in interest.

~~(c)No Right to Employment~~. The grant of Performance Share Units shall not be construed as giving Participant the right to be retained as an employee of the Company or any Affiliate. In addition, the Company or an Affiliate may at any time dismiss Participant from employment, free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement or the Plan.

~~(d)Headings~~. Headings are given to the sections and subsections of this Agreement 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 this Agreement or any provision hereof.

~~(e)Severability~~. If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction under any law deemed to be applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law, or if it cannot be so construed or amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken as to such jurisdiction or this Agreement, and the remainder of this Agreement shall remain in full force and effect.

~~(f)Governing Law~~. The internal law, and not the law of conflicts, of the State of Washington will govern all questions concerning the validity, construction and effect of this Agreement. Any claim or action brought with respect to this Award shall be brought in a federal or state court located in Seattle, Washington.

~~IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.~~

~~EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.~~

By:

~~Date: _______________________________~~

~~Participant~~

~~Date:~~

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-30~~

~~Exhibit A~~

~~PERFORMANCE SHARE AWARD AGREEMENT~~

~~Expeditors International of Washington, Inc. 2017 Omnibus Incentive Plan)~~

This Exhibit A to the Performance Share Award Agreement sets forth the manner in which the Committee will determine whether, and the extent to which, Performance Share Units that will become vested, and thus the number of Shares of Common Stock that will become payable with respect to the Award.

~~Definitions~~

Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Performance Share Award Agreement. The following terms used in this Exhibit A shall have the meanings set forth below:

“Cumulative EPS” shall equal the [sum of the] Company’s diluted earnings attributable to shareholders per share for the [___] fiscal year[s] of the Company included in the Performance Period. The Company’s diluted earnings attributable to shareholders per share for any such fiscal year of the Company during the Performance Period shall be as set forth in the audited consolidated financial statements of the Company and its subsidiaries.

“Net Revenues” means the [sum of the] net revenues for the [___] fiscal year[s] of the Company included in the Performance Period, as reported in the Company’s Annual Report on Form 10-K in the Financial Highlights table under Item 6 - Selected Financial Data. Net Revenues are a non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

~~“Cumulative EPS Threshold Performance” means ___________________________________.~~

~~“Cumulative EPS Target Performance” means ______________________________________.~~

~~“Cumulative EPS Maximum Performance” means ___________________________________.~~

~~“Determination Date” means the date on which the Final Award Number is determined, which date shall not be later than 60 days after the last day of the Performance Period.~~

“Final Award Number” means the number of Shares that become payable in settlement of this Performance Share Award determined based on performance in accordance with this Exhibit A, and Final Award Number for an individual Tranche means the number of Shares that become payable in settlement of that Tranche determined in accordance with this Exhibit A.

~~“Net Revenues Threshold Performance” means ______________________________________.~~

~~B-31~~ | ~~Expeditors International of Washington, Inc.~~

~~“Net Revenues Target Performance” means__________________________________________.~~

~~“Net Revenues Maximum Performance” means ______________________________________.~~

~~“Performance Period” has the meaning set forth in Section 1(b) of this Performance Share Award.~~

~~“Target Award Number” for each Tranche means the target number set forth in Section 1(b) of the Award Agreement.~~

~~“Target Award Number Percentage” means, for each Tranche, the percentage of the Target Award Number for such Tranche that may become vested, determined in accordance with this Exhibit A.~~

~~Determination of Final Award Number~~

Each Participant has been granted a number of Units equal to the Target Award Number. Seventy-Five percent (75%) of the Target Award Number is allocated to Tranche A and twenty-five percent (25%) is allocated to Tranche B, as set forth in Section 1(b) of the Performance Share Award Agreement.

The Target Award Number for each Tranche will be adjusted upward or downward following the end of the Performance Period on the Determination Date, depending on whether, and the extent to which, the Cumulative EPS Target and the Net Revenues Target, as applicable, have been met. The Final Award Number for each Tranche will be determined by multiplying (i) the Target Award Number Percentage for the Tranche by (ii) the Target Award Number for the Tranche. The Target Award Number Percentage will be determined in accordance with the following:

If Cumulative EPS Target Performance is achieved, 100% of the Target Number for Tranche A will become vested. If Cumulative EPS Maximum Performance (or greater) is achieved, 200% of the Target Number for Tranche A will become vested. If Cumulative EPS Threshold Performance is achieved, 50% of the Target Number for Tranche A will become vested. If Cumulative EPS Threshold Performance is not achieved, 0% of the Target Number for Tranche A will become vested. The Final Award Number for Tranche A will be determined by linear interpolation for performance between Cumulative EPS Threshold Performance and Cumulative EPS Target Performance, or between Cumulative EPS Target Performance and Cumulative EPS Maximum Performance, as applicable.

If Net Revenues Target Performance is achieved, 100% of the Target Number for Tranche B will become vested. If Net Revenues Maximum Performance (or greater) is achieved, 200% of the Target Number for Tranche B will become vested. If Net Revenues Threshold Performance is achieved, 50% of the Target Number for Tranche B will become vested. If Net Revenues Threshold Performance is not achieved, 0% of the Target Number for Tranche B will become vested. The Final Award Number for Tranche B will be determined by linear interpolation for performance between Net Revenues Threshold Performance and Net Revenues Target Performance, or between Net Revenues Target Performance and Net Revenues Maximum Performance, as applicable.

The Final Award Number for each Participant shall be determined by the Committee on the Determination Date. The Committee shall have no discretion to increase the amount determined on the basis of the objective performance criteria set forth herein but shall retain discretion to reduce such amount.

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-32~~

~~Committee Determinations~~

The Committee shall make all determinations necessary to arrive at the Final Award Number for each Tranche for each Participant. Any determination by the Committee pursuant to this Exhibit A will be binding upon each Participant and the Company.

~~No Fractional Units~~

~~In the event the Final Award Number is a number of Units that is not a whole number, then the Final Award Number shall be rounded down to the nearest whole number.~~

~~FORM OF EXECUTIVE RESTRICTED STOCK UNIT AWARD AGREEMENT~~

~~(Expeditors International of Washington, Inc. 2017 Omnibus Incentive Plan)~~

~~THIS AGREEMENT, dated as of ________________, 20___, (“Agreement”) is entered into between Expeditors International of Washington, Inc. a Washington corporation (the “Company”), and ____________________, an employee of the Company or an affiliate of the Company (“Participant~~”). This Agreement sets forth the terms and conditions of this Restricted Stock Unit Award. This Restricted Stock Unit Award is granted by the Company pursuant to its 2017 Omnibus Incentive Plan, which was approved by shareholders on May, 2, 2017 (the “~~Plan”). Capitalized terms that are not defined in this Agreement shall have the meaning ascribed to such terms in the Plan.~~

~~Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a Restricted Stock Unit Award. Each Restricted Stock Unit (sometimes referred to herein as “RSU”) represents the right to receive one share of Common Stock of the Company (“Common Stock~~”), subject to the vesting requirements and distribution provisions of the Agreement and the terms of the Plan. The shares of Common Stock distributable to Participant with respect to RSUs granted hereunder are referred to as the “~~Shares~~”.

~~The Company and the Participant agree as follows:~~


1.	~~Award of Restricted Stock Units.~~ The Company, effective as of the date of this Agreement, hereby grants to Participant an award of ______ Restricted Stock Units, each Restricted Stock Unit representing the right to receive one Share of Common Stock on such date as set forth herein, subject to the terms and conditions set forth in this Agreement.

2.~~Rights of Participant with Respect to the Restricted Stock Units.~~

~~(a)No Shareholder Rights~~. The Restricted Stock Units granted pursuant to this Agreement do not and shall not entitle Participant to any rights of a shareholder of Common Stock. The rights of Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested, and the restrictions with respect to the Restricted Stock Units lapse, in accordance with Section 3 hereof.

~~(b)Dividend Equivalents~~. As long as Participant holds Restricted Stock Units granted pursuant to this Agreement, the Company shall credit to Participant, on each date that the Company pays a cash dividend to holders of Common Stock generally, an additional number of Restricted Stock Units (“~~Additional Restricted Stock Units~~”) equal to the total number of whole Restricted Stock Units and Additional Restricted Share Units previously credited to Participant under this Agreement multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such date, divided by the Fair Market Value of a share of Common Stock on such date. Any fractional Restricted Stock Unit resulting from such

~~B-33~~ | ~~Expeditors International of Washington, Inc.~~

calculation shall be included in the Additional Restricted Stock Units. A report showing the number of Additional Restricted Stock Units so credited shall be sent to Participant periodically, as determined by the Company. The Additional Restricted Stock Units so credited shall be subject to the same terms and conditions as the Restricted Stock Units with respect to which such Additional Restricted Stock Units were credited, and the Additional Restricted Stock Units shall be forfeited in the event that the Restricted Stock Units with respect to which such additional Restricted Share Units were credited are forfeited. Further, for avoidance of doubt, Participant will be eligible to receive Additional Restricted Stock Units with respect to unvested Restricted Stock Units only if Participant remains in continuous employment with the Company or an Affiliate through the applicable dividend record date as declared by the Board. Additional Restricted Stock Units are subject to income and payroll tax withholding by the Company.

~~(c)Issuance of Shares; Conversion of Restricted Stock Units~~. No Shares of Common Stock shall be issued to Participant prior to the date on which Restricted Stock Units vest, and the restrictions with respect to the Restricted Stock Units lapse, in accordance with Section 3 hereof. Neither this Section 2(c) nor any action taken pursuant to or in accordance with this Section 2(c) shall be construed to create a trust of any kind. After any Restricted Stock Units vest pursuant to Section 3 hereof, the Company shall promptly cause to be issued, in either certificated or uncertificated form, Shares of Common Stock registered in Participant’s name or in the name of Participant’s legal representatives, beneficiaries or heirs, as the case may be, in payment of such vested whole Restricted Stock Units and shall cause such certificated or uncertificated shares to be delivered to Participant or Participant’s legal representatives, beneficiaries or heirs, as the case may be (including for this purpose the delivery of Shares to a deceased Participant’s brokerage account maintained in connection with Awards under this Plan). The value of any fractional Restricted Stock Unit shall be cancelled at the time certificated or uncertificated shares are delivered to Participant in payment of Restricted Stock Units and any Additional Restricted Stock Units.

3.~~Vesting; Forfeiture.~~

~~(a)Vesting~~. Subject to the terms and conditions of this Agreement, Restricted Stock Units shall vest in full and the restrictions with respect to Restricted Stock Units shall lapse if Participant remains continuously employed by the Company or an Affiliate of the Company until the date of such vesting (the “~~Scheduled Vesting Date”) and lapse of restrictions, as set forth below:~~

~~Scheduled Vesting DatePercentage of Restricted Stock Units to Vest~~

~~_____________, 20__33%~~

~~_____________, 20__34%~~

Subject to earlier settlement of RSUs pursuant Sections 3(c), 3(d), 3(e) or 3(f) below, Participant shall be entitled to receive a payout/settlement with respect to RSUs that become vested as of a Scheduled Vesting Date, and all corresponding Shares of Common Stock payable in settlement of such RSUs will be issued and delivered as soon as administratively feasible, but in no event more than sixty (60) days following the applicable Scheduled Vesting Date.

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-34~~

~~(b)Termination of Employment~~. In the event that Participant’s employment with the Company and all Affiliates is terminated prior to a Scheduled Vesting Date, Participant’s right to receive any Shares corresponding to that Scheduled Vesting Date shall be immediately and irrevocably forfeited, unless such termination is by reason of:


~~(1)~~	~~Participant’s permanent disability (within the meaning of Section 409A(a)(2)(C)(i) of the Code (“Disability”);~~


~~(2)~~	~~Participant’s death;~~


~~(3)~~	~~Participant’s Retirement (as defined below in Section 3(d) below).~~


~~(4)~~	~~Participant’s Involuntary Termination without Cause (as defined in Section 3(e) below) or~~


~~(5)~~	~~Participant’s Voluntary Termination for Good Reason (as defined in Section 3(e) below.~~

~~(c)Death; Disability~~. In the event Participant dies or experiences a Disability (as defined in Section 3(b) hereof) prior to a Scheduled Vesting Date, all unvested Restricted Stock Units then outstanding (and not previously forfeited) shall immediately vest, and Participant or Participant’s estate shall be entitled to receive a payment of all corresponding Shares of Common Stock, and for this purpose the delivery of Shares to a deceased Participant’s brokerage account maintained in connection with Awards under the Plan shall be considered delivery to a Participant’s estate. Such payment shall be made as soon as administratively feasible, but in no event more than ninety (90) days following Participant’s death or Disability, as applicable.

~~(d)Retirement. In the event Participant terminates employment due to Retirement prior to a Scheduled Vesting Date, unvested RSUs immediately shall become vested. “Retirement~~” shall mean the voluntary or involuntary termination of Participant’s employment for any reason other than for Cause, Disability or death (i) at such time or after Participant has attained age 55 and completed at least ten years of service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, or (ii) after having completed at least thirty years of continuous service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, and in either case, so long as Participant has at all times that Restricted Stock Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. In this Agreement, “terminates employment” or other references to Participant’s termination of employment, including termination due to Retirement, shall mean Participant’s “separation from service” as that term is defined under Section 409A of the Code. Payment/settlement with respect to RSUs that become vested pursuant to this Section 3(d) will occur as soon as administratively feasible following the Scheduled Vesting Date(s) applicable to such RSUs, but in no event more than sixty (60) days following the applicable Scheduled Vesting Date. If a payment/settlement is made pursuant to this Section 3(d) with respect to otherwise unvested Restricted Stock Units, no payment/settlement shall be made pursuant to Section 3(a) of this Agreement.

~~(e)~~

~~Involuntary Termination without Cause or Voluntary Termination for Good Reason (not in connection with a Change in Control)~~. The following provisions apply if Participant terminates employment as a result of an Involuntary Termination (as defined below) without Cause (as defined in the Plan) or a Voluntary Termination for Good Reason (as defined below) and such termination is not a Qualifying Termination (in connection with a Change in Control), as defined in the Plan. If Participant’s employment is terminated as a result of an Involuntary Termination without Cause or a Voluntary Termination for Good Reason prior to a Scheduled Vesting Date, then (i) unvested RSUs granted

~~B-35~~ | ~~Expeditors International of Washington, Inc.~~

during the prior six month period will be forfeited; (ii) provided that Participant timely executes a waiver and release of claims against the Company in a form acceptable to the Company, those RSUs that otherwise would have vested during the twelve (12) month period following Participant’s termination will immediately become vested upon Participant’s termination; and (iii) all other unvested RSUs shall be forfeited. “~~Involuntary Termination without Cause~~” means termination of Participant’s employment by the Company’s exercise of unilateral authority in circumstances where Participant was willing and able to continue employment and such termination was not for Cause (as defined in the Plan). “~~Voluntary Termination for Good Reason~~” means Participant’s voluntary termination of employment as a result of (i) a material diminution of Participant’s annual base compensation, authority, duties or responsibilities; (ii) a material change in Participant’s reporting relationship, including a requirement that Participant report to a corporate officer or employee instead of reporting directly to the Board; (iii) a material change in the geographic location at which Participant must perform the duties of his or her position; or (iv) any other action or inaction that constitutes a material breach by the Company of the agreement under which Participant serves (e.g. an employment agreement), and in each case Participant has advised the Company in writing of the condition set forth above within ninety (90) days of the initial existence of the condition and the Company has not remedied the condition with thirty (30) days following receipt of such notice.

Notwithstanding the foregoing, the provisions in this Section 3(e) will apply only if Participant has at all times that Restricted Stock Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. Settlement of RSUs that become vested pursuant to this Section 3(e) shall occur as soon as administratively feasible following the Scheduled Vesting Date(s) applicable to such RSUs but in no event more than sixty (60) days) following the applicable Scheduled Vesting Date. If a payment/settlement is made pursuant to this Section 3(e) with respect to otherwise unvested RSUs, no payment/settlement shall be made pursuant to Section 3(a) of this Agreement.

~~(f)Change in Control - Qualifying Termination. For purposes of this Restricted Stock Unit Award, “Change in Control~~” has the meaning ascribed to it in the Plan, provided, however, that any such change in control event described therein must also constitute a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, in each case as defined under Section 409A. Subject to the foregoing limitation on the Definition of Change in Control, upon such a Change in Control the terms of the Plan will govern the treatment of Restricted Stock Units.

~~Restrictions on Transfer~~. Restricted Stock Units shall not be transferable other than by will or by the laws of descent and distribution. Notwithstanding the foregoing, Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant and receive any property distributable with respect to Restricted Stock Units upon the death of Participant. Each right under this Agreement shall be exercisable during Participant’s lifetime only by Participant or, if permissible under applicable law, by Participant’s legal representative. Restricted Stock Units and any rights under this Agreement may not be sold, assigned, transferred, pledged, alienated, attached or otherwise encumbered and any purported sale, assignment, transfer, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company or any Affiliate.

5.~~Income Tax Matters.~~ In order to comply with all applicable federal, foreign, state or local income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, foreign, state or local payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. Participant is responsible for all taxes required to be withheld as a result of either the payment/settlement of RSUs or, if applicable, the earlier vesting of RSUs (i.e. the lapse of restrictions with respect to RSUs under the terms of this Award Agreement).

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-36~~

Generally, when RSUs become vested and no longer subject to risk of forfeiture, withholding of employment taxes (including FICA and Medicare taxes) is required, whereas federal income taxes and related withholding occurs at the time RSUs are settled and paid.

6.~~Securities Matters~~. No Shares of Common Stock shall be issued pursuant to this Agreement prior to such time as counsel to the Company shall have determined that the issuance of such Shares will not violate any securities or other laws, rules or regulations. The Company shall not be required to deliver any Shares of Common Stock until the requirements of any applicable securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied. In addition, the grant of these Restricted Stock Units and/or the delivery of any Shares of Common Stock under this Agreement are subject to the Company’s executive compensation clawback policies as they may exist at the time of grant of this Award and as the Company may adopt in the future to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (or any other applicable law) and any applicable rules and regulations of the Securities and Exchange Commission or applicable stock exchange.

7.~~Tax Consequences~~. Participant agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimize the Participant’s tax liabilities. Participant will not make any claim against the Company, or any of its officers, directors, employees or Affiliates related to tax liabilities arising from Restricted Stock Units or the Participant’s other compensation.

8.~~Adjustments~~. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares, 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 Common Stock such that an adjustment is necessary to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Committee shall, in such manner as it may deem equitable, in its sole discretion, adjust any or all of the number and type of shares subject to Restricted Stock Units.

9.~~General Provisions~~.

~~(a)Section 409A~~. Notwithstanding the foregoing, to the extent that any payment due hereunder is (i) deferred compensation subject to Section 409A of the Code (“Section 409A”), and (ii) is payable to a specified employee (as that term is defined in Section 409A), and (iii) is payable on account of the specified employee’s separation from service (as that term is defined in Section 409A), payment of any part of such amount that would have been made during the six (6) months following Participant’s separation from service shall not then be paid but shall rather be paid on the first day of the seventh (7th) month following the separation from service.


~~(1)~~	~~For this purpose, specified employees shall be identified by the Company on a basis consistent with regulations issued under Section 409A, and consistently applied to all plans, programs, contracts,~~ ~~etc. maintained by the Company that are subject to Section 409A.~~


~~(2)~~	~~For this purpose, “termination of employment” shall be defined as “separation from service” as that term is defined under Section 409A.~~

~~(3)~~

To the extent that Section 409A is applicable to this Agreement, this Agreement shall be construed and administered to comply with the rules of Section 409A. Neither the Company nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the participant or other person on

~~B-37~~ | ~~Expeditors International of Washington, Inc.~~

~~account of any amounts under this Plan or on account of any failure to comply with any Code section.~~

~~(b)Interpretations~~. This Agreement is subject in all respects to the terms of the Plan, except as specifically modified by this Award Agreement. Terms used herein which are defined in the Plan shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein. Any question of administration or interpretation arising under this Agreement shall be determined by the Committee, and such determination shall be final and conclusive upon all parties in interest.

~~(c)No Right to Employment~~. The grant of Restricted Stock Units shall not be construed as giving Participant the right to be retained as an employee of the Company or any Affiliate. In addition, the Company or an Affiliate may at any time dismiss Participant from employment, free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement or the Plan.

~~IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.~~

~~Expeditors International of Washington, Inc.~~

~~By:~~

~~Date:~~

~~Notice of Annual Meeting & Proxy Statement~~ | ~~B-38~~



Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o	Preliminary Proxy Statement

o	Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2))

ý	Definitive Proxy Statement

o	Definitive Additional Materials

o	Soliciting Material Pursuant to Section 240.14a-12



Expeditors International of Washington, Inc.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (check the appropriate box):

ý	No fee required.

o	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

	(1) Title of each class of securities to which transaction applies:

	(2) Aggregate number of securities to which transaction applies:

	(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4) Proposed maximum aggregate value of transaction:

	(5) Total fee paid:


o	Fee paid previously with preliminary materials.

o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1) Amount Previously Paid:

	(2) Form, Schedule or Registration Statement No.:

	(3) Filing Party:

	(4) Date Filed:



To Our Shareholders		1		Executive Stock Ownership Policy
				Insider Trading Policy Prohibits Hedging or Pledging
Notice of Annual Meeting of Shareholders		3		Other Retirement or Disability Payments
	Annual Meeting of Shareholders			Potential Payments upon Termination & Change
				in Control
Proxy Summary		4		Policy on Deductibility of Compensation
	Annual Meeting of Shareholders			Compensation Committee Report
	Meeting Agenda & Voting Recommendations			Summary Compensation Table for the Fiscal Year
	Compensation Philosophy			Ended December 31, 2016
	Responding to Shareholders			Grants of Plan-Based Awards Table
	CEO Compensation			Option Exercises & Year-End Option Value Tables
	Substantive Changes to 2017 Compensation			Outstanding Option awards at December 31, 2016
	Governance Highlights			Securities Authorized for Issuance Under Equity
				Compensation Plans
Proposal No. 1: Election of 11 Directors		8
	Nominees for Election		Proposal No. 3: Approve the Frequency of
	Director Identification & Nomination Process		Advisory Votes on Executive Compensation		40
	Majority Vote Standard for Director Elections
			Proposal No. 4: Approve the 2017 Omnibus
Corporate Governance		14	Incentive Plan		41
	Board Operations			Introduction
	Board Practices & Procedures			Factors Considered in Setting Size of Requested
	Board Attendance			Share Reserve
	Director Retirement Policy			Rationale for Implementing Proposed 2017 Plan
	Board’s Role in Risk Oversight			Principal Features of the Proposed 2017 Plan
	Director Compensation Program			No Outstanding Awards Under 2017 Plan
	Director Compensation Table			Equity Grants under Prior Plans
				Certain U.S. Federal Income Tax Consequences
Shareholder Engagement & Stock Ownership
Information		17	Proposal No. 5: Ratification of Independent
	Shareholder Engagement		Registered Public Accounting Firm		46
	Communicating with the Board of Directors			Relationship with Independent Registered Public
	Information Requests			Accounting Firm
	Fair Disclosure
	Five Percent Owners of Company Stock		Audit Committee Report		47
	Security Ownership of Directors & Executive Officers			Audit Committee
	Section 16(A) Beneficial Ownership Reporting			2016 Committee Highlights
	Compliance
	SEC Filings & Reports		Shareholder Proposal
			Proposal No. 6: Link Executive Compensation
Nominating & Corporate Governance			to Sustainability Performance		49
Committee Report		21		Supporting Statement
	Nominating & Corporate Governance Committee			Company Statement in Opposition
	2016 Committee Highlights
	Key Nominating & Corporate Governance		Other Information		51
	Policies & Practices			Other Business
				Certain Relationships & Related Transactions
Proposal No. 2: Advisory Vote to Approve				Voting Procedures
Named Executive Officer Compensation		24		Voting Securities
	Substantive Changes to 2017 Compensation			Solicitation of Proxies
	Compensation: What We Do and Don’ t Do			Deadlines for Shareholder Proposals for the 2018
				Annual Meeting of Shareholders
Compensation Discussion & Analysis		26		Householding
	Base Salaries
	Executive Incentive Compensation Plan		Appendix A: Summary of the 2017 Omnibus
	2016 Long-Term Incentive Grants		Incentive Plan
	Perquisites & Other Personal Benefits		Appendix B: Omnibus Incentive Plan
	Risk & Compensation Clawback Recovery			Form of Performance Share Award Agreement
	Role of the Compensation Committee, Management			Exhibit A: Performance Share Award Agreement
	& Consultants			Form of Executive Restricted Stock Unit Award
	Employment Agreements			Agreement



To Our Shareholders

Notice of Annual Meeting of Shareholders		1

Proxy Summary		2

Proposal No. 1: Election of Directors		5

Corporate Governance		10
	- Director Compensation	12

Shareholder Engagement & Stock Ownership Information		13
	- Five Percent Owners of Company Stock	14

Nominating & Corporate Governance Committee Report		16

Proposal No. 2: Advisory Vote to Approve Named Executive Officer Compensation		19

Compensation Discussion & Analysis		22
	- Compensation Committee Report	28
	- Summary Compensation Table	29

Proposal No. 3: Approve Amendment to Employee Stock Purchase Plan		34

Proposal No. 4: Ratification of Independent Registered Public Accounting Firm		37

Audit Committee Report		38

Shareholder Proposal No. 5: Political Disclosure Shareholder Resolution		39

Other Information		41

Appendix A: Amendment to Employee Stock Purchase Plan		45




TUESDAY	•	Election of 11 Directors
May ~~2, 2017~~7, 2019	•	Approve (advisory) ~~executive compensation~~
•	~~Approve frequency of advisory votes on executive compensation~~Named Executive Officer Compensation
@ 9:00 A.M. Pacific Time	•	Approve ~~2017 Omnibus Incentive~~Amendment to Employee Stock Purchase Plan
	•	~~Ratify appointment~~Ratification of ~~independent auditors for 2017~~Independent Registered Public Accounting Firm
Expeditors International	•	Vote on ~~a shareholder proposal,~~Shareholder Proposal No. 5, if presented at meeting
1015 Third Ave
Seattle, WA 98104		Record Date: Close of business on March ~~7, 2017~~12, 2019


1.	~~Increasing the long term incentive equity incentive component of total compensation;~~


2.	~~Adding a 5% operating income growth requirement to achieve full payout of the annual cash incentive; and~~


3.	~~Adopting PSU (performance share units) metrics that vest only if certain 3-year performance goals are achieved.~~



Meeting Agenda & Voting Recommendations
Proposal	Board's Voting Recommendation		Page ~~References (for more detail)~~
No. 1: Election of 11 Directors	ü	FOR (each nominee)	pg. 85
No. 2: Advisory Vote to Approve Named Executive Officer Compensation	ü	FOR	pg. 2419
No. 3: Approve ~~the Frequency of Advisory Votes on Executive Compensation~~	ü	~~1 YEAR~~	~~pg. 40~~
~~No. 4: Approve 2017 Omnibus Incentive~~Amendment to Employee Stock Purchase Plan	ü	FOR	pg. 4134
No. 5:4: Ratification of Independent Registered Public Accounting Firm	ü	FOR	pg. 4637
No. 6:5: Shareholder Proposal: ~~Link Executive Compensation to Sustainability Performance~~Political Disclosure Shareholder Resolution	ûX	AGAINST	pg. 4939


1.	~~Shifting a greater portion of CEO pay from cash to long-term equity incentives in order to further enhance shareholder alignment and multi-year performance;~~


2.	Reducing ~~the CEO's~~their allocation of the Executive Incentive Compensation Pool by 6%3% to ~~help fund expansion of the Company's strategic growth initiatives;~~invest in key personnel, effective January 1, 2019;


3.2.	~~Adding a minimum 5% operating income growth requirement for our CEO to realize full payout under~~Further reducing their allocation of the Executive Incentive Compensation ~~Plan; and~~



~~Action~~	~~Rationale~~
~~Shifting~~New Changes adopted for 2019		Reduced senior executive management's allocation of the executive incentive compensation pool by 3% to invest in key personnel	•	Aligns senior executives with focus on strategic growth initiatives and funds those investments

		Further reduced senior executive management's allocation of the executive incentive compensation pool by an amount equal to the target value of PSU awards	•	Will significantly increase NEO portion of pay to equity, increasing alignment with shareholders
			•	Supports focus on long-term performance by requiring 3-year performance goals to be met before any vesting occurs
			•	Aligns senior executive management with shareholders through share ownership (provided PSU are earned)
			•	Aligns with prevalent market practices

		Substantially increased stock holding requirement	•	Increases alignment with long-term interests of shareholders

Changes implemented in 2018 and 2017		Shifted a greater portion of CEO pay to equity and implemented a PSU program for the CEO	• ~~Increases CEO~~	Increased the CEO's equity portion of pay to 36% in 2018 from 24% in 2016, in alignment with ~~long-term interest of~~ shareholders • Equity will represent approximately 40% of CEO’s 2017 total pay (defined as base salary plus cash incentive plus the targeted value of RSU and PSU compared to approximately 24% of CEO’s 2016 total pay)
			•	~~• Provides performance-vesting LTI to align~~Supports focus on long-term performance by requiring 3-year performance goals to be met before any vesting occurs
			•	Aligns CEO with shareholders through share ownership (provided ~~PSUs~~PSU are earned)
			•	Aligns with prevalent market practices
	~~Adopting “double trigger” vesting upon a change-in-control for all new equity incentive awards beginning in 2017~~	~~• Aligns with emerging market practices and shareholder preferences~~
	~~Replacing stock options~~	Reduced senior executive management's allocation of the Executive Incentive Compensation Pool by 6% to fully fund the Company's strategic growth initiatives	•	Aligns senior executives with ~~restricted stock units (“RSUs”) for all NEO~~	~~• Increases shareholder alignment of NEO~~ ~~• Supports leadership continuity~~ focus on strategic growth initiatives and funds those investments
	~~Adding~~
		Added a performance requirement to CEO’s ~~annual Executive Incentive Compensation Plan~~executive non-equity incentive compensation, requiring 5% year-over-year operating income growth to earn unreduced payout ~~(in lieu of 115% payout cap that previously governed growth in year-over-year payouts)~~	•	Establishes performance expectation for continuous profit growth ~~where~~such that if year-over-year operating income growth is less than 5%, the ~~executive~~CEO receives a 5% reduction ~~on their~~in his payout
			•	Establishes minimum level of operating income performance ~~without penalizing for exceptional operating income growth~~
	~~Adopting~~
		Replaced stock options with RSU for all key employees	•	Increases alignment with shareholders
		Replaced stock options with RSU for all key employees	•	Provides retention of key employees in competitive market for talent

		Adopted a “hold until met” policy that requires executives to hold 75% of the net after-tax shares received upon vesting of ~~PSUs~~PSU and ~~RSUs~~RSU until their respective stock ownership guidelines are met	• ~~Aligns executives~~	Increases alignment with ~~long-term interest of~~ shareholders
			•	Aligns with emerging market practices and shareholder preferences

		Adopted “double trigger” vesting upon a change-in-control for all new equity incentive awards	•	Aligns with emerging market practices and shareholder preferences



Summary of Director Experience, Qualifications, Attributes & Skills
	INDEPENDENT DIRECTORS								NON INDEPENDENT DIRECTORS
Summary of Director Experience, Qualifications, Attributions & Skills	Wright	Carlile	DuBois	Emmert	Gulyas	McCune	Monié	Pelletier	Alger	Musser


Operations	l	l	l	l	l	l	l	l	l	l
Logistics Industry					l		l		l	l
International			l	l	l	l	l		l	l
Financial	l	l		l	l	l	l	l	l	l
Sales & Marketing					l		l	l	l	l
Information Technology			l					l		l
Leadership & Strategy	l	l	l	l	l	l	l	l	l	l
Governance/Business Conduct/Legal	l	l	l	l	l	l	l	l	l	l

Planned Committee Membership

Nominating & Corporate Governance
Nominating & Corporate Governance			l	l	l			CHAIR
Compensation		l		CHAIR	l		l
Audit		l	l			CHAIR	l
Audit

Additional Information

Age	59	63	55	66	62	73	68	61	62	53
Tenure	10	0	3	10	3	4	2	6	2	5
Other Public Company Boards	—	1	—	1	2	—	1	2	0	0



ü		The Board of Directors recommends a vote FOR the election of each of the Director Nominees.


Name	Fees Earned or Paid in Cash (1)		Stock Awards (2)	Option Awards	Non-Equity Incentive Plan Compensation	All Other Compensation	Total		Fees Earned or Paid in Cash	Stock Awards ⁽¹⁾	Option Awards	Non-Equity Incentive Plan Compensation	All Other Compensation	Total
Robert R. Wright	$	243,000	199,967	—			$	442,967	$240,000	$199,966	–			$439,966
Glenn M. Alger									$65,000	$199,966	–			$264,966
James M. DuBois	$	65,000	199,967				$	264,967	$65,000	$199,966	–			$264,966
Mark A. Emmert	$	88,000	199,967	—			$	287,967	$85,000	$199,966	–			$284,966
Diane H. Gulyas	$	68,000	199,967	—			$	267,967	$65,000	$199,966	–			$264,966
Dan P. Kourkoumelis (3)	$	68,000	199,967	—			$	267,967
Michael J. Malone	$	68,000	199,967	—			$	267,967
Richard B. McCune	$	93,000	199,967	—			$	292,967	$90,000	$199,966	–			$289,966
Alain Monié									$65,000	$199,966	–			$264,966
Liane J. Pelletier	$	88,000	199,967	—			$	287,967	$85,000	$199,966	–			$284,966
James L.K. Wang	$	68,000	199,967	—			$	267,967
Tay Yoshitani	$	67,000	199,967	—			$	266,967	$65,000	$199,966	–			$264,966


Name & Complete Mailing Address	Number of Shares		Percent of Common Stock Outstanding	Number of Shares		Percent of Common Stock Outstanding
The Vanguard Group	18,721,312	⁽¹⁾	10.37%	21,257,030	₍₁₎	12.31%
100 Vanguard Boulevard, Malvern, PA 19355
Loomis Sayles & Co., L.P.	14,691,969	⁽²⁾	8.15%	16,292,353	₍₂₎	9.44%
One Financial Center, Boston, MA 02111
BlackRock, Inc.	14,184,647	⁽³⁾	7.90%	14,648,105	₍₃₎	8.50%
55 East 52nd Street, New York, NY 10022
55 East 52nd Street, New York, NY 10055				14,648,105	₍₃₎	8.50%
State Street Corporation	10,738,360	⁽⁴⁾	5.95%
State Street Financial Center, One Lincoln Street, Boston, MA 02111
Fiduciary Management, Inc.	9,016,591	⁽⁵⁾	5.00%
100 East Wisconsin Avenue, Suite 2200, Milwaukee, WI 53202
State Street Financial Center				9,641,951	₍₄₎	5.60%
One Lincoln Street, Boston, MA 02111



~~DIRECTORS & NOMINEES~~		~~Amount & Nature of Beneficial Onwership~~	~~Percent of Class~~
	~~Robert R. Wright~~	~~16,646~~	*
	~~Glenn M. Alger~~	~~505,826~~	*
	~~James M. Dubois~~	~~4,129~~	*
	~~Mark A. Emmert~~	~~19,978~~	*
	~~Diane H. Gulyas (1)~~	~~4,129~~	*
	~~Dan P. Kourkoumelis~~	~~55,959~~	*
	~~Michael J. Malone~~	~~22,402~~	*
	~~Richard B. McCune~~	~~8,360~~	*
	~~Alain Monié~~	-	*
	~~Jeffrey S. Musser (2)~~	~~219,960~~	*
	~~Liane J. Pelletier~~	~~17,870~~	*
	~~James L.K. Wang~~	~~516,375~~	*
	~~Tay Yoshitani~~	~~17,870~~	*

~~ADDITIONAL NAMED EXECUTIVES OFFICERS~~
	~~Eugene K. Alger (3)~~	~~67,989~~	*
	~~Philip M. Coughlin (4)~~	~~121,678~~	*
	~~Daniel R. Wall (5)~~	~~83,410~~	*
	~~Bradley S. Powell (6)~~	~~78,899~~	*
	~~All Directors & Executive Officers as a Group (18 persons) (7)~~	~~1,406,340~~	*



DIRECTORS	Amount & Nature of Beneficial Ownership	Percent of Class
Robert R. Wright	23,207	*
Glenn M. Alger ⁽¹⁾	512,387	*
Robert P. Carlile	–	*
James M. Dubois	10,690	*
Mark A. Emmert	15,539	*
Diane H. Gulyas ⁽²⁾	10,690	*
Richard B. McCune	14,921	*
Alain Monié ⁽³⁾	6,561	*
Jeffrey S. Musser ⁽⁴⁾	389,167	*
Liane J. Pelletier	24,431	*
Tay Yoshitani	24,431	*

ADDITIONAL NAMED EXECUTIVES OFFICERS
Eugene K. Alger ⁽⁵⁾	157,208	*
Daniel R. Wall ⁽⁶⁾	165,869	*
Richard H. Rostan ⁽⁷⁾	152,603	*
Bradley S. Powell ⁽⁸⁾	181,119	*

All Directors & Executive Officers as a Group (18 persons) ⁽⁹⁾	2,030,847	1.2%



Board Retainer	$~~65,000~~90,000 in cash.
Chair Retainers	An additional $175,000 retainer for the Chair of the Board. An additional $25,000 retainer for the Chair of the Audit Committee. An additional $20,000 retainer for the Chair of each of the Compensation Committee and the Nominating and Corporate Governance Committee.
Stock Ownership Policy	Each ~~independent director~~Director is required to ~~accumulate~~retain a minimum of ~~15,000 shares of~~5x the ~~Company’s~~cash Board retainer in Expeditors’ Common Stock, ~~over~~which is to be accumulated within the first 5 years of a ~~six-year period from~~Director joining the ~~date first elected to the Board or the policy adoption date.~~Board.


1.	~~Prior to May 2016, a fee of $1,000 was paid for attending meetings or performing operational reviews.~~


2.(1)	This column represents the aggregate fair value of restricted shares issued in ~~2016.~~2018. The fair value of restricted stock awards is based on the fair market value of the Company’s shares of Common Stock on the date of award. These restricted shares vested immediately upon award.


3.	Prior to 2008, each independent Director received a stock option grant of 32,000 shares at the closing market price on the date of grant. As of December 31, 2016, Mr. Kourkoumelis held 32,000 vested option awards.


1.	Reducing their allocation of the Executive Incentive Compensation Pool by 3% to invest in key personnel, effective January 1, 2019;


2.	Further reducing their allocation of the Executive Incentive Compensation Pool by an amount equal to the target value of performance share unit ("PSU") awards that will vest only if 3-year performance goals are achieved for Net Revenue and EPS, matching a similar program that shareholders supported for our CEO in 2017 and 2018; and


5.	The holding shown is as of December 31, 2016, according to Schedule 13G dated February 15, 2017 filed by Fiduciary Management, Inc., an investment adviser. Fiduciary Management, Inc. reports that is has sole voting power with respect to 8,265,959 shares of Common Stock.over 9,640,216 shares.


1-(2)	All shares are held in trust for which Ms. Gulyas maintains voting and dispositive authority.


2-(3)	All shares are held in trust for which Mr. Monié maintains voting and dispositive authority.


(4)	Includes ~~142,838~~112,513 shares held in trust for which Mr. Musser maintains voting and dispositive authority, ~~and 70,500~~247,000 shares subject to stock options exercisable within sixty days, and 13,977 shares subject to RSU vesting within sixty days.


3-(5)	Includes ~~13,050~~18,657 shares held in trust for which Eugene Alger maintains voting and dispositive authority, ~~and 41,125~~127,000 shares subject to stock options exercisable within sixty days, and 5,649 shares subject to RSU vesting within sixty days.


4-(6)	Includes ~~48,125~~119,250 shares subject to stock options exercisable within sixty days and 5,649 shares subject to RSU vesting within sixty days.


5-(7)	Includes ~~51,250~~92,750 shares subject to stock options exercisable within sixty days and 4,999 shares subject to RSU vesting within sixty days.


6-(8)	Includes ~~73,750~~157,000 shares subject to stock options exercisable within sixty days and 5,649 shares subject to RSU vesting within sixty days.


7-(9)	Includes ~~367,125~~989,925 shares subject to stock options exercisable within sixty days and 46,237 shares subject to RSU vesting within sixty days. No Director or Executive Officer has pledged Company stock.



ENVIRONMENT

We go beyond environmental compliance, maintaining a corporate consciousness sensitive to environmental matters. Our goal is to make a positive difference through our own operational footprint, as well as through our partnerships with customers and service providers. Whenever possible, we encourage and help our business partners adopt practices leading to increased environmental sustainability. See more at https://web.expeditors.com/environment.

SOCIAL

Our commitment to our employees, service providers, customers, and communities is integrated into our daily practices and procedures, from providing extensive training and support on health, safety, and security, to engaging with at-risk young adults and veterans who deserve a promising career, to giving back to the communities in which we live and work. Building skills and trust with these valuable groups contributes to strong and effective operations and a better world for all.
–– Corporate Social Responsibility: We have an unwavering commitment to make our communities a better place to live and work, which is ingrained in our culture and apparent through the success of our business. For more information on our social responsibility, visit our Community webpage: https://www.expeditors.com/about-us/sustainability/social.
–– Security, Health and Safety: Our Security, Health and Safety Program is not just a set of rules; we put the rules into action by integrating them into our daily practices and procedures so that they become second nature to every employee and to our service providers. Our security, health and safety efforts are aimed at protecting our people, our information, our systems, our customers’ assets, and our competitiveness and brand reputation. Our employees are our most valuable asset — they set us apart in the industry by promoting both operational excellence and customer service. It is critical that we offer a safe working environment that attracts the best and brightest in the logistics industry. See more at https://www.expeditors.com/about-us/sustainability/social.

GOVERNANCE

Our Code of Business Conduct is a cornerstone of our governance framework and an important reference for how to do business the right way. It covers a range of compliance and ethics topics; including anti-corruption, conflicts of interest, community activities and political contributions, privacy and data protection, labor standards, security, health and safety, and the environment. We have continued to update our Code of Business Conduct and make it more user-friendly, while leaving the embedded, core Cultural Attributes — Integrity, Excellence, and Confidence, among others — unchanged. The Code is currently available to our employees in nine languages. Our Code of Business Conduct is accessible at https://investor.expeditors.com/corporate-governance/governance-documents.


4.	~~Shifting a portion of CEO pay from annual~~Pool by an amount equal to ~~longer-term by adopting performance metrics in~~ the ~~form~~target value of performance share ~~units (“PSU”~~unit ("PSU") awards that will vest only if 3-year performance goals are achieved for Net Revenue and ~~EPS.~~EPS, matching a similar program that shareholders supported for our CEO in 2017 and 2018; and



What We Do	What We Don't Do
Pay decisions are made by independent ~~Directors~~Directors; the Committees and the full Board meet regularly in executive session without management present	No guaranteed bonuses

Pay for performance (over ~~98%~~80% of CEO pay is 'at risk' and directly linked to performance)	No ~~perquisites~~
	pay disconnected from performance (excluding modest base salaries)
Focus on multiple performance metrics ~~(beginning in 2017)~~	No perquisites
Increase the NEO allocation of the Executive Incentive Compensation pool at time of promotion	No arbitrary increases to the NEO allocation of the Executive Incentive Compensation pool
Reduce the NEO allocation of the Executive Incentive Compensation Pool over time	No supplemental pension benefits
Limit the NEO allocation of the Executive Incentive Compensation Pool to preset allocation percentages	No repricing of underwater options
Strictly tie NEO Executive Incentive Compensation to U.S. GAAP operating income	No hedging or pledging of Company shares
Double trigger vesting of unvested equity upon a change in control (beginning in 2017)	No ~~repricing of underwater options~~
	tax gross-ups paid on severance benefits
Work with an independent compensation consultant	No ~~hedging or pledging of Company shares~~
	retirement bonuses
Align with shareholders through ~~PSUs~~PSU and ~~RSUs (beginning in 2017)~~	~~No tax gross-ups paid on severance benefits~~
RSU
Maintain executive and outside Director share ownership guidelines	~~No retirement bonuses~~

Subject incentive compensation to clawback policy

Engage shareholders on compensation matters

~~Annual say-on-pay votes for our shareholders~~



	2016	2017	2018	Target 2019	Change from 2018-2019
Chief Executive Officer	5.2%	4.9%	4.9%	4.7%	(3)%
President - Global Services	4.4%	4.2%	4.2%	3.5%	(17)%
President - Global Products	4.0%	3.7%	3.7%	3.1%	(17)%
President - Global Geographies ⁽¹⁾	4.6%	3.7%	3.7%	3.1%	(17)%
Chief Financial Officer	4.4%	4.2%	4.2%	3.5%	(17)%


(1)	In 2016, the President of Global Geographies was Philip M. Coughlin. Effective February 28, 2017, Richard H. Rostan was promoted to the position.