<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
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/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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RYDER SYSTEM, INC.
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(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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
/X/ Fee paid previously with preliminary materials.
/ / 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:
<PAGE> 2
RYDER SYSTEM, INC.
NOTICE OF
1995 ANNUAL MEETING AND
PROXY STATEMENT
[LOGO]
<PAGE> 3
RYDER SYSTEM, INC. [LOGO]
3600 N.W. 82nd Avenue
Miami, Florida 33166
TO THE STOCKHOLDERS OF RYDER SYSTEM, INC.:
You are cordially invited to attend our Annual Meeting of Stockholders on
Friday, May 5, 1995, at 11:00 A.M., at the Miami Airport Hilton and Towers,
located in Miami, Florida.
The proposals to be acted upon at the Meeting include the election of directors,
the ratification of the adoption of the new Ryder System, Inc. Stock for Merit
Increase Replacement Plan, the ratification of the adoption of the new Ryder
System, Inc. 1995 Stock Incentive Plan, and the ratification of the appointment
of independent auditors for 1995. I hope you will carefully read the proposals,
which are described in the accompanying Proxy Statement, and cast your vote in
favor of them.
The Company has been informed that certain Stockholders again intend to present
proposals for consideration at the Meeting. The Board of Directors believes that
these proposals are not in the best interest of the Company and its Stockholders
and unanimously recommends a vote AGAINST the Stockholder proposals.
It is important that your shares be represented at the Meeting. Accordingly,
even if you plan to attend the Meeting, please sign, date and promptly mail the
enclosed proxy card in the postage-prepaid envelope.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Sincerely,
M. Anthony Burns
----------------
M. Anthony Burns
Chairman, President and
Chief Executive Officer
March 24, 1995
<PAGE> 4
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1995
The Annual Meeting of Stockholders of Ryder System, Inc. will be held at the
Miami Airport Hilton and Towers, 5101 Blue Lagoon Drive, Miami, Florida, on
Friday, May 5, 1995, at 11:00 A.M., for the following purposes:
(1) To elect five directors;
(2) To ratify the adoption of the Ryder System, Inc. Stock for Merit
Increase Replacement Plan;
(3) To ratify the adoption of the Ryder System, Inc. 1995 Stock Incentive
Plan;
(4) To ratify the appointment of KPMG Peat Marwick LLP as auditors for the
Company;
(5) To consider, if properly brought before the Meeting, certain
Stockholder proposals described in the Proxy Statement; and
(6) To transact such other business as may properly come before the Meeting
and any adjournments of the Meeting.
Only Stockholders of record of the Company's Common Stock at the close of
business on March 9, 1995, are entitled to vote in person or by proxy at the
Annual Meeting or any adjournments of the Meeting.
The 1994 Annual Report of the Company has been mailed with this Notice and Proxy
Statement to each Stockholder entitled to vote at the Meeting.
RYDER SYSTEM, INC.
H. Judith Chozianin
-------------------
H. Judith Chozianin
Secretary
March 24, 1995
Miami, Florida
YOUR VOTE IS IMPORTANT!
Please sign, date and return the accompanying proxy card in the enclosed
postage-prepaid envelope as promptly as possible.
If because of a disability you will need auxiliary aids or services to attend
the Annual Meeting, please contact the Secretary prior to the Meeting.
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<PAGE> 5
RYDER SYSTEM, INC. [LOGO]
3600 N.W. 82nd Avenue
Miami, Florida 33166
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TABLE OF CONTENTS PAGE
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Proxy Statement 1
Solicitation and Voting of Proxies 1
Policy of Confidential Voting 1
Procedures for the Meeting 1
Participants in the 401(k) Plan 2
Outstanding Voting Stock 2
Election of Directors (Item No. 1) 3
Board of Directors and Committees of
the Board 9
Compensation of Directors 9
Certain Relationships 10
Ryder System, Inc. Stock for Merit
Increase Replacement Plan (Item No.
2) 11
Ryder System, Inc. 1995 Stock Incentive
Plan (Item No. 3) 14
Selection of Auditors (Item No. 4) 17
Stockholder Proposal (Item No. 5) 18
Stockholder Proposal (Item No. 6) 20
Beneficial Ownership of Shares 23
Compensation Committee Report on
Executive Compensation 24
Compensation of Executive Officers 28
Option Grants 29
Aggregated Option Exercises and Fiscal
Year-End Option Values 30
Pension Benefits 30
Stock Performance 32
Cost of Solicitation 32
Submission of Stockholder Proposals for
the 1996 Annual Meeting 33
Ryder System, Inc. Stock for Merit
Increase Replacement Plan Appendix A
Ryder System, Inc. 1995
Stock Incentive Plan Appendix B
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<PAGE> 6
PROXY STATEMENT
RYDER SYSTEM, INC.
3600 N.W. 82ND AVENUE
MIAMI, FLORIDA 33166
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Ryder System, Inc. (the "Company") of proxies to be voted
at the Annual Meeting of Stockholders of the Company to be held on Friday, May
5, 1995, and at any adjournments of the meeting ("Annual Meeting" or "Meeting").
This Proxy Statement and the accompanying proxy card are being distributed on or
about March 24, 1995, to holders of the Company's common stock ("Stockholders"
or, singularly, a "Stockholder") entitled to vote at the Meeting.
A Proxy Committee consisting of M. Anthony Burns, James M. Herron and Edwin A.
Huston will vote the shares of common stock, par value $.50 per share, of the
Company ("Common Stock", "Common Shares" or "Shares" or, singularly, "Common
Share" or "Share") represented by each proxy card returned to the Company. The
Shares represented by such proxy cards will be voted in favor of the election of
each director nominated in this Proxy Statement, in favor of the adoption of the
Ryder System, Inc. Stock for Merit Increase Replacement Plan, in favor of the
adoption of the Ryder System, Inc. 1995 Stock Incentive Plan, and in favor of
the ratification of KPMG Peat Marwick LLP as auditors of the Company, but
against the Stockholder proposals set forth in this Proxy Statement (if properly
brought before the Meeting), unless a contrary instruction is made on such proxy
card, in which event the proxy will be voted by the Proxy Committee in
accordance with the Stockholder's instructions. Any Stockholder giving a proxy
has the power to revoke it at any time before it is exercised at the Meeting by
filing with the Secretary of the Company an instrument revoking it, by
delivering a duly executed proxy card bearing a later date, or by appearing at
the Meeting and voting in person.
POLICY OF CONFIDENTIAL VOTING
It is the Company's policy that all proxies, ballots and vote tabulations that
identify the particular vote of a Stockholder be kept confidential, except that
disclosure may be made: (i) to allow the independent election inspectors to
certify the results of the vote; (ii) as necessary to meet applicable legal
requirements, including the pursuit or defense of judicial actions; or (iii) in
the event of a proxy or consent solicitation in opposition to the Company based
on an opposition proxy or consent statement filed, or required to be filed, with
the Securities and Exchange Commission (the "SEC"). Accordingly, proxy cards are
returned in envelopes addressed to the tabulator, which receives, inspects and
tabulates the proxies. The final tabulation is inspected by inspectors of
election. Both the tabulator and the inspectors are independent of the Company,
its directors, officers and employees. Except as described above, information as
to the voting instructions given by individuals who are participants in the
Ryder System, Inc. Employee Savings Plan (the "401(k) Plan") will not be
disclosed to management by the trustee of the 401(k) Plan. Information as to
which Stockholders have not voted and periodic status reports on the aggregate
vote will be available to the Company.
PROCEDURES FOR THE MEETING
The presence, in person or by proxy, of the holders of a majority of the
outstanding Shares of Common Stock entitled to vote at the Meeting is necessary
to constitute a quorum at the Annual Meeting. Business at the Meeting will be
conducted in accordance with the procedures determined by the Chairman of the
Meeting and will be limited to matters properly brought before the Meeting
pursuant to the procedures prescribed in the Company's By-Laws. Those procedures
include the requirement that any Stockholder who desires either to bring a
Stockholder proposal before an annual meeting or to nominate a person for
election as a director at an annual meeting give written notice, prior to such
annual meeting, to the Company with respect to the proposal or nominee (see also
"Submission of Stockholder Proposals for the 1996 Annual Meeting"). The Chairman
of the Meeting may refuse to acknowledge any Stockholder proposal or any
nomination for director not made in accordance with the foregoing.
<PAGE> 7
The Board of Directors does not anticipate that any matters other than those set
forth in this Proxy Statement will be brought before the Annual Meeting. If,
however, other matters are properly brought before the Meeting, proxies will be
voted in accordance with the judgment of the Proxy Committee.
PARTICIPANTS IN THE 401(K) PLAN
If a Stockholder is a participant in the 401(k) Plan, the proxy card represents
the number of full Shares held for the benefit of the participant in the 401(k)
Plan as well as any Shares registered in the participant's name. Thus, a proxy
card for such a participant grants a proxy for Shares registered in the
participant's name and serves as a voting instruction for the trustee of the
401(k) Plan for the Share account in the participant's name.
OUTSTANDING VOTING STOCK
On March 9, 1995, there were 78,771,273 outstanding Shares of Common Stock. All
such Shares may be voted at the Annual Meeting and each outstanding Common Share
is entitled to one vote. Only holders of Common Stock of record at the close of
business on March 9, 1995, are entitled to vote at the Annual Meeting or any
adjournments of the Meeting. Neither broker non-votes nor abstentions are
counted as affirmative votes, in whole or in part.
2
<PAGE> 8
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ELECTION OF DIRECTORS
(ITEM NO. 1)
The Company has three classes of directors serving staggered three-year terms.
Serving in the class of directors whose term expires at the 1995 Annual Meeting
are Vernon E. Jordan, Jr., James W. McLamore, Paul J. Rizzo, Donald V. Seibert
and Alva O. Way. The term of office of David T. Kearns, Lynn M. Martin, Hicks B.
Waldron and Mark H. Willes expires at the 1996 Annual Meeting. Arthur H.
Bernstein, M. Anthony Burns, Edward T. Foote II, John A. Georges and Howard C.
Kauffmann are currently serving a term which expires at the 1997 Annual Meeting.
On January 1, 1995, Paul J. Rizzo was appointed by the Board of Directors to
serve in the class of directors whose term expires at the 1995 Annual Meeting.
In addition, Joseph L. Dionne has been nominated by the Board to serve as a
member of the Board of Directors, serving in the class of directors whose term
expires at the 1996 Annual Meeting.
Howard C. Kauffmann and Donald V. Seibert will retire as members of the Board of
Directors effective May 5, 1995, at which time they will each be appointed
Director Emeritus by the Board of Directors.
Accordingly, the Stockholders are asked to elect Vernon E. Jordan, Jr., James W.
McLamore, Paul J. Rizzo and Alva O. Way, all of whom have been duly nominated by
the Board of Directors, to serve a term of office expiring at the 1998 Annual
Meeting, and Joseph L. Dionne, who has been duly nominated by the Board of
Directors, to serve a term of office expiring at the 1996 Annual Meeting.
Unless a proxy card specifies otherwise, the Proxy Committee will vote the
Shares covered by the proxy for the election of Vernon E. Jordan, Jr., James W.
McLamore, Paul J. Rizzo and Alva O. Way to the class of directors whose term
expires at the 1998 Annual Meeting, and for the election of Joseph L. Dionne to
the class of directors whose term expires at the 1996 Annual Meeting. In the
event any of these nominees becomes unavailable to serve (which is not
anticipated), the proxy card gives the Proxy Committee the authority to vote for
such other person as it may select.
The following material sets forth the name of each nominee and of each director
continuing in office, a description of positions and offices with the Company,
any other principal occupation, business experience during at least the last
five (5) years, certain directorships presently held, age and length of service
as a director of the Company.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for the election of each nominee to the Board of Directors.
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3
<PAGE> 9
NOMINEES FOR DIRECTOR
FOR A TERM OF OFFICE EXPIRING AT THE 1998 ANNUAL MEETING
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VERNON E. JORDAN, JR. Mr. Jordan is a Senior Partner in the law firm of
Senior Partner, Akin, Gump, Strauss, Hauer & Feld, LLP. Prior to
Akin, Gump, Strauss, joining Akin, Gump in 1982, he was President and
Hauer & Feld, LLP Chief Executive Officer of the National Urban
[PHOTO] League from 1972 to 1981. From 1970 to 1972, he
Member--Audit Committee was Executive Director of the United Negro
Member--Committee on Directors College Fund. He is currently serving on the
and Public Responsibility Board of Directors of American Express Company,
Bankers Trust Company, Bankers Trust New York
Corporation, Corning Inc., Dow Jones & Company,
Director since 1989 Inc., Revlon Group, J.C. Penney Company, Inc.,
Age 59 Sara Lee Corporation, Union Carbide Corporation
and Xerox Corporation. He is also a director of
The Brookings Institution and The Ford
Foundation.
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JAMES W. MCLAMORE Mr. McLamore has been extensively involved in the
Chairman Emeritus, food service industry throughout the past 47
[PHOTO] Burger King Corporation years. In 1954, he co-founded Burger King
Corporation and served as its President or
Chairman--Committee on Directors Chairman of the Board through 1976. He currently
Director since and Public Responsibility serves as Chairman Emeritus of both Burger King
1977 Corporation and the Board of Trustees of the
Age 68 Member--Audit Committee University of Miami. He also serves as a director
of Lennar Corporation.
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PAUL J. RIZZO Mr. Rizzo was employed with International
Retired Vice Chairman, Business Machines Corporation from 1958, where he
International Business Machines held increasingly responsible positions, until
[PHOTO] Corporation his retirement as Vice Chairman of the Board in
1987. He returned to IBM in 1993 as Vice Chairman
Member--Compensation Committee of the Board until he retired again on December
Member--Finance Committee 31, 1994. He was Dean of the Kenan-Flagler
Business School of the University of North
Carolina from 1987 until 1992, when he retired
from that position to become a partner in
Director Franklin Street Partners, a Chapel Hill
1987-1993 and investment firm. Prior to joining IBM in 1958, he
since 1995 was associated with Dan River Mills, and Lybrand,
Age 67 Ross, Montgomery (now Coopers & Lybrand). He is
currently serving on the Board of Directors of
Johnson & Johnson, McGraw-Hill, Inc., Cox
Enterprises, Inc. and Maersk, Inc.
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ALVA O. WAY Mr. Way was elected Chairman of the Board of IBJ
Chairman, Schroder Bank & Trust Company in 1986. He serves
IBJ Schroder Bank & as a consultant to and director of Schroder PLC,
Trust Company London, and related companies. Mr. Way joined
General Electric Company in 1951, where he served
[PHOTO] Chairman--Finance Committee in various executive positions including Chief
Member--Compensation Committee Financial Officer. In 1979, he was elected Vice
Chairman of American Express Company, and in 1981
he was named President of American Express
Company and Chairman and Chief Executive Officer
of American Express International Banking
Direct since 1985 Corporation. Mr. Way served as President of The
Age 65 Travelers Companies, a financial services
organization, from 1983 through 1984. He is a
director of Eli Lilly and Company, Guidant
Corporation, McGraw-Hill, Inc. and Gould, Inc. He
is Chancellor of Brown University and a trustee
of the Committee for Economic Development.
</TABLE>
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NOMINEE FOR DIRECTOR
FOR A TERM OF OFFICE EXPIRING AT THE 1996 ANNUAL MEETING
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JOSEPH L. DIONNE Mr. Dionne has been Chairman of the Board and
Chairman and Chief Executive Chief Executive Officer of McGraw-Hill, Inc.
Officer, McGraw-Hill, Inc. since 1988. He joined McGraw-Hill Book Company in
1967 as Vice President for Research and
Development at Educational Developmental
[PHOTO] Laboratories. A year later, he was appointed
General Manager of California Test Bureau and
became a Vice President of McGraw-Hill Book
Company in 1970. He has held various positions in
the company including Executive Vice
President--Operations. In 1981, he became
President and Chief Operating Officer of
McGraw-Hill and held that position until 1983
when he became President and Chief Executive
Officer. Prior to joining McGraw-Hill, Mr.
Age 61 Dionne's experience included teaching,
educational administration and consulting work on
a number of experimental education projects. He
serves on the Board of Directors of Alexander &
Alexander Services, Inc., The Equitable
Companies, Incorporated, The Equitable Life
Assurance Society of the United States, and
Harris Corporation, and is a trustee of Hofstra
University.
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DIRECTORS CONTINUING IN OFFICE
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ARTHUR H. BERNSTEIN Mr. Bernstein has been President and Chief
President and Chief Executive Executive Officer of Bancorp Capital Group, Inc.,
Officer, Bancorp Capital a venture capital firm, since 1987. He joined the
Group, Inc. Company in 1955 as General Counsel and Secretary
[PHOTO] and from 1958 to 1965 he was Vice President and
Member--Audit Committee Treasurer and a member of the Board of Directors.
Member--Finance Committee In 1966, Mr. Bernstein joined Lazard Freres &
Co., Investment Bankers. In 1968, he joined
Norton Simon, Inc. as Vice President--Finance,
and from 1970 to 1976 he was Senior Vice
Director President of Max Factor & Co. and a member of its
1958-1966 and Board of Directors. From 1977 to 1980, Mr.
since 1974 Bernstein was a practicing attorney and business
Age 69 consultant and from 1980 to 1993 he was Managing
General Partner of California Capital Investors,
Ltd. Mr. Bernstein serves as a trustee of the
Sierra Trust Fund, the Sierra Variable Annuity
Fund and the Phillips Graduate Institute.
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M. ANTHONY BURNS Mr. Burns, who joined the Company in 1974, was
Chairman, President and elected a director, President and Chief Operating
Chief Executive Officer, Officer of the Company in December, 1979.
Ryder System, Inc. Effective January 1, 1983, he was elected to the
[PHOTO] position of Chief Executive Officer of the
Company, and on May 3, 1985, he became Chairman
of the Board. He serves on the Board of Directors
of The Chase Manhattan Corporation, The Chase
Manhattan Bank, N.A., J.C. Penney Company, Inc.
and Pfizer Inc. He is an Active Member of The
Director since Business Council, is a member of The Business
1979 Roundtable and The Business Roundtable's Policy
Age 52 Committee, and chairs The Business Roundtable
Health, Welfare, and Retirement Income Task
Force. He serves on the boards of the United Way
of America, the American Red Cross and the Boy
Scouts of America. He also serves on the Board of
Trustees of the University of Miami.
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EDWARD T. FOOTE II Mr. Foote has been President of the University of
President, University of Miami Miami since 1981. Prior to joining the University
of Miami, he was Special Advisor to the
[PHOTO] Member--Compensation Committee Chancellor and Board of Trustees, Washington
Member--Finance Committee University, from 1980 to 1981. From 1973 to 1980,
he was Dean of the Washington University School
of Law, and from 1970 to 1973, he was Vice
Director since Chancellor, General Counsel and Secretary to the
1987 Board of Trustees of Washington University. Prior
Age 57 to that he was an associate with the law firm of
Bryan, Cave, McPheeters and McRoberts.
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JOHN A. GEORGES Mr. Georges was elected Chairman of the Board of
Chairman and Chief Executive International Paper in 1985 and Chief Executive
Officer, International Paper Officer in 1984. He is Chairman of the Board and
Company a director of IP Forest Resources Company (the
[PHOTO] managing general partner of IP Timberlands,
Member--Audit Committee Ltd.). He is also a director of Warner-Lambert
Member--Committee on Directors Company, AK Steel Holding Corporation and Scitex
and Public Responsibility Corporation. Mr. Georges is a member of The
Business Council and the Policy Committee of The
Business Roundtable, a member of the Board of the
Director since Business Council of New York State and a trustee
1993 of its Public Policy Institute, serves on The
Age 64 Trilateral Commission and is a member of the
Advisory Committee for Trade Policy and
Negotiations. He is also a trustee of Drexel
University.
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DAVID T. KEARNS Mr. Kearns has been Chairman of the New American
Chairman, New American Schools Schools Development Corporation since 1993 and
Development Corporation, was Deputy Secretary of the United States
and Retired Chairman and Chief Department of Education from 1991 through 1993.
Executive Officer of Xerox From 1982 through 1990, Mr. Kearns was Chairman
[PHOTO] Corporation and Chief Executive Officer of Xerox Corporation,
which he joined in 1971 as a Vice President.
Chairman--Audit Committee Prior to joining Xerox, he was a Vice President
Member--Finance Committee in the Data Processing Division of International
Business Machines Corporation. Mr. Kearns is a
senior university fellow at Harvard University
Director and a member of The Business Council, the Council
1988-1991 and on Foreign Relations and the American Philo-
since 1993 sophical Society. Mr. Kearns is a trustee of the
Age 64 University of Rochester and the Ford Foundation
and a director of The Chase Manhattan Bank, N.A.,
The Chase Manhattan Corporation and Time Warner,
Inc.
</TABLE>
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LYNN M. MARTIN Since serving as Secretary of Labor under
Former U.S. Secretary of Labor; President George Bush from 1991 to 1993, Ms.
Chairperson, Deloitte & Touche's Martin has served as Chairperson of Deloitte &
Council for the Advancement of Touche's Council for the Advancement of Women and
[PHOTO] Women; advisor to Deloitte & as an advisor to that firm. She is a regular
Touche; and Professor, J. L. commentator, panelist, columnist and speaker on
Kellogg Graduate School of radio and television programs, in national
Management at Northwestern publications and before various business and
University academic groups, with respect to the changing
global economic and political environment. Prior
Director since Member-- Compensation to serving as Secretary of Labor, Ms. Martin
1993 Committee represented the 16th District of Illinois in the
Age 55 Member--Finance Committee U.S. House of Representatives from 1981 to 1991.
She also serves as a director of The Procter &
Gamble Company, Ameritech, Harcourt General,
Inc., The Dreyfus Corporation and Chicago's
Lincoln Park Zoo. She is a member of the Council
on Foreign Relations.
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HICKS B. WALDRON Mr. Waldron was Chairman and Chief Executive
Retired Chairman and Officer of Avon Products, Inc. from 1983 through
Chief Executive Officer, 1988. Prior to joining Avon, he was Executive
[PHOTO] Avon Products, Inc. Vice President of R.J. Reynolds Industries, Inc.,
which he joined when R.J. Reynolds acquired
Member--Committee on Directors Heublein, Inc. in 1982. He joined Heublein in
and Public Responsibility 1973 as President and became Chief Executive
Director since Member--Compensation Committee Officer in 1975 and Chairman in 1982. From 1946
1987 to 1973, Mr. Waldron was associated with General
Age 71 Electric Company, acting in various management
and executive capacities. He is currently serving
as a director of the Atlantic Richfield Company.
</TABLE>
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MARK H. WILLES Mr. Willes was elected Vice Chairman of General
Vice Chairman, Mills, Inc. in April 1992. Mr. Willes joined
General Mills, Inc. General Mills on July 1, 1980, as Executive Vice
President and Chief Financial Officer and a
Chairman--Compensation member of the company's Management Policy
[PHOTO] Committee Committee. He was elected to the Board of
Member--Finance Committee Directors in December 1984, and elected President
in 1985. Prior to joining General Mills, Mr.
Willes served as President of the Federal Reserve
Bank of Minneapolis from 1977 to 1980. He had
previously been with the Federal Reserve Bank of
Director since Philadelphia, where he was named Director of
1992 Research in March 1970 and First Vice President
Age 53 in October 1971. From 1967 to 1971, Mr. Willes
was Assistant Professor of Finance and Visiting
Lecturer, Wharton School of Finance and Commerce
at the University of Pennsylvania. Mr. Willes
serves as a director of Black & Decker
Corporation and The Talbots, Inc. He is Chairman
of the National Advisory Council of the School of
Management, Brigham Young University. He is also
Chairman of the Science Museum of Minnesota.
</TABLE>
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8
<PAGE> 14
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors currently consists of 14 members. During 1994, the Board
met 8 times. The Board has established standing Audit, Compensation and Finance
Committees and a Committee on Directors and Public Responsibility to assist the
Board in the discharge of its responsibilities. The Board may also appoint other
committees for specialized functions as appropriate. All of the directors of the
Company are independent directors (as that term is defined in the Company's
By-Laws) other than Mr. Burns. The Company's By-Laws provide that a majority of
the Board of Directors, and all members of the Compensation Committee and the
Committee on Directors and Public Responsibility, must be independent directors.
The Audit Committee consists of David T. Kearns, Chairman, Arthur H. Bernstein,
John A. Georges, Vernon E. Jordan, Jr., James W. McLamore and Donald V. Seibert.
The Audit Committee met 6 times in 1994. The Committee is responsible for
recommending to the Board the engagement of independent auditors, reviewing the
scope of and budget for the annual audit and reviewing with the independent
auditors the results of the audit engagement, including the financial statements
of the Company. The Committee also reviews the scope and results of the
Company's internal audit procedures and reviews compliance with Company policies
relating to conflicts of interest and business ethics.
The Compensation Committee consists of Mark H. Willes, Chairman, Edward T. Foote
II, Howard C. Kauffmann, Lynn M. Martin, Paul J. Rizzo, Hicks B. Waldron and
Alva O. Way. The Compensation Committee met 6 times in 1994. The Committee
reviews and approves or recommends to the Board, as appropriate, compensation
for senior management, recommends to the Board the adoption and implementation
of incentive compensation plans, stock option plans and employee benefit plans
and reviews non-management Board members' compensation and benefits and
recommends changes as appropriate. The Compensation Committee Report on
Executive Compensation is set forth on pages 24 through 27 of this Proxy
Statement.
The Finance Committee consists of Alva O. Way, Chairman, Arthur H. Bernstein,
Edward T. Foote II, David T. Kearns, Lynn M. Martin, Paul J. Rizzo and Mark H.
Willes. The Finance Committee met 6 times in 1994. The Committee reviews the
financial condition and capital structure of the Company, advises the Board with
respect to capital appropriations and other financial matters affecting the
Company and reviews and recommends to the Board a dividend policy for the
Company and any actions to be taken thereunder.
The Committee on Directors and Public Responsibility consists of James W.
McLamore, Chairman, John A. Georges, Vernon E. Jordan, Jr., Howard C. Kauffmann,
Donald V. Seibert and Hicks B. Waldron. The Committee met 6 times in 1994. The
Committee reviews and recommends criteria for Board membership, reviews the
qualifications of and recommends individuals for election as directors and
reviews and recommends the function and authority of all Board Committees as
well as their composition. The Committee will review nominees suggested by
Stockholders in writing and sent to the Secretary of the Company. Any such
suggestion should include sufficient information about the proposed nominee to
permit the Board of Directors to make an informed determination as to whether
the proposed nominee, if elected, would be an independent director, as that term
is defined in the Company's By-Laws. Additional responsibilities of the
Committee include identifying and analyzing current trends and issues pertaining
to public policy, public affairs and corporate responsibility and bringing such
matters to the attention of the Board.
The directors spend a considerable amount of time preparing for Board and
Committee meetings and, in addition, are called upon for their counsel between
meeting dates. Each of the incumbent directors attended 75% or more of the
aggregate number of meetings of the Board of Directors and the Committees on
which he or she served in 1994.
COMPENSATION OF DIRECTORS
Each director of the Company, other than Mr. Burns, is entitled to an annual
retainer of $21,500 for Board membership and $3,500 for each membership on a
major Board Committee. The chairperson of each such Committee is also entitled
to an additional retainer of $4,500 per year. The meeting fee payable to
directors for telephonic meetings of the Board of Directors or standing
Committees of the Board is $1,100. Directors are entitled to a per diem fee for
all other regular and special meetings of the Board or its Committees of $2,200
and $1,100, respectively, together with reimbursement for travel expenses. Mr.
Burns does not receive any additional compensation by reason of his membership
on the Board or attendance at meetings of any of its Committees.
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Under the Company's Directors Stock Plan any eligible director may make an
election to receive a combination of Common Shares determined by a formula and
$11,500 in cash (collectively, the "Formula") in lieu of the annual retainer.
The Formula provides that the number of Shares granted to a participant will be
equal to the nearest number of whole Shares which can be purchased for $15,000
based on the Fair Market Value of the Shares on the date of grant. The Shares
will be entitled to cash dividends and full voting rights, but will not fully
vest until six months after the date of grant provided that the director
continues to serve in that capacity at that date. None of the Shares may be sold
or transferred prior to six months after the date when service as a director
ceases. A majority of the eligible directors have elected to participate in the
Directors Stock Plan.
The Company also provides all non-employee directors with $100,000 of accidental
death and dismemberment coverage under the Company's travel accident insurance
policy, yearly compensation at retirement equal to 100% of the annual Board
membership cash retainer in effect at the time of their retirement, optional
coverage under the Company's medical plan, $100,000 of coverage under the
Company's group term life insurance policy and the use of a Company-owned
automobile, resulting in additional average compensation of $12,894 to each such
director. The Company also provides all non-employee directors with long-term
disability income protection.
The Company has adopted a Directors' Charitable Award Program under which it
intends to make charitable contributions in the name of current and future
directors. The program is designed to acknowledge the service of directors and
to benefit and recognize the mutual interest of directors and the Company in
supporting worthy charitable and educational institutions. In addition, it
enhances the Company's ability to attract and retain directors of the highest
caliber and experience. Under the Directors' Charitable Award Program, each
current or future director may designate up to 2 charitable organizations and it
is the Company's intention to contribute the sum of $500,000, in ten annual
installments, to the designated organizations in the director's name upon the
director's death. The program may be funded with the proceeds of insurance
policies on the lives of paired directors. Individual directors will derive no
financial benefit from this program, as all charitable deductions accrue solely
to the Company. A majority of the current directors and three retired directors
participate in the Directors' Charitable Award Program.
Directors of the Company may elect to defer receipt of their retainer and fees.
Deferred funds become part of the general assets of the Company and bear simple
interest at a rate based upon the base or prime rate of a major bank, but not
lower than 5% or higher than 12% per annum. At the discretion of the director,
the funds may be deferred until the earlier to occur of a fixed date,
retirement, disability, or removal, and are payable in a lump sum or
installments. However, upon a change of control of the Company all deferred
amounts will be distributed immediately to the director in a lump sum.
CERTAIN RELATIONSHIPS
Mr. Jordan is a senior partner in the law firm of Akin, Gump, Strauss, Hauer &
Feld, LLP which performed professional services on behalf of the Company in
1994. Additionally, in the ordinary course of business, the Company and its
subsidiaries may from time to time engage in transactions with other
unaffiliated corporations whose officers or directors are also directors of the
Company. All such transactions are conducted on a commercial, arms-length basis
and may not come to the special attention of the directors or officers of either
the Company or the other corporation involved. The Company does not consider
either the transactions or the amounts involved in such transactions to be
significant.
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RYDER SYSTEM, INC.
STOCK FOR MERIT INCREASE REPLACEMENT PLAN
(ITEM NO. 2)
On December 16, 1994, the Board of Directors adopted, subject to ratification by
the Company's Stockholders, the Ryder System, Inc. Stock for Merit Increase
Replacement Plan (the "Replacement Plan"). The Replacement Plan is designed to
give key executives of the Company the opportunity to receive stock option
grants in lieu of merit salary increases. The intent of the Replacement Plan is
to increase the proportion of executive compensation and benefits tied to stock
ownership while reducing the proportion related to cash compensation. In
addition, the Replacement Plan will provide these executives with an ownership
interest in the Company's Common Stock.
The Board believes that increased Common Stock ownership by key executives more
closely aligns Stockholder and employee interests by encouraging greater focus
on the long-term growth and profitability of the Company and its Common Stock.
The Replacement Plan may also provide the Company with an immediate benefit due
to lower salaries and lower cash bonuses.
The Replacement Plan is designed to meet the strict requirements of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), regarding
performance-based compensation so that stock-based compensation in excess of $1
million will be tax deductible by the Company.
A summary of the material features of the Replacement Plan appears below. The
full text of the Replacement Plan is set forth in Appendix A and should be
referred to for a complete description of its provisions.
EFFECTIVE DATE AND EXPIRATION
The Replacement Plan will become effective on May 5, 1995, if ratified by the
Company's Stockholders. Grants may be made under the Replacement Plan until its
termination on May 4, 2005, but awards made prior thereto may extend beyond that
date.
ADMINISTRATION
The Replacement Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"), which consists entirely of outside
directors as defined for purposes of Section 162(m) of the Code. No member of
the Committee will be eligible to participate in the Replacement Plan. The
Committee shall have plenary authority, subject to the express provisions of the
Replacement Plan, to (i) select participants; (ii) determine the nature, amount,
time and manner of stock option grants made under the Replacement Plan; (iii)
interpret the Replacement Plan; (iv) prescribe, amend and rescind rules and
regulations relating to the Replacement Plan; and (v) make all other
determinations deemed necessary or advisable for the administration of the
Replacement Plan.
LIMITATIONS ON AWARDS
The aggregate number of Shares for which stock options may be granted under the
Replacement Plan may not exceed 500,000 Shares. No individual participant may
receive stock options for more than 300,000 Shares in the aggregate during the
term of the Replacement Plan. On March 15, 1995, the closing price of a Common
Share on the New York Stock Exchange Composite Index was $22.63.
ELIGIBILITY FOR AWARDS
Awards under the Replacement Plan may be made to members of the Company's senior
leadership group, known as the Executive Committee, and to such other elected
officers of the Company or its subsidiaries as the Committee may select. The
Executive Committee currently consists of 12 individuals and there are
approximately 58 elected officers of the Company and its subsidiaries. No
executive eligible to participate in the Replacement Plan may receive an award
under the Replacement Plan unless the executive has been selected by the
Committee and has made an irrevocable election to receive stock options in lieu
of a merit salary increase at least six (6) months in advance of the date of
grant of such stock options.
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<PAGE> 17
It is impossible to determine the exact number of persons who will be eligible
under the Replacement Plan during its term because the selection of participants
is a discretionary decision of the Committee. Non-employee directors are not
eligible to participate in the Replacement Plan.
DETERMINATION OF AMOUNT AND FORM OF AWARD
The amount of individual awards to participants will be determined by the
Committee, subject to the limitations of the Replacement Plan. Nonqualified
stock options and options qualifying as incentive stock options may be awarded
to participants under the Replacement Plan. The option price may not be less
than 100% of the fair market value of a Share of Common Stock on the date of
grant. The term of a stock option cannot exceed ten years from the date of
grant. Options generally will terminate three months after the termination of
employment, except in the event of the participant's death, disability or
retirement or except if the participant is terminated for cause. Because these
option grants are made in place of salary increases, twenty percent (20%) of
each option grant will vest immediately, with the remainder to vest in equal
annual installments over a four (4) year period. However, the Committee may, in
its discretion, accelerate the date on which a stock option may be exercised.
Options may not be assigned or transferred by the participant except by will or
the laws of descent and distribution. A participant exercising a stock option
must pay the exercise price in full in cash or, at the discretion of the
Committee, in previously acquired Shares or in a combination of cash and Shares.
CHANGE OF CONTROL
In the event of a "change of control" (as defined on page A-3 of the Replacement
Plan), each unexercised and unexpired stock option will become immediately
exercisable in full, and remain exercisable in full for the remainder of its
term, unless the participant is terminated for cause. Participants holding
unexercised and unexpired stock options may, in lieu of exercising, at any time
within 60 days following a change of control, require the Company to purchase or
cash out such stock options or portions thereof at a price based upon the
highest of: (i) the highest closing price of the Common Stock within the 60-day
period preceding the date of purchase or cash out; (ii) the highest price per
Share of Common Stock reported in certain Schedule 13D reports; or (iii) a
liquidation or breakup value for the Company, except that incentive stock
options are limited to the spread between the fair market value of Common Stock
on the date of exercise and the purchase price per Share at which the related
stock option is exercisable.
AMENDMENT
The Committee may at any time (i) terminate the Replacement Plan or (ii) modify
or amend the Replacement Plan in any respect, except that, to the extent
required to maintain the qualification of the Replacement Plan under Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or as
otherwise required to comply with applicable law or the regulations of any stock
exchange on which the Common Stock is listed, the Committee may not, without the
Stockholders' approval, (A) materially increase the benefits accruing to
participants under the Replacement Plan; (B) materially increase the number of
securities which may be issued under the Replacement Plan; or (C) materially
modify the requirements as to eligibility for participation in the Replacement
Plan. However, in the case of a merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure of the Company, the Committee may make appropriate adjustments in the
Replacement Plan or any awards granted under the Replacement Plan.
FEDERAL INCOME TAX CONSEQUENCES
The grant of a nonqualified stock option does not result in income for the
participant or in a deduction for the Company. The exercise of a nonqualified
stock option results in ordinary income for the participant and a compensation
deduction for the Company measured by the difference between the option price
and the fair market value of the Shares received at the time of exercise. Income
and employment tax withholding is required. To the extent permitted by law and
Committee rules, a participant may authorize the Company to reduce the number of
Shares to be issued for an option exercise in satisfaction of the withholding
obligation.
Neither the grant nor the exercise of an incentive stock option results in
taxable income for the participant or in a deduction for the Company. However,
the excess of the market value on the exercise date over the option price of the
Shares is an "item of adjustment" for purposes of the participant's alternative
minimum tax. When a participant
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disposes of Shares acquired by exercise of an incentive stock option, the
participant's gain (the difference between the sale proceeds and the price paid
by the participant for the Shares) upon the disposition will be taxed as capital
gain, provided the participant (i) does not dispose of the Shares within two
years after the date of grant nor within one year after the transfer of Shares
upon exercise and (ii) exercises the option while an employee of the Company or
a subsidiary or within three months after termination of employment for reasons
other than death or disability. If the Shares are disposed of before the
expiration of either period, the participant generally will realize ordinary
income in the year of the disqualifying disposition and the Company can deduct
that amount as compensation.
ADDITIONAL INFORMATION
Because awards under the Replacement Plan will require future action by the
Committee and a decision by each eligible executive whether to participate or
not, it is impossible at this time to state the benefits any named executive
officer or other individual executive may receive if the Replacement Plan is
ratified by the Company's Stockholders. The awards made under the Ryder System,
Inc. 1980 Stock Incentive Plan during fiscal year 1994 to the five highest paid
executive officers of the Company are described on pages 29 and 30 of this Proxy
Statement.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is required for ratification of the Ryder System, Inc. Stock for Merit Increase
Replacement Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE RYDER SYSTEM,
INC. STOCK FOR MERIT INCREASE REPLACEMENT PLAN.
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<PAGE> 19
RYDER SYSTEM, INC.
1995 STOCK INCENTIVE PLAN
(ITEM NO. 3)
On February 17, 1995, the Board of Directors adopted, subject to ratification by
the Company's Stockholders, the Ryder System, Inc. 1995 Stock Incentive Plan
(the "1995 Plan"). The 1995 Plan is designed to provide incentive compensation
to key management employees of the Company and to provide them with an ownership
interest in the Company's Common Stock. The Board believes that the 1995 Plan
will be beneficial to the Company and its Stockholders by enhancing the
Company's position in the highly competitive market for key executives. The
Board intends to grant options and other awards under the 1995 Plan as a means
to recruit, retain, motivate and appropriately reward those highly qualified
individuals who contribute to the success of the Company.
The 1995 Plan is substantially the same as the Ryder System, Inc. 1980 Stock
Incentive Plan (the "1980 Plan"), which was originally approved by the
Stockholders at the 1980 Annual Meeting. If the Stockholders ratify the 1995
Plan, no further Shares will be added to the 1980 Plan and it will terminate in
accordance with its terms. The major changes between the 1980 Plan and the 1995
Plan are designed to meet the strict requirements of Section 162(m) of the Code
regarding performance-based compensation so that stock-based compensation in
excess of $1 million will be tax deductible by the Company.
A summary of the material features of the 1995 Plan appears below. The full text
of the 1995 Plan is set forth in Appendix B and should be referred to for a
complete description of its provisions.
EFFECTIVE DATE AND EXPIRATION
The 1995 Plan will become effective on May 5, 1995, if ratified by the Company's
Stockholders, and will terminate on May 4, 2005. No award may be made under the
1995 Plan after its expiration date, but awards made prior thereto may extend
beyond that date.
ADMINISTRATION
The 1995 Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"), which consists entirely of outside directors as
defined for purposes of Section 162(m) of the Code. No member of the Committee
will be eligible to participate in the 1995 Plan. The Committee will have full
authority to interpret the 1995 Plan and to establish rules for its
administration. The Committee may, in its discretion, accelerate the date on
which a stock option, SAR or Limited SAR (as defined on page 15) may be
exercised, the date of termination of restrictions applicable to a restricted
stock right, or the end of a performance period under a performance unit award.
LIMITATIONS ON AWARDS
The 1995 Plan provides that over its ten-year term, stock options (and related
SARs and Limited SARs) and restricted stock rights for not more than 3,300,000
shares of Common Stock may be issued. No individual participant may receive
stock options for more than 800,000 Shares in the aggregate during the term of
the 1995 Plan. On March 15, 1995, the closing price of a Common Share on the New
York Stock Exchange Composite Index was $22.63.
ELIGIBILITY FOR AWARDS
Awards under the 1995 Plan may be made to key management employees selected by
the Committee. The current eligible group consists of approximately 320 persons.
It is impossible to determine the exact number of persons who will be eligible
under the 1995 Plan during its term because the selection of participants is a
discretionary decision of the Committee. Non-employee directors are not eligible
to participate in the 1995 Plan.
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<PAGE> 20
DETERMINATION OF AMOUNT AND FORM OF AWARD
The amount of individual awards to key employees will be determined by the
Committee, subject to the limitations of the 1995 Plan. In determining the
amount and form of an award, consideration will be given to the functions and
responsibilities of the key employee, his or her potential contributions to the
success of the Company and other factors deemed relevant by the Committee.
Five types of awards may be granted to participants under the 1995 Plan: (1)
stock options, (2) Stock Appreciation Rights ("SARs"), (3) Limited Stock
Appreciation Rights ("Limited SARs"), (4) Performance Units and (5) Restricted
Stock Rights ("Rights"). SARs, Limited SARs and Performance Units may be granted
only in connection with stock options. The exercise of SARs, Limited SARs or
Performance Units reduces the number of Shares subject to the related stock
options on a one-for-one basis. The exercise of a stock option reduces the
number of related SARs, Limited SARs and Performance Units on a one-for-one
basis. Unless the Committee determines otherwise, a participant may not be
granted both Rights and a stock option in any one year.
STOCK OPTIONS
The Committee may grant nonqualified stock options and options qualifying as
incentive stock options under the Code. The term of a stock option cannot exceed
ten years from the date of grant. The option price must be not less than 100% of
the fair market value of a Share of Common Stock on the date of grant. A
participant exercising a stock option must pay the exercise price in full in
cash or, at the discretion of the Committee, in previously acquired Shares or in
a combination of cash and Shares.
SARS AND LIMITED SARS
The Committee may grant SARs which permit the participant to receive in cash or
Shares (or a combination of both) the excess of the fair market value of a Share
on the date the SAR is exercised over the exercise price for the related stock
option. Limited SARs function in a manner identical to SARs, except that Limited
SARs are exercisable by the participant only in the event of a change of control
of the Company (see "Change of Control"). The amount paid to the participant on
exercise of a Limited SAR is based on the price specified for the cash out of a
stock option following a change of control. Generally, each participant who
receives a grant of a stock option will receive Limited SARs covering all of the
Shares subject to such stock option.
PERFORMANCE UNITS
The Committee may also grant Performance Units which are payable in cash or
Shares (or a combination of both) at the end of a specified performance period.
Payment will be contingent upon achieving performance goals by the end of the
performance period. The Committee will determine the length of the performance
period, the minimum performance goals required before any payment will be made
and the payment value of any award. However, no payment may exceed 150% of the
exercise price per Share of the related stock option.
RIGHTS
The Committee may grant Rights which entitle a grantee to receive a stated
number of Common Shares over a certain period of time during which the
participant must remain in the employment of the Company. A participant who
holds Rights is not entitled to any of the rights of a holder of Common Stock
prior to the issuance of Shares pursuant to the Rights, but is entitled to an
amount in cash equal to the per Share cash dividend.
CHANGE OF CONTROL
In the event of a "change of control" (as defined on page B-1 of the 1995 Plan),
each unexercised and unexpired stock option becomes immediately exercisable in
full, and remains exercisable in full for the remainder of its term, unless the
participant is terminated for cause or unless otherwise determined by the
Committee. Participants holding unexercised and unexpired stock options as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
at any time within 60 days following a change of control, require the Company to
purchase or cash out such stock options or portions thereof at a price based
upon the highest of: (i) the highest closing price of the Common Stock within
the 60-day period preceding the date of purchase or cash out; (ii) the highest
price per Share
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<PAGE> 21
of Common Stock reported in certain Schedule 13D reports; or (iii) a liquidation
or breakup value for the Company, except that incentive stock options will be
limited to the spread between the fair market value of Common Stock on the date
of exercise and the purchase price per Share at which the related stock option
is exercisable. In the event of a change of control, all restrictions on Rights
would expire and all Shares subject to Rights would be issued to the
participants, unless otherwise determined by the Committee.
AMENDMENT
The Committee may at any time (i) terminate the 1995 Plan or (ii) modify or
amend the 1995 Plan in any respect, except that, to the extent required to
maintain the qualification of the 1995 Plan under Section 16 of the Exchange Act
or as otherwise required to comply with applicable law or the regulations of any
stock exchange on which the Common Stock is listed, the Committee may not,
without the shareholders' approval, (A) materially increase the benefits
accruing to participants under the 1995 Plan; (B) materially increase the number
of securities which may be issued under the 1995 Plan; or (C) materially modify
the requirements as to eligibility for participation in the 1995 Plan. However,
in the case of a merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate structure of the Company,
the Committee may make appropriate adjustments in the 1995 Plan or any awards
granted under the 1995 Plan.
FEDERAL INCOME TAX CONSEQUENCES
The grant of a nonqualified stock option or the addition of a SAR, a Limited SAR
or a Performance Unit to an option, does not result in income for the
participant or in a deduction for the Company. The exercise of a nonqualified
stock option results in ordinary income for the participant and a compensation
deduction for the Company measured by the difference between the option price
and the fair market value of the Shares received at the time of exercise. Income
and employment tax withholding is required. To the extent permitted by law and
Committee rules, a participant may authorize the Company to reduce the number of
Shares to be issued for an option exercise in satisfaction of the withholding
obligation.
Neither the grant nor the exercise of an incentive stock option results in
taxable income for the participant or in a deduction for the Company. However,
the excess of the market value on the exercise date over the option price of the
Shares is an "item of adjustment" for purposes of the participant's alternative
minimum tax. When a participant disposes of Shares acquired by exercise of an
incentive stock option, the participant's gain (the difference between the sale
proceeds and the price paid by the participant for the Shares) upon the
disposition will be taxed as capital gain, provided the participant (i) does not
dispose of the Shares within two years after the date of grant nor within one
year after the transfer of Shares upon exercise and (ii) exercises the option
while an employee of the Company or a subsidiary or within three months after
termination of employment for reasons other than death or disability. If the
Shares are disposed of before the expiration of either period, the participant
generally will realize ordinary income in the year of the disqualifying
disposition and the Company can deduct that amount as compensation.
ADDITIONAL INFORMATION
Because awards under the 1995 Plan will require future action by the Committee,
it is impossible at this time to state the benefits any named executive officer
or other individual employee may receive if the 1995 Plan is ratified by the
Company's Stockholders. The awards made under the 1980 Plan during fiscal year
1994 to the five highest paid executive officers of the Company are described on
pages 29 and 30 of this Proxy Statement.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is required for ratification of the Ryder System, Inc. 1995 Stock Incentive
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE RYDER SYSTEM,
INC. 1995 STOCK INCENTIVE PLAN.
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SELECTION OF AUDITORS
(ITEM NO. 4)
Upon the recommendation of the Audit Committee of the Board of Directors, the
Board has selected KPMG Peat Marwick LLP, independent certified public
accountants, to audit the accounts of the Company and its subsidiaries for the
fiscal year ending December 31, 1995.
The firm of KPMG Peat Marwick LLP has audited the accounts of the Company since
1955 and has offices in, or convenient to, most of the localities where the
Company and its subsidiaries operate. The Company has been advised that
representatives of KPMG Peat Marwick LLP will be present at the 1995 Annual
Meeting with the opportunity to make a statement and to respond to appropriate
questions raised at the Meeting.
KPMG Peat Marwick LLP performed audit services in connection with the
examination of the financial statements of the Company and its subsidiaries for
the year ended December 31, 1994. In addition, they also rendered other audit
services which included the review of financial statements and related
information contained in various registration statements and filings with the
SEC, services related to the Company's acquisition of other companies,
examinations of the separate financial statements of the Company's retirement
and benefit plans, and limited reviews of financial statements and related
information contained in quarterly reports provided to the Stockholders and the
SEC.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for the ratification of the appointment of KPMG Peat Marwick LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF
KPMG PEAT MARWICK LLP AS AUDITORS.
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STOCKHOLDER PROPOSAL
(ITEM NO. 5)
The Company has been informed that John J. Gilbert of 29 East 64th Street, New
York, New York 10021 and Martin Glotzer of 7601 N. Kedzie, Chicago, Illinois
60645 again intend to offer a proposal at the Annual Meeting requesting that the
Board of Directors take the steps necessary so that, once the current terms of
sitting Directors have expired, future elections of all Directors will be
annual, rather than by class. Mr. Glotzer states that he owns 70 Shares and Mr.
Gilbert states that he owns 105 Shares. Mr. Gilbert states that he also
represents an additional 600 Shares held by family interests and an affiliated
corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
The proposal which the Company understands the proponents intend to introduce at
the Annual Meeting is as follows:
"RESOLVED: That the stockholders of Ryder System, Inc., assembled in annual
meeting in person and by proxy, hereby request that the Board of Directors
take the needed steps to provide that at future elections of directors new
directors be elected annually and not by classes, as is now provided, and
that on expiration of present terms of directors their subsequent election
shall also be on an annual basis."
The proponents have furnished the following statement in support of their
proposal:
"Continued very strong support along the lines we suggest were shown at the
last annual meeting when 57%, 1,826 proxies representing 34,437,590 shares,
were cast in favor of this proposal. The vote against included 1,192
unmarked proxies.
Last year ARCO, to its credit, voluntarily ended theirs, stating that when
a very high percentage, 34.6%, desired it to be changed to an annual
election it was reason enough for them to change it. Several other
companies have also followed suit such as: Pacific Enterprises, Katy
Industry, Hanover Direct, Campbell Soup and others.
Because of normal need to find new directors and because of environmental
problems and the recent avalanche of derivative losses and many groups
desiring to have directors who are qualified on the subjects, we think that
ending the stagger system of electing directors is the answer. In addition,
some recommendations have been made to carry out the Valdez 10 points. The
11th, in our opinion, should be to end the stagger system of electing
directors and to have cumulative voting.
Recently Equitable Life Insurance, which is now called Equitable Companies,
converted from a policy owned company to a public stockholder meeting.
Thanks to AXA, the comptrolling French insurance company not wanting it
they now do not have a staggered board.
The Orange and Rockland Utility Company had a terrible time with the
stagger system and its 80% clause to recall a director. The chairman was
involved in a scandal effecting the company. Not having enough votes the
meeting to get rid of the chairman had to be adjourned. Finally, at the
adjourned meeting enough votes were counted to recall him.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for adoption of the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Before 1984 the directors were elected annually. At the 1984 Annual Meeting, the
Stockholders approved an amendment to the Restated Articles of Incorporation
providing that the Board be divided into three classes of directors serving
staggered three-year terms.
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In the 1984 Proxy Statement the Board stated that it believed the interests of
the Stockholders were better served by a classified board than by the annual
election of all directors. Among the reasons presented at that time in favor of
a classified system of director elections, the Board stated the following:
The classification of directors will have the effect of making it more
difficult to change the composition of the Board of Directors. At least two
Stockholder meetings, instead of one, will be required to effect a change
in the control of the Board. While there has been no problem in the past
with the continuity or stability of the Board, the Board believes that the
longer time required to elect a majority of a classified Board will help to
assure the continuity and stability of the Company's management and
policies in the future, since a majority of the directors at any given time
will have prior experience as directors of the Company.
The Board continues to believe that a classified Board of Directors promotes
continuity of experience on the Board, provides for an orderly succession of
directors and would encourage any unsolicited bidder for control of the Company
to negotiate with the Board, which can best represent the interests of all of
the Stockholders. In addition, the Company's system of director elections is
fully supported by Florida law.
The resolution offered by the proponents would not amend the Restated Articles
of Incorporation at this time, but, instead requests that the Board take the
steps necessary to elect all directors on an annual basis in the future. Under
the terms of the amendment to the Company's Restated Articles of Incorporation
approved by the Stockholders in 1984, an affirmative vote of 75% of the Shares
entitled to vote on a future resolution proposed by the Board to amend the
Restated Articles would be required at a future meeting of Stockholders in order
to amend the provisions governing the staggered election of directors.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
19
<PAGE> 25
STOCKHOLDER PROPOSAL
(ITEM NO. 6)
The Company has been informed that Arthur Wair of 984 Barners Road, Antioch,
Tennessee 37013, intends to offer a proposal at the Annual Meeting requesting
that the Board of Directors either redeem or submit to a vote of the
Stockholders the Company's Preferred Share Purchase Rights Plan. Mr. Wair states
that he owns 450 Shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
The proposal which the Company understands this proponent intends to introduce
at the Annual Meeting is as follows:
"Resolved, that the shareholders of Ryder System, Inc. hereby request the
Board of Directors redeem the shareholder rights issued in 1986, unless the
issue is approved by the affirmative vote of a majority of the outstanding
shares at a meeting of the shareholders held as soon as possible."
The proponent has furnished the following statement in support of his proposal:
"On February 28, 1986, the Board of Directors adopted a shareholder rights
plan which issued a dividend of one preferred share purchase right for each
outstanding share of common stock. In my opinion, such plans tend to
entrench management and depress companies' stock prices.
The Board created this plan unilaterally without consulting shareholders.
Furthermore, the Board protected the plan by an unusual voting requirement:
To overturn the plan, a majority of shares outstanding must be cast against
the plan, instead of a majority of votes cast.
Our proposal attempts to give shareholders an opportunity to express their
views on the rights issue and the manner by which it was adopted.
Since the adoption of this plan, shareholders have expressed opposition. In
1994, 62.7% of stockholders voting supported this proposal. This echoed the
62.5% vote on a similar proposal in 1990, and the 59.6% in 1991. However,
these votes represented less than 50% of the shares outstanding.
At other companies, such votes are enough to prod directors to make the
changes that a majority of voting shareholders want. We feel management's
refusal to heed past overwhelming expressions of shareholder opinion on the
subject of the poison pill reflect the negative impact this plan has had on
shareholder relations.
Poison pills have drawn increasing fire in recent years. Following the
spring annual meeting season, the Investor Responsibility Research Center
found that five of the seven resolutions calling for a change in poison
pills won majority votes, and three actually passed. Proposals such as this
one were the most common type of shareholder initiatives in 1993, according
to the IRRC. During 1993 Consolidated Freightways agreed to put their
poison pill plans to a shareholder vote following a resolution advanced by
a Teamster. The company joined companies like Time Warner, Lockheed, United
Technologies, and La Quinta Inns in voluntarily redeeming their poison
pills since 1990.
Congress expressed opposition to poison pills. In a vote on takeover
reforms, the Senate chose to ban such plans. Sponsors of the amendment
argued that a poison pill is an inappropriate way to stop hostile
takeovers.
Academic researchers have criticized poison pills, showing that they harm
shareholder value.
For these reasons, we urge you to vote FOR this resolution."
20
<PAGE> 26
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for adoption of the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
The Preferred Share Purchase Rights Plan (the "Rights Plan") was adopted by the
Board of Directors on February 28, 1986 to protect the Company's Stockholders
against certain abusive takeover practices prevalent in the marketplace and to
ensure that all Stockholders are treated fairly and equally.
The overriding objective of the Board of Directors in adopting the Rights Plan
was, and continues to be, the preservation and maximization of the Company's
value for all Stockholders.
The Board believes that the Rights Plan is a sound and reasonable means of
protecting against unfair and abusive takeover practices and is both
appropriately within its discretion and an essential exercise of its fiduciary
obligations to the Stockholders. The Board also believes that many Stockholders
have come to recognize the effectiveness of these plans in protecting and
enhancing value for all Stockholders.
The Rights Plan does not preclude a prospective bidder from making an offer for
the Company. Moreover, the Rights Plan is not intended to prevent a takeover of
the Company nor would it do so.
The Rights Plan is intended to give the Board sufficient time, if confronted
with an offer to acquire the Company, to evaluate the offer and any possible
alternatives and to take those steps that the Board believes would be necessary
to maximize the value that can be achieved for all Stockholders.
The Rights Plan is designed to encourage any prospective bidder for the Company
to negotiate with the Company's Board. The Board believes that its ability to
negotiate effectively with a potential acquiror on behalf of all Stockholders is
significantly greater than that of the Stockholders individually. A bidder who
chooses to bypass the Board is pursuing his own interests and is not concerned
with the interests of the other Stockholders. In this regard, it is important to
remember that hostile acquirors are interested in buying a company as cheaply as
they can. Without the Rights Plan, the Company could find itself negotiating
with the acquiror from a defensive posture rather than at arms-length. While a
bidder may make an offer for the Company's stock which is in excess of the
stock's current market price, without such negotiations the premium offered may
not reflect the long-term value of the Company. This is particularly true of
companies whose stock is prone to cyclical movements, such as the Company.
The Board strongly disagrees with the view that rights plans deter legitimate
acquisition proposals from being made or depress the price of the stock of
corporations adopting them. Since the adoption of the Rights Plan, at least 65
companies which had rights plans have been acquired or were parties to
agreements to be acquired, including 42 companies which were acquired after
receiving an unsolicited bid. Furthermore, in 36 of the 42 acquisitions of
companies with rights plans that were initiated by unsolicited bids, the prices
ultimately received by stockholders were higher than the initial bids by an
average premium to the initial bid of more than 21%.(1)
Two of the largest corporate takeovers in the past two years, AT&T's acquisition
of NCR and Viacom's acquisition of Paramount, involved target companies with
rights plans. In the case of NCR, AT&T's original bid of $85 per share was
eventually raised to $110 per share in a negotiated merger of the two companies.
In the case of Viacom's acquisition of Paramount, Viacom's final bid, which
included a tender offer at $107 per share for 50.1% of Paramount's common stock,
followed a protracted bidding contest which started with Viacom's initial offer
valued at $69.14 per share.
While the proponent cites Time Warner as a company which had previously redeemed
its rights plan, the proponent fails to mention that Time Warner adopted a new
rights plan a year ago in an action described by the IRRC as one where "some
institutional shareholders actually pushed for the adoption of the new pill".
---------------
(1)Based on data obtained from Securities Data Corporation and other industry
sources.
21
<PAGE> 27
Studies by Georgeson & Co., a leading investor communications firm, have
concluded that "[rights plans] do not prevent takeovers nor do they diminish the
value of a company's stock." These studies also indicated that "companies
protected by [rights plans] receive premiums 69% higher in takeover contests
than companies without [rights plans]."
The Board of Directors believes that the Rights Plan continues to protect
Stockholders against abusive and unfair practices that force Stockholders to
sell their investments at less than full value. Over 1,700 of the largest U.S.
companies, representing the entire spectrum of American business, have adopted
rights plans in response to such practices. The Board supports the Rights Plan
and asks Stockholders to be aware that if the rights were redeemed now, without
a substitute plan and in the absence of any specific acquisition proposal, the
Board would be deprived of an effective negotiating tool which could otherwise
be used to protect and enhance Stockholder value.
It is for these reasons that the Board of Directors believes that the redemption
of the rights at the present time would not be in the best interest of the
Company's Stockholders.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
22
<PAGE> 28
BENEFICIAL OWNERSHIP OF SHARES
As of January 15, 1995, each director or nominee and each executive officer
named in the Summary Compensation Table herein, individually, and all directors,
nominees and executive officers of the Company as a group, beneficially owned
Common Stock as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
------------------------------------------------------------- ----------------- ----------------
<S> <C> <C>
Arthur H. Bernstein(3),(6)..................................... 16,241
M. Anthony Burns(4),(5)........................................ 624,492
Dwight D. Denny(5)............................................. 86,503
Joseph L. Dionne............................................... 0 less
Edward T. Foote II(6).......................................... 1,741 than
John A. Georges(6)............................................. 1,599 1%
James M. Herron(5)............................................. 201,913 per
Edwin A. Huston(4),(5)......................................... 249,369 individual
Vernon E. Jordan, Jr.(6)....................................... 1,741
Howard C. Kauffmann(6)......................................... 3,799
David T. Kearns(6)............................................. 2,041
Lynn M. Martin................................................. 500
James W. McLamore(6)........................................... 57,245
Larry S. Mulkey(5)............................................. 86,164
Paul J. Rizzo.................................................. 2,000
Donald V. Seibert(6)........................................... 1,324
Hicks B. Waldron(6)............................................ 3,891
Alva O. Way(6)................................................. 2,741
Mark H. Willes(3),(6).......................................... 3,268
Directors, Nominees and Executive Officers as a Group
(27 persons)(3),(4),(5),(6).................................. 1,671,228 2.12%
</TABLE>
---------------
(1) Unless otherwise noted, all Shares included in this table are owned
directly, with sole voting and dispositive power. The inclusion of Shares
in this table shall not be construed as an admission that such Shares are
beneficially owned for purposes of Section 16 of the Exchange Act.
(2) Percent of class has been computed in accordance with Rule 13d-3(d)(1) of
the Exchange Act.
(3) Includes Shares held jointly with their spouses or other family members, as
follows: Mr. Bernstein 15,000 Shares; Mr. Willes 2,027 Shares; all
directors, nominees and executive officers as a group 17,451 Shares.
(4) Includes Shares held in the accounts of executive officers pursuant to the
401(k) Plan as of December 31, 1994, as follows: Mr. Burns 7,035 Shares and
Mr. Huston 3,572 Shares; all directors, nominees and executive officers as
a group 26,023 Shares.
(5) Includes Shares the direct ownership of which may be acquired within 60
days of January 15, 1995, through the exercise of stock options, as
follows: Mr. Burns 523,077 Shares; Mr. Denny 77,503 Shares; Mr. Herron
190,667 Shares; Mr. Huston 223,603 Shares and Mr. Mulkey 86,164 Shares; all
directors, nominees and executive officers as a group 1,403,382 Shares.
(6) Includes the following number of Shares held as of January 15, 1995, in the
account of each of the following directors pursuant to the Directors Stock
Plan: 1,241 Shares in the account of Mr. Bernstein, Mr. Foote, Mr. Jordan,
Mr. Kearns, Mr. McLamore, Mr. Waldron, Mr. Way, and Mr. Willes; 599 Shares
in the account of Mr. Georges; and 799 Shares in the account of Mr.
Kauffmann and Mr. Seibert.
As of January 15, 1995, the following table sets forth information regarding the
number and percentage of Shares held by all persons who are known by the Company
to beneficially own or exercise voting or dispositive control of more than 5% of
the Company's outstanding Common Stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
----------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
State Treasurer
State of Michigan
P.O. Box 15128
Lansing, Michigan 48901.................................. 5,053,145(1) 6.42%
</TABLE>
---------------
(1) The Michigan State Treasurer has sole voting power and sole dispositive
power as to all 5,053,145 Shares. The foregoing ownership information is
based upon oral information furnished to the Company on behalf of the
Michigan State Treasurer on February 10, 1995, and confirmed in
writing by the Company.
23
<PAGE> 29
FILINGS UNDER SECTION 16(a)
Compliance with Section 16(a) of the Exchange Act requires the Company's
directors, executive officers, and persons owning more than 10% of the Company's
Common Stock to file with the SEC and the New York Stock Exchange initial
reports of ownership of Common Stock and other equity securities of the Company
on Form 3 and reports of changes in such ownership on Forms 4 or 5. Directors,
executive officers and greater than 10% Stockholders are required to furnish the
Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on a review of the copies of the
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1994, the
Company's directors and executive officers complied with all applicable Section
16(a) filing requirements.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is overseen and administered by the
Compensation Committee of the Board of Directors, composed entirely of
independent Directors. The Committee reviews and recommends, and the Board of
Directors determines considering such recommendations, all matters involving Mr.
Burns' compensation, other than the approval of the long-term component (stock
options) of his compensation, which remains the responsibility of the Committee
under applicable tax requirements. Compensation actions affecting executive
officers of the Company other than Mr. Burns are based upon recommendations made
to the Committee by Mr. Burns. The Committee reviews Mr. Burns' recommendations
with respect to the long-term component of these executive officers'
compensation and determines the appropriate awards. Recommendations with respect
to the remaining components of these executive officers' compensation are
reviewed and evaluated by the Committee and, upon approval, are forwarded to the
Board for final review and approval. No member of the Committee is eligible to
participate in any of the executive compensation plans or programs that the
Committee oversees. Further, there are no interlocks between the members of the
Committee and any executive officer.
In 1994, the Committee reviewed but, except as discussed below, did not
significantly change any of the Company's executive compensation policies or
programs. Among other matters, the Committee considered the possible effects of
the new tax law that limits the deductibility by the Company of compensation in
excess of $1 million paid to certain of the Company's executive officers. In
response to this new law, the Committee recommended to the Board and the Board
has proposed to the shareholders their approval of two new performance-based
executive compensation plans designed to meet these new tax law requirements
(See "Deductibility of Executive Compensation").
EVALUATION OF EXECUTIVE PERFORMANCE
In its evaluation of executive performance, the Committee employs criteria
designed to motivate individual executives. The Committee believes that the
executive compensation program strengthens the Company's ability to attract,
retain, motivate and appropriately reward those individuals who are responsible
for the Company's short-term and long-term profitability, growth and return to
shareholders. The Company's compensation program is designed to link executive
compensation to both individual performance and the performance of the Company
and the Committee believes that total compensation should increase or decrease
with such performance. As a result, a significant portion of each executive
officer's total compensation opportunity is at risk, to be earned only if
specific financial and individual goals are met. In 1994, 57% of Mr. Burns'
total cash compensation opportunity was at risk and an average of 55% of total
cash compensation opportunity was at risk for the other named executive
officers.
The Committee reviews the executive compensation program continuously to ensure
its effectiveness and to ensure that the program remains externally competitive
within the range that the Committee considers appropriate, based upon the
Company's performance. Each element of the program is compared to the practices
of several similar companies (companies with sales levels and/or financial
characteristics similar to those of the Company) contained in survey data
analyzed by management and by Hewitt Associates and Frederick W. Cook & Co.,
Inc., independent compensation consultants retained by the Company. This data
includes information regarding various components of compensation and benefits
provided to executives holding comparable positions at similar companies and is
24
<PAGE> 30
referenced by the Committee to aid in setting executive compensation within the
median range for companies similar to the Company.
The Company's competitors for executive talent are not necessarily the same
companies that would be included in a peer group established to compare
shareholder returns. For purposes of the five-year stock performance comparison
graph, the Company has identified the Dow Jones Transportation 20 as its peer
group. The Company, however, generally recruits executive talent from companies
other than those comprising this peer group. Since these non-peer group
companies compete with the Company for, and are often the source of, executive
talent, the Committee believes that they are the most appropriate comparison
group for purposes of compensation decisions. Therefore, the comparable
companies for purposes of executive compensation are not the same as the peer
group index used in the five-year stock performance comparison graph included in
this Proxy Statement.
The Company's executive compensation program consists of three key elements: (1)
base salary; (2) annual cash incentive awards and (3) long-term incentive
awards, typically in the form of stock options. In addition, executive officers
receive a range of employee benefits generally available to all employees of the
Company, including participation in a retirement plan, a savings incentive plan,
a benefit restoration plan and a medical plan. While each element of
compensation is reviewed separately, the Committee takes into account the total
compensation and benefits package offered by the Company to each executive
officer in making compensation decisions. The Committee believes that the total
package represents an attractive compensation and benefits program. The goal is
for the program to be flexible with the ability to be customized to attract and
motivate the talent necessary to execute the Company's business strategy.
In evaluating management's 1994 performance, the Committee considered the
Company's financial results, which included record revenue and earnings, the
continued refocusing of the Company as a provider of transportation "solutions"
and management's progress toward implementing its stated strategic initiatives.
The Committee also recognized the Company's substantial increase in return on
equity in 1994 which represents significant progress toward the Company's
long-term goal of a 17% return on equity.
BASE SALARY
Base salaries for executive officers are determined by assigning each executive
officer to a pay grade and range which indicates the level of responsibility
associated with that executive officer's position and the importance of that
position to the operations of the Company. Salary levels for executive officers
are competitive in comparison to salary levels at similar companies with which
the Company competes for executive talent. In making decisions to adjust
individual salary levels, the Committee considers Company performance, the
executive officer's individual performance and position in the existing salary
range, and the external comparative data provided by the Company's outside
compensation consultants. The Committee, however, does not employ any
predetermined formula or assign any particular weight to any individual
criterion in making these adjustments.
Mr. Burns' salary in 1994 remained at the level set in June 1992. In December
1994, however, in accordance with the Committee's emphasis on performance-based
compensation, the Committee awarded Mr. Burns options to purchase 130,000 Shares
in lieu of an increase in his base salary. These options were granted at the
fair market value of the Company's stock on the date of grant and vest in five
equal installments over a four-year period commencing on the date of grant. The
Ryder System, Inc. Stock for Merit Increase Replacement Plan, which is being
recommended by the Board of Directors to the shareholders for their approval at
the Annual Meeting, will provide an opportunity for executive officers of the
Company, including all of the named executive officers, to be selected by the
Committee to elect to receive stock options in lieu of future merit salary
increases.
ANNUAL INCENTIVE AWARDS
The Company's annual incentive compensation program provides for the payment of
cash bonuses, as a percentage of base salary, to executive officers and other
key employees of the Company based upon Company financial performance and
individual performance. Bonus payouts are primarily driven by the Company's
financial results with approximately 85% of the maximum bonus opportunity based
upon financial results and approximately 15% of the maximum bonus opportunity
based upon individual performance. The financial results-based portion of the
bonus awards is based upon annual financial performance targets set in the
Company's Business Plan, which is approved
25
<PAGE> 31
by the Board of Directors at the beginning of each year and used to manage the
Company's business. These financial performance targets are measured by net
after-tax return on assets ("NAT ROA"), net before tax ("NBT") earnings, (for
two executive officers in 1994) business unit revenue and (for one executive
officer in 1994) quantifiable strategic benchmarks tied to new markets and
accounts. The specific targets are considered confidential by the Company and
are not included in this Report in order to avoid compromising the Company's
competitive position. When determining these annual bonus plan targets, the
Committee strives to align the bonus plan with the Company's long-term goals so
that strategic focus is maintained. The Committee believes that improvements in
these financial measures will, over time, result in the Company reaching its
long-term return on equity goal and the maximization of shareholder value.
Accordingly individual cash bonuses are linked directly to these performance
measurements.
Executive officers of the Company, other than Mr. Burns, are eligible for bonus
awards in an amount ranging from 0% to 100% of base salary based upon Company
performance and 0% to 20% of base salary based upon their individual
performance. Award opportunities are set to provide above-median compensation in
comparison to comparable companies in a year when Company performance exceeds
financial performance targets and below-median compensation in comparison to
comparable companies in a year when performance is below these targets. In
February of 1995, each of the named executive officers of the Company was
awarded the cash bonus illustrated in the Summary Compensation Table on page 28
based upon the Committee's review of the Company's (or applicable business
unit's) 1994 financial performance and its success in meeting the 1994 financial
performance targets and each executive's individual performance during 1994.
Mr. Burns was eligible for a 1994 incentive award of up to 110% of his base
salary based upon Company performance, measured by NAT ROA and NBT earnings, and
an additional award of up to 20% of his base salary based upon his individual
performance. Since the Business Plan targets set by the Board for the Company's
1994 financial performance were achieved, Mr. Burns received a bonus equal to
98.5% of his base salary based upon Company performance. Mr. Burns also received
an individual performance award equal to 20% of his base salary based upon the
Committee's evaluation of Mr. Burns' contributions toward the Company's
achievement of record financial results in 1994 and his accomplishment of other
individual goals which he presented to the Board at the beginning of 1994. These
goals included progress in the Company's focus on marketing and its
reengineering projects as well as progress in organizational and management
development.
LONG-TERM INCENTIVE AWARDS
To encourage strategic decision-making and tie executive compensation directly
to shareholder return, the Committee believes that a significant portion of
executive compensation should be comprised of long-term incentives. The
Company's 1980 Stock Incentive Plan provides such an incentive through the award
of stock options to executive officers and other key executives at the
discretion of the Committee. Under this Plan, stock options may only be granted
at the fair market value of the Company's stock on the date of grant and the
executive receives a benefit only if the price of the Company's stock
appreciates. In addition, the Company's executive stock ownership guidelines tie
executives receiving stock options directly to the future performance of the
Company, while the amount of stock owned by these executives may be considered
by the Committee in determining future awards (See "Stock Ownership Program").
The Company has no policy regarding the timing and frequency of stock option
grants, although stock option awards generally have been made on an annual basis
to the Company's executive officers and on some occasions upon the hiring of a
new executive.
In 1994, the Committee made such an annual grant to certain key executives of
the Company, including each of the named executive officers, utilizing three
criteria to determine individual awards: current individual performance,
potential for promotion and impact on Company performance. These options were
granted at the fair market value of the Company's stock on the date of grant and
vest over a two-year period.
In making its determination of the total amount of options to be granted in
1994, the Committee considered the amount of previous awards and determined that
the 1994 option awards would be granted at a median level in comparison to
similar companies. Additional awards of stock options were granted to certain
key executive officers, including two of the named executive officers, in 1994
as a further incentive to accomplish financial performance
26
<PAGE> 32
objectives and give these executives a larger and more meaningful stake in the
Company. These additional options were granted at the fair market value of the
Company's stock on the date of grant and will vest the earlier of eight years
after the date of grant or, after a minimum of two years, when the price per
share of the Company's stock reaches $45, almost double the exercise price of
the options, on the last business day of each of three consecutive months.
In 1994, in addition to the stock options which Mr. Burns received in lieu of a
merit increase to his base salary, Mr. Burns was granted options to purchase
70,000 shares as an incentive to continue his efforts toward improving the
long-term financial performance of the Company and based upon the Committee's
judgment of Mr. Burns' importance to the attainment of those long-term goals.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has reviewed the Company's executive compensation program in light
of recent changes to the Internal Revenue Code relating to the disallowance of
deductions for compensation in excess of $1 million to certain executive
officers. The tax law changes include an exception for "performance-based"
compensation, including stock options, provided certain requirements are met.
The Company's 1980 Stock Incentive Plan discussed earlier meets these
requirements. Accordingly, stock options awarded to the Company's executive
officers in 1994 are eligible for the "performance-based" compensation
exception. The proposed Ryder System, Inc. Stock for Merit Increase Replacement
Plan (see page 11) and the proposed Ryder System, Inc. 1995 Stock Incentive Plan
(see page 14) are designed to meet these new requirements as well and are being
proposed to the shareholders for their approval partially in response to these
tax law changes. The annual incentive awards granted to the Company's executive
officers in 1994 are not eligible for the "performance-based" exception because
they are based in part on individual performance goals that are not deemed
"performance-based" by the tax law changes. The Committee, however, believes
that these individual goals are a valuable part of the annual incentive award
and does not believe that eliminating these individual performance measures from
the annual incentive program would be in the best interests of the Company and
its shareholders. In addition, the Committee does not believe that the amount of
any deduction foregone by the Company with respect to the annual incentive
awards would be material in comparison to the value of this program. The
Committee will continue to evaluate its position on these tax law changes in
consultation with its outside compensation advisers as regulations are
finalized.
STOCK OWNERSHIP PROGRAM
In 1993, the Board of Directors adopted guidelines for stock ownership by all
executives of the Company. Under these guidelines, executives are encouraged to
own Company stock equal in value to various multiples of their annual salary.
Mark H. Willes [Chairman], Edward T. Foote II, Howard C. Kauffmann, Lynn M.
Martin, Paul J. Rizzo, Hicks B. Waldron and Alva O. Way.
27
<PAGE> 33
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual and long-term compensation which the
Company paid to, or deferred for, those persons who were at December 31, 1994
(a) the chief executive officer and (b) each of the other four most highly
compensated executive officers of the Company (collectively, the "named
executive officers") for services rendered in 1994, 1993 and 1992:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ --------------------
AWARDS
--------------------
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/LIMITED ALL OTHER
SALARY BONUS COMPENSATION SARS(2) COMPENSATION(3)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#) ($)
-------------------------------------------- ---- -------- -------- ------------ -------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
M. Anthony Burns Chairman of the 1994 $725,000 $860,000 $ 56,627 200,000 $ 12,688
Board, President 1993 725,000 460,000 4,219 60,000 12,642
and Chief 1992 693,750 810,000 3,370 54,712 11,541
Executive Officer
Dwight D. Denny President -- Ryder 1994 300,000 315,000 2,994 90,000 9,330
Commercial Leasing 1993 260,000 225,862 2,813 25,000 6,316
& Services 1992 220,000 251,680 2,246 20,405 4,575
James M. Herron Senior Executive 1994 358,000 403,000 2,994 25,000 18,257
Vice 1993 336,917 275,427 2,813 23,000 16,884
President and 1992 318,500 361,000 2,246 22,432 13,854
General
Counsel
Edwin A. Huston Senior Executive 1994 434,167 485,000 2,994 30,000 16,485
Vice 1993 413,250 337,842 2,813 25,000 16,425
President -- Finance 1992 391,167 437,000 2,246 25,715 14,394
and Chief Financial
Officer
Larry S. Mulkey President -- Ryder 1994 285,833 280,000 2,994 55,000 9,952
Dedicated Logistics, 1993 240,833 180,155 2,813 25,000 7,023
Inc. 1992 188,833 174,783 2,246 23,069 5,570
</TABLE>
---------------
(1) This column represents amounts reimbursed for the payment of income
taxes on certain perquisites provided to these executive officers. Other
perquisites and personal benefits furnished to the named executive officers,
other than Mr. Burns, do not meet the disclosure thresholds established
under SEC regulations and are not included in this column. Of the 1994
amount shown for Mr. Burns, $25,663 represents the incremental cost to the
Company for his personal use of the Company aircraft. The balance of the
1994 amount shown for Mr. Burns includes a Company provided car, a tax
planning allowance and other perquisites.
(2) Stock option and Limited SAR grants generally vest in 50% annual
installments commencing with the first anniversary of the date of grant. The
May 1994 grant will vest 100% at the earlier of eight years or, after a
minimum of two years, when the average of the high and low prices of a Share
on the last business day of each of three consecutive months exceeds $45 per
Share. The December 1994 grant will vest in 20% annual installments
commencing with the date of grant. Each named executive officer who received
a grant of stock options received a number of Limited SARs equal to the
number of Shares subject to such stock option. The numbers given reflect an
option with a tandem Limited SAR as a single unit. Under the antidilution
provisions of the Company's 1980 Stock Incentive Plan, as amended and
restated as of October 22, 1993, upon a payment of a special dividend
effecting the spin off of the Company's aviation services business (Aviall,
Inc.) on December 7, 1993, all then outstanding stock option grants were
converted so that as to each such grant there was an increased number of
ex-dividend Shares at a lower exercise price per Share and the optionees'
resulting spreads were the same as they were prior to the dividend.
(3) This column is composed of: (a) contributions to the 401 (k) Plan in the
amount of $400, $400, and $200 for each named executive officer for 1994,
1993 and 1992, respectively; (b) dollar value of premiums for compensatory
split-dollar insurance payments for Mr. Burns in the amounts of $355, $315,
and $960 for 1994, 1993 and 1992, respectively; for Mr. Denny in the amounts
of $105, $80 and $0 for 1994, 1993, and 1992, respectively; for Mr. Herron
in the amounts of $507, $441, and $1,516 for 1994, 1993, and 1992,
respectively; for Mr. Huston in the amounts of $446, $398, and $898 for
1994, 1993, and 1992, respectively; and for Mr. Mulkey in the amounts of
$127, $113, and $432 in 1994, 1993, and 1992, respectively; (c) premiums
paid under the Supplemental Retiree Life Insurance Plan for Mr. Burns in the
amounts of $3,795, $3,789, and $2,243 for 1994, 1993 and 1992, respectively;
for Mr. Denny in the amounts of $3,459, $3,453, and $2,090 for 1994, 1993,
and 1992, respectively; for Mr. Herron in the amounts of $8,380, $8,353, and
$4,448 for 1994, 1993, and 1992, respectively; for Mr. Huston in the amounts
of $4,805, $4,793 and $2,462 for 1994, 1993, and 1992, respectively; and for
Mr. Mulkey in the amounts of $3,484, $3,479, and $2,049 for 1994, 1993 and
1992, respectively; (d) premiums paid under the Supplemental Long Term
Disability Insurance Plan for Mr. Burns in the amounts of $8,138, $8,138,
and $8,138 for 1994, 1993, and 1992, respectively; for Mr. Denny in the
amounts of $5,366, $2,383, and $2,285 for 1994, 1993, and 1992,
respectively; for Mr. Herron in the amounts of $8,970, $7,690, and $7,690
for 1994, 1993, and 1992, respectively; for Mr. Huston in the amounts of
$10,834, $10,834, and $10,834 for 1994, 1993, and 1992, respectively; and
for Mr. Mulkey in the amounts of $5,941, $3,031, and $2,889 for 1994, 1993,
and 1992, respectively.
28
<PAGE> 34
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with each executive officer,
including the named executive officers, and other key employees of the Company
and its subsidiaries, which provide that if the Company terminates the
employment of an executive for reasons other than death, disability or cause,
or, if within the three-year period commencing with a change of control of the
Company (as defined on page A-3 of Appendix A), the executive terminates
employment with the Company for good reason, the Company will provide the
executive with a multiple of salary and bonus ranging from a maximum of three
times salary and three times bonus for the highest level executive to a minimum
of .5 times salary and, for each year of service, one month bonus (subject to a
maximum of 12 months bonus) for lower level executives, as well as various
benefits and perquisites, net of excise taxes. In the event of a termination of
employment and, if applicable, a change of control of the Company, which
triggers the provisions of a severance agreement, Mr. Burns would be entitled to
three times salary and three times bonus, Messrs. Denny, Herron, and Huston
would be entitled to three times salary and two times bonus and Mr. Mulkey would
be entitled to two times salary and two times bonus.
OPTION GRANTS
The following table provides information regarding the grant of stock options to
the named executive officers in fiscal year 1994. In addition, in accordance
with SEC regulations, hypothetical gains of 5% and 10% required by the SEC along
with a third column representing a 0% gain (listed in the table under "Potential
Realizable Value at Assumed Annual Rates of Stock Price Appreciation for
Option/Limited SAR Term") are shown for these stock options. These hypothetical
gains are based on assumed rates of annual compound stock price appreciation of
0%, 5% and 10% from the date the stock options were granted over the full option
term of ten (10) years. Each named executive officer also received a grant of
one Limited SAR in tandem with each Common Share subject to the stock option.
Such Limited SAR may only be exercised in the event of a change of control of
the Company if the named executive officer is at that time a Section 16(b)
insider.
OPTION/LIMITED SAR GRANTS IN FISCAL YEAR 1994
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------------
% OF TOTAL
NUMBER(2) OPTIONS/ POTENTIAL REALIZABLE
OF LIMITED VALUE(1)
SECURITIES SARS AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO OF STOCK PRICE
OPTIONS/ EMPLOYEES EXERCISE APPRECIATION FOR
LIMITED IN FISCAL PRICE OPTION/LIMITED SAR TERM
SARS YEAR PER EXPIRATION ---------------------------------
NAME GRANTED 1994 SHARE(3) DATE(4) 0% 5% 10%
---------------------------- ---------- ----------- -------- ----------------- --- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
M. Anthony Burns............ 70,000 5% $25.38 October 20, 2004 $0 $1,117,074 $2,830,885
130,000 9% 21.94 December 14, 2004 0 1,793,529 4,545,154
Dwight D. Denny............. 60,000 4% 24.06 May 5, 2004 0 907,967 2,300,966
30,000 2% 25.38 October 20, 2004 0 478,746 1,213,236
James M. Herron............. 25,000 2% 25.38 October 20, 2004 0 398,955 1,011,030
Edwin A. Huston............. 30,000 2% 25.38 October 20, 2004 0 478,746 1,213,236
Larry S. Mulkey............. 30,000 2% 24.06 May 5, 2004 0 453,983 1,150,483
25,000 2% 25.38 October 20, 2004 0 398,955 1,011,030
</TABLE>
---------------
(1) If the 5% or 10% annual compound stock price appreciation shown in the
table were to occur, the price of the May 1994 grant would be $39.20 or
$62.41, respectively, on May 5, 2004; the October 1994 grant would be $41.33
or $65.82, respectively, on October 20, 2004; and the December 1994 grant
would be $35.73 or $56.90, respectively, on December 14, 2004; and the
appreciation in the market value of the Company's Common Stock would be
$1,191,868,742 and $3,020,429,400, respectively, for the May 1994 grant;
$1,256,879,764 and $3,185,180,095, respectively, for the October 1994 grant;
and $1,086,612,801 and $2,753,690,181, respectively, for the December 1994
grant. The appreciation during this period realized by the five named
executive officers from each of these stock options would be 0.11% (May
1994), 0.23% (October 1994), and 0.17% (December 1994) of the gain to all
Stockholders under these two cases. The use of the 5% and 10% rates as
required by the SEC is not intended by the Company to forecast possible
future appreciation of the Company's Common Stock.
29
<PAGE> 35
(2) Stock options and Limited SAR grants generally vest in 50% annual
installments commencing with the first anniversary of the date of grant.
The May 1994 grant will vest 100% at the earlier of eight years or, after a
minimum of two years, when the average of the high and low prices of a
Share exceeds $45 per Share on the last business day of each of three
consecutive months. The December 1994 grant will vest in 20% annual
installments commencing with the date of grant. Each named executive
officer who received a grant of stock options received Limited SARs equal
to the number of Shares subject to such stock option. The numbers given
reflect an option with a tandem Limited SAR as a single unit.
(3) Represents fair market value as of date of grant.
(4) Ten (10) years from grant date of May 6, 1994, October 21, 1994, or
December 15, 1994.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information, with respect to the named executive
officers, regarding the exercise of options during fiscal year 1994 and
unexercised options held as of the end of fiscal year 1994.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994 AND FISCAL YEAR-END 1994 OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/LIMITED OPTIONS AT FISCAL YEAR-END
SARS AT FISCAL YEAR-END 1994 1994(1)
SHARES ACQUIRED VALUE ----------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
M. Anthony Burns............. 0 $0 523,077 204,000 $ 327,975 $ 0
Dwight D. Denny.............. 0 0 77,503 102,661 204,628 0
James M. Herron.............. 0 0 190,667 36,500 354,604 0
Edwin A. Huston.............. 0 0 223,603 42,500 161,125 0
Larry S. Mulkey.............. 0 0 86,164 68,137 82,153 0
</TABLE>
---------------
(1) Amounts reflect gains on outstanding stock options based on a fair
market value of $21.69 for the Common Stock, as determined by using the
average of the high and low price on December 30, 1994. As no change in
control of the Company has occurred the tandem Limited SARs had no
calculable value at such date.
PENSION BENEFITS
The Company covers substantially all regular full-time employees who are not
covered by plans administered by labor unions or plans sponsored by a subsidiary
or division of the Company ("Division Plans") under the Ryder System, Inc.
Retirement Plan ("Retirement Plan"). Benefits payable under the Retirement Plan
are based on an employee's career earnings with the Company and its
subsidiaries. At normal retirement age of 65, a participant is entitled to a
monthly pension benefit payable for life. The annual pension benefit, when paid
in the form of a life annuity with no survivor's benefits, is generally equal to
the sum of 1.45% of the first $15,600 of compensation and bonus received, plus
1.85% of the portion of such compensation and bonus in excess of $15,600 during
each such year while a Retirement Plan member. Accrued benefits under the
Retirement Plan have been improved from time to time.
Retirement Plan benefits vest at the earlier of the completion of five (5) years
of credited service or upon reaching age 65, provided, however, that in the
event of a change of control of the Company, all participants will be fully
vested and the term "accrued benefit" will include the value of early retirement
benefits for any participant age 45 or above or with 10 or more years of
service. These benefits are not subject to any reduction for Social Security
benefits or other offset amounts. An employee's pension benefits may be paid in
certain alternative forms having actuarially equivalent values.
The maximum annual benefit under a qualified pension plan is currently $120,000
beginning at the Social Security retirement age (currently age 65). The maximum
compensation and bonus that may be taken into account in determining annual
retirement accruals is currently $150,000. The Company maintains a
non-qualified, unfunded benefit plan, called the Benefit Restoration Plan (the
"Restoration Plan"), which covers those participants of the Retirement Plan and
certain Division Plans whose benefits are reduced by the Internal Revenue Code
or other United States or Canadian laws. A participant in the Restoration Plan
is entitled to a benefit equaling the difference between
30
<PAGE> 36
the amount of benefits the participant is entitled to without reduction and the
amount of benefits the participant is entitled to after the reductions.
The table below sets forth annual pension benefit projections assuming each
named executive officer remains continuously employed by the Company at current
compensation levels until retirement at the normal retirement date.
ESTIMATED ANNUAL BENEFITS AT RETIREMENT(1)
(IN THE FORM OF A SINGLE LIFE ANNUITY)
<TABLE>
<S> <C>
M. Anthony Burns........................................... $605,512
Dwight D. Denny............................................ $260,502
James M. Herron............................................ $211,081
Edwin A. Huston............................................ $314,487
Larry S. Mulkey............................................ $219,294
</TABLE>
In addition to the Retirement Plan and the Restoration Plan, the Company
maintains the Split Dollar Life Insurance Plan and Deferred Compensation Plan
for the benefit of each named executive officer and certain other key executives
who elect to participate. The Split Dollar Life Insurance Plan provides
participants with additional life insurance and the Deferred Compensation Plan
acts as a supplemental pension benefit. The participant pays a portion of the
premium and the Company pays that portion of the premium which is equal to the
increase in cash surrender value of the policy during each policy year. In the
event of death prior to normal retirement, the face value of the policy is paid
to the participant's chosen beneficiary and the Company's investment in the
policy is recaptured by a supplemental term policy maintained by the Company. In
the event a participant ceases to be employed by the Company prior to the
participant's normal retirement date, the participant has the right to purchase
the policy from the Company for its cash surrender value. Assuming normal
retirement dates, the named executive officers would have the following
estimated minimum annual benefit shown below:
<TABLE>
<S> <C>
M. Anthony Burns............................................ $14,077
Dwight D. Denny............................................. $ 5,247
James M. Herron............................................. $ 5,064
Edwin A. Huston............................................. $ 5,700
Larry S. Mulkey............................................. $ 9,780
</TABLE>
---------------
(1) These amounts include benefits under the Retirement Plan and the
Restoration Plan combined.
31
<PAGE> 37
STOCK PERFORMANCE
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG RYDER SYSTEM, INC., S&P 500 INDEX & DOW JONES TRANSPORTATION 20 INDEX(1)
[GRAPHIC]
<TABLE>
<CAPTION>
DOW JONES
TRANSPORTATION
MEASUREMENT PERIOD RYDER SYSTEM, S&P 500 INDEX 20 INDEX
(FISCAL YEAR COVERED) INC.
<S> <C> <C> <C>
1989 $100 $100 $100
1990 $ 76 $ 97 $ 79
1991 $106 $126 $119
1992 $148 $136 $129
1993 $166 $150 $159
1994 $141 $152 $133
</TABLE>
---------------
(1) Assumes for comparison that the value of the Company's Common Stock and of
each index was $100 on December 31, 1989, and that all dividends, including
the Company's distribution of Aviall, Inc. common stock in December 1993,
were reinvested. Past performance is not necessarily an indicator of
future results.
COST OF SOLICITATION
The cost of solicitation of proxies, including expenses in connection with the
preparation and mailing of this Proxy Statement, will be borne by the Company.
The Company has retained D. F. King & Co., Inc. to aid in the solicitation of
proxies. For their services, D. F. King & Co., Inc. will receive a fee estimated
at $18,000 plus reimbursement of reasonable out-of-pocket expenses. The Company
does not otherwise expect to pay any compensation for the solicitation of
proxies, but will reimburse brokers and nominees for their reasonable expenses
for sending proxy material to principals and obtaining their proxies. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone or other means of
communication.
32
<PAGE> 38
SUBMISSION OF STOCKHOLDER PROPOSALS FOR
THE 1996 ANNUAL MEETING
Pursuant to SEC regulations, in order to be included in the Company's Proxy
Statement for the 1996 Annual Meeting, Stockholder proposals must be received at
the principal office of the Company, 3600 N.W. 82nd Avenue, Miami, Florida,
33166, Attention: Secretary, no later than November 23, 1995, as well as meet
all other SEC requirements. In addition, the Company's By-Laws provide that any
Stockholder who desires either to bring a Stockholder proposal before an annual
meeting or to present a nomination for director at an annual meeting must give
advance notice to the Company regarding the proposal or nominee. The By-Laws
require that written notice be delivered to the Secretary of the Company not
less than 60 days prior to the date of the annual meeting at which the proposal
or nomination is to be presented and contain certain information regarding the
Stockholder desiring to present a proposal or make a nomination, as the case may
be. A copy of the By-Laws is available upon request from the Secretary of the
Company.
RYDER SYSTEM, INC.
H. Judith Chozianin
-------------------
H. Judith Chozianin
Secretary
March 24, 1995
Miami, Florida
33
<PAGE> 39
APPENDIX A
RYDER SYSTEM, INC.
STOCK FOR MERIT INCREASE REPLACEMENT PLAN
1. PURPOSE OF THIS PLAN
The purpose of the Ryder System, Inc. Stock for Merit Increase Replacement Plan
(this "Plan") is to give key executives of Ryder System, Inc. (the "Company")
and its subsidiaries who are primarily responsible for the management of the
business of the Company the opportunity to receive stock option grants in lieu
of merit salary increases, thereby encouraging focus on the growth and
profitability of the Company and its Common Stock (as defined in Section 4).
2. EFFECTIVE DATE AND TERM OF THIS PLAN
This Plan shall become effective on May 5, 1995, subject to the approval of the
shareholders of the Company. Unless previously terminated in accordance with
Section 14 of this Plan, this Plan shall terminate on the close of business on
May 4, 2005, after which no Options (as defined in Section 4) shall be granted
under this Plan. Such termination shall not affect any Options granted prior to
such termination.
3. ADMINISTRATION OF THIS PLAN
This Plan shall be administered by the Compensation Committee (the "Committee")
of the Board of Directors of the Company which shall consist of not less than
three members of the Board of Directors, each of whom shall be a "disinterested
person" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). Additionally, all members of the Committee shall be
"outside directors" as defined or interpreted for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee without a meeting, shall be the acts of the
Committee. The Committee shall have plenary authority, subject to the express
provisions of this Plan, to (i) select participants; (ii) determine the nature,
amount, time and manner of stock option grants made under this Plan; (iii)
interpret this Plan; (iv) prescribe, amend and rescind rules and regulations
relating to this Plan; and (v) make all other determinations deemed necessary or
advisable for the administration of this Plan.
4. COMMON STOCK SUBJECT TO THIS PLAN
The shares of Common Stock of the Company, par value $.50 per share ("Common
Stock"), to be issued upon the exercise of an option to purchase Common Stock
granted in lieu of a merit salary increase (an "Option") may be made available
from the authorized but unissued Common Stock or Common Stock purchased on the
open market or otherwise.
Subject to the provisions of the next succeeding paragraph, the maximum
aggregate number of shares of Common Stock for which Options may be granted
under this Plan shall be 500,000 shares. If an Option granted under this Plan
expires or is terminated without having been exercised in full, the unpurchased
or forfeited shares or rights to receive shares shall become available for grant
to other executives. No executive shall be eligible to receive any Options or
series of Options covering, in the aggregate, more than 300,000 shares during
the term of this Plan.
If there shall be any change in the shares of Common Stock subject to this Plan
or any Option granted under this Plan as a result of merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other change in
the corporate structure, adjustments may be made by the Committee, as it may
deem appropriate, in the aggregate number and kind of shares subject to this
Plan or to any outstanding Option, and in the terms and provisions of this Plan
and any Options granted hereunder, in order to reflect, on an equitable basis,
any such change in the shares contemplated by this paragraph. Any adjustment
made by the Committee pursuant to this paragraph shall be conclusive and binding
upon the grantee of an Option, the Company and any other related person.
A-1
<PAGE> 40
5. ELIGIBLE PERSONS
Only persons who are members of the Company's senior leadership group, known as
the "Executive Committee", or other elected officers of the Company or its
subsidiaries selected by the Committee, shall be eligible to receive grants of
Options under this Plan in lieu of a merit salary increase. No grant shall be
made to any member of the Committee or any other non-employee director.
No executive selected to participate in this Plan may receive a grant of Options
unless the executive has made an irrevocable election to receive Options in lieu
of a merit salary increase at least six (6) months in advance of the date of
grant of such Option. No such election shall obligate the Company to grant a
merit salary increase or options.
6. PURCHASE PRICE OF OPTIONS
The purchase price for each share of Common Stock issuable under an Option shall
not be less than 100 percent (100%) of the Fair Market Value of a share of
Common Stock on the date of grant. "Fair Market Value" as used in this Plan
shall equal the mean of the high and low price of the Common Stock as reported
by the composite transaction reporting system for securities listed on the New
York Stock Exchange on the applicable date.
7. OPTION TERM
The term of each Option as determined by the Committee shall not exceed ten (10)
years from the date of grant and shall expire as of the last day of the
designated term, unless terminated earlier under the provisions of this Plan.
8. OPTION TYPE
Option grants may be either non-qualified stock options or incentive stock
options governed by Section 422(b) of the Code.
9. NON-TRANSFERABILITY OF OPTIONS
No Option granted under this Plan shall be assignable or transferable by the
grantee except by will or the laws of descent and distribution. A grantee shall
forfeit any Option assigned or transferred, voluntarily or involuntarily, other
than as permitted under this Section. Each Option shall be exercised during the
grantee's lifetime only by the grantee or the grantee's guardian or legal
representative.
10. EXERCISE OF OPTIONS
Except as provided in Sections 12 and 13, and subject to any limitations under
Section 16 of the 1934 Act, each Option shall be exercisable as follows: (i)
twenty percent (20%) of the shares of Common Stock subject to an Option on the
date of grant and (ii) the remainder of the shares subject to such Option in
four equal annual installments on the first, second, third and fourth
anniversary of the date of grant. The Committee may, at any time, provide for
the acceleration of installments or any part thereof.
Subject to the provisions of this Section 10, each Option may be exercised in
whole or, from time to time, in part with respect to the number of then
exercisable shares in any sequence desired by the grantee and without regard to
the date of grant of stock options under other plans of the Company; provided,
however, that any incentive stock option must be exercised in accordance with
Section 422(b) of the Code.
To exercise an Option, the grantee shall (i) give written notice to the Company
in form satisfactory to the Committee indicating the number of shares of Common
Stock which the grantee elects to purchase, (ii) deliver to the Company payment
of the full purchase price of the shares being purchased (A) in cash or a
certified or bank cashier's check payable to the order of the Company, or (B)
with the approval of the Committee, in shares of Common Stock having a Fair
Market Value on the date of exercise equal to the purchase price, or (C) a
combination of the foregoing having an aggregate Fair Market Value equal to such
purchase price, and (iii) deliver to the Secretary of the Company such written
representations, warranties and covenants as the Company may require to permit
this Plan and any Options or shares of Common Stock granted or issued hereunder
to comply with any applicable blue sky or other federal or state securities
laws.
A-2
<PAGE> 41
Except as provided in Sections 12 and 13, no Option may be exercised unless the
grantee, at the time of exercise, is an employee and has continuously been an
employee of the Company or any subsidiary since the grant of such Option.
A grantee shall not be deemed to have terminated his period of continuous employ
with the Company or any subsidiary if he leaves the employ of the Company or any
subsidiary for immediate reemployment with the Company or any subsidiary.
A grantee of any Option shall not have any rights as a shareholder until the
close of business on the date on which the Option has been exercised.
11. WITHHOLDING TAXES ON OPTION EXERCISE
Each grantee exercising an Option shall deliver to the Company payment in cash
or by check (as described in Section 10) equal to all federal, state and local
withholding taxes required to be collected by the Company in respect of the
exercise of such Option, and until such payment is made, the Company may, in its
discretion, retain all or a portion of the shares to be issued. Notwithstanding
the foregoing, to the extent permitted by law and pursuant to such rules as the
Committee may adopt, a grantee may authorize the Company to satisfy any such
withholding requirement by directing the Company to withhold from any shares to
be issued such number of shares as shall be sufficient to satisfy the
withholding obligation.
12. EXERCISE OF OPTIONS IN THE EVENT OF A CHANGE OF CONTROL
Notwithstanding any other provision of this Plan, in the event of a Change of
Control (as defined below), each Option not previously exercised or expired
under the terms of this Plan shall become immediately exercisable in full and
shall remain exercisable to the full extent of the shares of Common Stock
available thereunder, regardless of any installment provisions applicable
thereto, for the remainder of its term, unless the Grantee has been terminated
for Cause (as defined below) in which case the Options shall automatically
terminate.
Grantees of Options not otherwise exercised or expired under the terms of this
Plan may, in lieu of exercising, require the Company to purchase for cash all
such Options or portions thereof for a period of sixty (60) days following the
occurrence of a Change of Control at the Price specified below; provided that
Options subject to this purchase requirement held by grantees who are subject to
Section 16(b) of the 1934 Act must have been held for at least six (6) months.
For purposes of this Section 12 and otherwise, the following definitions shall
apply:
A "Change of Control" shall be deemed to have occurred if:
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the 1934 Act, but excluding any employee benefit plan or plans of the
Company and its subsidiaries and affiliates, becomes the beneficial owner,
directly or indirectly, of twenty percent (20%) or more of the combined
voting power of the Company's outstanding voting securities ordinarily
having the right to vote for the election of directors of the Company; or
(ii) the individuals who, as of June 26, 1987, constituted the Board
of Directors of the Company (the "Board" generally and as of June 26, 1987
the "Incumbent Board") cease for any reason to constitute at least
two-thirds ( 2/3) of the Board, or in the case of a merger or consolidation
of the Company, do not constitute or cease to constitute at least
two-thirds ( 2/3) of the board of directors of the surviving company (or in
a case where the surviving corporation is controlled, directly or
indirectly, by another corporation or entity, do not constitute or cease to
constitute at least two-thirds ( 2/3) of the board of such controlling
corporation or do not have or cease to have at least two-thirds ( 2/3) of
the voting seats on any body comparable to a board of directors of such
controlling entity, or if there is no body comparable to a board of
directors, at least two-thirds ( 2/3) voting control of such controlling
entity), provided that any person becoming a director (or, in the case of a
controlling non-corporate entity, obtaining a position comparable to a
director or obtaining a voting interest in such entity) subsequent to June
26, 1987 whose election, or nomination for election, was approved by a vote
of the persons comprising at least two-thirds ( 2/3) of the Incumbent Board
(other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest, as
A-3
<PAGE> 42
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
1934 Act) shall be, for purposes of this Plan, considered as though such
person were a member of the Incumbent Board; or
(iii) there is a liquidation or dissolution of the Company or a sale
of all or substantially all of its assets.
If the Company enters into an agreement or series of agreements or the Board
passes a resolution which will result in the occurrence of any of the matters
described in subparagraphs (i), (ii) or (iii), and a grantee's employment is
terminated subsequent to the date of execution of such agreement or series of
agreements or the passage of such resolution, but prior to the occurrence of any
of the matters described in subparagraphs (i), (ii) or (iii), then, upon the
occurrence of any of the matters described in subparagraphs (i), (ii) or (iii),
a Change of Control shall be deemed to have retroactively occurred on the date
of the execution of the earliest of such agreement(s) or the passage of such
resolution.
"Cause" shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the grantee's part which result in or are intended to result in
the grantee's personal enrichment at the expense of the Company, (ii) conviction
of a felony, (iii) conviction of a misdemeanor involving moral turpitude, or
(iv) willful failure to report to work for more than thirty (30) continuous days
not supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.
"Price" shall mean, upon the occurrence of a Change of Control, the excess
of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New
York Stock Exchange within the sixty (60) days preceding the date of
exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any person or group referred to in subparagraph (i) of the
definition of Change of Control on any Schedule 13D pursuant to Section
13(d) of the 1934 Act as paid within the sixty (60) days prior to the date
of such report; and
(iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred
to in subparagraph (iii) of the definition of Change of Control, with all
noncash consideration being valued in good faith by the Incumbent Board;
over the purchase price per share at which the related Option is exercisable as
applicable, except that incentive stock options are limited to the spread
between the Fair Market Value of Common Stock on the date of exercise and the
purchase price per share at which the related Option is exercisable.
13. TERMINATION OF EMPLOYMENT
If the grantee's employment with the Company or any subsidiary terminates for
any reason other than as specified in the subsequent paragraphs of this Section
13, any Option shall terminate three (3) months after the later of (i) the date
of such termination or (ii) with respect to a non-qualified stock option, the
end of any severance period applicable to such grantee; provided, however, that
in the event of the death of the grantee during such period, such Option shall,
to the extent it was exercisable on the termination date or at the end of any
applicable severance period, be exercisable by the grantee's personal
representatives, heirs or legatees for a period of one (1) year commencing on
the date of the grantee's death and shall terminate at the expiration of such
period.
If the termination of employment is due to the grantee's death, any Option
shall, to the extent it was exercisable on the termination date, continue to be
exercisable by such grantee's legal representatives, heirs or legatees for the
term of such Option.
If the termination of employment is due to the grantee's retirement or
disability, any non-qualified stock option not previously exercised or expired
shall continue to vest and be exercisable during the three (3) year period
following the grantee's termination date, and to the extent it is exercisable at
the expiration of such three (3) year period, it shall continue to be
exercisable by such grantee or such grantee's legal representatives, heirs or
legatees for the term of such non-qualified stock option. Any incentive stock
option shall, to the extent it was exercisable on the termination date, continue
to be exercisable by such grantee or such grantee's legal representatives, heirs
or legatees for the term of such incentive stock option; provided, however, that
in order to qualify for the special tax treatment afforded by Section 421 of the
Code, incentive stock options must be exercised within the three (3) month
period commencing on the termination date (the exercise period shall be one (1)
year in the case of
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termination by reason of disability, within the meaning of Section 22(e)(3) of
the Code). Incentive stock options not exercised within such three (3) month
period shall be treated as non-qualified stock options.
If a grantee is terminated for Cause (as defined in Section 12), or for any
other activity which would constitute grounds for termination for cause of the
grantee by the Company, all Options with respect to such grantee shall
automatically terminate as of the grantee's termination date.
14. AMENDMENTS TO THIS PLAN
The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Common Stock is listed, the Committee may not, without the
shareholders' approval, (A) materially increase the benefits accruing to
participants under this Plan; (B) materially increase the number of securities
which may be issued under this Plan; or (C) materially modify the requirements
as to eligibility for participation in this Plan. Should this Plan require
amendment to maintain full legal compliance because of rules, regulations,
opinions or statutes issued by the Securities and Exchange Commission, the U.S.
Department of the Treasury or any other governmental or governing body, then the
Committee or the Board may take whatever action, including but not limited to
amending or modifying this Plan, is necessary to maintain such compliance. The
termination or any modification or amendment of this Plan shall not, without the
consent of any grantee involved, adversely affect rights under an Option
previously granted to such grantee.
15. MISCELLANEOUS PROVISIONS
(a) Service on the Committee shall constitute service as a director of the
Company and members of the Committee shall be entitled to indemnification,
advancement of expenses and reimbursement as directors of the Company pursuant
to its Restated Articles of Incorporation, By-Laws, resolutions of the Board of
Directors or otherwise.
(b) No Employee shall have any claim or right to be granted an award under this
Plan, nor having been selected as a grantee for one year, any right to be a
grantee in any other year. Neither this Plan nor any action taken hereunder
shall be construed as giving any grantee any right to be retained in the employ
of the Company and the Company expressly reserves its right at any time to
dismiss any grantee with or without cause.
(c) With respect to grantees subject to Section 16 of the 1934 Act, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of this
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.
Moreover, in the event this Plan does not include a provision required by Rule
16b-3 to be stated herein, such provision (other than one relating to
eligibility requirements, or the price and amount of Options) shall be deemed
automatically to be incorporated by reference into this Plan insofar as grantees
subject to Section 16 are concerned.
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APPENDIX B
RYDER SYSTEM, INC.
1995 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Plan is to enable the Company to recruit and
retain those key executives most responsible for the Company's continued success
and progress, and by offering comparable incentives, to compete with other
organizations in attracting, motivating and retaining such executives, thereby
furthering the interests of the Company and its shareholders by giving such
executives a greater personal stake in and commitment to the Company and its
future growth and prosperity.
2. Definitions. For the purpose of this Plan:
(a) The term "Award" shall mean and include any Stock Option, SAR, Limited
SAR, Performance Unit or Restricted Stock Right granted under this Plan.
(b) During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect to
any Stock Option shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the Grantee's part which result in or are intended to result in
his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), but
excluding any employee benefit plan or plans of RSI and its Subsidiaries
and affiliates, becomes the beneficial owner, directly or indirectly, of
twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; or
(ii) the individuals who, as of June 26, 1987, constituted the Board
of Directors of RSI (the "Board" generally and as of June 26, 1987 the
"Incumbent Board") cease for any reason to constitute at least two-thirds
( 2/3) of the Board, or in the case of a merger or consolidation of RSI, do
not constitute or cease to constitute at least two-thirds ( 2/3) of the
board of directors of the surviving company (or in a case where the
surviving corporation is controlled, directly or indirectly, by another
corporation or entity, do not constitute or cease to constitute at least
two-thirds ( 2/3) of the board of such controlling corporation or do not
have or cease to have at least two-thirds ( 2/3) of the voting seats on any
body comparable to a board of directors of such controlling entity, or if
there is no body comparable to a board of directors, at least two-thirds
( 2/3) voting control of such controlling entity), provided that any person
becoming a director (or, in the case of a controlling non-corporate entity,
obtaining a position comparable to a director or obtaining a voting
interest in such entity) subsequent to June 26, 1987 whose election, or
nomination for election, was approved by a vote of the persons comprising
at least two-thirds ( 2/3) of the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) shall
be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
(iii) there is a liquidation or dissolution of RSI or a sale of all or
substantially all of its assets.
If RSI enters into an agreement or series of agreements or the Board passes a
resolution which will result in the occurrence of any of the matters described
in subparagraphs (i), (ii) or (iii), and a Grantee's employment is terminated
subsequent to the date of execution of such agreement or series of agreements or
the passage of such resolution, but prior to the occurrence of any of the
matters described in subparagraphs (i), (ii) or (iii), then, upon the occurrence
of any of the matters described in subparagraphs (i), (ii) or (iii), a Change of
Control shall be deemed to have retroactively occurred on the date of the
execution of the earliest of such agreement(s) or the passage of such
resolution.
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(d) The term "Code" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time.
(e) The term "Committee" shall mean the Compensation Committee of the Board
of Directors of RSI constituted as provided in Section 5 of this Plan.
(f) The term "Common Stock" shall mean the common stock of RSI as from time
to time constituted.
(g) The term "Company" shall mean RSI and its Subsidiaries.
(h) The term "Disability" shall mean total physical or mental disability of
a Grantee as determined by the Committee upon the basis of such evidence as the
Committee in its discretion deems necessary and appropriate.
(i) The term "Disinterested Person" shall mean any person who qualifies as
a disinterested person as defined in Rule 16b-3, as promulgated under the 1934
Act, or any successor definition.
(j) The term "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).
(k) The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as reported
by the composite transaction reporting system for securities listed on the New
York Stock Exchange on the date as of which such determination is being made or
on the most recently preceding date on which there was such a sale.
(l) The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under this Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.
(m) The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is redesignated by the
Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.
(n) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.
(o) The term "Non-qualified Stock Option" shall mean a Stock Option granted
under this Plan which is not intended to qualify under Section 422(b) of the
Code.
(p) The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.
(q) The term "Option" shall mean any stock option granted under this Plan.
(r) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.
(s) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.
(t) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.
(u) The term "Plan" shall mean the Ryder System, Inc. 1995 Stock Incentive
Plan as the same shall be amended.
(v) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New
York Stock Exchange within the sixty (60) days preceding the date of
exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any person or group referred to in subparagraph (i) of Section 2(c)
on any Schedule 13D pursuant to Section 13(d) of the 1934 Act as paid
within the sixty (60) days prior to the date of such report; and
(iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred
to in subparagraph (iii) of Section 2(c), with all noncash consideration
being valued in good faith by the Incumbent Board;
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over the purchase price per Share at which the related Option is exercisable as
applicable, except that Incentive Stock Options and, if and to the extent
required in order for the related Option to be treated as an Incentive Stock
Option, SARs and Limited SARs granted with respect to Incentive Stock Options,
are limited to the spread between the Fair Market Value of Common Stock on the
date of exercise and the purchase price per Share at which the related Option is
exercisable.
(y) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.
(z) The term "RSI" shall mean Ryder System, Inc.
(aa) The term "Restricted Stock Rights" shall mean a Restricted Stock Right
granted by the Committee pursuant to Section 11 of this Plan.
(bb) The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.
(cc) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.
(dd) The term "Shares" shall mean shares of the Common Stock and any shares
of stock or other securities received as a result of the adjustment provided for
in Section 12 of this Plan.
(ee) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of this Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of this Plan.
(ff) The term "Stock Option" shall mean any stock option granted under this
Plan.
(gg) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in this Plan.
(hh) The term "Termination Date" shall mean the date that a Grantee ceases
to be employed by RSI or any Subsidiary for any reason; provided, however, it
shall mean the end of any severance period applicable to a Grantee with respect
to any Non-qualified Stock Options held by such Grantee.
(ii) The term "Year" shall mean a calendar year.
3. Shares of Stock Subject to this Plan.
(a) Subject to the provisions of Paragraph (b) of this Section 3, no more
than 3,300,000 Shares shall be issuable pursuant to grants under this Plan.
Shares issued pursuant to this Plan may be either authorized but unissued or
reacquired Shares purchased on the open market or otherwise.
(b) In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised or any Restricted Stock Right is forfeited or cancelled,
the number of Shares subject to such Stock Option or Restricted Stock Right
shall again become available for issuance under this Plan, subject to the
provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this Plan.
(c) No Grantee shall be eligible to receive any Stock Option or series of
Stock Options covering, in the aggregate, more than 800,000 Shares during the
term of this Plan.
4. Participation. Awards under this Plan shall be limited to key executive
Employees selected from time to time by the Committee.
5. Administration. This Plan shall be administered by the Compensation
Committee of the Board of Directors of RSI which shall consist of not less than
three members of the Board of Directors, each of whom shall be a Disinterested
Person. All members of the Committee shall be "outside directors" as defined or
interpreted for
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purposes of Section 162(m) of the Code. The Committee shall have plenary
authority, subject to the express provisions of this Plan, to (i) select
Grantees; (ii) establish and adjust Performance Goals and Performance Periods
for Performance Units; (iii) determine the nature, amount, time and manner of
payment of Awards made under this Plan, and the terms and conditions applicable
thereto; (iv) interpret this Plan; (v) prescribe, amend and rescind rules and
regulations relating to this Plan; (vi) determine whether and to what extent
Stock Options previously granted under this Plan shall be redesignated as
Incentive Stock Options and, in this connection, amend any Stock Option
Agreement or make or authorize any reports or elections or take any other action
to the extent necessary to implement the redesignation of any Stock Option as an
Incentive Stock Option, provided that any redesignation of a previously granted
Stock Option as an Incentive Stock Option shall not be effective unless and
until consented to by the Grantee; and (vii) make all other determinations
deemed necessary or advisable for the administration of this Plan. The
Committee's determination on the foregoing matters shall be conclusive. A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee without a meeting, shall be
the acts of the Committee.
6. Awards. Subject to the provisions of Section 3 of this Plan, the Committee
shall determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof, SARs
pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.
7. Stock Options.
(a) The Committee from time to time may grant Stock Options either alone or
in conjunction with and related to SARs, Limited SARs and/or Performance Units
to key executive Employees selected by the Committee as being eligible therefor.
The Stock Options may be of two types, Incentive Stock Options and Non-qualified
Stock Options. Each Stock Option shall cover such number of Shares and shall be
on such other terms and conditions not inconsistent with this Plan as the
Committee may determine and shall be evidenced by a Stock Option Agreement
setting forth such terms and conditions executed by the Company and the Grantee.
The Committee shall determine the number of Shares subject to each Stock Option.
The number of Shares subject to an outstanding Stock Option shall be reduced on
a one for one basis to the extent that any related SAR, Limited SAR or
Performance Unit is exercised and such Shares shall not again become available
for issuance pursuant to this Plan.
In the case of Stock Options, the aggregate Fair Market Value (determined
as of the date of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an Employee during any Year under
this Plan or any other plan of the Company shall not exceed $100,000. To the
extent, if any, that the Fair Market Value of such Common Stock with respect to
which Incentive Stock Options are exercisable exceeds $100,000, such Incentive
Stock Options shall be treated as separate Non-qualified Stock Options. For
purposes of the two immediately preceding sentences of this subparagraph (a),
Stock Options shall be taken into account in the order in which they were
granted.
(b) Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or any
Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event for greater
than ten years) and shall be exercisable in such installments as shall be
determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the Stock
Option but such price shall not be less than one hundred percent (100%) of the
Fair Market Value on the date of grant of the Stock Option. If a Grantee owns
(or is deemed to own under applicable provisions of the Code and rules and
regulations promulgated thereunder) more than
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ten percent (10%) of the combined voting power of all classes of the stock of
the Company and a Stock Option granted to such Grantee is intended to qualify as
an Incentive Stock Option, the Incentive Stock Option price shall be no less
than one hundred and ten percent (110%) of the Fair Market Value of the Common
Stock on the date the Incentive Stock Option is granted and the term of such
Incentive Stock Option shall be no more than five years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is an
Employee and has continuously been an Employee of RSI or any Subsidiary since
the grant of such Stock Option. A Grantee shall not be deemed to have terminated
his period of continuous employ with RSI or any Subsidiary if he leaves the
employ of RSI or any Subsidiary for immediate reemployment with RSI or any
Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number of
Shares which he elects to purchase, (ii) deliver to the Company payment of the
full purchase price of the Shares being purchased (A) in cash or a certified or
bank cashier's check payable to the order of the Company, or (B) with the
approval of the Committee, in Shares of the Common Stock having a Fair Market
Value on the date of exercise equal to the purchase price, or a combination of
the foregoing having an aggregate Fair Market Value equal to such purchase
price, and (iii) deliver to the Secretary of the Company such written
representations, warranties and covenants as the Company may require under
Section 16(a) of this Plan.
(g) A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock Option
has been exercised.
(h) Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of this Plan shall become immediately exercisable in full and shall
remain exercisable to the full extent of the Shares available thereunder,
regardless of any installment provisions applicable thereto, for the remainder
of its term, unless Section 14(a) of this Plan applies or the Grantee has been
terminated for cause, in which case the Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a) or
the Grantee's Termination Date, as appropriate.
(i) If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(v); provided that Stock Options subject to this
purchase requirement held by Grantees who are subject to Section 16(b) of the
1934 Act with respect to RSI must have been held for at least six (6) months.
(j) Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.
(k) The Company intends that Section 7(i) shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of Section 7(i) not be necessary to comply with
the requirements of the Rule, or should any additional provisions be necessary
for Section 7(i) to comply with the requirements of the Rule, the Committee may
amend this Plan or any Stock Option agreement to add to or modify the provisions
thereof accordingly.
(l) Notwithstanding any of the provisions of this Section 7, a Stock Option
shall in all cases terminate and not be exercisable after the expiration of the
term of the Stock Option established by the Committee. Except as provided in
Section 7(h), Stock Options shall be exercisable after the Grantee ceases to be
employed by RSI or any Subsidiary as follows, unless otherwise determined by the
Committee:
(i) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of Disability or Retirement, (A) any Non-qualified
Stock Option not previously exercised or expired shall continue to vest and
be exercisable during the three (3) year period following the Grantee's
Termination Date, and to the extent it is
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exercisable at the expiration of such three (3) year period, it shall
continue to be exercisable by such Grantee or such Grantee's legal
representatives, heirs or legatees for the term of such Non-qualified Stock
Option, and (B) any Incentive Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee or such Grantee's legal representatives, heirs or legatees for the
term of such Incentive Stock Option; provided, however, that in order to
qualify for the special tax treatment afforded by Section 421 of the Code,
Incentive Stock Options must be exercised within the three (3) month period
commencing on the Termination Date (the exercise period shall be one (1)
year in the case of termination by reason of disability, within the meaning
of Section 22(e)(3) of the Code). Incentive Stock Options not exercised
within such three (3) month period shall be treated as Non-qualified Stock
Options.
(ii) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such
Stock Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii) above,
in the event that a Grantee ceases to be employed by RSI or any Subsidiary
for any reason other than termination for cause, any Stock Option shall, to
the extent it was exercisable on the Termination Date, continue to be
exercisable for a period of three (3) months commencing on the Termination
Date and shall terminate at the expiration of such period; provided,
however, that in the event of the death of the Grantee during such three
(3) month period, such Stock Option shall, to the extent it was exercisable
on the Termination Date, be exercisable by the Grantee's personal
representatives, heirs or legatees for a period of one (1) year commencing
on the date of the Grantee's death and shall terminate at the expiration of
such period.
(m) Except as otherwise provided in Section 7(l), a Stock Option shall
automatically terminate as of the Termination Date, provided that if a Grantee's
employment is interrupted by reason of Disability or a leave of absence (as
determined by the Committee) the Committee may permit the exercise of some or
all of the Stock Options granted on such terms and for such period of time as it
shall determine.
8. Stock Appreciation Rights.
(a) The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares covered
by such Stock Option. Each SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed by
the Company and the holder of the SAR. A SAR may be granted either at the time
of grant of a Stock Option or at any time thereafter during its term. A SAR may
be granted to a Grantee irrespective of whether such Grantee has a Limited SAR.
Each SAR shall be exercisable only if and to the extent that the related Stock
Option is exercisable, provided, however, that no SAR may be exercised in any
event (i) until the expiration of six (6) months from the date of grant of the
SAR unless prior to the expiration of such six (6) month period the holder of
the SAR ceases to be employed by RSI or any Subsidiary because of death or
Disability, or (ii) more than six (6) months after the Termination Date of a
Grantee. Upon the exercise of a SAR, the related Stock Option shall cease to be
exercisable to the extent of the Shares with respect to which such SAR is
exercised and shall be considered to have been exercised to that extent for
purposes of determining the number of Shares available for the grant of further
Awards pursuant to this Plan. Upon the exercise or termination of a Stock
Option, the SAR related to such Stock Option shall terminate to the extent of
the Shares with respect to which such Stock Option was exercised or terminated.
(b) The term "Spread" as used in this Section 8 shall mean, with respect to
the exercise of any SAR, an amount equal to the product computed by multiplying
(i) the excess of (A) the Fair Market Value per Share on the date such SAR is
exercised over (B) the purchase price per Share at which the related Stock
Option is exercisable by (ii) the number of Shares with respect to which such
SAR is being exercised, provided; however, that the Committee may at the grant
of any SAR limit the maximum amount of the Spread to be paid upon the exercise
thereof.
(c) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
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<PAGE> 50
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the Grantee
exercising the SAR an amount equivalent to the Spread. The Committee shall have
the sole and absolute discretion to determine whether payment for such SAR will
be made in cash, Shares or a combination of cash and Shares, provided, that any
Shares used for payment shall be valued at their Fair Market Value on the date
of the exercise of the SAR.
(d) A SAR may be exercised only during the period beginning on the third
(3rd) business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the Company and
ending on the twelfth (12th) business day following such date. Such release
shall be deemed to have taken place if the specified financial data appears (i)
on a wire service, (ii) in a financial news service, (iii) in a newspaper of
general circulation or (iv) is otherwise made publicly available.
(e) The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(f) To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii) deliver to the
Company such written representations, warranties and covenants as the Company
may require under Section 16(a) of this Plan.
(g) A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.
(h) The exercise of a SAR shall reduce the number of Shares subject to the
related Stock Option on a one for one basis.
9. Limited SARs.
(a) The Committee shall have authority in its discretion to grant a Limited
SAR to the holder of any Stock Option with respect to all or some of the Shares
covered by such Stock Option; provided, however, that in the case of Incentive
Stock Options, the Committee may grant Limited SARs only if and to the extent
that the grant of such Limited SARs is consistent with the treatment of the
Stock Option as an Incentive Stock Option. Each Limited SAR shall be on such
terms and conditions not inconsistent with this Plan as the Committee may
determine and shall be evidenced by a Limited SAR Agreement setting forth such
terms and conditions executed by the Company and the holder of the Limited SAR.
A Limited SAR may be granted to a Grantee irrespective of whether such Grantee
has a SAR.
(b) Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control; provided, however, that
a Limited SAR that has not been held by the Grantee for at least six (6) months
before the occurrence of a Change of Control may be exercised only during the
sixty (60) day period commencing upon the expiration of such six (6) month
holding period.
Each Limited SAR shall be exercisable only if and to the extent that the
related Option is exercisable; provided, however, that no Limited SAR may be
exercised in any event (i) until the expiration of six (6) months from the date
of grant of the Limited SAR, or (ii) more than six (6) months after the
Termination Date of a Grantee. Upon the exercise of a Limited SAR, the related
Stock Option shall cease to be exercisable to the extent of the Shares with
respect to which such Limited SAR is exercised, and the Stock Option shall be
considered to have been exercised to that extent for purposes of determining the
number of Shares available for the grant of further Awards pursuant to this
Plan. Upon the exercise or termination of an Option, the Limited SAR with
respect to such Option shall terminate to the extent of the Shares with respect
to which the Option was exercised or terminated.
(c) For any Limited SAR, the term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(v) by (B) the number of Shares with respect to which such
Limited SAR is being exercised.
(d) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
value per
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<PAGE> 51
Share exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a Limited SAR, the holder thereof shall
receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or Performance
Unit may be exercised with respect to any Stock Option at a time when any
Limited SAR with respect to such Stock Option held by the Grantee of such SAR or
Performance Unit may be exercised.
(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option.
10. Performance Units.
(a) In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options; provided,
however, that in the case of Incentive Stock Options, the Committee may grant
Performance Units only if and to the extent that the grant of such Performance
Units is consistent with the treatment of the Stock Option as an Incentive Stock
Option. Each grant of Performance Units shall cover such number of Shares and
shall be on such other terms and conditions not inconsistent with this Plan as
the Committee may determine and shall be evidenced by a Performance Unit
Agreement setting forth such terms and conditions executed by the Company and
the Grantee of the Performance Units. The number of Performance Units granted
shall be equal to a specified number of Shares subject to the related Stock
Options. The Committee shall value such Units to the extent that Performance
Goals are achieved; provided, however, that in no event shall the value per
Performance Unit exceed one hundred and fifty percent (150%) of the purchase
price per Share at which the related Stock Option is exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria, and
the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per Share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust Performance
Goals for the Performance Period as it deems equitable in recognition of
extraordinary or nonrecurring events experienced by the Company during the
Performance Period including, but not limited to, changes in applicable
accounting rules or principles or changes in the Company's methods of accounting
during the Performance Period or significant changes in tax laws or regulations
which affect the financial results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean the
period of time selected by the Committee (which period shall be not more than
five nor less than three years) commencing on January 1 of the Year in which the
grant of Performance Units is made, during which the performance of the Company
is measured for the purpose of determining the extent to which Performance Units
have been earned.
(e) Performance Units shall be earned to the extent that Performance Goals
and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the extent
to which Performance Units have been earned by such Grantee. A Performance Unit
may be exercised only during the period following such notice and prior to
expiration of the related option. Performance Units which have been earned shall
be paid after exercise by the Grantee pursuant to Paragraph (h) of this Section
10. The
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<PAGE> 52
Committee shall have the sole and absolute discretion to determine whether
payment for such Performance Unit will be made in cash, Shares or a combination
of cash and Shares, provided that any Shares used for payment shall be valued at
their Fair Market Value on the date of the exercise of the Performance Unit.
(f) Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.
(g) The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this Section
10 not be necessary to comply with the requirements of said Section 16(b) and
the rules thereunder or should any additional provision be necessary for this
Section 10 to comply with the requirements of Section 16(b) and the rules
thereunder, the Committee may amend this Plan or any Award agreement to add to
or modify the provisions thereof accordingly.
(h) To exercise Performance Units, the Grantee shall give written notice to
the Company in form satisfactory to the Committee addressed to the Secretary of
the Company specifying the number of Shares with respect to which he is
exercising Performance Units.
(i) The exercise of Performance Units shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.
11. Restricted Stock Rights.
(a) The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").
(b) Restricted Stock Rights shall be subject to the following restrictions
and limitations:
(i) The Restricted Stock Rights may not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of;
(ii) Except as otherwise provided in Paragraph (d) of this Section 11,
the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted
Stock Rights and Shares shall terminate without any payment of
consideration by the Company if the Grantee fails to remain continuously as
an Employee of RSI or any Subsidiary for the Restricted Period. A Grantee
shall not be deemed to have terminated his period of continuous employment
with RSI or any Subsidiary if he leaves the employ of RSI or any Subsidiary
for immediate reemployment with RSI or any Subsidiary.
(c) The Grantee of Restricted Stock Rights shall not be entitled to any of
the rights of a holder of the Common Stock with respect to the Shares subject to
such Restricted Stock Rights prior to the issuance of such Shares pursuant to
this Plan. During the Restricted Period, for each Share subject to a Restricted
Stock Right, the Company will pay the holder an amount in cash equal to the cash
dividend declared on a Share during the Restricted Period on or about the date
the Company pays such dividend to the stockholders of record.
(d) In the event that the employment of a Grantee terminates by reason of
death, Disability or Retirement, such Grantee shall be entitled to receive the
number of Shares subject to the Restricted Stock Right multiplied by a fraction
(x) the numerator of which shall be the number of days between the date of grant
of such Restricted Stock Right and the date of such termination of employment,
and (y) the denominator of which shall be the number of days in the Restricted
Period, provided, however, that any fractional Share shall be cancelled. If a
Grantee's employment is interrupted by reason of Disability or a leave of
absence (as determined by the Committee), then the Committee may permit the
delivery of the Shares subject to the Restricted Stock Right in such amounts as
the Committee may determine.
(e) Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on
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<PAGE> 53
Restricted Stock shall expire and all Shares subject to Restricted Stock Rights
shall be issued to the Grantees. Additionally, the Committee may, at any time,
provide for the acceleration of the Restricted Period and of the issuance of all
or part of the Shares subject to Restricted Stock Rights. Any determination made
by the Committee pursuant to this Section 11(e) may be made as to all Restricted
Stock Rights or only as to certain Restricted Stock Rights specified by the
Committee. Once made, any determination by the Committee pursuant to this
Section 11(e) shall be irrevocable.
(f) When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of Shares
registered in the name of the Grantee.
12. Dilution and Other Adjustments. If there shall be any change in the Shares
subject to this Plan or any Award granted under this Plan as a result of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure, adjustments may be made by the
Committee, as it may deem appropriate, in the aggregate number and kind of
Shares subject to this Plan or to any outstanding Award, and in the terms and
provisions of this Plan and any Awards granted hereunder, in order to reflect,
on an equitable basis, any such change in the Shares contemplated by this
Section 12. Any adjustment made by the Committee pursuant to this Section 12
shall be conclusive and binding upon the Grantee, the Company and any other
related person.
13. Substitute Options. Incentive and/or Non-qualified Stock Options may be
granted under this Plan from time to time in substitution for either incentive
or non-qualified stock options or both held by employees of other corporations
who are about to become employees of the Company as the result of a merger,
consolidation or reorganization of the employing corporation with the Company,
or the acquisition by the Company of the assets of the employing corporation, or
the acquisition by the Company of stock of the employing corporation as the
result of which it becomes a Subsidiary of the Company. The terms and conditions
of the Stock Options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Committee at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but, in the event that the
option for which a substitute Stock Option is being granted is an incentive
stock option, no variation shall adversely affect the status of any substitute
Stock Option as an incentive stock option under the Code.
14. Miscellaneous Provisions.
(a) Notwithstanding any other provision of this Plan, no Stock Option, SAR,
Limited SAR or Restricted Stock Right granted hereunder may be exercised nor
shall any payment in respect of any Performance Unit granted hereunder be made
and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the time of
such exercise or payment, the Committee (or in the event of a Change of Control,
the Incumbent Board) determines that the Grantee has (i) used for profit or
disclosed confidential information or trade secrets of the Company to
unauthorized persons, or (ii) breached any contract with, or violated any legal
obligation to, the Company, or (iii) engaged in any other activity which would
constitute grounds for termination for cause of the Grantee by the Company. The
Committee (or the Incumbent Board) shall give a Grantee written notice of such
determination prior to making any such forfeiture. The Committee (or the
Incumbent Board) may waive the conditions of this Paragraph in full or in part
if, in its sole judgment, such waiver will have no substantial adverse effect
upon the Company. The determination of the Committee (or the Incumbent Board) as
to the occurrence of any of the events specified above and to the forfeiture, if
any, shall be conclusive and binding upon the Grantee, the Company and any other
related person.
(b) The Grantee of an Award shall have no rights as a stockholder with respect
thereto, except as otherwise expressly provided in this Plan, unless and until
certificates for Shares are issued.
(c) No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be exercisable
only by the Grantee or the Grantee's guardian or legal representative.
B-10
<PAGE> 54
(d) The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving such
Common Stock shall be required, as a condition of such distribution, either to
pay to the Company at the time of distribution thereof the amount of any such
taxes which the Company is required to withhold with respect to such Shares or
to have the number of the Shares, valued at their Fair Market Value on the date
of distribution, to be distributed reduced by an amount equal to the value of
such taxes required to be withheld.
(e) No Employee shall have any claim or right to be granted an Award under
this Plan, nor having been selected as a Grantee for one Year, any right to be a
Grantee in any other Year. Neither this Plan nor any action taken hereunder
shall be construed as giving any Grantee any right to be retained in the employ
of RSI or any Subsidiary, and the Company expressly reserves its right at any
time to dismiss any Grantee with or without cause.
(f) The costs and expense of administering this Plan shall be borne by the
Company and not charged to any Award nor to any Grantee.
(g) This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under this Plan, and payment of Awards
shall be subordinate to the claims of the Company's general creditors.
(h) Whenever used in this Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.
(i) With respect to Grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee. Moreover, in the event this Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one
relating to eligibility requirements, or the price and amount of Awards) shall
be deemed automatically to be incorporated by reference into this Plan insofar
as Grantees subject to Section 16 are concerned.
15. Indemnification of the Committee. Service on the Committee shall constitute
service as a director of the Company and members of the Committee shall be
entitled to indemnification, advancement of expenses and reimbursement as
directors of the Company pursuant to its Restated Articles of Incorporation,
By-Laws, resolutions of the Board of Directors of RSI or otherwise.
16. Compliance with Law.
(a) Each Grantee, to permit the Company to comply with the Securities Act of
1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an Award except in compliance with the 1933 Act and such
Grantee shall enter into such agreements and make such other representations as,
in the opinion of counsel to the Company, shall be sufficient to enable the
Company legally to issue the Shares without registration thereof under the 1933
Act. Certificates representing Shares to be acquired under Awards shall bear
legends as counsel for the Company may indicate are necessary or appropriate to
accomplish the purposes of this Section 16.
(b) If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares under
such Award, such Shares shall not be issued unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
B-11
<PAGE> 55
17. Amendment of this Plan. The Committee may at any time (i) terminate this
Plan or (ii) modify or amend this Plan in any respect, except that, to the
extent required to maintain the qualification of this Plan under Section 16 of
the 1934 Act, or as otherwise required to comply with applicable law or the
regulations of any stock exchange on which the Shares are listed, the Committee
may not, without shareholder approval, (A) materially increase the benefits
accruing to Grantees under this Plan, (B) materially increase the number of
securities which may be issued under this Plan or (C) materially modify the
requirements as to eligibility for participation in this Plan. Should this Plan
require amendment to maintain full legal compliance because of rules,
regulations, opinions or statutes issued by the SEC, the U.S. Department of the
Treasury or any other governmental or governing body, then the Committee or the
Board may take whatever action, including but not limited to amending or
modifying this Plan, is necessary to maintain such compliance. The termination
or any modification or amendment of this Plan shall not, without the consent of
any Grantee involved, adversely affect his rights under an Award previously
granted to him.
18. Effective Date and Term of this Plan.
(a) This Plan shall become effective on May 5, 1995, subject to the approval
of the shareholders of RSI.
(b) Unless previously terminated in accordance with Section 17 of this Plan,
this Plan shall terminate on the close of business on May 4, 2005, after which
no Awards shall be granted under this Plan. Such termination shall not affect
any Awards granted prior to such termination.
B-12
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APPENDIX C
RYDER SYSTEM, INC.
ANNUAL MEETING - MAY 5, 1995
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned hereby constitutes and appoints M. Anthony Burns,
X James M. Herron and Edwin A. Huston, and each of them, as true and lawful
Y agents and proxies with full power of substitution in each, to represent
the undersigned and to vote, as designated below, all the shares of common
stock of RYDER SYSTEM, INC., held of record by the undersigned on March 9,
1995, at the Annual Meeting of Stockholders to be held at the Miami Airport
Hilton and Towers, 5101 Blue Lagoon Drive, Miami, Florida, on Friday, May
5, 1995, and at any adjournments thereof, on all matters to come before the
meeting.
Election of Directors. NOMINEES: COMMENTS: (change of address)
Vernon E. Jordan, Jr., James W. McLamore, -----------------------------
Paul J. Rizzo and Alva O. Way for a term of
office expiring at the 1998 Annual Meeting; -----------------------------
and Joseph L. Dionne for a term of office
expiring at the 1996 Annual Meeting. -----------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse of this card.)
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. However, please sign
the card in any event since the Proxy Committee cannot vote your shares unless
you sign and return this card.
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
/X/ Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of directors and
FOR proposals 2, 3 and 4 and AGAINST proposals 5 and 6.
--------------------------------------------------------------------------------
DIRECTORS RECOMMEND A VOTE "FOR"
--------------------------------------------------------------------------------
1. Election of Directors. (SEE REVERSE)
/ / FOR / / WITHHELD
For, except vote withheld from following nominees.
------------------------------------------------
2. Ratification of the Ryder System, Inc. Stock for Merit Increase Replacement
Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of the Ryder System, Inc. 1995 Stock Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. Ratification of KPMG Peat Marwick LLP as auditors.
/ / FOR / / AGAINST / / ABSTAIN
--------------------------------------------------------------------------------
DIRECTORS RECOMMEND A VOTE "AGAINST"
--------------------------------------------------------------------------------
5. Stockholder Proposal relating to Annual Election of all directors.
/ / FOR / / AGAINST / / ABSTAIN
6. Stockholder Proposal relating to the Ryder System, Inc. Preferred Share
Purchase Rights Plan.
/ / FOR / / AGAINST / / ABSTAIN
--------------------------------------------------------------------------------
In their discretion said proxies may vote Change of Address/
for a new nominee of management. If any Comments on Reverse
nominee has become unavailable, and any Side. / /
other matters properly coming before the
Meeting, all as set forth in the Notice
of Annual Meeting and Proxy Statement.
Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature: Dated
------------------------------------- -------------
Signature: Dated
------------------------------------- -------------
